Agenda - Council - 08/23/1988 - Laserfiche WebLink

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Ur./Mr. Hartley July 8, 1988 Page Three Presented (Attachment C), is a summary of the bonds and their cost for communities served by NCTV. Incidentally, these costs fall very unevenly on subscribers, depending upon where they live. For example, costs for subscribers In Anoka are $1.01 per subscriber per year. These subscribers are subsidizing subscribers In Ramsey, where bond costs are $1.98 per year. The total cost for the Quad Cities bonds is $6,500 per year, $1.34 per subscriber per year, or $0.11 per subscriber per month. NCTV believes a more reasonable bonding level of $25,000 for the Quad Cities service territory is adequate. For comparison purposes, the Ramsey/Washington Cable Commission requires a total bondIng level of $50,000 for Its 14,700 subscribers, while the Northwest SuburbS of Hennepin County requires $100,000 for Its 41,000 subscribers. OFFICE We wish also to advise you of the heavy burden imposed on subscribers by the requirement that an "office" be maintained in the franchise area. The office at 737 East River Road is not necessary because few subscribers choose to use it and all of its functions can more conveniently be handled in other ways. Moreover, it is difficult to staff this office because, the Customer Service Representatives who staff it, find the job boring and are concerned about being isolated and alone. I The functions of the office are: I 1) Trouble Call Scheduling 2) Bill Paying 3) Converter Exchange I Most subscribers have elected not to use the office because function 1 (trouble call scheduling), is more conveniently handled by telephone; function 2 (bill paying), is more conveniently handled by mail and function 3 (converter exchange), is more conveniently handled by having our service representative exchange the converter at the subscriber's house. In effect, the customer service provided by NCTV eliminates any need for the office. I Maintaining the office represents a needless expenditure for salary, rent, taxes, maintenance, utilities and insurance. I The total cost is $89,980 per year, or $18.48 per subscriber per year, or $1.54 per subscriber per month. The total number of transactions handled by this office in 1987 was 2,797. The cost per transaction was $32.17. I Since most of these transactions are the result of repeated visits by a few people, and since all of these transactions could more conveniently be handled in other ways, there is obviously no need for this inefficient office and no need for subscribers to pay $1.54 per month for its continuation. The relatively few subscribers who visit the office are being subsidized by the vast majority who do not. FRANCHISE FEES In addition to the above costs, NCTV pays to the Commission 5% of its gross revenues as franchise fees. These fees now average $1.45 per subscriber per month, or $84,490 per year.