06-07-1979 Transcript BOARD OF SUPERVISORS
TRANSCRIPT OF MEETING
June 7, 1979
Supervisors in Attendance:
Mr. E. Merlin O'Neill, Sr., Chairm~n
Mrs. Joan Girone, Vice-Chmizman
Mr. J. Ruffin Apperson
Mr. C. L. Bookman
Mr. R. Garland Dodd
Mr. Nicholas M. Meiszer
County Administrator
Staff in Attendance:
Mr. Steve Micas, County Attorney
Mr. Bill Howell, Budget Analyst
The Cable TV Public Hearing was held at the Courthouse at 7:00 p.
(EDST).
O'Neill: The meeting will come to order. I am going to read the
procedures to be followed tonight. All of the applicants, I unde~
stand have had a copy of this for thirty days or so, and I think
that there are some available for the public.
At the public hearing, each applicant will be afforded an
opportunity to elaborate upon or clarify (but not modify) its
proposal with an oral presentation before the Board of
Supervisors.
The formal presentation will be confined
of the applicant's proposal. No comments
to other proposals will be allowed.
solely to a discussi¢
or criticism relatir
3. There will be no interruptions during the presentations.
4. The order of presentation shall be the same order in which th~
proposals were submitted. They being first, WOMETCO0 second,
Continental; third, Storer. '
Each applicant will be allowed 30 minutes for its formal pre-
sentation followed by a 15 minute period for questions. The
consultant shall ask questions first followed by the Board o~
Supervisors and staff. '
Following the formal presentation, if any applicant feels tha
an oral presentation significantly modifies the written pro-
posal submitted, the applicant may ma~ke note of that fact by
submitting a written objection to the County Administrator.
The County staff and consultant will comment on the objection
at an appropriate later date.
7. After the formal presentations, each applicant will be allowe~
ten minutes to make any comments it deems appropriate in
reverse order of the formal presentations. That order being
first~ Storer; second, Continental; and third, WOMETCO.
8. At the conclusion of the rebuttal period, an hour shall be
available for citizen input. Any person speaking should state
that he has no direct or indirect financial interest in any of
the applications.
9. The Board, we hope, would award a franchise at its next
regularly scheduled meeting on June 13, 1979.
I might modify that last one, if the Board is ready to make a
decision by then, by June 13, if not it could be later.
Gentleman in Audience: I would like to discuss that at the end of
the meeting.
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O'Neill: We will not know until the end of the meeting, and then
the work session scheduled between now and the 13th, then we will
know whether we have a decision or not.
So, moving right along, the first applicant, or the first person,
I believe the consulant, Barry Babcock.
Babcock: Mr. Chairman, Members of the Board, my name is Barry
Babcock, I am from Telecom Engineering out of St. Louis,
interestingly enough, Chesterfield, Missouri, and I brought
with me tonight, Mr. Robert Brooks ~who is a principal in our
firm and is a registered engineer, and this big fellow who has
an engineering degree and who concentrated on the financial as
of our analysis. I would like to make a few brief comments this
afternoon before we get started on the presentations. To give
you a little bit of overview as to what is going to happen this
evening, throughout the evening we will be referring to the
applicants as Storer, WOMETCO and Continental. This is the name
of the parent company. I point this out because I think it is
important to emphasize you are here tonight to see the principal
and those chosen representatives from the parent company and I
to emphasize that you are dealing with these people and you are
dealing with those companies. They are the people who you will
ultimately decided to invite into your community as a business
partner and they will hopefully be here for many, many years to
come. It is kind of important to think of it in those terms.
I might say that in terms of financial capability of these three
companies, there is no doubt in my mind that they are all perfectl
capable of financing the projects that they have proposed. There
is very little difference, in fact there is no difference in the
capability. The financial capability, to begin with they said
they will do. I would go further to say that there is very little
difference in their levels of experience, their management
experience in cable tv. All of these companies are what we call
multiple system operators. They have many, many systems throughou
the United States, they have all been around for a long time,
and they operate many cable systems. The level of management
and experience is pretty much evened out. I do not think that
is particularly important to you. The three companies do offer
slightly different levels of technical plant, cable plant, to the
County of Chesterfield. I think I would describe it in the
following manner: WOMETCO offers what is in essence current
state of the yard cable system, which is a one-way system
providing a number of channels, that number is something like
thirty or thirty-three channels to the individual television sets
in Chesterfield County. They are using current state of the yard
technology. It is good equipment. It is providing a system
which is a system which should be provided to a community of this
size. It is a good system. One step above that is Continental
which offers a cable tv system which essentially, is identical to
WOMETCO except that, and let me say I am speaking in very general
terms now, the difference is that they have proposed an immediate
two-way capability. Now Continental does not propose to use that
two-way capability from the individual home.
Excuse me.
Babcock: Yes, Sir.
What is a two-way capability?
Babcock: I am sorry, let me back up. Alright, one-way capability
is sending signals from a hub or a central station out to the
individual tv sets. Cable tv today, has the capability, to also
send signals from the individual subscriber homes back through
the cable system to other locations or a central location.
Specifically, Storer is offering to the citizens of Chesterfield
County, an active two-way system whereby if you choose to have the
service, and its an additional cost, you can have installed by
way of your cable television system, security systems in the home.
It involves the installation of additional equipment, its an
extra chNrge, its in a sense separate from the basic cable system.
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As I started to say, Continental is in-between because they are
offering the immediate capability to use a two-way system to be
able to send those signals back down stream towards the central
location. But they are not offering to do anything with it
right now, they are not offering to activate it from the
individual homes. So you have WOMETCO that has the capability,
but no electronic gear installed for two-way, you have Continental
who will have the gear installed, but not used, and you have
Storer who will have the gear installed and they propose immediate
capability to use that for anyone who chooses the extra option of
having the home security system. That is a brief overview of the
technical side of it. I might say that as far as the pictures
that go into someone's house and appear on their tv sets, these
systems will all provide high-quality pictures. You would not be
able to tell one picture from another on the basis of technical
design. They will all be extremely high-quality pictures. There
is no differentiation there. Some areas that I would suggest
that you look for tonight, include the organizational structure
of the local cable tv applicant, that is, Continental proposes
a system that is wholly owned by the subsidiary, Storer and
WOMETCO both propose a system that has local partnership interest
and as we have explained in our evaluation, and I am sure that
they will be discussed by the companies tonight, that is one
thing you can look for. Another thing would be the programs
offered, the actual number of channels utilized and how they are
utilized. There is a diversion on that and we have provided a
table at the back of the final evaluation to be turned in which
gives you a pretty good indication of the program offerings of
each of the companies. I might state that there is just one
correction on that table, we have indicated on there that
Continental is a partial two-way. We want to correct that.
Continental is a full two-way as is~Storer, a distinction I have
already made in the difference between the two. With regard
to the program offerings, there is really three basic areas that
you want to look at. You want to look at first of all, all of
them have to carry the broadcast signals, the signals that are
broadcast from the Richmond area. That is required and they all
have to do that. But, they are offered different combinations
of independence, independent networks that they will bring in.
In addition, they offer different combinations of programming
that is primarily derived from satellite, and some of these may
be more or less attractive to individual members of the Board.
Another area to look at is local origination programming. That
is the programming that is going to be generated essentially
from Chesterfield County. And you have a long list of those names
But that is something that probably deserves some consideration
because you are talking about what is the cable company going to dc
for the citizens of Chesterfield County in terms of local
production and presentation in the community. There are differenc~
in these. I am sure the differences will become more apparent
as the presentations are made, and we will be happy to comment
at a later time. I do not want to go any further. I think I am
giving a brief overview. We are here to not only comment on
what is being said tonight, we are here particularly to answer
any questions and we will do so. So, if you have any questions of
course you can ask the applicants, but you may feel better about
it or you may be confused whmt one applicant says and what anot~
one says and you may want to ask us what they mean or what do
we think they mean. That is what we are here for. We are here
to help you and we will be happy to do so. I think I will leave
it at that and let you get on with the hearing.
O'Neill: Do the Board members have any questions? Alright the
first presentation will be made bY WOMETCO.
Meiszer: Mr. Chairman, let me say that the time is 7:%0 and it
will be thirty minutes.
Cox: My name is Jimmy Cox, I live in Chester, I am an officer of
Chesterfield CATV, and I would like to introduce Mr. Lewis Wolfmon
who is the Senior Vice President of WOMETCO Enterprises.
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Wolfson: Thank you Jimmy. Members of the Board, Mr. Chairman,
Madam Chairman, Mr. Supervisors, Members of the staff, my name
is Lewis Wolfson, II. I am Senior Vice President of WOMETCO
Enterprises, Inc. in charge of Broadcasting, in charge of CATV,
and in charge of STV, which is over the air delivery of pay
television in New York City. WOMETCO, by the way, just for
beginners, I know Lewis E. Wolfson. Lewis got us in trouble
some years back. But the only time I ever served in the Leg
was in Tallahassee in the State of Florida from 63 to 73. That
was bad enough. But there is no relation between families. The
reason I bring out the families is the fact that WOMETCO is a
family corporation. We started this about the turn of the
century. My grandfather was from QS he was on the council there.
I understand county commissioners don't see much of the Council.
My father was mayor of Miami Beach just before the war. He
served in the European section. My calling in politics,
my contribution, like yours, was in a much higher plain, it was
on the plain of a county supervisor or State Legislature,
not a politican, only a statesman. But be that as it may, the
corporation was a family corporation. My uncle sold out. And
we still have almost fifty percent of the company. Its a
New York Stock Exchange company with well in excess of $300,000,0
this year. My backgrounds from the South, my family is in
Pennsacola, Key West, prior to that Mobile. A cousin of mine
and a nephew, not a nephew, an uncle of mine was distinguished in
the war, the Spanish-Civil War, there is a park named after him
in Mobile, and the Revoluntary War. So with my background in
the South I understand about, I was educated in Massachusetts
and Iowa so I don't sound like it. The company is devoted to
service. We are a service corporation. We have been bending
and serving~the public case since before or about the turn
the century, in a corporate manner. We give the public what is
portable, expendable, we are in Coca-Cola bottling, we are in
publishing, we are in theater business and we are in cable
television. That is enough, I think, background so that you can
get a history of it~. You have cable systems in the South. We
will not be a disgrace to you, I think we will be a great asset
to you, and we can get along with you, and we know that we must
have the know how. I have got to tell you that I think our team
is second to none, I heard tonight that there are three good
teams, so I won't say its best, but its certainly not in second
place. It is an excellent team. We are well financed. We've
done for the past eighty years or more what we promised, and
will do here what we promised. We will give you, and I promise
you this, we will give you service second to none anywhere.
