Attachment 1. Adelphia Separation Plan
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- Debra Morgan
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2 Attachment 1 Adelphia Separation Plan
3 ADELPHIA SEPARATION PLAN Time Warner Cable will separate the Adelphia system to be divided between us and the consortium of Local Franchise Authorities (the Consortium ). This plan outlines the steps necessary to complete this separation including a brief review of the current system layout, followed by a recap of separation issues, details of the separation components including estimated cost, and a brief list of transitional issues not covered in this plan. System Overview The portion of the Adelphia system involved in the separation includes: Total Headends - One in Mooresville Total Nodes Total Hubs - One in Statesville Total Plant Miles Customers - 38,889 estimated SEPARATION ISSUES Assumptions: 1. This plan is based on the information available to Time Warner Cable as of August 25, 2006 and all cost listed in this document are estimates. The plan may need to be revised if additional information collected by field engineering and verification of Adelphia s system maps and other engineering data prompt any substantive changes to our assumptions. 2. Separation must be completed prior to the closing of the purchase by the Consortium. Time Warner Cable will use commercially reasonable efforts to complete the separation within one hundred twenty days after the date the Consortium elects to purchase; however, factors outside the reasonable control of Time Warner Cable could delay completion including: a. Material Delivery or damages in shipment. b. Acquisition of Construction and Encroachment Permits. c. Weather or other acts outside the control of Time Warner Cable. d. Delay in closing of acquisition of land for hub site. 3. Consortium Cities will work with TWC to expedite encroachment permits required for underground construction and any required pole attachment permits. 4. Underground construction shall use the directional bore method to meet timeline for separation. 5. Mooresville Headend will transition to Consortium upon close. 6. Termination of all optical transport to Statesville and TWC designated nodes will occur in the Mooresville Headend prior to transfer to Consortium. 7. The system currently includes a total of one hundred and thirty nine (139) nodes (added Sher 04A, a new construction node) receiving services from the Mooresville Headend, including the nodes fed from the Statesville Hub. a. Ninety two (92) nodes are served directly from the Mooresville Headend, of which twenty four (24) nodes share a footprint between either the City of Mooresville and Iredell County or the City of Troutman and Iredell County. These twenty four (24) will be allocated between Time Warner Cable and the Consortium to minimize splitting nodes in the field. b. Forty-nine (49) nodes in the Consortium areas including North Mecklenburg County, Davidson, Cornelius, Huntersville, Mooresville and Troutman will maintain fiber connectivity to the Mooresville Headend and therefore continuity of optical service post separation. Nodes in these Consortium areas will not require any construction attention for separation.
4 c. Forty three (43) nodes in the Time Warner Cable areas of Iredell County including portions of Mooresville and Troutman footprints will require construction of new transport and distribution fiber for separation. d. One node West1, in Mooresville will be split between Time Warner Cable and Consortium Cities creating Node West1A and increasing the Consortium s total nodes to fifty (50). 8. Time Warner Cable must construct one new hub to facilitate the separation. 9. Some cleanup may be required post separation where drops are found to feed from one parties system to customers in another parties system. In the Consortium communities of Mooresville and Troutman, Twenty four (24) nodes overlap areas that lie within the cities limits and areas (Iredell County) that will continue to be serviced by Time Warner Cable post separation. Time Warner Cable and representatives from the Consortium met August 22, 2006 and preliminarily agreed to allocate eleven of theses nodes to the Consortium and thirteen to Time Warner Cable final allocation of nodes will be determined upon completion of the ride out. With the addition of Sher 04A the Consortium total rises to 12 nodes being allocated to the consortium. All nodes are preserved in whole with the exception of node West 1, which will be physically split in the field into West 1 and West 1A. The list of node assignments between parties follows: Time Warner Nodes Consortium Nodes Troutman Troutman Trout05 Trout01 Trout03 Mooresville Mooresville Bral01A West05 West10 Bral 01 West03 More02 West04 West01* West01A* More01 More11 (morehe) Sher03 