PALENCIA TV and Internet Services AN UPDATE

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Anastasia Gilbert
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1 PALENCIA TV and Internet Services AN UPDATE 1

2 PALENCIA AND LITESTREAM BACKGROUND Prior to the development of Palencia, no infrastructure existed at this location to provide cable television and high speed internet access to residents of the newly planned community. In exchange for developing the required infrastructure to provide these services, Litestream entered into a 12 year contract with the POA, which obligates all residents to pay a monthly assessment for which they receive high speed internet and basic cable television through Litestream. This 12 year contract will expire in December The POA Board must make an important decision regarding this contract. Regardless of any decision that is made, the ownership of the only existing infrastructure will remain with Litestream. 2

In exchange for developing the required infrastructure to provide these services, Litestream entered into a 12 year contract with the POA, which obligates all residents to pay a monthly

3 PALENCIA AND LITESTREAM AN IMPORTANT DECISION If the POA decides not to renew the contract with Litestream, it must give notice no sooner than 180 days and no later than 60 days before the termination date (termination date is Dec ). This advanced notice requirement means that this important decision needs to be made not later than Oct Input on the Litestream experience has been gathered via a resident survey, but the 42% return means that the opinion of most of the community remains unknown. 3

This advanced notice requirement means that this important decision needs to be made not later than Oct 21 2014.

4 PALENCIA AND LITESTREAM AN IMPORTANT DECISION There may be some misconceptions that exist concerning what will happen if the contract is not renewed and what alternative options will be available to Palencia residents. There are three important things to keep in mind concerning this decision: There are plusses and minuses to renewing the contract There are plusses and minuses to terminating the contract Those plusses and minuses will vary, depending on the resident s individual circumstances. 4

There are three important things to keep in mind concerning this decision: There are plusses and minuses to renewing the

5 PALENCIA AND LITESTREAM AN IMPORTANT DECISION If Palencia goes RETAIL with Litestream, then some residents will see a decrease in costs, others will see an increase. Some examples: Residents with Direct TV, currently paying for two TV systems and Litestream Internet, a decrease. Residents who are absent several months of the year, a decrease if they have the ability to suspend service. Owners who rent out their property will probably pass TV and Internet costs to tenants. Residents who are here year round and keep using Litestream as usual will see an increase in their costs. 5

Residents who are absent several months of the year, a decrease if they have the ability to suspend service.

6 PALENCIA AND LITESTREAM AN IMPORTANT DECISION CURRENT COSTS SOME CONSIDERATIONS Providing TV and Internet service is a constantly changing business with fluctuating costs and capabilities. The current cost for Palencia residents for BASIC TV and internet service is $82.60 per month. The service at this rate includes 6mbps internet download speed, 70+ channels and a 10% management fee paid to administer the billing. One little known fact is that program providers charge cable companies, such as Litestream, less for programming packages that are provided to bulk-rate customers than they charge the cable companies for packages which are provided to customers billed on an individual basis. 6

The service at this rate includes 6mbps internet download speed, 70+ channels and a 10% management fee paid to administer the billing.

7 PALENCIA AND LITESTREAM AN IMPORTANT DECISION HOW DO THESE CURRENT COSTS COMPARE TO LITESTREAM S RETAIL RATES? Although there has been some speculation that retail rates charged to other non- bulk rate communities are lower than what Palencia residents pay, this speculation is essentially incorrect. There are 7 residents in a nearby community that have been paying an introductory rate which, due to an oversight, was not amended at the end of the introductory period. This introductory rate, which is for a slower 3mbps download speed and the 70+ channel TV package is no longer offered to residents. This rate was still about $4 per month more expensive than the rate paid by Palencia residents when prorated to 6Mbps. Litestream s current regular retail rate is $ for 6Mbps download speed and the basic 70+ channel package. This compares to our current bulk rate of $82.60, an increase of $54.09 per month (See sample invoices). 7

There are 7 residents in a nearby community that have been paying an introductory rate which, due to an oversight, was not amended at the end of the introductory period.

8 Litestream, Kensington Litespeed Internet plus LS Classic Cable - 3 Mbs $73.80 Upgrade Prorated to 6Mbps $6.84 Plus Cable Modem $6.31 ========== Note: These rates are no longer offered by LS Total $86.95 <---- 8

9 Litestream Retail and Bulk Rates Litestream Retail Litestream Bulk Rate (Regular Rates, no special up front deals) Internet 6Mbps $54.95 Internet 6Mbps Plus Cable Modem $6.31 Cable modem included $75.10 TV Basic 70+ channels $75.43 TV Basic 70+ channels ======== ======== Total $136.69<---- Total LS Bulk Rate $75.10<---- Add 10% management fee: $7.50 ======== Total Paid by Palencia Residents $82.60 * Internet is not taxed, TV Cable and equipment are taxed. 9

43 TV Basic 70+ channels ======== ======== Total $136.69<---- Total LS Bulk Rate $75.

10 PALENCIA TV and Internet Services WHAT ABOUT OTHER PROVIDERS? Any other companies that provide service via cable must introduce their own infrastructure to the community. They may or may not be interested in doing this. Upheaval in the community due to construction efforts would be significant. Information gathered by POA board members indicates that the current cost for COMCAST, regular rates, no upfront promotion, 6mbps and 93 channels, is about $ per month plus tax on the TV and equipment (see Comcast rate sheet). 10

They may or may not be interested in doing this. Upheaval in the community due to construction efforts would be significant.