We will change with the art, we will update and money won't be
a problem. We will also try to provide great service. With
that I think that there is enough time spent to get enough feel
that maybe we can get into some technicalities. Let me introduce
Don Zimmerman, who is Vice President of WOMETCO Communications
and Chief Engineer. Don.
Zimmerman: Good evening. As Lewis told you, I am Don Zimmerman,
Vice President of WOMETCO Communications from Miami, Florida,
and I also serve as Director of Engineering. Rather than stand
here tonight and bore you with a bunch of technical details
which I am sure I could probably get involved in for two hours,
I would rather take up your time simply by explaining some of
the highlights of WOMETCO's proposal. The first highlight, and
this is very important to the subscribers of the cable system,
would be that WOMETCO offers a free installation for one year to
each area after it has been activated. The second item is a
brief discussion on the difference between remote converters and
non-remote converters. I would just like to show you a couple of
units that I have sitting on the floor here so that you can
visually get a perception of the difference between the two and
why WOMETCO has selected the use of remote converters in all its
cable systems and has the intention of providing all remote
converters in this system. I will just take a brief moment to
them up to you and you can take a look. This is a set top conver
non-remote. I would like for you to take a close look at it.
This is a typical remote converter that WOP~TCO intends to use.
It is manufactured by Sylvania. This gold portion of the box will
79-257
be placed behind the customer's television set or in some other
remote location at their request. The part that interconnects
the remote channel selection unit can be made to be any length.
We normally would provide about twenty-five to thirty feet to
reach from a tv set to someone's easy chair, or from the
location of a tv set to the night table next to a bed in someone's
bedroom on an additional outlet. This unit plugs into the wall
and the tv set then plugs into the back of this unit. The hand
held unit comes detached from the cord so you can get a close
look at it. It has no moving parts on it. The manufacturer
claims you can put it in a dishwasher, take it out and it would
operate the way before. We have done everything to it except hit
it with a sledge han~Ler and we find it to be true. This unit,
when operating has an on-off control for your television set from
a remote location. Simply by pressing the off button it turns
it off, by pressing the channel number of the channel you wish to
view, a little LED indicator, like you have on a hand-held
comes on and tells you that is the channel, indeed, that you have
selected. The unit is also capable of free programming up to
nine channels of television viewing. By simply depressing the
little button on the back, and then putting in there in sequence
as you would like to view them, the channels you would like to
set back and review. When you want to watch those nine channels
or change them, simply hit the channel recall button and that
channel will instantaneously appear on television. I will pass
this around so that you can get an overview on that. The last
item I would like to bring to the Supervisor's attention is that
WOMETCO has proposed our rates with the remote converter, the
lowest of all the applicants. I would like to close by simply
stating that, WOMETCO's engineering department stands ready,
willing and anxious to comply Chesterfield County's cable
communications requirements, and I would like to introduce
WOMETCO's Mid-Atlantic Regional Manager, Jim McQue who will speak
to you briefly on some of the operational points of our proposal.
McQue: Mr. Chairman, Members of the Board of Supervisor, my
name is James D. McQue, Regional Manager, Mid-Atlantic, as
Don pointed out, stationed in North Carolina, where we operate
some seventeen systems in seventeen municipalities in cities,
towns and counties. Serving at this point in access of twent~
thousand subscribers. I would like to give some idea about the
philosophies of our operation, how we do operate the cable s
I think that you found in looking at our operations, through
your consultant, that we are close to you if you need to know
something. We are offering twenty-six active channels. Twenty-
six active channels as you reviewed. Nine of these will
be automated. The rest will be active. We have three access
channels, four channels that are part of potential interference
with FAA communications, and three left for future expansion or
leased use. We are offering three levels of pay tv. Three types
of pay tv, which vary and serve different needs and different
communities. We have found in many of our systems today that
this is really what the people want. People want entertainment
and they are going to pay for that entertainment. The resources
that we are offering are home box office, APO which is an
engineering term, show time, which has no sports, and home
theater network, which is a many series, six nights a week, one
movie a night, paid PGA product, offered for those families who
have children who do not want that product in their home. Our
installation policy, is an installation policy which we have
perfected in all of our systems, which gives us maximum ~
at the beginning and it is one year of free installation for all
services. I would like to speak briefly about our ohilosoPhv in
regards to return communications. Ail of our systems are new
systems. The ones in North Carolina have all been built since
1973, they are normal state of the grt,. capable of two-way,
though none of us, at this point use two-way, except from the
local operations. It is our belief that the remote services now
available are not truely viable for a cable tv system. We
believe there is a future and that future should be generated by
those people who have expertise in that field, providing no
services to the people. That space is available for lease also.
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We feel that to do so otherwise, would downgrade our capabilities
and present a drain to our subscribers. If it becomes viable,
obviously, we will enter into it. Our local origination
is something in North Carolina that we are extremely proud of.
We have systems that range from 450 subscribers to our largest
one to date with about eight thousand subscribers. Everyone of
these systems has local origination capabilities and utilizes it.
Anywhere from four and a half hours per day to twelve hours per
day. In March, 1978 our system in Durham, North Carolina took
upon itself to aid the North Carolina March of Dimes, local
chapter. Why? To present for them a remote from a shopping
center in Raleigh, North Carolina, which was not one of our
systems, but owned by another company, thirty hour program of
those women microwaved~ into cablevision in Raleigh, then
inserted into the county carrier to be able to serve in access
of sixty thousand homes in North Carolina. That was only the
third time we have done that for the March of Dimes. It has
now become an annual event and we have done it for many others.
That is one way we utilize local or~iniatio~ doing the same
thing with our school systems. Let them utilize our facilities.
Help them utilize and train them to utilize them. It is a very
difficult job. People want it, people like it, but they really
don't want to learn how to use it. I am sure you have found that
in trying to get community support for anyt~i.n~ This is one way
you can get it, we will work at it, we promise in our proposals
to hold ongoing seminars, much as we do in all of our systems.
We will interest people in the schools and in the community, in
how to use the equipment. That is our philosophy to provide
portable services and enjoyable services. I would like take this
time now to introduce you to Mr. Milton Lewis, President of
WOMETCO Communications.
Lewis: Thank you Jim. Chairman O'Neill, Members of the Board,
my name is Milton Lewis, I reside in Dade County, Florida, I
am President of WOMETCO Communications. I will make my presentatJ
very brief. I would like to stipulate that we will provide local
management, and we will ask you for local input, as to the
management of this company. We will provide adequate service
for subscribers and give them what they want. It has been
WOMETCO's philosophy to always serve a subscriber in the best
manner possible and we will do this. Thank you.
O'Neill: Alright, thank you sir.
Dodd: Mr. Chairman, We are going to have a period of questioning
the individual people and let everyone make their presentation
and then come back at a later time.
Meiszer:
O'Neill:
After each presentation.
After each presentati6n.
Meiszer: Does that conclude your presentation?
O'Neill: That concludes your presentation?
Lewis: Yes
Dodd: That is why I was asking.
Meiszer: You haven't barely used the allotted time, so we can
begin with questions.
Dodd: Who is going to feel the questions out?
O'Neill: First let the consultants ask questions.
Meiszer: The question period is fifteen minutes and begins at
7:40.
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~n
Babcock: With regard to local ownership, we are still unclear
as to equity contribution of the two local minority partners.
Could you respond to that please.
WOMETCO: Mr. Babcock, the proposal indicates the dollar value
of contributions of $210,000 of both local partners. Of the
$2,100,000 equity funds to be contributed, WOMETCO will contribut~
$2,000,000, with the balance of $100,000 being contributed by
Mr. Cox and Mr. Terry in the amount of $50,000 each.
Babcock: Are remote converters ever mentioned in your proposal?
WOMETCO: No, and that is explainable through the fact the WOMETC¢
never found any reason to mention any ~iffe=entia~i~mbetween the
converters since we provide remote converters in all of our
operations. The RFD did not specifically in any manner whatsoeve~
request that we differentiate between remote and non-remote.
Babcock: Mr. Lewis mentioned that there will be local management
of the system, and I was unclear in your response to our comments
exactly how that local management was to be chosen or specificall~
if it was going to be one of the local minority partners who
was going to be managing or can you explain what the term local
management means?
WOMETCO: Well the management will be chosen by the Board of
Directors. The management will be elected and the Board of
Directors will have input as to the manager of the system.
Babcock: That is all the questions I have. I would like to
mention to the Board a couple of comments, some relating
specifically to WOMETCO and some that are kind of general. First
of all we had indicated in one of our evaluations that we did not
find the offering the free installation for the first year in
WOMETCO's proposal. It is there, it was pointed out to us and
we did find that, so anything that was said ~tonight is not in
anyway a modification. I might say that WOMETCO has indicated
that because of the addition of the remote converters they have
the lowest rate. Let me make two comments about that. We
are still undecided, I will say I will differ comment on whether
or not we think that is a modification to their proposal. But
I would like to make a comment about rates in general and this
is not specific to WOMETCO. Don't be too concerned as to
whether or not the company you choose has the specific lowest
rate. That is one factor, and of course it is an important facto~
but it is not as important as a lot of other things. And of
course the rates are subject to change as the companies can
justify those changes, they are all pretty close anyway. But
I just want to emphasize that just because a company has a lowest
rate on a particular level of service does not mean they are the
lowest bidder. It just means its a factor to consider that is
not all that significant. That is all the comments I have.
I will be glad to respond to questions.
Bookman: Let me ask Mr. Lewis who is going to select these
Directors. Who is going to select these Directors and how are
they going to be made available.
WOMETCO: They will be selected from those stockholders, local
stockholders. Jim Cox has agreed to serve on the Board.
O'Neill: Does any other Board member have any questions about
WOMETCO's proposal?
Dodd: Yes sir. I noticed that they haVe 722 miles of service,
is this in the time period in which they are suppose to guarantee
the installation of that service within 30 months? I notice it
is quite a bit larger than the other applicants
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WOMETCO: The 722 miles that WOMETC0 has indicated it will have
completed at the end of the fourth year is based on the
construction rate of an average of four miles of cable per week
and one mile of underground cable per week. It is WOMETCO's
intent to complete the initial franchise area, approximately 520
miles are planned by the end of the second year of operation.