More12 (morehe) Sher04 More05 East02 Sher01 East03 Sher 04A East05 West02 More06 Total 13 Total 12 * Node West 1 will be split in the field into West 1 and West 1A. At the end of the separation, Time Warner Cable will have ninety (90) nodes fed from the Statesville hub and one new hub. The Consortium will have fifty (50 with Sher 04A) nodes, all fed from the Mooresville Headend. These numbers are based on the Adelphia Headend Combiner Report which does not reconcile to the Adelphia system prints. SEPARATION COMPONENTS Transport Fiber, Distribution Fiber and Node Swaps and Splits Time Warner Cable will build a new and distinctly separate transportation and distribution fiber overlay in order to separate the system and provide service to the nodes coming to TWC including fifty one (51) miles of aerial construction and twenty five (25) miles of underground. Completely new coaxial distribution cable will also be constructed in any locations where it is necessary so that TWC and the Consortium do not share any aerial strand or underground facilities. The required work and estimated costs
5 break down in two main categories, as described below. All costs set forth below are estimates and are subject to change. Stand-Alone Transport Fiber: (Ttl; $332,323.46) One 48 count fiber transport link will be built to connect TWC existing plant outside Cleveland, North Carolina to the Statesville hub. The link from the Cleveland fiber intercept point to Statesville is 16.3 miles. Within this path we have 14.3 miles that will contain coax, nodal fiber and transport fiber. The remaining 2 miles will be a newly constructed fiber path for transport only. The transport fiber path from Cleveland back to Salisbury (a distance of 15.3 miles) is planned to be carried over an existing TWC fiber path and there are no costs currently allocated within this plan for the use of the 15.3 miles owned by TWC (see map). A second 48 count fiber transport link will be built to connect the Statesville Hub to a new TWC hub to be built north of Mooresville in Iredell County (see map). A third 48 count fiber transport link will be built to connect the new TWC hub to an existing TWC fiber tie point near the Cabarrus/Iredell County boarders. The link from the new Hub North of Mooresville back to the Cabarrus/Iredell boarder follows a route path of miles. Within this path, miles will contain coax, nodal fiber and transport fiber. Only 1.5 miles of the mile path is fiber transport path specific. From the Cabarrus/Iredell boarder back to the Kannapolis Hub, TWC will then dedicate an existing transport path (14.9 miles) and fiber to complete the link. There are no costs currently allocated within this plan for the use of the 14.9 miles owned by TWC (see map). Distribution Coax/Fiber/Node Swaps and Splits: (Ttl; $3,136,476.36) Six (6) count distribution fiber cables will be constructed to service all nodes coming to Time Warner Cable. These fiber runs will terminate at node locations or intersect existing Adelphia fiber in the field to reduce construction cost. Other existing Adelphia distribution fiber will be left intact to maintain service to nodes going to the Consortium. Six (6) count distribution fibers will be constructed to service all thirteen (13) nodes coming to Time Warner Cable as a result of swaps listed on page one. One node in Mooresville, West 1, will be split in the field to form West 1 and West 1A. A new node and power supply will be installed to service West 1 for TWC. West 1A will go the Consortium. TWC will make any necessary design changes and place cable, actives and passives to effectively split the distribution plant in West 1. Cost Breakout: Stand-Alone Transport Fiber Costs $332, Kannapolis to Iredell Hub; $111, Cleveland to Statesville Hub; $168, Iredell Hub to Statesville; $52, Distribution Coax/Fiber/Node Swaps and Splits $3,136, Construction Cost $2,636, Fiber Cable $354,905 Fiber Splicing $89,402 Field Walkout $55,800 Grand Total, Field Construction $3,468,799.82
6 Hub Construction TWC will transition a total of forty two (42) nodes, thirty five (35) to a new hub in Iredell County and seven (7) to the existing Statesville hub. The transition requires the following steps: Land acquisition (1/2 acre) and site preparation Design and purchase of one hub building approximately 720 sq. ft. Purchase hub electronics Installation of equipment including wiring integration and documentation Estimated cost to build the hub includes: Land, site preparation and Power $90,000 Hub building $461,000 Hub electronics $867,000 Transport/CMTS $540,000 (error correction, dropped original price $170,000) Total: $1,958,000 Hub Construction Assumptions and Variables: The cost for land, site preparation and 3-phase power estimated based on historical data. The close date for land may vary based on availability and