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• (SPECIAL) imy 14, 1981
A MOTION OF THE CITY COMMISSION AUTHORIZING THE CITY
MANAGER TO RETAIN THE SERVICES OF TELECOMMICATIONS
MANAGEMENT CORP. (CARL PILNICK) TO CONTINUE TO SERVE
AS CONSULTANT TO THE CITY DURING THE NEGOTIATIONS
PERIOD WITH AMERICABLE OF GREATER MIAMI
Mn#TES OF SPECIAL MEETING
CITY COMMISSION OF MIAMI, FLORIDA
On the 14th day of July, 1981, the City Commission of Miami, Florida
met at its regular meeting place in the City Hall, 3500 Pan American Drive,
Miami, Florida in Special Session.
The meeting was called to order at three o'clock by Mayor Maurice A.
Ferre with the following members of the Commission present:
Commissioner Joe Carollo
Commissioner J. L. Plummer, Jr.
Commissioner (Rev.) Theodore Gibson
Vice -Mayor Armando Lacasa
Mayor Maurice A. Ferre
ALSO PRESENT: Howard H. Gary, City Manager
George F. Knox, City Attorney
Ralph G. Ongie, City Clerk
Matty Hirai, Assistant City Clerk
An invocation was delivered by Reverend Gibson who then led those present
in a pledge of allegiance to the flag.
Mayor Ferre: Good afternoon, Ladies and Gentlemen. This is a continuation
of a public hearing of the City of Miami Commission for the purposes of
Cable Television hearings and hopefully, for a decision and a selection by
this Commission on one of the five applicants to negotiate with the City
Manager for a contract to install a cable television system in Miami. At
the previous meeting the allotted time to the different contenders was not
totally consumed and so therefore Miami Telecommunications has an additional
6 minutes, Americable has 6 minutes, Vision Cable has 4 minutes, Cable Systems
has 14 minutes and Six -Star Neilson has 32 minutes remaining in their pre-
sentation. To try and make it as equal as possible we had agreed upon 15
minutes per each one of the applicants so consequently you can add 15 to the
numbers I just read which make Miami Telecommunications 21, Americable 21,
Vision Cable 19, Cable Systems would be 29 and Six -Star Neilson would have
47 minutes. I would hope that additional time would be taken only if the
applicant feels it is absolutely nece, -.ary. The batting order that was sel-
ected at the last meeting, is as fol' ems: Cable Systems will make the first
presentation, Six -Star Neilson will make the second presentation, Miami Tele-
communications will make the third presentation, Americable will make the
fourth presentation and Vision will make the fifth presentation. Since we,
hopefully, will not have another hearing then I must stop you within your
allotted time to keep this totally fair. I will ask the Clerk to please ad-
vise whoever is speaking 3 minutes before the slotted time and again to in-
form whoever is speaking 1 minute before the slotted time expires. When that
time is up I would be most grateful if you would finish whatever sentence you
as making and let the next speaker have the microphone. Mr. Pilnick is with
us today. Mr. Pilnick has presented a series of letters which members of the
Commission have in answer to previous questions. I'm going to recognize him
first so that he can explain what it is he has concluded and answer in written
reports to Commission questions. Secondly, I would like to ask Mr. Knox to
review for the Commission any pending lawsuits that in his opinion or in that
of Mr. Pilnick might be important for us to understand or discuss in our de-
liberations and as a matter of fact, I really think, George, it might be even
more appropriate to begin with you, because Mr. Pilnick I know has also in-
vestigated some of these pending lawsuits and I'm sure that he will have some
comments, as I asked him to have some comments ready, regarding to his opinion
it's seriousness. Now, after Mr. Knox is...
Mr. Plummer: Mr. Mayor, -nay I determine please that copies of both, which
you've just referred to uhich is Telecommunications Management Corp. July
14th date and also Mr. Knox's memo of July the 14th, I would like to be ass-
ured that the spokesman or applicant for each company is in receipt of both
01 JUL 14 198J
Mr. plumomert (continued) of these documents. Is there any company here,
spokesman for the company, who has not received either one of these documents?
All right, thank you, Mr. Mayor.
Mayor Ferret We will follow the following procedure. Mr. Knox will first
answer the questions that were asked of him in the previous meeting. Mr.
Pilnick will then go over the written report that he hat made and answer ques-
tions from the Commission, we will then have presentations by the following
five cable companies and I will then open the floor up for any discussion
input by members of the public that wish to testify during this public hear-
ing. Let me expalin to you that at the previous Commission meeting we closed
the discussion. Early during the meeting we have 12 maybe 13 people speak,
they each spoke 3 minutes into the record, after that was concluded there was
a motion that was moved and seconded to close the public hearing and the
public input at that time and at that time I said that I would re -open the
public input at the appropriate time. I think the appropriate is after both
the City Attorney and Mr. Pilnick have had the opportunity to answer previous
questions, after all the presentations have been made and at that time I will
recognize any input from the members of the public who wish to make a state-
ment to this Comission before our deliberations are taken. After those pre-
sentations and after the input of those members of the public who wish to
speak, we will close off the public discussion r-irtion and then the Commission
will enter deliberations. Does anybody have, any members of the Commission,
have any problems with the outline that I've stated? Is that acceptable to
you, Father, you got any problems? Okay. Now, how many people are here from
the public who are associated directly or indirectly with any of the five
applicants who wish to address the Commission on this issue, would you raise
your hands please? We have eight. Would you eight please submit your name
to the Clerk and I will take you in the order that the Clerk gives me the
cards, so you proceed. Now, are there any other announcements before we
begin? Mr. Lacasa, you said you need to leave by 8, would you put that on
the record.
Mr. Lacasa: Yes, Mr. Mayor, I have to leave at 8 o'clock P.M.
Mayor Ferret Is there anybody else who wishes to make any statements at
this time to the CommissionT We will now begin the process. Mr. Knox, the
Chair recognizes you, sir.
Mr. Knox: Pursuant to the City Commission's instruction at it's last
meeting the Law Department has based upon information contained in Form C,
which is attached to the request for proposals, catalogued all the informa-
tion which was submitted by the cable companies relative to questions that
were asked concerning their involvement in litigation and due to the short
period of time within which we had to operate we have limited our information
to that source plus our independent inquiries of the companies relative to
whether or not there is any litigation that was not mentioned in response
to the request for proposals. The first company that appears in your memo-
randum is Americable of Greater Miami. Americable showed that it was not
involved in any litigation in response to the question in the request for
proposal, however, the attorney, Mr. Kenneth Myers, for Americable advised
the City Attorney's Office on this day that there was litigation which was
against one of its principals, Mr. Charles Hermanowski, individually which
involved a dispute concerning the strand mapping which is a part of laying
of cable and that lawsuit was settled. The amount in dispute was $55,000
and the claim was settled for $40,000 and the case was brought in the state
of Tennessee against Mr. Hermanowski individually. The next cable company
is Cable Systems of Miami. In reponse to the request for proposal Cable
System indicated that they were involved in a lawsuit with the City of
Minneapolis where the City rescinded a franchise that had been previously
granted Cable Systems. The City prevailed and the Supreme Court of the
State of Minnesota upheld the trial court in that case and that's the only
case listed. Miami Telecommunications showed that it is involved in a law-
suit with the City of Boulder, Colorado, which is currently before the
United States Supreme Court which contested the City of Boulder, Colorado
asserted right relative to 'rates. Miami Telecommunications was also in-
volved in a lawsuit with another corporation which involved anti-trust matters
and this case has not been scheduled for trial. Miami Telecommunications
is also involved in 8 cases involving cities in the State of California which
02 JUL i 41981
Mr. Knox: (continued) related to a rate dispute. In addition, Miami Tele-
communications was involved in litigation with the City of Jefferson, Missouri
and the nature of the case was allegations against the City involving anti-
trust. Six -Star Neilson indicated that they were involved in a case. The
principals of Six -Star were previously involved in a case which resulted in
some sanctions being imposed by the Security Exchange Commission against those
principals. Vision Cable was involved in 1964 with the Herald Company, The
Herald Company was a pre -assessed interest to Vision Cable and the Herald
Company prevailed and that case involved considerations of price fixing. Now,
that covers the information that we have relative to involvements of these
companies in litigation. We have some fragmentary information which analyzes
the cases further but time has not permitted any extensive reviewing and eval-
uation of the actual cases because almost of them occurred in jurisdictions
outside of the State of Florida. in summary, we show that Americable has
been involved, a principal in Americable has been involved, in one piece of
litigation. Principals of Cable Systems have been involved in at least one
piece of litigation. Miami Telecommunications has been involved in 10 pieces
of litigation. Principals of Six -Star Neilson have been involved in one piece
of litigation and Vision Cable has been involved in one piece of litigation.
That concludes our report unless you have some questions, Mr. Mayor and mem-
bers of the Commission.
Mayor Ferre: With regards, I'm talking about your memorandum dated July
14th, Mr. Knox. I noticed that in the case of Miami Telecommunications that
you,....which is item #3 on page 2, I notice that you have put in that Miami
Telecommunications has had 10 lawsuits. The question I have is how many of
those lawsuits if any were inherited because they were corporations that
Miami Telecommunications purchased? In other words, that were not lawsuits
that they originated because they were involved in the process, but rather
that they were corporations which they bought that had lawsuits pending?
Mr. Knox: I can read a portion in response to that question and perhaps
one of the principals can amplify upon on it. We also have a letter from
Mr. Richard E. Gerstein, who is the President of Miami Telecommunications,
Inc., in which there is an indication that 7 of the 10 lawsuits for Miami
Telecommunications were settled out of court and further that all 7 of these
suits were pending at the time TCI purchased the system from the local opera-
tor. We have not independently verified this representation, but it was made
by the President of the corporation.
Mayor Ferre; When they come up to discuss this matter, I just want to put
on the record, Mr. Knox, that I would expect that either you or I will, ask
them on the record to clarify that because if out 10, 7 of them were companies
that they bought that had those lawsuits pending and I don't think it's
quite right to assume that those 10....
Mr. Knox; We just also received information that there was a lawsuit
filed in the City of St. Louis on June 9th of 1981 involving Miami Tele-
communications or TCI to which they may wish to respond.
Mayor Ferre: In St. Louis, you say?
Mr. Knox: Mayler Corporation vs. the City of St. Louis, Missouri..
Mr. Plummer: What was the basis of the suit?
Mr. Knox: It starts out talking about anti-trust, anti-trust and con-
stitucional of questions associated with it, we can read the opinion, I just got
my hand on the compliant 5 minutes ago.
Mayor Ferre: All right, would you have somebody in your office read that
and maybe later on we can discuss that.
Mr. Knox: Yes, sir.
Mr. Plummer: Mr. Knox, you indicated that one company's -counsel obviously
you talked to that they had litigation that was not in the report. Did you
give the same opportunity to every company? Did you talk to every one of
the companies and ask them if they had any further litigation other than
03 JUL 141961
Mr. Plummer: (continued) whet you have here?
Mr. Knox: We did speak to representatives of all of the companies and
I might indicate that we spoke to counsel for this particular company in
response to a suggestion which was made by a competitor relative to that ques-
tion and I can indicate also for the record.... well, I'll let them indicate
the reason *hy it did not appear in their response to Cie request for proposal.
Mayor Ferree All right, are there any further questions from Mr. Knox or
Mr. Knox do you wish to make any further statements at this time on any liti-
gation pending?
Mr. Knox: Not at this time..
Mayor Ferre: If not, then we will now hear from Mr. Pilnick. Mr. Pilnick?
Mr. -Carl Pilnick: Mr. Mayor, Commissioners. I don't have anything to add
to Mr. Knox's report with respect to the litigation. I think in general the
cases that he mentioned are the ones that I'm familiar with and I would be
happy to answer any specific questions about any particular case that I have
knowledge of, if you wish.
Mayor Ferre: Well, I think that we should go through them, Mr. Pilnick.
Mr. Plummer: Are we going to speak to the letter first?
Mayor Ferre: No, at this point, since Knox started out and as I said in
the beginning we will deal first with the legal aspects and then we'll get
into the answers that Mr. Pilnick was requested. Let's stick strictly to
the legal ramifications. Mr. Pilnick, you said....
Mr. Pilnick: Mr. Mayor, I'll just go through the cases that I have some
knowledge of. I'm not familiar with the Americable situation at all. With
respect to the Cable Systems suit I'm familiar with it to the extent that I've
read about it in the trade journals...
Mayor Ferre: Is this the one in Minneapolis?
Mr. Pilnick: Yes. In essence, as I understand it, the City Council in
Minneapolis by resolution indicated that they were going to award a franchise
to Cable Systems and subsequent to that resolution during the period of ne-
gotiation before a final franchise agreement was reached apparently there was
a City Council Meeting, a City Council election, which changed the nature of
the Council. A second vote was held after the election and that reversed
the decision of the first vote and awarded the franchise to a subsidiary of
Storer and I believe that Cable Systems filed suit under the grounds that
they believe that the first award constituted a firm contract and as I under-
stand it, the courts did not uphold that view, they upheld with the right
of the counsel to change the decision. That's about all I know about that
particular case.
Mr. Plummer: Mr. Mayor, pertinent to that partiL."?tr point, I think we ought
to make this very clear as I understand it and if I'm not understanding it
correct, Mr. Pilnick, I want to make it clear right now and you correct me.
It is my understanding what we will be doing here today is choosing one, two,
three companies, whatever the decision of this Commission is, that in no way
is the final decision?
Mr. Pilnick: That certainly would be my recomme=4 tion, Commissioner Plummer.
Mr. Plummer: All right and what you have stated throughout your report many
times and very clear is the most key important thing of this whole selection
process is the negotiations with the particular company that is going to be
signing the final contract.
Mr. Pilnick: That's correct.
04
JUL 141981
Mr. Plummer: So that we don't get into this problem, all of the people are
sitting in the room fully understand as I understand, that this today assuming
that a company is chosen is not the final approval of this Commission.
Mr. Pilnick: Well, certainly that would be my recommendation, but I think
you have to make that clear when you do make your decision.
Mr. Plummer: Well, I hope that at such time, I think that would avoid this
kind of litigation that they got into there, but, in other words, I just
wanted, if anybody has any problem with that I'd like to know it, because that's
my understanding and that's the way I'm traveling.
Mayor Ferre: Well, let me tell you what my problem is definitely. My pro-
blem is as follows, if this Commission comes to a decision today, I would
hope that would be a final decision. Now, what in effect we will be doing,
what in effect we will do, the decision is that we will ask the Manager with
the.help and the advice of Mr. Pilnick and a well -seasoned expert law firm
in this particular field and he's recommended several, and I would like to
have later on that George Knox interview these firms and any others that might
have expertise and come back to this Commission with the recommendation of
one or two or three firms that we can choose and I think that we've got to
be very very specific that the law firms that are chosen for this purpose
have got to be seasoned, experienced high -accredited law firms that specialize
in this particular field, this is a very highly accredited Is;, firms that specialize
point it would be this Commission's instructions to the Manager to negotiate
and come back to the Commission for acceptance or rejection or a change to
that extent, Commissioner Plummer, I'm in agreement with you that this is not
the final vote by a long shot. Furthermore, it is my opinion and I think
that it is essential and to me as important as choosing the winner is choosing
number two, because I think that we've got to let the winner know that if
buddy, he doesn't come up with the right type of goodies for the people of
Miami that this Commission will not hesitate in any way to go to number two.
I think that will make the negotiations with number 1 a lot easier. Now,
if number one doesn't make it, then I think the Manager is going to be in-
structed by this Commission to hopefully before November 3rd to go to number
two if there is impasse. It seems to me that does make it similar to the
Minneapolis lawsuit of Cable Systems because what Cable Systems sued on was
the concern that after an election when there was a different composition and
as I recall, it was a vote of 8-7 by 1 vote, there was a change, which, by
the way, that lawsuit is going to the Supreme Court of the United States, that
is how far it has gone because there questions of the First Amendment and other
very complicated technical questions that are involved in that. Now, I cer-
tainly don't want to go through that kind of procedure so I agree with you
mostly, Commissioner Plummer, but I want to make that distinction the way
I see this.
Mr. Plummer: Mr. Mayor, let me simplify that because we're in concurrence,
so seldom we are, but we are in this particular case and I think any fear
there can be alleviated by putting on the Manager, Mr. Pilnick and the law
firm chosen, a 30 or 44 day timeframe. I cannot believe even though this is
very intricate type things that this thing with the number one company could
not in fact be settled. Mr. Pe nick, is 30 days out whatever you....
Mr. Pilnick: I think that 45 would be a little easier.
Mr. Plummer: All right, sir, 45 days, so if there's any fear in anybody's
mind that the election is the key factor, it's not, by putting in a 45 day
decision date. Forty-five days from today is the lst of September. If there
is no conclusion reached, an agreement is not reached, the Manager has got to
come back and tell us before the 1st of September and I think that can allievate
the Mayor's problem, it would allievate my problem. Not problem, but it would
allievate that things are progressing the way that they should. Mr. Pilnick,
may I ask another question based on that of the Mayor, are there law firms
in this country that do exclusive or near exclusive or could be considered
experts in the field of contract negotiations for cable systems contracts?
Mr. Pilnick: There are, Commissioner Plummer, unfortunately most all of them
work for the cable companies.
05 JUL 141981
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Mr. Plutamer: That's unfortunate for them, sir.
Mr. Pilnick: Well, the problem is that...
Mr. Pluumners Is that before or after the contract, I believe.
Mr. Pilnick: It is only very recently that I think that cities have awakened
to the fact that the final contract is that important and have decided to
negotiate it in that much detail and it is more recent that cities have de-
cided to try to utilize outside law firms. To my knowledge and all the
situations that I have been involved, the City of New Orleans just 6 months
ago was the first one that made that first decision.
Mr. Plummer: What decision?
Mr. Pilnick: New Orleans.
Mr. Plummer: What decision?
Mr. Pilnick: To hire an outside law firm in addition to their own city
attorney staff to help negotiate the cable matter and to look for one with
expertise in that area.
Mr. Plummer: I don't think there's any question in anybody's mind'in this
Commission that our City Attorney shall sit in on all of those meetings.
Mr. Pilnick: Yes, sir.
Mr. Plummer: Okay, that...
Mr. Pilnick: Yes, I assume that, but what I was saying is that there haven't
been too many cities and New Orleans is the only one that I'm aware of up
to now that have looked for a law firm to represent them on their side of
the negotiating table and almost in every other case the City Attorney has
sat on one side and the outside communications attorney has sat on the other
side.
Mr. Plummer: Since you have been involved in the New Orleans situation,
can you give me a rough idea as to what they paid for that outside counsel?
Mr. Pilnick: I don't know. They retained the counsel themselves and they
had a separate contract. I probably could find out, but I just don't have
that information.
Mr. Plummer: Thank you, sir.
Mr. Pilnick: I would think that if you negotiate the kind of agreement
that is usual where the successful cable company is responsible for your
city out-of-pocket costs in the franchise process that in effect those costs
recoverable.
Mr. Plummer: What you're saying is tha4- the companies that are set tc ne-
gotiation would pay those -costs?
Mr. Pilnick: Yes.
Mr. Plummer: ...whether they win or lose?
Mr. Pilnick: What I'm saying is that they've paid some of the costs in their
application fee, but in addition to that, if the city's costs exceed that
dollar amount the usual practice is to require the cable company that gets
the franchise to pay any additional out-of-pocket costs to the city.
Mayor Terre: All right, Mr. Pilnick, you'll continue in a second. Commissioner
Carollo, we got the message that you had to go get your hand taped and every-
body is aware of that. We started about half hour ago exactly and in this
past half hour we heard from Mr. Knox, who reviewed a memorandum you have in
your packet dated July 14th, which basically outlines the lawsuits that Mr.'
Knox... was asked to review and Mr. Pilnick is now in the process of going over
06 JUL 141981
x
Mayor Ferret (continued) those suits which he is aware, he's not aware of some,
but those he's aware of and explaining to us what he's thinks they're all about,
that's where we're at.
Mr. Carollo: Thank you, Mr. Mayor.
Mayor Ferre: Okay, Mr. Pilnick, then you can continue.
Mr. Pilnick: The next suit that I have familiarity with is the Telecommunica-
tions suit against the City of Boulder. I think, Mayor Ferre, that is the
one that is front of the Supreme Court now and that's the one that does have
a variety of complianrs and including First, Fifth, Fourteen Amendment and
the anti-trust laws and I'll try to be very brief in summary of that. As I
understand that case, Telecommunications bought a cable franchise from a pre-
vious franchisee, operated the system for some years, for some period of time
provided very limited service only to a small portion of the :-esidents of the
community. The City claims that it had asked Telecommunications to expand
service to the remainder of the community a number of times and the response
they got over the years was it was not economically feasible and at some point
the City decided to go out on requests for proposal for another cable franchise
award and either concurrently or around the same time TCI began expanding
their construction, began building through the rest of the City. The City was
concerned I think that if they expanded the system too much and covered too
much of the City there would be essentially no territory left for anyone else,
so they imposed a moratorium on the building and they also followed it in
effect by revoking the franchise in one resolution and in a subsequent re-
solution on the same night granting a second franchise which restricts to the
territory that TCI that was allowed to operate under. TCI's case is the City
had no power to do that, that was I think a unilateral abridgement or modifica-
tion of the contract and I think that is their basic compliant, but a lot of
other compliants were listed in the lawsuit including the First Amendment
which takes the position that since Cable provides news it is the equivalent
of an electronic newspaper and therefore, the City has no right to regulate
it just as they wouldn't have the right to regulate it just as they wouldn't
the right to regulate print newspaper. The anti-trust aspect comes into the
TCI's contention that by holding TCI back from construction when they had
a valid license and allowing other people to come in and bid for the same
territory that in effect the City was conspiring with the other companies and
with violating anti-trust laws. I think the main issue that presumably the
Supreme Court is being asked to adjudicate is the anti-trust question is whether
the City can be liable for anti-trust, but it can decide the case on any of
the other issues that I have mentioned. I think this is a brief layman's
summary of the case as I understand it and you can probably get TCI's counsel
to explain it a little more. The only other suits that they have that I'm
generally familiar with maybe to a more superficial extent were those for
Jefferson and the St. Louis suit that you're talking about now and as I
understand it, TCI purchased franchises from previous franchisees and the City
has attempted in either case to limit the franchise or revoke the franchise
based upon the performance of the previous company and TCI's position is they
have a vested interest since they purchased the franchises and they don't be-
lieve that they should be subjected to revocation. I'm familiar with the Six -
Star Neilson cases, both the previous settlement of securities law violations
and the one that was filed by the SFC in 1980. The one in 1980 is directly
relative to cable operations because the charges that were made by the SFC
is that in effect 3 of the principals of Six -Star and I'm talking about Six -
Star Cable Vision which is a 50% partner of Six -Star Neilson Cable Vision,
but the 3 major owners of Six -Star were accused of selling unregistered stock
in the form of splitting franchises up and selling in effect pieces of fran-
chises to various investors for a tax shelter arrangement. There has been a
consent degree as I understand it between the SFC and 2 of the principals,
one of the principals has not consented and that case is still pending. I'm
not familiar with the Vision Cable suit at all and I believe that has nothing
to do with cable. If you don't have any more questions, then I think I will
proceed as you...
Mr. Plummer: Yes, I do.
Mayor Ferre: Mr. Pilnick and J.L., let's stick to the legal aspects so we
can get that behind us and then we'll go on to the others. Commissioner
07 JUL 141981
Mayor Ferre: (continued) Plummer?
Mr. Plummer: well, I guess thine is a legal question and I'll to have ask it
to find out. Mr. Pilnick, in your estimation, sir, the F" and the way in
which the companies bid -is our system since a lot of these lawsuits seem to
immanent from rates, setting of rates, do you feel that what we have since you
did not participate in the RFP is clear enough to hopefully and I know you
can't guarantee, I can't either, that our system of setting rates is clear
enough to avoid litigation in the future?
Mr. Pilnick: I think it's clear. I don't necessarily think it will avoid
litigation. I think there are some cable companies that take the view that
cities either should not have the power or legally do not have the power to
regulate rates, that's one position. If you push that First Amendment argu-
ment to its extreme then what that argument is saying that a cable system
should be as free from regulation as a newspaper should be. The courts have
not made a final ruling on that yet. Depending on that ruling you may or you
may not have some constraints put on your power to regulate rates. I think
your procedure, the question is whether someone else may prempt your abilities,
someone at the Federal or state level or the judicial level.may at some point
may a decision that interferes with the regulatory procedure that you set up.
Mr. Plummer: Well, then I guess I have to ask my question in a different
way. Do you feel that what we have there presently is clear enough under the
best of conditions?
Mr. Pilnick: I think it's clear enough so that the company that doesn't
want to challenge your right to regulate rates should be able to live with it.
Mr. Plummer: Is that one of the things that you will cover in the negotiations
of the contract?
Mr. Pilnick: That's one of the things that I think should be covered and
again, I wish to point out that regardless of what a company says or agrees
to the final decision may be outside of the City's hands.
Mr. Plummer: And we can't do the courts, but if they agree to it in the
contract then we can hold to that?
Mayor Ferre: Well, I'm not a lawyer, but I think in a contract you can put
alternatives, in other words, I think that you can say that if at any time
in the future the 5uF_eme Court decides such and such or the communications
systems advances to a point where such and such then the Company agrees to
do such and such, so that I think you can by putting it as part ... I think,
I'm not too sure this becomes a complicated legal problem, but I think you
i can agree to agree in the future and I would hope that at least we would try
that even if later on a Federal court would rule that out, but I think we
certainly have to attempt to put it in and in other words, I think we've got
to tie this down as much as we can possibly tie it down.
Mr. Pilnick: As a direct answer to your question, Commissioner P'-uaner, I
think that's an important part of the negotiations and we will attempt to
make that as tight as possible, but I just don't to leave any il:_3ions that
will necessarily last.
Mayor Ferre: Let me just put for the record, Father, then I'll recognize
you. I have spent some time calling different cities, different people that
are involved in this whole process and there's no question that there is an
attitude with some of these companies and of course, I'm sure, will be vehe-
mently denied and I'm not goinq to name any companies, but there are companies
that are bitter and that they have a poor record of their attitude towards
municipalities and governments and once they are awarded the franchise they
take a rather dim view of what they consider interference and there is a rather
bad record in some places by some companies of being rather rude, crude or
whatever you wish to call it with local governments. Father Gibson?
Rev, Gibson: Are we permitted to ask the questioner?
Mayor Ferre: Yes, sir, absolutely on the legal aspects.
08 JUL 141981
Rev. Gibson: It would appear to me and I'm not a lawyer that we ought to ask
each company. Let me say, I don't want you to ask them for me. I want to ask
thud right on the record so that when I vote I know whether I want to send
him to you. Mine is very clear, crystal clear and T want it understood that if
the court rules later on that they have that right that exonerates them, that
frees them, but as right now, I want to know about the attitude of the people
I'm going to be dealing with and the buck stops right here, I know not to send
you to negotiate no contract with my people. Now, we could pass the buck all
we want to, but the buck stops right here and if that's the attitude you don't
give a damn, we don't have no authority, I'm prepared to say, "Okay, I'll accept
it, but I don't have to deal with you". Now, I learned in that in law school,
the one day I went there, okay. All right, Mr. Mayor, at the proper time I
want that question answered.
Mr.*P1ummer: Mr. Pilnick, I guess this is in the realm, sir, of the legal and
Mr. .Mayor, if I'm out of line, I'll wait. Mr. Pilnick, one of my concerns hasn been since Day One in this thing and I learned a lot from negotiating, not
negotiating but being involved as a Commissioner in Southern Bell franchise,
which I'm sure you're somewhat familiar with that and this almost parallels
it, the state of the art of the cable t.v. is just changing daily, you know,
it's unbelievable and I learned this from Southern Bell what I learned that
there is the possibility that we could wake up tomorrow morning and they no
longer need telephone poles that they can send 100,000 communications thro,Agh
a single pipe underground or through a pipe and my concern is that this City
Commission is going to be depending on the minimum income as part of it's
revenue and it's budget procedure for the next 15 years, that's the bird in
the hand, we know that, that on the 15 years the minimum as it calls for is
a $500,000 a year and we can pretty well write that in, that's the way my
feeling is. Now, if the state of the art tomorrow were to come up where
cable companies don't need cables, they don't need franchise any more, is it
proper in the contract or in the negotiations that this City could be assured
of $7 1/2 million dc.11ars or 15 years of $500,000 a year regardless of the
change of the state of the art, now is that proper? I'm concerned that we get
3 or 4 years down and we have 15 years built into the budget and suddenly
tomorrow morning we wake up and we don't have that $500,000 in budget.