Dodd: What equipment is going to be in Chesterfield County,
for its use. Facilities such as studios and such.
WOMETC0: The two proposed initial distribution of WOMETCO
will b?th be originated from studios. The equipment in those
studio s, a good portion of it will be what is termed portable,
and will not required the use of a mobile van. We point out
that a mobile van can be an inconvenience at times, especially
when that van is inoperative. We have successfully operated in
a number of our systems, portable equipment, placing equipment
in vans, in some cases using the smaller equipment supplied by
Sony. It will supply very good pictures and that is our
intention of using mobility.
Our studios in North Carolina are very simply, but yet quite
complex. The studios all have full color cameras, at least two
cameras, studio quality cameras, with a full switch affect,
special generators, etc. just like a regular television studio.
Coupled with that we have the remote cameras, portable, which
we utilize for special effects. The equipment we have is housed
in wheel trailers. We do on occasion wheel these out. We
have one trailer which we have now constructed which will be used
either parked in the studio area, or on location. We find that
studio equipment is extremely expensive. We would like to
utilize it in a way that would best serve people for their money
The average cost of one of our studios is near $85,000. You
speak about what we propose, for Chesterfield County initially
two studios, one at each receiver hub. Possibly a third at
the central. Normally, we would put one at every hub as it
If the use is in such a way where we can generate a lot of
remote capabilities, then a van would be necessary. But even
with the remote van, there is still an awful lot of on-site setup
O'Neill: Any other questions? In this proposal that you submitt~
and after I received the booklet, I receDved this map showing
the area that you propose to serve. Now I don't see anything
in m~ district, at the other end of the County, what do you
propose down there?
WOMETCO: Can I have the name of your district sir?
O'Neill: Yes, you include where I live, but no where else.
WOMETCO: These portions of the community which are not shaded,
would be served as an expansion after'~the initial franchise
area, which is shaded, providing it met the ordinance for
minimum of homes per mile.
O'Neill: Sometime in the future after 30 months?
WOMETCO: ~l~t necessarily sir. We had to put the proposal in
some sort of sequence. If by some act of God, next week, the
entire County met the requirement of minimum homes per mile,
WOMETCO would do everything in its power to provide cable tv
to the entire county in the shortest amount of time. The AML
Microwave distribution system you see located at Area 1,
has the capability of being split eight times, we have only
proposed use of four splits. We will split that further as
required, in order to maintain the system design that we have
proposed and it will be more than adequate to serve the entire
County with the same quality of reception throughout.
O'Neill: Thank you. Any other questions?
Babcock: Mr. O'Neill, let me pursue this local management one
step further. You say that the management is going to be
selected by the Board of Directors and two local minority partner:
79-261
will be on the Board of Directors.
Board of Directors will there be?
How many members of the
WOMETCO: The local partners will represent twenty percent of thc
total number on the Board, regardless of how many are on the
Board. If there is to be a five member Board, then one local
partner would be entitled to serve, even if he wasn't asked to
serve. On a ten member Board, we would give them two seats.
Babcock: So they will have twenty percent of the vote?
WOMETCO: That is right.
O'Neill: The format, I believe is that once you've ended,
you have to come back in rebuttal. One minute left for question~
are there any further questions? Board Members, or consultant?
We will move on to Continental.
Meiszer: The time is 7:55.
O'Neill: The next presentation will be made by Continental.
Fred Gray: Because I have long been interested in Chesterfield
having a good cable tv system, I was unwilling to accept represe~
ation in Continental until I investigated for myself and
whether or not they had the capability and whether or not they
lived up to their commitments. After I had satisfied for myself
these points, then I accepted them for a client. At that time,
that was before the adoption of your ordinance, we offered to he]
your attorney and staff in the preparation of the County ordin~
and I think you prepared a good ordinance for Chesterfield and I
hope that we were helpful. Later on after you adopted your
ordinance, I spoke to you during a recess of a Board meeting,
to tell you of my employ, and to say to you at that time, as I
will say to you again tonight, this franchise should be granted
strickly on the basis of what is best for this County. I know
that you will not act in response to those personal and politi~
pressures, but you will decide on the basis of what is best
objectively for Chesterfield County, and I think you for the
opportunity of making this presentation tonight, in that contrac~
I am convinced that in that contract, when you have concluded
deliberations, you will have selected Continental. So I suggest
to you that you should take the best offer for Chesterfield
County, do not necessarily say to you that you should select the
most sophisticated, and therefore the most expensive system that
can be found. Not everyone can afford gold plated Cadillacs,
especially if they have to pay for the operation of it, and you
should make no mistake about it, there is no free ride, sooner
or later the subscribers will have to pay for whatever system it
is you decide to put in. I think you should be looking for a sys
that is financially sound, well balanced, high level tv offering.
A cost conservative enough, without frequent rate increases, be
the demand of normal inflation. You will decide on that basis
then you will select Continental. The theme of our story tonight
is that Continental is best, and it is best for one reason. Becau
it is the most definite offer in several if not every respect.
In the first place, one of the things you should be concerned abo'
is the financial ability and capability, Your
consultant did not question Continental's ability. We believe we
are superior in that area because of two factors. First, we have
the necessary financial footings, and we have a letter of credit
to prove that. Secondly, because Continental uses a rifle shot
approach, that is,~select a target so that they can concentration
the majority of their resources on the solution of a problem in ti
particular objective, not the shot gun.approach which results in
often straining oneself too thin, or being over committed. Because
of that approach Continental's ability to perform, and there is
no contingency regarding past conm~itments anywhere else.
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Next we think you should be concerned about the people you deal
with. In our case you are not forced to look upon far away
reputations. We come not as strangers, I already mentioned to
you our early involvement. But beyond that, of the bidders here
tonight, only Continental has a Virginia record, and its a good
record. We have a record right in this area. I would like to
read to you a letter, and it is a little bit unusual because
I will be reading a letter addressed to a gentlemen who has not
received the original yet, but it will be delivered to him.
It is addressed to Mr. Merlin O'Neill, Chairman of the Board of
Supervisors for Chesterfield County.
"Dear Merlin:
I understand that Continental Cablevision is about to receive a
cable tv franchise in Chesterfield County. As you know, we
selected Continental as the best four in 1977. They are buildin~
and operating their system in Henrico. Our relationship with
Continental is excellent, and we are pleased with our choice.~
Since the award, Continental has added services beyond those
that they promised us, and expanded the initial service area
beyond ~hat they had proposed. More importantly, they have
kept us informed of their progress on a regular basis, and have
responded quickly to questions from the public. In summary, we
are very pleased with the performance of Continental, and
recommend them to you.
Sincerely,
Eugene Riley, Jr.
Board of Supervisors
Henrico County"
One of the things that I was concerned about with the company
that would build a system in Chesterfield County was what areas
could they serve. Now obviously I would like to have a company
that could bring a system into Bermuda Hundred where I live,
and I believe that that is just not financially feasible. We
spent an awful lot of time and an awful lot of money making surve s
and riding around Chesterfield County, and I did some of this
riding myself looking at some of the areas, and we have presented
to you a definite commitment for an area, we have presented to yo
a map, and we propose to serve, and to build a system for the
homes in that area in the first eighteen months. Three months of
marketing time and in twenty-one months the homes that exist in
that map area will be offered cable tv sea, ice. In addition to
that definite location on the map, we have provided for you
a list of the subdivisions that are going to be served. We
believe of all the offers you have, we have the most definite
commitment. You can see exactly what we propose in respect to
Continental. In addition to that, we believe we have the most
definite offer so far as line extension. Because the policy whic
we propose for you is if a mile of line can serve fifty homes,
then service will be given. It is not determined by howmany
people in that area want tv service. So the individual can get
the service, even though his neighbor may not decide to have
the service. Now that does leave, the map will leave, and the
Chairman has already asked questions on another matter, with
respect to his area of the County. Let me tell you that Continen
took this position with the respect to his area, which I call
the Ettrick-Matoaca area, the Southern area of the County, and
that was this: The area is already ba&.~ served on some basis,
by another company, we take this position, if the people in that
area want the service that they now have, we do not feel that
we should arbitrarily say to you that you have gotto oust them
from the position they have down there. If on ~he other hand,
you want that area served 'by the company that has the franchise
in Chesterfield County, we are prepared to serve them and
serving that area and putting them into the initial service area,
with the same criteria that we have used in drawing up the map
for the rest of Chesterfield County. The same criteria for that
79-263
area. So we leave that decision with you. Whether you want
to say to the people there, you have got to get rid of the servic~
that you have and put the Chesterfield County franchise in,
we will be happy to go that route, but we do not insist upon
your making that change. The final point that I want to make in
respect to that which is definite, we understood at the beginning
and we understand now, that local input, is important. My
understanding of the law is that Boards of Directors are chosen
by the stockholders. The majority of the stockholders can select
the Board of Directors that suit them in any meeting of the
stockholders, any annual meeting of the stockholders. So that
minority stock interest is not going to be the answer to permanen~
local control or local input into the system. So we have
suggested that we have a citizen advisory board, made up of five
persons, one from each magisterial district in this County to be
selected by this Board of Supervisors, so that you will hare a
direct liaison with our company. Now, why is that important?
Why is citizen input important? I think it is particularly
important in the case of Continental, because you will see from
the listing that we have six unassigned channels, six channels
that are available for service. So if the offerings we are
making in Chesterfield County don't meet all the desires of the
people of this County, the local board can determine that, they
can hear the~complaints, hear the desire of the people and pass
them on to our corporate board, either directly or through you
so ~hat we can provide the services that are wanted. This type
of local input is definite, it will be here. We are perfectly
willing to enter into a binding agreement. We will have such a
board for the people. Mr. Chairman, ladies and gentlemen of the
Board, at this point I wish to give you a slide presentation so
that you can get to know more about Continental and more s~
what it is that is offered by the way of programming.
