 So by my phone it's 10 o'clock so we're gonna get started I hope Karen's gonna be able to join us but I know we have a lot of ground to cover so for those of you who don't know me who are in the room I'm Senator Becca Ballant, I'm the chair of this committee representative is the vice chair and we are gonna start off with 15 minutes of public comment so I understand there are some folks here who wanted to testify committee so yes great okay so we'll start with a one two three okay come on up stage your yes please and stage your name and we represent and if you're a private citizen that's fine too and we're here to learn good morning my name is Rosie and can Sarah executive director of the Vermont Youth Orchestra Association I'm happy that this committee has been formed and is taking the time to explore the sustainability of community centers in Vermont and I thank you for the work that you're doing I asked that you work to find a solution to keep community media strong and viable for the future the Vermont Youth Orchestra Association where the YOA enters its 56th season this September and with that there are nearly 2,000 individuals who call themselves alumni when asked what is a favorite memory or highlight our musicians and alumni respond to performing at the Flynn Center for the Performing Arts is one of the most important experiences for them however for many of these musicians their families or extended families do not live close enough to attend these concerts this is where our partnership with Burlington Educational Access Channel RETN has played a critical role in making it possible for us to share this experience with our musicians families and friends across the US and internationally RETN recorded its first Vermont Youth Orchestra or BYO concert in 1998 this past May marks the 95th performance it has produced and shared with the community on average 18 Vermont community media centers carry each concert that RETN shares I consistently encourage patrons before every concert to be back relax enjoy the performance and visit RETN in the following weeks to enjoy a high quality professional recording filming an orchestra concert with 70 to 80 musicians on stage is no easy feat high production values and their use of multiple cameras allows for the viewer to see our musicians in action we are the envy of many young many youth orchestra organizations across the country when considering the quality and viewing possibilities available to our families and community members if not for this media partnership the last 21 years of coverage would have cost the BYOA an estimated $250,000 to $300,000 imagine for a moment the value this brings to the BYOA invisibility and public perception as a professional youth music organization directly our musicians access these recordings for their college conservatory and summer program applications on an annual basis I mentioned earlier that family members for many of our musicians do not reside locally the ability to view online is expanded viewership by our musicians families throughout Vermont the US and across the globe for example family members in England would regularly view their granddaughters BYO concerts online this past May when they were attending her final BYO concert because she was graduating they mentioned to me with tears in their eyes how lucky they felt that they had been able to hear her all of these years even though they're so far away our partnership with RTN not only benefits our families but community members across our region who appreciate and enjoy the arts but are unable to attend for example a Sunday concert at 3 p.m. especially in the winter we are proud to play a role in RTN arts programming and to showcase some of the finest young musicians in our region RTN makes it possible for us to share our talented young musicians with these communities and this contributes to a thriving local media ecosystem thank you for your time and allowing me to share with you today why the BYOA so values our partnership with RTN and sharing our musicians talent with community media viewers across the state so I want to make sure that folks on the committee have an opportunity to ask questions okay I'd love to start just by if you could reference this partnership with RTN you feel like saves the BYOA $250,000 to $300,000 over the past one year thank you in an aggregate and so can you just break that down for us like how are you calculating that value sure so we do four concerts a year at the Flynn they probably bring in three to five staff members they're manning let's say four panelists so we're getting different angles on the stage so they're there probably about 9 a.m. it's half o'clock setting up and then they finish up our concerts go total they started we're out by five o'clock so by the time they close up so that's over eight hours of it there and then I will always have a staff member that goes down and they'll do post-production together so to make sure that certain portions where that those right camera angles or camera spots are on the appropriate musicians at that point so and that I'm not sure how many hours that can be you know a couple hours of post production for my sound you're not sure for them so I would say in recent years it's been anywhere from 12 to $15,000 in you know estimated sponsorship this partnership and it's probably a little price I would say that it acts it really is 21 years you said 21 years so since 1998 and I would say I mean they're fine that they're really high high yes absolutely high quality the way they're doing the camera angles it's very similar to watching us at the orchestra on PDFs you know it's the very same idea and that idea of looking at the score and making that connection which I you know probably 98 wasn't being done right and they have refined with us and refined that over the years is it recorded and so we were very careful about licensing we make sure that the pieces of public domain if we are using rental music we make sure that we are paying for that extra licensing to have it distributed they will distribute it to area but also I've heard of channels out in the West you know they'll pick it up and pick up our concerts as well we don't handle it but usually if there's a student that's asking for a particular yes they will pay something I believe to them to get like a recording a DVD of it because it's dreamed online yeah that's how all of them are watching which is really I mean what a change I joined the organization in 2012 and this is how our families are accessing this the online has really been an important thing for all of us great thank you thank you very much sure it's just that we are probably my front is recording so if we bring this mic over I would never purport to take Karen Horn's place my name is thank you for having me my name is Bill Fraser I'm the city manager in my pillier have been for 24 plus years and I'm and ironically I'm on the board of directors of the league of cities and towns but not wearing that hat today I too thank you for taking this up and can't express the importance of the community media centers in an era where there's a lot of distrust of government we find this is the best way to put ourselves out there we broadcast all of our city council meetings planning commission development view design review any special forums that we have school boards various committees and we find that oh no Karen I'm in trouble I'm in your seat and we find that it is our way for for our citizens to know what's going on and they count on it that's okay you know I'm surprised anecdotally I'll walk down the street all the time people say you know I saw you on TV or I watch you're like you know I'm here I know what's going on and I'm bored why are you doing watching this on television but they are because they're interested and they want to know what their government's doing and it's just crucial in fact the feedback we get over the years you know when I first started we had one camera and one mic and it was you know now we have split screen and all this kind of thing and people are still you know they want better production value they want to be able to hear better they want to be able to see better because they want to know what's going on so I you know we live in a world where information is king we live in a world where people want to know what's going on with their government and this is essential to us so I would urge you to do that we we feel we can do even more with it in the future but for now we are broadcasting everything we can think of and then some separate broadcast that folks can watch like in the website or is it like live I know a lot of local communities around the the nation or you know starting to implement that kind of audio equipment right so we have a split screen we have a split signal so it's broadcast live on cable and also streamed and then it's archive so you can watch it later but it's all with the setup with the local cable so it's you can watch it now no we we own you know Rob's here you can probably correct me if I if I get wrong but we co-own some equipment with them we work very cooperatively with them whenever we have technical issues I mean they're right across the street from us so they can come right over and help you know if something goes wrong in a meeting they're there the next day to correct it and very good partnership we pay for the camera operator that night but otherwise it's a shared arrangement yes but not super recently and in about 2009 we did a community survey and I think we're planning to do another one this year in with a lot of general questions it's and one of them was where you get information and it was a very high percentage I don't remember the exact number but very clearly people were watching on cable so we pay an hourly rate to the the person who comes and sits and you know unfortunately some of those meetings can be pretty long but and that's a set rate we pay them directly we have their name but Orca helps schedule them and we will contact them and let them know you know we have four meetings this week and here's the times and here's the locations and they will coordinate with my office to get someone there and then we pay them the technical production costs we don't pay for that's part of what they provide I don't know how that started but I think it we were one of the first to really expand you know a lot of people had their select board meeting or city council meeting and that was kind of it and we back in the 90s and wanted to put everything on and so we said hey we'll pay for it but we want it we want to provide this and now it's you know once you do it it's an expectation so and we're happy to do it it's a good thing my pleasure thank you for doing this and I hope we can keep this as you know transparency and government is essential so thank you know all of you a little bit last night after watching to midnight your first meeting my name is Tom Chamberlain I am a resident of Rotland Vermont where I have a private practice in family mediation I have been a producer of a show on pay TV called the relationship toolbox for the past two years having worked as a consular and a mediator with families children and employees for over the 40 some years I have been struck with a lack of communication skills in our society and skills for dealing with conflict by the time couples parents and employees reach mediation services it's often late in the game to begin learning some of the conflict resolution skills two years ago while visiting the peg TV studio in Rotland the development coordinator approached me and act asked me what I did for a living when I explained she seemed very interested and went on to inquire whether I would be willing to produce a television show on these skills when I explained to her that I was very interested in public education but that I had no idea how to produce a television show she was very reassuring and told me don't worry about that you will learn quickly and we will help you with that encouragement and the technical expertise of peg TV I produced our first show in April of 2017 since that day we have produced 20 shows dealing with the skills for building positive relationships with intimate partners skills for building relationships between parents and children and skills for building relationships with colleagues in the workplace we have had parents teenagers young children lawyers and mediators up here on the show currently we have airing a doctor on our show who is talking to our audience about the communication skills we need with our care providers because of these shows available in peg TV I can now say to people they want to learn more about ways to improve their relationships with others excuse me all they have to do is to go to peg TV and select the episode they want to view I can't imagine what it would be like to live in a society where we would not have this kind of opportunity to educate others without the constraints of profit and regulation that govern commercial television as a customer of Comcast I am happy to pay a portion of my monthly bill to preserve the opportunity for public access to the airways I am appealing to this committee to preserve current funding and support for public access no matter how strong pushback from commercial prices so I have a question you said what you have on I do that yeah that's are your programs available to other TVG stations I believe so sounds like a very very