REPORT ON CABLE TELEVISION-RELATED NEEDS …

REPORT ON CABLE TELEVISION-RELATED NEEDS ASSESSMENT FOR THE CITY OF FORT COLLINS, COLORADO

By Constance Ledoux Book, Ph.D. Telecommunications Research Corporation

and Thomas G. Robinson, President Dick Nielsen, Senior Engineer Krystene Rivers, Research Associate

CBG Communications, Inc. Thomas Duchen, President Robert Duchen, Vice President River Oaks Communications Corporation

Lou Karrison, CPA Karisson, LLC Carson Hamlin

City of Fort Collins, Video/Media Specialist

February 21, 2014

Fort Collins Cable TV Needs Assessment

CABLE TELEVISION NEEDS ASSESSMENT IN FORT COLLINS, COLORADO TABLE OF CONTENTS

Executive Summary

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Section Reports

A: Residential study of citizen experiences with Comcast cable television.

25

B: Communities of interest and other stakeholders' needs as related to cable television. 57

C: Public, Education and Government (PEG) needs assessment and a technology plan

for future needs.

81

D: Technical audit of the cable television system.

150

E: Financial audit of the franchise's financial requirements.

179

F: Current trends in cable television franchises.

188

Attachment A: Marked Random Residential Survey Attachment B: Online Residential Questionnaire Findings Attachment C: Fort Collins PEG Access Equipment Projections Attachment D: Fort Collins Comcast Physical Plant Audit Issues Attachment E: Fort Collins Financial Audit Document Request

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Fort Collins Cable TV Needs Assessment

EXECUTIVE SUMMARY

Telecommunications Research Corporation (TRC), working with its team partners, Tom Robinson and Dick Nielsen of CBG Communications; Tom and Bob Duchen of River Oaks Communications; Lou Karrison, CPA; and Carson Hamlin, Video Engineer/Media Integrations Specialist with the City of Fort Collins, has conducted an extensive cable-related needs and interests ascertainment in the Fort Collins franchise area. This work included the following studies:

A. Residential study of citizen experiences with Comcast cable television. B. Communities of interest and other stakeholders' needs as related to cable television. C. Public, Education and Government (PEG) needs assessment and a technology plan for

future needs. D. Technical audit of the cable television system. E. Financial audit of the franchise's financial requirements. F. Current trends in cable television franchises.

This ascertainment has been conducted as part of cable franchise renewal proceedings with the local cable television provider, Comcast. The current franchise is set to expire March 16, 2015.

TRC and its partners have decades of experience working with local governments on cable television issues, such as, needs assessment, PEG Access, technology, franchise fee payment audits, telecommunications, and other matters. We have performed numerous community, PEG and I-Net Needs Ascertainments, as well as PEG Access, Technical and I-Net reviews and audits in preparation for franchise renewals.

The full results of the needs and interests ascertainment are presented in detail in the attached report. Our findings offer a wealth of information for Fort Collins regarding issues of significance to the citizens and organizations in the Fort Collins franchise area, related to cable communications, and the ability of the cable system and Comcast to meet demonstrated needs and interests. The

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Fort Collins Cable TV Needs Assessment

key findings, recommendations and observations discussed in this summary and in the report are based on an extensive data collection including, but not limited to, the following:

A written residential survey on cable-related needs and interests, randomly administered to 4000 randomly selected households in the Fort Collins area with a return sample of 701 or 18%. This provides a margin of error of ?3 percentage points.

An on-line questionnaire which resulted in a wide variety of residents' participating and a response rate of 868.

A well-attended public hearing in October 2013. Internal and external stakeholders focused discussions that again included a variety of

representatives from different community organizations, government agencies and businesses. Interviews with educational organizations, including representatives from Poudre School District and Colorado State University. Focused discussions, interviews with staff and on-site visits to current PEG Access programming production and origination locations. Online questionnaires with Fort Collins stakeholders that reached more than 200 citizens to detail their business, non-profit, government and educational current and future needs related to cable television. A review of a variety recently negotiated cable television franchises to offer perspective on what is happening around the country between local franchising authorities and cable television.

The analysis of this data enabled TRC and its team partners to develop a series of findings for Fort Collins to consider as it plans for renewal of the cable television franchise with Comcast. The following recommendations and observations are offered to the City for its consideration.

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Fort Collins Cable TV Needs Assessment

A. Residential study of citizen experiences with Comcast cable television.

The following series of observations and recommendations emerged during the random, residential survey of cable television needs and interests in Fort Collins, Colorado. The survey, conducted in October 2013, surveyed 4000 randomly sampled homes and had a response rate of 18% or 701 returned surveys. This provides a margin of error of ?3 percentage points. The following observations and recommendation are offered for franchise renewal consideration:

1. Subscribership and Non-Subscribership ? The City of Fort Collins has a strong engagement with Comcast services with 53% of households participating in this study reporting they subscribe to the cable television services offered. This is consistent with the national average where just over half of households in the United States report subscribing to cable television.

Among non-subscribers to Comcast in Fort Collins, the primary reason is related to the cost of service (46%). Thirty-seven percent (37%) of non-subscribers reported subscribing to a competing satellite service (17% of all respondents surveyed). Overall the findings suggest that to further engage non-subscribers as Comcast moves into franchise renewal it would need to offer new/alternative programming package options at a variety of more affordable rates. This would address concerns about costs, rate increases without perceptible change in service levels (price/value concerns) and a la carte channel selection. It is important to note that 28% of non-subscribers to cable television service do subscribe to one or more of Comcast's other products available in Fort Collins (Internet, telephone or home security).

2. Subscriber Satisfaction ? Sixty percent of cable subscribers (60%) are generally satisfied with their overall cable service, with 43% indicating a positive trending score and 17% indicating "very satisfied." The other 40% of subscribers trend negative with 13% of these "very dissatisfied." While these scores show a significant negative opinion, they

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