SLIDE PRESENTATION:
In 1949 television viewing in America was a curious form of
entertainment. After spending in excess of five hundred dollars,
for a black and white set, the viewer would peer nightly to the
snowy, underpowered pictures for the opportunity to watch one or
perhaps two stations available in his area. Unquestionably sets
were expensive, reception poor and variety limited in 1949. But
that was a little price to pay for the opportunity to watch
Argentine Rocko chase Gorgeous George around the ring live from
Chicago. TodayB cable c cmmunications systems have come a long
way from those early days of television. Todays cable systems
offer communities new and diverse services, such as first run
movie channels, community progamming and even two-way communic
Achieving the potential offered by cable tv provides a challenge,
a challenge that will be met with companies which possess a
successful blend of experience, yet imaginative management,
innovative engineering, and sound financial backing. That compan]
Continental Cablevision. Organized sixteen years ago, for the
single purpose of owning and opera, cable communications system~
Continental is today the second largest privately owned company
in the industry and the twelfth largest among the more than three
hundred companies in CATV. Continental is not a division or a
subsidiary of any other company. The design, construction and
operation of cable communication system is this company's only
business. Continental Cablevision offers not a collector of
purchased franchises, instead the company has chosen a deliberate
type of growth based on the timely construction of cable systems.
Those of which were awarded directly to Continental from city
government. In fact the company has constructed over eighty~f%ve
percent of the cable systems it owns and operates, a performance
record touched by few companies in the industry. Continental
Cablevision is proud of its reputation as a leader in advanced
engineering accomplishments. The company is accredited with the
design and construction of the first system in the mid-west to
comple~]yuse solid state amplification, the design and utilizati
of ~ne of the first microwave~ systems in the community antenna
relay service band waves, and ~he design, construction and
operation of large bidirectional cable systems such as its
facilities in metrop$1itan Dayton, Ohio, in Michigan, Stockton,
California and most recently Hanrico County, Virginia. In the
79-264
area of local origination, Continental has played an important
role in the development of community programming. It is
significant that Continental has conttnuous]~., received both local
and national recognition for program excellent. Among other
distinctions, Continental was the first cable television company
in America to receive the coveted. Broadcast Media award. An
honor which had previously been conveyed only to public television
stations and networks. And in pay cable, Continental has again
demonstrated the value of experience and imaginative management.
Responding to consumer interest in economically priced cable servil
the company created Cinevue, ~ a concept which offers Hollywood's
top current films for $3.95 per month. The subscriber response
was record breaking. Within two years, this exclusive service
of Continental has become one of the largest pay television
companies in the United States. Tonight, we'would like to direct
your attention to two major areas of importance in consideration
of any Cable TV applicants. Those areas are proposed services
and corporate commitments. First, lets consider proposed services
In the early days of cable tv, cable companies constructed a
five channel system, because it was the only kind available.
Then twelve-channel systems were developed. With advances in
technology, cable television can now provide thirty-five channel
systems, permitting greatly expanded services to subscribers.
We propose such a thirty-five channel system for Chesterfield
County~ with twenty-nine of the total thirty-five channels to be
programmed immediately. Continental proposes eight full time
broadcast channels, including three commercial network stations
from Richmond, two independent stations from Washington, D.C.,
two Richmond educational stations, and one Portsmouth speciality
station. Additionally, we propose two pay-tv channels, a
children's channel, a sports channel,featuring live sports
events from Madison Square Garden,: a congressional channel,
offering live coverage from the U.S. House of Representatives,
late night programming from WTCG in Atlanta, eight automated
channels providing everything from news and sports to community
information. A tv program guide channel. A Chesterfield County
local origination channel with full color equipment. Two
inspirational religious channels. A free all night movie channel,
and three access channels dedicated exclusively to coverage of
educational and governmental use. Since programming is so
essential to the success of any cable tv system, lets take a
closer look at some of these proposed channels. Following a
comprehensive study of all available independent stations,
Continental proposes to offer the residents of Chesterfield County
two independent stations from Washington, D.C., WTTG, Channel 5,
W'DCA TV, Channel 20. Although Channels 5 and 20 are considered
by many to be the top stations in the Country, they were selected
because of the extent to which they offer fresh programming not
available on local stations. For example, Channel 5 offers
excellent non-network programs aimed at both adult and children
audiences, in addition to a popular 10 p.m.newscast. Channel 20
compliments this programming with a wide selection of movies and
sports including NCAA football and basketball. Washington
Boiler's Basketball, Washington's Capital Hockey and Baltimore
Oriole Baseball. Many of the other independents evaluated, also
had strong programming. But in our judgement lacked the appeal
of these regionally oriented tv stations which share a community
of interest with the residents of Chesterfield County. In additio
to these quality tv stations, Continental will provide channels
programmed exclusively for cable television subscribers. For
instance, Madiso~. Square Gardens, a sports channel carrying not
only sports, news and scores, bu~ live sporting events received
via satellite from Madison Square Gardens, including New York
Rangers Hockey, professional boxing, track meets, w-~estling and
college basketball tournaments. To further enhance late night
viewing, Continental is offering in additional to WTCG, an
exclusive all night movie channel, each night beginning at 1 a.m.
the service will feature two motion pictures, including many
film classics. The all night movie channel is provided at no
additional cost to the subscriber. And, there is Nickelodeon,
the first all day children's programming package available to
79-265
cable television. Nickelodeon programs up to fourteen hours a
day and covers age groups from pre-school to teenagers.
Continental will also offer two channels of religion and
inspirational programming. Delivered via satellite, CBN and PTL
offer a wide range of religious programs intended to educate and
ent~=~a~n.. Of particular interest are Continental's proposed
premium movie channels. Note that this is a two tier system,
which we feel puts premium pay cable services within reach of
all Chesterfield County cable subscribers. First, there is
Cinevue z developed exclusively for Continental subscribers.
Cinevue is not a subsidiary or programming service of any othe~
company. It belongs solely to Continental and is available only
in COntinental systems. Nevertheless, it is today the fourth
largest pay-tv programming service in the industry with nearly
one hundred thousand subscribers. The response of the Cinevue
has been phenomenal. In Henrico County, for instance,
ninety percent of Continental subscribers have selected .Cinevue
a level far in excess of other similar services. Cinevue
premiers a new major Hollywood motion picture each week, in
addition to children's films.and movie classics. Recent popular
attractions have included "House Calls", "The Cheap Detective",
"Benji", "The Ten Commandments" and "The Goodbye Girl" The
vast majority of films seen on Cinevue carry a G and'PG rating
We are convinced that such films will have the broadest possible
and most positive appeal to your constituency, the residents of
Chesterfield County. At $3.95 per month, Cinevue is in
economic reach of nearly all subscribers. The second level of
premium television offered by Continental for Chesterfield Count~
is Home Box Office. Home Box Office is an entertainment package'
with as many as twelve new movies, five entertainment specials
and exclusive sports events each month. We feel Home Box Office
is an excellent second tier, premium pay tv service for those
subscribers who want a broader programming selection not provide~
by Cinevue. In the area of local origination, Continental is
proud of its innovative concept called CTV-7 a local programming
service which we propose for Chesterfield County. CTV -7 is
dedicated to the development of intra-community communications
focusing on local people and events. Continental will provide a
totally self-contained color remote unit, to facilitate this
local program. Additionally, Continental will have a full color
central cable casting studio. Supported by a full time staff,
the studio will be available to all responsible community groups
and institutions. We fully expect to spend in excess of three
quarter million dollars over the initial term of the franchise
to construct, equip and operate Chesterfield County's community
programming facilities. It is our commitment to the potential
of local programming. We concentrated on our proposed Chesterfi,
County programming, because programming obviously is the major
determinate of a cable system's success in any community. There
are however, several other important considerations. For exampl~
system design and construction. Continental proposes a three
hub system, interconnected via microwave and supertrunk.
Although some surfaces, such as the Washington TV station, the
all night movie channel and Cinevue will be received from our
Henrico System via microwave,~ this does not mean that Chesterfi~
County will share their channel capacity with Henrico or be
limited in any way. Each community will receive its own separate
operated, full capacity cable system. An important consideratic
in the selection Of an applicant. Another important considerat
is the time frame necessary to complete construction of the
Chesterfield system. It was reported that Continental would
require forty-eight months to build the system. That is not
Our commitment to Chesterfield County is to complete the system
by the first quarter of 1981. Approximately twenty-one months
the anticipated franchise grant. The final item for considera~
concerns public commitment. In other words, will we do what we
say we will? The answer is an unqualified yes. When we say we
are committed to the development of institutional uses of cable
we are. As we have been in our Lansing, Michigan system,
involving Michigan State University, Lansing Community College
the Lansing Public School system. And in our surburban Dayton,
Ohio system, which was featured in a recent New York Times artic
79-266
What we propose is to develop community access programming, and
we will do it. As we have in our Springfield, Fairborne and
surburban Dayton, Ohio system. And, when we say we can build
a Chesterfield system in twenty-one months, we will do it.
Our management and engineering team is already here, and not
only are we meeting our commitments to Henrico County and the
City of Richmond, we are ready to start serving the communicatio~
needs of Chesterfield County's residents as well. In total,
our corporate commitment to Chesterfield County is to build a
modern, state of the ..art, quality cable communications system
that will become an active, responsive and responsible citizen
of your community. And we will do it.
Fred Gray: Mr. Chairman and ladies and gentlemen of the Board,
I would like to present Mr. Herb Grosb~ck'~, President of
Continental Cable TV who has a few remarks to make.
Grosb~ck~i. Thank you Fred. Mr. Chairman, Members of the Board.
I am happy to be here to conclude our presentation. I will
start with a word of comfort. In my view you have three very
fine companies, and it is very hard to make a selection. I
feel that any three will do a first class job for you. I
personally know members of the management of each of the other
two companies, I think well of both of them, and their track
record. That should be a source of comfort as you make, what
I am sure will be a very difficult choice. Our proposal, and
some of what we have told you tonight, has described us quite
effectively, and for a moment I would like to describe us in
ualitative terms. How are we different? What sort of a differ~
eel, or tone might we convey? The first point has been touched
on and that is the point of our Virginia presence. We are here.
We now employee fifty-one people in the i~mLediate area. We
have an operating record though it is brief, we just began
service two months ago. We have been in this area for several
years. We know a lot of people, and a lot of people know us.
Cable is our only business. We are not a diversified company.
We are a focused company. We are not a public company. We are
a private company. A point of differentiation is that we have
no local stockholders, propose~ in Chesterfield County. We appeal
to you to you on the merits that we have structured our proposal
so that our relationship with the people of Chesterfield can
occur both through our direct contact with you and through our
advisory board, which will have regular meetings. What is the
feel of Continental Cablevision? My partner and I started the
company sixteen years ago, we have never been in any other busin~
except this business. We don't devote any time to anything else.
