Item 9BMEMORANDUM
February 12, 2004
TO: Billy Campbell, City Manager
FROM: John Eaglen, Assistant to the City Manager (481 -1433)
SUBJECT: Resolution No. 04 -016, authorizing the City's participation in the Coalition of
Cities initiating a formal hearing process against Charter Communications,
Inc. to assess liquidated damages and other such actions as determined by
the "Steering Committee of the Cities Participating in the Charter
Communications Liquidated Damages Litigation "; seeking liquidated
damages; and authorizing the expenditure of funds for the purpose of
conducting such proceedings.
Action Requested: Staff requests City Council consideration of the following action items:
Authorizing the City's participation in the Consortium of Cities (the
"Consortium ") efforts to conduct an administrative hearing process
against Charter Communications, Inc. ( "Charter ") for the purpose of
assessing liquidated damages and other cause of actions deemed
necessary by the Consortium for non - compliance with the customer
service standards stipulated in the City's franchise agreement with
Charter;
Approval of an amount not to exceed $6,000 to pay the City's
proportional costs associated with conducting the administrative
hearing process;
• Authorizing the City Manager or his designee to represent the City of
Southlake in the Consortium and / or the Steering Committee of the
Cities Participating in the Charter Communications Liquidated
Damages Litigation.
Background
Information: In September 2002, the City of Southlake joined with Fort Worth and
eight other cities to contract with C2 Consulting Services to perform an
audit (the "audit ") of Charter call centers located in Fort Worth, Denton,
and Duncanville. The study entailed a review of call center reporting by
Charter and their compliance with the customer service standards
identified within each of the consortium cities franchise agreements.
Billy Campbell, City Manager
February 23, 2004
Page 2 of 31
The consortium was provided seven audit findings in January 2003. The
finding that pertains to the assessment of liquidated damages is finding #1,
stated as follows:
"The Cities should find that the Company has not met its burden of
proof concerning compliance with the 90% service level standard for the
period of January 2001 through June 2002. "
Staff presented the City Council with the audit findings and the Council
authorized the following actions on May 6, 2003 (7 -0):
Authorized the City Manager to assess liquidated damages against
Charter in the amount of $135,167;
Authorized the designation of a hearing officer selected by the
consortium to handle Charter's appeal through an administrative
hearing process.
During the City Council's consideration, questions were raised regarding
the legal costs that would be required to process this administrative
hearing, and staff indicated that the hearing procedures and the selection
of the hearing officer would need to be identified to estimate the City's
proportional costs for conducting the hearing process.
Charter disputed the results of the audit and requested 120 days to prepare
a response. The consortium cities franchise agreements provide the
opportunity for Charter to appeal an assessment by requesting a hearing
before the City Council or a City Council designated hearing officer. In
June 2003, Charter requested a hearing officer, input towards the selection
of such officer, and in the procedures involved in the hearing process. In
the summer and fall of 2003, legal representatives of the consortium and
Charter met several times to discuss the hearing process and the potential
for settlement. Charter then proceeded to provide a large amount of
previously unavailable data for the consortium to review. The consortium
has reviewed this material, and upon review by the City of Fort Worth
litigation division, the recommendation is to proceed with a formal
hearing process.
Financial
Considerations: The City of Fort Worth provided the following cost estimate for
proceeding with the administrative hearing. The breakdown among the
cities is on a per- subscriber basis. Fort Worth's litigation division has
recommended approval of limited contingency funds for unanticipated
expenditures associated with the hearing. Staff is requesting an approved
amount not to exceed $6,000 in order to proceed. This represents 3.96%
Billy Campbell, City Manager
February 23, 2004
Page 3 of 31
of the total costs of the hearing. The breakdown among the funds is as
follows:
City
Initial Costs
Contingency
Funds
Total
(Estimated)
Benbrook
$3,471
$1,871
$5,612
Burleson
$2,551
$1,276
$3,827
Duncanville
$4,661
$2,331
$6,992
Fort Worth
$67,471
$33,736
$101,207
Hurst
$5,301
$2,651
$7,952
Keller
$4,541
$2,271
$6,812
North Richland Hills
$7,771
$3,886
$11,657
Southlake
$3,961
$1,981
$5,942
Totals
$99,998
$50,003
$150,001
Financial Impact: The administrative hearing costs provided by the City of Fort Worth
should be sufficient to cover the administrative hearing process. Charter
has retained Attorney Rick Disney to represent them on this issue;
therefore the potential for additional litigation outside of the
administrative hearing is possible. However, the consortium would
recommend following the same type of proportional financial arrangement
to pay for additional litigation costs.
Citizen Input /
Board Review: As previously stated, the City Council approved the actions taken to date
at their May 6, 2003 meeting (7 -0).
Legal Review: The City Attorney's Office represents the following consortium cities:
Southlake, Burleson, Benbrook, North Richland Hills. In order to
streamline communications and to have adequate legal representation in
the post- assessment phase, TOASE assigned Wade Adkins to represent the
consortium cities. Wade has been involved in every phase of the project
and the attorney's office can address legal issues that arise.
Alternatives: Alternatives include the following:
Input towards the discussion as desired, including potential
alternatives for resolution of this matter.
Billy Campbell, City Manager
February 23, 2004
Page 4 of 31
Supporting
Documents: Supporting documents include the following items:
• Copy of Resolution No. 04 -016;
• Copy of audit performed by C2 Consulting Services, Inc., received
January 6, 2003;
• Page 32 of the existing franchise agreement between the City of
Southlake and Paul G. Allen, highlighting the procedure for the
assessment of liquidated damages;
• Copy of letter from City Manager to Charter Communications, Inc.,
"Assessment of Liquidated Damages and Notice of Violation and
Opportunity to Cure dated May 30, 2003;
• Copy of letter from M. Celeste Vossmeyer, Vice - President of
Governmental Relations for Charter Communications, Inc.,
"Assessment of Liquidated Damages & Notice of Violation &
Opportunity to Cure dated June 12, 2003.
Staff
Recommendation: Place Resolution No. 04 -016 as a consideration item on the March 2, 2004
City Council meeting agenda regarding the following action items:
Authorizing the City's participation in the Consortium efforts to
conduct an administrative hearing process against Charter for the
purpose of assessing liquidated damages and other cause of actions
deemed necessary for non - compliance with the customer service
standards stipulated in the City's franchise agreement with Charter;
• Approval of an amount not to exceed $6,000 to pay the proportional
costs associated with conducting the administrative hearing process;
• Authorizing the City Manager or his designee to represent the City of
Southlake on the Consortium and / or the Steering Committee of the
Cities Participating in the Charter Communications Liquidated
Damages Litigation.
RESOLUTION NO. 04 -016
AUTHORIZING PARTICIPATION OF THE CITY OF SOUTHLAKE IN
THE COALITION OF CITIES THAT PROPOSE TO INITIATE A
FORMAL HEARING PROCESS AGAINST CHARTER
COMMUNICATIONS, INC. TO ASSESS LIQUIDATED DAMAGES AND
SUCH OTHER CAUSES OF ACTIONS AS THE "STEERING
COMMITTEE OF THE CITIES PARTICIPATING IN THE CHARTER
COMMUNICATIONS LIQUIDATED DAMAGES LITIGATION" MAY
DETERMINE; SEEKING LIQUIDATED DAMAGES FROM CHARTER
COMMUNICATIONS; AND AUTHORIZING THE EXPENDITURE OF
FUNDS FOR ATTORNEY AND EXPERT WITNESS FEES AND OTHER
COSTS ASSOCIATED WITH SUCH PROCEEDINGS; PROVIDING FOR
AN EFFECTIVE DATE.
