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MR. PARDINI: Hi.
COUNCILMAN COHEN: Why don't you proceed. And you're technically in a panel all by yourself. Go ahead, Mr. Pardini.
MR. PARDINI: Okay. Good afternoon, Mr. Chairman and members of Council. My name is Ed Pardini, and I'm the Area Vice President and General Manager of Comcast Cablevision of Philadelphia, Incorporated.
I appreciate the opportunity to appear before you today to discuss the creation of a municipal corporation for the purposes of providing public access television to cable customers in the City of Philadelphia.
Appendix E of the Franchise Agreement outlines the obligations of the cable operator for each of the four franchise areas in the city. Because Council envisioned a citywide public access channel, the obligations of each operator in each area are the same. These obligations include:
Number one, that up to five channels be allocated for public access programming. These channels are currently utilized by Comcast Cable to provide additional basic cable services, such as C-Span 2, Pennsylvania Cable Network, Trinity Broadcasting Network, Eternal Word Television Network, and the TV Guide Channel. These channels are provided to customers in the absence of public access programming by the municipal access corporation.
Number two, that upon the establishment of a municipal access corporation, Comcast would contribute funding in an amount ranging from $75,000 to $125,000 per year, per area, as directed by City Council, or a total of $250,000 for Comcast Areas 3 and 4. As a matter of federal law, these operating funds are deducted from the total of the franchise fees payable to the City, which currently go to the City's General Fund.
Number three, that Comcast would provide funding of $250,000 per area for the creation of two neighborhoods access facilities in each area. Each neighborhood access facility is to be equipped with a production studio, three color cameras, two VCRs, lighting equipment, a video editing suite, and portable battery packs. In addition, Comcast has agreed to contribute $50,000 to the purchase after mobile van and two electronic news-gathering cameras, a video switching device, and two VCRs.
The total initial capital contribution for area public access facilities is $300,000 per area. Comcast agreed to fund another $150,000 per area for replacement equipment over the life of the franchise agreement.
Obligation number four was that Comcast would contribute $150,000 per area towards the establishment of a citywide public access center, which would house a main studio and control room, as well as offices for reception, employees, equipment repair, and production for the access corporation. Comcast agreed to further contribute an additional $75,000 per area for replacement equipment over the life of the franchise.
The spending requirements outlined in the agreement represent capital commitments of $675,000 per area over the life of the franchise and annual operating subsidies of up to $150,000 per year. With an average of 85,000 cable customers each in Area 3 and Area 4, the capital requirements amount to a cost of 53 cents per customer per year for capital, or roughly between 4 and 5 cents per customer per month. Operating subsidies of $125,000 per area per year represent a cost of $1.47 per year, per customer -- or just over 12 cents per customer per month. Total capital operating contributions for public access would amount to $2 per year, per customer -- or between 16 and 17 cents per customer, per month.
It should be noted that in franchise areas of the city with fewer customers, such as Area 2, Wade Cable, the per-subscriber cost would be proportionately higher. In effect, cable customers in one area of the City, such as West or South Philadelphia, would be paying more than cable customers in the Northeast for public access programming.
The operating subsidies of up to $125,000 per year, per area, or $500,000 in total, are currently in part of the over $8 million that cable operators in the City of Philadelphia pay in franchise fees each year. These franchise fees are currently directed to the City's General Fund.
Slightly more than half of the residents of Philadelphia enjoy cable television service. The establishment of an access corporation would have the effect of requiring non-cable customers in the City of Philadelphia to subsidize the public access viewing of those residents who elect purchase cable television service.
Should this committee and the full Council decide to incorporate a municipal access corporation, Comcast Cablevision of Philadelphia, Incorporated stands ready to fulfill all of its contractual obligations, as outlined in the franchise agreement. As a leader in the Philadelphia civic community and as a cable operator recognized for its outstanding services, Comcast has prided itself in its absolute compliance with all of the terms outlined in the franchise agreement over the last 15 years.
On the issue of public access television, let there be no mistake -- Comcast will cooperate and fulfill its obligations to the letter of the law.
Mr. Chairman, members of Council and committee, I thank you for your time this afternoon and stand ready to answer questions you may have.
COUNCILMAN COHEN: Thank you very much, Mr. Pardini.
And Mr. Schwartz -- Mr. Pardini, we'll ask you to stay because questions will be directed when the panel is completed.
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