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HomeMy WebLinkAboutCC Resolution 14721 (Grand Jury Report on Marin's Telecommunications Disconnect)RESOLUTION NO. 14721 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE THE CITY’S RESPONSE TO THE JUNE 13, 2019 MARIN COUNTY CIVIL GRAND JURY REPORT ENTITLED "MARIN’S TELECOMMUNICATIONS DISCONNECT” WHEREAS, pursuant to Penal Code section 933, a public agency which receives a Grand Jury Report addressing aspects of the public agency’s operations must, within ninety (90) days, provide a written response to the Presiding Judge of the Superior Court, with a copy to the Foreperson of the Grand Jury, responding to the Report’s findings and recommendations; and WHEREAS, Penal Code section 933 specifically requires that the “governing body” of the public agency provide said response and, in order to lawfully comply, the governing body must consider and adopt the response at a noticed public meeting pursuant to the Brown Act; and WHEREAS, the City Council of the City of San Rafael has received and reviewed the Marin County Grand Jury Report, dated June 13, 2019, entitled “Marin’s Telecommunications Disconnect”, and has added the discussion of this report to the September 3, 2019 City Council meeting agenda to consider the City’s response. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of San Rafael hereby: 1. Approves and authorizes the Mayor to execute the City’s response to the Marin County Grand Jury’s June 13, 2019 report, entitled “Marin’s Telecommunications Disconnect”, a copy of which is attached hereto and incorporated herein by reference. 2. Directs the City Clerk to forward the City’s response forthwith to the Presiding Judge of the Marin County Superior Court and to the Foreperson of the Marin County Grand Jury. I, Lindsay Lara, Clerk of the City of San Rafael, hereby certify that the foregoing Resolution was duly and regularly introduced and adopted at a regular meeting of the San Rafael City Council held on the 3rd day of September 2019, by the following vote to wit: AYES: COUNCILMEMBERS: Bushey, McCullough & Mayor Phillips NOES: COUNCILMEMBERS: Colin & Gamblin ABSENT: COUNCILMEMBERS: None ___________________ LINDSAY LARA, City Clerk RESPONSE TO GRAND JURY REPORT FORM Report Title: llarin's Telecommunications Disconnect Report Date: June 13, 2019 Response By: San Rafael City Council Title: Mayor and City Council FINDINGS: • We agree with the findings numbered N/A • We disagree wholly or partially with the findings numbered N/A RECOMMENDATIONS: • Recommendations numbered N/A have been implemented. • Recommendations numbered N/A have not yet been implemented, but will be implemented in the future. • Recommendations numbered R2, R3, and R4 requires further analysis. (See Attachment A) • Recommendations numbered N/A will not be implemented because they are not warranted or are not reasonable. DATED: R15 -f( ATTEST: Lindsay Lara, City Clerk Number of pages attached: 2 Signed: —4��d �' GARY O. PHILLIPS, Mayor ATTACHMENT A: RESPONSE OF THE CITY OF SAN RAFAEL TO GRAND JURY REPORT "MARKS TELECOMMUNICATIONS DISCONNECT" RECOMMENDATIONS AND RESPONSES R2: The MTA's franchise fee collection and disbursement responsibilities should be moved to the MGSA. Response: This recommendation requires further analysis. The City of San Rafael is a member of both the Marin Telecommunications Agency (MTA) and the Marin General Services Authority (MGSA). According to the MTA, these two joint powers authorities have engaged in discussions regarding the assumption by MGSA of MTA's functions related to the collection and disbursement of franchise fees. More recently, in 2018, the MTA's Executive Officer and MGSA's Executive Director met to discuss possible arrangements and determined that incorporating the responsibilities of MTA into MGSA's existing staffing and programmatic structure was not feasible. These conversations resulted in MTA retaining that function. Should the current franchise fee revenue stream decline, it may be advisable at some point to reevaluate the most cost- effective approach. However, at this time, the City recommends that the MTA retain its franchise fee collection and disbursement responsibilities. R3. MTA's responsibilities for CMCM should be terminated. Response: This recommendation requires further analysis. The relationship between MTA and Community Media Center of Marin (CMCM) is built upon two foundations, which are as follows: the Designated Access Provider (DAP) contractual agreement between the MTA and CMCM; and Section 5780(b) of the Digital Infrastructure and Video Competition Act of 2006 (DIVCA), which states the following: "The PEG channels shall be for the exclusive use of the local entity or its designee to provide public, educational, and governmental channels." The MTA has entered into a contractual agreement with CMCM, a non-profit organization, to serve as the Designated Access Provider to control and manage the use of PEG access facilities and equipment. The provisions of this agreement include MTA's ownership of the capital equipment that CMCM purchases using PEG funds to establish the broadcast and transmission capabilities at each city, town and the County. This agreement provides that CMCM shall manage the exclusive provision of public, education, and government channels. MTA oversight of the CMCM activities and expenditures are duties required to ensure compliance with state law and the Designated Access Provider (DAP) agreement. At this time, the City of San Rafael recommends that the MTA continue its