WHEREAS, a coalition of affected cities has proposed to initiate a formal hearing
process to assess liquidated damages for non - compliance with the customer service standards in
the City's agreement with Charter Communications; and
WHEREAS, major issues in the assessment of those liquidated damages are common to
the City of Southlake and other municipalities in the Charter Communications service area; and
WHEREAS, a consolidated action by municipalities in the Charter Communication
service area that seeks liquidated damages will reduce duplication of effort and the attendant
legal, expert, and court costs; NOW
THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
SOUTHLAKE, TEXAS THAT:
Section 1. The City hereby agrees to participate with other similarly situated Texas
municipalities and join the City of Fort Worth in pursuing the formal hearing process or other
cause of action against Charter Communications and other entities associated with Charter
Communications to collect liquidated damages for non - compliance with the customer service
standards.
Section 2. The City hereby agrees to pay: (i) Three thousand, nine hundred and
sixty one dollars (,$3,961) on or before March 5, 2004 to the Treasurer of the Steering
Committee of the Cities participating in the Charter Communications Liquidated Damages
Litigation as an initial contribution toward the underwriting of the initial legal and expert witness
fees and other costs associated with the formal hearing process or subsequent related causes of
action; and (ii) such additional sums as the City Council may deem necessary, in the City
Council's sole discretion, up to an aggregate amount not to exceed Six thousand dollars
( $6,000).
Section 3. Billy Campbell, City Manaker or his designee shall be the City's primary
contact and liaison in this matter and shall be eligible to serve on the Steering Committee of the
Resolution No. 04 -016
March 2, 2004
Page 2 of 2
Cities Participating in the Charter Communications Liquidated Damages Litigation if elected by
other participating municipalities.
Section 4. Notices to the City should be addressed as follows: City of Southlake
Attn: Billy Campbell, City Manager, 1400 Main Street, Suite 460, Southlake Texas 76092
with a copy to John Eaglen, Assistant to the City Manager at the same address.
Section 5. That this resolution shall become effective immediately upon its passage
and approval.
PASSED AND APPROVED THIS DAY OF .2003.
Andy Wambsganss, Mayor
Lori A. Farwell, City Secretary
M ONSULTING SERVICES, INC.
7 801 ROn CFOs s (9 ? 2) ?216-7216
Do] Ias, Texas 25248 (9 ?2) ?26 -0212 (fax)
January 6, 2003
Ms. Shawna Cortez Ms. Sheri Campbell- Husband
City of Benbrook City of Burleson
911 Winscott Road 141 West Renfro
Benbrook, Texas 76126 Burleson, Texas 76028
Mr. John Cabrales Ms. Jeanne Fralicks
City of Denton City of Duncanville
215 E. McKinney PO Box 380280
Denton, Texas 76201 Duncanville, Texas 75138
Mr. Randy Westerman Mr. Mario Canizares
City of Fort Worth City of Hurst
401 West 2nd Street 901 Precinct Line Road
Fort Worth, Texas 76102 Hurst, Texas 76053
Ms. Phyllis Lee Ms. Paulette Hartman
City of Keller City of North Richland Hills
PO Box 770 7301 N.E. Loop 820
Keller, Texas 76244 North Richland Hills, Texas 76180
Mr. Dolph Johnson Mr. John Eaglen
City of Saginaw City of Southlake
PO Box 79070 1400 Main Street, Suite 460
Saginaw, Texas 76179 Southlake, Texas 76092
Dear City Representatives:
C2 Consulting Services, Inc. ( "C2 ") submits the following report concerning a review of Charter
Communications' ( "Charter" or the "Company ") call centers located in Fort Worth, Denton, and
Duncanville. The study entailed a review of call center reporting by Charter to the Cities for the period
January 1, 2001 through June 30, 2002. As will be discussed more fully below, not all of the data was
made available by Charter, so some of the conclusions are based only on the data that was provided and
not necessarily representative of the entire review period.
Project Activities
C2 performed the following project activities:
• Reviewed monthly and quarterly call center reports provided by the Cities
• Prepared detailed requests for information that were submitted to Charter
City Representatives
January 6, 2003
Page 2
• Reviewed Charter responses to requests
• Met with Charter representatives to discuss each of the call center telephone systems and
data collection and reporting techniques
• Performed on -site reviews of source documents developed by Charter to prepare the reports
to the Cities
• Discussed "adjustment" computations with Charter representatives
• Reviewed "typical" call center call counts by day by hour or half hour increments
• Discussed certain findings with Charter representatives
SUMMARY OF OVERALL FINDINGS
Based on the above activities, C2 presents the following overall findings. Please note that not all findings
are relevant for every call center. Those specific to each call center will be discussed in greater detail
within the appropriate section.
A. Charter was unable to produce various data requested for each of the call centers.
B. The data reported on the monthly and quarterly reports, in many instances, did not tie to the
telephone source reports.
C. Two of the call centers did not appropriately consider abandoned calls in the compliance
computation.
D. Charter was unable to provide a supportable computation for adjustments made to telephone
system statistics which were ultimately used to show compliance with the standards.
E. Charter is currently unable to report "trunks busy" for two of the call centers.
F. Locations that have calls transferred to the Fort Worth call center after hours and on weekends are
not receiving any compliance information for these periods.
G. Charter currently excludes calls related to high speed Internet service from one of the call centers.
OVERVIEW
Each of the three call centers have differing ways in which telephone statistics are obtained, computed,
and reported to the Cities. C2 provides the following overview of each call center to demonstrate some of
the differences and, where appropriate, similarities.
Fort Worth Call Center
The telephone system used by the Fort Worth call center runs on a Windows NT -4 based computer
system. On average, the Fort Worth call center handles over 6,000 per weekday, and approximately 8,000
on the weekend, with the highest volumes on Monday. Generally, system statistics are captured every half
hour based on the following four classifications:
• New Sales
• Spanish
• Customer Service
• Repair
For every half -hour increment, the telephone system reports:
• Incoming calls
City Representatives
January 6, 2003
Page 3
• Calls abandoned
• Service level (based on 30 second answer times)
• Average talk time
• Other data (not necessary for testing compliance)
Added to this data are the ARU (automated routing unit) calls for daily calls answered and completed by
the automated menu system. C2 notes that Charter considers all of these calls answered within the 30
second requirement.
Generally, the Cities receive monthly reports that include the following statistics:'
• Calls Offered - All calls from the four CSR categories above plus the ARU handled calls
• Answer Rate - Percentage computed based on Calls Handled Within 30 Seconds divided by
Calls Offered
• Calls Handled Within 30 Seconds - Service level percentage times incoming calls plus all
ARU handled calls
• All Trunks Busy - Minutes of time that all incoming calls received a busy signal
• Answer Rate Under Normal Operating Conditions - Percentage of Calls Handled Within 30
Seconds divided by Adjusted Calls Offered
• Adjusted Calls Offered - Calls Offered minus calls considered by Charter to be received due
to abnormal operating conditions
• Description of Abnormal Operating Conditions - A general description of what Charter
considered as abnormal and the length of time the occurrence lasted (This information is
derived from the technical department reports)
The above information is recorded on a daily basis and summarized for each month. The data is for all
calls received at the call center and does not separate out any individual city. The adjusted answer rate for
the month (total Calls Handled within 30 Seconds divided by total Adjusted Calls Offered) is reported to
the Cities as Charter's demonstration of compliance for the entire region.
With respect to staffing, Charter representatives reported that there are between 60 and 80 CSRs available
to take calls. The staffing is adjusted based on the time of day and day of the week. For example,
according to Charter, the weekday staffing is full until lOpm and then adjusted downward due to
significantly lower call volumes. However, the call center is a 24/7 operation.
Denton Call Center
The Executone telephone system used by the Denton call center is somewhat antiquated in that the
manufacturer is no longer in business or able to provide information concerning the system operation. The
Denton call center receives calls from other jurisdictions, but the City of Denton contributes the largest
call volume. On average, the Denton call center handles over 500 calls per day during business hours,
with the largest volumes on Mondays.