Our approach is a generally small company personalized approach.
You don't have very many layers of management. BUZz~ Goodall,
whom some of you have met, lives in this area and is our Vice-
President in charge of Operations here and he reports directly
to me. We think we have a quick response time. We are not
high crown, we think we are flexible. More personalized. We
are almost old fashioned in that respect. We are not flashy.
We are not going to give you any surprises. We are not going to
over promise. We are not suggesting that anyone else is over
promising, at all. I am simply suggesting that we do not over
promise. For example, we have chosen our coverage area carefull
We think it represents full coverage of the feasible area.
Finally, I will leave you only with a sentence from the consult~
report, which we think merely characterizes us at the bottom of
page 13. "Speaking about Continental, it is the opinion of the
consultant, that Continental has been conservative in their
preparation of their projections, has left themself a safe guard
to counteract rising costs, because their penstration projections
are conservative and they have not included any rate increases."
I think that describes us well. We are who we are. We would
like to have this chance to serve you, and we will serve you
openly and honestly. We th~nk you for your time and will happil~
accept your questions.
79-267
Micas: Mr. Chairman, I would like to indicate before the consul
begin that the consultants will indicate in any of the proposals
those areas which they consider to be additions or modifications
the original proposal. Ultimately, the Board will have to decide
what it deems to be an addition, and at such time as you make the
final decision, those additions and modifications will have to be
ignored and disregarded in your decision when you make it in ord
to be fair.
Babcock: I do not really have any questions for Continental, but
I have some comments~that I would like to make. First of all,
it has been pointed out that there is a difference of opinion, I
guess you would say between what we consider to be their construe
schedule proposed in the application, and what we consider and
what they consider to be the final construction schedule, for the
initial franchise area. On page one and two of our supplemental
evaluation, we go into a discussion of why we believe it is forty-
eight months instead of twenty-one months which has been stated
here tonight. We stand by that opinion. We have not changed that
opinion. But I will say this, and I think perhaps a response is
appropriate. With very little explanation, I think Continental
could give a reasonable explanation why they are saying twenty-one
months instead of forty-eight. An explanation which we accepted
from another company, but which was not given to us at the time
we requested the responses, let me say this. They have in their
performance, indicated that all the area which is approximately
69% of their plan will be completed in the first year. So I think
we are talking a little bit about technicalities here, but we still
recognize the difference and we still stand by our statement that
technically we are still talking about forty-eight months final
completion. Secondly, I would like to say that the line extension
policy that has been stated tonight by Mr. Gray was not in the ori
!application of Continental. It was given in a response to a questi,
!we had, which in effect opened the door, but I do want to point out
and as Mr. Micas says, it is the ultimate decision of the Board,
that line extension policy was not in the original application, and
we took the position then, because it was not in the original
application, technically, Continental should be considered to
agree to meet the ordinance requirements and nothing more. I migh
also state, in fairness to Storer, Storer was the only company that
actually stated a line extension policy which was in excess of thos
requirements. Secondly, with regard to the Southern extension of
plant which was mentioned by Mr. Gray, that is an addition to, and
I think Mr. Gray said this, this was not in the original apt
from Continental. It is in the form of a suggestion. It is not
a part of their proposal. I think Mr. Gray backed that up. That
is all I have to say. We will be happy to say again in our report
it is written in the final evaluation%hich you have, and I did not
want to get into it, because it is kind of complicated, it is based
on what we evaluate as their response and their financial performan.
with respect to construction. As I say, we have written down why
we think it is their way and we stand by that explanation.
Bookman: How are we to wipe this from the picture. They have
said forty-eight months and now they are down to twenty-one. How
are we suppose to blot our minds out to this? We are human, you
Babcock: Yes you are human. The only thing I can say is that you
kind of have to, and you are kind of in a situation of a jury that
just been told to disregard the last victim. Obviously we are
all human, but if you are looking at construction schedules and you
determine, as a Board, that that is an addition, then we have go
to aay, okay they have forty-eight months construction schedule w~
you are analyzing who you want to choose based on the criteria that
we have.
Micas: Mr. Bookman, in comparing the bids, I think you should
consider that you can only bind the companies to what was in the
~riginal application. You can only legally bind then to what the
~pplication says.
~rosb~ck..: The first few questions have been easy for our question
Period, we would be glad to respond to that or be silent whichever
Your preference is.
79-268
O'Neill: Okay. You might want to reply in a rebuttal right now.
Board members are there any questions.
Dodd: Where are you going to locate your studio? In Chesterfield~
Grosbeck: It is near the corner of Courthouse Road and Route 10
I believe, it is in the proposal. '
O'Neill: You will have a Chesterfield Studio?
Dodd: If our local government, or etc. would like to do any tapin
they would not have to go to Henrico County?
Goodall: My name is Buzz Goodall, sir. We have proposed a comp
separate local origination facility for Chesterfield.
Grosbeck: Both the facility and location are in our proposal.
Dodd: There was a statement in the consultant's report that some
of the equipment would be shared with Henrico and this might create
a problem, that is why we asked the question.
Grosbeck: Sir, in preparing our performance, as we aaid in our
answer, we did underestimate the amount of test gear that we would
need. However, because of the fact that we have systems in Henric¢
there is test gear equipment that we will be happy to supply, but
it can be shared because it is used for periodic tests. You buy
a spare tire for every car, but you don't buy a timing gear for eve
car.
Apperson: Suppose its over there and we need it over here, or it
is over here and you need it over there?
Grosbeck: Well there are two responses to that. One is that in
our judgement that is equipment which can well be shared, and not
disadvantage either Henrico or Chesterfield by sharing it. The
second answer is that it represents approximately forty thousand
dollars of equipment in a project of many millions of dollars.
Apperson: You are speaking of test equipment, with the thousand
kinds of electronic components nowdays and types of equipment, one
of the most important pieces of apparatus is the test equipment
isn't that correct? '
Srosbeck: Yes. The jack is very important on my car. But if
the car is only driven around a very narrow area, I might not need
a jack for every car. It is a piece of equipment that is vital,
but it does not have to be there for every system because the
systems are contiguous to each other.
Apperson: I am a little sensitive in this area. This bothers me.
That sharing of equipment gets a little touchy.
~rosbeck: We stand by this, we think it is sensible and well
considered, but I can understand your concern.
O'Neill: The statement that was made by Gray, that Continental toot
the position that the people in the Matoaca area wanted service,
wanted to get rid of the service we now have, leads me to believe
that maybe he did not look down there hard enough. The service tha~
they now have is only in the immediate Ettrick area. It does not
extend to Matoaca, nor does it extend to subdivisions surrounding
Ettrick and Matoaca. Again, I feel that we have been put on the
back of the burner, for whenever we want service. The County
~ttorney has just advised me that whatever you have proposed in
~our proposal is what we are holding you to. And you do not have
Where~°methingI live. in the proposal about that. And there is nothing about
;rosbeck: I think what Mr. Gray was trying to say would be
slightly different than I understood you to summarize it.
was trying to say that we were not attempting to put the
in a position by expanding to that area and in order to
our proposal in ordinance form we would have to
79-269
disinframchise the operator, we would leave that decision to the
Board. We would serve that area if the Board so stipulated.
O'Neill: Perhaps I wasn't clear again. The only area of the
area down there is one little part of that area. Ettrick area.
It is only in the Village of Ettrick. It is not outside of it,
it is not in subdivisions around it, nor is it in Matoaca, about
a mile up the road. Any other questions? Thank you. The final
presentation will be by Storer.
Burnett: May I congratulate you on your efforts to select a
Cable t'v company by best bid basis. It is a very complicated and
complex situation. I want to also thank Nic Meiszer and his
staff for their cooperation in disseminating the information, they
have been very helpful. It is my lot to be the local Chairman
of the Board of Directors, which is a thirteen member board of
citizens who have a genuine interest in the development of
Chesterfield County. We all think it is immensely better to have
a local group to control the operation of such a powerful facility
as Cable tv then'to have it completely controlled from outside of
the County. We are a group which knows the area, knows something ot
its needs and potential. We believe that our Board has the
expertise to guide the development of cable tv, and will be of gre~
benefit to the citizens of this County. The local Board will work
very closely with Storer Company, a Company which we have found
to be very professional, very large, economically well founded.
have found that Storer has over one hundred cable systems in many
states across the Country. It ranks among the ten largest ot
in the Country. Its stock on the New York Exchange is a bright
spot on a declining market. 'Storer has its own construction
Which is why quality installation can be done quickly and cheaply.
We stand by our bid, our stated bid of thirty months. We have a
great presentation~tonight, one I think will demonstrate the
~professional approach that Storer is capable of. It is a demon-
stration I think you will enjoy. To present this, may I introduce
a man whom I have found to be a real genioua in the art, a
splendid gentlemen, Mr. Rod Warner, Vice President, Director of
Marketing for the Storer Broadcasting Company. Rod Warner.
Warner: Ladies and Gentlemen~ our presentation will consist of a
video tape highlighting the specific points in the application,
followed by a projection on the live screen, which highlights the
quality and the character of Storer Broadcasting Company. Fo
that presentation, I would then like to introduce the officers of
the Company that are here tonight to answer any questions you may
have about our presentation. If we can have the house lights, we
will proceed with our video tape.
VIDEO TAPE:
Thirteen outstanding Chesterfield County citizens and the Storer
Broadcasting Company present to you the most modern cable communi-
cations system. Chesterfield Cablevision has made long and detail
preparatiQns for this cable television service. Our company's
experts have spent many hours in the area talking with local peopl.
analyzing communication requirements, first hand, and we consulted
with one of the industries foremost electronics experts,Mr. Warren
Braun. Mr. Braun designed this system to suit the County's unique
characteristics and incorporated several new concepts. Ail of thi~
activity had a single goal. To provide Chesterfield COunty with
the most benefit, at the lowest possible cost to subscribers. As
a result you will find many outstanding qualities in the system
which we proposed and which we will briefly illustrate here for yo~
We propose a.cable system which performs three separate functions.