valuable type of program when you first went to the station what was your like what you got the first I know a project I think you step into this well it wasn't a little bit I said I saw advertised in the Rufflin Herald advertising if you wanted to come in and do a Christmas green for people about what you do in the community you're welcome to come in to do that so I thought why not I was just gonna say we have a statewide program exchange called Vermont media exchange so when your program is produced it's then posted on this shared platform and access centers in Vermont take it down to run it locally and in the case of the youth orchestra it's also connected to a national network so that can also be used by access centers outside of the state so Lord like do they pay dues into the sharing platform to be able to be part of that network well Vermont access network is a great do space organization so I'm sorry that helps to support the platform this might be a question for you perhaps aren't Glenn do you have any idea what the viewership numbers look like for you I'm curious about that too I don't know participation like a participation aspect or people call in or something or is it more just outward education it's a really interesting aspect that you've brought here Tom that I really hadn't considered which is I've been thinking around issues of broadband and telemedicine and the issues of how does somebody who's in their home doesn't have access to a therapeutic setting access that information and so I appreciate you taking the time because I haven't thought about that aspect of what the value is to the community I've been thinking much more through government meetings and government transparencies but my lens was so thank you thank you thank you all three of those witnesses for making the trip and certainly anyone in the room that knows somebody who would like to give public comment please spread the word we're going to start each meeting with 15 to 20 minutes for public comment so I believe next up we are going to get a tutorial on Peg funding and access and I want to thank Dan Blanville and Lauren and Vivian for pulling this together because I know many of us here and so this is a really important rallying that we need to have and so I'm going to turn it over to to Dan to get started great thank you very much I have some hands as I go through that's okay I have a question they're all open in the same house oh okay yes good is that okay I just saw the door close oh so so in the Vermont State House every meeting is open right they're announcing it's going into executive session which rarely happens in this building excellent okay I just want to do it for logistics because some jurisdictions there yes yes people's house okay great so thank you very much so I know that we have a specific amount of time for these topics and I think in the general overview on cable service so cable service finds its origin under the federal cable act and where the provision was in that was basically they use the public use of the rights of way and oftentimes I describe that people might not realize it but when you actually go down the street you see the telephone poles they're actually in the public right of way which is owned by the local municipalities where we provide service and franchising varies across the country in some jurisdictions it's given to the really the most jurisdictions it's given to the states to determine how franchising will take place and what the local franchising authority is for instance in neighboring Massachusetts the local franchising authorities are done at the municipal level therefore the franchise renewal and that process of granting use of the public rights of way is done at the local level in other jurisdictions it can be a shared requirement for my son a little bit different but not different from many other jurisdictions in the sense that the local franchising authority is done at the state level but there is a little bit of a quasi local approach to that as well because the CPG or the franchise the certificate of public good those interchangeably they basically mean the same thing has the authority for then the negotiation for the peg access contracts for the AMO contracts here in Vermont and we do that across the jurisdiction with all the members of band so AMO meaning access management organization and those are the members of and we have 22 of those and there are others with other providers across the state as well so we have good relationships with all of them but the origin also in the use of the public rights of way goes back into the local franchising authority being able to assess based upon cable related needs what is up to a 5% franchise fee in most of the jurisdictions where I operate that franchise the is predominantly used for public access like it is here in Vermont what I say the future cable related needs what that process is it goes through a process of ascertainment as well and when you go through the ascertainment process it's really done during the renewal process or in some instances here in Vermont it's done when we negotiate specifically with the AMO's and I'll get into some specifics of that in a moment but in most jurisdictions they actually do a little bit of survey work where they survey the local community members to determine what the future cable related needs are there's also a provision in that where you consider the future cable related needs well considering the cost of meeting those needs as well in some jurisdictions they have they go up to the 5% cap in some jurisdictions they go a little bit lower than the 5% cap and in some jurisdictions there is no franchise fee what we have in what we have done in Vermont as we negotiated with all of the AMO's I'm pleased to say that all the AMO's have been very active in the provision of public access they've done great work in what they do and they consider they continue to be deeply involved in their communities you know in the orchestra was presenting here and I thank them for the presentation really that's just the key fundamental of what public access is intended it's to bring that electronic soapbox into the house and it's interesting how it's done that way to really bring that to people who can't make it out and see that so it's really a good example of how 1501C3 is working with the AMO organizations to bring that into the house and to the enjoyment of some people who might not be in the jurisdiction as well so we work with the AMO's the individual access management management organizations and we are at 5% in those organizations I will tell you since I've been involved in Vermont we've never per se challenged that 5% we've we don't have a desire to reduce that percentage payment because we recognize through our research that there is a strong element of support for public access here in Vermont do you find it is different you know there so you're also in Massachusetts when you say you find that there's local support here in Vermont is it is it a greater support than you've seen in other yes so that's a good question and it varies because I would say that in in I'll say local franchising authorities rather than municipalities sure easier for me to in local franchising authorities where there is an established provider of access you are more likely to see people who have recognized it a and then recognize the value that brings to the community so there are some jurisdictions not here in Vermont there are some jurisdictions we primarily use it for government access so you would probably get less of a reaction in regard to to that request I will tell you something that is pretty common in most of the jurisdictions is that there is a recognition of access generally we find I've seen limited instances where the statistics vary on this in my tenure generally you find that people recognize it they support its continuance but when you ask the question of whether or not they like to pay more resources which you as government official probably recognize we all get a negative response on that but I think that's human nature there I have seen some jurisdictions where we have where we have seen a willingness they do surprise me but I have seen those so 5% is there as well we also have in many jurisdictions a capital piece as well capital generally falls outside of the 5% amount in Vermont the way we do that is we actually do that as a continued percentage so you'll see some that will be five and a quarter percent five and a half percent which will allocate that that specific and then sometimes in the ammo contracts we have some small provisions such as advertising reimbursement which are which are also negotiated and which are then related to the animals throughout the process of the agreement so it's kind of a general history of how it happens I can be sometimes rather mundane so I hope that I try to limit the discussion I'll be happy to answer any questions we may have I can make this available electronically as well I have six copies of this but I will make it available electronically so if you would email that to Mike yes you can post it right to our page on the legislature website that has this committee and this is all publicly available information that we buy on our annual report so no big surprises here we did enter through our yes sir yeah I have a question I just wanted to make sure that I understand so you said that beside the 5% up to 5% amount that I guess is provided by the FCC you also have a capital piece that's a quarter to a half percent addition that you and advertising reimbursement yeah it varies by by animal contract it's a small amount of dollars and what happens is the advertising of the MO's will do some advertising during a particular year advertising cable usually newspapers yeah we reimbursed with that it was probably probably I'll defer to learn right we're glad an opinion because it's probably more productive in the past newspaper advertising than it is today but we continue the process no I think that is through a little more than Q1 I'm fairly certain through the details but we entered in 2006 where we were and where we go through 2018 I know that I come up later in the process to discuss some trends so I can speak to what they cause some trends at that juncture but this just gives a general flavor as to how the funding has taken place over that period and I must say this is all funding so this is not this is we can categorize this I see learning my squinting so we can categorize this by percentage payment by capital payment and also by advertising payment my statistician on the list appears is the one who puts all of this together and that's what I have right now but I will have some I have some further information regarding the trending report and some general commentary as what affects trends as well okay yes can you discuss a little bit what revenues yes a good question cable service revenues include our included in that cable service has a broad definition it's generally the provision of our television service it also includes revenue from the rental of cable service equipment meaning insect on boxes in that type of equipment in addition there is a proportional basis of advertising revenue because we receive advertising revenue from our some of the local ad providers which are included in the cable service revenue as well and what policies collected is that it is collected on a monthly basis as a percentage of the cable service that subscribers pay then paid on a quarterly basis a most most going through a quarterly basis to the ammo providers did that answer your question yes any questions for Dan at this point I have a question but I think he's going to address it later okay right so at this point I will turn it over to Lori Lynn short I have a little more colloquial colloquial history of cable and Vermont great I think Vermont and also I wanted to drill down into this question of community needs assessments and ascertainments as a driver for our budgets so this is helpful because some of the numbers in my presentation are overstated so I'm glad to have the actual numbers so as clay was saying at the previous meeting Vermont was one of the first states to have cable television in the country because of our train and at that time entrepreneurs many people who want to sell television sets think of that or entrepreneurs in general think of Richard Snowing and Dr. Beijing and Burlington set up cable systems so people could receive signals from the big cities so at that time the cable systems were about 12 channels they were very simple systems and until the 70s they really weren't early 80s weren't more than 24 channels then the 80s they started creep up to 36 and then a new order of technology came in but I think what's helpful to know is that in 1984 when CCTVs took up the work of public access there were 50 cable companies in Vermont and the biggest company at that time was Cox Cable and they owned the biggest cities in the state and a group of regional managers put together a offer to buy up the Vermont properties and the Berkshire properties and in 1987 in 85 they bought those properties for $35 million and two years later they sold it to a Delphi cable for $139.00 two years later, yes, within two and a half years the value of the cable properties went from $35 million to $117 million. That's okay. So it was pretty significant and it actually was I think just as an asterisk it was a very important