zoning issues that require action. The property cost may increase due to location and local market conditions. The cost of electronics may vary due to the optical loss budgets, which can only be determined post walkout and design. Other electronic items, e.g., IRDs, CherryPickers, etc., are estimated based on the current channel lineup that will be duplicated at the hubs. Vendor lead times for equipment may also shift the projected timeline as outlined above. TOTAL SYSTEM SEPARATION COST ESTIMATE Construction $3,468,799 Hub & Electronics $1,958,000 Total $5,426,799 TRANSITIONAL ISSUES NOT INCLUDED IN THE SEPARATION PLAN Transition Customer Premise Equipment TWC will migrate data to our DNCS in Charlotte from the Adelphia DNCS in Mooresville approximately one week after billing migration. The Consortium will need to arrange a second DNCS data migration from TWC DNCS back to the Consortium DNCS in Mooresville post separation. The Consortium is responsible for all expenses related to this second migration. TWC will provide reasonable assistance with the migration, including requesting necessary assistance from Scientific Atlanta.. The Consortium will be solely responsible for the payment of any fees charged by Scientific Atlanta for such work. Billing System Conversion TWC plans to convert Adelphia customer and homes passed data from the Adelphia AMDOC billing system to ICOMS. The Consortium will need to arrange a second conversion to their billing system to coincide with separation. TWC can convert ICOMS billing and homes passed data, and then transfer it to the
7 Consortium s billing system. Convergys can assist with project management, subject to the payment of fees which will be the sole responsibility of the Consortium. Convergys s programming and consulting fees are partially based on the Consortium billing system vendor. Convergys can develop a program to identify customers by Node(s). This will act as the driver file to process base de-conversion programs. Estimated timing, 10 Hours Convergys can process de-conversions data. Estimated timing, 8 Hours each run (Typically new vendor requires several test de-conversion runs and then a final de-conversion file) De-converted customers can be purged in ICOMS after go live. Estimated timing, 8 Hours Estimated range to produce and hand off customer data = 26 Hours - 50 Hours. Costs will be billed to the Consortium at Convergys s programming rate per hour. HSD System Conversion TWC will provide an electronic copy of all pertinent customer/hardware data to the Consortium. All tasks performed to merge all HSD customer data into the Consortium s database will be the sole responsibility of the Consortium. TWC will stand ready to answer questions pertinent to the transfer. Assumptions: 1. De-conversion programs will be processed on Charlotte's AS/400 and the de-conversion data will also reside on the AS/ TWC can FTP or ship the de-conversion extracts to the Consortium s new billing vendor. 3. TWC can process and provide as necessary any ICOMS reports for balancing services, dollars, etc. 4. TWC can work with the Consortium s new billing vendor as it relates to the data being de-converted. 5. Estimate only includes the extract of raw data via Convergys standard de-conversion programs. 6. Consortium will probably need Convergys to consult on the process, at additional cost. TWC Proposal for Division of Adelphia owned Real Property There are three Adelphia owned properties that the parties need to divide in an equitable manner: 1. Headend and Office Building 420 South Academy Street, Mooresville Approximately 7,500 square feet. 2. Customer Service Payment Center/Warehouse 435 S. Broad Street, Mooresville Approximately 7,500 square foot wood and brick building. 3. Car Port Parking and Mechanics Work Area 420 South Academy Street, Mooresville Mechanics area/storage--approximately 4,500 square feet. Car port (roof only building)--approximately 6,250 square feet.
8 TWC proposes that, upon close, the Consortium would take title to the Headend and office building and all contents. TWC would, upon close, take title to the customer service payment center and warehouse. Contents of the customer service payment center would go to TWC. With respect to the car port parking and mechanics area, if the Consortium is interested in having this building, TWC is willing to allow the Consortium acquire it, together with contents related to vehicle maintenance, for $275,000. If the Consortium is not interested in having this building, TWC may elect to purchase the building at the same price. All inventory at all of the above locations that is used to run and maintain the system outside of the Headend through the customer premises shall be allocated between the parties based on percentages of subscribers.
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