A home subscriber network, an institutional communications network
a home life and property security system. Ail three functions
operate from a master head-endand reach out from super trunk cable
to homes and institutions. Our home subscriber network has a
cable carrying thirty-five channels to each home. Our basic month
rate is $5.45. With the running converter device for all thirty-
five channels, renting at $1.50 per month, or the subscriber may
elect to purchase the converter, and thus avoid the monthly
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converter rental fee. The additional institutional network works
this way. The cable has capacity to carry two-way communications
to and from area institutions. For example from a high school to
other schools. Or to all home subscribers. There is more than
enough extra channel capacity to serve all Chesterfield institution~
and we provide free connections so the library, the County offices
and others can enjoy this special network. The two-way capacity
of our system allows another major immediate benefit. A home life
and property security system. This sophisticated computer based
home security system monitors fire, intrusion and medical
emergencies. We propose a two-way fire, burglar, medical alert
system which .is actually three sub systems interconnected. First
a bidirectional cable plant is constructed. This allows televisiol
~ictures to travel from the head-end hub to the house. It also
~rovides a path for the data signals to go from the head-end to each
subscribers house and back. The second part is a local alarm s
installed in each house. This can be as simple as push button,
to summon police or ambulance, with fire engines responding to an
automatic smoke detector, or as complex as a fire and burglary
system used in today's museums and banks. The third installation
is a monitoring system consisting of a central data system and
terminals in the home. The home terminal is the communications
link between the local alarm system in the home and the cable
plant. The central data system or computer, constantly interrogate.
each home terminal over the cable plant to find alarm conditions.
When an alarm is found, the computer matches the identification
number of the terminal with the corresponding name and address and
relays this information to the proper authority. Chesterfield
Cablevision wants to encourage subscribers to use this system and
therefore will absorb installation costs above $99.95, and will
offer the monitoring service at $15.95 per month. There are
several other emergency safeguards designed into our system.
Chesterfield County officials will have an emergency override and
warning system to interrupt instantly any audio and/or video on
the system, to advise subscribers what action to take for safety.
As an option for subscribers who want to receive this warning,
even if their set is turned off, we offer an emergency alert
signal. When the emergency override is activated, by officials,
this signal makes a loud noise, alerting the subscriber to turn on
the tv set, to receive the important emergency information. Also
for safety's sake, the home subscriber network includes a channel
on which the viewer can tune in twenty-four hours a day, to a
sweeping 'radar. This scan, several hundred miles distance from
Chesterfield, shows the position of approaching severe weather
systems. Mr. Br~un's design of the system, incorporating the three
major functions of home subscriber network, institutional network,
and home security systems, has several design elements unique to
our two-way proposal. One such feature is segmented return. That
means every two thousand subscribers have their own five channels
returning through the head-~nd, forty-five total channels of return.
With segmented return, each group of two thousand subscribers had
its own connection to the master head-~nd, so if ever there is an
outage in one section, all of the rest of the cable system remains
operational. And should the power go off, we have stand by power
throughout the system. Another design feature is cable trunk B,
an additional cable trunk running from the head in to the subhead
in to insure plenty of channels to use for the institutional networ~
Upon Mr. Brown's design, we can bring to Chesterfield County the
most advanced cable communications system at the lowest possible
cost to subscribers. With our years of experience as a major
American Broadcasting company, and one of the~ten largest cable
operators in the Country. We've learned what people want from
their cable system. Here is how we have worked those desires into
the Chesterfield County home subscriber network. On our system,
you get all the local television stations and there are seven
access channels, for the general public, County and local governmenl
local religous groups, fine arts interest. There is a channel
produced by Storer to cover local events. Like amateur sports,
talent shows and local news. And two channels for education access
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Including a feed of the associated press wire for educators and
students. We will describe later the extensive production
equipment we provide to produce the programming for these access
channels. There are channels brought here by satellite to give
you around the clock additional movies and sports programming.
There is a special childrens channel where all day long, kids see
wholesome entertainment and educational programming, all absolutel
without commercials. There are several channels to make living
easier. Time and weather forecasts, job listings and community
news. A guide to the other tv channels, with talking books for
the blind, as audio. Consumer news, with comparison pricing of
local items in local stores, so shopping can be planned in advance
to save time and gasoline. State and national news wires, and a
stock market ticker, same as in the brokers office. And from
Storer Broadcasting resources, a special family movie channel
where from noon until after 2 a.m. each day, motion pictures are
shown for the entire family with no interruptions, no commercials
and no extra charge. From communications satellites to our two
earth stations, we present several outstanding attractions. Sport
events live from Madison Square Garden, live coverage of the
U.S. House of Representatives, slow scan news photos twenty-four
hours per day, around the clock religious programming and NCAA
sports action from the nation's finest college. That is just a
quick review of what is on Chesterfield Cablevision for just $5.45
er month, with your own converter, or a converter rental for a
1.50 per month. In addition to this basic cable service, we
also offer two premium entertainment options, via satellite. Home
box office is the home premium service of over twenty first run
movies, and special night club productions each month for $8.00.
~ake two is a economy version of HBO, that has viewer movies
P and PG only for $4.00 per month. Now some special notes about
our rates. All of our rates are guaranteed to remain firm, as
proposed for a full four years after the franchise award. In
addition, we charge no deposit for company equipment in the home,
like converters. Further, we guarantee free installation to anyon~
ordering within the first thirty days service is available to the
home. All of these rate features are extremely important to those
on low and fixed incomes. People will also be particularlypleased
with the results of the Company's significant investment here in
technology. For example, two earth stations operating from the
outset, the master color studio, will be equipped with the finest
equipment, including three color cameras and character generators.
Satellite production studios, near the subhead-end for public
access, each with two color cameras, and keyboard character
generator input installed at the Courthouse for government access,
at least four portable color units for loan access users. Thats
not all. You can use a twenty-seven foot mobile studio production
van at no cost to non-commercial users, an investment by the
Company of well over one hundred eighty thousand dollars. This
studio on wheels is self contained to do color programs from
anywhere with cameras outside, on top of or in the van's own
studio with four camera capability. It can do productions live by
microwave, back to the head-end or by taping into the cable system,
or video tape programs for later replay on the system. It carries
its own power supply and levelers to stabilize the van for
productions in its own studio. All this represents a capital
investment of well over one million dollars in production faciliti~
alone. Remember, all the equipment, studios and channel time is
provided by Chesterfield Cablevision at no cost to the public,
institution or local government. We even provide free training ant
production advice to those who want to do their own programs.
That is an example of why Storer has a reputation for being a good
operator. With good relations with the cities we serve, and for
being sensitive to our subscriber needs and interests. We will
also have satellite offices near the subhead-end, so we can easily
be reached for complaints. Our computer billing and service
systems will get us to your account fast for quick response. We
want satisfied customers from the very start. That is why there
are so many other features that make the Chesterfield Cablevision
proposal best. Like the audio for the premium tv channels, and
stero phonic sounds on the FM dial, upper rental control locking
device for the premium channels. Scholarships and internships,
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as part of our affirmative action and equal employment opportunity
programs. A local purchase policy for materials and equipment.
Allowances for the pressures of inflation on expenses and rates.
A program advisory committee of a cross section of local citizens
to insure program sensitivity. We will build the entire cable
system in thirty months. We can easily meet that commitment,
because Storer has its own construction company insuring materials
equipment and skilled workers. We have already leased office
facilities in Meadowbrook Plaza to insure thereisno delay. We
are indeed ready to move ahead swiftly, from the moment of your
franchise award. To sum it up, you can count on Storer Cable
Television. And the thirteen local citizens on the Chesterfield
Cablevision Board of Directors. We will build you an advanced
cable communications system with the most benefit for the lowest
cost to subscribers. Featuring a home subscriber network, an
institutional communications network, and a home life and property
security system. Rates, as low as $5.45 per month, with a four
year rate guarantee. Free installation and no deposit. Superior
technology, like two earth stations and a studio on wheels. Fast
construction with our in-house company. Offices already leased.
A liberal extension policy. And a strong company, that can easily
make the required capital investment of over thirteen million
dollars. That is a brief overview of the Chesterfield Cablevision
proposal, for Chesterfield County.
Chesterfield Cablevision. A subsidiary of Storer Broadcasting
Company presents beautiful Chesterfield County, Virginia.
We have taken a close look at Chesterfield County, and we like
what we see. We have found the people here to be proud of what
they have accomplished, working together to make this an attractiv
place in which to live and raise a family. Now, we would like to
take a few minutes to show you our family, because we are proud
too of what we have accomplished as functioning members of other
communities just like yours. Our name is Storer Cable Television
We are a division of the Storer Broadcasting Company which is
listed on the New York Stock Exchange and headquartered in
Miami, Florida. Storer Broadcasting Company is a pioneer in the
business, but what makes a pioneer, a pioneer? Well, Storer
Broadcasting Company was founded by George B. Storer in Ohio in
1927, and has grown steadily over the years. Today, Storer
Broadcasting is one of the nation's largest operators of televisiol
stations and more than eighty cable tv systems from coast to coast
At the helm of Storer Broadcasting are Bill Michaels, Chairman
of the Board, Peter Storer, President, and Terry Lee, Executive
Vice President. In charge of Cable TV Operations is Arnold Muller,
also Vice President of Finance for the parent company. Through
these eyes pass the clearest, brightest, most entertaining,
informative and fascinating' im~__ges. These are the eyes of a Storer
cable tv home subscriber, who enjoys a full dial of crisp,
colorful television viewing. All kinds of programming to satisfy
every kind of entertainment taste. Programs from local stations,
~sharp and clear with no snow, and with crisp images. "I do
enjoy it, my tv has never been better". "My husband and I were
out of town several weeks ago and we were in a town with only
three stations, we couldn't believe it, we are completely spoiled
now." "I can go through the whole dial system and get what I
want." "The reception we get from all of the stations is much
better with cable television, after you reach a certain age you
cannot sleep but so muc~ and I enjoy having company as a result of
having the television all night." "I had three, and that is the
three local channels here." "How many do you have now?" "Goodnes~
I think I have something on every channel." "Oh its good. We
had an antenna before, and the cable tv is much clearer."