moment for us in the access world because at that time the Green Mountain Cable partners were our hometown guys they were local they weren't Cox they were not far away they lived here they were very friendly they were very helpful to public access but then they were made an offer they couldn't refuse by Delphia and they had the fiduciary obligation to take that offer so the cable industry can market and the dynamic can change quickly and we learned about this idea of fiduciary responsibility that there is a fundamental financial case to be made in the business and that that as peg activists we had to take that into consideration so at Delphi as you know went on a pretty significant we may not know went on a pretty significant buying spree at that time and they increased their subscriber base from 45,000 to 450,000 by the mid 1990s they bought up many of the smaller cable systems in Vermont and the properties that Comcast ultimately bought after Delphi is bankruptcy were the result of that consolidation at that time so at this time there's less than 10 cable companies in the state of Vermont and that's the result of that period of consolidation as the Department of Public Service points out 65 percent of Vermont cable TV service or it runs by their home so the penetration rate is substantial and many Vermonters depend on cable and have the pending on cable television to get their communications and their local communications and national and as you can see here on page two there are one two three or five other cable systems that have peg AMO's that serve their communities with peg service in addition to Comcast and that's Charter, VTEL, Burlington Telecom, Southern Vermont cable and Waitsville Communications so that gives you a sense of the landscape of cable in Vermont I'm sure Dan can also add to that but the legislative and regulatory history I think is also of some interest because it was in the early 70s that the RAND Corporation actually published a paper on public access holdings 1970 and 1973 and I actually was not even aware of that until yesterday but the work of public access really began in Canada the Canadian film board and the man named George Stoney who is a documentary maker was hired as an executive producer to preside over a project where citizens were given what were then newly portable video cameras to use as an organizing tool in cities and rural areas to convene people ask them what they felt was important for community development purposes have a screening everybody comes together they see they have come and cause it becomes the basis of community organizing so George Stoney who was that executive producer was so impressed by this that he took the model to New York University and he started the alternative media center and at the same time that he was training the first generation of activists with cameras community developers really with cameras Goddard had a community media center also operating and so the first leaders of that time from the 70s were generated from Vermont and New York and they were sent across the country at a time when there was no federal requirement for public access the FCC would include requirements for public access that they included be struck down included be struck down there was this iterative process until the cable act of 1984 which was an amendment to the communications act of 1934 and cable was in effect it was created as a title given the title six and the I think important thing to know about the cable act in 1984 is that a substantial part of the outcome well number one the cable act existed largely because the cable industry wanted some continuity and franchising there was this gold rush going on across the country for municipalities wine cable cable operators wanted to serve the cities these incredible deals were being made these incredible promises were being made and it was in order to get the bigs because the cities were in the last place to get cable right the big cities strangely enough they already have reception so the industry wanted some help in sort of reigning in this process and so the cable act was created in part as a compromise between the National League of Cities and Towns and the cable industry and the franchise fee the compensation for the use of the right to white was part of that compromise so I think that's an important piece to know so in Vermont rule 8 is the state's articulation of the rules related to that are controlled by the cable activating form and rule 8 is essentially I think we know but I'll just state gives the guidelines for what a cable operator has to do to put by get a contract a certificate of prep of good to serve Vermont and rule 8.4 in that section outlines what the public access requirements are and those were we put that together I think in the was the late 80s early 90s and that again helped to rationalize this process that until then was done on a case-by-case basis the point that I want to really stress here is that even before there was a cable act there was public access there were channels in St. John'sbury and in Brattleboro but even when we at CCTV negotiated with Cox for the first channels in 1983 there was no cable act so we were using precedent so other communities that had public access and we also were using what we still use today and is incredibly important community needs assessment the identification of community needs is an interest as a driver for the resources to be set aside so the channels obviously were important set aside but the budgets that outlined what the capital requirements were and what kind of operating support there would be has always been driven not on some number that we think we can get but on a specific time to our community needs so this is done on an 11-year basis there is a community assessment ascertainment done the department conducts it as part of the new certificate of public good Comcast or cable operators do their own research and the access community does its own research but in the intervening years access management organizations conduct strategic plans they do surveys they they are always trying to identify if the services that they're providing are aligned with community needs I just wanted to point out the most recent so we this year conducted us have the Center for Rural Studies do a poll for us for my access network so I just wanted to point out this is a kind of statewide assessment in addition to the very granular vocal assessments that we do so this folks were asked have you ever watched public access television and on cable TV 61% said yes although I think some of them might have thought they saw it on satellite because that was added in there so I think there is I think it's important to know that sometimes people think public access television is public television so it's conflated in their mind so it's not always easy to know what people are thinking but I think there's a general awareness of public access television and that's backed up another survey especially the one done through most recent Comcast CPG have you ever watched public access TV for any of the following reasons so there's quite a range municipal meetings community events election coverage school events and educational programs and other local programs so it's a pretty strong distribution of what people are interested in watching it doesn't all skewed to municipal meetings although it's the one that we hear a lot about and then this is the one that we this is the question that we that we're interested in in particular do you think having public access to the programs and services is important somewhat or etc and so there is the very important somewhat important the idea as Dan said public access existing we didn't ask if are you willing to pay more but what we asked was public access programs and services are mostly funded by a fee applied to cable TV bills but this source could be eliminated or diminished would you support future funding through any of the following so we were trying to get the heartbeat on what people are they willing to pay for the service that they say and how well yeah so local government budgets was seen as one way forward state government budget subscriptions which is an idea that we haven't yet fully explored local fundraising efforts of course plan to be is the point to drop her can I ask you a question is it okay to drop please so could you I presume then you could answer more than one so that 262 was not limited to only being that right okay thank you yeah of these right it's not up to 100 so I think this gives just a kind of picture that again create guidelines for us to think about the work that we're doing is one of the reasons that the PEG study committee exists because we saw all there's actually interest in thinking about how state government might support this order to have a conversation on that level in this document which you can read at your leisure there is just again I wanted to refer to a more granular strategic planning process that are a TN conducted with the camp in Chippin County and so the Center for World Studies for my data center did random phone calls of Vermonters during the particular period not just people that you know watch exactly follow to that random did they do it statewide and wait counties for space of population just curious I live in a place that doesn't have cable TV so I were to take a survey my answers might reflect that I don't have cable folks who are videoing this are you able to see that okay great so they a random sample for the poll was drawn from a list of Vermont landline and cellular phone numbers and these numbers conform to surveys we've seen before there's nothing there's no outlier on this so I'm page six just Wilson talks about she's executive director of our itn about their strategic planning and again I use the word granular because this is the the one-on-one conversations with users and community members that indicate how to spend your money what we need to do we need obviously the one thing we always hear is you need to market more effectively we're kind of like she-makers children we have it to be gentle but people need to know we're there so that's that's always what everyone cares but what's interesting here was that some of the initiatives that they planned based on what they heard was the launch of a merge database for community equipment reservations and virtual reality and 360 degree production education program people were interested in that they work with young people this is a very important aspect of what they do so onto peg access financing Peg access financing is primarily based on cable subscriber revenue and their contributions to the cause there is an increasing focus on business planning and revenue diversification among the access centers and you can see here from the bctv G Natto chemo Valley even have sections on their website that say underwrite with us members with us it is important to point out that the work that the peg centers do actually supplement the budgets of the public institutions so I think that Montpelier is an outlier most municipal municipalities receive deeply discounted or free coverage of their public meetings so this is an offset to their public budgets educational institutions for whom RTN and educational access centers supplements public education budgets through the training in the education that they provide to young people as well as to older people the nonprofits for whom their reach as the youth orchestra just mentioned this is a cost to them that they don't have to pay because these peg budgets are supplementing it now this is not to say that there is not a way forward to diversify the revenue and to increase earned income or fees for service contributions and underwriting but we know given that these budgets range from about fifty thousand to almost a million between Hardwick and Rutland that these larger budgets will be really hard to replace diverse revenue sources other the traditional way it will take several years for these organizations to have a philanthropic base that yields two or three hundred thousand dollars a year so looking ahead we are interested in thinking about ways to leverage the value that peg offers and some of the things that we have been thinking about include a statewide TV channel reviving Vermont interactive television services to the state working closely with state government services that we can provide to the state that amplify the region impact of what we as the state are trying to do and finally there were some questions about internet statistics so we don't have access to the cable cable numbers how many people we don't have a venial sense for the cable that's not something that is made available to the peg so actually since we've gone online on the internet we've had a much better sense of who's watching beyond anecdotal and I think that very short there's details in here like that you can look at but I think what's really important to know is that if there is a gun hearing you know gun rights hearing in Essex you're going to have a thousand people watching that life if it's a regular select born meeting you might have 30 people watching that life but the situational value for that to be there when those thousand people wanted is how we measure the value of access it isn't how many people are watching on Friday night at four o'clock or 10 o'clock it's how valuable and to what audiences are these niche programs and general