responsibilities for CMCM. R4: The MTA should be dissolved. Response: This recommendation requires further analysis. The MTA is a joint powers authority that was formed in 1998 to provide participating agencies increased coordination with respect to franchising and regulating telecommunications services and to set policies that provide more effective and efficient telecommunications benefits to the community. On September 29, 2006, the Digital Infrastructure and Video Competition Act of 2006 (DIVCA) was passed into law, which required that video franchises be issued by the California Public Utilities Commission, rather than local entities. The effect of DIVCA, and its later amendments, was to divest the MTA and its member jurisdictions (i.e., Marin County and its municipalities) of control over local telecommunications (including internet access), leaving it with specific authority only over cable TV franchise and PEG fees. Given this reduction in its responsibility, the MTA narrowed its mission statement in 2016 but still identified telecommunications as an area of continuing local concern, as follows: Support availability, accessibility, affordability and public inclusion in the advancement and enhancement of telecommunications infrastructure and services in Marin on behalf of MTA's members and the community. In alignment with their mission, the MTA has four Strategic Directions: 1. Continue to Perform Cable Franchise Administration, including, but not limited to, Provider Revenue Audits and Customer Service Assistance, and Other Administrative Functions. 2. Support and Oversee Public, Educational and Governmental (PEG) Access. 3. Provide Coordination, Policy Guidance and Advocacy Related to Telecommunications on Behalf of MTA's Members and the Community. 4. Support Broadband Infrastructure Expansion, Services, Affordability and Accessibility The MTA Board of Directors is aware of the changing environment of the administration of telecommunications services at the local level, and has involved each of its member agencies, including the City of San Rafael, in discussions surrounding appropriate and responsible actions to accommodate those changes. If the MTA Board of Directors decides to reconsider its activities, it will conduct a detailed evaluation of its options, and make decisions based on its findings. As a member agency of the Marin Telecommunications Agency, the City of San Rafael will continue to be part of that evaluation, and will take action accordingly. 2 2018–2019 MARIN COUNTY CIVIL GRAND JURY Marin’s Telecommunications Disconnect Report Date: June 6, 2019 Public Release Date: June 13, 2019 Marin County Civil Grand Jury Marin’s Telecommunications Disconnect SUMMARY Marin has been short-changed by a lack of telecommunications leadership by county and municipal officials. Because of this, the public does not have countywide fiber to the home and has only limited ability to aggregate demand. Aggregation strengthens the ability to negotiate cost, coverage, and other contractual terms with telecom providers. Our officials have turned over network development policy to commercial network providers, resulting in a patchwork of network services that benefit the companies’ profit-making priorities. Our officials have not ensured that all county residents receive the best value in telecom services. Effective leadership that has technical expertise in telecom business, regulation, and technology is needed so that individuals, businesses, and government entities will better understand what is happening and what is possible, and choose what is best for all. Major telecom opportunities were missed by existing agencies. Few applications were made for available federal and state funds to provide high quality broadband internet access to unserved and poorly served areas such as West Marin and the Canal Area of San Rafael. The opportunities to use existing fiber optic networks to provide broadband for businesses and residents were ignored. The opportunity to negotiate favorable terms for countywide 5G (the next generation cellular technology) installations was ineffectively addressed. A detailed review of 5G deployment issues is not included in this report in part because federal law precludes health effects from being used to prevent installation of cell phone transmitting stations. The lack of countywide telecom leadership and coordination means that the various government entities did not and do not formally seek or use opportunities to plan and cooperate with each other. The Marin Telecommunications Agency (MTA) was intended to provide leadership, coordination, and policy guidance in the county; however, it has abandoned these functions. With the MTA’s originally stated mission, interested parties could have expected that countywide leadership was being provided. However, the MTA’s Board decided over a decade ago to focus essentially on the collection and distribution of franchise fees and oversight of the Community Media Center of Marin and to ignore its policymaking leadership mission. Marin County needs competent and effective guidance on telecom. The Board of Supervisors should set up a commission or a public advisory group to monitor telecom activities and propose appropriate actions to best serve the telecommunications interests of Marin’s residents. Marin’s Telecommunications Disconnect June 6, 2019 Marin County Civil Grand Jury Page 2 of 8 BACKGROUND Through requests for investigation submitted by concerned members of the public and articles and opinion pieces in the Marin Independent