FCC Competition Report: PCOs up 54%

Annually, the FCC is required to produce for Congress a report on competition in video markets. Findings of this year's report include a decrease of subscribers receiving their video programming from a local franchised cable operator; 80.9 million households subscribe to multichannel video programming services - an increase of 5.5%; DBS subscribers grew from 7.5 million households to 10.1 million households and SMATV subscribers have increased 54% since the last report.

The complete report (CS Docket 99-230) In the Matter of Annual Assessment of the Status of Competition in Markets for the Delivery of Video Programming can be obtained from the FCC web site: http://www.fcc.gov/Bureaus/Cable/Reports/fcc99418.doc

ICTA - SBCA MDU Segment Meeting

Mark your calendars now - March 26 - 27, 2000 - Charleston, SC. The ICTA Program of Excellence (POE) will be presented to SBCA MDU Segment members and the 125 MDU/REIT attendees at the Multihousing Telecommunications & Technology Conference 2000. A meeting agenda and registration form accompany this issue of ICTA Notes. For additional information contact Brenda O'Connor boconnor@imcc-online.org or (202) 364-0882.

The Multihousing Telecommunications & Technology Conference: 2000 "Making the Connection"

March 27 - 28, 2000 - Charleston, SC. Making the Connection is for multihousing professionals suffering from meeting and tradeshow burnout. Its purpose is to provide an educational environment for those who are more serious about learning than walking a tradeshow floor or listening to vendor's sale pitches. Each session delivers cutting edge information on current inside wiring options, technologies for cable, phone and high speed Internet, critical regulatory issue and contract negotiations. Additional information on this conference is available at www.multihousing.com.

Program of Excellence (POE)

The ICTA - SBCA Task Force which includes Scott Wiggins, Robert Oulton, Bob Grosz and Bryan Rader has developed three components for the Program of Excellence (POE): Standards of Excellence, PCO/DBS Provider Data Collection and Dissemination and POE Training and Certification.

The Standards of Excellence component is in draft form which will be sent to all ICTA BOD members in the near future in preparation for a conference call to discuss its details. Thereafter, the BOD will meet on Sunday, March 26 in Charleston to discuss the POE and its adoption. Assuming the Standards are adopted, they will be presented to the Charleston Technology Conference on Monday, March 27.

FCC Rulemakings

As of this date, the FCC indicates that the rulemaking addressing exclusive contracts, perpetual contracts, and mandatory access is in final stages of preparation and will be submitted to the Commissioners in the near future. Assuming we can ascertain the contents of the rulemaking, ICTA representatives will communicate with the FCC Commissioners and their legal advisors regarding our point-of-view. Therefore, it is requested that BOD members be prepared for letters, telephone calls and perhaps visits to the FCC during the middle of February and thereafter.

18 GHz

The FCC International Bureau rulemaking on the use of the 18 GHz radio spectrum is also still in preparation. We are quite certain the appropriate FCC staff understand the PCO point-of-view and are taking it into consideration in their draft that will be submitted to the Commissioners within the next month or so. This issue also will require ICTA lobbying intervention, but the exact time frame is unclear.

Executive Director 2000 Goals

Based on the November ICTA BOD meeting and conversations with many people concerned with the MDU marketplace, Bill Burhop has identified 10 goals to pursue during this year, as follows:

1. Win on FCC rulemaking regarding exclusive contracts, perpetual contracts and mandatory access statutes. Work to prevent new mandatory access statutes.
2. Win on 18 GHz rulemaking.
3. Get more deeply involved in the FCC Wireless Bureau local telephony competition rulemaking. Define MDU and PCO goals for this rulemaking.
4. Develop Program of Excellence with 3 components, seek adoption by ICTA and SBCA, work toward implementation of Standards by the end of the year, make progress on PCO/DBS Data Collection/Dissemination, and more fully develop the POE Training and Certification plan for the July MDU Conference.
5. Organize successful ICTA/SBCA activities at the March Charleston Technology Conference.
6. Organize and manage a successful MDU Conference at the SBCA Convention scheduled for Las Vegas, July 19 - 21.
7. Solicit more MDU/REIT members of ICTA.
8. Solicit more Internet Service Provider members of ICTA.
9. Solicit more financial institutions as members of ICTA.
10. Work toward development of a high quality electronic and print publication utilizing the resources of PrivateCable.com, WSNet News and any other periodical that focuses on the PCO/DBS products in the MDU environment.

Satellite Home Viewer Act

On November 29, 1999, President Clinton signed the Satellite Home Viewer Act which passed the Congress on November 19.

Chuck Hewitt, President of Satellite Broadcasting and Communications Association (SBCA), said, "For three years, the satellite television industry and the SBCA, backed by over one million satellite television consumers who have called, written and visited their Members of Congress, have been fighting for legislation that would enable the satellite industry to become more competitive with the cable monopoly. Congress has now passed legislation that contains many of the building blocks our industry needs to bring to consumers a more competitive video marketplace."