programs of value to people and in a community like Brattleboro you will have as many hits on their website as you do in in Chittin County so the size also doesn't really of the community doesn't really matter it has to do with the relevance of the services that we offer and that's why the community needs its sentiments are so critical because they assure that we can remain relevant and serve the people in our community. Is there any questions? So if I could hear just no it's okay I just want to make sure that we don't squeeze the later topics and so I'll take a couple questions here anyone as I move us along if your question doesn't get answered please make a note of it we'll circle back around and I just know from my own morning committee that often the folks at the end get their time for tail then I don't want to do that so Karen go ahead. I think it's a question but I believe that in recent years some of the cattle stations have added themselves to the list of charitable organizations at town meeting that you contribute to I think that's the case in a bunch of towns recently. Do you want to do what kind of revenues go up from that? Kevin is that a number that you are aware of? It's not offhand. Yeah it's it's a range yeah for example in the case of channel 17 we were receiving about six thousand dollars per community that we served between six and 12,000 and when the the reclassification cable revenue happened at the end of 2017 we all took their financial hit and for us it was about 48,000 dollars so we asked all the municipalities to ink to double their contribution so now we're yielding about 90,000 dollars in municipal revenue I think that Brattle World probably asked for something on the order of 1500 or 2000 dollars per municipality so I think we have arranged depending on the community but you are right more more of those requests were granted. So I think that's an important question this is just cable service revenue so you have revenue from other sources and so being able to see I'm sure you've already provided that so I'm my apologies I'm kind of the total picture of revenue is and what the different sources are. I have appreciate that. Yes I have but I did bring just say you know and I'll just send it around we did a quick little survey of the who's raising money in different ways so I will find that and pass it around it's in like I just had one other question for AMOs that serve multiple political jurisdictions or multiple communities like ORCA I'll make a good example how are resources allocated between the different communities as in how do you make decisions about you know recording and streaming or not streaming but broadcasting Montpelier and then Randolph and the other communities. In the case of I can speak for channel 17 town meeting television we allocate resources based on the subscriber breakdown so we get a subscriber and that actually hasn't changed significantly in 23 years but surprisingly enough but that's how we do so we allocate it based on the number weighted number of subscribers so they get Berlin gets more resources than Essex. So a town that's in a franchise territory of Comcast but Comcast hasn't actually built that town so there would be zero subscribers would they then get zero resources allocated to their tummies or their we don't have that situation in Jitton County Rob is that do you want to add how you allocate resources? Sure. Rob can you state your name and be a representative? Sure. So my name is Rob Chapman I'm the executive director of ORCA media here in Montpelier. differently than in Florida as we do not discriminate on our towns we serve 14 towns in Central Carolina around Montpelier and Randolph. We try to make sure that all towns would get services because we have a basic line so we'll do the select boards and school boards and districts. There is an organic sense of serving obviously more events more community events in Montpelier than there are and say we'll serve a long time. So we don't we try to make sure and my board often says we have to make sure that we get the small towns there were resources that they might need and serve them as just as well as do the other towns. So if I could we take a moment and have Bornland, Dan and Clay look over the five remaining agenda items and just let me know which of those topics do you think is going to require the most? Some of their minds won't require any discussion. Okay. Here's the map. Here's your own information. Okay. Happy to talk about it but at most a minute. Okay. Okay. The French has these on video providers and other states. I have just a brief update on that and I think what I can do is offer also to bring in a guest one of our future meetings that can give much more of a topical discussion on it. Great. That is helpful. I just want to make sure that we have a lot of enough time. I know they're I assume they're going to be plenty of questions about the proposed FCC report in order that that recently came down so I want to make sure we save time for that. So I would love to turn it over to Lauren Glenn again to talk about capital funding over and above five percent. I wasn't exactly sure. I wasn't exactly sure about this. Okay. But I would just say that the franchise fee that's allowed to be collected by the Frenchizing Authority by the Cable Act is five percent but an amount unspecified may be collected over and above that for capital purposes and in Vermont that number has been set at roughly half a percent. Not roughly half a percent. So when you say that's been set so you flush that out a little bit. The Public Service Board in based on precedent and then in roll eight said that five percent is the max for operating and half a percent is the guideline that we suggest for capital. So it's a guideline. It's not a it's not hard and fast and but it's the number that most of the access centers collect. There are a couple that do not collect capital funds for reasons that are not clear to me and then there may be and Melissa or Dan would know this communities where they may get slightly more than a half a percent. But as you can imagine scale is really important a half a percent and Burlington is going to be different than a half a percent in hard web. So these capital these dollars are used to purchase equipment and they're also used in some cases to purchase technical assistance because increasingly in the old days you would just buy equipment for every technical issue you had but now they're software driven or their technical assistance driven as opposed to well in addition to just simply buying a camera. So you have to rent storage for example we didn't use to have to rent storage right when I say storage to put video files in a place so that you can retrieve them so you can watch them. So forgive my ignorance are we talking about on the cloud like when you okay so you're talking about or you might you might purchase your own servers to store your video or you might have a subscription service with amazon okay and pay them a monthly basis so the nature of capital payments have made it during the digital transition have gone from being primarily hardware driven yeah to a combination of hardware or software subscriptions technical assistance that enables access centers to produce distribute and store their content produce transport and store their content. What's been the the increase in the the costs for your capital expenditures yeah so equipment doesn't get cheaper just because it gets there's a funny thing in equipment cameras are not less expensive and in fact we've had to make the transition from SD standard definition to high definition because that's the only equipment that's being sold now so we're required to move our production and our transport into high definition we don't have access to high definition channels most of us some of us do so that we're down converted to standard definition that's another story but we're here now to talk about that so we have so that so there haven't been any price savings and in fact again i can speak for channel 17 the technical requirements for us to preserve our archives which now are 35 000 programs are incredibly expensive and they um we have more digital content in our archives than anyone else in the state of Vermont probably in terms of video archives it's enormous so the expertise needed to figure out how to handle that and the cost of storage um is while cost storage is coming down is a is a big capital burden for us because we're holding this repository the community history in addition to delivering service all the time it's a really good point so i think that um many of us are finding the technical needs to be quite challenging um i mean we're managing but it's it's expensive to maintain a television so over the last 10 years has the cost doubled or well i would say that for the past 10 years the amount of money we received for capital from the cable operators has not been sufficient to cover our capital expenses and we have had to move money from our reserves to cover those expenses can we're getting to half percent again we have half percent yeah yeah okay so um and it's i'm getting to have the cost risen by double two three two or three times so what the size of our video storage needs have increased the costs have been flat or gone down but our requirements have gone up right because we're saving we used to put it on a bigotting and sell the bigotting back the total expenditures for for that right so it has gone up i would say it has gone up in our case um i could provide a more coherent answer related for the whole movement right um but the capital needs are a big concern and how to maintain room is a question uh so Karen and then click do you do you keep everything do you have any sort of quality process or do you keep almost 35 000 appropriates that you would ever need yeah so we have in our case and again i think we might be unusual in our archival practices not all the access centers have kept everything they've produced since the beginning of time since 1984 so um we have not kept the municipal meetings prior to when we went online in the mid 2000s we did not keep municipal meetings so we had 15 16 years of municipal meetings that we gave back to the municipality so we don't have those in our case but once we went digital once we went online with our collection everything and we're in the process of digitizing the collection from 84 to 2006 so we have particularly intensive needs other access centers may not have those needs however i think that the economies of scale don't necessarily accrue in behind our opportunities i mean it just let me just remind us when you were talking earlier about the situational value i'm sitting here thinking about so train is a historian that's my wheelhouse i'm thinking about the value of of that archival footage to these towns and these communities and that's a different kind of situational value long-term and again like i find in chair in this committee there are so many aspects of this i hadn't considered so i really appreciate that click that just uh were there's two questions for me uh you mentioned reserves and i was curious to hear and i was also asked both questions at once um what that means and where that revenue has come from and then the second question is and this might be a question that gets answered on a different day but in terms of um we have 22 or 25 am 25 amos right um to what extent do the aim of share resources you talk about archiving is there uh is that a shared effort or are each a no archiving on their own um and then other resources so a lot of questions there i apologize if you want to say something about that share resources yeah hello thank you for am i not yeah uh my name is kevin christopher i'm the executive director link sampling access to you and co-chester and the president of the law and access network um i think uh given our uh physical proximity to each other that's not always the easiest thing um in bernieton uh vcam ritn have a co-located facility with facilities and they are doing a lot of shared resources they have a tech core there which cctv is part of that tech core as well and then we'll extend it but um so there's a lot of shared um storage there that we know of um i don't know of any other example like that in the state i know that we are uh there are discussions about what's going on um yeah that helps a little bit yes we built a tech core in grointon as a hub that we hoped would position us to create a statewide archiving process so we've we have done a lot of our development work with an eye to statewide economies of scale um i think the truth is is that each access center is somewhat anarchistic in its practices and so to have everyone kind of get on the same page with me with archiving practices is is a a time function of time more than technical need and our movements of foot uh remind access network as an archiving committee right that's kind of exploring that's practices and the ways that we can uh and is the state involved in any way like uh the other agencies devoted to historical preservation part of the libraries things like that are there a discussion you know there's been outreach to other entities in the state i can't speak to the specifics of that i would say we work informally and anecdotally with with those entities because i think we're not quite at the point we don't quite have the technical infrastructure to move ahead with a statewide archiving