Journal, the Marin Civil Grand Jury became aware that questions exist regarding the telecommunications services provided and the management of telecommunications by county and municipal agencies. APPROACH The Grand Jury used the following methods in developing this report: ■ Interviewing representatives from public and governmental agencies, consultants and citizens. ■ Attending public meetings of agencies and city councils. ■ Researching websites. ■ Examining documents. ■ Reviewing documentation provided with citizens’ complaints. DISCUSSION Telecommunications is ever more important to the functions of daily life. It is an essential medium affecting all sectors of the Marin community. Telecom technologies enable broadband transmission (capacity for sending high speed data over any medium), which can be in the form of coaxial cable, wireless radio, optical fiber, or satellite links. The deployment of telecommunications technology in the county has been handled by several government entities: ■ Marin General Services Authority (MGSA) is a Joint Powers Authority which was created in 2005 by the cities, towns, and the County of Marin to administer various public services effectively and efficiently throughout the county in a uniform manner with minimal overhead expense. The MGSA owns most of the street light poles in the county and licenses what is mounted on them, for example, 5G cellular equipment. ■ Information Services and Technology Department (IST) of Marin County government focuses on government computing and communication needs. IST creates and maintains the infrastructure that supports official county services delivered through the Marin Information Data Access Services (MIDAS), which links county government, cities, and other institutions together in a shared high-speed network. ■ Community Development Agency (CDA) protects public health and safety, preserves environmental quality, and plans sustainable, diverse communities. Among its responsibilities, the CDA controls the siting of cellphone towers within the county through land use regulation. Marin’s Telecommunications Disconnect June 6, 2019 Marin County Civil Grand Jury Page 3 of 8 ■ The Marin Telecommunications Agency (MTA) was established in 1998 to negotiate, collect and disburse cable tv franchise fees and Public, Education and Government (PEG) fees, and to coordinate telecommunications issues for its members. It is a joint powers authority (JPA) that consists of Marin County and all the cities and towns in Marin, except Novato and Larkspur, which have separate cable franchise agreements. Its purpose, as published on the MTA website, is described as follows: The mission of the MTA is to be the key policy-making and coordinating body related to telecommunications matters in Marin. This is in line with the core values that have defined the MTA throughout its history of promoting availability, accessibility, affordability and public inclusion in the advancement and enhancement of telecommunications infrastructure and services in Marin.1 The MTA also established the Community Media Center of Marin (CMCM), which operates Marin TV. Created with PEG fees, CMCM is a non-profit corporation with its own board of directors, and is responsible for Marin County’s non-commercial public access, educational and governmental cable channels. For example, residents can watch broadcasts of their town council and board of supervisors meetings on the CMCM government channel. It also provides residents with access to communication technologies, media training, and the latest digital tools to create original content for cable TV and online media. None of these government agencies, individually or together, functions to ensure that Marin’s residents, businesses, schools and county government enjoy the greatest benefit from telecom service providers and their technologies. MTA’s Changing Role The MTA’s role as the “key policy-making and coordinating body related to telecommunications matters in Marin,” has changed. In September 2006, California enacted the Digital Infrastructure and Video Competition Act of 2006 (DIVCA). This legislation removed local bargaining power and mandated that the cable industry pay local governments a 5% franchise fee for allowing cable franchisees access to the public right of way and a 1% PEG fee to fund public access broadcasting. DIVCA was intended to even the telecom playing field and close the digital divide.2 Cable subscribers pay these fees as a percentage of the monthly bill they pay to the cable providers. They are based on only that portion of the provider’s bill attributable to basic tier cable TV services, not the wi-fi, internet, and other services portions of the service bundle. The precise portion of the bill allocated for basic cable TV service among all the services provided is 1 “Marin Telecommunications Agency.” Marin Telecommunications Agency. Accessed 17 May 2019. 