11 PALENCIA TV and Internet Services WHAT ABOUT OTHER PROVIDERS? (Contd.) A recent rate sheet indicates that the retail rate for AT&T U-verse is $ per month for 6mbps download speed and a package of 200 channels (See AT&T U-verse rate sheet). Both Comcast and AT&T U-verse have indicated that they would be interested in coming into Palencia but have said that they would want bulk agreements lasting 7 years. 11

99 per month for 6mbps download speed and a package of 200 channels (See AT&T U-verse rate sheet).

12 Comcast Proposal - Highlights Bulk Video and Internet solution for Palencia High Definition Digital Starter and Performance Internet- $75.00*/month per dwelling unit (1007) units a 45% discount off retail rates. (Implies a retail rate of $136.36/month for the package of services) 7 year term for Bulk billing year. 12

00*/month per dwelling unit (1007) units a 45% discount off retail rates.

13 Extract from AT&T U-verse .i have been working with our network team to get more defining dates for you. I have found out that Palencia is built out with our Fiber In the Loop infrastructure. This is a type of infrastructure that our U-verse doesn t work across yet. With that being said, we do expect to have this updated within the next 6 months. From there, we will be able to give Palencia a proposal to getting U-verse to your entire property... Although we can t give you a proposal today until we have this completed, with Palencia being as large as it is, once this is done, I will work with you to ensure Palencia is one of the first to upgrade if we are able to work towards an agreement. Please feel free to reach out to me any time to check on our status and keep this on the hotplate! Thank you, Kristina Baker North Florida Sales Executive AT&T Connected Communities 13

From there, we will be able to give Palencia a proposal to getting U-verse to your entire property.

14 Palencia System Upgrades

15 HOA Video Service Upgrade Enhanced basic video lineup to be available in 180 days at no extra cost All Digital, Basic Lineup without a Set Top Box Digital to Analog boxes provided at no cost Basic Lineup includes 128 SD, HD and Music Channels Also: Video On Demand- 1,000 s of titles to choose from and PPV- The best movies and sporting events available on InDemand and ESPN PPV YOUR COMMUNITY VIDEO, INTERNET AND PHONE PROVIDER

includes 128 SD, HD and Music Channels Also: Video On Demand- 1,000 s of titles to choose from and PPV-

16 HOA Internet Services Enhanced internet speeds to be available in 180 days at no extra cost Increased Basic Speed- 20 Mbs Up to 100 Mb available as well Cable Modem Included Five (5) addresses Web Mail Outlook or Apple mail clients YOUR COMMUNITY VIDEO, INTERNET AND PHONE PROVIDER

available as well Cable Modem Included Five (5) email addresses Web

17 Renewal flexibility Short term renewal contract offered depending on Palencia s wishes Up to 30% of the community can choose another provider (70% participation in master agreement) YOUR COMMUNITY VIDEO, INTERNET AND PHONE PROVIDER

can choose another provider (70% participation in master

18 Survey Results (The complete results will be online) 18

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23 The Status of Bad Debt TOTAL Cable/Internet Bad Debt Write-offs by Year: $15,065 $5,410 $2,187 $10,369 $33,032 Current Over 30 Over 60 Over 90* TOTAL Cable/Internet Balances as of April 15, 2013: $10,077 $6,102 $3,834 $45,295 $65,308 *NOTE: the Over 90 is comprised of approximately 19 properties in foreclosure or bankruptcy The POA has recovered over $37,000 during the March 2013 time period, via two methods: Approximately $25,900 from several homes that sold under a short-sale scenario Approximately $11,100 from banks which automatically owed the Association for the prior 12- month period of cable / Internet assessments from when they take title to a home once the foreclosure process is finished, per Florida Statutes 23

PELICAN MARSH CABLE COMMITTEE RECOMMENDATIONS. January 19, 2012

PELICAN MARSH CABLE COMMITTEE RECOMMENDATIONS January 19, 2012 PELICAN MARSH CABLE BRIEFING JANUARY 19, 2012 Introduction of Consultants Finley Engineering CSI Industry technology trends Dean Minske, Finley