project and that's what we're trying to position thank you what was your first question is that reserves reserves when you're spending money from the reserves to pay for capital expenses so are you backfilling the reserves or are you or what does that mean out of oh right where are you getting that reserve funding from yeah yeah during the adelphia years um they we had funding in our case we had a funding issue with them that ended up them compensating us and i'll lump some for money they haven't paid over several years so we had a pretty substantial in addition to our savings we call it a reserve so fund balance would be what a typically a non-profit would call and so the best practice is to have three to six months of operating revenue in the bank and the the we have been we're now at about three months because we've been spending to support our capital needs so um i think it's good practice for everyone to have reserves but um they range depending on the size of the organization and their their spending practices so reserves the reserve is specific to your ammo it's not necessarily a a resource that every game has that's right right that's true yes and we have the same situation that one of my organization did with adelphia um sort of a one fall owed uh revenue so we were able to go reserve and i think a lot of it is is informed by our strategic plans in terms of what do we need to accomplish in terms of capital over the next five to ten years so it's budgeting and spending around that and building up those funds to do an hd upgrade or a new playback service or something like that which i think i would just also say it's important to know that it isn't just that we're buying one or two cameras a year periodically we have to do massive capital upgrades sure a playback system is a thirty thousand dollar investment so we're similar to any tech intense right this right thank you thank you are you going to close my remarks okay great other questions from we're glad before we move on i have a question that's not directly okay it's the capital funds but i think it might um be useful because it was based on something that you said earlier um which was other opportunities for funding you mentioned these for service contributions underwriting and then you talked about ways to leverage the value and you talked about um a statewide tv channel and so this discussion of um leveraging what other AMO's are doing just sort of moved my mind into you know how could these opportunities to provide this you know there's a statewide tv channel or the modern interactive television um how's that an opportunity to make to to find more funding potentially and um you know what value does that relate to the state and to citizens overall and that is a transition to you know budgeting so i was just i don't know if we have to move that on to another topic or if it's that's something that i'm still formulating or you kind of you know if it's okay let's these are great questions let's let's park that okay at the end we're going to set the agenda for the next week i mean the next meeting and um certainly we'll have you weigh in on what direction you should we should go and we're already answering this question so great so next is Dan Landville is going to take us through fun trend lines great um thanks for welcoming me back uh it's similar to six copies of this actually i don't agree with this so i will okay and share yep and that's a uh a trending sheet uh that basically shows where the trend of funding has gone now for instance when we entered uh in 2006 our annual payments uh remitted uh exceeded just over 3.5 million dollars we've gone off every year since then we did have some dips in 16 and a dip in 18 which i'll talk about but primarily it's an increase that has the fund has doubled since our entry into the market some of the things that have caused changes in funding there could be a change in capital funding which could have been implemented and since i entered the market we had about five of those who we implemented a capital payment so as a result it would have seen an increased funding level in addition sometimes when we have renewed an AMO agreement we have changed a payment schedule to what might have been a non-traditional payment schedule to put it more consistently with all the rest of our payments go out to AMOs so that it can be easier for us to send payments so that can in a given year if something's done or a quarterly payment might have been made in that first year could have adversely affected the structure in that particular year in addition a little over a year ago we implemented some changes to the generally accepted accounting practices which as a result of that did have a impact into the funding model for that one year and it will continue but it will be static but i think one thing that i think should be stated is that there's been a message or a a thought process that as a result some of the funding is decreasing due to decrease in cable revenues we have seen some impact of core cutting but we think that we have made significant investment in the cable services that we provide since entering the market the implementation and the change of viewer aided devices which lead to the x1 implementation we think has actually increased increased interest in cable service. CONCAST has continues to make billion dollar investments into the infrastructure that we provide to continue to compete effectively with over the top providers and other providers we believe for the long term that the viability of cable service will continue can i just ask you to say over the top providers such as netflix okay great i just want to make sure there's a sorry term of art yes yes you're you're in yeah pull back a little bit okay thank you so but we do think that that reaction in our investment has continued to lead to the continued customer consumer interest in cable service and we believe we'll we'll continue to do that i mean you have seen some over the top providers enter the market with great success and then fall off with subscriber numbers and we do believe that ultimately we continue to make investment in that front we continue to hopefully meet the demands of what our subscribers want in need for the provision of their cable service and we ultimately believe that the five percent revenue will continue to support AMO providers in vermont and across the country for years to come as comcast given time maybe this is an industry wide i mean you compete in video with or as you say over the top netflix who loom um is concast moving in that direction as well and how does it plan to treat public access if it decides to go toward a video streaming platform well he did all the video products that we bought for two days have been designated as cable service and we continue to pay the franchise fee on those services for a stream product can you say that again even for the stream product that we currently offer today back up just all your services yeah still classified still classified as cable services meaning we pay the five percent the all your videos all of our video services yes so not so i i said all of our cable services i probably should have said all of our video services when i can say cable services i it's the it's the legal term for it okay yeah when i hear cable services i think my cable bill is only paying for broadband you know like because i'm not i don't have a television video service so it's interesting to me that even though i might listen to or view the um the amo content through the internet via cable that is not charged that the five percent is not applied to that is that is that correct that's correct so you're viewing it through your internet service purchased through concast but not through a cable service purchased through concast so it moves through the cable right it does okay it's just i know that this is all discussed on the federal level and already you know limited it's really important just from a practical standpoint you know who i pay my bill to it's not i look at the netflix bill you know i separate but that vehicle comes through a cable and if you buy netflix or not you pay five percent more if you want the concast product which is i can well but it's not the same product oh we offer netflix as an app on our excellent service and we will we will bill for that and provide it to you okay so if it were provided that way then the five percent would apply okay and then you know this is this well they're using the same infrastructure yeah but they're classified they're running businesses that are classified differently under the communications act right so you've got title six which is the cable and then you've got title one which is the information service right and title one is not subject to the franchise god the title six is even though it's essentially the same infrastructure so that's why he's taking pains to use the right terminology so when you talk about the viability of cable service being ongoing um you're not just talking about the services provided through cable tv but also the broadband services that you're providing we're talking about the video television service okay so so what you're saying is you're going to continue to have enough subscribers to video television service we absolutely believe that in case and with the addition of something like netflix it makes it easier for some customer to subscribe some yeah in a way i i mean that would actually keep the connection with the customer yeah it's one spot so it would be available on our apps we have that we have Amazon Prime uh and others it's interesting so x1 is cable service x1 is cable service so do you work do you have a partnership with them do you have networks okay thank you you're welcome did you have something else yeah uh so another thing you said is that the uh you had a change in general accepted counting practices what that was in 2017 implemented at the end of 2017 for impact in 2018 these meetings and years blend together quickly okay so um you said that that decreased the the 5% franchise speed for one year now is that ongoing is that has that increased and it's going to stay at that level this is a change so the 5% remain the same but what happened is how it was calculated and how we calculated our services as a result of how it would fit into that 5% was adjusted to meet gap and as a result of that going forward that adjustment should not impact going forward does that make sense so when you say it should not impact does that mean that it'll no longer decrease but not as a result of the same level correct it's going to stay the same level well as a result of the gap it will not cause a decrease yeah there are i mean look it's a it's a it's business that changes month to month so there could be impact month to month but something has resulted the gap impact would was a one-time impact but you i'm sorry no it's supposed to be revenue neutral but the shift in gap practice i guess i don't understand the question no no no essentially the if i may your the concass accountants said there's been a change in gap classifications for all industries and we have to make this change uh-huh and that is going to result in a in a reclassification of of our revenue how we define our revenue so it meant that there was less revenue to put the 5% against so there was this redefinition of revenue on the gap side not on the state side and there was a one-time drop of about a half a million dollar statewide in revenue franchise the revenue so that happened so we've lost it it's gone but it's not going to keep going down because of that which is so for us non-accountants what did what exactly changed in the accounting practices that resulted in this decrease what is not being counted or so something was an allocation and how it was allocated so the percentage as to how a bill which could have been a bundled bill was allocated for a cable service for the internet service for the home service or for the telephone service and how those are specifically allocated within one bundled bill okay so what is now subject to the 5% franchise speed and what that wasn't what is not subject to 5% franchise speed that was subject to the former nothing but uh you pay your contest bill let's say it's 100 bucks you're buying telephone internet and cable tv all of those things they sell separately and i believe the rules change the way uh you allocate the percentage so it's not just 33 33 33 percent each item has a different value in a way to calculate that value is to look at what do they sell that service for independently and then they fit that together you know well because they're offering discounts on all of them to get you to buy all free how what percentage of that hundred dollars can be counted as cable versus telephone versus internet that's what changed but the percentage remains the same so it's yeah sounds good it sounds like i'm not it sounds like i'm speaking with fork tongue but it's dead skin i think you're protecting i think you're you're you're trying to help us understand some some difficult concepts for some of us who are not in the business so but then was there also a change in broadcast fees well how that was maybe not i don't believe so yeah don't believe those there was an impact regarding that and also just fyi we had a workshop at the public utility commission on this question so we all got together and got it sorted out so we can understand and we agreed that it