The calls received are separated into two main categories. Calls included in the first category are not used
in the compliance computation, and are calls that are routed to administrative staff. All other calls are
' The Cities include Benbrook, Burleson, Fort Worth, Hurst, Keller, North Richland Hills, Saginaw and Southlake.
One of the issues with respect to the Fort Worth call center is the unavailability of historical staffing levels. This
will be discussed in greater detail later in this report.
City Representatives
January 6, 2003
Page 4
considered to be inbound calls to be answered by a CSR and included in the computations reported to the
Cities served by this call center.
Based on the telephone system's K2 daily report, Charter reports the following telephone system statistics
(as adjusted) for each hourly increment that the center is open:
• Inbound Calls — Calls received by the Denton call center
• Handled by ARU — Calls routed to administrative staff
• Calls Abandoned — All calls reported as abandoned after the recording
• Answered in 30 Seconds — Calls reported on the K2 as answered within 30 seconds
• Level % - Calls Answered in 30 Seconds divided by Inbound Calls
• Length of Call — Average length of call for the day based on K2 report
• Trunks Busy % - There is no data used to generate the percentages shown in this column
The total calls Answered in 30 Seconds for the month divided by the Inbound Calls (as adjusted) are used
to demonstrate Charter's compliance with the 90% service level standard.' The data reported to the Cities
only includes the Denton call center statistics, and does not reflect the Company's performance for after
hours or weekend service offered by the Fort Worth call center.
According to Charter representatives, the staffing at the Denton call center consists of at least 7 CSRs at
any given time during weekdays, with 2 CSRs handling the walk in traffic. There are 13 CSRs employed
that have staggering shifts from gam to 7pm. On Saturdays, there are at least 3 CSRs available to take
calls from Sam to 5pm with an additional CSR from Sam to 1pm. The exception is that from 1:OOpm to
2:OOpm, the calls are forwarded to Fort Worth for a lunch hour break.
Duncanville Call Center
The Duncanville call center is operated with the same Executone telephone system as that used in the
Denton call center. On average, the Duncanville call center handles 130 calls per day Monday through
Friday and approximately 60 on Saturdays. The highest volumes are received on Mondays and Tuesdays.
There are a few differences in the data captured and reported when compared to the Denton reporting.
First, the telephone system statistics are captured in half -hour increments. Second, the statistics that are
reported are found directly from the K2 report without adjustment.
There are at least 3 CSRs to handle calls at the Duncanville call center during the week. There is also one
supervisor that is made available when required. The office hours are 8:30am to 5:30pm during the week
and 8:30am to 5pm on Saturday. From 12:30pm to 1:30pm on Saturday, the phones are rolled over to
Fort Worth for the lunch hour break.
3 Based on comparison of the reports submitted to the City of Denton and the telephone system statistics, the
Inbound Calls captured by the system are "adjusted" before being included in the report. Such "adjustment' will be
discussed in detail later in this report.
4 There is an error in the computation in that Duncanville statistics remove abandoned calls inappropriately.
However, the numbers used all come directly from the K2 report.
City Representatives
January 6, 2003
Page 5
ISSUE DISCUSSION
A. Unavailability of Data
During the on -site reviews at each of the call centers, C2 noted that certain data was either not currently
maintained by Charter, or could not be produced. The following discussion identifies such data by call
center location.
1. Fort Worth Call Center
As noted above, the compliance computation includes the ARU handled calls that are all considered to be
answered within 30 seconds. During the on -site, the Company explained that this data was taken directly
from the ARU system daily and transferred to a spreadsheet report. However, no source documents are
produced from the system to later verify the accuracy of the ARU statistics. Therefore, C2 was unable to
verify any of the reported ARU handled calls for the entire period under review. This issue is significant
due to the fact that, on average, it appears that ARU calls represent between 20% and 30% of all calls
reported on a daily basis.
Additional data that has not been provided to date relates to the staffing levels at the call center. Charter
did provide shift information for each employee, but C2 requested that a more condensed analysis of
CSRs by time of day be prepared. As of the writing of this report, this analysis has not been provided.
Also related to staffing is the fact that Charter stated it cannot provide historical staffing information.
This is significant from the standpoint that any analysis of call center "normalcy" is somewhat hampered
without understanding the number of CSRs available during the historical period under review.
2. Denton Call Center
Charter's inability to produce requested data from the Denton call center activity is much more
significant. None of the 2001 information could be found and is thought to have been destroyed.
January and February, 2002 also could not be located. The unavailability of such data is extremely
significant in that C2 cannot verify any of the statistics reported before March 2002, and as noted below,
the statistics reported to the City of Denton during the period available show gross inaccuracies.
Also important is the inability of Charter to provide any information concerning the "trunks busy."
Although the reports indicate compliance with a 0% shown, the 0% actually is only a placeholder and is
not reflective of any actual compliance. C2 notes that such information is required to demonstrate
compliance with the standard of less that 3% busy signals.
In is interesting to note that, unlike the Fort Worth call center, the Denton call center internal reports do
show staffing levels by day. As would be expected with only 13 employees, there is little fluctuation.
Charter did not produce any historical staffing information for the 2001 period.
3. Duncanville Call Center
Charter was able to provide the telephone system statistics for the first 5 months of 2001 and part of 2002.
However, even within the data provided were numerous days that were not readable due to printer errors.
Charter representatives stated that they were unsure of the location of the remaining months. Again, the
' A Charter representative demonstrated the method by which the data is obtained. In addition, the Company stated
that is was going to start retaining source documentation from the actual system.
6 These statistics were generated based on selected Call Center Pulse Reports showing the number of calls by
category.
City Representatives
January 6, 2003
Page 6
lack of source documentation is significant from the standpoint that reported statistics can not be verified.
However, where data was made available, C2 noted little necessary adjustment to the reported statistics.
Based on the internal reports prepared by Charter, there are a number of days where there were no
telephone statistics generated, as the telephone system was "down." C2 is unable to determine the impact
of this lack of data, but points out that any statistics reported to the City do not include the number of
callers that attempted to contact the Duncanville call center during these days.
According to the internal reports, there were 10 days where no statistics were available, either due to the
entire system being out of service or technical difficulties with printing the information. In C2's opinion,
these days should be accounted for in the reporting. At a minimum, on a going forward basis, the average
number of calls per day should be considered abandoned for all days where the telephone system is down.
With respect to days that have inaccessible statistics, the previous day's activity could be considered as a
substitute.
C2 notes that unlike the Fort Worth call center, Charter was able to provide all of its internal reports for
the period under review that included historical staffing for the Duncanville call center.
B. Variances in Reported Data
There were a number of variances noted between the data shown on the telephone system statistics reports
and the final reports submitted to the Cities.
1. Fort Worth Call Center
C2 did not note any major discrepancies in the data from the telephone system reports and those included
as unadjusted data on the reports to the Cities. The issue with the reports is primarily related to the
adjustment methodology discussed below.
2. Denton Call Center
Based on the information that was available (3/02- 6/02), there were gross errors in the telephone
statistics reporting.' In many instances, C2 was unable to tie either the number of calls answered within
30 seconds or the number of calls answered by CSRs. The Charter representatives had no explanation for
the discrepancies.
Based on discussions with Charter, the Company adjusted the reports to the City of Denton for the period
January through June 2002. Although the calls handled by CSRs and calls answered within 30 seconds
now tie to the telephone system reports, the Company continues to exclude an important statistic
(abandoned calls) as discussed below.
3. Duncanville Call Center
Based on the monthly telephone system reports that could be made available, the Duncanville call center
telephone system statistics tie to the reports submitted to the City. As with the Denton call center, the
Duncanville call center reports have not accurately taken into account the abandoned calls statistic.