Mr. Pilnick: As I read your ordinance, Commissioner, I think it requires a
$500,000 minimum regardless of revenues from the cable company for 15 years,
so that...
Mr. Plummer: I'm not saying that, sir..
Mayor Ferre: J. L., what we're getting into now is the legal of the contract
itself rather than the legal of the lawsuits and the other...
Mr. Plummer: All right, sir. Well, I'll wait, Mr. Pilnick, but I want the
matter clarified.
Rev. Gibson: Can I get my question answered?
Mayor Ferre: When they come up, Father Gibson, yoy'll have that opportunity
and I'm sure you won't forget and I won't forget either.
- Rev. Gibson: All right, let me do this way. Each company that addresses us
today I want you to tell me what your attitude is just, you know, if I'm
- sleeping say, "Gibson, I want you to wake up. This is what my attitude is with
regard to you're being able to tell us what the rates are." If we agree today
_ that you are or have authority and there's a court ruling which negates that
i later on we have a gentlemen's agreement to back away, back off, don't do it
any more, okay. You know, 7'm going to be listening like hell waiting for that answer,
okay.
Mayor Ferro: Are there any other questions with reference to any of the law-
suits that the 5 applicants have been involved or are involved in?
Mr. Plummer: Mr. Pilnick, in your experience, sir, we have only 5 out of how
many companies there are, is there in a formal transcript I saw where you told
the Mayor there was more than 100 but less than a 1,000 companies, is a rate
09 JUL 141981
Mr. pluamr: (continued) lawsuit unusual? Is it common? Is it rarity? Be-
cause the overwhelming indication here in one particular company that is one
heiluva problem with them. Now, whether it was a problem before they owned it
or after they owned it, what I'm saying to you is, take away these 5, the
other companies is that a common thing, a big problem and it winds up in law
suits or it is not?
Mr. Pilnick: I'll try to be brief, but let me qualify my answer. I think
that it depends on the kind of cable systems you're talking about. If a company
for example, operates several hundreds systems around the country and most of these are
older systems, systems where the franchises were granted in the fifties and
sixties, in most cases, those franchises were pretty useless as a contractual
agreement. They were one or two pages of paper that in effect said, "Give us
the franchise fee and you've got the franchise". There may have been a lot of
implied commitments but they were not written in contract form, there may have
been a lot of promises made that the city thought they heard, when the city
tries in many cases to collect on it, there's nothing contractual to enforce
it: What I've seen time and time again is that cable company, again, one of
these old agreement will go to the city and say, "We need a rate increase, be-
cause we're not making enough money". And the city will listen to it and say,
"Fine. We understand your financial position, but you haven't met the commit-
ments that you said you would meet or there's a system in the next town that
has twice as many channels and twice as many services as yours, how come we're
being neglected?" And what happens is that the only tool the city has to try
to get the commitments met is denying the rate increase, so both sides get into
a sort of confrontion position where the company says, "Worry about my economics
first and take care of the rate increase and then we'll talk about all these
other things" and the city says, "No, we'll talk about these other things first
before you get a rate increase" and if that goes on it leads to a lawsuit at
some point.
Mr. Plummer: So, what you're saying'is, as I understand it; in effect that
it's not unusual that's its really more for clarification because of old agree-
ments that this Commission should not hold against one company because they
have a lot of old contracts, is that what you're saying?
Mr. Pilnick: The more systems and the older the contracts probably the more
disputes there be on rates.
Mr. Plummer: All right. I just wanted that on the record.
Mayor Ferre: Any further questions with regards to lcgal? All right, Ladies
and Gentlemen, the reason why, of course, the way we're doing this is that we're
leaving all of this in the record which shows the legislative intent of this
Commission and that, of course, will be instructions to the negotiators and
later on if it ever gets into a lawsuit, I'm sure it will be basis for the
intent of this Commission when it voted. All right, now, hearing no more ques-
tons, Mr. Pilnick, will you now address yourself to the second portion of this
which was the answering of questions that were previously asked of you by the
members of the Commission.
Mr. Pilnick: Yes, sir. I think probably the first and most important docu-
ment that I submitted is my letter dated July 13th, which is page 4 of the
package that you have and this is a result of Commissioner Plummer and I think
several other Commissioners, wanting some breakdown of the dollar commitments
that were made by the various applicants and as we indicated last time there
were some commitments that were made that were very specific, there were a lot
of others that were fairly vague and I think that the Commission was having
problems of trying to determine the value of those, so what we did here was take
those items that were listed in two categories, one category where there was
specific dollar amounts committed by the cable companies and the other category
where some promises were made but where there were no dollar amounts committed
and again, I want to point out what this excludes. This does not include the
facilities of the cable system itself. Ik someone said, "I'm going to put a
lot of studios
around different parts of the
city, but essentially they are
my studios and
can be used by someone else",
that's not included here. This
does not include their own staff. If someone
said, "I'm going to hire 50
program people
to help the community groups",
that's not included here. What
is included in
the list that I've provided for each applicant are those items
10
JUL 141981
-r.
t
i,
Mr. Pilnick: (continued) that they claim they are going to give to either the
City or City agencies or to the community and as I've indicated, I've divided
those intwo 2 categories, and one category, I think, the numbers are specific,
the other category which amounts, in my opinion, to a smaller percentage in
the number of dollars the categories are not specific. The bottom line is
the cover page which indicates that 3 applicants have in their proposals com-
mitted significant amount of dollars for the use of either the City or the
various community groups that would be involved with the cable system. Those
3 are Cable Systems of Miami, Miami Telecommunications and Vision Cable and
the amounts over the 15 year life of the franchise range from a low of about
$5,500,000 to a high of almost of $9,000,000 and I just like to indicate how
those numbers were arrived at and then I'll answer any questions. If we look at Miami Telecommunications, which I think is page 6 of your report, I'm sorry
for the small print we had to reduce it, on page 6 we have a Category (A)
which are those items of both of the horizontal line and those are the items
that the company has put a dollar amount onto each of the specific commitments.
With respect to the funding for the public access corporation, the public
access corporation would be presumably a non-profit corporation with members
appointed by the City so the City would have some control over this corpora-
tion and would use funds for local programming, but funding for the public
access corporation is promised that $125,000 for Year 1, $175,000 for Year
2, $200,000 for Year 3 and a 7% increase each year from Years 4-15, if you
ad' all that up for the 15 year total you get $4,328,000. The second item
is Funding for the Crime Watch Cablelog Model Project' and their commitment
was made to grant $100,000 for each year of Years 1-5, so when you take that
together that would be $500,000. There would be a contribution to the Spanish
Public Television of $100,000 each year for 15 years, so taken over the life
of the franchise that would be $1,500,000. There's a one time grant of
scholarships to minority college students for about $50,000. There is a con-
tirubti.on to a vocational training project for the disadvantaged with a com-
mitment of $50,000 for each year for the first 5 years, so that would be
$250,000 and there is funding for the Cultural Arts and Ethnic Heritage Fund,
which is specified at a $1,500,000 total over the 15 year life of the franchise.
When you add all of that up, you get the total that's shown on the cover page _
of $8,128,000. Now, again, I want to point out that those are just the items
to which the cable company committed dollars. The list on Category (B) at
the bottom of the page are additional promises that they've made without a
dollar figure put on it and we haven't put a dollar figure on it either. For
example, they'll provide 3 mobile communications command control centers to
the Police Department and computer systems instructions software to the Fire
Department for training and so forth, so that those would be presumably addi-
tional dollar value items and if a negotiation took place those could be
clarified with respect to how many dollars would actually be offered.
Mayor Ferre: Well, Mr. Pilnick, let me ask you a question there. The con-
cern that I have on that this...I've got 2 problems. First is that you take
into account the value of money somewhere and some but there's a big difference
obviously if I'm going to give a million dollars if I give it to you a $100,000
for 10 years or if I give you a $500,000 in 5 years and a $500,000 on the
loth year, so where it is given has something to do with the value of it,
that's number one. I know that sometimes you end up getting into subjective
analysis on this so you have to be careful how far you can stretch because
theoretically you could take the case of Cable Systems and say $2,500,000
compounded over 15 years at the percent simple interest is $20,000,000 or
15 % or whatever it is. The second thing that I have is that you have in these
categories in Figures 3, page 5, 6 7 and so, on Category (B), for example in
Figure 3, page 6 of your memorandum, which is Miami Telecommunications, I'd
like to say the same thing now about the next one which is Cable Systems,
page 7, you have a whole bunch of categories will povide 3 mobile communica-
tions command control, will provide TV transmittors for 6 EMS units and on
and on, those all have a numerical financial value. Sure they do, well,
in other words, what you're saying if they didn't put a dollar figure then
out of fairness they cannot be counted as such, but the problem with that is
when you get to Six -Star Neilson and when you get to —where is the figure
for Americable?
Mr. Pilnick: On page S.
Mayor Ferre: In the case of Americable, you see, Americable is giving 1
Spanish local organization studio in Little Havanna.
11
JUL 141981
Mr, Pilnick: They're not giving, they're locating the studio in those areas.
Mayor Ferre: One Black location and so on, studio employees from the local
area, interconnection to County Operations Center and then, does that have
any value at all? I mean, is that worth a million dollars or $10 or any
dollars?
Mr. Pilnick: What I put down was the Way they responded to that particular
question and this is the way they responded. I give that essentially no
value because those studios are studios that would be their property located
in various parts of the City. All of the other cable companies are going to
locate studios in various parts of the City, too, but they didn't respond to -
that question in that way.
Mayor Ferre: Well, for example, Miami Telecommunications is providing 50
remote video cameras for crime surveillance, now that's got to have a dollar
value:
Mr. Pilnick: Yes, sir. The reason I didn't put a dollar value and there
were 2 reasons. First, is I didn't think it would serve a useful purpose to
get into a dispute with the companies as to whether my guess was correct or
not, but secondly, I think all those Category (B) items added together won't
amount, no matter how much you stretch, to a very large percentage of the
8 or so million dollars that you're talking about.
Mayor Ferre: That's where I'm headed. Let me ask you, for the 5 companies
on page 5, Americable, Miami Telecommunications, Cable Systems, Six -Star
Neilson and Vision, in the Category (B), is any of those, in your opinion,
rough guess, amount to over a million dollars in any one of those categories?
Mr. Pilnick: I think they are all well below that amount.
Mayor Ferre: All well below.
Mr. Pilnick: In Category (B), yes.
Mayor Ferre: So, if in effect then we were going to give credit for that to
any of the 5 applicants they would be added then, for example, in the case
as I see it in your letter, you think that Cable Systems offer is worth $8,775,000,
Miami Telecommunications is $8,128,000, Vision is $5,450,000, the addition
to that plus in the case of Americable and Six -Star Neilson would not be more
than a million dollars in any case in any one of those.
Mr. Pilnick: I think you're talking about probably $200,000 or $300,000,
I think it's considerably....
Mayor Ferre: So, it's not substantive?
Mr. Pilnick: That's the point, Mayor.
Mr. Lacasa: So actually what you're saying from the standpoint of video
community benefit out of donations from these companies, there are only 3
companies, Lhat are really been substantial as far as the community is con-
cerned in this particular aspect and those are the ones listed here in the
first page?
Mr. Pilnick: Yes, Commissioner Lacasa, that's what I'm saying and matter of
fact, what I'm saying even more than that, I'm saying that I have not been
able in the proposals of the other 2 to see anything that they were giving in
the way of these kinds of benefits.
Mayor Ferre: All right, proceed Mr. Pilnick.
Mr. Pilnick: With respect to Cable Systems of Miami, Figure 2, page 7 and
here is one of those case, Mayor Ferre, where I think depending on what assump-
tions you make you can come up with substantially different dollars.
Mayor Ferre: What page?
.12 JUL 141981
z
Mr. Pilnick: page 7, Cable Systems Miami. Three of the items that Cable
Systems of Miami committed to are fairly clear. If we just skip over the
first item for a moment 'The Pre -payment of License Fees', the second item,
'Funding for the Public Access Corporation' there is a $1,300,000 initial
grant and a $100,0000 a year for the life of the franchise. The funding for
the Miami Together Project, there's $3,600,000 over the 15 year period, the
funding for the Crime Watch Pmject there's-$500,000 over the 15 year life
franchise, those are pretty clear. The question is how do you trade the
$2,500,000 advance on franchise fees....
Mr. Lacasa: That's pretty clear to me, $2,500,000 up front at 15% interest
—� is real money so the $375,000 on location there, on account of that is a
pretty clear fee.
Mr. Pilnick; Well, what I've done, Commissioner Lacasa, is actually what
you've said, but I've taken it only for 5 years. I've assumed that by the
5th.year their revenues would be high enough so that they would really be
owing you $2,500,000 at that point, so you're getting the use of the $2,500,000
for 5 years before you ordinarily would get it and then, I would assume that
if you simply put that in the bank at 15% interest and collected the interest
and spent it each year you'd be getting $375,000 each year, but if the money,
for example, were deposited for a longer period of time, obviously it would
generate more interest. I think there may be some argument about whether the
exact dollars are correct. I think that the magnitudes of what is being
offered by the various companies are valid depending upon what they bid and
I think they give you a good basis for comparison.
mayor Ferre: So, in effect the value of that $2,500,000 in your calculation
of Cable Systems is $375,000 per year for 5 years or roughly a $1,800,000....
Mr. Pilnick: $1,875,000.
Mayor Ferre: And the argument that could be made, just to put it on the re-
cord to be fair, is that in effect if you took that $2,500,000 and put it in
the bank and say "We're not going to touch this until the end of the 15th
year" at 10% accumulative that would be $10,000,000 rather than $1.8 and at
15% accumulative it would be $20,000,000, but I think, just for myself, that
is an unreasonable assumption because obviously if we're going to be paid
that I think the assumption you made and that is that it is valuable until
such time as the course of the payment of that fee would naturally come up
to the $2,500,000 beyond that then everybody's really, you know, is an equal
type of a thing.
Mr. Pilnick: That's correct, Mayor Ferre. The reason I didn't take it for
any longer time is that you always have the option as a City to take any of
the franchise fee money and deposit and gain interest if you want, but the real
benefit you're getting is the period of using the $2,500,000 before they would
owe it to you. Now, the third company, there's Vision Cable, their commitments
ae shown on page 9 and they've committed to donate to the City a $100,000 a year
for each year of the franchise for the development of institutional services
which would be a $1,500,000. They've committed to funding the Access Corpora-
tion at the rate of $100,000 for 15 years, which would be another $1,500,000
and they've committed to establishing a cable training center with $350,000
funding for the first year and a $150,000 for each year thereafter and if you
add those numbers up over the 15 year franchise life you get $5,450,000. Can
I answer any questions about either the numbers or the way I arrived at them?
Mayor Ferre: All right, questions Commission? All right, go ahead Mr.
Pilnick.
Mr. Plummer: Does that wrap up that segment?
Mr. Pilnick: That wraps that segment of quantifying the over and above type
of public benefits that have been proposed, yes sir.
Mr. Plummer: Mr. Mayor, I just want again, once again, put on the record
that I think that this report further exemplifies what I said at the last
meeting that I think it is detrimental to the Commission's decision making not
to know what those dollar figures are in Column B and more important there is
13 JUL 1 41981
Mr. Plffwars (continued] no time schedule attached. I pant to re-emphasise
that on the record. I think that it is detrimental for decision making not
to know those answers and I understand your concern, sir, I understand that
completely, but as far as I'm concerned I think it is very very crucial that
that matter be done and also on the record, Mr. Pilnick, I received a letter'
which everybody received from one particular company who volunteered that
information. All right, sir, they volunteered that information. Mr. Pilnick,
I have been in this Commission 11 years and I have seen a trend of what happens
and the things that are not delineated and not defined as to timetable
schedules will all be done in the 14th year, because in the 15th year the
Company will say, "Well, you've got to give me the contract back, because I
Just spent $18,000,000".
Mayor Ferre: That's what we negotiate.
Mr. Plummer: Well, okay, I'm saying that I'm putting once again on the
record that I think it's detrimental not to have those answers and I under-
stand anybody's fear.
Mayor Ferre: Further questions? All right, Mr. Pilnick, why don't you pro-
ceed?
Mr. Pilnick: One item that I think Cowmissioner Carollo asked about was the
comparison of what the City of Miami has been offered against other major
cities in recent times. I think in the packet, I'm trying to find the page,
there is a response to that and to be absolutely certain....14, all right,
I think there's also a typographical error down in the paragraph 'Public
Rights' that should be Cable Systems Miami instead of Cable Vision Miami,
but essentially to be sure of my facts I restricted the comparison to just
2 major cities that I've been working with in the last year, Portland and
New Orleans, and I evaluated those proposals so I'm familiar with what has
been offered and in the crucial areas, such as System Capacity for example,
New Orleans has a franchisee who proposed a single residential truck network
rather than a dual, so that certainly the capacity is lower. In the Portland
system, as I recall, it is a dual network and not a 400 megahertz network
so that eseentially you're getting more capacity and a more sophisticated de-
sign, higher frequencies, in effect, an overall better design from and I want
again to stress what I said before, from 3 of the proposals I don't think that
necessarily compares all the proposals. 'Programming and Services': Pro-
gramming and Services proposed for Miami equal or exceed those that are com-
mitted to be provided to Portland or New Orleans and in terms of public rights
I think that really should be benefits, but in terms of the public benefits
we've gone through the analysis now and we're talking about dollars even ig-
noring the Category (B) items completely, we're talking about dollars ranging
from about $5,500,000 to $9,000,000 over the life of the franchise and that
exceeds what the both the City of Portland and the City of New Orleans ne-
gotiated for.
Mayor Ferre: Programming and Services?
Mr. Carollo: I have a question, Mr. Mayor. Mr. Pilnick, when was all this
information typed and given to our City Manager?
Mr, Pilnick: Everything except this page I brought with me today, so the
City Manager didn't have it until today. This particular page was typed here be-
cause I had recalled that you had asked the question but I didn't recall that
you wanted it in writing, tl-e answer....
Mr. Carollo: I was just wondering because I see that all the information
that I have here before me has today's date and was just wondering if it was
all done today or during the period of time.
Mr. Pilnick: No, everything document that I've brought except this one part-
icular page I brought with me and we typed it before I left, so...
Mr. Carollo: Do you have any additional information which is what 7 requested
from other cities outside of the cities that you worked in?
Mr. Pilnick: I'm familiar with what has been offered to cities such as
.14 J U L 141981
Mr. Pilnick: (continued) Dallas and Ft. North and Minneapolis and I haven't
examined the proposals in that much detail, but in general, I would reiterate
exactly what I'm saying here and that is you're getting at least equal and
probably better than all those cities have got, not because necessarily Miami
has a special category but simply because the ante in terms of the competitirn
has gone up with successive city.and each time a company bids a new city they
feel they have to offer a little bit more than they have before. The next
city after '.iami that goes through the franchise process will probably be
offered more than you are.
Mr. Carollo: Which were the companies that made bids in those two cities
in Portland and New Orleans, do you recall?
Mr. Pilnick: Cable Systems, an affiliated company of the Cable Systems Miami,
was the successful bidder in Portland, they received the franchise.
Mr..Carollo: Which were some of the others that had bids there?
Mr. Pilnick; In Portland there were 3 other biddsrs, Cox Cable, Storer
Cable and Liberty Communications. Liberty is an Oregon company. In New
Orleans there were 8 bidders. Of :.he major companies bidding it included
TCI, which is one of the applicants here and it also included Telepromter,
Cox, ATC and Storer and Cox received the franchise there.
Mr. Carollo: What system do they use there when they hired you as a con-
sultant?
Mr. Pilnick: I'm not sure if I understand the question.
Mr. Carollo: The question was, what system did they use, New Orleans and
Portland when you hired you as their consultant?
Mr. Pilnick: I've worked both cities for a number of years. First I con-
sulted with them in trying to help them define their requirements for Cable
System. I worked with them in establishing the request for proposal and then
evaluated the proposals and worked with both cities in assisting them to ne-
gotiate a franchise agreement.
Mr. Carrillo: So, the bottom line is that you feel that what is being pro-
posed to us by the different companies is just as good or better than what
has been given to other major cities throughout the country in the past?
Mr. Pilnick: Only 3 of your proposals I would put in that category. I think
with respect to system capacity and programming and services, all 5 are top
category, but in the last item, the item of 'Public Benefits', which is the
category we just went over in terms of dollar contributions, only 3 of your
applicants have proposed anything significant there.
Mayor Ferre: I was in the beginning trying to ask a question on 'Programming
and Services', you say equal or exceed those that were provided by Portland
and New Orleans. Now, in other words, the minimum we have is equal, what I
want to know is do we exceed?
Mr. Pilnick: Well, on the average, I think you probably exceed, Mayor Ferre.
The reason that I have to qualify it is I'm talking about 3 different proposals
that you have here in Miami..
Mayor Ferre: Well, let's be very very specific. You have 5 companies tell
me in each one...with exceeds.
Mr. Pilnick: For example, with respect to the entertainment services I think
you're getting everything that's available from all the companies. With re-
spect to things like the text services, Cable Systems has proposed the Tale -
don, which they consider exceptional text and graphic system....
Mayor Ferre: I'm not interested in what they consider. I'm interested in
what you consider.
.15 JUL 141981
s s�
Mr. Pilnick: Yes, I'm goinq to say that they're going to describe later, but
it's one form of text system. It has advantages. It has disadvantages. The
advantages are that it probably has better capability for graphics than most
other systems. The disadvantage is it is pretty high cost right now, so that
rather....
Mayor Ferre: Who has that system?
Mr. Pilnick: Cable Systems of Miami. The disadvantages that the cost is still
high so they're proposing it on a time share basis where several hundreds
homes would have to in effect share the same de -coding terminal. Vision has
proposed another text services and they've proposed more channels of that
text service than Cable Systems but the argument could be made that particular
kind of text perhaps doesn't have all the capabilities, so that in going into
each applicants proposal, I think the differences are not in the entertainment
services, the differences are in the new services, such as security, such as
text services and such as the services that are promised for future years, like
home shopping and home banking.
Mayor Ferre: Now,Mr. Pilnick, answer my question and I will repeat it again.
I'm interested in knowing your opinion in each one of the 5 proposals, which
one exceeds the contracts that New Orleans and Portland have signed?
Mr. Pilnick: In programming and services I would say...
Mayor Ferre: They're all the same, I heard that.
Mr. Pilnick: No, no. I'm not saying that. I'm saying that if you include
services, if you include new services in that area, institutional services and
so forth and what they've committed to here, I would say that all 3 of the
bidders that I've listed above: Cable Systems Miami, Miami Telecommunications
and vision, exceed what has been committed to Portland or New Orleans.
Mayor Ferre: They exceed?
Mr. Pilnick: Yes.
Mayor Ferre: Now, obviously when you don't mention the other 2 that means
that don't exceed but they're equal?
Mr. Pilnick: I think, yes. I think that the other 2 are what I would call
generally equal and I don't have any fault to find with their system design
or program ..... I think if we're talking on the average, I think that they
have proposed good system designs and good programming packages. I think the
big difference in my opinion that separates the 3 that I've mentioned the
other 2 is in the area of public benefits.
Mayor Ferre: I was also going to ask you a question on 'Public Rights'. You
say and I'm going to quote it: "As noted in my company letter of July 13th, it
establishes the dollar value of the additional accompanying benefits offered by Gable
Systems .......
Mr. Pilnick: It should be Cable Systems, Mayor Ferre.
Mayor Ferre: "..Cable Systems Miami, Miami Telecommunications and Vision
Cable,.this probably ranges from $5,500,000 to almost $9,000,000 over the life
of franchise". We've gone over that and as I understood it, because �...
Portion B which Commissioner Plummer also alluded to, in your opinion in no
case exceeds a million dollars, so as compared to the $5,500,000 to $9,000,000
it is not as important in its totality.
Mr. Pilnick: My estimate on Section B the unquantitified areas is that they
not only don't exceed a million for any company but they don't probably ex-
ceed maybe $300,000.
Mayor Ferret So in comparison to the totality they're less of a factor. Any
other questions in regards to this portion? "Okay, go ahead.
.16 JUL 141981
Mr. piwmner: Let me...Mr. Pilnick► you raised that point, let me raise a
point, sir. Now, I can't find it, you all gave us too many papers. Go ahead,
I'll come back to,it, Mr. Mayor.
Mr. Pilnick: The only other information, Mayor Ferre, that I have provided
is essentially the proposal that you requested for providing consulting
support to the City in the negotiations process and also 2 suggestions for
law firms that you might wish to interview.
Mayor Ferret My comments to that is to the first one, I think you're offer
is very reasonable, that's my personal opinion and I think it's one that we
should accept and I'm sure that the Manager is going to want to negotiate
with you and I think we should give him that right, but I think it's important
since you have been with us through this whole process that you remain through
the negotiations. With regards to the law firms, I would like this City
Attorney to really get into that with you and report back to the Commission
and.if any member of the Commission has any law firm that they might think
would qualify in the sense, I think it's important that they be proffered. I
put out a whole bunch of feelers to big law firms in Washington and New York
that I'm acquainred with to ask them for advice on this and I will submit to
the Commission the names of the companies that have been submitted to me as
being highly qualified in this particular field.
Mr. Knox: Mr. Mayor, I might advise the Commission unless they instruct
otherwise that we have planned to go to Washington, D.C. We've already
scheduled 3 interviews in Washington with law firms that are based in Washing-
ton, so if the City Commission has any names, we would appreciate it if you
get to us right away because we've already begun to move on this process.
Mayor Ferret Jo you want some action from this Commission?
Mr. Knox: No, we don't need any, but if there anybody other than 3 firms
that we have scheduled then we need to know before we go out.
Mayor Ferret Let's leave it this way. If I offer any names to you they will
be names that are recommended from either Brownwood, Fuller, Ivy or I've also
asked the law firm of Able Fortas law firm, I've forgot...
Mr. Pilnick: Arnold and Porter?
Mayor Ferret Arnold and Porter and I've asked 3 or 4 of those Washington
firms for input on recommended names of firms that specialize in this particu-
lar field. If any other members of the Commission wish to do that I would
encourage that would be done because I really think that the selection of a
law firm is very important and I would leave Mr. Knox, I'm only speaking for
muself, I of course be guided by your recommendation, but I would like for
you when you come back to give me at least 2 maybe 3 alternate law firms so
that we'll have the ability to choose. I think, as far as I'm concerned, the
only criteria in this particular and very important area is experience and a
track record of accomplishment in that particular field.
Mr. Knox: We have scheduled interviews with the 2 firms that Mr. Pilnick
suggested and also Arnold and Porter in Washington.
Mayor Ferret Mr. Pilnick, that concludes as I understand it your presentation.
Is there any other questions?
Mr. Plummer: Mr. Pilnick, going back to that which you referred as commonly
as Column B, sir, your statement was that you didn't feel that any of the firms
in Column B would exceed $300,000, rough?
Mr. Pilnick: That's my estimate, sir. .,cc sir.
Mr. glummer: Where I find concern with that is, are you in receipt of a memo
from Chief Herman Brice of the Fire Department and the City Manager?
Mr. Pilnick: I have some information from the Fire Department, but I'm not
sure if I have the memo that you're referring to.
.17 JUL 141981
e� •
Mr. Plur: Well, I'm going to tell you and I don't have a calculator with
me, but their estimate for what their needs of a cable channel are going to
be which I assume going to be paid for by the company, very quickly I would,
sir, is up in the neighborhood of $200,000 to $250,000, that's number one.
The little bit that I know of the Police Department needs would not be any
less. Now, if I take your statement of $300,000 you're in effect saying to
me that the needs of my police and fire are not going to be met and that
bothers me.
Mr. Pilnick: No, sir, I don't believe I'm saying ... I'm saying the $300,000
is my estimate of the upper limit of what the companies have proposed in
Column B. I'm not saying that it is all the City can get. I think as part
of the negotiation process part of what I've proposed in the negotiation pro-
cess is to draw up a list of desires or need of City departments and other
public agencies and to negotiate for that over and above what they promised
in Column A and Column B. I'm not guaranteeing that you will get that, but
I'm saying that you have a pretty good chance.
Mr. Plummer: You might not guarantee it, sir, but I will. This one vote.