2 “Video Franchising.” California Public Utilities Commission. Accessed 17 May 2019. Marin’s Telecommunications Disconnect June 6, 2019 Marin County Civil Grand Jury Page 4 of 8 proprietary information, so the exact total of fees paid by all subscribers in each jurisdiction is only verifiable by independent auditors. As a consequence of DIVCA, the MTA changed its direction and focused primarily on the collection, distribution and auditing of the fees collected from Comcast, AT&T, and Horizon Cable TV. Essentially, the MTA’s broader strategic role was reduced to monitoring and collecting streams of income from the telecom industry and receiving cable and internet complaints. Its mission of providing telecom policy leadership has not been carried out. The individual members of the JPA (the towns, cities and county) have expressed no interest in paying any portion of their income for telecom policy purposes, preferring instead to maximize distributions to the JPA members’ general funds. As for handling complaints, the MTA’s consumer support consists of offering a link on its website to connect consumers directly to the complaint pages of the websites of AT&T, Comcast, and Horizon and providing an MTA general complaint form on a separate page on its website. As a test, the Grand Jury sent in a consumer complaint to the MTA on its general complaint form, and, to date, no response has been received. After deductions for overhead and professional costs, the MTA distributes the net proceeds of the franchise fees to the general funds of its constituent government members, and it uses the PEG fees to fund the capital costs of public access broadcasting by CMCM. The MTA budget covers hiring an outside accounting firm to audit the fees due from the cable franchise companies and the costs of running an office with a part time executive director and some clerical support. The overall cost of running the MTA amounts to over $200,000 per year, a significant expense for MTA’s largely ministerial role. Even these limited functions of the MTA are unlikely to survive into the future because the continued payment of these fees by the cable companies is unlikely to last. With the availability of broadband streaming services, consumers are now “cutting the cord,” so the payment of franchise fees is declining and is likely to eventually cease altogether. Additionally, the cable companies are challenging their obligation to pay the franchise fees at all, claiming that it is anticompetitive compared to other non-cable providers, such as DirecTV and DISH. Added to all of this, cable providers may be able to offset some of the amount paid to the MTA because the FCC has ruled that providers may charge entities like Marin TV for use of the providers’ facilities to distribute the entities’ content. The future of this income stream to local governments is in jeopardy which brings even the diminished function of the MTA into question. Marin’s Telecommunications Disconnect June 6, 2019 Marin County Civil Grand Jury Page 5 of 8 Detrimental Results and Missed Opportunities As a result of the lack of coordinated and properly supported oversight, the county has not taken advantage of important opportunities: ■ Each municipality has negotiated separately with telecom providers and the potential benefits of a proactive strategy and aggregation have been lost. For example, cities are separately engaging legal counsel in determining local rules for deploying 5G technology. Additionally, there is no coordinated strategy for investigation of the use, benefits, detriments or installation of this technology. ■ Exclusive use of six strands of optical fiber alongside the SMART tracks was offered to Marin County to service its telecom needs free for 20 years by SONIC, but these fibers have sat idle for several years. ■ Only a few attempts were made belatedly by the MTA to connect the existing Skywalker Ranch broadband fiber network to underserved communities in West Marin. Nicasio and Bolinas did succeed in getting fiber to the home projects going with support and partial funding by the California Public Utilities Commission and the County of Marin and with support from Marin County’s Information Systems and Technology Departments.3,4 ■ The MTA made no application for Obama-era funds specifically dedicated to the delivery of broadband to underserved and unserved areas, such as the Canal area of San Rafael and West Marin.5 California Public Utilities Commission (CPUC) funds were also available, though again, the MTA for the most part, did not apply for them.6 The MTA took no advantage of these opportunities, offered no strategy to the cities and towns of Marin, and provided no oversight of telecommunications services for Marin County as a whole. Unlike the City of San Jose that, as an example of proactive telecom planning, negotiated agreements for 5G cellular deployment with Verizon, Mobilitie and AT&T to ensure service to all areas of the city so that redlining (not providing service to less profitable areas) was prevented. Additionally, the vendors will be contributing to a $24M Digital Divide Fund for San Jose over the next decade that will support programs and initiatives for residents who lack access to broadband internet services.7 3 Avants, Maggie. “Skywalker Ranch Broadband Carrier Tapped for New Nicasio Network.” Patch. 15 July 2016. 4 Evans, Beau. “West Marin’s Internet woes and hopes.” Point Reyes Light. 25 Jun. 2015. 5 “Secretary Locke Announces Recovery Act Investments To Expand Broadband Internet Access And Spur Economic Growth .” National Telecommunications and Information Administration. 27 Sep. 2010. 6 “California Advanced Services Fund (CASF) Grant Program and Revolving Loan (California).” Grants Office. Accessed 17 May 2019. 