C2 reiterates the inability to verify the ARU handled calls.
s Charter provided information subsequent to the period under review which also showed such errors.
City Representatives
January 6, 2003
Page 7
C. Treatment of Abandoned Calls
Each of the call centers has a different methodology for handling "abandoned calls" in reporting to the
Cities. Typically, these calls are those that enter the telephone system and then are abandoned by either
the customer or the system.
1. Fort Worth Call Center
The Fort Worth call center reports all abandoned calls on its daily internal pulse reports. These calls are
included in the total number of calls routed to the CSRs. As a result, the reported statistics accurately
take into account the abandoned calls in developing a compliance service level.
2. Denton Call Center
The reports provided by the Denton call center originally included daily abandoned call statistics.
However, no where in the compliance computation do these calls appear to have been included. In fact,
based on the inability to tie many of the reported numbers, C2 cannot definitively state any conclusions
with respect to the treatment of abandoned calls.
In the revisions provided to the City of Denton in December, Charter excludes the abandoned calls in the
computation. In C2's opinion, this is incorrect. Any revision should add abandoned calls to the total calls
handled by CSRs before computing compliance. In fact, the 30- second compliance statistic that is
reported in the K2 report performs this same calculation.
3. Duncanville Call Center
The compliance computation made by the Duncanville call center actually deducts the abandoned calls
from the calls answered." This actually compounds the problem in that such calls should be added to the
calls answered statistic. The impact of this problem is shown in the following table:
9 In other words, the inclusion of abandoned calls lowers the compliance statistic, reflecting the Company's inability
to answer such calls within 30 seconds.
10 The actual computation should be to add the total number of calls handled by CSRs to the total abandoned calls
(after the recording begins). The total number of calls answered within 30 seconds should be divided by this result
to show daily service levels.
" This is one of two major issues with respect to the Duncanville call center computation. Otherwise, the statistics
reported appear to be directly from the telephone system reports without adjustment.
Originally
C2
Reported
Re-
Difference
computation
May -01
88.60%
84.81%
3.79%
Jul -01
90.00%
85.04%
4.96%
Aug -01
87.70%
83.43%
4.27%
Sep -01
88.40%
85.12%
3.28%
Oct -01
92.40%
89.87%
2.53%
Nov -01
92.20%
90.12%
2.08%
Jan -02
90.40%
90.11%
0.29%
Feb -02
91.70%
89.05%
2.65%
Mar -02
93.20%
89.52%
3.68%
Apr -02
88.40%
85.37%
3.03%
9 In other words, the inclusion of abandoned calls lowers the compliance statistic, reflecting the Company's inability
to answer such calls within 30 seconds.
10 The actual computation should be to add the total number of calls handled by CSRs to the total abandoned calls
(after the recording begins). The total number of calls answered within 30 seconds should be divided by this result
to show daily service levels.
" This is one of two major issues with respect to the Duncanville call center computation. Otherwise, the statistics
reported appear to be directly from the telephone system reports without adjustment.
City Representatives
January 6, 2003
Page 8
May -02 88.30% 84.11% 4.19%
Jun -02 84.20% 82.62% 1.58%
As shown, several of the months are missing. This is due to some actual reports not being available from
the Cities. However, from the above data, C2 notes that the three quarters where all months were
available, the re- computation shows that Charter did not meet the 90% requirement during any of them
(third quarter 2001, first quarter 2002, and second quarter 2003). The statistics reported to the City of
Duncanville showed that Charter met the requirement during the first quarter 2002.
D. Unsupported Adjustment Methodology
The telephone system statistics from the Fort Worth and Denton call centers were significantly adjusted
for what the Company termed as "abnormal" conditions.
1. Fort Worth Call Center
Based on discussions with Charter representatives, the Company adjusts the actual Calls Offered for each
daily event considered to be "abnormal." As shown on the reports submitted to the Cities, adjustments can
be generally classified as follows:
• Cut Cable by Third Party
• Power issues with TXU
• No Problem Found ( "NPF ")
• Box Driver or other Headend Issues
• Bad Weather
• Other Power Supply Issues
As C2 understands it, the basic methodology employed by the Company is to identify the total time that
each outage occurred, record all Calls Offered during each of the half -hour increments, and select some
or all of the calls recorded as adjustment for the day. Based on Charter representatives, there is no
explainable computation that is made to compute the adjusted calls other than looking at the total received
during the time period in question and using those as the basis. In fact, there were a number of days in
which the adjustment actually exceeds the total number of calls offered during the outage period
reported. 13
In C2's opinion, there are a number of problems with Charter's adjustment methodology. To begin with,
the categories for adjustment do not always appear to be outside of the control of the Company. For
example, "No Problem Found" gives no indication as to whether the incident occurred due to Company or
outside activities. It appears that issues involving box driver and other headend problems are Company
issues and should not be cause for adjustment. In many instances noted during the period under review,
the other power supply issues appeared to be issues that were not related to anything outside the
12 The first quarter 2002 does show a re- computation of 89.6 %. If rounded up, the requirement could be considered
met.
" Several examples of this include 5/21/01 in which the total outage period calls were 8,551 and the Company
adjusted the actual calls offered by 8,930. The raw data for that day showed a service level of 55 %, and the adjusted
data showed a service level of 92 %. Another example is 5/28/01 with outage period calls shown as 2,535 and
adjustment calls shown as 4,926. The service level for this day was raised from 51% to 90 %. One more recent
example is 3/18/02 with outage period calls shown as 222, and adjustment calls shown as 1,872. The service level
was raised from 62% to 77 %.
City Representatives
January 6, 2003
Page 9
Company's control. Examples of this include "blown fuse," "replace power supply," "repaired cable
short," etc.
With respect to "Cable Cuts by Third Party," there are several issues that should be noted. First, there is
not sufficient information to indicate that, in fact, the numerous cuts reported were due to third party
activities. Second, of the 546 days under review, 244 days reported at least one third party cable cut. This
means that approximately 45% of the time, Charter claims to experience abnormal call volumes related to
cable cuts. In C2's opinion, there is some point at which cable cuts become normal operating conditions
particularly since the Charter representatives stated that they staff based on historical call volumes, (not
adjusted call volumes).
Third, Charter has not been able to demonstrate that the call volumes actual change due to such cable
cuts. A review of calls received during each half hour on days without adjustment do not seem to vary
significantly from many of the days that show one of more cable Cuts. 14
Clearly, power outages can have an effect on the Company's ability to provide cable service. And clearly,
outages caused by TXU are outside of the Company's control. However, at least two other factors must
be considered. First, Charter is required to have certain backup power that does not appear to have been
taken into account in the reported TXU power outages. Second, much like the cable cuts, TXU power
outages are reported for 195 days of the 546 day period. Again, with over 35% of the days having
reported TXU power outages, it appears that such occurrences are either not "abnormal," or not being
appropriately taken into account by the Charter adjustment methodology.
Overall for the period, Charter only had 174 days of 546 (32 %) that did not reflect an "abnormal"
occurrence. This would indicate that Charter is experiences abnormal conditions 68% of the time where
CSRs' ability is hampered in meeting the 90% standard. When looking at the days of the week
individually, the following adjustment percentage to the total calls actually reported was noted:
Reported Adjusted
Calls Calls %
C2 also notes that without adjustment, the weekend performance is considerably below standards. This is
significant from the standpoint that all Cities are served on Sundays and all or part of Saturdays. Based
14 This is not to say that there could be call volume spikes during outage periods in which a significant number of
subscribers are affected. However, there is nothing in the data provided that proves that any of the changes in call
volumes are actually related to the outages that occurred.