Mr. Pilnick: Just as a indication last week in New Orleans after 6 months
of negotiating a franchise agreement with the company that was selected, Cox,
before approving the agreement the City Council voted to require the cable
company to add in excess of another $500,000 for the library for the develop-
ment of an on-line cataloguing system, that was not in the proposal, not
in the original negotiation.
Mayor Ferre: Okay, any other questions at this time. Mr. Pilnick, in page
2, let's go over that to make sure that we've covered. "Comparison of Pro-
posals Given By Miami and Other Cities', we've kind of covered that, right?
Mr. Pilnick: Yes, sir.
Mayor Ferre: 'Identified Benefits by Ethnic Groups', this was a request of
Gibson, have you complied with that?
Mr. Pilnick: I found it to difficult to be able to make a judgement other
than to simply repeat what the cable companies have said what they would do
in repsect to minority programming and minority involvement. There was one
specific question in the RFP that asked that and the responses are pretty
much on the record.
Mayor Ferre: Well, let me then be very explicit and specific and Father
may want to get into it deeper. Do you have any questions with regard to
ethnic groups, I'm talking about the negative, I'm going to get to the posi-
tive in a moment, with any of the groups, in other words, %here are 5 people,
companies that are seeking this, do you have any negatives as far as ethnic
groups?
Mr. Pilnick: The only negative that I would point out is in the areas that
I've already mentioned in terms of public benefits, what the cable companies
have proposed over and above the standard cable system and I think as I said
3 of the companies have proposed very significant amounts of dollars that
presumably would be available by community groups of all ethnic composition.
That's the only difference I can make between them.
Mr. Lacasa: Do all of the companies or all the applicants have members of
the different ethnic groups in their Board of Directors? Are all the ethnic
groups represented in all of the companies in the Board of Directors or stock-
holders?
— ; Mr. Pilnick: I don't know that Commissioner Lacasa. I know the namees and
— I'm not familiar with the individuals to be able to answer that question.
Mayor Ferre: That's something that perhaps each company should answer when
they come up. I would like for you to please and this is my request as in-
dividually here as you address the Commission in your slotted time to dis-
cuss specifically the question both at the stock ownership level, at the
Board of Directors level and in the local programming and the people you will
.18 JUL 141981
Mayor Ferre: (continued) have employed or will have in your company. I think
that will cover. Contact Miami Crime Commission for their input on'crime
related programs.
Mr. Pilnick: I don't believe I was requested to do that, Mayor Ferre.
Mayor Ferre: That's something that will be done during the contract, I would
imagine.
Mr. Pilnick; Yes sir.
Mayor Ferre: And by the way, that is applicable to Channel 2, Public Tele-
vision. Mr. Manager, I don't see that's in there. I did mention that. 'Dollar
Value and Timetables' that was Plummer's request and that what your letter
dated July 13th was all about. 'Rates Compared Nation-wide' that was Carollo's
request, you answered only with regards to New Orleans and Portland, which
are. the 2 franchises that you're directly associated with. Let me ask you
this, are there any other franchises that have been issued within the last
6-12 months that you feel that you should put into the record that perhaps
might be better than the city of Miami's? I'm not interested in they are
equal, I waist to know if anybody has got a better?
Mr. Pilnick: One of the problems, Mayor Ferre, is the way the rates have
broken out. They are broken out for a lot of different services. Some cable
companies in recent months have taken the approach of trying to reduce the
rates on the basic package of services and perhaps make up for it on the
pay television services. That's an approach that seems to becoming more
favorable now. The total for both basic and the pay service doesn't vary
all that much from one company to another. I think just as an indication
though I'm familiar with California. In Californialthe California Cable
Association just made a survey of rates for basic service in the state. These
are for operating systems and they include a lot of older services, too and
just for basic services and they're almost a $10 average or about $9.75 or
$9.80, so that this just emphasizes the point that the rates that are quoted
now are very attractive compared to what's being charged.
Mayor Ferre: All I'm trying to get on the record both from the service
point of view and what the City gets and from the rate point of view and
what the public get and what they have to pay for that these offers are not
in any way not as good as what other cities have got.
Mr. Pilnick: In general they're competitive with the most recently granted
franchise.
Mayor Ferre: And you can't tell of us any where you think there a substantive
better proposal both from service and rate?
Mr. Pilnick: I can't tell you of any where the total dollar spent per month
for family is going to be much different, but I think there is some sentiment
from some of the cities towards keeping the basic rate down as low as possible
and perhaps allowing the pay rates to go a little higher.
Mayor Ferre: The next one: "What is the minimum numbers of channels dedicated
for city use?" You've answered that I think. Is that-orrect?
Mr. Pilnick: Yes, sir. I think there's requirements in the ordinance and
also the number of channels over and above that minimum are specified in each
proposal.
Mr. Plummer: But the minimum is S.
Mr. Pilnick: Yes. That's a requirement.
Mayor Ferre: Then there's a question of, which I don't understand, gets
speedy commitment from Florida Power and light.
Mr. Pilnick: I think that was a request to the staff to try and coordinate
with the telephone company and with the power company to see if they can do
anything to speed up the pole clearing process.
4n
.13 JUL 141981
- Mayor Ferret All right, any questions on that? "Clarify nebulous parts
of proposal?" well, that is...
- Mr. Pilnick: I think the Category B still remains nebulous at this point.
Mayor Ferret Well, that all comes out in negotiations, I would imagine.
"Negotiate over and above the base items in proposals such as fire and police
programs." Again, that's negotiations. Lastly, "Hire outside legal counsel"
and that we've discussed. Is there anything else you want to add, Mr. Pil-
nick?
Mr. Pilnick: I don't believe so, Mayor Ferre.
Mayor Ferre: Are there any questions from any members of the City Commission
for Mr. Pilnick ?
Mr. Plummer: Only this. Mr. Pilnick, somewhere here I'm losing something,
sir, maybe you can help straighten me out. You said that you felt that if
we went and did what I requested in the Column B that it could be construed
as re -negotiation and the Commission agreed with you, disagreed with me, yet I
stand here and you tell me that one of the cities and the name is not im-
portant, in the contract talks or negotiations required of an applicant to
put in another $500,000 for a library system, that's not re -negotiation?
Mr. Pilnick: Not in the same context, Commissioner Plummer, because that
was after the company had been selected as the contender to negotiate with.
What I think I'm trying to stress is that the city has to be very cautious
about allowing changes or modifications or whatever could be construed as
re -negotiation before you select your number one company,. Once you select
your number one company you presumably followed all your ground rules, sel-
ected the company that's best, then there's nothing at that point that prevents
you from making them even better than best. You're not giving, you're not
doing them any favors and you're not allowing a company with a poor proposal
to improve its proposal.
Mayor Ferre: Further questions? Mr. Pilnick, I'm going to hand to you,
sir, a publication which deals with the Warner Cable of Pittsburg and its
a summary and obviously you can't do it today, but I would like you to photo-
stat this and return this to me and I would like to have a comparison of
Iwhat we're getting vs. what Pittsburgh got, specifically. I know that yours,
( as I understand it, you were not involved with Pittsburgh, but I just want
I to read quickly some of these things that Warner is doing for the government:
"$236,000 for equipment for a complete studio to be located in the City -
County building, exclusive use of the government communications channels for
subscribers, an emergency alert system enabling the Mayor and the other city
officials to reach also subscribers with emergency information, use of a.."
did you give them a copy of it?
Mr. Pilnick: Yes sir, I have one.
i
Mayor Ferre: "Use of a channel on the institutional network, free service
for certain government building and fire and police stations" ane *hen they
have a security service and so on and then for community they're going to
come up with a "$200,000 grant may available to the city for community com-
munications, $165,000" and so on. I won't bore you with repeating with the
whole thing, but I would like a kind of a comparison eventually with who-
ever it is that we select today so that we'll have ... it will be post -facto,
but at least we'll have it on the record, because I've been specifically
asked that these offers as good as Pittsburgh got. From having looked at
this briefly I would summarize that the majority of these offers that we
have are as indeed as good if not better than what Pittsburgh got.
Mr. Pilnick: I think you may also find the difference between what was in
the proposal and what's in the contract in Pittsburgh?
Mayor Ferre: You mean this is the proposal?
Mr. Pilnick: This is a summary of Warner's proposal. Essentially this is
the summary that all the applicants provide.
20 JUL 141981
Mayor Perre= i see, i got you. All right, any other questions for Mr.
Pilnick at this time? If not, then we revert and we're now in that portion
where the presentations are to be made. Cable Systems is the first presents-
tion and they have 29 minutes. Let's repeat what we're doing here, okay. You
will let them 3 minutes from the time that they're to finish and you will let
them know 1 minute and would you do it loudly, I know you're reluctant into
the mike,, but make sure they know.
Mr.'Phillip Lynn: Mayor Ferre, members of the Commission Ladies and Gentlemen.
My name is Phillip Lynn and I'm President of U.S. Cable Systems. As this
campaign comes to a end, I'd like to express once again, Mr. Mayor and to
members of your Commission and the citizens of the City of Miami, our gratitude.
For us the Miami cable experience has been an honorable one and we commend
you for a job well done. I just want to talk if I may briefly about Minn-
eapolis because Father Gibson raised it earlier and I know it's on a lot
of people's minds. Lawsuits, expecially with the city, are a very very
serious matter. 4e have never had a lawsuit, except for the one in Minn-
eapolis, never had a lawsuit before with the city, never had a lawsuit since,
never had lawsuit on rates or any other matter with the city, so this one
was entered into very seriously. I just want to recount one or two facts.
First, as was indicated earlier by the consultant, we were recommended by
the City Council for the franchise, then we negotitated with the staff for
a period of 8 weeks and we concluded these negotiations and then we were
recommended to the City Council by the staff, so that we had, it wasn't a
question of being frivilous situation, the City Attorney had signed off on
our contracts. The subsequent events are in the court case that we lost,
the court alluded to the unusual nature of the circumstances of our losing,
the Minnesota State Cable Board then voided the second contract with the
City, the Mayor vetoed an amendment that would have brought it back and up-
held with the City Council and so the long and short of it is that Minneapolis
is in a re -bid situation right now, so that we feel certain, we feel that
we were vindicated by the action that we took. Now, members of the Commission
you will soon be making a very important decision for your city and I'm sure
you'll do what every major city has done in the same situation and that is
make the long-term decision and select the company that will best serve the
future interests of Miami as a world class city. We think and you might
expect us to think this, but we think we're the only company that matches
the international and world class position that Miami is moving into. We
offer you a partnership of community minded local citizens, people like
Garth Reeves and Raul and Eddie and Tom and Herb Levin, whom I hope we can
j persuade to take on the leading role in managing the cable system here. It's
a partnership of those people and people with great experience in operating
major urban cable systems. As you hear today's presentations I urge you to
1 keep the next 15 years in mind. Miami will have become one of the world's
great cities, the most important gateway to the Americas, a city with
true national dnd international prestige and a city with the right decision
today will have a world class cable communications system. Now, one example
of this is what you see on the screen, teledon., the world's finest information
P retrieval system. We're the company bringing this technology to Miami. Tele-
don standard has been adopted by ATT, CBS and Time, Inc. Three years ago
we offered it exclusively. We were the only cable company that offered and
we were instrumental in its early development. Now, Time Inc. and the Times
j Mericorp and others are using it. It has a great future, but we're the only
company offering it today. Now, I'd like to turn t7,e podium over to Tom
Gallagher, but I would say, Father Gibson, that we're anxious to answer
your question on rates whenever you want us to answer then. Do you want us
now?
Rev. Gibson: Yes, sir.
Mr. Lynn: The answer to your question is absolutely yes. We do expect
you to be negotiating the rates for the life of the franchise. That's our
record and we've held to it even in jurisdictions where the state legislation
has had under circumstances disallowed the city authority to regulate rates,
even in those cases, such as in the state of New York and the state of
California, we have gone to the city and said, "We won't come in under that
state legislation. We'll continue to live up to the agreements that we have
made with the city vis-a-vis you regulating the rates". So our position
on that issue is quite clear, we recognize the city's jurisdiction and that
is consistent with our position that we took on F-2827, which was an attempt
01 JUL 1 41981
v Mr. Lynn; (continued) some members of the cable industry to disallow City
Jurisdiction of cable. It was a Senate bill, we publicly opposed it and we're
the one earliest, if not the earliest, cable television company to take that
position. Now, I'd like to turn the podium to Tom Gallagher. Thank you.
Mr. Town Gallagher: Thank you. Mayor Ferre, Commissioners. The cable tele-
vision proposals before you are complicated, technical and diverse. But to
get to the bottom line there are only 5 major factors to determine the best
proposal and company for the next 15 years. They are the financial commit-
ment to Miami, the totel security offering, the system design and institutional
network, urban experience, community commitment, let's compare the first fact.
In view of the City's current deficit this comparison takes on even greater
importance. As you can see there's no comparison when it comes to the
immediate financial benefit to the City of Miami. Only Cable Systems licenses
fee.pre-payment of $2.5 million dollars will inject a large sum of money
needed in the City's budget and to insure these payments to the City continue
every year, we will not offset this pre -payment until the late years of this
franchise. The first decision factor belongs to Cable Systems. The second
key factor concerns security, total security. We offer the most comprehensive
security offering of any applicant. Consider the following: Crime Preven-
tion Channel 1, Crime Prevention Channel 2, cooperation with police and fire
departments and our home security package. The last category of our security
is our home security system, this area deserves direct comparison. As you
can clearly see Cable Systems offers the most service for the best price.
Last week you heard from our Security Consultant, Rocky Pomerance, he told
you of our experience in this area, which is the only underwriters approved
facility offered among the proposals before you. For security it's Cable
Systems of Miami. Youre third decision factor is a system designed and
specifically the institutional network. As you know we've offered a shared
subscriber institutional network and we'll .construct a third separate network
when either the City or the user demands warrants it. A shared network has
a number of advantages over separate networks. First, it offers more flex-
ibility. The network goes city-wide. The separate institutional cable does
not. Secondly, we think that our proposal is a more prudent way of operating
the institutional trunk. Thirdly, it eliminates cross subsidization so home
subscribers are not, through their monthly charges, paying for the third cable.
Compare the facts from Mr. Pilnick's report on page 31. Obviously, our
institutional network makes good sense. We've created the longest network
reaching the entire City and Miami's businesses are sprea3 out. We've com-
mited $2,000,000 more than our competitors for the institutional network.
Clearly this evidence is final proof which proposal for the institutional net-
work makes the most sense. Again, the decision factor belongs to Cable Systems.
The fourth, a most important factor, is urban experience. The kind of world
class experience so important to Miami. We will directly compare the 2 largest
applicants, Cable Systems and TCI. What's important here is not only the
number of subscribers but the number of systems, because the number of systems
really tells the real story as you can see by the next key comparison. When
it comes to real urban experience there is only one clear leader with an
average system size near what Miami will be and the world's largest system,
only we have substantial large system experience and we've never disposed of
a system. TCI has disposed of 19. The fourth decision factor belongs to
Cable Systems. The fifth and final factor to consider in making your decision
is community commitment. Again, the 2 largest companies. Community commit-
ment on this, as you can see, local origination, access, community commitment
for local programming, community commitments for the arts and culture....
Mayor Ferre: You're going too fast.
Mr. Gallagher: As you can see the funding there, cable systems has $2.7 million
dollars and have offered what WPBT-TV asked for a$1.1 million dollars up -link
at WPBT and we have 5 existing Boards already in place, the peoples names and
everything in place, they're willing to do it and ready to go. Minority part-
icipation that's part of a community commitment. In every category of community
commitment Cable Systems is superior. This is not an ac-ident. We have more
local and multi -cultural programming experience than any^able operator in the
world. In our Miami proposal continues this tradition anC the following people
have endorsed our unmatched commitment, you heard them do ►* right here last
week. on the merits, it's Cable System Miami completely and clear. In every
category Cable Systems is the superior company with the superior offering. In
.22 JUL 141981
Mr. Gallagher: (continued) our financial commitment $2.5 million dollars pre-
payment. In our total security offering the most service for the best price.
` In our practical system design and institutional network, which covers the en-
tire city, that we spent clearly two more million dollars than any other com-
pany. In our unique urban experience an average system size similar to what
you're going to get here in Miami and in our community commitment, as you saw
from Mr. Pilnick, it's endorsed by community leaders and we truly spend the
most. In these 5 most important decision factors we've proved which company
is superior and which proposal has the merit. These 5 areas are the key areas
to guide your decision. Our leadership is clear. Now, I'd like to turn the
podium over to Garth Reeves who will tell you how we will serve our community.
Thank you.
Mr. Garth Reeves: Mayor Ferre, Commissions, Ladies and Gentlemen. It has been
said over and over that the most important benefits of cable television are
really for the community and to measure these benefits you have to look at the
special commitments made by these applicants. Our commitments are above and
beyond the normal. We offer Miami's tri-ethnic community more than double than
of any applicant. We offer the community $8 1/2 million dollars in special
firm commitments, $500,000 for job training, $500,'000 for crime prevention pro-
gramming, $1.1 million dollars for WPBT satellite up -link, $2.7 million dollars
for direct program grants to community groups and $3.7 million dollars for an
exclusive Miami Together Project, that's a total of $8 1/2 million dollars.
These are commitments of above and beyond that of any other applicant. I'd
Ake to tell you about my pet project, Miami Together. It's a specific com-
mitment of $3.7 million dollars with one purpose, multi -cultural harmoney,
something I've worked for all my life. Miami Together will be directed by
Dr. Manny Mendoza, the awarding winning Producer of television show "Que Pasa,
U.SA.", he's a real pro. And Miami Together will have its own autonmous ac-
tion committee to administer the program for the life of the license. A firm
commitment of dollars and people with one aim, Miami Together and through our
WPBT up -link our multi -cultural efforts will become a national model. We are
the only company with a substantial special commitment to bringing Miami To-
gether for the next 15 years, this program is very important. Miami is not
together. It hasn't been for a long time and this City's future is at stake,
its entire future, not just 5 years, 10 years or 15 years, we must take posi-
tive action right now to insure the kind of future this City can future, the
kind of future we all want. Unless projects like Miami Together become a
reality right here today, Gentlemen, you can put your hopes for the future on
hold. We need Miami Together, all of us. I'm committed to it and I hope you
are, too. There's only one company with the experience in making a project
like this work, only one, Cable Systems Miami. For this reason alone, we merit
your decision, but here are 25 more reasons. Twenty-five people who made a
special commitment to this community and to us, not TCI, not Americable, not
Vision, twenty-five people who believe in Miami and its future. These people
have no financial interest in cable T.V. We are the only company here today
reaching out with advisory boards and no other company has committed nearly
$4 million dollars specially for bring Miami Together and you won't find any
where near $8 1/2 million dollars for special community commitments in any other
proposal. You ask for special community benefits and we delivered. We have
proved beyond a doubt which proposal offers the community the most. Comparu
the next 4 proposals and your choice becomes crystal clear. Don't listen to
fast talk today, the pledges are all in and now, Herb Levin.
Mr. Herb Levin: That's a tough act to follow. I'm proud to follow him. Mayor
Ferre, members of the Commission, speaking for my local partners, Tom Gallagher,
Garth Reeves, Ed London, Raul Masvidal and by the way, we're not passive
investors in this, we're active partners and what you've heard so far we've
developed and worked hard on and on behalf of Rogers Cable Systems, I'd like
to thank you for your careful consideration. I'm very proud of our offer. We
have confidence in the merit of our proposal is clear to you that the specific
offerings that we have made are far superior to any other applicant and that
you'll recognize the integrity of our group. I think you know us all and know
us all well. You know our word is good. May I offer you a final quick review
of the key points of our proposal and I invite you to ask the other applicants,
as you watch them today, if they can measure up to the Cable System's standard.
You know Rocky Pomerance has helped us design the finest security system in the
U.S. Cable Systems Miami is the only applicant here with the security monitor-
ing system in place right now, Gilbrator Security. We'll monitor our security
.23 JUL 141981
Mr. Le`rins (Continued) system 24 hours a day and we'll be on line on Day One
and for only $8.95 a month Miamians can have a home burglar alarm, 2 smoke
alarms and two -door intruder alarms. We are the only company here today with
really big city experience. We have more experience in building and operating
large cable systems than any other company in the world, let alone the other
companies here today and we have more experience in multi-lingual programming
more than any other company in the world and I've offered you our Annual Report,
our 1980 Annual Report, to give you an idea the size of our company and the
scope of our company and I hope that you'll have a moment or two while the
other companies present to review our material. That's a little humor at ran-
dom. We're the only company that's going to bring in, has offered to bring in
WKAQ Channel 2 from Puerto Rico and we're going to do by the satellite to offer
a new look into Miami Spanish language televsion. We have some special Black
television programming offerings, we'll have a channel dedicated, it'll have
a staff, a studio, we'll fund it and we'll add to it the Black entertainment
television network. We're the only applicant that will offer the comprehensive
Miami Together Project which was drafted by Garth Reeves and Manny Mendoza and
we'll fund it with $3.7 million dollars and I have believe that Miami Together
will foster mutual understanding and inter -group harmony that Garth referred
to. We're the only company here today that is offering you a pre -payment of
license fee, that's a Cable System's exclusive and as Commissioner Lacasa
pointed out the present value of money that could be as much as $1.8 million
_
dollar bonus and when you add that to the $8.6 million dollars of our special
initiativeQ and our Lp-link with Channel 2, which is $1.1 million dollars, we're
way over $10 million dollars in special offerings to the City of Miami and when
we sit down at that table with you, J. L., we're willing to negotiate it, put
it into writing, commit to it and live with it. Cable Systems is the only
company with a solid commitment to job training with local agencies and in our
community we need jobs and we're going to put $500,000 on the line to existing
agencies to help train people to come to work for us. You asked for the state
of the art, I think we've delivered. You've asked for specifics, we're giving
you $10 million dollars worth. You've asked for local involvement and you
know, that's been a popular issue these last days, the local company. I think
we are the local company. I think that our offering and our people make us
a local company. Personally I have 22 years of broadcast experience. I,
personally, assure you that I will be directly involved in the negotiation of
this franchise. I will be here when we build the system. I will be directly
j
involved in the building of this system and I will be and pledge to you, avail-
able to you on the day to day management of this cable system Father Gibson,
i
you won't have far to look for me, I'll be right there. You'll be able to find
me whenever you want. I'm proud to be associated with these Canadians and I
don't think it's a negative here today. When the Canadian Ambassador in Iran
helped our men come out, our hostages come out, I felt proud that they would
do that and I feel as a citizen of Miami to see the millions of dollars being
j
invested in downtown Miami by Canadians, maybe five hundred million in the
DuPont Plaza and Brickell Avenue, I'm proud to see Canadians bring here, bring
their money here and I'm not sure if we went to send a signal out that Miami is
anti -Canadian, God forbid they'll take that money back. Gentlemen, make a
_
decision today based on merit. Give us, Cable Systems Miami, the opportunity
to build and operate your cable system. Thank you very much for your consider-
ation.
Mayor Fer=-- Herb, I assume that concludes your presentation. All right,
thank you. You want to take a break, all right, we'll take a five minute break
and let's see if we can keep on schedule because Lacasa has to leave here as
he announced at 8 o'clock sharp, let's be back here in five minutes. The next
presentor will be Six -Star Neilson.
THEREUPON, THE CITY COMMISSION WENT INTO A BRIEF RECESS
at: 5:12 P.M., reconvening at: 5:25 P.M., with all members
of the Commission found to be present.
Mayor Ferre: All right, Sir, the Chair recognizes you.
Mr. Jack Sutton: Mayor Ferre, Honorable Commissioners, my name is Jack Sutton.
I reside at 5055 Collins Avene, Miami Beach, Florida. I am the Market Repre-
sentative for Six -Star Neilson Cable Vision of Miami, Incorporated. Gentlemen,
we're greatly disturbed by this morning's article in the Miami Herald which
quotes members of the Commission with statements that being a local company
JUL i 41981
# Mr. Sutton: (continued) will be given consideration in the selection process.
We call to your attention that being a local company was not a criteria in
meeting the request for proposal. Our company has gone through great expense,
as have others, in preparing our proposal and would have never entered into
competition if being local was a criteria. If the Commission now feels that
local involvement is necessary for the public interest then our suggestion is
that the City itself retain 20% to 25% equity interest in the cable company
as opposed to local investors who are primarily interested in profit and nat-
turally we would be delighted to enter into such an agreement. Commissioner
Gibson, we expect the City of Miami to have jurisdiction over our rates. You
have listened to the report from the consulting firm and have heard the words
"strengths and weaknesses" throughout all presentations. Some companies were
given strengths in areas where others with the same proposals and strengths
were not given this. Our proposal has fulfilled the needs of the City of
_ Miami for local programming with community, governmental and educational
accesses and quality programming for each ethnic area of the community. Our
proposal has fulfilled the needs of the City of Miami by offering a product
delivered by the most modern state of the art cable communications system
available. One that works. Finally, Gentlemen, we have the expertise, the
equipment we use works, we have the financing and we hope that on the final
vote you will award the franchise for providing the cable communications ser-
vices for the City of Miami to Six -Star Neilson Cable Vision of Miami, Incorp-
orated. Thank you very much.
Mayor Ferre: That concludes your presentation, Sir, doesn't it? All right,
the next presentation will be Miami Telecommunications. Miami Telecommunica-
tions has 21 minutes available if they so wish.
Mr. Richard Gerstein: Mayor Ferre, members of the Commission. Good afternoon,
I'm Dick Gerstein, President of Miami Telecommunications. Father Gibson, let
me answer your question directly. Miami Telecommunications accepts the City
Commission's jurisdiction over our rate structure at any time in the future.
Further, I have made a personal commitment in writing in a letter delivered to
your City Attorney's office that Miami Telecommunications will at no time in
the future bring any type of litigation against the City of Miami, that's a
personal commitment in writing from me as President of this company to this
City and to this Commission. Mayor Ferre, members of the Commission, Miami
Telecommunications today would like to repeat our commitment to t).Q City of
Miami. We will construct a state of the art cable system that meets the needs
of Miami's tri-ethnic community with diverse services and programs at low rates.
Let me review briefly what we propose to do. Miami Telecommunications con-
sistently received more strengths for our proposal than any other applicant
here today. Our rates are lower than any other applicant before you. We don't
have to come here with a Hollywood type presentation to you and a lot of
poppery and the reason we don't have to do that is your consultant rated us
number one in strengths and lowest in weaknesses. Other companies have to come
up here with a Hollywood type presentation in an attempt to cover up the real
issue here, that is, who is the professional in the butiness. The consultant
that you retained gave the most strengths to and the least weaknesses to and
we occupy that number one position and we don't need a glamorous type presenta-
tion for that reason. Our subscriber and institutional networks cover more
miles than any other applicant here today. Our commitment to municipal ser-
vices, minority prog=:--ming and public access is larger in cold hard dollars
than any other applicant. Each of us, members of the Commission, have received
this handout from my company. It talks about benefits to the City of Miami,
to culture -and -the arts $2,213,000, to the Black community $1,756,000, to the
Hispanic community $2,068,000, to the disadvantaged in our community $300,000,
for the community at large $21,843,000 and with a total value to the community
of $28,180,000, each of you have a copy of that. Miami Telecommunications is
the only company before you that doesn't believe that the police should do
the work for the cable company in checking false alarms for its security ser-
viceb. All of you know and I know from my personal experience what a tre-
mendous problem false alarms in security systems are to the police. We re-
sponded to that problem and we're the only company to use a security guard
service and you all approved alarm verification procedures so that the police
and the taxpayers do not have to subsidize the cable company operations. In
terms of lawsuits and I know that was a matter of interest to all of you and
you asked your City Attorney to report to you based on information we submitted
in writing to the City Attorney's office, our lawsuit rate for 60D systems we
.25 JUL 141981
Mr. Gerstein: (continued) own is far below that of all other applicants here
.
today except Americable, but very conveniently, Americable failed to mention
a number of lawsuits in which they were named as defendants and several of
them and I have the xerox copies of them, were brought right here in Dade
County which were never mentioned in their report. We know that we are the
most experienced and reliable company before you today and as your own con-
sultant reported the most capable of building a system than greets the needs
of Miami's tri-ethnic community today and in the future. By now there's pro-
bably there isn't anyone in this community and certainly all of you have seen
the newspaper ads extolling the local angle of the lowest rated company that
is here before you today, Americable. They call themselves local, but what
they didn't tell you, what they don't say in their ad, is that 40% of their
owners live in New York City. Let's talk about who some of the locals are
in Americable and where they live. For instance, a part of the 40% ownership
of it is owned by a law firm that I've never heard of but I'm sure if you
lived in New York you might know of them, there are Aronkrantz, Aronkrantz
and Schultz of 375 Park Avenue, does that sound local? Another one of their
owners is Fred R. Sullivan of 857 Fifth Avenue, New York City. He's employed
_
by Walter Kidd and Company in New York City, does that sound local? Then
there's a gentleman who I have heard of and who some of you may have heard of,
Mr. Lawrence R. Tish of Island Drive, Ryan, New York, does he sound
like a local resident and then there's Mr. Alan B. Tishman, I've heard of him,
because he is President of a large real estate company. Where does he live?