would have been nice to have a little more advanced communication on it but that was really the essential thing that could have been different okay was there a document that was generated from that meeting that we could refer to it was um case number 19-0367 and there was a final report issued by the hearing officer and there were documents related to it we can yeah we had some documents and i think there was there was a several hours of testimony yeah yeah if there is document that was generated that you think that would be helpful for us to see you can get that electronically to micron who's seeking committees um through the council and you can post that that's to see but but so essentially the end result was reduction in correct Dan thank you i just have one suggestion um it is really helpful to see the information presented this way but i think that the scale is off in a way that doesn't really do enough justice to the to witness the change in amounts um because you know for some of these thing in those a small amount is a big deal and so yeah maybe if you'd like squeeze in the dates because i could see something like this going to a report and it would be really helpful to have yeah i don't disagree with you when i when i read so let's see if we can make that uh if we do do that actually it shows it shows more of a hockey stick but uh we i think we do that that would be great point well thank you take the um the uh y-axis and the x-axis and just move them together and make instead of 1.6 being the highest you know whatever the highest actually is and it would just present information a little bit better right does that make sense yeah papers only so big yeah well yeah if you there are ways we will we will work out right people who are probably better at it than we are okay yeah i have one other question yes okay in the first sheet you hand it out yes it looks like um in 20 in the 2019 uh column yes that is about half of what was uh allocated in 2018 and i'm wondering is that a six month is that reflect six months or is that i believe it's less than six months so we will be serving that for the next meeting i think it's a little more than first quarter because we were just first quarter we had to die okay or we're going to have a big smile on that's right okay what about five months about five months okay so if we could i'd love to uh move forward on franchise fees and video providers um and you said you had a fairly brief update on that yeah so i have to be too brief but yeah i did a little research into this there was messachusetts implemented one and satellite providers uh about four or five years ago and uh it's outside the scope of my expertise so i did some review on it and talked to some people on it i think the better way to go might be to have somebody come in and do an explanation for us for 15 or 20 minutes as to what that was and what some others might be that would be acceptable to the body i would be very interested in that so um i can arrange for that yeah we should try i don't know if it'll be in our next meeting or it would have to be in the one after that a little more yes okay okay that's all i had okay great i just want to make sure i'm not not putting you up um so clay is going to um give us an overview of the map of cable franchise towns this can be a very quick item uh and do we have a copy of that actually is great just for the folks at home okay i'm going to do this for you thank you so this is a map that the department put together we look at all of the cable cpgs as you know cable companies receive a certificate of public good from the public utility commission to operate in specific towns so if you looked at concats cpg it would individually list every town in which they are authorized to do business but they would come to town saying to come back to the public utility commission to do that um just talking about uh cable franchise areas we're talking about the uh mls this that is the ml map this is the map i'm talking about this is the map we're talking about yes the uh we have this this is the only one that's the only map okay okay thank you just because a cable company is not or is branchized for town doesn't mean that there are any cable services in that town um we can also produce a map of where there's active cable plans so you can see but as lauren linn um mentioned earlier in meeting cable uh service uh passes about 65 percent of our state's buildings so can you can you say that one more time uh cable service passes about 65 percent of the buildings so okay meaning it's available if uh those homes people in those homes want to buy it doesn't mean they have to buy it right um but they could be connected right and so are these um pink is pink is nothing at all but there might be um service but not service to everyone right that's what you that's what you're saying in the pink there is absolutely no cable because the cable companies do not have uh the franchise franchise to operate in those in those towns so you can see the northeast came it has if you looked at um i don't think on bergfield i like to pick on bergfield um i think there may be three homes in bergfield that have cable plant going by it um if the con cast is franchise to offer service in bergfield doesn't mean they do or to the entire town and so most towns are like that at least rural towns um that doesn't mean that the town that has 100 access to cable it might have 60 or 30 or it depends um at con cast you can see the largest um followed by charter just the second biggest um some towns have two franchises um it doesn't mean that they compete directly or for furlington's probably the only place where cable companies are two cable companies are competing head to head for the same body of customers and then um you have this kind of other there are several small cable uh companies stow dunking cable and southern remote cable come to mind as uh tops them as well as a few cable companies that are just very small so that's all i have on this map that just shows you um not where cable companies are this map here it was actually produced by vermont access network um and this just shows the territories in which the amos operate so um amos uh operate in several they can operate i guess in different cable franchise territories they can they can share territories um often they are split based on the communities they serve so that just shows you where where we have amos and where we don't so there are communities that aren't really served by amos here's a tacked on that version that we'd like to see the whole thing at once um oh yes um go ahead go ahead uh so for instance shore shoreline more now uh are their service from new york at all like on those border towns um no if a cable company wanted to build anything in those towns they would have to come to the the public facility commission if there is a cable company selling cable for for money there um and uh they don't have a cpg that that's a problem but uh no the they probably are not receiving service from new york um and plus that company is going to go to the public facility commission first there are i i believe there is one in the northeast kingdom that went out of business so at one point there was cable service canaan not any longer so my question i think is for dat so i know that um in particular inshallah it's not entirely covered by by con casts so um there was a situation where community wanted to get cable in and because of the the low density of the uh development there uh con cast charged each resident that wanted to hook up a certain fee or putting that in um is that um construction fee or whatever it's called uh hookup fee is that is that covered by the franchise that one of the drug use of the cable company that is called by franchise fee listen you know what would you call that the franchise fee i think it's direct payment for services rendered so yeah it's not big any of service yeah melissa what's your last name pierce p i e r c d thank you i'm sorry melissa pierce is our manager of government affairs on my team here in vermont i don't believe it is a good question i don't i don't believe it is they're very careful they have heard uh because oftentimes so the the national average is about 25 homes past per mile that used to be the level for construction to be built uh we've gone as low as eight nine and ten here in vermont in some areas so what remains is probably very low density so as a result has a very high cost per mile and as a result of very uh long return on investment model oftentimes when there would be one two or three houses that are interested uh they would have they would probably have very low density so as a result the price for construction that could be presented to them would be very high so it would be unlikely that many of the residents would want to do that we have had some very successful partnerships with the state and the public private partnership room in the past five or seven years uh where we one of those is that one that we just inked last week was with uh cattle for non so we'll be doing some extension there in an area that traditionally didn't meet requirements for build out uh so knock on wood hopefully there might be some more of that if there is an infrastructure package out of of washington that could meet the needs of some very rural construction we had a very successful project that we did with kind of up in massachusetts as well through the mass broadband institute we were able to do some densities as well with uh eight to ten homes back from on so it was a long-winded answer but kind of wanted to give a general flavor for how planes extended and then I don't care if you mentioned the tariff you have a tariff on one yeah so specific money extension tariff that we abide by on how we have to what uh at what what level we would have to build uh and at what level we can then charge uh for a build uh so we comply with that and then we report back on an annual basis what what is built but those build out fees are not included in the revenues that you can't talk about it don't believe so okay don't believe so that's my question we might have more to report in our next meeting on build out questions clarifications anything else you wanted to add that is all I have at this time thank you so I want to check in with the check in with the committee here do folks need a break to stretch get a drink use the bathroom or should we move on keep going okay I wasn't just interested I had to send a quick text to somebody that I missed a call so I apologize if someone saw me text no that's all right all right so I believe next up we are talking with our legislative council we're just going to come up yes we can Karen if you don't mind moving your microphone over thanks great role those with our legislative council here the state house who's going to talk to us about the proposed FCC report order that came down recently good morning Maria good morning thank you for joining us and happy to be here yes Maria Royal legislative council so you've heard about a couple of issues that are impacting the funding for pay taxes change in accounting practices I think you've heard about kind of declining in cable service cable television service revenue generally I think that's nationwide I'm not mistaken also some increases in capital costs whether it's the archiving and all of your software so what I'm going to be talking about are some changes proposed changes at the federal level specifically through the FCC that impact funding that's available so the FCC has a very extensive history dealing with rules and challenges to rules about specifically the franchise fee which as you know is capped at five percent what's included in that fee so extensive that it goes back to at least 2007 at that time the FCC issued two orders basically saying that cable operators could deduct from the five percent fee any cable related in kind contributions so that might include something like three-year discounted service to public buildings cable service to public building that those expenses could be deducted from the total amount of money that's available over above that so that issue there were some petitions to reconsider and I'm limiting myself the the orders did include other other things yes absolutely so I'm just talking about the fee and so and you said so 2007 two orders or two orders and do you want to tell us what the second what or do you want to the second one and basically I think just explain that though the rules in the first order would apply to incumbents and not just new entrants and okay I think for purposes of the discussion that's maybe not quite as relevant but but I think that's why there were the two orders the first order was challenged in corporate those petitions were denied the second order was challenged there were motions for reconsideration filed as early as three years in the early 2008 but the FCC did not issue a reconsideration order until 2015 so a lot of time has elapsed just to get to the reconsideration order but in short I'm summarizing a lot of information basically the FCC in 2015 reaffirmed that cable related in time contributions can be deducted from the 5% that order was appealed and there was a circuit opinion both the most recent FCC order which I haven't talked about yet and the 6th 3rd 3rd opinion are online on the web page should you desire to read them and basically the court said that the FCC failed to adequately explain the