Adjusted
Monday
543,638
437,968
19.44%
Tuesday
499,564
420,379
15.85%
Wednesd
539,128
464,587
13.83%
ay
Thursday
474,007
395,191
16.63%
Friday
490,553
412,833
15.84%
Saturday
414,053
326,318
21.19%
Sunday
272,528
237,866
12.72%
C2 also notes that without adjustment, the weekend performance is considerably below standards. This is
significant from the standpoint that all Cities are served on Sundays and all or part of Saturdays. Based
14 This is not to say that there could be call volume spikes during outage periods in which a significant number of
subscribers are affected. However, there is nothing in the data provided that proves that any of the changes in call
volumes are actually related to the outages that occurred.
City Representatives
January 6, 2003
Page 10
on the information provided, the overall actual service level for Saturdays was 67 %, but the adjusted
service level was 85 %. For Sundays, the actual service level was 78 %, and the adjusted service level was
90 %. Based on the unadjusted telephone statistics, Charter met the 90% answer rate for Saturdays and
Sunday only 12% and 28% of the time, respectively.
Without further justification for the adjustment methodology, it is C2's opinion that the adjusted service
levels reported by Charter during the period January 2001 through June 2002 should not be accepted.
Barring additional information to support the "abnormal" impacts, C2 recommends that the monthly
reports be restated to reflect only actual telephone system statistics as shown in the following table:
Jan -01
Feb -01
Mar -01
Quarter
Apr -01
May -01
Jun -01
Quarter
Jul -01
Aug -01
Sep -01
Quarter
Oct -01
Nov -01
Dec -01
Quarter
Jan -02
Feb -02
Mar -02
Quarter
C2
Recommended
Actual
Service Level
89.48%
90.21%
60.63%
77.00%
87.65%
71.63%
50.77%
68.43%
40.22%
58.84%
63.36%
53.14%
72.95%
85.78%
79.47%
78.84%
80.96%
88.09%
76.61%
81.35%
Charter
Reported
Adjusted
Service Level
91.08%
91.93%
90.63%
91.17%
91.66%
91.24%
90.88%
91.29%
53.11%
70.94%
79.60%
67.16%
90.59%
93.21%
91.16%
91.61%
90.22%
93.57%
89.61%
91.00%
Apr -02 82.20% 92.03%
May -02 85.39% 94.53%
Jun -02 80.42% 90.42%
Quarter 82.65% 92.32%
City Representatives
January 6, 2003
Page 11
Overall 72.58% 86.95%
2. Denton Call Center
As noted above, there were a number of errors noted in the telephone system statistics provided with
respect to differences in the actual reports and the statistics ultimately reported to the City of Denton.
Charter representatives initially stated that the differences were due to adjustments that were made for
"abnormal" conditions. However, when additional technical backup was reviewed (outage reports), many
of the days with discrepancies showed no outages or other abnormal conditions.
In fact, Charter representatives conceded that there was no explanation for all of the adjustments that had
been made, and that errors in reporting had occurred. Charter provided the City of Denton with "revised"
reports from review period months January 2002 through June 2002. However, as noted above, C2
continues to take issue with the revisions with respect to the treatment of abandoned calls and provides
the following recommendations for the revised period.
*Charter had a number transposition in its revised
computation
Based on the above computation, Charter has not complied with the 90% standard during either of the
first two quarters of 2002.
3. Duncanville Call Center
As stated above, the Duncanville telephone system statistics are not adjusted for "abnormal" conditions
other than not reporting for those days where the entire system was down or unavailability of data due to
technical printing difficulties.
" C2 cannot make any recommendations with respect to the period January 2001 through December 2001 because
of Charter's inability to provide the telephone system statistics.
Service
Service
C2
Level
Level
Originally
Revised
Recommended
Reported
by Charter
Service Level
Jan -02
90%
80%
73%
Feb -02
88%
85%
77%
Mar -02
90%
71%
67%
Apr -02
90%
59%
56%
May -02
90%
67%
63%
Jun -02
90%
63%
64%
*Charter had a number transposition in its revised
computation
Based on the above computation, Charter has not complied with the 90% standard during either of the
first two quarters of 2002.
3. Duncanville Call Center
As stated above, the Duncanville telephone system statistics are not adjusted for "abnormal" conditions
other than not reporting for those days where the entire system was down or unavailability of data due to
technical printing difficulties.
" C2 cannot make any recommendations with respect to the period January 2001 through December 2001 because
of Charter's inability to provide the telephone system statistics.
City Representatives
January 6, 2003
Page 12
E. "Trunks Busy" Reporting
1. Fort Worth Call Center
As you are aware, the standard for "trunks busy" is less than 3% measured on a quarterly basis. The Fort
Worth telephone system captures the actual daily busy minutes which can be translated into a monthly
percentage. During the 18 month review period, the actual "trunks busy" statistics were adjusted in 7
months, with only 3 months significantly adjusted. These three months provided descriptions of
"abnormal" conditions as either severe weather or the bankruptcy of the high speed Internet service. In
C2's opinion, both of the occurrences can be considered outside of the control of the Company, deserving
of adjustment. However, as with the adjustment to calls, Charter cannot provide a supportable
computation of the calculations made.
C2 notes that, with the exception of the three months where the adjustments actually placed Charter in
compliance with the standard (where compliance was not shown by the actual statistics), Charter reported
non - compliance for months during the review period. The first of these was in June 2001, but the
quarterly computation resulted in 2.5 %. All of the others were in the third quarter 2001, with the
quarterly average at 10 %.
2. Denton Call Center
According to Charter representatives, the Executone system does not capture the "trunks busy" statistic.
In reviewing the telephone reports, C2 did not note any such information. However, the reports submitted
to the City of Denton indicate that the "trunks busy" statistic is 0 %. Given that no statistic is generated,
this information is not necessarily accurate. In fact, it would be more appropriate to report "unknown"
rather than a 0% which can be misperceived. 16
3. Duncanville Call Center
As with the Denton call center, the Executone system in Duncanville does not provide the "trunks busy"
statistic. Again, the reporting to the City of Duncanville indicates that the "trunks busy" time is 0 %. In
C2's opinion, both the Denton and Duncanville call centers are unable to demonstrate any compliance
with the "trunks busy" standard.
F. Fort Worth After Hours Service
C2 understands that, of the Cities included in the consortium, only Denton and Duncanville do not have
all of their calls answered by the Fort Worth call center. However, it is also C2's understanding that all of
Denton's and Duncanville's calls (along with other cities served by these two call center) are forwarded to
the Fort Worth call center after 5- 5:50pm Monday through Friday, after 5pm on Saturday, and all day
Sunday.
Given that much of Denton's and Duncanville's calls are handled by the Fort Worth call center, it is C2's
opinion that these Cities should also receive compliance information from that center. When asked,
Charter representatives stated that the reported statistics to the Cities of Denton and Duncanville do not
include any service level information from Fort Worth. Clearly, this is inappropriate when the standard is
supposed to apply to all customer service related calls for each of these two Cities.
16 It appears that Charter merely reported what was included on the spreadsheet as 0% because no data had been
input into the spreadsheet.
City Representatives
January 6, 2003
Page 13
This issue was briefly discussed with the Fort Worth call center management, and the Company stated
that there is no easy way to determine the number of calls that are forwarded from the other call centers.
If the system does not allow some way in which to separate out these after hour and weekend calls, then
the Fort Worth statistics should be maintained in such a way as to separately demonstrate the compliance
during these time periods.
G. Fort Worth Excludes Internet Calls
During 2002, the Fort Worth call center separated the video calls from high speed Internet. A separate
CSR group receives calls concerning high speed Internet service with completely separate telephone
statistics. However, with respect to the Denton and Duncanville call centers, the calls that are referred to
CSRs are not separated. In C2's opinion, it is inconsistent to include these calls in two locations and not
in Fort Worth.
C2 does not render an opinion as to whether such calls should be included given the controversy over
high speed Internet service. However, C2 does recommend that the data collection and reporting be
consistent.