In Stanford, Connecticut. There's Robert S. Birch, he's another of their
owners. He gives his address as New York City, New York, East 72nd Street.
There's Preston R. Tish, the other Tish's brother. Where does he live? Ryan,
—
New York, some of you may know where Ryan is. There's Herbert D. Fried. i
don't know him, because he lives in Oweningsmill, Maryland. That's a part of
—'
the local ownership. Then there's Steven Beck, he lives on Park Avenue. I've
been on that street, it's in New York City, that's local ownership. Here's
another gentleman, Joseph L. Gitterman III, if you please. He lives on East
64th Street in New York, that's local ownership. That's the kind of company
that has been representing repeatedly that they have a fantastic emount of
local ownership. Now, I say to you again, that puffery here in this presenta-
tion, a slick Madison Avenue type presentation is not necessary in our opinion
because you have an independent objective consultant to whom you pay the fee
to rate for you in an objective fashion based on hard cold facts who has the
most strengths and who has the most weaknesses. Let's talk about this company
that bills ; itself as a local company. The 1980 census will be of interest
=
to you, Father Gibson, will be of interest to every member of this Commission,
'
says that 81% of the people of the City of Miami are either Blacks or Latins.
j
The local company does not have one Black representative. They do not have
one Latin representative. They do not have one woman. This is 1981 and I
cannot believe that a company would come before you, especially in this tri-
ethnic commmunity, to represent themselves as being representative of the .
local people of this community and not have among their owners, a Black, a
Latin or a woman. We must as well be turning the clock back and the counter
back a 100 years. We do want to provide you with some of the information that
you requested at the last meeting regarding the proposals of the applicants
in other markets. Telecommunications, which is our department, has in within
the last year prepared proposals in New Orleans, Ft. Worth,Tuscom and Prince
-
George's County and recently in Queens and Staten Island in New York. Mr.
Pil^tck confirmed in his letter to Mr. Gary, the City Manager, the substantial
-
contribution that we would be making to the City of Miami and let me assure
you that we're offering Miami the same or more than we offered in all those
cities where we recently made proposals. Our rates for pay movies here are
lower than those other cities and many movies which we will be offering will be
free. Your constituents basic rates are the same or lower than in those other
cities. Our institutional network is more extensive and sophisticated in its
services than were offered in 3 of our last proposals. They are similar to the
networkss we proposed last month in New York City. Minority programming we're
offering substantially more services in dollars here for minority programming,
and specifically Black programming on a per capita basis than in last 4 pro-
posals. On a per capita basis they are similar in the amount of money pro-
posed in the 2 most recent proposals 34 New York City. This component will be
the most advanced program in the cable industry today. As for local programming
our studio facilities and staff are larger than we offered in the last 4 cities
and comparable to what was offered per capita basis in New York City. As to
municipal services our offering here is more than what we provided in the last
�6
JUL 141981
Mr. ftrsteint (continued) 4 Cities and for except for computer Capability is
moue than we offered in New 'York City. Your consultant realized Miami We -
wen u-Scatlow is offering the people of Miami the best system, the best pro-
gramming and the best services. That's why he rated us number one, because
our co6mitment and system are the strongest. If you see fit in your good judge-
ment to award this franchise to us based on our record of service, based upon
the consultant's rating, based upon the number of strengths and the few
weaknesses we have, greater in number of strengths than any other applicant,
fewer in the number of weaknesses, then you will know that you have acted re-
t sponsibly. You will not have to apologize or justify that decision based on
- the consultant's recommendations to any citizen of this coamrunity or to any
one else. You will have acted in an absolutely responsible fashion and needs
no explanation, needs no rationale needs no justification because the justifi-
cation has been given to you by the professional in the business. All of you
know me. All of you know my co -investors, my partners in this enterprize.
They are Latins, Blacks, Anglos, people with whom I'm proud to be associated
with, people who have made a mark in this community by what they've done. Peo-
ple you can trust and believe in. We will bring this community a cable system
of which you'll be proud and of which I know, since I'm lending my name to it
as President, that I'll be proud. Thank you. I'll be glad to respond to any
questions yo1, have and if I cannot answer them, one of my colleagues will re-
spond.
Mayor Ferre: At the proper time, Mr. Gerstein, I will open it up for quest-
tions from the members of the Commission. The next presentation will be made by
Americable. Americable has a total of 21 minutes, if they so desire.
Mr. Kenneth dyers: Mayor, members of the Commission.' We understood that tod+av was
going to be utilized primarily for the presentation'of new matters, a the nswer-
ing of questions and some rebuttal, which I intend to do in the minutes allotted
to me. We do not intend to reiterate again our entire presentation and we
want to say that we stand upon that presentation. Before I begin I would like
to introduce,which I don't think was formally done yet, Mr. Charles,Hgrpanowsky
and his wife, Joan. Would they stand?, the general partner of Americable;
Bill Wertz, Chief Operating urrLcer, who ie here to answer any of your ques-
tions; John Hanley, our Controller, in charge of finances, who is also here to
answer any of your questions. All of these people are available for any ques-
tions the Commission may have. During this past week and today a lot of smoke has
surrounded these proceedings. Charges, counter -charges, some inaccuracies in
the press have been common,and I suppose that's the nature of.the game when
proceedings like this are at stake. There are some, though, in which I'm
particutarly concerned and we have to dispose ot'them now. Onet.was a report,
I i ink the Herald, which quoted a Mayor of Braman, Ohio, regarding
Americabie. In Braman by the way, their system is entitled Cable Vision,
that's Americable's entity there. Mayor Ferre received a telegram•today,, sent
to him on behalf of the entire Commission which states from Mayor Joe Hoover
of Braman, Ohio: "Miami Herald newspaper article erroneous. Taken completely
out of context. We are very happy with Cable Vision," meaning Americabie's
entity. Signed Mayor Joe Hoover, Braman, Ohio. Now, on the question of civil
actions and suits. Mr. Gerstein mentioned that Americable has 10 civil
27 JUL 141981
Mr. Myers (cont'd): proceedings against them. Let me point out to you, members of the
CommissigQp, that Form C, in the Request for Proposal, was very explicit. It's
entitled Tharacter Qualificationsofand in that form you asked these are the types
of suits, these are the types of suits that you've asked for to be recorded,
not civil actions about money disputes and so forth which every applicant here
could report hundreds of, it's the nature of business; but these are the types
of suits you've asked for: "Has the applicant or any principal ever been con-
victed in a criminal proceeding in which any of the following offenses were
charged ' Fraud,, Embezzlement Tax evasion Bribery Extortions Jury
tamperingf Obstruction of justice affecting public officials, False mislead-
ing advertising. Jury. Anti-trust violations, Violations of FCC regula-
tions, Conspiracy to commit any of the foregoing offenses." Then you asked:
"Has the applicant or any principal ever been a party to any civil proceeding
in which it was hale liable for any of the following things: Unfair or•anti-competi-
tive business practices, Violations of security laws, False or misleading advertising,
Violations of FCC regulations.".• Then you asked: "Has the applicant or any _
principal ever, .aa-a result of an adjudicated proceeding, been found in violation'
nthPr than rn,ttine service. complaints of any franchise agreement, contract
or regulations governing their cable communications systems owned or operated
by them?" Gentlemen, only Americable could answer all of those questions "no" and
only Americable did not have to cite any such suits or proceedings in its
application. No city or county has ever sued Americable nor has Americable
ever sued any of its franchisors or licensor cities or counties. No other
applicant standing before you can make that statement, because every other
applicant in one form or another has had lawsuits, actions, criminal or civil
proceedings falling in these categories, where Americable has not. Sure, there
are civil suits involved every day, but not that fall within the seriousness
of these#and that's why Americable, as far as that is concerned, is far and above
any of these other applicants on a clean slate as far as suits by or against
municipalities. Does that answer your question, Father Gibson? Absolutely,
Americable agrees completely with the jurisdiction of the City to regulate
rates and will also pledge, as I'm sure all the other applicants will pledge
to you, that they will not sue the City and as a matter of fact, Americable
can also add that they have never been sued by a city and have never sued a
city regarding ratestor rate structures Ior anything involved in them. We sub-
mit completely to the rate jurisdiction of the City and will continue to do so.
That's your prerogative and as matter of fact, it might be a healthy situation
to have that continued jurisdiction. Now, on the questions of
civil proceedings, questions of fulfilling obligations under franchises, I
want to add one footnote. Mr. Pilnick, at your request, Mr. Plummer and at
the request I think of other Commissioners as well, sent out a survey to some
cities and counties which are served by the various applicants and in the
survey, -this was between the last meeting last week and today so this is as
update as you can get on where these applicants stZnd, and one of the questions, one
of the series of questions you asked, Mr. Pilnick asked: "Does your City re-
ceive services from X-Company" (fn this case Americab`10'"liave those services been
satisfactory?" (i.e., Any complaints or problems between the -city --and the -company)
Number 3: "How long have they been serving your city and how many subscribers
are served?" Four: "Have they fulfilled all their commitments to the city
within the time promised?" Here is the answer Dade County gave regarding
Americable: The name of the Company: "Americable" (2) Have those services been
satisfactory, any comp.L&-nts or problems between the city and the company?
"No complaints. Construction timely." (3). How long have they been serving
your city and how many subscribers are served? Answer:~Since 1978. 8,907
subscribers as of March, 1981", (that'Q individual home subscribers, not total
number of people). (4) Have they fulfilled all of their commitments to the
city within the time promised? Answer: "Yes." So that's as clear a statement'
as you would want to make to counter the charges and counter -charges and the
smokescreens that have been raised regarding civil actions or proceedings. On
the question of local investors vs. out-of-state investors and the question of
profit going out of town. Mr. Gerstein had his figures a little wrong. It's
not 60% locally owned by Americable. Americable is 70%, 70% owned by local
residents in Florida, primarily in Miami, only one, Ken Barry, in Tamarac, 70%
No other applicant standing here before you can say that 70% of their stock-
holder interest is owned locally, at home, here,now, by local investors.
What about those outside investors that Mr. Gerstein talked about? We're
proud to have Fred Sullivan, Chairman of the Board of Walter Kitty and Company;
Lawrence A. Tish, Chairman of the Board of Lowes Corporation, one of the larg-
est corporations in America; Preston R. Tish, President of Lowes Corporation
JUL 14198J
Mr. Myers: (continued) and Alan P. Tishman, Executive Vice President of
Tishman Realty and Construction Co., Inc., as part of the Americable team.
These people have evidence, these people, the largest construction people and
some of the largest responsible corporate people in America, have put their
money on Charlie Hermanowshi and Americable, not now, today, but not only to-
day, but for the last 4 years, in Miami, in South Miami, in Homestead, in Rey
Biscayne and in Metropolitan Dade County. They've been with him from the
beginning, these out-of-state investors. They make a clarion state-
ment to this Commission that they're backing their will and their money on
Americable and they've done it with their track record and with Americable's
track record always in the past. We're proud of ti.at minority investment from out-
of-state and we're glad that Mr. Gerstein brought them up; but you know, there's one
other thing that's very interesting about the entire situation that distinguishes
Americable from the other applicants with respect to out-of-state investors,
they're 3O% out-of-state. Rather than having Miami investors going elsewhere
to seek expertise in cable, like all the other applicants with local groups,
local people, extremely reputable people, who are not experts in cable, having to
reach out to Canada, New York, Colorado or some place else for the cable
expertise they want to bring in Miami, Americable is just the opposite from
all these other applicants. In Americable we have investors, out-of-state in-
vestors, coming to Miami for the cable expertise. These people say, "You've
got it, down, already. Americable is there, in the ground, serving people and
we're booking on them." So, these investors come out of state to Miami
and the other applicants have local investors reaching out elsewhere, no I'm
not discouraging that, but the fact is that they're reaching elsewhere to try
nad find the cable t.v. expertise to come in. Now, on this question of minority
investors, the fact that we don't have a cross-section of ethnic or minority
investors. Members of the Commission, investors don't run studios. Investors
don't hire, train or program. Investors don't run cameras. This is done by
hiring and training a professional staff. This is where you want to get the
emphasis on the cross-section of ethnic and minority representation, not nec-
essarily at the investor level. The emphasis should be on -going career oppor-
tunities to make, not just profits, to a few well established members of the
community, whether they be Black or White, that's where your emphasis on ethnic
and minority should be, in your career opportunities. On public benefits, sure
everybody has made a big claim on what they're going to do, give, how much money
they're goint to put up. Americable's application can stand the test of any
of the other applicants. It wasn't as sophisticately drawn, we did not categorize
one particular area, public benefits. The fact remains that throughout
the application you will see, Mr. Plummer, you're absolutely right, the
public benefit is a semantical thing and it is very ethereal thing that has
to be ironed out through the negotiation stage. Americable stands committed
just as any of these other applicants here to come up with any kind of reason-
able commitment in programming and finances that the Commission desires in
public programming and Miami benefits, a, that's done at the negotiating stage
and we'll do it just as anybody else here in this room would commit themselves
to do, but you will se in the application over and above that, 26 local origina-
tion channels, 3 local studios, fire and police community group services, local
ethnic and minority programming, all matching or better than the other appli-
cants, so on the question of what benefits, public benefits specifically in
these applicants, I submit that the semantics can be worked out and you
will find in every application, every one of them, including Americable's,
if you seek, if you search the application. Now, one more point, on local ownership.
Members of the Commission when this franchise is awarded today, it's only the
beginning, it's only the beginning. The public benefits question at the negotia-
ting stage is only one thing. Many times during the 15 years you're going to
want to negotiate and update the state of the art. You'll want to
bring in new programming, you're going to want to add more services, all of
which involves major capital outlays and major policy decisions. I ask you, Mayor
Ferre, Commissioner Lacasa, Mr. Plummer, Father Gibson, Joe, Commissioner Carollo, who
would you rather go to negotiate these things all requiring a substantial final
corporate decision at the end of a bureaucratic ladder? Would you rather have
a local decision made by somebody who lives here, to whom you can pick up a tele-
phone and call and say, "John, we need you to come down. We've got to decide
this right now", to whom the Miami franchise represents 90% capital investment
in cable t.v. who has already demonstrated his commitment to Miami by not only
operating cable systems here, but living here, ghose headquarters will be on
N.W. 7th Avenue and 12th Street, right here in downtown Miami, that you could
call?, or do you want to go through the bureaucracy of a large corporate decision-
29
JUL 141981
3
Mr. Myers: (continued) making process based in Canada or New York or Colorado,
perhaps waiting weeks or months for a decision and where that decision is
weighed against capital commitments to hundreds of other cities throughout this
country?•I think that your answer is going to be. "Np". We want neaiby, local
decisionmaking quick, mencumbered by a corporate bureaucratic structure
located far aw y". I'hen and again'the question is the same. "What's best for
Miami?" Again and againthis particular case d� the answer is the same, in terms
of proven experience and professional knowledge of the local market and local
conditions here, a track record here, in terms of knowing of the community's
needs, in terms of having a headstart by reason of facilities in place and
operating right now, in terms of system capability, fiscal responsibility and
independence from parent companies located miles from Miami, in terms of keeping
millions and millions of dollars...
Mr: Ongie: Three minutes remaining.
Mr. Myers: ...in Miami's economy rather than having them sent and spent
out of state, 70% here, only 30% out of state,and finally in terms of a record
of performance for municipal clients,free from costly lawsuits,and free of
any charges of fraud, price fixing or violation of any FCC regulations. The
answer comes up the same in every instance, Americable. What's best for Miami?
Americable, the only cable t.v. company that can honestly call Miami home.
Mayor Ferre: The last presentation will be made by Vision Cable. Vision Cable
has 15 minutes and 4 which is a total of 19 minutes in its presentation.
Mr. Barry Kuten: Commissioners. Gentlemen, it's been a long hot battle. We've
all got hot under the collar from time to time during these proceedings and I
want to direct my comments today about the companies, not people like my good
friend, Steve Ross, who I took a shot at last week, who I love dearly, but
after days of testimony and presentation your decision, all your decisions,
get down to this: falsification, litigation, qualification. Strong words? To
be sure; but this is my city, this is my home ane the integrity of my fellow
investors is on the line. There's always some exaggeration in proceedings
like this but when statements are so overstated that they're obviously pre-
meditated they must be exposed as to their truthfulness. After your consultant
noted that Miami Telecommunication's parent company, TCI, lacked experienced
in large system construction and operation their Vice President,,Mr. Paul Alden
made this statement just one week ago before you. He claimed that TCI serves
148,000 subscribers from a single head -end or control center outside Pittsburgh.
This is blatantly inaccurate because TCI doesn't even serve Pittsburgh, it
serves the small mill towns around Pittsburgh from more than a dozen head ends
and operates . out of numerous small offices, falsification. We're all aware
of TCI's litigation record, of the litigious nature. At the last presentation
Mr. Alden told you that the reason that they had litigation was because they
were buying companies which had problems including lawsuits. The fact is that
just within the last year there have been 2 major lawsuits instituted by
wholly -owned subsidiaries of TCI against municipalities dissatisfied, dissatis-
fied with the service of TCI. These 2 lawsuits, plus some half -dozen more,
demonstrate the company's inability to properly provide service which the people
of those communities want and deserve, the service which they were promised.
TCI is certaintly not alone in its misconduct and the way its has handled itself
in this bid proposal process nor city. Now, :::-'t about Americable? Ali they .
.
have to hang their hopes on is their local" iinage. Remember, you consultant nteo
them last, that's right, last. Look at the headline, you all saw it in the news-
paper. They would like you to believe that they, alone, would not bq withdraw-
ing money from Florida. But as Mr. Gerstein indicated to you, nothing could be fur-
ther from the truth. Americable associates has 26 limited partners, all of
which live outside the state of Florida. I have the list here for you to examine.
They've been read by Mr. Gerstein. You all might remember several months ago
that Mr. Hermanowski called us carpetbaggers and yet I have been here 39 years
and he's ,nly been here 4 years. The fact of the matter is that apart from our
local investors the President of our company was raised and grew up in Miami,
Florida. Americable, the company that is before you here today, has in their
application at least 40% ownership by non-residents of Florida, so Commissioners,
I ask you, where their money going? My good friend, Senator Myers, told you
last week that only one company, namely Americable, will make 2 popular paid
t.v. services available to their subsribers at no additional cost on their tier
one level. If that is a true state mentIwhy isn't in their proposal? Their
.30 JUL 141981
Mr. Kuten: (continued) application shows that show time is not even offered
on tier one and just look at Galavision. cost on that tier. In fact, it's
offered for less under Vision Cable's proposal. Virtually all of our services
are considerably less expensive, Falsification. How many of you remember the
last hearing when Senator Meyers said that Americable will be creating jobs
for a tri-ethnic community breathing new life into an impoverished area on
N.W. 7th Avenue. Look at this: these figures were taken from Americable's 3atest
filing with the FCC: SO people employed, 1 Black; 80 people employed, 10 His-
panics, sensitive to Miami? Nogwash. Gentlemen, I've even come to question
whether or not Americable should be allowed to continue in this bidding pro-
cess. The request for bids asked if any applicant or any principal, any prin-
cipal , ever had a business license revoked or suspended. Mr. Charles
Hermanowski who signed this application said"noy Mr. Hermanowski even failed
to include the communities you're about to become familiar with in Form E
entitled "Former Franchises". I suggest this is not an oversight, it's a
deliberate falsification. 'r"hese are coversheets of franchises granted to
companies in which Mr. Hermanowski was a principal in 4 northern New Jersey
communities. Mr. Hermanowski even represented these companies in subsequent
correspondence. After 3 years of total inaction this letter was submitted to
the Department of Public Utilities requesting that Mr. Hermanowski be allowed
to abandon those previously granted franchises. His action resulted in sub-
sequent revocations of these franchises as evident by the ordinance passed in
Guttenberg,New Jersey which clearly stated that Mr. Hermanowski's franchise
is repealed) repealed through the failure of Mr. Hermanowski's company to per-
form and carry out it'e obligations. This unfolding New Jersey drama relates
even closer to Miami than one would care to realize. Prior to Mr. Hermanowski
having his franchises revoked, he distributed letters of anticipated, anticipated
credit to the State of New Jersey assuring officials that his financing was
forthcoming. In this letter there were some 40 entities listed as potential
investors. Gentlemen, number 31: The tax shelter law firm Aronkrantz,
Aronkrantz and Schultz" was listed in a letter signed on behalf of Cable Tel
by Mr. Hermanowski. Your requestinn the City of Miami..for proposals asked us
to document our financial capability to insure the construction and operation
of your cable system. Guess what? Here are copies of the financial noncommit-
ments provided by Mr. Hermanowski for this franchise application. Included
on the left of the screen is a letter from the same Aronkrantz, Aronkrantz and
Schultz stating that "they may" and I repeat "may have clients who are interested
in investing in the construction of the City of Miami system. Even their bank
commitments states that it is subject to further negotiations. This is a 15 —
year, $90,000,000 commitment, not pocket change, big bucks. Hermanowski couldn't
even finance 75 miles in northern New Jersey, 1/10th the commitment necessary
for Miami and then he blatantly hid this fact from you. If you have questions
about thisiZ want you to know that Cliff side Park, New Jersey.,during their
franchise proceeding,and here are the transcripts, their.Gouncilmeu,qugetiQned_.
the financial capability, of Hermanowski's investors in the.oronnaPA RvRram. The
answer was and I quote Mr. Ron Mann, who represented Mr. Hermanowski's company;
"Our stockholders have a net worth of well over 10 times what is needed". Soune
familiar? And while we're talking about financial commitments, let's take a
look at two more. Here's a letter submitted by TCI from their bank. I quote
from their letter "We have not yet had the opportunity to examine Miami Telecommunica-
tions financial projections." Now, I ask you, is that commitment? Clearly,
no. A commitment should like the Chemical Bank letter nn behalf of Vision
Cable of Miami "We stand ready to lend Vision Cable of Miami up to $50,000,000
on a long-term basis at its request." Our system will be built on time,
$34,000,000 guaranteed by our company to continue the system over the 15 years
on top of the $50,000,000. Now how about this question of litigation against
municipalities? Litigation is certainly a disease we don't need here in the
City of Miami. TCI has submitted to you in their application a lengthly
list of legal cases in which they have been involved. Municipalities
suing TCI and TCI suing municipalities. What does being litiguous say about
the character of a company? It tells me, beyond a question of a doubt, that
they haven't lived up to their commitments and that they can't resolve their diff-
erences in city after city after city where they operate. In Jefferson City,
Missouri, when that city refused to grant them a renewal franchise because
they hadn't fulfilled their promises, TCI sued. In Boulder, Colorado, when
TCI wasn't delivering the services they had promised the city told them to stop
expanding, guess what ? TCI sued. When Bridgeville, Pennsylvania held that they
weren't entitled to a rate increase they told the town they'd cut back service
and increase their rates anyway. TCI got sued. Same thing in Greentree,
31
JUL 141981
i
Mr. Kuten: (continued) Pennslyvania TCI got sued. If you see a pattern
developingryou're right. Pacific o California, when the city opposed their
rate increase, because of failure to live up to their previous agreements they
raised the rates anyway and TCI got sued, and then TCI turned around and sued
them back and if TCI doesn't agree with my recount of history, sue me. I
want you to know this is a list of lawsuits by TCI. Father Gibson, Vision
Cable has rate regulations and responsibilities all over this country. We
have never sued a franchising authority, we have never been sued by a franchis-
ing authority. It will never happen in the City of Miami. The only case sub-
mitted to you is one that was from 1967 dealing with a newspaper case of New
House Companies. It had nothing to do with cable television and it never will.
We, the local people. of Vision Cable of Miami, Willie Bermejo, David
Plumberg, Armando Codina, Hank Green, Carry Meek, Ann B. M-yer, Linda McCowen
Robert McKnight, Athalie Range, Edmund Skellings and myself promise to de-
liver all these pursuant to our contract. Our company has committed to
establishing their southeast regional offices in Miami when we receive this
franchise. You have my word on it. One further thing, for the record, this
is a.letter dated March 9, 1981 from Telecommunications, Inc.,filed as part of
an application for Jefferson City cable franchise which they were renewing.
This letter is written by none other by Mr. Paul B. Alden, March 9, 1981:
"Accordingly" and I quote from it "TCI Cable Vision, Inc.
contractually commit itself to the City of Jefferson to either", and it goes
through a few things, but mainly, "agree to the substitution of the judgement
of city officials for that of company officials as the nature and type of
capital facilities required to provide its services or to agree that the city
officials shall have through rate controls, financial control unless indirect censure -
ship controls 'of the nature and amount of programming provided." I'd like
to further quote from this statement on the second page: "Many of the provisions
of the above -described proposed ordiances call for a waiver by TCI Cable Vision,
Inc. of constitutional rights guaranteed on the Fourth, Fifth and Fourteen
Amendment. It is the view of the company,'�lthe company that it cannot be re-
quired to waive these rights as an condition to conducting a lawful cable tele-
vision business where TCI is already existing license actively competing
supplier on the markets hence, the limited nature of TCI's proposal." They
have absolutely, on March 9, 1981, to Jefferson City, refused to allow them to
regulate their rates. Thank you very much.
Mayor Ferre: I think we'd better.....
Mr. Kuten: Excuse me. I apologize. I do have one further member of our
group that would like to speak, Athalie Range.
Mayor Ferre: All right, how much time dry they have?
Mr. Ongie: They have 4 minutes.
Mr. Kuten: Four minutes, thank you.
Ms. Athalie Range: Honorable Commissioners, Honorable Mayor, Ladies and Gentle-
men. I had a short script that I would much have preferred to read from, but
I find it very very necessary to clear up one or two statements which have been
made. I'm not going to attack the companies, I'm simply going to cl^rify state-
ments made by presentors. Ken Meyers justified the absence of minorities by
_stating that we are not needed at the level of directorships or board memberships,
but rather to fill the jobs of lesser importance. That's one of Miami's short-
comings today, gentlemen. of this Commission, and I know you know it because I
sat where you sit and ....
Mr. Ongie: Three minutes.
Ms. Range: ...you know that we do not have the kind of the quality that we need.
Cable Vision recognized this shortcoming and as a result reached out to
ethnics. Blacks in Cable Vision, alone, own a greater percentage than any other
group here represented..and this is not to say that other groups do not have
Blacks, but I repeat, Blacks in this company own a greater percentage than any
other company. My dear friend, Garth Reeves, made mention of the fact that Miami
Together is really important, it is and I agree with him. Nevertheless, we need,
I contend, that we need people at the top level and I say to you, ladies and
gentlemen, I represent Cable Vision here in Miami as Vice Chairman of the Board,
32
JUL 141981
Me. Ranges (continued) which means that you really don't have to go to New
York for the answers. I have exacted this from the gentleman who contacted
me to become a part of this that I would have a voice, that I would be able to
make decisions when it's necessary and I guarantee you, gentlemen of this
Commission, that if were not so, please believe me when I say, that Athalie
Rangeland I speak for Carry Meek, would not be a part of a company that we
could not help to control and to generate. Thank you.
Mayor Ferre: All right, that concludes, I assume, all the presentations.
The next portion, then, is the public sector input. This has now grown be-
yond the original 11 and it is now up to 13.110w, I will ask the 13 people,
who have asked to be heard today, whether or not any of them feel that they
need more than 3 minutes which is the time we previously allocated and which,
I think, met the needs of the previous speakers. Does anybody who wishes to
speak need more than 3 minutes? If not, we'll proceed that way and if you'll
please let the speaker know when 2 minutes are up so that he or she may con-
clude the statement within the minute left. All right, the first speaker is
Mrs. Jane Theederof the All Night Animal Clinic. Would you give us your
name and address, Mrs. Theede?
Dr. Jane Theede: I'm Dr. Jane Theede. I'm a veterinarian, also a candidate
for Mayor of Miami. I address this to all the people here. In ancient literature
concerning the private servant, the soul and the heart, God states you
you cannot serve two masters or you will hate one and love the other.