7 “City of San Jose Announces Major Agreements with Verizon, AT&T & Mobilitie to Significantly Enhance Broadband Infrastructure in San Jose.” City of San Jose. 15 Jun. 2018. Marin’s Telecommunications Disconnect June 6, 2019 Marin County Civil Grand Jury Page 6 of 8 JPA Structural Limitations JPAs exist in special obscurity because their directors are elected to other councils or boards from which they are assigned to serve on JPA boards. The MTA is an example of this. Its members — the County of Marin, and the cities and towns of Belvedere, Corte Madera, Fairfax, Mill Valley, Ross, San Anselmo, San Rafael, Sausalito and Tiburon — each appoint one of their council members to the MTA board. No council candidate campaigns on issues related to a JPA because their election to a city or town council does not guarantee appointment to any specific JPA board. As a consequence, it is unlikely that JPA board members would have telecommunications expertise, and in fact, they do not. Possible Solutions What can the county do to ensure that future telecom opportunities and benefits are not missed? What organization would be suited to oversee the provision of the best telecom services (such as broadband internet, television programming, 5G, or future telecom technologies) in the best possible way? Whatever form it takes, the county needs competent guidance and leadership in technical, business and regulatory matters regarding telecom. Simply allowing market forces to determine telecom deployment without government intervention will produce service area gaps that leave less populated communities without connection — as has occurred in the more remote areas of Marin County. Dense population areas are more profitable for telecom providers because they can get the highest returns on the costs of extending their infrastructure and siting their equipment. To address these issues, the Grand Jury proposes that a citizen advisory commission be created to monitor and address telecom matters for the whole county. The commission should be made up of members of the public who have the interest and expertise to provide advice on telecom issues. Marin’s Telecommunications Disconnect June 6, 2019 Marin County Civil Grand Jury Page 7 of 8 FINDINGS F1. Neither the County nor any of its agencies is providing strategic leadership or advice for telecommunications services such as broadband internet access or 5G, leaving Marin poorly served. F2. Each municipality has been obliged to negotiate separately with 5G and fiber to the home telecom providers, so the potential benefits of aggregation have been lost and some communities remain unserved or underserved. F3. The MTA has chosen to abandon its policy making and coordinating mission, so the MTA serves no strategic or advisory function to the county. F4. Currently, the main function of the MTA which is to collect and distribute cable franchise and PEG fees to its members, could be efficiently performed by the MGSA. F5. CMCM is a nonprofit tax-exempt corporation which is governed by its own board so it could operate without MTA oversight. F6. The MTA has applied for few of the available Federal or CPUC grants, and it has missed opportunities to access existing fiber networks, all of which has caused Marin County to fall behind the levels of telecom service provided to other areas in California. F7. The MTA’s income is declining and may be eliminated altogether; as a result, the MTA will have no function and is likely to disband or it will need to be funded by its constituent municipalities or from some other source. F8. The county could benefit from strategic guidance and leadership in technical, business and regulatory matters regarding telecommunications for its businesses and residents. Marin’s Telecommunications Disconnect June 6, 2019 Marin County Civil Grand Jury Page 8 of 8 RECOMMENDATIONS R1. By December 31, 2019, the Board of Supervisors should appoint a citizen’s advisory committee that will provide advice and information on telecommunications services and policy. The Grand Jury recommends that citizens with telecommunications expertise be appointed to the committee. R2. The MTA’s franchise fee collection and disbursement responsibilities should be moved to the MGSA. R3. MTA’s responsibilities for CMCM should be terminated. R4. The MTA should be dissolved. REQUEST FOR RESPONSES Pursuant to Penal code section 933.05, the grand jury requests responses as follows: From the following governing bodies: ■ Marin County Board of Supervisors (R1, R2, R3, R4) ■ Marin Telecommunications Agency Board of Directors (R2, R3, R4) ■ Belvedere City Council (R2, R3, R4) ■ Corte Madera Town Council (R2, R3, R4) ■ Fairfax Town Council (R2, R3, R4) ■ Mill Valley City Council (R2, R3, R4) ■ Ross Town Council (R2, R3, R4) ■ San Anselmo Town Council (R2, R3, R4) ■ San Rafael City Council (R2, R3, R4) ■ Sausalito City Council (R2, R3, R4) ■ Tiburon Town Council (R2, R3, R4) The governing bodies indicated above should be aware that the comment or response of the governing body must be conducted in accordance with Penal Code section 933 (c) and subject to the notice, agenda and open meeting requirements of the Brown Act. The following individuals are invited to respond: ■ CIO, County of Marin ■ General Manager, Sonoma Marin Area Rail Transit (SMART) Note: At the time this report was prepared information was available at the websites listed. Reports issued by the Civil Grand Jury do not identify individuals interviewed. Penal Code Section 929 requires that reports of the Grand Jury not contain the name of any person or facts leading to the identity of any person who provides information to the Civil Grand Jury. The California State Legislature has stated that it intends the provisions of Penal Code Section 929 prohibiting disclosure of witness identities to encourage full candor in testimony in Grand Jury investigations by protecting the privacy and confidentiality of those who participate in any Civil Grand Jury investigation.