REVIEW OF ACTIVITIES BY DAY
In an attempt to estimate a call volume that can be handled at a 90% service level, C2 reviewed a number
of individual days that were identified as having met the standard and not showing any "abnormal"
adjustment by Charter. These days were segregated by day of the week into half -hour or hour increments.
C2 makes the following observations:
A. Fort Worth Call Center
As noted above, there were only 174 days during the review period that did not have adjustment. To
further reduce the sampling, C2 only chose from those days where the 90% standard was met."
Thirty days were chosen, with at least two of each individual day included. The results are as follows:
" C2 notes that not all of the days that met the two qualifications were included. Those included were chosen
randomly.
Est. CSR
Est. ARU
Est. Total
Avg. Daily
Avg. Daily
Avg. Daily
Calls
Calls
Calls
Mondays
5,100
1,500
6,600
Tuesdays
4,900
1,300
6,200
Wednesda
5,000
1,500
6,500
ys
Thursdays
4,700
1,300
6,000
Fridays
4,300
1,200
5,500
Saturdays
2,900
1,400
4,300
Sundays
2,200
1,400
3,600
" C2 notes that not all of the days that met the two qualifications were included. Those included were chosen
randomly.
City Representatives
January 6, 2003
Page 14
C2 does not suggest that these are necessarily absolute levels that should be used to set the basis for
reasonable daily call levels. However, given the data that was available, these are the best estimates that
can be calculated at this time. To more accurately determine the call levels that allow Charter to achieve
compliance, a time and motion study would have to be performed to provide certain additional data,
including, but not limited to:
• Categorization of all CSR calls received by half hour increment
• Staffing for each half hour increment
• Categorization of all ARU calls
• Monitoring of specific levels of calls by half hour increment that significantly impact service
levels
• Identification of each special promotion, PPV event, soft disconnect, or other action on the
part of the Company that could increase the number of calls received
However, it is C2's opinion that the above statistics provide an estimated baseline for purposes of
determining large variations that could be investigated as to cause. Of course, if Charter is able to receive
higher volumes of calls within the 90% service standards, then the above daily baselines should be
adjusted accordingly.
B. Denton Call Center
The call statistics for the Denton call center are currently maintained at hour increments. For consistency
and comparison, the Company may want to reprogram the telephone system to provide half hour
increments as provided in both of the other two call centers. That aside, a review of the data that was
available (March 2002 through June 2002) yielded the following average daily call volumes:
Avg. Daily
Calls
Mondays
760
Tuesdays
663
Wednesdays
588
Thursdays
525
Fridays
605
Saturdays
348
Sundays
N/A
Given these averages over a period of four months, it is reasonable to assume that these call volumes will
continue. Again, C2 notes that these call volumes do not include any after hours calls made to the
Denton call center that are forwarded to Fort Worth.
C. Duncanville Call Center
" All of the available daily data was included in the analysis. And as shown in the recommended revision of the
statistics, Charter has not been able to meet the 90% standards with these volumes. However, the volumes are based
on averages and potentially point to the need for additional staff.
19 Unless the Company is able to show that there were factors that make these four months abnormal.
City Representatives
January 6, 2003
Page 15
As noted above, much of the telephone system data was either not available or unreadable for the
Duncanville call center. Based on the data that was available, the following daily averages were
computed:
Avg. Daily
As with the Denton call center, these statistics do not include any of the after hours calls that are received
by the Duncanville call center and forwarded to the Fort Worth call center.
ADDITIONAL OBSERVATIONS
During the course of the study, the City of Fort Worth provided the results of its own attempts to contact
the Fort Worth call center. C2 finds it interesting that the general trend in the Fort Worth statistics (not
necessarily statistically significant by generally accepted sampling techniques) follows the unadjusted
trend in the Fort Worth telephone system statistics. As shown in the following graph, the trend lines are
very similar, with the lower line based on the City call percentages, and the top line based on the actual
unadjusted monthly service levels of the call center.
Calls
Mondays
142
Tuesdays
149
Wednesday
133
s
Thursdays
109
Fridays
114
Saturdays
63
Sundays
N/A
As with the Denton call center, these statistics do not include any of the after hours calls that are received
by the Duncanville call center and forwarded to the Fort Worth call center.
ADDITIONAL OBSERVATIONS
During the course of the study, the City of Fort Worth provided the results of its own attempts to contact
the Fort Worth call center. C2 finds it interesting that the general trend in the Fort Worth statistics (not
necessarily statistically significant by generally accepted sampling techniques) follows the unadjusted
trend in the Fort Worth telephone system statistics. As shown in the following graph, the trend lines are
very similar, with the lower line based on the City call percentages, and the top line based on the actual
unadjusted monthly service levels of the call center.
City Representatives
January 6, 2003
Page 16
Comparison of City Study to Actual Call Center Activities
100.00%
90.00%
80.00%
70.00%
60.00%
a
a
J
v 50.00%
.
a
fA
40.00%
30.00%
20.00%
10.00%
0.00%
OVERALL RECOMMENDATIONS
Fort Worth
f Charter
Based on the data that was provided by Charter and the information that was obtained on -site, C2 makes
the following recommendations :20
1. The Cities should find that the Company has not met its burden of proof concerning
compliance with the 90% service level standard for the period January 2001 through June
2002.
2. The City of Denton should find that the Company has not been able to provide any
information prior to March 2002 to verify the accuracy of reporting for all months under
review.
3. The City of Duncanville should find that the Company has not been able to provide all
monthly information to verify the accuracy of the reporting during the period under review.
4. The Cities of Denton and Duncanville should find that Charter be required to provide call
center service level information for after hours calls that are forwarded from their respective
call centers to the Fort Worth call center.
5. The Cities should find that the Fort Worth call center should keep historical source
documentation with respect to daily ARU calls and staffing levels.
20 These recommendations are based on the results of the study as reported. In the event that Charter is able to
provide additional information after reviewing the report, C2 is willing to consider the impact of such information at
the Cities' request.
Jul -01 Aug -01 Sep -01 Oct -01 Nov -01 Dec -01 Jan -02 Feb -02 Mar -02 Apr -02 May -02 Jun -02
City Representatives
January 6, 2003
Page 17
The Cities of Denton and Duncanville should find that the telephone systems in their
respective call centers should be modified or upgraded to provide "trunks busy" information.
With respect to adjusting call volumes for "abnormal" incidences, C2 provides the following
alternative approaches:
a. Require the initial reporting to be based only on the raw data, with an opportunity for
Charter to provide specific dates and times for agreed upon "abnormal" occurrences.
This approach would not require an exact computation, but would allow for the exclusion
of those days where "abnormal" situations arose in the compliance calculation.
b. Again require the initial reporting to be based only on the raw data. However, based on
the call volumes identified above, (broken down into half hour increments), allow Charter
to show that "abnormal" situations forced call volumes significantly above the norms.
This approach also requires that Charter be able to show that the calls received during
those half hour increments were related to the "abnormal" incident and not some other
issue that is within the Company's control.
c. Require Charter to conduct a time and motion study that shows the impact of specific
occurrences that are both within and outside the control of the Company to establish a
"situation adjustment." (This may not be a reasonably workable alternative, but would
provide an adjustment computation for specific types of occurrences.)
Of the three, the first alternative is the simplest approach to initiate, provided that the Cities and
the Company can agree as to what is "abnormal."
C2 appreciates this opportunity to work with the consortium of Cities. If you have any questions
concerning the findings and recommendations included in this report, please contact Ms. Connie Cannady
at 972.726.7216.
Very truly yours,
C2 Consulting Services, Inc.