scope of the in-kind contribution what does it mean and the reason why I'm giving you all this background is because that gets us closer to today and the issues of today so in 2018 last fall the FCC issued a notice of final proposed rule making where it greatly elaborated on what constitutes an in-kind contribution and just recently on july 11 issued a proposed final order which has not yet been adopted but it's likely to be adopted in August so that sort of frankly covers a lot of history and this is I think typical for the communications industry that there is a lot of back and forth and there's a lot of litigation and a lot of jurisdictional issues and they're constantly evolving and playing out in the courts in the FCC and then the states are responding so what the in terms of deducting from the franchise fee in-kind contributions are they is that deducted before the franchise fee is assessed or is that a deduction from the if the five percent is calculated based on revenues and then the in-kind contributions are deducted after that I'll defer to um I mean that's part of the general the table coming to the department to you know kind of flush it out a little bit more now it actually takes place on the ground so yeah so is that after after the fact deduction yeah we don't have any in-kind deductions that take place today okay so have they been estimated no estimates and I should just mention that the in-kind does happen but like there are in-kind contributions correct but they just haven't been deducted and they have they've been monetized or are they monetized to uh we have not been so monetized in the sense that if you look at an individual in-kind uh grant you could determine what the value is but monetized from the sense of what it how it would impact the five percent payment in a particular franchise area so for instance free service free video service to a particular school that might have been required in a franchise in western massachusetts we can say what that value would be but whether or not what its impact would be on franchise in franchise fees has not been determined and is it voluntary for the company for to to make these changes to deduct from the in-kind contributions as it's written out i think it would be subject to the order which my understanding is that it would not be voluntary but uh i would have to defer to you i haven't i haven't done a full review of what came out last week so that's all can you just say that doesn't happen in room one not yeah that's right that's what's up in luxury yeah so and as the proposed rule reads now just for some clarification cable operators would be permitted to deduct from permitted permitted to not required to i'm sure they they wouldn't have to if they didn't want to but i presumably i'm just curious what the wording was negotiation okay bargaining for use of the right of ways right and but it is clear that the rule would be applied prospectively so that there would be no going back to try to recoup any okay past funds so um the other kind of issue that's looked at is um and you've heard mentioned of this uh the capital costs that are over and above the fee um the FCC made clear that both construction related and non-construction related contributions um can be included in capital these capital costs so you could have things obviously a construction of high studios um but programming equipment such as cameras potentially the archive software that's required um would or would not be allowed would be included in capital costs that are not subject to the five percent cap in other words they wouldn't be subtracted from the franchise fee they're exempt so there's a franchise fee up to five percent and then there's the capital right and so what the FCC is saying here's what we consider to be capital and that is safe in other words it cannot be subtracted from the five percent these costs that we define as capital cannot be subtracted from the franchise fee if they're provided income or if it's just period oh sorry so thank you you're doing my 30 hours explaining no it's just it's later so there's the franchise fee and then there's the capital which are two things that the cable acts at half a percent right well in vermont up to half a percent but two no cap so the concern was can these capital expenses also be deducted from this franchise fee and the FCC says no capital cannot be and this is how we define capital it includes these things like equipment or construction construction costs yeah construction and non-construction like equipment and transport which is getting the programming from the studio to the cable right head end i think is what they call it but so so what the real question was from the peg stand point was what could be subtracted from this franchise fee one of the questions that was on the table was the cost of channels and this was on the table and the FCC has taken that off the table they said this is we don't have enough information to know about this question so channels cannot be subtracted from the franchise fee for now yeah you're absolutely right they said that the record was not complete to determine whether they should be channel capacity should offset the five percent and if it does how do you value channel capacity so right now the FCC says the status quo remains which is that that capacity is not valued in views to offset but will likely be looked at earlier and can you say what examples examples of what could be subtracted from the franchise fee that the FCC defined what those are is it like courtesy internet service or current courtesy cable service or i'm not i'd have a little more okay more of us late i mean uh the proposed order is about 57 pages and they may very well have been more specific i think the one example that i kind of noted was you know free of discount discounted service the public facilities but whether they're in kind and there are to be values at market value bear with the value i believe so i think that tended to be how yes how they're going to value things whether that creates some complexity or difficulty for example channel capacity or not i think that's part of the problem this is an accurate determine who determines that and how can it be reviewed i mean the back way of what what's channel capacity do you want to speak to the channels capacity just channels so the threat was that okay we would have to pay for channel 17 oh i see just for half only just for having access to it okay as if it right it wasn't clear that there was so much lack of clarity that i think maybe at the right ruin this was like what what would be your charges for and how much would it be and this could kill us right yeah yeah i mean we didn't know if we just assumed so then what's also in the order that i think will directly relate to some of the issues that you're considering in terms of possible other sources of revenue fcc didn't go on he was very specific about kind of with respect to its preemption authority what the local franchising authorities can and cannot do in terms of collecting additional revenue whether it's on cable service or whether it's on non cable service such as internet access or telecommunications access avoid and i think what's most interesting here is that the fc was very clear that it's ruling was confined to the franchise fee and the use of the right-of-way this bargain you can use the right way we're going to charge you but then said that the space uh do you have through its traditional police powers the ability to enact to tax to have broad-based taxes revenue raising taxes but it's not entirely clear whenever you're talking about economic burdens on communications providers at what point are you running into conflict with the fcc's policy of non-regulation of not imposing economic burdens on the internet or other communication services so there's a competitive market and it's a thriving and if you are um kind of have broad-based taxes or fees for the use of right-of-way doing so in a non-discriminatory competitively neutral way so for example if you look at taxing the right-of-way within the right-of-way uh the state wouldn't want to be duplicative if you're already taxing cable services but also you might want to consider well you might be capturing this group of communications providers that has facilities in the right-of-way but are we capturing the satellite providers and so visibility in the state's jurisdiction to to regulate and uh you know other than just income tax or corporate tax you know really broad you're going to get into these very specific issues of making sure that the entire industry is kind of treated fairly or neutrally right so universal service fee and u.s. of charge fall under the taxation authority um so the fcc talked mostly mostly about the local franchising authority's ability to tax but what broader in terms of saying well the states do have your traditional business powers but yes so the usf the universal service state usf does fall within the state's general authority to raise revenue um the scope of the universal service but right now on technicians right it's a separate from cable television service so this would be your your telephone bill and you pay a flat two percent fee so the usf applies to title two coaches tell us communication services which are more like common carriers right cable is regulated title six more like a publisher right sort of not a common carrier so usf is on the traditional the phone business so this title title six uh prohibited the use of something similar to usf type one type yeah title six is equivalent to usf is this franchise fee so the common good the public benefit like each one of these titles have a public benefit but okay so title six pertains to caving cable radio services where does the internet fall on title one title one which is a information service and it's um it doesn't have a comparable public benefit um condition like the usf or french sb which is kind of interesting but it's you know it's it's considered this might actually be this is a big question but actually helpful because i didn't know about this really till yesterday i was trying to figure it out so there were proceedings in the sec called the computer increase increase and they said there are two kinds of services there are basic services and enhanced services basic services kind of like telephone you know just the the line with no content on it just the fact is and the enhanced is um software going over the line valuable content on the line and so they made this distinction between basic and enhanced and that distinction has made its way into this title one and title two so title one is the basic it's just the carrier and title two i mean sorry title two is the basic common carrier and title one is this information services it's got content on it it's and the people the companies that send it are more like publishers than they are like just the common carrier operator so they have the first amendment rights that accrue there you know there's a bunch of stuff that goes with that title one and so the internet it was decided it's gone back and forth is the internet just a pipe or is the internet an information service and that's what this debate back and forth so most recently when the net neutrality rules were um taken back the internet was moved remained at title one information service and the people the companies that control it were like publishers then telephone companies to be clear in access to the internet so internet access services or that's the proper need but there's also a federal law that prohibits the taxation of internet access services as well so there's a so there could be there there can't be a u.s. for a righteous people right then they're well i had to study the well on internet access services so there are other title one services uh lauren love mentioned that the computer inquiries when the sec was really trying to do is not regulate idm they didn't want to regulate these huge multi-room computer systems that i began was creating in the 60s they wanted to stay away from them that's why they did that but the the federal law that prohibits the taxation of internet access services is just that it's a simple very straightforward law that the internet tax freedom yes freedom from taxation actor might be confusing that than other well there's the internet there's the internet tax freedom act is the one you're talking about versus the internet freedom act which is the neutrality you know yeah well yes there are i think a half of the law is that it's a library of the library of the okay and the franchise the franchise view is considered a tax in that thing it's a fee on cable service well i meant it could there be a franchise fee or some is that considered to be tax though how does it look for rea next question it depends what it's used for i mean there's a whole body of case law and difference between a tax and a fee so it depends what is a general revenue raising and it's more like a tax is it a fees commensurate with regulatory authority or use you know so it would depend so is there any way to look one thing that lauren glen just said was there's no public benefit condition on the title one services is there any way to add that without or would have to be like have fun that or would that be considered any way doing that anybody do that would that consider be considered a tax i think that's going to be an issue of you know the fcc's definitions and determining