In modern law concerning conduct and ethics of the public servants, the in-
tellect and the dollar, our laws state you cannot be involved in the conflict
of interests else you will turn your back on the people that you serve to
serve yourself. Within each profession there is an understanding that the
basis of vrofessionalism involving the ethical conduct of its members, a pro-
fessional does not provide financial gratuities to obtain favorable gain for
his client or for himself. According'to this morning's Herald, 3 of our
Commissioners and our Mayor, have received funds from the various cable com-
panies. It is my belief that the acceptance, past or present, of campaign
contributions from any person, company or their representatives that has
business before the Commission constitutes a conflict of interest. If such
a conflict of interest exits then the individual should abstain from voting
on the issue or return his contributions. Also, I think each of these
companies lack sufficient experience and expertise to warrant the representa-
tives of the citizens of the City of Miami to commit itself for 15 years allowed
by City Charter. Any business person would agree a 15..year contract is not an
unreasonable time for an investment in.....
Mr. Ongie: One minute remaining.
Dr. Theede: The Commission should chose a company and enter into a con-
tract wisely and without haste. Mr. Pilnick has already stated tnat
later contracts will provide larger yields. I suggest that the Commission
table the quest of the company and the awarding of the contracts for one
or more years to allow for us, the citizens, to observe the physical and the fis-
cal performance of each of these companies.
Mayor Ferre: All right, thank you, Mrs. Theede. The next speaker is
Erny Fannotto. Mr. Fannotto, would you give us your name and address for
the record, please, sir and you have 3 minutes.
Mr. Erny Fannotto: Erny Fannotto is my name and I'm President of the Tax-
payers League in Miami and Dade County and the Homestead Tax Exemption League
in Dade County. First, I want to commend the cable owners for saying they
will not sue the City of Miami. I think that's real sportsmanship and I
think they are all qualified, the whole five, except you, as M- yor and
the Commissioners, should decide which is the most qualified. You're going to
make a decision and your decision should be a responsible, business -like
decision that won't leave any scars and that will be an asset to the City of
Miami and not a liability. So I'm just going to conclude by saying, the stakes
are high for the City of Miami and it's importantithis decision,to every one
of these 5 television stations, the verdict.....; the case is in your
hands, give us a verdict and come up with the best television station that
has the most outstanding ability and knowledge, 'they can do justice
to the s cit ' - - - - - - -
y taxpayers iri the Cityi�of Miami,
33 JUL 141981
s
Mayor Ferret Thank you, sir. The next one is Dr. Larry David Calf. I
think that's the name• is that correct? of 1611 N.V. 52nd Street, is he
here? Dr. Larry David Calf? The next speaker will be Mr. Arthur Curtiss.
Is Mr. Curtiss here? Your name and address for the record, sir. You've got
3 minutes.
Mr. Arthur Curtisst My name is Arthur Curtiss. I live at 3421 S.W. 26th
Street, here in Miami. Mayor Ferre, Commissioners, I'm the Director of Grove
Downstairs which has been a part of the City's cultural community since 1971
and also President of State Dance Association of Florida. The advent of
cable television brings many exciting new opportunties to the arts organiza-
tions; for this reason, I have taken an interest in the cable companies pro-
posing service to the City of Miami. I would like to take the opportunity
today to give my personal report on Americable. The management of this organiza-
tion has been actively supportive of us and shown a real interest in Grove
Downstairs. We have been assured that our company will be given free access
to studio space and that we will have the opportunity to broadcast concerts
or classes on Americable. This access opens all sorts of exciting possibilities
for us. I hope the City Commission will vote favorably on Americable's
application. Miami needs more organizations for this strong commitment to
the arts, especially in the broadcast area. Thank you very much.
Mayor Ferre: Thank you, sir. The next speaker will be Sonia Jensen. Ms.
Jensen, your name and address for the record. You have 3 minutes.
Ms. Sonia Jensen; My name is Sonia Jensen and I live at 15841 S.W. 86th
Avenue. I have very little to say, I just want to say that I have had
Americable service and it's been excellent. The day that they went to connect
the cable, they were very fast, punctual, effective, neat and the services
have been very good, my picture has been great since then, and I hope they
are elected to do this.
Mayor Ferre: Ma'm, you didn't tell us who?
ms. Jensen: Pardon me?
Mayor Ferre: You said everything, but who, I didn't hear you who...you
hope they are selected.
Ms. Jensen: Americable.
Mayor Ferre: Americable, is that who....?
Ms. Jensen: Yes.
Mayor Ferre: Thank you. I didn't hear. Sorry. The next speaker is Jan
Petrucci. Your name and address for the record. You have 3 minutes.
Ms. Jan Petrucci: Good evening, I am Jan Petrucci and I live at 8620 S.W.
159th Street. Mayor and Commissioners, I am a satisfied Americable customer.
I have been serviced for a number of months and I have had an opportunity to
deal with the service, repair department, sales and their construction in-
stallation, and I'm very pleased with my service, my family and I enjoy it
iWensely. Thank you.
Mayor Ferre: Thank you. The next speaker is Bennette J. Quarles. Is Mr.
Quarles? Miss, I beg your pardon. Ms. Quarles.
Ms. Bennette Quarles: My name is Bennette Quarles. My address is 3122 N.W.
- 50th Street, here in Miami. I have been following the media coverage for
the decision that you must make in selecting a cable t.v. company. Much of
what I've heard revolves around a local ownership agreement. I guess we all
have our definition of who is local. To me, local ownership means, a resident
and a voter of this city, someone who is familiar and ensitive to the"needs
of my city. I_feel a lot _more _local it""I called Georgla A3ra to tell her
about a need in the Black community than if I had to call Charles Hermanowski,
whom I have never met and I doubt if any other people in my community have
either. What is local to me? Local is being able to call someone I know
from my community who has a say as an owner and who will understand and
�E
JUL 141981
a
Ms. Quarles: (continued): respond to my needs. If this somcalle� local company ''
is so interested in local ownership, why don't they have any Blacks or women as
Partners? If a consultant is hired, why not listen to what he has to say?
This entire situation seems very simple to me. You should vote for the com-
pany that has offered the most to the citizens in Miami, I think we deserve
the best system available. I hope you will give this franchise to the strong-
est company rated by the consultant. Thank you.
Mayor Ferre: The next.... please, we don't want any emotional outburst of
any kind, no applause, no boos, please. Mr. Bob Epling is the next speaker.
Mr. Bob Epling: Bob Epling, S.W. 293rd Terrace, President of Community
Bank of Homestead. About 4 years ago I had the opportunity to meet Charles
Hermanowski, who came to Homestead involved in a dilapidated cable company,
one that had caused more misery than enjoyment, it was supposed to be an
entertainment company in and around our small community. During the past 4
years I have observed Mr..Hermanowski on a professional basis and I have
found him to be a man of his word and I have found his company to provide a
meaningful service to our community. He has hired people, they have put in
the lines, it has been a timely service, and he raised the channel selection
from 19 to 32, he's taken the subscribers twenty -fold and I understand he's
talking about 164 channels here. Well, I don't know where in the world 164
channels can come from, because I don't know that much about cable t.v., but
I ei know this, that based upon my experience in the past 4 years with Charles
Hermanowski, if he says you're going to get 164 channels, you're going to
164 channels. Thank you.
Mayor Ferre: Bob, I hope you can stay, because I would like to ask you a
question a little bit later, it won't be long, not now, because we've fot to allow
everybody..... when the question period comes. The next speaker and you 11 have
to forgive 'me because I can't your handwriting very well, it's Nick... it's either
Sicome... Simcor. Okay.
Mr. Mike Simcor: Simcor. I'm the Mayor of Homestead, Florida....
Mayor Ferre: Oh, excuse me, Mr. Mayor, I didn't.......... Nick, I apologize,
I know you and I couldn't read your handwriting, when I saw you'll recognized you.
Mr. Mike Simcor: No problem, I'm from an ethnic background, I am an Italian,
so we don't
Mr. Plummer: Mr. Mayor, you picked on two funeral directors at the same time.
Mayor Ferre: I just know one that I picked on, the other was a mistake.
Mr. Plummer: I got your first customer.
Mr. Simcor: Mayor Ferre and Humble members of the Commission, I've sat here
in this proceeding and of course, I think we've all been in a proceeding be-
fore, I think if we give someone professional in their work to dig up dirt
any one of us here, they could dig all the dirt they want on each and every
one of us here and discredit all of us. I'm not one for character assassina-
tion. or assassination on anyone. I like to run on my own merits, present my
own case on my own merits and not anyone's else. If I can't present on mine,
I don't need the other. I have to defend Charles Hermanowski, though, be-
cause I know him and I know his wife and they came to Homestead about 4 years
ago and they made all kinds of promises to the City of Homestead. At that
time, I felt, well, here's an outsider coming into Homestead making all of
these promises, but we took him at his word and he has a track record, he has
done everything he said he would do and more. I have confidence in him and
I trust him. I haven't heard the first thing about Charles Hermanowski in
the negative or Americable television cable sysem at all. I'm not going to
defend what I've heard here about him, all I can say, is he's a friend of
mine and I believe in him and I believe he will do what he says he will do
and he's already done it. The people of Homestead respect him, they commend
hits/ and they appreciate him and I thank you very much for the time.
Mayor Ferre: The next speaker has a better handwriting and his name is
Wellington Rolle. Is he here? Wellington Rolle? Is Mr. Wellingtn Rolle in
the audience? Will someone extend him the courtesy of letting him know that
35 JUL 141981
Me. Quarles: (continued): respond to ny needs. If this so.calle8 local company '*64
is so interested in local ownership, why don't they have any Blacks or women as
partners? If a consultant is hired, why not listen to what he has to say?
This entire situation seems very simple to me. You should vote for the com-
pany that has offered the most to the citizens in Miami, I think we deserve
the best system available. I hope you will give this franchise to the strong-
est company rated by the consultant. Thank you.
Mayor Ferre: The next....please, we don't want any emotional outburst of
any kind, no applause, no boos, please. Mr. Bob Epling is the next speaker.
Mr. Bob Epling: Bob Epling, S.W. 293rd Terrace, President of Community
Bank of Homestead. About 4 years ago I had the opportunity to meet Charles
Hermanowski, who came to Homestead involved in a dilapidated cable company,
one that had caused more misery than enjoyment, it was supposed to be an
entertainment company in and around our small community. During the past 4
years I have observed Mr. Hermanowski on a professional basis and I have
found him to be a man of his word and I have found his company to provide a
meaningful service to our community. He has hired people, they have put in
the lines, it has been a timely service, and he raised the channel selection
from 19 to 32, he's taken the subscribers twenty -fold and I understand he's
talking about 164 channels here. Well, I don't know where in the world 164
channels can come from, because I don't know that much about cable t.v., but
I d-j know this, that based upon my experience in the past 4 years with Charles
Hermanowski, if he says you're going to get 164 channels, you're going to
164 channels. Thank you.
Mayor Ferre: Bob, I hope you can stay, because I would like to ask you a
question a little bit later, it won't be long, not now, because we've fot to allow
everybody.....when the Question period comes. The next speaker and qou 11 have
to forgive 'me because I can't your handwriting very well, it's Nick... it's either
Sicome...Simcor. Okay.
Mr. Mike Simcor: Simcor. I'm the Mayor of Homestead, Florida....
Mayor Ferre: Oh, excuse me, Mr. Mayor, I didn't.......... Nick, I apologize,
I know you and I couldn't read your handwriting, when I saw you'll recognized you.
Mr. Mike Simcor: No problem, I'm from an ethnic background, I am an Italian,
so we don't
Mr. Plummer: Mr. Mayor, you picked on two funeral directors at the same time.
Mayor Ferre: I just know one that I picked on, the other was a mistake.
Mr. Plummer: I got your first customer.
Mr. Simcor: Mayor Ferre and Humble members of the Commission, I've sat here
in this proceeding and of course, I think we've all been in a proceeding be-
fore, I think if we give someone professional in their work to dig up dirt
any one of us here, they could dig all the dirt they want on each and every
one of us here and discredit all of us. I'm not one for character assassina-
tio.. or assassination on anyone. I like to run on my own merits, present my
own case on my own merits and not anyone's else. If I can't present on mine,
I don't need the other. I have to defend Charles Hermanowski, though, be-
cause I know him and I know his wife and they came to Homestead about 4 years
ago and they made all kinds of promises to the City of Homestead. At that
time, I felt, well, here's an outsider coming into Homestead making all of
these promises, but we took him at his word and he has a track record, he has
done everything he said he would do and more. I have confidence in him and
I trust him. I haven't heard the first thing about Charles Hermanowski in
= the negative or Aa►ericable television cable sysem at all. I'm not going to
defend what I've heard here about him, all I can say, is he's a friend of
mine and I believe in him and I believe he will do what he says he will do
and he's already done it. The people of Homestead respect him, they commend
him, and they appreciate him and I thank you very much for the time.
Mayor Ferre: The next speaker has a better handwriting and his name is
Wellington Rolle. Is he here? Wellington Rolle? Is Mr. Wellingtn Rolle in
the audience? Will someone extend him the courtesy of letting hiss know that
35
JUL 1 41981
(I
LJ
2
Mayor Ferre: (continued): his name has now come up? All right, then we'll
go the next one. Oh, Mr. Rolle, your recognized, air.
Mr. Wellington Rolle: Mr. Mayor, members of the Commission. Can you tell
what the grounds are, sir?
Mayor Ferre: You've got 3 minutes, sir, we need your name and address and
you've got 3 minutes to talk.
Mr. Wellington Rolle: Wellington Rolle, 1471 N.W. 43rd Street, Miami,
Florida. I guess my comments will probably depart from all that most people
have said, because I want to go back to square one and I want to suggest to
the Commission a couple of things. I think you've violated your own ordinance
I think you've violated the recommendation that you follow the Oregon Plan.
There is no stipulation in the ordinance that you could not award a franchise
to more than one firm. There is nothing, to my way of thinking, in Mr. Knox'a
ruling that you have the authority to issue a license. The Charter does
not give a provision, does not provide for this Commission being able to issue
a license. I think the same language that applied to the franchise of the
telephone company applies to a franchise of a cable company and I think that
when you re -do this you'll find out that the language is almost identical to
what you would normally use for franchise with a company doing similar work
that's normally -done with cable companies. The other thing that I'm concerned
about, Mr. Mayor, is the fact that we do have minority participation in
any meaningful fashion. 1 guess on one side of the coin,you might say that
it's the minority fault, well, I don't see that at all. I think that part
of this problem has to deal with the fact that your records do not show that
Mr. Ongie: One minute remaining.
Mr. Rolle: ....were given and the news media, going back prior to December
17th, I don't think that the notices were posted after the first hearing on
October 30, 1980, I don't think the appropriate public notices were published
for the hearing on December 17th a matter of fact, Mr. Mayor, you will
not find any notices by the City of Miami that suggest in a public notice,
as you do for water and sewers and all these other things where it says "Public
Notice, Public Hearing", those are not on record in the Clerk's office, they're
not on file anywhire, and I think. sir, I think that Carl Pilnick can verify this
that if,you are following the Oregon Plan that you should have established a
citizens committee, you could have called Carl Pilnick as an consultant, and I think
that what they have and what they have in Oregon is certainly a good plan, but
I think that this Commission, and possibly others, have yielded the process in
sur.h a fashion where I think that has become somewhat of a farce. Thank you,
Mr. Mayor, members of the Commission.
Mayor Ferre: All right, thank you, sir. The next speaker is Janet Cooper.
Your name and address for the record and you have 3 minutes.
Ms. Janet Cooper: Janet Cooper, 1901 Brickell Avenue. Thank you for allowing
me the time to speak today and I'll try to keep it in 3 minutes which is hard
for me. I feel that cable t.v. is a terrific bonus for the City of Miami and
is a wonderful opportunity, not only for the all reasons that has been pre-
sented to you already, but also to correct one of the major problems that I've
seer existing in the City of Miami and that is deficient notice on zoning matters
and other matters regarding the City of Miami activities. I have, in my mind,
created a proposal that I'll bring to the City at the appropriate time that
the agendas of all the boards, all the Commission meetings, be placed on cable
t.v. and I think this is a very good way that we can have the City communicate
with the citizens. As to which company is the best company fgr the Cit of
Miami, I would prefer to see this Commission not go the way o favoritism, personal
friends, political influence, I'd like this Commission to make its' decision
based on the merits. I believe it's very clear that Mr. Pilnick, your con-
sultant, has indicated that there are only 3 companies who are offering
superior public benefits. I think it would be negligent for this Commission
to go with any other than those 3 companies. I believe it is important to
offer same form of service to as many of the citizens as possible, therefore,
I'd like this Commission to go with the company that offers a basic service to
all the citizens for no fee. I believe this is a very important way of oommunica-
ting, .I think that the notice channel should be included in that package and
nTo
J U L 141981
1°
t
Me. Coopers (continued): I believe that certain of the cable companies have
proposed that type of...
Mr. Ongie: One minute.
Ms. Cooper: ...channel availability in its' free package. I believe in order
to make the service available to the citizens so that the City can communicate,
that it is necessary to go with all the company that has the low installation fees. I
also believe Ms. Athalie Range was absolutely correct in her statement regard-
ing minority groups, Blacks, women, Latins and I support her fully in that.
I'm not going to name companies because I'm not impressed with a name and I'm
not here to tell you I like a company, I don't think that's important, I think
what it important is that you consider the interest of the greatest number of
citizens in the City of Miami and that you do what's best for the greatest
number of citizens, I trust you will, thank you.
Mayor Ferre: Thank you. The next speaker is Raul Pozo. Mr. Pozo, your name
and address, you've got 3 minutes.
Mr. Raul Pozo: The name is Raul Pozo, I live at 2855 Tigertail Road.
Mr. Mayor, distinguished Commissioners. I was listening to the lawyer repre-
senting Americable and he said something which is to me is rather disturbing.
He said that, "Yes, Americable doesn't have anybody who belongs to the minority
groups to date on an ownership level, but Americable will hire working per-
sonnel from the minority groups". Does he mean by that, that more than 80%
of this community is good enough for the manual work and not good enough to
be considered for ownership. I feel that this is, again, rather disturbing.
We, the responsible citizens of this community, have a commitment that we
should fulfill. We want a balance in this Commission. We want a balance in
this community and I feel that the selection of the cable t.v. franchise will
say very much about this commitment of the leaders of this Commission, be-
cause I cannot understand it how this Commission of the City of Miami who
represents every segment of our population could vote on behalf of any organiza-
tion who doesn't represent the different segments of this community. I feel
that this vital if we are to feel this.....
Mr. Ongie: One minute.
Mr. Pozo:... .. ....necessary prejudice of understanding and comprehension about
the different people who comprise our community. The time has come for this
community and for the leadership of this community to take into consideration
the moment to accept or assign somebody, like in this case the cable t.v., the
time has come to consider each and every one of the aspects of this problem.
Yes, yes, we need a company who has the best ratings, well, if that's failures
of the City of Miami already paid a very prominent consultant who has rendered
a very good information about it, there's no doubt about that Miami Tele-
communication has the best rating, but also, it is very important that the
citizens of this Commission of this community realize that any company who
doesn't represent the Blacks, the Whites, the women and each and every one of
the people who belongs to this Miami of ours, who doesn't belong exclusively
to anybody should be....
Mayor Ferre: Thank you very much. The next speaker is Mr. William R. Perry,
Jr.- Mr. Perry, your name and address for the record, you have 3 minutes.
Mr. William R. Perry: My name is William Perry. I'm President of the Greater
Miami Branch of the National Association for the Advancement of Colored People,
located at 4610 N.W. 7th Avenue. I'd like to say first of all these I can
appreciate the process that you elected officials have presented this community
and I must look at that and weigh it against another one that's bringing a
firm into town called City Metric Control Data, which is an entirely different
so I think it's a good process. Beyond that, I also like to think that some
of the rumors I've heard in the community are not true, and I'm sure they're
not, because I'm sure that our elected officials don't take the same racist
attitudes as Mr. Meyers takes. Nevertheless there is a rumor out that the
decision has already been made relative to who'll get the franchise and there
certain other rumors of that nature floating around in the community, particularly
the Black community, and I hope they're not true. Just let me speak about what
I consider to be a benefit for the total community, because I'm sure that you
,. realize a lot of people would be desirous of having a cable t.v., I just think
I
37 JUL 141981
Mr. Perry: (continued)i that you should make a demand on all these companies
or the company that you give the franchise to, that they install the cap-
ability for cable television in each person's home free. What I'm talking
about is free installation and I guarantee you they will still make money, but
beyond that, I'm considered about the kinds of services and the benefits that
the Black community will receive as a result of the millions of dollars being
poured into the coffers of persons, some internal to the community, some ex-
ternal, and I sent to the Mayor and the members of the Commission a letter
in which we stated our position, brought to those things that we would ask,
that you would look for....
Mr. Ongie: More minute.
Mr. Perry: .......within the company that receives the franchise and I'll read
them just for the matter of the record: "(1). To hold and reserve no less
than 15 channels for future control by the Black community, (2). That company
work in conjunction with the Dade County Public School system to implement
specific trading programming in various areas of areas of telecommunications,
management, operations, etc. for Black citizens of Miami, (3). To make avail-
able to the Black community equipment and programming facilities, (4). To
create an Oversight Committee," and I think this is crucial, "to plan, imple-
ment and monitor Black access, quality and extent of Black programming, Black
participation, Black employment, training and upward mobility. The persona
that _^.hould be appointed to that committee should be recommended by community
based organizations, (5). That 5% of all the profits earned are to be placed
in a trust fund to support the community based telecommunications operation,
(6). That the work force of the awardee reflect the racial composition of
the work force of this community and that such a distribution be reflected
across all levels of employment". And this is the last one....
Mayor Ferre: Thank you very much. Dr. Perry......
Mr. Perry: ..."(7). Is to create Black owned and operated businesses to
contract with the awardee for industry related materials, supplies and equip-
ment."
Mayor Ferre: Dr. Perry, why don't you make that and give the letter to the clerk, I've
already done that by the way, if you submit that letter and we'll make a part
of the record in its' totality, all right. I'd like to two statements, and
excuse me for interrupting the proceedings this way, but Dr. Perry I just
want to tell you two things. First of all, Ken Meyers doesn't need anybody
to defend him, but I want to tell you that I know Ken Meyers for well over
20 years and I'm going to tell you personally that he is not a racist, I want
to tell you that he's a lawyer who represents his client as best he can, and
I do not interpret any statement that he made as being a statement that quali-
fies him as a racist, because I know that's the case and he served with great
distinction in the Florida Senate, and did a lot of great things for this
community, Black and White. Second thing I want to say is, that I will be
moving at the proper time, that a Citizens Committee be organized for the pur-
poses, at the end of the negotiating process, that the Manager and the City
Attorney and the expert who will be in have input, and at that time I would
welcome the NAACP as I would all responsible organizations, Channel 2, and
I'm z:•--e many, many other civic organizations to have input into the process,
and I'm sure you will be &fforded and I certainly would want you to serve on
that Committee. The last speaker is Alicia Baro. Ms. Baro, if you would give
us your name and address, you have 3 minutes.
Ms. Alicia Baro: My name is Alicia Baro and I reside at 271 N.W. 64th Avenue.
As a committee oriented person who has been in this community and has worked
for over 30 years, I am very much interested in all the issues that affect
the City of Miami and that's why I want to speak to you today about the choice
that you have to make. The cable company that has impressed me the most is
Cable Systems Miami because they have. made a commitment to this community.
For example, there are 3 points in which I want to emphasize. Cable Systems
has committed over $3.7 million dollars over the life of the license for this
Miami Together Project, which I consider a major initiative to promote into
a cultural understanding and harmony. This will create an opportunity for
this community to express itself. We will receive assistance in organizing
a great variety of programs. It will make us all work together. This is of
upmost importance to me, for I have worked very long and very hard in this
.J
JUL 141981
Me. garos (continued): cot itp to bring groups together and to create better
nun
hw mony and better understanding Ln this community. Cable Systems is allotting
thousands of dollars in job training commitments for young people to help the
unemployment rate. I'm very much involved in programs that are trying to
LK bring the private sector into the training end employment of young people and
therefore this job training commitment has great meaning for me. I have been
especially concerned about people opportunities for women and issues affecting
women for many years, as some of you know, therefore, I'm very excited with
8 Cable Systems proposal of a local origination channel for women....
Mr. Ongiei One minute.
Ms. Baro: ....that will offer us of 24 hours of special programming, and
now in addition to this, of course, we have being offered a comprehensive
home'security system, such as fire and intrusion alarm, etc., and they have
hired a very well-known expert in security. I believe in Cable Systems, I
believe in the commitment that they have made to this community and I am ask-
ing that you support their proposal.
Mayor Ferre: All right, thank you very much, are there any other members
of the public which have not been heard and wish to be heard at this public
hearing by this City of Miami Commission? Anybody else? All right, then,
seeing that nobody stands, is there a motion that this portion of the public
hearing be closed?
Mr. Lacasa: Move.
Mayor Ferre: Is there a second?
Mr. Plummer: Second.
Mayor Ferre: Further discussion. All right, call the roll, please.
Thereupon, a motion to close the Public Hearing portion of
this meeting, duly introduced by Commissioner Lacasa and
seconded by Commissioner Plummer was passed and adopted
by the following vote:
AYES: Commissioner Joe Carollo
Commissioner Armando Lacasa
Commissioner J. L. Plummer, Jr.
Vice -Mayor (Rev.) Theodore R. Gibson
Mayor Maurice A. Ferre
NOES: None.
t
ABSENT: None.
Mayor Ferre: Now, we're on the portion where the City of Miami Commission
will be asking questions and will be having discussion. I would like before
we do that to put several things into the record that have been submitted to
me. The first one is a telegram in reference to the Miami Herald article that
appeared on the 14th of July and just so that's very clear, I read the
statement that it is in reference to. It says: "In Brenan, Ohio it was a
different story. Americable took 3 years to z_ring 14 miles of cable. We
had to get Hermanowski up here and threatened to sue him". Mayor Joseph
Hoover said: "He scared me to death when I first met him. Wouldn't buy a used
Rolls Royce from him for $50." I received the following telegram from Mr.
Joseph Hoover, Mayor of Brenan, Ohio, this telegram was received at 2:05 and
it was called in by Western Union: "The Miami Herald article of 14ih is
erroneous. I was taken out of context. I am happy with Cable Vision." Mr.
Joseph Hoover, Mayor of Brenan, Ohio. The second communications for the
record that I wish to submit is the following letter from The New World Festival
Inc.: "To members of the Commission, soon you will be approving the license for
cable communications in Miami and I know you will make the consideration both
on the history of professionalism in the companies as well as the companies
commitment to Miami. As one of the leaders of the cultural community of Miami,
I ask that you give the most serious consideration to the cable applicant who
will do the most for arts programming.. Now more than ever in the face of
budget cuts in the arts, the community will need all possible help in promoting
cultural activities. Coordinally, Howard Dando, Artistic Coordinator
for The New World Festival, Inc." I also have a letter which I'm going to read
but I will place into the record from Parent Resources Center of Dade County,
signed by Carol VanArx, Vice President, that basically appeals to the Commisign, Q�
.39 J LL}� �7
Mayor fektet'(continued) to vote for Cable Systems. Are there any other
coemunications that anybody wishes to place into the record? Okay. 1121 apeft
for questions from members of the Commission.
Rev. Gibsons I want to ask this gentleman a question.
Mayor Ferret All right, Father...
Rev. Gibson: I want to ask that gentleman a question, you, sir. Right. Did
I hear you say when you made your presentation that you lived on Miami Beach?
Mr. Jack Sutton: Yes', sir.
Rev.'Gibson: What was your address?
Mr. Sutton: 5055 Collins Avenue.
Rev. Gibson: Collins Avenue. Is that local?
Mr. Sutton: Pardon me?
Rev. Gibson: Is that local?
Mr. Sutton: It's an address...
Rev. Gibson: No, no, is that local?
Mr. Sutton: Yes.
Rev. Gibson: Oh, I see. You remember what you said earlier?
Mr. Sutton: I remember.
Rev. Gibson: You do.
Mr. Sutton: Yes, I do.
Rev. Gibson: Okay, that's all right, I want to make sure I got that into the
record, you know, you criticized that portion of our deliberation and you are
local, okay, all right, all right, you're Six -Star....
Mr. Sutton: I reside there, air.