202 Company shall establish the Following procedure for resolving
complain:-, #`torn subscribers about the quality of the television signal
delivered to them: All complaints shall go initially to Company. All
matters not resolved by Company shall at Company's or the
subscriber's option be refamd to- the City for it to resolve. All matters
not resolved by the City may be referred to the FCC for it to resolve,
20.3 The C'icy at its expense (no more than twice per year, barring unusual
circumstances) upm thirry (30) days written notice to Company may
test the cable systern for compliance with thr FCC tecl;Tical standards.
Company shall cooperate in such tests and provide access to the cable
system. Company shall reimburse the City for the full expense of any
test which shows a material nori- compliance with such standards.
21, LiRyidaigd Dama - Tele h la ' n &grvqge Calls:
€;ompwiy acknowledges that von- compliance with the customer service
standards identified above will harm subscribers and the City and the amounts
of actual damages will be difficult nr impassible to ascertain. For the second
calendar quarter of 1999 and thereafter, [he City tray therefore assess the
Following liquidated damages against Company for non- compliance with the
customer service standards sat forth in Sections 7 3, 7A, 7.5, 9, 1C.1, 10.,2,
10, 3. 14.111, 12..1, 12..2 and 12 4 (measu red on a quartcrly basis). Company
acknowledges that the liquidated damages set forth below are a reasonable
approximation of actual damages and that This Section 23 is intended to
provide compensation and is not a penalty.
21.1. Iolophone Standards The damages for non-compliance with ono ar
more of the standards in Sections 7.3, 7.4 and 7 daring a calendar
quarter arc:
21 1.1 First non - Compliance: S 100 per subscriber,
21 12 Second non - compliance within three (3) consecutive calendar
quarters: 52.00 per subscriber.
Z1 -1-3 Third non - compliance within six (6) consecutive calendar
quarters and (subject to Section 21.4) each subsequent Don -
compliance: S3.00pers7ibscribcr,
21.2 5eruire agd Installati_an Standards The damages fOT non - compliance
with one or more offw standasdls in Sections 9,117.1,10.2,10.3,10.10,
12 1 12.2 and 12..4 during a calendar quarter are:
30
21 2.1 F irst non - compliance: 51.00 per subscriber.
2122 Second non- aomplisam within three (3) consecutive calendar
quarters: $2.00 per subscriber_
21.2.3 Third nott- compliance within six (6) consecutive calendar
quarters And (subject to Section 2 €.4) each subsequent nor)-
compliance: $3.40 per subscriber.
21,3 Minirnums The liquidated damages for The first and each subsKuent
non- compliance tinder Station 21 -1 or Seo#ion 21.2 shad be no less than
$5,O0, unless modified as pmvided in Section 21,4.
214 Effect of ExtMdcd Periods of Compjjanae If Company complies with
all of the standards identified in Sections 21.1 and 21,2 for eight
consecutive calendar quarters, the damages for the first subsequent non,
compliancc with any of those standards will be the greater of 25¢ per
subscriber or 53,000
21..4.1 Following such a non- compliance the damages provided in
Sections 21 _l and 21..2 wi11 again be applicable so that the next
noa- cornplianca within four (4) consecutive calendar quartm
will be subject to Sections 21 1.2 andlor 2[..2.2.
21.5 An event of non- compliance will bt~ taker, mttt aecbunl in determining
wkther a later event of non- compliance is a sw -land, third or
subsequent event without regard to whether City has assessed
liquidated damages or taken any other action with respect to tht: non-
compliance.
21,8 Company shall report the number ofsubscn - bear ur Un the City on the
last day of the quarter by the 15th Business day of the following quarter.
22 Liguidmd ])aMages -Oth :
22.1 Liquidated damages in the amount set farih in Sectitsn 21.1. . [(but not
less than the amount set forth in Section 21.3) may be assessed for
failure to timely submit the quarterly reports required by Section 19.
31
32:2 Liquidated damages may be assessed for violation ofthe provision of
Section 26.4 for submission of rc)orts within five (5) business days in
the smoun t of S 1,000 par day.
23. Procedure for f Assessrt mt of Liquidated Dot »acs The procedure for
consideration and assessment of liquidated damages is as follows:
33.1 Liquids ted damages shall be assessed by the City Manager or Ws or her
designee.
232 Company may obtain a review of the assessment by the City Council
by making a wri tten request within ten (10) business days after receipt
of notice in writing of the assessment and its basis,
23.3 Company shall have an opporttiui ty to be bean( gat a mee ing of the City
Council or by a person designated by the Council as a (tearing offic+sr
prior to action being taken by the Council,
33.4 The City Council may adopt additional procedure's, including
appointment of a City official or other person to act as a head ng officer.
The Council's decision may be based upon the record of ptoceedinp
conducted by the }searing officer or a proposal for decision submittod
by the hearing officer.
34. Pa5gnent of Li : Liquidatod darnages shall be paid on or
before the tenth ( i0th) business day following amesstnent or, if Company
requests review by the City Council, on or before the tenth (1E1tli) business day
following issuance of the Council's decision.
25_ t?rnbudsr ii Company will provide a senior employee (at the Vice President
or Directcr level) as director of gove=ent affairs and ornbudsntan reporting
directly to a regional vice presidcnt of CC Holdings_ The director of
goverment affairs will have responsibility for working whit tite City and other
cities in the arts to address problems that may arise cinder the Fra=hise and
shall be Company's az€ibudsn= for both the City and subscnbers. Company
will give the City an opportunity to cotttrfrettf on the detailed job description
of the director ofgoverament affairs before the position is filled_
26. Citv__l:jakon Company shall continue to provide problem solving liaison
services for th¢ City of the typo being provided to the City of Fort Worth by
Charter's Customer Cairo Group in the Fat] of 1948- The purpose of this
service is to provide the City with direct access to strpervisury lave] pernwmel
32
City of Scut lake
Office of the city Manager
1404 Main Street Suite 460 . Sauthlake, TX 76x92
(817) 481 -1420 • www.ciryofsauthlake_ com
May 30, 2043
VM CER TIF£ED A 14 I+r
Ms.. Margaret A. Bellville
Executive Vice President
Chief Operating Officer
12405 Powerscourt Drive
St. Louis, MO 63131 --6604
Mr. Paul G, Berra
Director of Government Relations - National
Charter Communications
12465 Powerscourt Drive
St. Louis, MO 63131 -6604
Ms. Lee A. Clayton
Sr. Vice President Midwest Division
Charter Communications
12405 Powerscourt Drive
St- Louis, MO 63131 -6604
Ms. Celeste Vossmeyer
Vice President - Government Relations
Charter Communications
12405 Powerscourt Drive
St. Louis, MO 63131--6604
Mr, Dan Spoelman
Vice President of Operations
Charter Communications
4800 Slue Mound Road
Fort Worth, TX 76106
Re= Assessment of Liquidated Damages and Notice of 'Etiolation and Opportunity to Cure
Dear Ms. Bellville, Mr. Berra, Ms. Clayton, Nis_ Vossmeyer, and Mr, Spoelman:
Marcus Cable Associates, LLC dlbla Charter Communications, a Wired World Company
("Charter") is the grantee under a franchise with the City of Southlake ( "City ") to operate a
cable system in the City ( "the Franchise')', This letter constitutes the City's notice to Charter
of Charter's failure to comply with the terms and conditions of the Franchise and an
opportunity to cure pursuant to Section 626(d) of the Communications Act of 1934, as
amended.'
Oxdinancc No - 58.3, as amended by Ordinance Nos. 675 and 737.
47 U.S.C. §546 (d).
Tinder the Franchise, Charter is required to adhere to the fallowing customer service
standard (the "Customer Service Standard"):
Under Normal Operating Conditions, telephone answer time by a Trained
Company Representative, including wait time, shall not exceed thirty (30)
seconds from when the connection is made. If the call needs to be transferred,
the time to complete the transfer time shall not exceed thirty (30) seconds.