Hewitt continued, "One of the most important features of the new legislation enables Direct Broadcast Satellite service providers ("DBS") to retransmit to subscribers local television broadcast stations within their service areas - so-called local-into-local service. This will allow the satellite industry to deliver to its subscribers the same local broadcast programming that cable subscribers receive. In many metropolitan areas, therefore, satellite carriers will be offering local television channels in addition to the high quality digital video and audio programming which is already part of their service."

Chairman Kennard of the Federal Communications Commission indicated that the FCC will aggressively implement the new Satellite Home Viewer Act so that consumers have viable alternatives to cable.

Visit ICTA's web site www.imcc-online.org to view a comparison prepared by SBCA of HR 1554 and S. 247 which were the bases for provisions in the final Act signed by President Clinton.

New Members

An expansion of the ICTA Board resulted in several new MDU members joining ICTA. Joining ICTA as Associate/MDU organizations are: Greg O'Berry, Sr. Vice President - AMLI Residential Properties; Kathleen Keating, Vice President - Archstone Communities; Steve Beltran, Vice President - EPT Management Company; Lori Reeves, President - Forest City Residential Properties; and Sue Ansel, Vice President - Gables Residential Trust.

Other new members include: Scott Skokan of Bozzuto & Associates, a property management company based in Greenbelt, MD; Jeff Maxwell, CEO - 4Com, Inc., based in Minneapolis, MN; Fred Guinta of New York based Telestar Systems, Inc. and Brian Kushner, President of TheResidentClub.Com, an ISP located in Austin, TX.

Doug Truckenmiller

In early December, Doug Truckenmiller joined the executive management team at WSNet in Austin, Texas as Executive Vice President and Chief Operating Officer. Doug is responsible for overseeing all of the company's operations, including programming and equipment sales, marketing, technical services, customer service and information technology. Originally trained as an electrical engineer, Doug has nearly 30 years of management experience in the telecommunications and private cable industries. He is the former Chief Operating Officer of a leading private cable management company Global Interactive Communications, and he has also served as the Chief Technical Officer for LodgeNet Entertainment Corporation. WSNet is the nation's leading provider of MDU private cable programming solutions.

Mandatory Access

The state legislatures are active again. Mark Armstrong, Managing Director, at SBVS, informed us that the Kansas legislature is considering S 54. It is a mandatory access bill. ICTA sent a letter to Chairman Carl Holmes of the Kansas House Utilities Committee strongly recommending that the Committee reject S 54 and the House substitutes. As in other states, ICTA believes the bill to be unconstitutional, it discriminates against video service providers who do not have municipal franchises and it would decrease rather than increase competition in the video services market for MDUs.

In early 1999, we reported that Georgia HB 669 was dead. While that bill is presently dormant, we have heard that it may make a comeback. ICTA members operating in either of these states are asked to keep an ear to the legislative grapevine for movement or action on these bills and any others which may be introduced.

ICTA members are encouraged to keep abreast of what is happening in the state legislatures of their service areas. In addition to sending letters opposing mandatory access legislation, ICTA works closely with National Apartment Association members to oppose legislation of this type.

Jim Honiotes

Jim has accepted the position of Vice President Marketing and Communications for International Channel Networks, a division of Liberty Communications in Denver, CO. ICN is a collection of American basic, premium and digital cable television networks that specialize in programming from around the world, in the language of their origin. Jim may be contacted at his new email address -- jhoniotes@i-channel.com or by direct phone at (303) 712-5459.

New Member - New Breed

John Craig and Michael Hassan of Marina Del Rey, CA, have been in the Private Cable Operator business since 1985 when they founded a billing company, Telepro Communications, Inc., to manage billing and customer service coordination for MDUs.

John and Michael also started Priority Systems to take advantage of DBS technology. Priority Systems has over 4,400 homes passed, is looking for full time sales people for ROEs and is seeking to purchase ROEs in the clustered areas served.

Good service and market differentiation is critical if PCOs are to survive and prosper with so many giants as competitors. Priority Systems understands that and hence the reason for their strategy of joint venturing with a local PCO/SO company to maintain a local presence in all of their ROE projects. For differentiation, Priority Systems also offers water submetering, as many of the elements in that business are the same as in the TV business. Same customers, same RF technology needed to remotely read water meters and both products bring revenue and expense relief to the property managers/owners.

A unique offer that Priority Systems makes if they are able to get the water submetering and TV contracts with a property owner, is to bear all the expense to install both state of the art systems at no cost to the property owner. Thus the property owners could not only see a reduction in his water bill of 75% but then receive revenue from the TV system installed by Priority Systems. A double win for the property owner and two long contracts for Priority Systems.

Telepro Communications, Inc. the billing company is capable of handling the billing for 6,000 different utility markets throughout the US as well as TV set top rentals and cable packages.

Priority Systems has financial resources available for building MDU projects, water or TV, and with the billing company to handle billing, reporting and customer service coordination it expects to grow to over 100,000 homes passed in the next five years.
For the PCO industry to survive, Priority Systems believes all providers need to work together in clustered areas so that PCOs can guaranty superior service and value for the property owner/manager.
For more information about Priority Systems or Telepro Communications, contact: Michael Hassan at mhassan@mediaone.net or via telephone at (310) 305-7216.