Rev. Gibson: You're Six -Star Neilson, all right, I just want to make sure,
you're local, I'm not a lawyer, but I'm going to take you up later, okay, that's
all right, let me raise another question. The Fire Department, is the Fire
Chief here?
Mr. Herman Brice: Yes, sir.
Rev. Gibson: Please, please, Chief, I do not know, I'm not the intelligent.
These 5 companies have come before us and made their presentation, I'm very con-
cerned knowing the part that the Fire Department plays in gi..r life and the in-
teresting thing is that it isn't necessarily tied nor bound to the City of Miami,
but it is perhaps one of the best P.R. outfit we have, I'm concerned about
whether or not we, the people, are getting a reasonable or fair share or adequate
share from each and every one of these 5 companies. I've seen people have
strokes and all this other business and I'm scared, please answer.
Mr. Brice: We talked to most of the companies, all of them•in fact, in
regards to some of the things that we thought were necessary, the proposals did
not include the specifics that we asked for, my understanding is, that those
matters would be taken care in negotiations with the company that is awarded
the bid by the Commission. We have several things that we need included in
order to provide, we think, the top level EMS and fire service that we're used
in this oommunity, and this is a tremendous opportunity for us to improve what
is already the best service in the country.
5
AO 4 IV:'.81
1
i
a
Rev. Gibson: All right, and you're saying that we are get those from each of
the five?
Mr. Bricei I said that according to the things that we asked for, they have
not been included in the base bids by the company. My understanding is, that
we will be negotiating with the company and at that point, it's my expectation,
that they will take into consideration those things that the Fire and Police
Department have asked for.
Rev. Gibson: I hope you'll be bidding hard and strong.
Mayor Ferre: Any further questions?
Rev. Gibson: I'll ask some others later.
Mayor Ferre: I'd like to ask Mr. Epling, if he would, I ask you to stay for
a second. Would you come to the microphone? Bob...
Mr. Bob Epling: Yes, sir.
Mayor Ferre: ...always good to see you. Let me ask you this. Do you or
do your company have, do you have any stock or do you lend any money to this
corporation?
Mr. Epling: No, sir, I have no stock of any type or no personal financial
interest in the company. Our bank does participate with a large Washington,
D.C. bank in a loan which has financed the development of the south Dade system.
Mayor Ferre: Thank you. Mr Knox, Mr. Gerstein said that he would guarantee
that his firm would not sue the City of Miami ever, I think I understood that,
then, subsequent to that, another company, and I think it was Vision, where
Mr. Kuten also repeated that, his wording was a little bit different, he said
that necessary was not the intention, but I assume that means the same thing,
that's a blanket guarantee statement that Vision would never sue the City of
Miami, so the question I have for you, sir, as our Attorney, can any individual
in our system of government with our constitution and our laws, guarantee or
bridge somebody's else future or potential ,right to sue? Let me put it to
you this way, I don't know whether there are any rights or options to purchase
the stock of minority holders, but if 5 years from now. one of these corporations,
whether it be TCI or Cable or Vision, were to exercise or make an offer or
tender and purchase their stock, which I think they would be allowed to under
both the laws of the State of Florida and certainly the United States, that
specifically in Florida, because there would be less than 20% as I recall, the
corporate laws, a majority stockholder that would own 80a can by tender buy
the automatically purchase the stock of the minority stockholders, the only
thing that they could sue on the matter of price, now I went long and deep into
that under the law of the State of Florida, and believe me, as of 3 years ago,
that wasn't the law. Now, my question is, because there is that possibility
of stock ownership either by, you know in a nice way or being forced, under
Florida corporate law, Florida, by the way, is the only one out of three states
in the Union where you can do that, you guys in the Legislature better check
on that, but, my question to you is, any individual representing _ corpora-
tion make that kind of a statement and is that something that you could put into
writing that would be binding on this corporation over the next 15 years?
Mr. Knox: Essentially the question is that, well, the answer is that a
corporation may make certain representations and if the record clearly reflects
that the City in making what ever decisions that it makes or in a negotiation
process is relying upon those representations, then the organization can be
bound. Now the question on the right to be sued or the right to sue, as you
indicated, is one that is fundamental in our constitutional government and
individualized, and, therefore, it will probably be that a corporate decision
may be binding if the corporate structure changes there could be some serious
question as to whether or not a previously corporate decision would be binding
and this is very close to the question that is being litigated now in the
Supreme Court about a change in the composition of the City Council.
Mayor Ferre: Well, then, I would then have to ask Mr. Gerstein, and if any
of the otliar companies wish to respond in a similar way, Mr. Gerstein or whoever
.41
JUL 141981
,I -
A
Mayor Ferret (continued).represents the company, if that statement of yours
would be binding, sir, and Whether both Taft broadcasting and TCI, the
other joint venture, would also subscribe to that and would it be binding on
them?
Mr. Gerstein: Well, I committed in writing that as long as I was President
of this corporation no lawsuit would be brought against the City and I would
assure you that I obtain such a commitment from Taft and TCI.
Mayor Ferret Well, it couldn't be, Mr. Gerstein, dependent on your incumbency
as President, because you might be President for 3 years....
Mr. Gerstein: I understand that, Mr. Mayor, however, I believe that if the
City relied upon that representation, as Mr. Knox has indicated, contracting
with TCI or to whomever you award this franchise, such a representation could
be made binding upon the successor officers of this corporation.
Mr. Al Cardenas: If I may add, Mr. Mayor, we'll be more than delighted to
work with the City Attorneys and the law firm that you retain to help prepare
the proper documentation with which you will be satisfied, and just thinking
off the cuff, I'm sure that there are legal mechanisms that I can represent
to you, where this can be assured. In last week's presentation, Mr. Gerstein
as President of our company, had made a statement, which is a correct statement,
that policy decisions must be made by 85% of those stockholders assuring local
control and I assure that we can have a shareholders agreement where there is
a voting thrust as to the issue of the suing the City of Miami enter into by
a sufficient percentage of the stock of the company, so in that event that
some of the stock is divested it will be subject to the limitations so that
voting thrust ac to that specific issue, and this is just one idea, but I'm
sure we can conform it to your needs and define it accordingly.
Mayor Ferre: Let me ask, you a question, if I may, take just a second on
that. Are you telling me that on that 85% rule that you are going to have
between you and TCI Taft, that a 5% out of the 20 that is locally held, could
veto a decision or are you telling me that it would require 85% of the majority
and what provision do you have for them buying 5% from some of the members
that might at one time in the future wish to sell, and therefore, they would
have 85%?
Mr. Gerstein: I cannot tell you about such a provision because if it exists
I'm unaware of it, I can tell you that the 85% of vote required insures local
control, I can also tell you that I doubt that anyone else has represented in
writing as I have, that there will never be a lawsuit brought by this company
against the City of Miami and that you can in your contract negotiations with
us insure that such a representation is binding upon any successors.
Mayor Ferre: Okay, would the other members, I don't know, Barry, you want
to speak to this and any of the other firms that wish to address that issue,
they're welcome to do it.
Mr. Kutun: Mr. Mayor and Commissioners, our company really doesn't feel
that it is a problem, we have never sued a city or have we been sued in all
the years we've been business, I'd just like to preface what I said, we would
be more than happy to contract with the City, okay, on any basis which the
City Attorney feels is fair or the City Commission, with regards to any law-
suits, we would be more than happy to be bound never to file a lawsuit against
the city. I will say this in terms of transfer of ownership, Mr. Mayor, that
your RFP in the ordinance provides that, I believe, anything over 2% owner
must have consent of the City Commission to transfer ownership of the company,
so any of us who are pledging to you our commitments, and that you're concerned
about them, we have to come before you if we were ever to sell any interest
that we have in the company, any transfer of interest, I believe, over 2% or
2% more must be approved by this City Commission, so you would certainly know
all the individuals who are involved, all their personal commitments, all their
written commitments and contractual commitments with the company. There is
a legitimate question that's involved in terms of constitutionally prohibiting
someone from bringing any kind of suit, and I'm not a constitutional lawyer,
however, anything that's within the law, Mr. Mayor and Commissioners, as to a
prohibition, we will abide by and we will sign and live with it.
.42 JUL 141981
Mayor Ferre: All right, in the microphone, Senator, so that we have a clear
record of your statement. Senator Meyers.
Mr. Ken Meyers: We would make the same commitment, I think every applicant
would make the same statement, I cannot foresee that a cable t.v. can gain
any possible thing, particularly with respect their relations throughout the
entire country With other cities and counties, with a record of having sued
the City of Miami. We have never sued any municipality and I think that is
pretty clear in the record....
Mayor Ferre: Well, I think the question is, and you've answered it.
Mr. Meyers; ..nor been sued and we would be willing to make the same
commitment that Mr. Gerstein has indicated.
Mayor Ferre: All right, the next.....sir?
INAUDIBLE RESPONSE FROM AUDIENCE
Mr. Plummer: Are you affording the opportunity, excuse me, to the other firm,
one firm has not spoken.
Mayor Ferre: Everybody has the same opportunity if they wish to take it,
I'm not going to deny anybody the right and answer that question.
INAUDIBLE RESPONSE
Mr. Plummer: For the record, sir, your name and who you represent.
Mr. Jack Sutton: I'm sorry. Jack Sutton and I represent Six -Star Neilson
Cable Vision of Miami, Inc.
Mayor Ferre: Okay, thank you. My next questions I've got are for Mr. Pilnick.
Mr. Pilnick, there was a statement made here by one of the firms that they.were
the only ones that would have a satellite uplink, and I think the price that
they quoted was a $1.2 million, There's another firm that specifically has
a satellite uplink and they're talking about $500,000. Now, I'm confused, is
there only one firm that has a satellite uplink?
Mr. Pilnick: As I remember, Mayor, I think another firm, I believe it was
Miami Telecommunications, indicated that they would be prepared to provide
uplink within the first 2 or 3 years, they did not specify an exact time and
indicated it would depend upon the need, but I think their statement, and
they could perhaps correct us, but I think their statement was that they'd be
prepared to provide it within the first 2 or 3 years of operation.
Mayor Ferre: Well, does that mean that at the negotiating table, should that
firm be selected, that within a 3 year period there would be a satellite up-
link?
Mr. Pilnick: That's one of the commitments that you can get them to clarify,
yes sir.
Mayor Ferre: All right,. now, with regards to the other company, and I think
it was Cable Vision,.....
Mr. Pilnick: Cable Systems.
Mayor Ferre: ...I mean, Cable Systems, and they've made a very specific
commitment that they were willing to spend a $1.2 million for a satellite up-
link, now what is the difference between the satellite uplink that Cable
Systems or whatever the name is, say their going to do and....
Mr. Plummer: What's the $700,000 difference?
Mayor Ferre: Yeah, well, no, but sometimes, you know, there isn't that much
of a difference, s=etimes there's a vast difference.
Mr. Pilnick: Well, essentially, the uplink is simply a trasmitter portion
of the satellite earth station that allows to send programs from Miami to
43
JUL 1 41981
Mr. Pilnick: (Continued): satellites orbiting the earth than to have those
programs relayed around the country. You can buy various modals of uplinks
just as like you can buy various models of cars and the prices range anywhere
from about $300,000 to $400,000 up to a $1,500,000. It depends on which
satellite you're trying to communicate with, whether you want to be able to
reach all the satellites that carry programming, depends on a number of other
considerations, but the difference in price would reflect presumably the
capability of the equipment that was being offered. With respect to the
specific purposes, I think that Cable Systems indicated that a primary user
of their uplink would be Channel 2, with the assumption that, I think, they
could use it and other users could use it also. I think that Miami Telecommunica-
tions indicated they were prepared to provide uplink in 2 or 3 years, but they'
didn't specifiy who would be the users.
Mayor Ferre: Anybody want to clarify that position? Either one, all three
of you, okay. Very quickly.
Mr Paul: We.....
Mr. Plummer: Sir, this on a public record. Everybody should state your
name, who you represent, then your answer so it can be identified on the record.
Mr. Paul: My name is Paul, I'm the Vice President of TCI. I do want to
clarify that point and we very specifically, and I will be happy to
provide chapter verse, agreed to provide the .uplink in Year One and further
we included specifications in there that it was a scientific Atlanta uplink
and we include all the specs and model number of the uplink in there, it's
right in the proposal.
Mayor Ferre: All right, next.
Mr. Michael Wilner: Mr. Mayor, my name is Michael Wilner of Vision Cable
Communications. We provided for a uplink at our head end facility as noted
in the block diagram of our headend, which was specifically requested in the
RFP, we don't have to blow our horn about, we put in our financial projections
and there was no specific request to delineate it.
Mayor Ferre: Next.
Mr. Meyers: You recall that Americable....
Mayor Ferre: Name please for the record.
Mr. Meyers: Kenneth Meyers, attorney for Americable. Americable made the
commitment to provide a uplink system in its' presentation last week, I would
like to respectfully point out to the Commission that I'm given to understand
that the only way technically uplink can be•provided is if you have a 10 meter
satellite dish that,,I would point out, in the applications only Vision Cable
and Americable are proposing in their technical specifications 10 meter sat-
ellite dishes, so if these other companies are proposing uplink they haven't
proposed the system to do it with, but I suppose in all fairness to them, that
could probably be taken care of in the negotiating stage, but they can't do
it with a 8 meter dish, I do not believe.
Mayor Ferre: All right, sir, next.
Mr. Phil Lynn: Excuse me, Mr. Mayor, Phil Lynn, Cable Systems. We, our
statement was that were the only applicant to be proposing uplink at WPBT
and that was really, we were proposing to what they had asked for originally
and they had placed a Natter here on the file, so that was our claim. Secondly,
that we have put $1.1 million dollars which would buy the world's finest up-
link in our proformance, so it shows up very clearly that is a commitment.
mayor Ferre: Okay.
Mr. Alden: Just to clarify Mr. Meyer's statement....
Mayor Ferre: Your name for the record.
Mr. Paul Aldeni Paul Alden. We also propose 10 meters dishes and a totally
.44 JUL 141981
Mr. Alden: (continued): separate 10 meter uplink, which we call a "frequency
agile" so that they can look at any satellite, also, the way we put it in our
proposal we didn't want to limit it to just one entity that's available to the
community.
Mayor Ferre: Okay. Mr. Pilnick, any comments on statements made so far?
They stand for theaselves? All right, my next question has to do with sub-
scriber count. Mr. Pilnick, my understanding that different people count
differently, would you explain the question about subscriber count and then
I'm going to ask each one of the 5 companies to tell us how they count.
Mr. Pilnick: Well, the most conservative method of counting is to count a
single subscriber regardless of how many services that subscriber takes, the
subscriber may take a basic service, perhaps a pay channel, perhaps two pay
Channels and you would still count that has one subscriber. Some companies
count what they call "units" rather than individuals or homes. If a sub-
scriber takes a basic service and two pay channels that subscriber is counted
as 3 units or the equivalent of 3 subscribers, so that it's possible with that
method of actually having a small number of homes subscribing and make it look
as though it's a number of subscribers.
Mayor Ferre: All right, now, I would like to ask each one of the companies
here to please stand down up and tell us how many subscribers you have and
how you count them.
Mr. Sutton: Jack Sutton, Six -Star Neilson Cable Vision of Miami, Inc. We
count them by basic fee and we have 33,000 plus subscribers.
Mayor Ferre: Okay, by basic service. Does that mean you count each individual
if somebody's has 3 services you would count them 3 times in the same house?
Mr. Sutton: No, that's counted as one.
Mayor Ferre: That would counted as one?
Mr. Sutton: That's correct.
Mayor Ferre: All right,thank you. Next.
— Mr. Meyers: Ken Meyers, Americable. We use the system described by Mr.
Pilnick, we do it on the unit method and on that method, for instance, in
Miami it would be 25,000 subscribers, there may be only, because of apartments
and so forth, hotels, there may be only really 10,000 actual physical unit
connections, but on the unit count it's 25,000 subscribers and that's the way
our financial institutions, our banks require and desire us to do and that's
the way it's done. We also report to Dade County in the specific way that
they require, too, it's slightly different but they have both information;
both ways.
Mayor Ferre: Okay, next.
Mr. Wilner: Michael Wilner from Vision Cable. We count units, we do not
count second sets or pay television subscribers and we have combined national
subscribership of 550,000.
Mayor Ferre: Next.
Mr. Alden: Paul Alden from Miami Telecommunications. We, too, count by
the standard method and that is, single cable subscribers, we do*not count by
combined subs. Now, at the risk of having people play the numbers, I will give
you the official numbers that we quoted in our annual report as of the end
of March, they're not the actual numbers...
Mayor Ferre: All right, in that you mean that the actual numbers will be
more or less?
Mr. Alden: Considerably more, we simply haven't released them yet. Our
and of March numbers were 1.28 million as one of the companies accurately
projected on the screen. Our current subscriber count is in excess of about
1.7 million.
45
JUL 141981
7
Mayor Parrot Okay. Cable Systems.
Mr. Lynn: Philip Lynn. We count the cable subscribers as a household and
we have 1.3 million households. We have an application pending before the
FCC to acquire another company for 450,000.
Mayor Ferre: Okay. My question deals with minority ownership as a percentage
of the total. I would like each one of these five companies to tell me from
the local group, which is really the main interest, what percentage minorities
have, minorities are Blacks, Latins and women as I would look upon it, and I
would like you to tell me exactly what percentage of your ownership is Black,
what percentage is Latin, and what percentage is women. Who wishes to start
off on that? Anybody?
Mr: Plumaer: May be they don't understand the question.
Mayor Ferre: Well, the question ... all right, Mr. Gerstein, you're getting
up, so I will pose the question...
INAUDIBLE RESPONSE FROM MR. GERSTEIN
Mayor Ferre: Well, you have a .... out of 100%, my question to you, is 20%
is local, 40% is owned by Taft, 40% owned by TCI, of the 20% which is the
local ownership what percentage is Black, what percentage is Latin....
Mr. Gerstein: Let me correct you, it's 25% local ownership.
Mayor Ferre: Twenty-five percent.
Mr. Gerstein: I don't have the percentage breakdown in front of me, Mr. Mayor,
and I do not know who does have them, though the other companies have that,
it is in our application.
Mayor Ferre: Well, I would just like to repeat it, because I'd like to know,
you know, I'm writing these, what I think, pertinent facts down, I would like
for you to get that information and I'll go onto another question and I'll
come back to that one.
Mr. Gerstein: As I stated earlier, I do know that we have women, Blacks and
Latins represented in the ownership.
Mayor Ferre: I'll tell you what, I will tell you my next two questions be-
cause perhaps you may want to also come back, you may to do some...I want to
know about financing, I want to know exactly if you have a commitment from a
bank, an institution, an insurance company, a pension system and, what I
want to know is do you have a firm commitment for financing or do you have
partial commitment which is to be negotiated after you achieve and get the
franchise, in other words, do you have the financial ability to immediately
call upon your financing source to begin construction or do you have go through
a process of negotiation, and if so, how long a period of time would that take
because I certainly would not want to have or vote with a company who would
be awarded this franchise that by the time we finalized it and voted for it,
and contracted had not had their financing lined up.
Mr. Gerstein: Would you give us a couple of minutes to get this information?
Mayor Ferre: Let me tell you what my third question so you can think about
that and that is, I think, this local thing has become a very big issue in
the papers and evidently in the public view, even though papers don't, in my
opinion, necessarily represent the public's view, but the question I think is
a germane question, there are some people who have more local stockholders
than others, but I think you have to look, and I'm going to very blunt and I
don't want anybody to misterpret it, I'm not in any way tipping my hand or
implying anything or castigating anybody, but I want to make some points as
to this, for example, where's Herb? In your group you have Don Reed as, I
think you've got Don Reed, well, Don Reed is from Palm Beach and I've known
him awhile, he's a great guy, he's a great lawyer, probably without any
question, one of the best Legislators Florida has had, but he lives in Palm
Beach, you know, now I don't know whether I would consider that exactly local,
it's Florida, but it's not Miami. Now, in the case of Mr. Hermanowski, if
04
Mayor Ferres (continued): you look at Hermanowski's total, I thought it
was 60%, but since I have been corrected, I understand it's 70% but of that
70%, as I understand it Mr. Hermanowski owns 401 and the question of
Hermanowski's localness is one that has been brought up, in other words, you've
been here for 4 years, now, I would want on the record Mr. Hermanowski's
statement and commitment that he certainly perceives Miami as home and that
he's not going to be leaving us in 2 or 3 years once he gets his franchise
to go to California or to get the next franchise somewhere. I think that's
a germane question as to the localness. I also have a question, Mr. Gerstein,
which I think is a very pertinent question, and that is in your firm you
have emphasized the ability for your local group to make some very key deter-
minations in programming and other decisions, I'd like to know from you and
from others more about that, does that mean that you will actually have the
decision making, do you have the decision making power, can you...
Mr. Gerstein: I can answer that for you right now, sir.
Mayor Ferre: No, no, we're going to get into that, you knot.i, these are the
questions that I wanted you to know ahead of time, these are the 3 questions
that I want to ask and that is, does your firm at the local level a real
decision making ability and what is the guarantee that 5 years from now that
won't be removed or that if you sell your stock that's wiped out, in other
words, you know, I think what is present during these presentations is great,
but what happens 4 or 5 years from now when the parent company makes a tender
offer and removes all of the local, they have a right to do that, and I want
that very clearly on the record what Taft and what TCI's intentions are, what
Vision's intentions are and what the others are, and I want the same thing,
of course, from Mr. Hermanowski and from the Canadian group, etc. Those are
the 3 basic questions I want to get to.
Mr. Gerstein: Are you going to give us a 5 minute recess?
Mayor Ferre: Yes, I think that would be fine. Let's take a 10 minute recess.
THEREUPON, THE CITY COMMISSION WENT INTO A BRIEF RECESS
at: 7:30 P.M., reconvening at : 8:20 P.M., with all members
of the Commission found to be present.
Mayor Ferre: Before we broke up/I had 3 questions on the record, they
were dealing with: minority ownership, financing and local input, and voice
in decisions. I will take up the answers in any way that you wish to step up
and answer these questions. Anybody want to be first or do you want me to do
it arbitarily? Anybody want to step up and answer these questions? Yes, sir?
Mr. Sutton: I will, Mr. Mayor. Jack Sutton, Six -Star Neilson Cable Vision.
Mayor Ferre: Yes, sir.
Mr. Sutton: In answer to your first question, we have no local interest
partners.
May— Ferre: Yes, sir.
Mr. Sutton: All right. We have financing available to immediately start the
cable system upon award...
Mayor Ferre: Who is the financing from?
Mr. Sutton: Banker's Trust, New York.
Mayor Ferre: Is the commitment from Banker's Trust on an if basis or is it
irrevocable letter of commitment, if there is such a thing?
Mr. Sutton: Upon the award of the franchise to Miami.
Mayor Ferre: Upon the award of the franchise, on the record, you're telling
us that Banker's Trust of New York will give you the necessary funds for you
to complete the construction as you've outlined in your proposal, is that
correct, sir?
.47
JUL 141981
Mayor Perres (continued): you look at Hermanowski's total, I thought it
was GO%# but since I have been corrected, I understand it's 70% but of that
70t, as I understand it Mr. !ermanowski awns 400 and the question of
Hermanowski's localness is one that has been brought up, in other words, you've
been here for 4 years, now, I would want on the re,rord Mr. Hermanowski's
statement and commitment that he certainly perceives Miami as home and that
he's not going to be leaving us in 2 or 3 years once be gets his franchise
to go to California or to get the next franchise somewhere. I think that's
a germane question as to the localness. I also have a question, Mr. Gerstein,
which I think is a very pertinent question, and that is in your firm you
have emphasized the ability for your local group to make some very key deter-
minations in programming and other decisions, I'd like to know from you and
from others more about that, does that mean that you will actually have the
decision making, do you have the decision making power, can you...
Mr. Gerstein: I can answer that for you right now, sir.
Mayor Ferre: No, no, we're going to get into that, you know, these are the
questions that I wanted you to know ahead of time, these are the 3 questions
that I want to ask and that is, does your firm at the local level a real
decision making ability and what is the guarantee that 5 years from now that
won't be removed or that if you sell your stock that's wiped out, in other
words, you know, I think what is present during these presentations is great,
but what happens 4 or 5 years from now when the parent company makes a tender
offer and removes all of the local, they have a right to do that, and I want
that very clearly on the record what Taft and what TCI's intentions are, what
Vision's intentions are and what the others are, and I want the same thing,
of course, from Mr. Hermanowski and from the Canadian group, etc. Those are
the 3 basic questions I want to get to.
Mr. Gerstein: Are you going to give us a 5 minute recess?
Mayor Ferre: Yes, I think that would be fine. Let's take a 10 minute recess.
THEREUPON, THE CITY COMMISSION WENT INTO A BRIEF RECESS
at: 7:30 P.M., reconvening at : 8:20 P.M., with all members
of the Commission found to be present.
Mayor Ferre: Before we broke upj I had 3 questions on the record, they
were dealing with: minority ownership, financing and local input, and voice
in decisions. I will take up the answers in any way that you wish to step up
and answer these questions. Anybody want to be first or do you want me to do
it arbitarily? Anybody want to step up and answer these questions? Yes, sir?
Mr. Sutton: I will, Mr. Mayor. Jack Sutton, Six -Star Neilson Cable Vision.
Mayor Ferre: Yes, sir.
Mr. Sutton: In answer to your first question, we have no local interest
partners.
M&-- Ferre: Yes, sir.
Mr. Sutton: All right. We have financing available to immediately start the
cable system upon award...
4 Mayor Ferre: Who is the financing from?
Mr. Sutton: Banker's Trust, New York.
•
Mayor Ferre: Is the commitment from Banker's Trust on an if basis or is it
irrevocable letter of commitment, if there is such a thing?
Mr. Sutton: Upon the award of the franchise to Miami.
Mayor Ferre: Upon the award of the franchise, on the record, you're telling
us that Banker's Trust of New York will give you the necessary funds for you
to couplete the construction as you've outlined in your proposal, is that
correct, sir?
4'7
JUL 141981
s
Mr, Button: Yea.
Mayor Ferre: Okay, air, and the brat question was one to deal with minority
ownership, well?
Mr. Sutton: We have none, sir.
Mayor Ferre: Okay.
Mr. Sutton: Is that a new criteria or something?
Mayor Ferre: No, sir, I needed these questions that I, as a member of this
Body, have a right to ask, and I'm asking you.
Mr. Sutton: I understand. Thanx you.
Mayor Ferre: Okay. Next company? Who wishes to answer next? All right,
sir. You've got 3 questions, one is dealing with...
Mr. Lynn: Mr. Mayor, Phil Lynn. The ownership issue Garth will talk
about, the decision making I will and the financing I'll ask Raul.
Mayor Ferre: Okay.
Mr. Lynn: First on ownership, Garth.
Mr. Reeve: Our company....
Mr. Ongie: Please identify yourself.
Mr. Reeve: ....is 20%...
Mayor Ferre: Garth Reeves.
Mr. Reeves: Oh, excuse me. Garth Reeves, Cable Systems. Our company is
20% local ownership. Of the local partners, 40% are minorities, Raul Masvidal
who is Hispanic....
Mayor Ferre: Forty perecent?
Mr. Reeves: Yes.
Mayor Ferre: Did you say out of the 20, 40?
Mr. Reeves: out of five o's, yes, and I am Black and we intend to take,
not just serve in a dormant fashion, but we intend to be heard in the decision
making of our company.
Mayor Ferre: Mr. Reeves, didn't Mr. Masvidal say that.he would tender in
his stock to the...so, he would not be a stockholder, then?
Mr. Reeves: Well, he might have said that in a moment of emotion.
Mr. Plummer: Well, I heard Gerstein bought it.
Mr. Reeves: But, another point I would like to make, though, on our advisory
boards 19 of our 26 members are minorities. Thank you.
Mr. Lynn: on the specifics on the decision making....
Mr. Plummier: Your name, please, so that I hope all will do this....
Mr. Lynn: ....Garth has .... Phil Lynn, Mr. Plummer. Phil Lynn, Cable
Systems.
Mr. Plummer: ....will do the same, that this is a record and I want all of
you to know, we have a strange way around of holding you to the record, so
that's why I asked and before you state, state your name, the company you re-
present, then give your answer, because we're going to hold you to it.
Mayor Ferre: Go Ahead.
Mx. Lynne: Thank you, Commissioner. My name is Phil Lynn, Cable System.
