Presidents' Council Special Meeting - April 18, 2003
Opening Remarks - Chuck Woolard opened the meeting at 8:00 AM. The purpose of this special meeting was to hear a report by Bob Forbush regarding upgrading the JL Cable physical plant and services.
JL Cable Presentation - Bob distributed a draft writeup and spent an hour answering the questions posed by the presidents. The Presidents' Council thanked Bob for his presentation and voted its approval of the way JL Cable was proceeding. A copy of the writeup, including revisions resulting from the presidents' questions, is attached to these minutes.
Respectfully submitted - Gordon Cook, acting secretary
JONATHAN’S LANDING PROPERTY OWNERS ASSOCIATION
April 22, 2003
Dear Jonathan’s Landing Residents,
Your JL Cable Board has been evaluating various options for upgrading our physical plant and improving our product and service to our customers. After a thorough review and evaluation of those options, we have selected Adelphia as our sole provider of content (the programs that we watch).
The JLPOA Board has unanimously approved our recommendation to go with Adelphia, subject to the receipt and approval of a contract that spells out the responsibilities and obligations of both parties. We expect to have a draft of the contract in a few weeks for our review. The JL Presidents Council also unanimously approved the recommendation at a special meeting called on April 18, 2003 to discuss the issue.
As a result of our comprehensive negotiations with Adelphia, we believe that we will have a “partner” who will provide many benefits and enhancements to the cable operation at JL without jeopardizing the elements of our current setup which we deem important, particularly our loyal and trusted staff of Ron, Rick, and Greg.
Here are some of the details and benefits of the planned arrangement with Adelphia:
Adelphia will upgrade our physical plant by installing a fiber-optic/coaxial cable “hybrid” network to replace most of our current copper cable. The new cable network will allow us to broadcast analog programming with better quality, and give us the capability to broadcast digital signals as well. Installation of the new cable will be done during the summer months with minimal disruption of our landscaping and roads (they will be using a state-of-the-art “boring” machine to lay much of the conduit and cable instead of the more common trenching machines). The target date for completion of the upgrade is October 1. This upgrade is estimated by Adelphia to cost around $400,000 and will be done at no charge to us.
The fiber-optic/coaxial network will give us greatly expanded capacity. Our basic offering will include 72 channels (an increase of 12 channels, or 20%, above our current capacity). The added channels will include such channels as the Speed Channel (for you auto racing buffs), TVLand, The Disney Channel, and three channels of HBO. The Disney Channel and HBO had previously been offered by JL Cable as “premium” channels at extra cost. No set top boxes will be required for this basic service, and we will continue to offer “turn off/turn on” service for seasonal residents, as in the past.
The fiber-optic network will also allow us to offer cable-based high-speed Internet access to all residents. Cable-based Internet access is many times faster than standard “dial up” service, and twice as fast as DSL service.
The new cable plant will also allow us to offer “add on” digital programming for residents who wish to order it. Upwards of 300 channels of video and audio programming will be available in various increments for an additional monthly charge, as will “pay-per-view” programming of special events. Those of you who are contemplating installing satellite dishes may wish to reconsider in light of this.
JL Cable will continue to bill residents for basic service (the 72 basic channels) and Adelphia will bill residents directly for “add on” programming and for their high-speed Internet access, which Adelphia calls “PowerLink”. Adelphia will offer “turn off/on” service for “add on” programming (including their PowerLink Internet service) at no charge. Our JL Cable personnel will be doing any necessary installation work in residents’ homes for “add on” service (computer modems and set top boxes for digital programming).
Our JL residential security system will continue to operate on the new cable system and, again, Ron Wade and his crew will be handling any security-related equipment problems in residents’ homes, as in the past. The two community channels (currently Channel 5 for the JLPOA and Channel 50 for the Golf Club) will continue to operate on the system.
We expect that residents’ quarterly charges for basic service will increase in 2004 about what they would have increased under our old set up but we will be getting 12 more channels for that money. Many residents will actually see a reduction in their cable bills because the three HBO channels and the Disney Channel will be offered “for free” as part of the basic programming instead of as “additional cost” premium channels. Although programming costs rise every year, Adelphia has agreed to limit their annual increases to us to no more than 5% per year going forward.
Adelphia has agreed to pay JL Cable a rebate of 15% of all income generated from “optional” services ordered by JL residents, including digital programming and high-speed Internet access. Because we do not yet have a good feel for what that rebate total might be in a given year, we have factored only a small figure into our financial projections. It MAY be sizeable, which could enable us to hold down cable fee increases in the future.
As many of you know, Adelphia had management and financial problems in 2002. A new management team is restructuring the company and has its financial condition under much better control. We are confident that Jonathan’s Landing and JL Cable will not be “at risk” by forming this relationship with Adelphia. We will continue to have our own people operate the system, will continue to own our cable system and its plant (including the upgraded fiber-optic cable network), and will have appropriate protections built into the final agreement should Adelphia stumble.
The bottom line: Jonathan’s Landing will get a new state-of-the-art cable system, with expanded content (including free “premium” channels) and the options of digital upgrades and high-speed Internet access, FOR NOTHING! We will keep our valued cable staff in place, and maintain the operation of our security system in our own hands. We think it is a very good deal.
Robert B. Forbush
President, JL Cable, Inc. and Director, JLPOA