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Attorney Brandenburg noted that the County does not have a <br />copy of the current FCC changes and requirements and asked Mr. <br />Bolte if our 3% franchise fee is limited to the base facilities <br />and whether counties can now require 5% to be applied against the <br />gross subscriber revenues if there is a waiver. <br />Mr. Smith felt that since the County has an existing franchise <br />with Florida Cablevision, the franchise has the force and effect <br />of that contract; whether or not the County could require them to <br />increase the franchise fee to 5% rather than trying to negotiate <br />an increase, is another question. He advised that under the new <br />Cable Communications Policy Act, franchising authorities are <br />entitled to go as high as 5% of the annual gross revenues derived <br />from the system. <br />Mr. Smith explained that must -carry stations are stations <br />that are locally originated and must be carried even if they <br />duplicate existing stations. However, that doesn't always mean <br />local stations. If a station thinks it is "significantly viewed" <br />in a given area, they can petition the FCC to require the cable <br />system in that county to carry it. He advised that there is no <br />way that a cable system can get out from under it except by <br />petitioning the FCC that it is a hardship case and he advised <br />that those cases are almost never won. <br />Mr. Crosby announced that they have agreed to pay the City <br />of Vero Beach 3% on both pay and basic cable and wish to continue <br />along those lines with the County. <br />Attorney Brandenburg swore in rate consultant, Frederick <br />Bolte, who advised that they had segregated the City of Vero <br />Beach and Indian River County out of the analysis and approached <br />it on that basis and determined that the rate increase was <br />justified. He stated that he had anticipated that the County <br />might go to a 5% fee and the 1985 figures on Page 37 include a 5% <br />franchise fee on all gross revenues. The bottom line, however, <br />is that the rate increase would still be justified. He noted <br />that they looked at it in terms of rate of return on rate base, <br />8 <br />FEB1 8 1995 BOOK 5 Fr cG 898 <br />