Space age technology and satellite transmission make it possible
for Storer to provide cable system home subscribers a dial jam
packed with programs of cable communications services. This set
comes satellite and a fixed orbit in outer space picks up signals
from widely dispersed origination points. They are then received
by our Storer earth station, and retransmitted sharp and clear
over our cable system to the homes of subscribers. Satellite
programming not only makes possible superior tv transmission over
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great distances, but also opens up all kinds of exciting possibil
ities. For example, right now, today, Storer satellite prog
includes home box office. This very popular premium service
features first run movies, complete and unedited. Sports, conc~
top night club performances, all brought to you tn the comfort and
convenience of your own home. Madison Square Gardenj for the
average sports 'fan there is a variable cornucopia of sports and
sporting events with this excellent home cable tv service. The
Christian Broadcasting Network, transmits via satellite a
constant twenty-four hour a day flow of interesting religious
programming. Also an array of independent television stations
that can be received via satellite and feature live sports,
numerous movies and other syndicated events. Eminating from our
own system and facilities, are also channels for the ~torer
family theater, specially programmed all movie channel, slow
channels, for continuous weather, imstant news, finance, business
and stock and sports news. Channels with two way transmission
capabilities. We even have the built in technical ability set
aside in our system for protection from fire and burglary. Soon,
with the use of fiber optics and other technical advances, we
believe that we will also have the capability to provide as many
as eighty channels of programming to satisfy every taste and
serve every personal and community need. One of the services we
are most proud of is our Storer public access channel. We set
aside a station for the public at large so that anyone who wants
to can come to our studios to arrange for a program they would
like to conduct and participate in. 'tit is really unlimited.
And, we do a little bit of it all from day one. We have had
people coming in to make presentations, and we have been invited
to come out and tape a lot of the things happening around
Montgomery and some that will be happening in the future." Ail
of these channels are just the beginning. In the very near future
cable tv subscribers can expect many more programming and
communication services. And you can rest assured that Storer will
bring them to you. In a nutshell then, that is what the
business of cable tv is all about. So why Storer Cable TV over
others, first performance. We deliver what we promise. Ever'
we promise. Every time. A strQmg statement? Perhaps. But our
track record bears us out. "I am pleased to report to you on
the City of Montgomery's experience with Storer Cable Television.
The Company was awarded the franchise late in 1976, and was
serving the first subscribers by the end of the following June.
They are completing construction in two years well ahead of their
three year commitment to the City. I understand well over fifty
percent of all of our homes are subscribers to Storer Cable.
The acceptance has been fantastic in this City, and I think
Storer has done a remarkable job in making sure that their custom~
relations are excellent. I appreciate that as Mayor. They have
also just generally, been a first class company." "When we come
into your community it becomes home to us. We don't operate this
system like an outpost of the main office, back in Miami. We
become a hometown business. Just like any other. We hire
employees from the area and buy locally, e~e.z~ching that is availal
within your community." Why Storer Cable ~V? .... ~Mvice to our
subscribers, to our whole communities, and our attitude toward
our customers starts at the top. It is reflected by everyone in
our company, from system managers, technicians to installers, to
service men, to billing clerks. "You have to keep a good
attitude, you have to keep up with Storer." "The main thing is
to keep their customers satisfied and happy. That is one thing
Storer emphasizes on is the customer. They deal with the custome~
the way the customer wants it." "They are always saying how
nice everybody is and I think they feel like a family too, because
they are always asking your name." "I am paying for something
that is best to have, without too much interruption." "The
customer is always right, they are paying for a service, and
that is what we give them." "Our subscribers are our business.
They are paying salaries, they pay for our trucks, they pay for
our uniforms, they pay for everything we have. They are our boss.
Why Storer Cable TV? People. Our Company subscribes to the
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theory that to be the best, you have to hire the best. So Storer
seeks out only the most competent and mo,tivated individuals
for the systems we operate. "I think they have done great. It
enhanced Montgomery in that, one, it has provided the services
that people wanted, and two, it is providing a quality job for
some people who had the ability, but just did not have the
opportunity, until Storer came to the town." "When Storer
comes into the community, we recruit our employees and train them
locally. We are one of the first cable companies to implement a
meaningful EEOC program, an equal employment opportunity program,
we have internships, we have scholarships, we have people who
have gotten a full four year college education, and now hold a
college degree and one hundred percent of the tuition has been
reimbursed to them by the company." And Storer people not only
work in the areas they serve, they work for theirlcommunities'
We strongly encourage citizen involvement at every level. And
to a great degree we credit the success of our systems nationwide
to the interaction of Storer people, in their respective service
area. Why Storer Cable TV? Physical plant. We build ours to
be a credit to your community. Installing only the latest and
best equipment available. As with anything electronic, the
newer the equipment, the fewer the problems. Repairs are
aggravating to the customer and expensive to us. So our policy
demands ....rigid and regular maintenance of regular state of the
art equipment. "The basic technology which is available to us
is available to anyone, so you have to look beyond the proposal
into the corporate structure, and the integrity of a company.
Into its performance record, and we are very happy to stand our
record against anyone else in the business today. We have never
had a forfeiture of a license or franchise, or anything of this
type, and that is better than fifty years of operation." These
then are the building blocks of the success Storer TV has enjoyed
from its beginning. Service. We are proud of the excellent
courteous serviceweprovide to our subscribers and to the many
communities we call home. Performance. Our track record bears
us out. Ail Storer systems are operating successfully with the
wholehearted acceptance of every area we serve. People. We
sincerely believe our people are the core of our success.
Warner: We are ready to accommodate your questions. I would like
to introduce the officers of the company here to answer your
questions.
Meiszer: The question period has to begin.
Micas: You have a ten minute period after.
O'Neill: I think we will have to go with the introductions that
were on your video.
Bab~oTck~, We have expressed concern ink,the evaluation about some
concerns we have about the two-way system. And I would like a
response from you Mr. Warner. First of all, about the liability
potential for a security alarm system over cable tv network, which
can and does at times, break down. The second thing that I want
to ask you about the two-way system is that in your comments to
the consultant, you indicated that you felt very strongly that
whether or not the system stood on its own and generated the
revenue that you thought it would, you indicated that you very
strongly felt that it still would have no effect on the subscribers
and the rest of the cable system, even if it failed miserably.
In light of the fact that twelve percent of the revenue generated
from the entire cable system are generated from the home subscribe~
network, or the security network, would you coa~ent on that?
Warner: To answer your second question first. The revenues from
the home security are all related to the home security system. It
would have no effect on the subscriber system. The operating
expenses associated with the home security system are related
directly to the revenue. If the revenues are less, our revenues
are less. You take that whole twelve percent out, and with the
relationship to operating expenses, you still have a very viable
cable system With no relationship at all to the home subscriber
rate.
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I think that is evident by our subscriber rate which is similar
to Continental's and t~heirs is a much more conservative stand.
We don't have a higher subscriber rate for basic cable because of
home security.
Babcock: Yes, but is it not true that that 4% revenue is in the
subcriber rate base. It makes up part of the total.
Warner: Sir, the operating expenses are included also.
down, so does the other.
One goes
Babcock: Well, okay, I know what you are saying.
~rner: The initial question about liability, I think I should cal
on Mr. Braun, the Consultant in the design of the system, to
comment on reliability of the system because there are built
in safeguards to keep the system reliable, how it works and
to comment on adequate insurance. Mr. Braun.
Babcock: If I might state, no offense, Mr. Braun, I am sure it is
a well designed system and I know that it is but my question
concerns what if the~systemgoesdown. I think if we just assume
that part of the system has gone down, for whatever reason,
lightning, tornadoes, whatever? Well, no, ~I don't want to use
those cause that is a different legal question. But it has just
gone down. Amplifier blew up. That is what I am talking about.
If it goes down, then what about the liability?
Braun: I think Mr. Warner is very right. You do need to look at the
design of the system because it has an entirely different order
of redundancy than any conventional system today. It has a
totally separate return plant. It is not shared for every 2,000
subscribers. Now, that kind of reliability is the type that
is necessary both to make the plant maintainable and also reliable.
It is our belief also that you cannot have a home security
system without having standby power every where in the plant.
The entire plant has standby power. It uses very conservative
design with very short cascades. A combination of all of these
factors raise the redundancy in terms of reliability almost
in order of magnitude over conventional cable systems. That was
inherent in our design. The segmented return, I think you will
say its unique, it is a unique concept. It is probably the first
time you have seen this.
Babcock: You still haven't answered by question though.
Warner: The answer is that there is adequate insurance to cover
such a thing. I would like to point out another feature of
our application is that this is similar to any home security
service in the area that provides home security. And we are
perfectly willing to, ~¢e do not want to preempt local
security business who are making a livelyhood in this area.
The system is designed in such a way that any home security
system can attach to our system. If it is the pleasure of
the Board of Supervisors that an independent company operate
the security devices in the home, that company lease capacity
in the system to monitor, we have to do that.
Babcock: That leads me into my second question. You mentioned
that the security system can be as sophisticated as one that is
in a museum. What level of sophistication applies to the
maximum $99 installation fee?
Warner: The $99.95 inStallation fee includes two smoke detectors,
two medical alert buttons and two intrusion alarms. An example
might be, that a medical alert button might be in the bedroom and
also the main living area.
Babcock: Okay. That is all the questions I have, Mr. Warner.
I do have a conm~ent that I would like to make to the Board. I
don't want to be presumptuous but I would like to comment. A
statement that was made in the presentation that the large amount
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of capital investment in the local originiation, equipment,
studios, cameras, all of that was at no cost to the subscribers
or the local government. I think it bears stating that what
that means is that it is not a direct cost but those costs
as with all local origination costs from the companies, there are
indirect costs. They are in the rate base, they are a part of
the system, a capital part of the system. So they are not a
direct cost to the subscriber but they are an indirect cost
to the subscriber. It is all part of the financial picture of
the company. I just wanted to make that clear.
Warner: Can I ~comment on that.
Babcock: Sure.
Warner: In that, the greater the investment in this area,
brings benefits directly to the cable system than subscriber
interests of what is going on the system. The local originaticn
equipment, including the mobile studio van, the technical
equipment that we have right here is what we propose, cameras,
etc. has to be of a quality that will produce programming that
people will be interested Jnwatching and using. To make local
origination and public access, local government access, a
self-propelling prophesy, the cable company must make a
significant investment in broadcast quality equipment and provide
the opportunity for use including training, aid of our people
that we provide free. There is no studio charges at all in the
Storer application. There is no time when the clock starts
running when a local non-profit group may be charged time for
being there. We like to encourage the use of the local
origination access provisions and it will bring benefits to this
system and, therefore, we have the largest capital investment
in both origination equipment and satellitm studios for people to
get to easily. Plus, the main studio has four color camera
packs go it alone. And it is all there for the purpose of
stimulating the cable system and making it more attractive to
subscribers hence enlarging the number of subscribers we serve.