.48 JUL 141981
Mr. Lynn: (continued): Garth has mentioned our five advisory boards. Now
our agreement with our local partners is the same agreement that we made,
we consummate, with our other local partners and cities, such as, Borman or
Minneapolis, the firm sets up a board of directors, the decisions are made by
that board of directors and we pledge as we have everywhere that the majority
of the board of directors will be local.
Mr. Plummer: Excuse me, that didn't answer the question. Maybe, and Mr.
Mayor if I'm out of place, you tell me and I'll ask a different way...
Mayor Ferre: Go ahead.
Mr. Plummer: The real question is, of the local people how much say will they
have? Now, Garth said, "Hey, I intend," and I know GarUi, let me tell you
something, he's going to raise holy hell to make his point, but raising hell
don't do, okay, now of your local people, and I want to ask this of every one
of"the companies, of your local people what's strength will they have in
actually making decisions?
Mr. Lynn; Commissioner. I can't be any more specific that to say. that the
decisions of the Board are carried for by the majority of the Board and in
our particular case, in every community we serve, the majority of the board
members are locals.
Mr. Plummer: Are you sating that if the local board makes a decision they
do not have to go to the parent company for approval?
Mr. Lynn: That is right. The local board, that the Board, which is made
up of a majority of locals, makes the decisions for the company. I'll ask
Raul to talk about financing, unless you'd like me to further clarify.
MOM
Mr. Gallagher; Phil, let me....Tom Gallagher, Cable Systems. I can see where
you're a little bit confused. When we negotiated with Cable Systems and
brought them in, that was one of the things that we were emphatic about, and
what he's saying. is that when the board is set up it will be a group of local
partners, let's say the board is set at 5 people, would be 3 locals and 2 that
would not be local that would represent the company on the board, so therefore
at any time local people could, people who live right here, carry that board
to do the decision as to what we felt was strong locally.
Mayor Ferre: Tom, I've got a problem with that, I just want to tell you, be-
cause I served in Venezuelans corporations, where because of the requirments
of the law in South America and Venezuela particularly, there was concern, we
always had to have a local boards, but the moment one of those :vocal members
didn't vote the way we wanted he was out of that board the next meeting, you
know, and we do it all over again, and that quite never happened, so I just,
because they all knew, so I think it's very important because there are different
ways of doing these things, the fact that, you know, somebody there's a 5
member board and you have 3 locals doesn't necessarily mean that all the decisions
will be made by those local individuals because in a free society with a free
enterprize, you know, it's the golden rule, you know the golden rule, he who
has the gold rules.
Mr. Gallagher: Mr.Mayor, that's correct and of course that happen with absolutely
anybody that you're talking about, so...
Mayor Ferre: But, that's exactly why I don't want, I think it's important that
we be very, very truthful and honest on the record, I'm not saying that you're
not, I'm just saying that it's very important that on this public record now things
are stated very specifically and very clearly and if the decision making process
is being made, as I would assume it would be made by the parent company, because
nobody's going to come in here and invest $100,000,000 and then permit 3 people
that don't have that kind of commitment and an investment to make a decision,
now anybody who tells me differently is, in my opinion, insulting my intelligence,
and I don't, you know, I've been around too long and I've seen too many of
these corporate things to know how the corporate world functions, and don't
come telling me that somebody who owns a $100,000,000 in some company isn't
going to control the destinies of that company, come on. Just tell me how it
is.
JUL 14 1981
r
Mr. Lynn Mr. Mayor, you have outlined, obviously, a problem, you know,
that could occur on the basis of local representation, obviously the appoint-
ments to the board made by the parent company.
Mayor Ferre: Of course.
T
Mr. Lynn: But, what I'm saying to you to is...
Mr. Plummer: The parent company is going to name the local board?
Mr. Lynn: The parent company in conjunction with the local partners name
the local board, but the parent company will name the majority and..
Mayor Ferret Now, you know, I mean, there's a very simple way of doing it,
j
I'd think you'd be crazy to do it, if I were anywhere, if I were a stockholder
of -your company I'd be very upset if you do it, but, you can create a voting
trust, but I think you'd be crazy, but that's the only legal way that you can
turn over your voting rights in a corporation and that is if you create a voting
trust and I don't think you're about to do that.
Mr. Lynn: It may have some warts, we have found it works very, very well
in the communities in which we serve. The majority of the board is local and
the board makes the decisions for the company. Now, I'll ask Raul to talk
about financing.
—
Mayor Ferre: All right, sir, thank you.
Mr. Masvidal: I'm Raul Masvidal. I'm going to speak for Cable Systems Miami.
_
Mr. Mayor, just to clarify something, I do stand by my commitment of the other
day and that only mean that, an additional 50,000 Blacks and 150,000 Cubans
will be stockholders will be stockholders of Cable Systems Miami. I have re-
viewed the various letters concerning the financial commitments, about the
various financial institutions, I have reviewed the one from Toronto Dominion
Bank, the major Canadian hank and one of the largest banks in the world, this
letter concerns the franchise in Miami and it is addressed to Cable Systems
Miami. I have never in my 15 years in the banking business seen a more un-
qualified commitment letter than the one that I have in front of me and I.
would suggest that the Commission have the City Attorney review all of the
commitment letters that have been submitted in order to be able to substantiate
how firm the commitments are. Thank you, sir.
Mayor Ferre: Okay, thank you. Next company, Americable.
Mr. Meyers: What's the first question?
Mayor Ferre: Senator, there are 3 questions. One deals with the percentage
of minority ownership, secondly deals with financing and what kind of financing
you have and the third one deals with local input into the decision making
process. Senator, would you forgive me, because .... Mr. Masvidal, Raul, I'm
sorry because I was distracted looking at something here, your statement that
you just made on the record, you say that you've never seen a stronger letter
in 15 years in banking, etc., does '-hat mean in your opinion is an irrevocable
commitment for financing? -
Mr. Masvidal: Definitely.
Mayor Ferret Okay. Thank you.
Mr. Meyers: Let me just answer the quickly the questions and then Mr.
Hermanowski wants to make some remarks about this. As far as minority interest
in the investors, as far as I know, the group that Americable has has been
with him from the start and was a determined group, and I do not know, I cannot
think of any minority "per se" within that particular group, they have been
with Mr. Hermanowski from the beginning and there were no additional people
that came on at the and, but he will confirm to you that had some local people
asked to be involved in our system as they did with others, would have been
glad to had then.
Mayor Ferre: Ken, let me understand now, there's a 70% local, is that correct?
.50
Mr. Mayoral 70% local ownership and.....
Mayor Ferree But of that 70% Hermanowski has 40%.
Mr. Meyers: He is the general partner, this is a limited partnership, so
that he has 100% to determine of the vote of controlling determination, that's
the way a limited partnership works. He makes the decision. He has 40%...
Mayor Ferre: Of the stock, of the equity.
Mr. Meyers: ....of the equity interest in the entity, correct.
Mayor Ferre: Of the remaining 30% equity ownership that is local, were they
part of the original group, all of them?
Mr. Meyers: No. Most of them were, Mr. Hermanowski can explain that...
Mayor Ferre: 10%, 20% of the totaa. are new?
Mx. Charles Hermanowski; I'll explain that, Mayor. I'm Charles Hermanawski
of Americable of Miami. I reside at 17301 Cutler Road. The 70% that is local
with exception, for example, 10% is owned by Kenneth Barring of Barring In-
dustries, he owns the Bank of Tamarac, he has been an investor with me in 5
different cable situations. Mr. Ross, Mr. Knight and Mr. Mamber are new local
investors and I wean investors, by the way, they have put money into this
company.
Mayor Ferre: And they have what percentage of the stock?
lilt. l;ermanowski: Mr. Ross has 3%, Mr. Knight has 3%, Mr. Mamber has 8%, Mr.
Kundv, George Kundy, has 6%.
Mayor Ferre: So, it's 8, 6, 3 and 3.
Mr. Hermanowski: I have 40%. That's correct. Three, three, six, eight and
Ken Barring has 10 and i have 40, so we have 70% of the, which is local.
Mayor Ferre: And that 20% are new investors?
*Ar. 'Her-anowski: That'is correct. Now, to answer your other question, Mr.
Mayor, we have no minority investors, it's not by choice, the other groups have
explained to you that they went out to Canada and New York and Colorado and
they looked for companies to bring in, well, they didn't look in their backyard,
because if Athalie Range came to me I would have been delighted to make her part
of my company, if Armando Cardin came to me I would been delighted to have him
as part of my company. They did not approach me, consequently, I have no local
investors for that reason. As for my commitment in question, whether I'm a
resident, Mr. Mayor, I've lived in two locations all my life, this is my third
location at Miami, Florida, I moved my family here 4 years ago, my wife is a
practicing attorney in Florida, my son is a registered real estate broker in
Florida, my daughter is a registered stock broker, my other daughter goes to
school here and one little one goes to Palmer High School, this is our residence,
I have no other residence, and when 90% of my -_--al holdings are involved in
the City of Miami, I'm going to hop over to soike city and look for a franchise
and move my family. We just don't move, Mr. Mayor, as I said, we are all firmly
committed, my whole family resides and works in Miami, my wife, as I said, is
a practicing attorney and you might have missed that when you were on the
phone. As far as local control, as Kenny Meyers explained to you,. I'm the sole
general partner of all my partnerships and I am the Board of Directors, which
does not mean that I do not take advice, which means that we set up advisory
boards comprised of the various local groups, whether it be a Spanish group or
a Latin group for the Latin local origination channel or a Black group for the
Black origination channel, they make their own determination, we hire the people
and we hire the trained people, they will run it, they will make the decisions
in that regard, as far as the decisions on how quickly we build the system or
anything of that nature, any major decisions, are made solely by myself.
Mayor Ferre: Okay.
Mr. Plummer: Do you sell Rolls Royces?
.51
JUL 141981
r"'11
Mr.Hermanowski: •no, I don't. I'm strictly in the cable business, Commissioner.
As far as financing, it's just's moot question, it doesn't make sense, anybody
here can raise the financing in one hour to build the City of Miami, it's one
of the few remaining major franchises available. I have the firm financing
to build this system, not only what I stated, but additionally financing if it's
required, so there's not...
Mayor Ferre: So, in other words, Mr.Hermanowski, if you were to be awarded
by this Commission the right to negotiate with the City Manager and the team
that we put together, by the time this thing would be finalized and this Com-
mission would make it's final determination in the next couple of months, hope-
fully, you would have a unquestionable firm commitment for financing from a
major institution, bank?
Mr.Hermanowski: Absolutely, I have it now, the only thing that they wanted
to negotiate is the terms of the contract. It's the same bank I'm dealing with
and also a local bank that will support me, too.
Mayor Ferre: And since everybody else has stated what that bank is, why don't
you tell us to.
Mr.Hermanowski: American Security in Washington, D.C. I have a firm commit-
ment from American Security Bank, I have a firm commitment from my investors.
Mayor Ferre: Do we have that on record?
Mr.Hermanowski: Yes, you do, it's right in the application, Mr. Mayor.
Mayor Ferre: Just for the record. Okay, anything else?
Mr. Plummer: Yes. I can win one. Mr. Hermanawski, you have a firm commit-
ment, are you prepared to say how much is the firm commitment?
Mr.Hermanowski: Yes, I have a $20,000,000 commitment from the American Security
Bank in Washington, I have a $15,000,000 commitment from my limited partners.
I advised my limited partners that there will be other requisitions of that
franchise that weren't considered and I will not go into the deal unless one-
to-one debt equities, so I expect $20,000,000 from them, they confirmed that
they will get $20,000,000, right on the table.
Mr. Plummer: You're prepared if going into negotiations to produce evidence
of that
Mr.Hermanowski: Absolutely and furthermore, I'll back any other, I'll back
my commitment with my personal balance sheet.
Mr. Plummer: And, Mr. Mayor, excuse me, I would like to ask that of the other
companies when the time is right. What their dollar....
Mayor Ferre: Fine. You can do it now, you can do anytime you want.
Mr. Plummer: Raul, I wo»ld like to know what their dollar commitment is, he
said that they had a very strong and irrevocable commitmu..t, now how much is
it?
Mayor Ferre: How much did Hermanowski .ay he had?
Mr. Plummer: He said he had 20 and 20, is my understanding.
Mayor Ferre: 20 and 15.
Mr. Plummer: No, that was not my understanding, it was 20 and 20.
Mayor Ferre: Come and tell us on the record again, Mr.Hermanowski
14r.Hermanowski:I In the application when I did my numbers I thought that we'd
get by with 15 and I asked for 15 and I have a firm commitment, I now have a
firm commitment of $20,000,000 from limited investors, Mr. Mayor, and $20,000,000
from a bank, which is $40,000,000.
.52
JUL 141981
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Mayor Terre: All right, anybody else?
Mr. Plummer: Mr. Raul Masvidal, may I ask you, sir, if you're prepared to
state for the record, you say you have an irrevocable commitment from a bank,
it's immaterial where, of funding, financing, may I ask you if you will, air,
and it's up to you to answer, is to the dollar amount of that funding?
j Mr. Masvidal: $31,000,000.
Mr. Plummer: Thank you, sir.
i Mr. Masvidal: That's the amount of the loan.
Mr. Plummer: That's the commitment?
Mr. Masvidal: Loan commitment from the bank.
Mr. Plummer: All right, sir, that's what I'm looking for.
Mayor Ferre: Yes, but now, see Mr.Hermanowski said in addition to which his
limited partners were willing to invest $20,000,000 and he had a firm commit-
ment on that.
Mr. Masvidal: Our commitment on equity is $14,000,000.
Mayor Ferre: Okay, sir. Mr. Gerstein?
Mr. Gerstein: Mr. Mayor and members of the Commission, I'm Dick Gerstein,
President of Miami TCI. Mr. Mayor, your original question went to the number
of minority stockholders and their, and I believe Father Gibson was interested in
the percentages of stock which they own, I'd like my partners, one is standing
beside me, Bert Landy, and my other partners to stand up so you can see them.
Thank you. We have 17 local stockholders in Miami TCI, 12 of them are Latin,
female, or Black, I mean in the percentage of 70%. Of the stock owned locally
57% is owned by Latin, 8% by Blacks, 2% by females, one question that you
did not ask, Mr. Mayor, that related to minorities, you did not ask about
Anglo-Jewish minorities, we do have 2 of those which I am one, who are a dis-
tinct minority in the City of Miami.
Mayor Ferre:
Mr. Gerstein, would
you
repeat those figures again for me....
Mr. Plummer:
That was 2, one and
one,
him and me.
Mayor Ferre:
Your local, did you
say
20?
Mr. Gerstein: We have 17 local stockholders.
Mayor Ferre: No, no, sir, what's the percentage of the total stock?
Mr. Gerstein: 25%.
Mayor Ferre: 25%. All right.
Mr. Gerstein: Of our 17 local stockholders, 12 are Latin, female or Black
which is 70%.
Mayor Ferre: And it's 70% of the 25?
Mr. Gerstein: That's correct, sir.
Mayor Ferre: Thank you.
Mr. Gerstein: Is that what you wanted....
Mayor Ferre: Yes, sir, that's what I wanted. Thank you.
Mr. Gerstein: As I said 2 of us are a distinct minority Anglo-Jews in the
City of Miami. As to financing, we have irrevocable commitment letter from
Telecommunications, Incorporated and Taft Broadcasting, 2 public companies and
this is our national exchanges, at least that I know that Telecommunications
.53
JUL 1 41981
Mr. Gerstein: (continued)t is, t assume, that Taft broadcasting is as well.
They have annual revenues of $385,000,000, they have total assets or *yUU,000,U00
they have a combined task quote of $130,000,000. Further, Telecommunications
have $250,000,000 in an unused line -of -credit backed by New York Bank, Chase
Manhattan Bank and by a couple of pension funds.
Mayor Ferret Would you repeat the figure again?
Mr. Gerstein: We have a $250,000,000, TCI does, unused line -of -credit backed
by the Bank of New York and Chase Manhattan. TCI...
Mr. Plummer: Excuse me, to me that means nothing. What means to me what of
that is committed to Miami.
Mr. Gerstein: All right, I'll tell you what's committed and a letter went to
you, Commissioner Plummer and to Mayor Ferre from TCI-Taft dated April loth,
which said that they would irrevocably commit the full resources of Telecommunica-
tions, Inc. and Taft Broadcasting Company to finance the cable television
system as proposed in our application. TCI has set aside from it's operating
revenues $48,193,000 to build a local system, TCI can do it out of its' cash
reserves, they would not have to go to a bank. TCI has more cash in certificates
of deposits than it owes, so they can build the system from cash reserves.
Mr. Plummer: So their commitment to the Miami system is $49 million, $48
million nine.
Mr. Gerstein: Yes, sir.
Mr. Plummer: Okay, that's the answer that's very important to me.
INAUDIBLE RESPONSE FROM GERSTEIN
Mr. Gerstein: An equivocable, irrevocable letter of commitment. Now, as to
programming, the local stockholders have an agreement with TCI and Taft that
the responsibility for programming control and direction will rest with the
local group, we will have control of programming and its direction, and we
also have control, as I repeatedly stated, of all major decisions because they
must be made by 85% of voting stock. Does that respond, Mr. Mayor, to your
question?
Mayor Ferret That responds to the financing and to the minority ownership,
you haven't responded yet to the local importance and local voice, you have
mentioned it before, perhaps you want to mention it again very specifically
and clearly, what is the local input decision making and participation in
corporate decisions of TCI and Taft in Miami?
Mr. Gerstein: The local control is vested ' locally, by a virtual agreement,
we have to control the programming and direction is vested locally, we have
the majority to control over those decisions that will be made locally.
Mayor Ferret Is that irrevocable?
Mr. Gerstein: Yes, sir._
Mayor Ferret What happens if the parent corporation buys out the stock of
the local stockholders?
Mr. Gerstein: Mr. Landy can asked that.
Mr. Burton Landyt I'm Burt Landy, also attorney for Miami TCI. Perhaps I
can give the panorama, but to answer your question, Mr. Mayor, there is no
buy-out right on the part of TCI and Taft to buy out the local people, they
cannot force local group to sell its' interest. To follow along on the other
lines of questioning, if there is a sale of the part of the minority voters
group, because they're 17 individuals, the arrangements that irrevocable are
binding on the successor shareholders of the company. Now, I'd also like to
mention, too, that we have...
Mayor Ferro: There are binding on the successor, so what you're telling me
.54
JUL 141981
N,
Mayor Ferret (continued): is if 17 goes down that 25% goes down to 15• of
the total, that 15% would still have the binding irrevocability of the pre-
vious agreement?
Mr. Landys Yes, sir, because we have defined it as the Miami. group, so
the Miami group as Dick has mentioned, has the right, Mr. Mayor, to have 2/3's
representation on the committee which is in charge of programming, 2/3's. that's
the local group, now another thing I'd like to mention, is that we have another
irrevocable agreement that as to the board of directors of Miami TCI, the Miami
group, the local group, which has only 25% of the interest has the right to
name 40% of the board.
Mayor Ferre: You mean on the board of directors, itself?
Mr. Gerstein: Mr. Mayor, Dick Gerstein. May I just say one further thing?
All these representations which I have just made to you and the Commission
in response to your questions are contained in our bids, they are not an amend-
ment which we have come up with here tonight, they are all contained in our
bid.
Mayor Ferre: Mr. Gerstein, I accept all of that, I think it's in the interest
of all that we go through this process, I'm not trying to single you out, I'm
well aware that all of these things are part of your bid package, but I think
it's important that we do this evenhandedly with all, even though some sub-
mitted like you did '.n your bid package and others do not, we're well aware
of that.
Mr. Gerstein: It is in our bid, thank you, sir.
Ms. Range: Mr. Mayor, Commissioners, my name is Athalie Range, I represent
Vision Cable. of our local ownership, 18% are Black, 18% are Latins, 36% are
women, this gives us 56% of minorities and I want to point out, that this is
washing out the duplications, if we were duplicating as I believe has happened
at least once tonight, you'd find that our .(inaudible) would be far above what
56% is.
Mr. Plummer: All right, that answers to the minorities. Go ahead.
Mayor Ferre: No, it doesn't, no,no. The question that I want is, I would
like to know what of the total percentage do you consider to be local?
Mr. Sidney Konoff: Mr. Mayor, I'm Sidney Konoff, I'm Chairman of the Board
of Vision Cable of Miami, and spoke with you last week. The local share which
represents 224 of our total equity interest, I believe Barry Kuten required
that because he wanted to make sure, and I assume there was quite an under-
standing of that and we had no problem in coming to an agreement, he wanted
to be sure that there would be no tender for those shares. We also quite
mindful that the City controls the sale of the shares and I hope that you're
mindful that there is no buy-out provision whatsover. The question of minority
control is also a pragmatic question of who's doing what when it gets down to
operating a system. We have 2 members of the board, including Ms. Range who
is the Vice -Chairman of the Board, we have minority policies committee which
Mr. Cardina and Ms. Range serve on, which are authorized by ..:.e board to set
policy on employment, on programming and on operations, I think the remaining
question on the table is on financing and Mr. Coditta will want to make some
comments.
Mr. Armando Codina: Armando Codina, Vision Cable. First of all, let me thank
Mr.Hermanowski for inviting me to join his group tonight, unfortunately, I'm
already committed, so it won't be possible, but as far as the financing is
concerned I think we have provided you with the only absolute, non-continguous
letter from Chemical Bank, which by the way, Mr. Lumberg has personally called
on Chemical Bank and discussed it with them and he stated $50,000,000 no
contingencies and let me read to you exactly what it says in the last paragraph:
"We stand ready to lend Vision Cable of Miami for a loan and/or investment
in Vision Cable of Miami, Inc. up to $50,000,000 on a long-term basis at its'
request". That is, in the event of the fact that Vision Cable could if out of
cash flow certainly make the investment that is necessary here. Thank you.
.55 JUL 141981
i -
Mayor rerre: Let to ask Cable Vision, because there wasn't something very
-' o.teat, would you go to the microphone, please, your name for the record.
Mr. Lynn: Phil Lynn, Cable Visions.
Mayor Ferre: Let me ask you this, did you say that you had a 25% local oaer-
ship or 20t?
Mr. Lynn: 20.
Mayor Ferre: 20%. All right, now, I get the picture. Now, of that you have
a 40% minority ownership.
Mr. Lynn: That would be Garth and Raul.
Mayor Ferre: Okay. Now in that 20% you're including Don Reed from Palm Beach
as local.
Mr. Lynn: Yes. If you took him out, it would be 17%.
I
Mayor Ferre: Sir?
Mr. Lynn? If you took him out, it would be 16%.
Mayor Ferre: 16%, local and how much, in other words, 16% and Garth and Raul
each own 2%?
Mr. Lynn: 3.
Mayor Ferre: 3. So they would have 6.
Mr. Lynn: Yes.
Mayor Ferre: So out of the 16, 6 will be a minority?
Mr. Lynn: Yes.
Mayor Ferre: Okay. By the same token, Mr.Hermanowski, I would not accept
under the same thinking, Ken Barring does not live in Miami, so, you know, it's
60% local ownership. Okay. I think I've covered all the questions that I
have except that I've got one last question that I will eventually ask Mr.
Pilnick, but I'll wait on that. It's open to anybody who wants to ask the
next series of questions.
Mr. Plummer: Mr. Mayor, I want to give each one of the companies the opportunity
to speak to the area that concerns me and that is, litigation. First of all.
I want to know if from each company if there is any other litigation that what
has been in your form. You said, George, that you talked with Senator Meyers
in reference to litigation.
Mr. Knox: Yes, sir......
Mr. Plummer: My concern was to get on the record of the major stock.`. -'der or
president or whoever he was as to their prouncement on the record whether or
not they have other pending litigation and I will break that down to other
than what you have supplied us in this memorandum and that's one of the reasons
I asked previously that this memorandum has been distributed, and I want to
give each company the opportunity. Senator Meyers, you have, as.far as I know,
answered the question by your letter today, I would ask the rest of the companies
to answer likewise either yes and then spell it out or no, and you don't have
anything to s W 1 out.
Mr. Sutton? Jack Sutton. Six -Star Neilson Cable Vision, we have none.
Mr. Carollo: Excuse me, did Americable say none also?
Mr. Plummer: Other than that which the one letter that they gave and that's
when you were gone, I'm sorry. Mr. Knox is in receipt of a letter from them
in reference to...
JUL 141981
sr-
r Mr. Carollo: I'm being given a copy now.
Mr. Plummer: Yea, I think that would do it better for you.
g' Mr. Lynn: Mr. Plummer, Phil Lynn, Cable Systems. Thirty years in the
cable business serving in more than 50 communities, one lawsuit in the city
of Minneapolis for the reasons that we've explained and no others.
is
Mr. Plummer: All right, so that all the companies understand, the City
Manager gave us a memo, and you all have got copies, I assuming you all have
read it, and really the answer I'm looking for after you've had the opportunity
to read this memo, is there any further litigation other than what is contained
in this memo,that's really a simple.....
r
Mr. Lynn: No.
Mr. Plummer: All right, sir. I sure like when the people from Vision Cable
speak, I find that the speakers in the back are owned by Vision Cable. Mr.
i Gerstein? Other than what's listed here and you've explained what's listed
here.
Mr. Gerstein: Not to my knowledge and I'd have to check further, none to my
knowledge other what was listed with the City Attorney.
Mr. Paul: Paul, TCI. Yes, there is one, because one of our....
Mr. Plummer: Would you take into the mike a little clearer, please.
Mr. Paul: Yes, there is one, Commissioner Plummer, because one our compet-
itor chose to bring it up tonight, I will explain it. We had an agreement in
principle to purchase 80% of the stock in another corporation that we had
nothing whatsover to do with. The city of St. Louis has sued that company.
We are purchasing that lawsuit, that is the one in St. Louis that was exhibited
on the screen. We have nothing whatever to do with Melharp Corporation, they
were issued a franchise to the city of St. Louis 11 years ago, we're about to
purchase 80% of that company, that will become our lawsuit. Now there has
been a counter -claim filed to that suit, because we intend to become a party
to that company we are a party to that counter -claim.
Mr. Plummer: So what you're saying for the record is, there is an additional
suit that you have assumed by virtue of buying this major stockholder of
another company?
Mr. Paul: That's absolutely correct and that suit has occurred subsequent
to the filing of our proposal with the city of Miami.
' Mr. Plummer: Did we cover everybody? Okay, now, another question that I
have and this one is of the City Attorney. City Attorney, you have heard here
this evening a lot of claims, cross -claims, charges, cross charges, is there
any one of the charges that were made here this evening that you think are
significant that you would like to further elaborate on to this Commission?
Mr. Knox: No, sir.
M3;. Plummer: That's the simpliest answer I ever got out of you.
Mayor Ferre: Is that it?
Mr. Plummer: As far as J. L. is concerned unless somebody else brings some-
thing up.
Mayor Ferre: Mr. Lacasa?
Mr. Lacasa: No, Mr. Mayor, to me I think that we have got into this very
thoroughly, we have obviously 5 applicants who are most qualified.. -The question
of the local issue question, to me, is slightly different from my standpoint
or view of what has being discussed now. I feel that cable t.v. is more than
a business in this community, a tremendous impact that this system will have
especially in a tri-ethnic community such as this. There's a tremendous re-
sponsibility for the City Commission. To me the question of local content is
JUL 141981
A
7
7
_
mr. Lacasa: (continued): basically the question the duration of the stockholders
and the board of directors of the company, because I want to see this tri-
ethnic community well represented and the access of every segment of this
tri•ethnic community in this particular system. Secondly, as to the question
of what is a local issue, to me the local issue is basically a question of
—
local origination of program and public access to the channels rather than,
tdho at the particular moment owns a piece of the pie, because this is something
that is rather temporary, today somebody could own that, tomorrow that person -_
could sell and move, die, God knows, so the question here is basically where
is the program being originated. Three of the companies originate their pro-
-
gramming basically here and the public access is well depicted in one of the
charts that was provided by the consultant. To me the important question is
the question of the rates, because we want to see tremendous access by all
income level people of this community to this service, so to me, a company,
an applicant who proposes low rates has a tremendous priority because it's
going to allow the low income people to have access to the service and instead
of being a strictly luxury item we will be facing here the possibility of
_
having a complete service available to anyone that can bear paying of $6 or
$8 vs. a tremendous amount of money. The question of litigation, being an
attorney, doesn't impress me much, today now days people litigate almost every-
thing, and it's almost impossible that when you're dealing with corporation's
-
involved with multi -million dollars operations of the complexity of cable
system, there has to be litigation, so actually unless that litigation involves
something questionable as fraud, distortion, whatever it is strictly question
over business or over interpretations and terms; etc., quite frankly, doesn't
—_
impress me much and I think we've covered that fairly well. So the only thing
that is left for me to say is that, I think, we're on the threshold of making
a tremendous investment in this community in which system is chosen today.