These standards shall be met no less than ninety percent (90 %) of the time under
Normal Operating Conditions, measured on a quarterly basis' } .
A violation of this Customer Service Standard is subject to the assessment of liquidated
damages as follows: W First non-compliance. $1.00 per subscriber. (ii) Second non-
compliance within three (3) consecutive calendar quarters: $2.00 per subscriber; (iii) Third
non - compliance within six (6) consecutive calendar quarters and each subsequent non-
compliance: $3.00 per subscriber.
Based on an audit of Charter's records undertaken by C2 Consulting Services, Inc. (the
"Audit: "), the City finds than Charter was not in compliance with the Customer Service Standard
for the period from the First Quarter of 2001 through the Second Quarter of 2002. A copy of
the Audit is enclosed. The City is especially disturbed that the findings of the Audit conclude
that Charter's quarterly reports to the City during the same time period are, to a significant
extent, not supported by Charter's own records, especially where raw data has been adjusted
due to alleged conditions outside the scope of "normal operating conditions ", as that term is
used in Federal Communications Commission regulations''. For example„ with the exception of
the Third Quarter 2001, Charter's quarterly reports to the City showe €t that Charter was in
compliance with the Customer Service Standard in each of the quarters covered by the Audit.
However, the Audit rvals that C'harter's own data reflects that €�h2rter was not in
compliance with the Customer Service Standard in any of the quarters covered by the Audit.
On the basis of the Audit, we understand that, Charter has been questioned with respect
to Charter's quarterly reports for the period from the Third Quarter of 1999 through the
Fourth Quarter of 2000 and for the Third and Fourth Quarters of 2002. Charter has not been
able to substantiate the adjustments for abnormal operating conditions as reflected in Charter's
quarterly reports to the City for those time periods,
3 Ordinance No_ 737, Exhi bit "B ", Section 7.4,
4 Otdinance No. 737, Exhibit "I3 ", Section 211. This provision is subject to Section. 21.4, which
provides that the first event of neon- cornpiiaace shall be cause for the assessment of liquidated damages
in the amount of $0.25 ptr subscriber if C'liarter has complied with the telephone service standards set
forth in Exhibit "B ", Section 7 for eight (8) consecutive quarters.
5 See 47 C.F R. 74.309.
Accordingly, the City hereby assesses liquidated damages against Charter for violation
of the Customer Service Standard for Lhe following calendar quarters and in the fotlowing
amounts
Quarter
Number of
Subscribers
Amount of Damages
per Subscriber
"Total Anlnumt r:f
Damaaes for ',�uaz ter
3 "' Quarter 1999
3,152
$1
$3,152
4 " Qua 1999
3,
$2
$6,438
1" Quarter 2000
3,3016
$3
$9,918
2 "`' Quarter 2000
3,276
$3
$9,828
3 " Quarter 2000
3,320 - --
$3
$9,960
4" Quarter 2000
3,433
$3
$10,449
I" Quarter 2001
3,519
3,525
$3
$101,527
2 " Quarter 2001
$10,575
3 Quarter 2001 #
3,521
$3
$10,563
4' Quarter 2001
3,532
$3
$10,596
I" Quarter 2002
3,582 J
j $3
$10,746
2'd Quarter 2002 .k
3,592 _
i $3
$10,776
3", Quarter 2002
3,629
$3
1 $10,887
4 Quarter 2002
3,584
$3
$10,752
TOT AL
1 $135,167
a. Quarter covered by Audit
C11arter`s failure to comply with the terms of the Franchise may be considered by the
City as a basis for the denial of Franchise renewal unless cured as provided herein. Payment
of the above - referenced liquidated damages is due within ten f10) business days of receipt of
this letter". If Charter wishes to appeal this assessment, it must do so within ten (10) business
days in the forma of a written letter that sets forth the basis for the appeal. This letter must
be certified, addressed to me, and a copy must be provided to the City Attorney, Men Taylor - ,
6000 Western Place, Suite 200, Fort Worth, Texas 76107, as well as the Cable Administrator,
City I-Tall, 1400 Main Street, Suite 450, 5outhlake, Texas 76092. If such a letter is received, 1
will provide Charter an opportunity to state its case, either before me informally or in a formal
hearing before the City C'olincil in ar:c:Drdance with the Franchise.
i�avere]Y+ f
+r E bell
City L sager
Ct;' Mayot Andy Wambsganss
Allen Taylor, City Attorney
Eliclosure
6 Ordinance No. 737, l- xhibit "B ", Section 24.
7 Ordi naeice No. 737, Exhibit "B ", Section 23.
4 c W
0M N C# 1dH5•
Y A WiFM5 WORiL COUPANV_
.tune 12, 2003
VIA FACSD41LE 817- 481 -1463 AND CERTIFIED U.S. MAIL
Biliy Campbell, pity Manager
City of Southlake
1400 Main Street
Suite 460
Southlake, TX 76092
Re. Assessment of Liquidated Damages &
Notice of Violation & Ont7ortunity to Cure
Dear Mr, Carnpbell
M. Celeste 'Vossmeyer
Vice Presideni
Gavcmmcn! Rolatimis
pirect Zial- (314) 343 -2410
E -Mail: cv0ssmeycr&hW1=0m com
On behalf of Marcus Cable Associates, LLC d/b /a Charter Communications, this letter
responds to your letter dated May 30, 2003 on behalf of the City of Southlake regarding
Charter's telephone answer times under the City's customer service standards (Ord.. No. 99-904,
Lx. B).
Charter talces this notice with the utmost concern, and has begun an internal investigabui
to reconcile these allegations with our w vn data We plan to carefully review every aspect of the
audit report that you provided, prepared }y C-2 Consulting Sereic.es, Inc.
We have committed significant resources and attention in the Southlake system to
Charter's customer service, and believe that our actual performance is showing the benefits of
this attention. Since Charter's acquisition of the system in 2000, Chalter has strived to improve
customer service, build out the system and expand on these improvements, and we believe that
we have wntinued to demonmate to the City our commitment to do so. But if the City is
concerned, we need to resolve that concern.
We would like the opportunity to explain our performance and the results of oux internal
investigation.. Charter therefore respectfully requests a hearing with the City on the notice of
violation and the assessed penalties. At the same time, we request a more informal meeting with
yov and any other appropriate City officials to discuss this situation, and especially to explain
what Charter has done and is doing in its customer service operations. Blake Cummings,
Director of Government Relations, will be in touch with you to set up such a meeting_ Ms. Lee
A. Clayton, our Senior Vice President of the Midwest Division will attend this rneetiag together
with key Soui:lhlake system management.
Charter Plaza • 12405 Pmerssaurt Drhe • Ss loul8 MUDurl • 63131.3574
+mnuadranerccm • td. 314.965.4555 • fax: 314 965.6640
12 .tune 2003
Page ?
Charter believes it will demonstrate that its performance is not accurately reflected in the
repast prepared by C2. We also intend to dernortstmTe that the $135 in penalties assessed is
unwarranted because the penalties bear no relationship to any potential harm that could have
irsulted even if Charter's telephone answering service did not meet the standards imposed by the
City-
Given the volume of data underlying these penalties, Charter respectfully submits that it
will need 120 days in which to prepare a thorough response to the report- A shorter amount of
time would make it exticmely difficult, if not impossible, for the responsible personnel to review
the data while still performing their regular customer service and operational duties.
Please contact me to discuss this important matter.
Very truly yours,
M, Celeste Vossmeyer
Vice President - Government Relations
Cc: Mayor Andy Warnbsgar3ss
Members of the City Council
Allen Taylor, City Attorney
Margnret A. Bellville
Lee A. Clayton.
David Andersen
Paul C Berra
Dwi Spoelmmi
Blake Cununings
JA rrxasU X- southinke 12 june U3 doc