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CITY OF RIVERSIDE <br /> <br />CITY COUNCIL MEMORANDUM <br /> <br />People Serving <br />People <br /> <br />Riverside: <br /> <br />Ali-America C~ <br />IIIIIi~ <br /> <br />1998 <br /> <br />HONORABLE MAYOR AND CITY COUNCIL <br /> <br />DATE: April 13, 2004 <br /> <br />ITEM NO.: 26 <br /> <br />SUBJECT: CHARTER COMMUNICATIONS BASIC SUBSCRIBER RATES AND <br /> PROGRAMMING <br /> <br />BACKGROUND: <br /> <br />At the December 3, 2003 City Council meeting, the City Council referred the matter of cable rates and <br />basic level programming to the Finance Committee for review and discussion. The purpose of the <br />referral was to address the issue of cost of subscriber rates for Riverside subscribers and explore the <br />possibility of providing basic level "antenna" service for residents who cannot receive over the air <br />reception due to geographic features of the city. <br /> <br />The following information was provided to the Finance Committee at its March 22, 2004 meeting: <br /> <br />Rates Regulation <br /> <br />Rate structures of cable providers continue to be a concern among Local Franchise Authorities (LFAs) <br />across the country. LFAs may regulate rates for only the basic level service tiers. The basic level service <br />tier is the service tier that contains our local broadcasts, public, educational and government channels. <br />However, the Federal Communications Commission (FCC) has found that if effective competition exists <br />in your community, the LFA may not regulate the rates for even the basic level service tier. Additionally, <br />the rates of certain small cable companies are never regulated. The rates for any tier of service other <br />than the basic services tier, and for any pay-per-channel programming (for example, a premium movie <br />channel) and pay-per-program services (for example, pay-per-view sports events) cannot be regulated by <br />LFAs. However, in general, cable companies may not require a subscriber to purchase any additional <br />services other than the basic level service tier. <br /> <br />The City of Riverside, and other LFAs in the region, unsuccessfully attempted to regulate basic tier cable <br />service rates in the late 1990s, asserting there was no effective competition to cable television. Ina <br />Memorandum Opinion and Order adopted on May 8, 1997, the FCC found that effective competition <br />exists in the City and County of Riverside, and the City of Norco. The ruling concluded that, because <br /> <br />26-1 <br /> <br /> <br />