The barometers to me are those that I depicted and I will be hoping along
with those, and I have no further question as to the technical aspects, the
strictly technical aspects, I will have to completely rely on the consultant's
recommendation, basically because they're highly technical question and only
engineers or technicians in this field could address that same ..........•••
Mr. Plummer: Mr. Mayor, may I, just if I may and I want this for clarification
and unfortunately only one company made the statement so I got to ask just one
company. Barry, you're chosen. I want clear delineation, if you would, this
is, basically, a question from staff, you have proffered in your proposal a
_
$2 1/2 million dollar front fee. _
Mr. Kuten: Cable Systems.
Mayor Ferret That's .Cable Systems.
Mr. Plummer: That's you? You got excused, excuse me
Mayor Ferret Would you take this, because I think that's going to be in
reference to that questioi;.
Mr. Plummer: And then they want to know why on the .... I don't need that.
Sir, you have proffered $2 1/2 million dollars as a front fee, you have also
said that would be taken out of later revenues, the question is, the RFP was
very clear, you shall pay a half million dollars a year, minimum, so you can't
take that 2 1/2 out later and not pay the half every year, would you please
get on the record and clarify that statement.
Mr. Lynn: Mr. Plummer, that is precisely correct, we would offer the
2.5 in the Year One, we would agree to the floor and at a later time in the
franchise we would earn, we would start deducting the fund that we had already
donated, but your floor would be at a minimum of a half a million dollars and
of course, after about Year Four or Five, it gets in excess of $2,000,000 any
way, so you don't really notice at that point, the point is that you get your
money right up front very fast and that's a real advantage to you and you
don't suffer, because the deductions are made a much later time, the impact
of that at all, hardly at all.
Mr. Plummert Thanks.
Mayor Ferret Wait. Before you sit down, I just want to, you have before
you which I have submitted into the record, a statement which says: "Gable
.58 JUL 141981
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3
1
f
i
i
t
i
=' Playor Tersea (continued): Systems Miami projected license fee payment
schedule. As the years to the 15th year, 5• of gross revenue. License fee
payment schedule minimum payment.$500,000. Accumulated payment to the city
and accumulation of license fee credit", which is crossed out, drown at the _
bottom it says: "$23,112,000", do you have the same paper?
Mr. Lynn: Well, yes, Mr. Mayor, I just got it this second. Yes.
Mayor Ferret Why don't you look it because this part of the record now.
f� Mr. Lynn: Can I have a minute now?
1'.
Mayor Ferret Yes, you have your people look at it and make sure that you're
in agreement that's the way it is. _
Mr. Plummer; Mr. Mayor, while you're waiting for that may I caution the
people standing in the back not to make the job for the policeman any harder,
policeman under instructions, that you're invited to come in and sit within
the chambers or go outside, I hope you wouldn't make their job any harder.
Mr. Lynn: Mr. Mayor, Phil Lynn, Cable Systems. Is your question this
statement the projection?
Mayor Ferret
Mr. Lynn:
Mayor Ferret
Mr. Lynn:
Yes.
Yes, sir.
It is accurate?
Yes.
Mayor Ferret On the record would you make it is the same, make it part of
the record, okay. J. L., are you finished with your questions? Armando?
Father?
Rev. Gibson: I want to, Mr. Mayor, make an explanation. I presume the news-
paper said about me and some of the others and especially this guy about local
participation sharing and ownership. The newspaper was right, I have no
apologies for that. I want to say to the public what perhaps the public may
not know or doesn't remember. If you have any doubts about credentials, all
those Blacks that you saw coming here and sitting down there, they will certify
my credentials all right. I happen to be a native Miamian, born and bred on
12th and 2nd Avenue Northwest, I love it, love the fact that I am. In the 9
years I've been on this Commission and some 3 months one instance took place
in this city and from this Commission that I shall never forget. I remember
so well when we were talking about the pension system, part of the result,
part of the holdings of the pension system, went to Chicago, part went to New
York. and then that which mattered very little went to local people. I had
another experience. You the taxpayers made it possible for me and Rose Gordon
to go on the stock market in New York, I'll forget that. I learned from those,
two experiences that the pension system and going to New York on the stock
market, this thing kind of thing that has bothered me and plagued me, number
one. the guy who controls the goal controls the decision, I want to make sure
you hear me. Number two, -I've come to the point in my life that I know what
it is to be put on hold and say: "I'll be there. I'll be with you in a few
minutes." I'm thoroughly convinced that at this point and stage of the life
of the City of Miami, contrary to what anybody else might say, that I've come
to the point in my life where I want to look the guy into the eyes unequivocally
and tell him whether he's a liar or whether he is keeping his commitment. I
could afford to do that, I'm a man of 66 years of age, I'm Black, I've got
one damn good pension coating from the Episcopal church and social security, so
I can be independent, but my independence is not for Gibson, my independence
is the for people of the City of Miami, I owe them that as one of their sons
I owe it to them and I'll tell you this, I'm not adversed to merging, I'm not
adversed to sharing, I want to tell you what I happen to know, you all are
not in politics, I am.and you start, No. Range used.to be maybe it's changed
since she been here, maybe not, when you start making some of these decisions
30, 40, 50 million dollars, let me tell you this you need to be very certain
who you're talking with and what promises are made. I heard a lot of you
here, some of you I know and know well, know doggone well, some of you I
.JUL 141 1
Rev. Gibsons (continued) finished high school with, some of you I used to
serve acolytls,'with, but I want to make sure everybody understands I'm going
to vote tonight based on what Gibson believes to be right, fair and just and
where I can get the maximum, the maximum, for the people of Miami, and I
know I hear 1ou all now, I hear you now, and Gibson usually knows what you're
talking about, hey man, I think about all the Blacks in this city, I happen
'to be one of them, I'm not the only one, I pretty much know what I'm talking
about, know what is happening, and I kind of know where Blackfolk need to go
and what some of these coamitments and problems are, and let me say, ask any
of them, and I have some concerns about some of the people and their repre-
sentations, great concerne this is a public trust, that cable business is
a public trust I know some of you, this is a public trust, I'm not prepared
to gamble for so much, I want to be very certain about what I do and where
I go and how I act. And whether you're local and have local control makes
one hell of a difference with me. You can't fault are for that because you
put all those local people in there. Does make a difference. You understand this
some of _you, but it is an awful experience to be hold. If I go downtown
and that office down there, fortunately, the way they build now there's no
back doors, if I'm sitting out there in the lobby you'd be doggone be sure
you've got to come in order to leave, you coarse and meet me out in the lobby
in order for you to get out. I said this and I want to make sure and clear
up for the record, any company that comes here that expects to get this cable
system that I must vote on, I want to make sure you hear me, I want to make
sure I know who's making the decisions. I heard what some of you said and
don't tell me alout the consultant that's why I hired him and made sure, one
of the rules I stipulated and the Commission agreed with me, that he wasn't
going to do no rating for me, I'm a politician, I've got to bear some of the
burden, I'm like Truman, you know, can't stand the heat in the kitchen, get
out. That's right, and I insisted that professional, ask him even when he
came to see me personally, I said I don't need you to rate nobody for me,
you tell me if the company is capable, if they could produce and give me a
finished product, come to the mike, sir, you the consultant, that's why I
paid you. Didn't you tell me in the Commission meeting, a lot of these people
were not there, that of the 5 people all of them could do as a good job?
Mr. Pilnick: I said they were all qualified, yes sir.
Rev. Gibson: You said that all of them were qualified, that's all I need.
That other business, whether I agree with you or don't agree with you, is
another story, but you said that they were qualified, okay, let me go to
another point, I've lived all my life being told, "Gibson, you've got to be
qualified", most of you Whites don't understand that, but as a Black, my
Black brothers understand that far better than you think, my Latin brothers
wouldn't understand that, they're new. But I've lived all my life being
told, "Gibson, you have to qualify," note what I did, I said you said quali-
fied, I don't want you to rank them, at the time you start ranking them
you take my authority from me and I'm not about to let that happen. I like
what that gentleman said there, but he didn't get my point, he gave me a local
address, he said that being local shouldn't be important. I don't want to
argue and debate with you, but at least you gave me a local address and I
took that you were local. Remember when I asked you to come to the mike
and I said, "What did you say your address was?". Amen. I won't always be
a part of Miami, because I didn't do like most Blacks around here, old nor
young, I didn't. :o to suburbia and buy an apartment or build a home, I went
on Franklin Avenue, I'll never forget Plummer, Plummer got all excited and said,
"Gibson, I saw in the paper where you were going to build another house.
Where's that house to be?" I said, "Don't worry, Plummer." I say, "It's in
the City of Miami." Remember that? Five years ago I finished that house
I moved in. I didn't do like some of the Blacks who read you in the paper
the other day that when they come here they can't find their counterparts.
I see the Editor of the Miami Times,smiling because he knows what I'm talking about,
well, any time any of you are looking for me, I live in the city of Miami,
I have no where to go, I'm not going to build another house, I have no in-
tentions of getting a condominum, I'm going to be right here if it's a good
city, I'm going to live in it, if it's a bad city I'm going to live with it.
One of my White friends that came to church Sunday, he and his wife, don't
ask who that person, noose persons were, I asked him a question about Miami
and you know what he said when he called me the other night and said to
me, "Father", he said, "I'm sorry to tell you but all of my friends that used
to live in !Miami, no longer live in Miami". They'll never say that about me,
JUL 141981
Rev. Gibson: (continuedl: the decision I make tonight I willing to live with,
with my Black brothers, with my White brothers, with my Black sisters and
my White sisters, with you who have plently money, and with you who don't have
plenty of money, that has always been my pattern, I have no alibis, no regrets,
I'm going to make my decision tonight in the light of which you've heard me
say. Those newspaper people have bothered me to death, have you made up your
mind or you are leaning to one over the other, I have said to them and I say
to you now, I'm concerned only with knowing whose going to call these shots,
you don't know, I used to play baseball, third base and catch. I played foot-
ball, who is going to call these shots, that's the way I'm going to vote to-
night, okay, thank you very much Mr. Mayor and members of the Commission and
you the public for tolerating me that long and that much.
Mayor Ferre: All right, Mr. Carollo.
Mr. Carollo: Thank you, Mr. Mayor. I've heard it stated here that we
-' possibly might have some of the best and some of the worst companies across
the country. I'm a firm believer, also, that some of the companie that have
gone out to rent a citizen have got some of the best they possibly can, and
some of them have got some of the worst they possibly can. At the same time,
I'd just like to state that those companies, and if the shoe fits please wear
it, that went and got a rent a citizen, got another rent a citizen, got another
rent a citizen and so on and so on, for the purpose of possibly applying pre-
ssure or intimidation or sc.•re members of the Commission to go for them, that's
tough, you really haven't impressed this one member of the Commission. That's
all I can say, Mr. Mayor.
Mr. Plummer: Mr. Mayor, I would only like to reserve, it was my understanding
that we were under a question and answer period, I feel that my colleagues,
a lot of them, have made statements and I would reserve that right to make
a statement when everyone else is completed.
Mayer Ferre: Any time. You have the right even after somebody else is
completed to make a statement and I certainly wouldn't deny you or any member
of the Commission that opportunity before you vote and after you vote. We're
in the question period, I still have, as I said, my last question to Mr.
Pilnick, if Mr. Pilnick would please come forward. Mr. Pilnick, I understand
in your rating system the plus side and I must tell you that I've read it very
carefully and I've gone over it at least seven, eight, nine times, I've dis-
cussed with you three or four times, I want to make sure that this is properly
on the record. You went into a process of rating, on the positive side, you
rated the 3 top ratings that you gave was on a positive, you gave after ad-
justing, okay, you gave Miami TCI 29, you gave Vision 27, you gave Cable
Systems 24, those are the top 3 contenders. Now, on the negative side, you
gave Cable Systems a -9, you gave Vision a -4, and you gave Miami -2, and
of course, we can all add and substract to know what that means. My question
is in reference to Cable Systems with a -9, because, the other 2 are in the
mid -twenties if you substract the negative from the positive, in Cable Systems
the fact that you gave them a -9 really knocks them down, because it knocks
them down to a 15, okay, the question I have of you with regards to Cable
Systems and that -9, is, as I understood your explanation on 2 occasions, one
and then again this evening, your -9 is pretty well based on the technical
reason, it has to do with wi,..=her or not they have one or two cables, and
the fact that they are using that one cable and letting institutions use that
same cable, and, therefore, it diminishes the question of access to it by
the general public and the versatility of it, and you also mentioned to me
the possibility of security, in other words, that it is easier to tap in to
the institutional usage of that one cable, would you elaborate on that, would
you tell me exactly how much of these -9 points are based on that and how
strongly do you feel on that, because I still, you know, I'm wrestling with
that.
Mr. Pilnick: I'll try, Mayor. I think it's true that Cable System was
penalized in perhaps in 4 different areas for, what you might call, off -shoots
of that one design choice that they made and I think they also feel that's
double or quadruple jeopardy, or whatever. What they proposed is rather than
build a separate institutional network, which would be a third cable, rather
than build that initially they said they were prepared to build that in the
future when the need was clearly demonstrated, but to begin with they would
.61 JUL 141981
Mr. Pilnick: (continued): build only 2 cables that the other companies are
proposing to devote exclusively for residential services, and of those 2
cables they would share one of the cables between institutional services
and residential services. They claim that this is an advantage in some re-
spects, they claim that first there is lower initial cost because you're
putting 2 cables instead of 3, and I agree with that, there's a lower initial
cost, but I think there are disadvantages, too, and I can't agree with some
of the other advantages that they claim that their design would have. They
claim, for example, that the fact that the cable that is being shared goes
past every home, in effect makes the institutional cable a longer network,
because it does have the capability to reach not only institutions but homes.
I think it's true, it's now part of the residential network cable, it does
reach all points of the community, but I think you're paying a big cost for
that, I think that first you certainly have reduced your initial capacity,
instead of capacity of 3 cables, you have the capacity of 2, so there's no
way of saying that initially you have the same capacity, you don't. The
second point is the geographic distribution of the cable. Normally the re-
sidential network would go past the residential areas, the companies are re-
quired to serve every home and every dwelling unit in the city, but in most
situations the residential network is not provided in the downtown or commerical
or business areas of the city. In the downtown area, for example, you have
primarily businesses, primarily offices, and you also have a good deal of
underground cabling which makes the cost very expensive there, so that a
part from 2 different kinds of services, you have the fact that within the
confines of the city the 2 networks really are designed to serve somewhat different
geographical areas and trying to combine them, too, gives you some problems.
You do also have the problem of the two-way capability of the system. The
residential'cable normally is designed to provide most of its, capacity sending
information out to subscribers and a relatively small part of the capacity
is designed to provide information coming back. What Cable Systems has pro-
posed is to change that distribution to give you perhaps more capacity coming
back, but that's essentially, if you start with a certain limited capacity
in one cable to begin with, you're stealing from Peter to pay Paul, if you
do provide as much institutional capacity as the other companies do or some-
thing approaching that, you're reducing the residential capacity, so my
view of it, furthermore I think they got penalized for the statement that
they said they would a build a third cable later if it was necessary, because
I penalized them as a weakness in the construction schedule if they have to
build a third cable 3 or 4 or 5 years later, that means a second construction
cycle and probably higher cost. So I think it is true that one item probably
cost them fairly heavily....
Mayor. Ferre: How many points of the 9 did you dock them?
Mr. Pilnick: I think about 4, I'd have to double check them, but my first
recollection is 4.
Mayor Ferre: So, if, for example, that was not a consideration and technically
that was just not acceptable, you know if I, for example, were not convinced
that makes any sense, then instead of -9 then they would have -5.
Mr. Pilnick: Yes, they would be much closer to the other two.
Mayor Ferre: Then they would then go up to 20, you know, in the minus, plus.
Let me ask you this, does anybody else get docked for that same thing?
Mr. Pilnick: Nobody else proposed the same design. I just might say from
the point of view of consistency, I evaluated TCI's application for the city
of New Orleans, TCI, in that particular situation, proposed the exactly the
same scheme that Cable Systems is proposing now....
Mayor Ferre: TCI did?
Mr. Pilnick: Yes, and I took....
Mayor Ferre: In New Orleans, but not here?
Mr. Pilnick: That-'s correct, and they were penalised by my evaluation in
New Orleans for exactly the same reasons.
.62
JUL 141981
Mayor Ferret Was that evaluation open.to eyerybody, everybody had a......
Mr. pilnicks It was open for everybody, I don't know if, Cable Systems
did not bid in New Orleans, I don't know if they saw that or not.
Mayor Ferret Well, I would, seeing the tremendous thoroughness and expertise AF,=
of all of these companies, I'm pretty sure that if they knew you were the
evaluator in New Orleans and they knew you were the evaluator in Portland, I
tell you if I had been any part of it, I certainly would have gone very —
thoroughly through how you evaluated and I would have taken that into account.
Mr. Pilnicks I think you fooled them, Mr. Mayor, you didn't pick the con-
sultant until the day before the bids were due in. Usually they do that,
they try to in effect slant their proposals to the consultant and whatever
prejudices they think the consultant has, but in this particular case I don't
think they had the time.
Mayor Ferret Thank you, sir. I don't have any other questions.
Mr. Plummer: Mr. Mayor, just...Mr. Pilnick, just for edification, and I
want it on the record, somebody said why are you asking so many questions,
so the record will be very clear or at least I hope it will, Mr. Pilnick,
taking me through the time frame of the negotiations, which you have said is
the most important factor, if at the end of 45 days you are not able to come
up with what you would say is a negotiated contract, is it your intent at the
end of that 45 days to come back to this Commission and say, "We cannot and
we're then going on to number 2?", I'm looking for the time frame.
Mr. Pilnick: I think that by the end of the 45 days, Commissioner Plummer,
that what we'll be able to come back with is in effect the best agreement
that both sides will feel has been achieved up to that date and then I would
expect that agreement would be submitted to the Commission for the Commission
to decide whether that is acceptable or not, and then the Commission would,
in effect, if it were not satisfied would direct the proceeding to the second
s= contender to start negotiating with the second contender.
Mayor Ferret Okay, are we now ready to vote? J. L., you want to make a
statement before you vote?
Mr. Plummer: Mr. Mayor, just before we vote I want one other clarification
from you, since you set the ground rules at the beginning and no one objected,
but for clarification, are we going to be voting for 2 companies every time
we vote, Company A and S?
Mayor Ferre: No, my idea was that we will select a franchise awardee.
Mr. Plummer: All right.
Mayor Ferret And then after we've done that, I would hope that we would
then select a follow up and so that we would have a very clear understanding
as to who the number 2 is....
Mr. Plummer: Follow up will be an individual vote?
Mayor Ferret Yes.
Mr. Plummer: Okay.
Mayor Ferret I think that is the way it should be, because I think we should
have the time to consider who number one is, so that we can try to get a pro-
per number 2 that would be a proper balance.
Mr. Plummert Mr. Mayor, thank you. My ztatement is simple, I hope it will
be brief.
Rev. Gibson: You hope what?
Mr. Plummer: I hope it will be brief. Mr. Mayor, first of all, I want to
say that the 11 years that I have sat on this Comsmission, I don't think I've
.63 JUL 141981
me. plusxgers.(continued):.ever since a process that was more ably represented
by S people as -this has been. They did a tremendous job, with a few exemptions
of emotionalism, I think it was handled very professionally. To Mr. Pilnick
I have expressed that I'm not happy with the system that was used, but I have
to tell you, Mr. Pilnick, I think you aid exactly what you were directed to
do by this Commission. I don't feel that system as used, let me speak for
one, was that helpful to me, it has built me into a position of not having
all the answers that I wanted. As such, it is now I must go with your system
that says that the most important thing that will be done in this whole
process is the next 45 days, I'm not happy with that I want tell you, I would
have hoped that this Commission could have had all the answers, and I don't
feel that we do. I think we are in an unique position, if we accept the con-
sultant as an expert, any one expressing their vote here this evening according
him cannot be wrong. Quoting exactly from the wording of the transcript of
the meeting that I was not here, when the Mayor asked him: "You made this
opinion because of financial standing and backing and any investigations that
you've made, contractual relationships in the past with others, the performance,
the response, the offer or any other reasons that you may think of, that, it
is totally unworthy of our consideration", and his answer was, "I think they
are all capable of building a system in the City of,. Miami, that if they follow
their proposals would be a good system." In effect what he has said, we can-
not pick anyone not qualified and anyone who would not make a good system,
unfortunately, unfortunately, we are forced to go to the contract negotiations
to get all of these answers and this Commission will not be doing it.
Mayor Ferre: Ready now? Let's take a 5 minute break.
THEREUPON, THE CITY COMMISSION WENT INTO A BRIEF RECESS
at: 9:40 P.M., reconvening at: 9:50 P.M., with all members
of the Commission found to be present.
_ Mayor Ferrel I have a letter, a note from Wellington Rolle and it reads
as follows: "Mr. Mayor, would you permit some rebuttal on the question
that referred to minority participation? All of the answers," he underlines
all, "were seriously deficient. I request an opportunity to offer a response
on behalf of Slacks in general. Wellington Rolle." Now, I would...the Chair
rules as follows this public portion was closed and unless, the only way
technically that can be opened again, is if 2 members of this Commission vote
to re -open it and that point I would have to give anybody else the opportunity
to come up and talk, so I cannot arbitarily on my own open up the public portion.
Now, I will, because it is, as Mr. Rolle told me, a serious matter, I brought
it to the Commission's attention and if anybody wishes to re -open the public
hearing, I will be happy to accept that motion.
Rev. Gibson: What? Read that again.
Mayor Ferre: "Mr. Mayor, would you permit some rebuttal or. the question
that referred to minority participation. All of the answers were seriously
deficient. I request an opportunity to offer a response on behalf of Blacks
in general. Wellington Rolle". One more time, one last time, is there a
motion to permit Mr. Wellington Rolle, and obviously, others who wish to
speak, to speak by re -opening the public portion of this meeting? Hearing
none, then we are now ready t^ *proceed in our vote. You have ballots before
you...
Mr: Plummer: Let me understand. We're going to be voting on CompanyA and
we will vote on Company A until a majority of this Commission before we move
on to Company B?
Mayor Ferre: That's correct.
Mr. Plummer: OKay.
Mayor Ferre: In other words, we're going to vote until, hopefully, 3 members
of this Commission come to a conclusion and there is a potential or successful
winner., if you wish ..... All right, so mark Ballot #1, if you would please.
Ms. Janet Cooper: Why by written ballot?
Mayor Ferre: It is by written ballot with our names on it and that is the
way we have always voted and as long I'm around, that's the way we're always
r'
JUL 141981
Mayor Ferret (continued):, going to vote. 2t is not A secret ballot, Y know
you are very suspicious.
Mr. Plummer: Well, no, no, Mr. Mayor, I think that needs an answer, be-
cause the press asked me the same thing. We are writing our ballots to
make a written record, but the Clerk will, in fact, announce each one of the
votes, so it's not a secret ballot by any stretch of the imagination, it gives
a written record.
Mayor Ferree First ballot?
Mr. Ongie: First ballot, Vision Cable received one vote from Commissioner
Carollo. Commissioner Plummer voted for Americable. Commissioner Lacasa
voted for TCI. Mayor Ferre voted for TCI and Vice -Mayor Gibson voted for
Americable.
Mayor Ferre: Second vote. Ready to vote for a second time?
Mr. Ongie: Result of the second ballot. Mayor Ferre voted for Miami TCI.
Commissioner Carollo voted for Americable. Vice -Mayor Gibson voted for
Americable. Commissioner Plummer voted for Americable. Commissioner Lacasa
voted for TCI.
Mayor Ferre: The awardee..on the second ballot is Americable. We're now
on item #2, the selection of the follow-up. If you will mark it ballot #3 at
the top and mark down your preference.
Mr. Ongie: Results of Ballot #3...
Mr. Plummer: No....
Mayor Ferre: Yes, Ballot #3.
Mr. Plummer: Ballot #3, but for Company B.
_ Mr. Ongie: Yes, sir. Commissioner Plummer voted for TCI. Mayor Ferre
voted for TCI. Commissioner Lacasa voted for TCI. Commissioner Carollo
voted for Vision Cable. Vice -Mayor Gibson voted for Miami TCI.
Mayor Ferre: All right, so the back-up company is Miami TCI. Is there
anything else to be discussed before this Commission at this time? Mr. Man-
ager and members of the Commision before you break...... members of the Com-
mission, before we leave tonight we need to decide what the time for ne-
gotiations are going to be....
Mr. Plummer: I thought that was decided for 45 days.
Mayor Ferre: ....Mr. Pilnick, let us make sure we understand each other
clearly, we will...you will come back, hopefully, by the 24th of July ... Mr.
Pilnick?
Mr. Pilnick: Yes, sir.
Mayor Ferre: ...and give.us the recommendations that you and City Attorney
Knox will have with regards to an attorney and Mr. Manager you will tell us
who will be part of your negotiating team along with Mr. Pilnick, and I would
assume that we would then begin negotiations as soon as the attorneys are at
hand. Secondly, I would like to explain that there is obviously some very
large numbers involved in services, and it would be my hope, in your ne-
gotiations you would keep all of these figures in mind, so that when you come
back, I certainly expect for the company that got this contract to give us
all of the things and considerations that this city of Miami should have and
is expected to have. I also want to tell you that we need to keep the Com-
mission fully advised as to how these negotiations are going and by the end
of the 45th day I would hope that you would come back here with a recommended
contract, if that sloes not happen, then I think this matter is open up for
discussion again, and we would then hopefully move on to the next bidder.
Mr. Gary: Mr. Mayor, may I get permission from the City Commission to
continue the services of Mr. Pilnick in this second process?
yz-
-
t
Nalm
parn: All t.10ht, La there a notift to that elfeot.1
"ti Car6l at
Mayor rerret Mdved by Carollo, is there a second?
kr. Plummsrt I'm not voting for that without knowing the cost involved.
Mayor Ferret It's in the letter that was part of•your packet.
Mr. Garyt The cost is $7,600 total.
Mr. Plutamert Yes, okay, fine.
Mayor Ferret Somebody want to second that? To retain Mr. Pilnick to ne-
gotiate? All right, Father Gibson seconds, further discussion? Cali the
roll.
The following motion was introduced by Commissioner Carollo, who
moved its adoption.
MOTION NO. 81-646
A MOTION OF THE CITY COMMISSION AUTHORIZING AND DIRECTING
THE CITY MANAGER TO RETAIN THE SERVICES OF TELECOMMUNICATIONS
MANAGEMENT CORP. (CARL PILNICK) TO CONTINUE TO SERVE AS CON-
SULTANT TO THE CITY DURING THE NEGOTIATIONS PERIOD WITH
AMERICABLE OF GREATER MIAMI, WHICH COMPANY WAS SELECTED BY
THE CITY COMMISSION AS THE FIRST COMPANY WITH WHICH NEGOTIA-
TIONS WOULD BE CONDUCTED FOR THE OPERATION OF A CABLE TELE-
VISION SYSTEM TO SERVE THE CITY OF MIAMI; FURTHER INSTRUCTING
THE CITY MANAGER THAT IF NEGOTIATIONS WITH AMERICABLE OF
GREATER MIAMI SHOULD PROVE UNSUCCESSFUL, HE IS HEREBY
AUTHORIZED TO NEGOTIATE WITH MIAMI TELECOMMUNICATIONS (TCI),
WHICH WAS THE SECOND COMPANY SELECTED BY VOTE OF THE CITY
COMMISSION.
Upon being seconded by Commissioner Gibson, the motion was passed
and adopted by the following vote:
AYES: Co=issioner Joe Carollo
Commissioner Armando Lacasa
Commissioner J. L. Plug, Jr.
Vice -Mayor (Rev.) Theordore R. Gibson
Mayor Maurice A. Ferro
NOES: None.
ABSENT: None.
Mayor Ferro: All right, is there anything also to come up before this
Commission? Then we stand adjourned.
There being no further business to come before the City Commission,
on motion duly made and seconded, the meeting was adjourned at 10:00 P.M.
MAURICE A. FERRE
Mayor
ATT86Tt RALPH G. ONGIB
City Clerk
Assistant City Clerk