what the policy is with respect to the interest the internet and broadband and right now it's a policy of non-regulation okay and there are challenges i mean all of this is being mitigated and there are challenges about you know is is that has the fcc gone too far in preempting state authority to exercise its traditional police powers in the interest of public welfare you know is is internet more like a utility what is it used for you know and should there be i mean these are all major policy issues and they're all being litigated so that are there other states that implement something that's in litigation now or when the order itself has been challenged the fcc's restoring internet freedom order um where it reclassified broadband internet access as an information service to be free of federal or state regulation okay um and then that to separate federal act um that prohibits states from taxing the internet so there are a couple of federal laws but that fcc order has been challenged including for my year 22 state attorney generals who have challenged the order on numerous grounds both procedural and substantive and i i don't know the status of that hearing maybe in the spring so what we're talking about telephone cable video video uh internet um those are all services and they're governed by these different titles by the fcc and well regardless of what type of service is being provided every service requires infrastructure whether it's um cable lines fiber optic cable um satellite or anything else can the distinction be made legally between the authority to attack certain attack uh the tax services versus the authority to tax infrastructure uh you can make a distinction but what the authority is is going to vary based on the service so that it's an information service like internet access then the state authority is very limited right so can you can you look at the infrastructure as being regardless of what the service has been provided as as something that that can itself be taxed for instance utility part for instance the satellite dish our personal property is taxed uh in all the jurisdictions that we have so it's a personal property assessment for the wires for the electronics that's taxed at the local level across the country as well do you pay generally applicable taxes was there something that's my you know i'm just going down that particular path of thought Maria what else do we need to know and all we need to know a lot I mean you know you're having a discussion about what is the impact on current revenue right what's going to happen and want to do the policy matter applying additional revenue so actually so it sounds like there are certain avenues that are basically closed across in terms of looking at that i think there are there are some that are closed there's some that's just not clear right and you know that it might not be clear and it's just you know a lot of it i mean i can spend months like really trying to understand and come up with different arguments for doing whether you actually you know if you do something that's in the gray area is that going to be challenged and then are you going to right you know so i think there's always that risk unless it's absolutely right now well certainly okay this we can do so i think there are a few ideas that come up that are worth worthy of us just looking into it more one of the things that we've talked about where's the poll poll poll related fees like fees that you can attach to the owners of the polls for the users of the polls so there's a that's one area the agency transportation right of the way rental so i talked to the agency about that a little bit so there's that's worth us looking at a little bit more and these may maybe for close to us within 15 minutes of talking about them but i think they're useful to know about because they're all relevant to this discussion of the state's authority over its rights of way and what we can and cannot do would be a good thing to throughout all know by the end of this process usf there's policy implications and marina we're talking about that a little bit about whether you would add a fee to usf but usf really isn't so it's worth thinking about but it's not strictly this title free so anyway there are a few items there that just be worth us knowing a little bit more about this if there's fees or rental or taxes and then there's the road that you've gone down before which were the cloud tax and you know which had which you know about because you've already been through it so you know what the pros and cons are it might just be actually good to show update us on whether that's even viable as a way forward and i mean again i'm not advocating for no no no everything has to be on the table yeah so that we can we have to gather the information in order for us to be able to sit through and then the other thing i would say in response to what you raised before reminder interactive tv you know since it was closed has been there was a committee on it we wrote a a dissenting report on how to actually revive it using the access centers so there's been discussion about how this resource might be revived and that the infrastructure of the pegamos in the state of ramon could be used to serve that purpose and in a cost effective way it would be necessary so you know that's not strictly a oh is there an alternative to the franchise being but it's oh is there a partnership that actually would serve the state's requirements and utilize this infrastructure because i think that's another question in front of us we have this resource could we be doing other things with it we haven't thought about do we still have that resource it's as a primary purpose when i say the sites this resource i mean the peg infrastructure not that the vi team it's gone right although yeah it's all gone yeah it does it's but to have two-way interactive meetings is not impossible to recreate i mean i'd be done with small piece of equipment like that or i'd be done in the studio facilities of the access centers and having a proper budget who could make that happen that might be something that wanted so we could talk more about that period so we have about 12 minutes left and luring glad you did a great job just now of bringing up some topics that we need to get some more information on i'm wondering what else i'm going to circle back around and answer your questions earlier and other things that are bubbling up in people's mind that we need more information on witnesses that we want to come in certainly you're not going to be limited by this brainstorm session we can certainly continue emailing after this meeting to get the agenda topic topics for next time i might be sure to tell the folks who are watching on order that if you want to come testify we're going to be starting each of our meetings with 15 or 20 minutes of public comment and our the information about our meetings are posted on the legislative website so what other topics are on your minds that we need to get down on paper so that we can figure out the next couple of things i'd actually like to hear a little bit more about AMO governance and how will AMOs operate and how they decide to how they make decisions about spending money we don't actually regulate AMOs so it's not something that we necessarily look at okay so to be curious to see how how the the revenues that they received are spent maybe in that discussion uh one or two reviews of an annual budget and maybe also how coordination occurs with the AMOs at the tip of those yes that's important just like examples of resource sharing in okay and maria you should feel free as our legal counsel to weigh in on topics that you think have come up in this discussion today that we should perhaps delve into a little bit more and we might uh the three of us will keep you informed we might be better positioned at our next meeting to give an update on the cbg process okay for podcast correct yeah for podcast is that what you said yes is appeal yeah so i think um probably the best way to handle some of these questions would be to invite some witnesses yeah absolutely so and um those of you there are several of you at the table that probably have in mind who some of those individuals are and should feel free don't need to say it now we can talk afterwards about who we should fight who we're here for um andrea do you feel like there are bits of what you mentioned earlier that they're not represented in this list that we should i guess uh you know how to have this play out but sort of what are the actual options i know you know the legislative direction is consider alternative regulatory and funding mechanisms but a brainstorm of you know what what could these actually be right do we have any yeah i mean that's sort of what i like and that that's where marina is going to be critical to say right it's like there's a little actually you can actually do that and so i think that would be um really useful for all of us what are our actual options going forward and so that we can really focus on those options and not get sidetracked i think that just i think the sooner that we could do that okay the better you know so that the next meeting would be yeah and i think lauren let's list um sort of goes to that question as well it's like let's even if it's a few minutes of having someone come in and say you know here's the background you can or can't do this and then we'll be able to call through um well i wonder if green mountain power is there any value to have green mountain power come in on the pole for pole attachments or is that more a utility person should talk about pole the utility is sort of generally owned by generally owned by the poles right they own our poles but uh either well there's a change going through with some of the ownership but we don't the providers kind of cable providers don't own any poles right exactly we're ready to see our poles okay and some of that has been flexed now in front of the commission and our gas flux but being decided there's a lot of pole yeah 21 years in the industry every year we've been talking about poles there's uh just as a quick summary um proceeding about how we calculate the pole retrofit there's a proceeding about how companies can get attached to poles and then there is the pole sale bucket that Dan mentioned that's consolidating selling its poles to gmp which is i think we can all agree a good thing fueling your own pole for instance if they're in that territory like if a pole is in the gene yes most of their poles they actually own jointing so it's a matter of transferring the pole ownership to to gmp and so to um Lauren Glenn's question do you think clay would be of use to have you may want to exhaust all of the other avenues before you go down the pole because we're gonna have we're gonna need to new legislation to make this a decade long okay um but i wouldn't touch poles unless you absolutely have to okay this is worth asking how many poles there are what's that it's a worth asking how many poles there are uh i want to say like two two fifty maybe two fifty thousand two hundred fifty thousand yeah i have to get you an exact number there are there are many poles somewhere in the pool when you're done they need to be removed so of all kinds of coalitions so that moves down on the priority list right exactly did you still think it was a good idea to have Peter Blum come and talk about the internet tax premium you could certainly bring him in to get his perspective because he's looked at that i mean it would be good for us to understand the what the history and what it allows us to do and if there are any asterisks there might be yes have you reached out to him and then the um i think i was i was going to talk with Maria just a little bit more about what the agency of transportation guys said to see if it makes sense to bring him in so he was talking about this rental right away rental but it isn't i just need a little bit more okay conversation with Maria shorter to recommend whether that's a way forward if that's okay just to sort through what he said whether it's a chief of right ways no yeah there's a chief of right ways and i talked to him exactly he has no idea how excited i was that there was some of that job then you met um and then the usf fund again i'm not sure if it's a non-starter given right what it actually regulates so yeah and some of these things might be dispensed pretty quickly but for us to just feel like we have checked the box like can't go down that road so that we feel like we've done due diligence i think would be you know Maria other things that you're or Karen did iserian i did not actually just scratch my cheeks okay all right so thanks to everyone i know we're all really busy this is a very important topic for so many monitors i appreciate your your timing energy to this and so once again if you are interested in testifying public comment please um let us know and we'll schedule you for one of our next meetings senator can we confirm that yes i'm about to do that you are seeing my thoughtful what i've got is august 22nd thursday same time 10 to 12 30 here at the state house and so about you want me to send that as a meeting invite to the committee so it puts it up on people's elbow calendars 12 30 on august 22nd here yes please special thanks to mike ferrott yes and to maria royal and to our council from jfo who's here thank you very much for your time very much appreciated okay thank you