The Henderson County Board of Commissioners met for a special called meeting at 2:00 p.m. in the Town Hall for the Village of Flat Rock (Singleton Center).

Those present were: Chairman Grady Hawkins, Vice-Chair Bill Moyer, Commissioners Renee Kumor, Commissioner Don Ward, Commissioner Marilyn Gordon, County Manager David E. Nicholson, Assistant County Manager Angela S. Beeker, and Staff Attorney Jennifer Jackson from Henderson County.

Also present were representatives from the other municipalities in Henderson County, including the City of Hendersonville, the Town of Laurel Park, the Town of Fletcher, and the Village of Flat Rock.

Absent was Clerk to the Board, Elizabeth W. Corn.

Chairman Hawkins called the meeting to order and welcomed all in attendance. He explained that the purpose of this meeting was to hear a presentation from Mediacom regarding the upgrade of their system, and their desire to renegotiate their cable franchises with everyone.

Maggie Blythe, General Manager for Mediacom, presented an update on the company since their purchase of the Henderson County system in January of 1998. She stated that Mediacom was founded in 1995 by Rocco B. Commisso. It is based in Middletown, New York, and currently operates in 14 states serving over 340,000 subscribers. Mediacom is among the top 25 largest multiple systems operators in the U.S. Mr. Commisso serves as Chairman and CEO of the company and is located in Middletown, New York. Mr. Jim Carey is Senior Vie President, Field Operations, and is located in Gulfbreeze, Florida. Mr. Don Zagorski is the Regional General Manager of the Mid-Atlantic region and is located in Delaware. Mr. Zagorski was present at the meeting, as were Ms. Blythe and Penny Taylor, local governmental liaison for Mediacom.

The Western Carolina cable system is operated by Mediacom in five Counties:

The Hendersonville System is located in Henderson County and serves 23,434 customers. There are five franchises in Henderson County.

The Franklin System is located in Macon County and serves 4,754 customers. There are two franchises in Macon County.

The Sylva System is located in Jackson County, and serves 3,297 customers and 1,100 Western Carolina University students. There are four franchises in Jackson County.

The Nebo System is located in McDowell County, and serves 2,149 customers. There is one franchise in McDowell County.

The West Jefferson/Lansing System is located in Ashe County, and serves 3,368 customers. There are four franchises in Ashe County.

Ms. Blythe then reviewed the accomplishments in Hendersonville for the 1998-99 year. They were as follows:

January, 1998: Mapping and design for Hendersonville upgrade begins.

July, 1998: New billing and information system.

August, 1998: New centralized facility for all Hendersonville employees.

January, 1999: Activation of new head end

March, 1999: Cycle billing implemented. This entails staggering customers= billing cycles B allows a higher level of responsiveness.

June, 1999: New channel line-up

Summer, 1999: Upgrade completed. This is an upgrade to a 550 MHZ system with fiber optic technology. This gives the ability to increase programming for customers, it doubles the channel capacity to 80+ channels. Bandwidths can be reserved for other types of usage. An upgrade improves picture quality and reliability, and makes it easier to locate and fix problems. The upgrade will give the platform today which is needed for tomorrow.

Ms. Blythe stated that the cable companies today face an increasingly competitive market place. Therefore substantial investments must be made to bring them into the future. They are upgrading the system, and will be replacing 800+ miles of cable plant before the upgrade is complete. Ms. Blythe stated that an increase in services will result in an increase in prices. Banks want assurances that franchises are in good standing, and that there is a good relationship with the community. Mediacom would also like to standardize the agreements so that everyone understands them. For these reasons, Mediacom would like to extend all franchises to a 15 year period. They realize that these are non-exclusive franchises. Currently franchise expiration dates in Henderson County are as follows:

Henderson County 9/1/06

Flat Rock 7/11/06

Fletcher 5/31/10

Hendersonville 1/1/07

Laurel Park 11/01/06

Ms. Blythe stated that the advantages of a franchise renewal/renegotiation would be a standardization of the agreements and increased opportunities for future development and new technologies. She stated that Mediacom is interested in providing Internet services, as well as interactive television.

At the close of Ms. Blythe=s presentation, there was general discussion and questions regarding rate regulations, and the technology that would be available.

Commissioner Kumor inquired as to the ability for Henderson County to reserve some of the bandwidth for an intranet to link the local governments to one another. Mr. Zagorski stated that they may be able to look at this. High definition television must be available by 2004.

The Mayor of Hendersonville, Mayor Fred Niehoff, pointed out that they=re really requesting the right to operate for fifteen years.

Chairman Hawkins stated that we could wait until the franchise expires. Ms. Blythe responded that this would not allow the company to have easy access to money to continue to make improvements and offer more services. She stated that Mediacom realizes and accepts that consideration would be discussed for the extension.

Councilman Louis Bernst of the Village of Flat Rock, stated that they would like to make sure that the company is complying with the existing franchise first.

Mayor Cyrus Highlander of the Village of Flat Rock, recognized some advantages of a co-terminus expiration date for all franchises.

Mayor Art Stuenkel of the Town of Laurel Park, stated that they are still having problems with picture quality.

Don Zagorski stated that this is the best technology available.

Councilman Chuck McGrady of the Village of Flat Rock, inquired as to the process? County Manager David E. Nicholson indicated that Henderson County had used the services of a consultant in the past.

In response to a question regarding programming, Ms. Blythe stated that there would be a summer launch of new programming, that they were presently still in negotiations with programmers. The company did market surveys to determine the new programming. They have also tracked phone requests for programming.

Mayor Art Stuenkel stated that he wanted to wait until they saw the results of the upgrade.

Commissioner Moyer stated that the industry has placed itself in a bad position. If we cannot negotiate programming or rates, we can only wait and see what happens before we consider the extension.

No decisions were made. The meeting was just informational.

Meeting adjourned at approximately 3:00 p.m.

ATTEST:

Elizabeth W. Corn, Clerk Grady Hawkins, Chairman