Babcock: I don't have any further questions, if there are any commen
I would be glad to respond.
O'Neil%: Do the Board members have any questions?
Bookman: I have a question. Does your security system operation
costs, maybe you already answered this, have a bearing on your
cable costs.
Warner: Not at all. That is a point I hope I get through.
has no bearing because it operates independently of the whole
subscriber network.
It
Bookman: You have to look on the home subscriber, and not on the
basis of the security system.
Warner: That's right. Every installation of a home security
network requires a capital investment, and the operating costs
associated with that. That is all by itself and has no relation-
ship on the performer, although it is included in those revenues
because of the franchise proceeds that you earn also come from
the gross revenue of that security service.
Bookman: The program advisory committee, how is that handled?
Warner: Processing of citizens in the community to aid us in
being receptive to the types of programming, the opportunity,
the excess opportunities of the community. We will meet with them
on a regular basis and they would also make sure that we were
programming the system in standards of good taste for the communit~
We fundamentally say there are no X rated movies on the Storer
system. It is an additional sensitivity to the community and an
addition to the thirteen local investors.
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O'Neill: In addition to?
Warner: In addition to.
O'Neill: How are they selected?
Warner: They can be selected by the company, Or if the Board
of Supervisors would like to perform that function that would
be fine too. If you elect not to, then we would perform that
process. It is up to you. We did not put a number on this
committee either, because we thought you might have some feeling
on the number that should be on that committee.
Apperson: Your relays, I presume, will have to be more expensive
Warner: I think Mr. Braun has addressed the design of the
institutional communications network.
Meiszer: Four minutes left for questions.
Warner: Quickly then, the design of any cable television ~stem
today, involves the use of amplifiers that are capable Of
returning the signal as well as transmitting it downstream on
the same cable. That anyone can do. That, we believe, is
insignificant. For every two thousand subscribers we separately
route on a cable, sipf~/als back from the home, back to a common
point. So there is that traditional cost in this plan, above
and beyond a conventional bidirectional plant. However,
compared to the cost of generating a plant that can cover an
area this wide, the costs are not astronomical. So we are able
to provide this service at an economical and viable basis. As
you can see from our performance. Does this answer your
question sir?
Apperson: Let me go a little further. ..Raving traveled
in Russia, two-way communication scares me. Carrying signal
from the office, which also carries back this conversation.
Warner: Not unless sir, you order it. The way this is described,
the home subscri~has complete control over what goes back.
Dodd: Do you in fact, have a good track record with cooperating
with local government.
Warner: We have been in the cable business since 1962 and we
have been dealing with local governmental entities in all that
time and we now have 113 franchises that we deal with. All of
our broadcasting stations also have regulatory responsibilities.
Dodd: " Then you are saying you don't get law suits with
rates, etc. and things like that?
Warner: During a period of that time we have had occasions like
that. '
Dodd: I would like for you to elaborate on that real quick if
you would, because I don't want the County to get involved in a
law suit.
Warner: You want to ask me a specific question, or what?
Dodd: I want to know what your procedure is when you do get a
rate increase?
Warner: The rate increase procedure is through this ordinance
~recisely and we would have to follow that review process that is
in your ordinance.
Dodd: You are saying that ordinance is drawn better then maybe
some other localities.
O'Neill: The parental o. ontrol lock activator, can you explain
that briefly?
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Warner: Yes, it is a small box that fits in line with your home
box office or movie channel, that has a key in it. And when you
leave the home, you would lock the main control to the home
box office and take the key with you. We do not make any money
on providing the parental control device.
Apperson: Are there any systems of this kind already in o
or is this a unique system to your control?
Warner: No it is not unique to Storer. We have proposed it in
other places. The combination of a home security network, the
institution communications network and a home subscriber network.
We have proposed it in several other communities.
O'Neill: Our time is up, I am sorry.
Warner: I would like very much to have a summary of our
presentations on paper, £i-,.r~e~'reSno review now, but I just would
like to pass it out, and I w6uld appreciate it very much if I
could submit that as a summary of my presentation.
O'Neill: I think it has been ruled, so to speak, that we cannot
accept any more handout material here from anybody. Alright,
now, Mr. Warner, since you were last you can get into your
rebuttal now.
Warner: I would appreciate a reCes~ and I would like a moment
or two with my colleagues.
O'Neill: Mr. Warner with Storer has ten minutes in which to make
any further comments in rebuttal.
Warner: Ladies and Gentlemen, we recognize that the consultant
that saw our application is 'very sincere, clear and concise, with
no debate over what was in and what was out. We think the
can stand up by itself, and we stand on that proposal, with no
further comments.
O'Neill: Alright, next in rebuttal will be Continental.
Grosbeck: Two brief points if I may. Regarding the sharing of
equipment, we are going to share equipment which presently
itself with microwave and SCC system proofs. That means proof
of performance. The other equipment that does not fall into that
category, is equipment that is used at times which are schedule-
able. That is, no equipment that we are proposing to share, is
that which might be needed without notice. Indeed, by operating
systems nearby, we will be able to bring such equipment to
Chesterfield. The second point has to do with our construction
timetable, the forty-eight months veraus twenty-one months. I am
reading now from Schedule G of our proposal: "By the end of the
year 1980" which we can say is year one, or eighteen months after
the grant, "we will have spent one million six hundred forty-five
thousand dollars for aerial construction of three hundred and
fifty-three miles of plant, eight hundred thousand dollars for
underground construction, one hundred thousand which will complete
the construction of our initial service area" and the whole
service area as we propose it to you. The confusion arises on
the question, back on page 30, I think it is which asks how much
are you going to spend the first four'~years. We respond that we
just suspect or project that we are going to have to build eighteE
miles a year of additional underground plant in order to serve
expansion of Chesterfield County homes. To me it seems awfully
clear as you read it, and I would respectfully ask that you
read it and see whether you do, understand that our total system
as proposed will be completely cOnstructed in eighteen months.
The sole confusion arises out of additional projected underground
construction, not necessarily to serve the thirty-three thousand
homes that we have said we will initially serve. Thank you very
much, no additional comments.
O'Neill: That was Schedule G?
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Grosbeck: Yes sir, It is on page 19. It is entitled Capital
Access Costs. The question causing the confusion is on page 43.
Excuse me, it is page 42. It says "How many route miles of cable
plant does the applicant propose to be constructed within four
years following a grant by the SCC certificate of rights?" That
is the source of confusion. That is the extra three years.
O'Neill: Any further rebuttal or comment?
Grosbeck: No,' Sir.
O'Neill: WOMETCO.
Zimmerman: Mr. Chairman, on behalf of WOMETCO, I would like to
take the opportunity to thank the Board for its deliberation
and its patience and wish you good look on your deliberation of
this Company.
O'Neill: That concludes the rebuttal by the applicants. We now
have set aside one hour for citizen input. Any person wishing
to speak, should state that he has no direct or indirect financial
interest in any of the applications. Are there any such citizens
present who wish to speak? Are there any citizens present who
would like to ask any questions? That concludes the presentation
the Board will obviously spend a little time now trying to
decide which confusing situation we want to select, and hopefully
we will have a decision on June 13, which is our next regularly
scheduled Board meeting. Are there any comments the Board members
would like to make?
Apperson: Has anybody got a three-sided coin?
O'Neill: Does any of the Board members have any questions of
the consultant.
Bookman: In our comments to the consultants, did we ask them
to give us a rating on these companies. First of all I would
like to compliment all three companies on the good job of their
presentations.
O'Neill: I think Storer should leave &ll the slides of Chesterfiel
Bookman: In our choice of the consultant, did we ask them to
present a rating?
BoOkman: I would make such a motion.
Dodd: I don't know if that would be of any benefit or not.
Bookman: Is there any Board discussion on it?
O'Neill: I have a motion, is there a second to Mr Bookman's
motion. ·
Bookman: There are ~.three companies, maybe you know about cable
tv, but I would certainly like to have a percentage.
Micas: Mr. Bookman, current employment relationships with the
consultant is a contractual manner and we have to live with that.
However, I think it is Mr. Meiszer's intent to talk with the
consultants and arrive at a supplementary report which will be
given to the Board p=ior to actually making the decision. But the
actual terms of the employment, I don't think are subject to
negotiation at this point. But I believe Mr. Meiszer will handle
this.
Meiszer:
point.
They are not contractually obligated to do that at this
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Brooks: I think in'the original proposal submitted, we have
a philosophy on consultation of this type basically because
of the quality of the companies you have seen tonight, and I
believe it is true in this case also, of course I could be
wrong, that we specifically stated that we do not give a number
a rating or listing of the capabilities of the company. We have,
when there has been one company far superior to another, we have
grouped them in excellent, fair, and so forth, but we have not
to this point and time given a 1, 2, 3, ~, and 5. I would be
happy to discuss this with Mr. Babcock and make a response to
the Board within twenty-four hours as to whether or not we do
feel this is reasonable. We have a lot of reasons for this. I
am a former elected city official, we have a lot of input of
city officials who have been extremely reluctant to find themselve.
in a position to vote against a consultant's recommendation, when
a particular applicant has something in local origination or
education, or technical aspect that they feel is superior. If
that company comes out ranked number four by the applicant, they
find themselves in a position of voting against the consultant's
recommendation. So, we have not made that sort of a ranking
here. We would be happy to discuss it this evening and get back
to the Administrator tomorrow and let you know. There is no
costs involved here, it is a policy we have adopted, that I do
not want to change on the spur of the moment.
Bookman: Does any other Board member share that concern.
Apperson: If we get that recommendation, and then go against it,
I presume we would be in the legal ballpark.
O'Neill: There is one thing, the way this report is submitted,
it entails me going through all these things and finding what it
is, can you put what you are referring to, plus what you are
writing here together, so I won't have to hunt so hard.
Brooks: I think we have references.
O'Neill:
Brooks:
The references I have got to go find and dig out.
We would be happy to sit down with you.
Bookman: I guess what you are saying Merlin and I guess what
I am saying is that do you have a list of pluses. Maybe that is
a better way to approach it.
Brooks: Yes sir, we can do that.
O'Neill: Any further discussion? Thank you for coming and we
will let you know something as soon as we make a decision.
Nicholas M. MeisZer '.~!
County Administratoru
E. Merlin O'Neill;\Sr."
Chairman
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