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HomeMy WebLinkAbout30-City Administrator ORIGINAL CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Lori Sassoon, Assistant Subject: Resolution denying the assignment of a City Administrator cable television franchise by Adelphia Cablevision of Inland Empire, LLC to Time Warner NY Cable Dept: City Administrator's Office LLC, an indirect subsidiary of Time Warner Cable Date: November 29, 2005 Inc.;and a resolution denying the transfer of control of the cable television franchise from Adelphia Communications Corporation to Comcast Cable Holdings, LLC thereby denying the assignment of the cable television franchise by Comcast Cable Holdings, LLC to CAC Exchange I, LLC, and thereby denying a transfer of control of CAC Exchange I, LLC from Comcast Corporation to Time Warner Cable Inc. Meeting date: December 5, 2005 Synopsis of Previous Council Action: None. Recommended motion: Adopt resolutions Signature Contact persons: Lori Sassoon, Michael Reiter Phone:_ 5122 Supporting data attached: Staff Report Ward: All FUNDING REQUIREMENTS: Amount: none Source: Finance: I� Council Notes: Agenda Item No. i j:� bS STAFF REPORT Subject: Resolutions concerning the denial of franchise transfers related to the sale of Adelphia Communications to Time Warner Cable Backiround: On June 14, 2005, Comcast and Time Warner filed an FCC Form 394 Application with the City of San Bernardino asking for approval of a transfer of a Cable Television Franchise controlled by Adelphia Communications through Century-TCI California,L.P.to Time Warner Cable Inc.At the same time,Time Warner filed an FCC Form 394 Application with the City asking for approval of a transfer of a Cable Television Franchise controlled by Adelphia Communications Corporation to Time Warner Cable Inc. Ultimately, should both transactions meet all the necessary approvals, Time Warner subsidiaries would control both of the Adelphia franchises. Once a Form 394 is filed, the City has 120 days in which to approve or deny the franchise transfer. Section 14.08.400 of the San Bernardino Municipal Code allows the City to review and approve the financial,technical,and legal qualifications of Time Warner in connection with the proposed assignment of the franchise. If no action is taken, the franchise transfer is deemed approved by operation of law. Initially, the 1201" day was October 7, 2005. During that initial 120 day period,the City commissioned an audit of Adelphia's franchise fees and utility users' tax payments, and the audit results were expected in late October. In September,the City requested through its outside counsel and consultants an extension of the 120 day period from Time Warner to allow time for the audit to be completed. On October 3,Time Warner agreed to an extension to the first Council meeting in December(see attached letter). At this point, the City and Adelphia/Time Warner representatives are discussing the audit results, which were received in mid November. A settlement agreement will likely be recommended to the Mayor and Council in the coming weeks. The City through its outside counsel and consultants has requested another extension until the first Council meeting in January. However, Adelphia/Time Warner has not agreed to an extension in writing. It is recommended that all of the franchisee's obligations be met prior to the transfer of the Franchise. Since Adelphia has not met its obligations under the existing Franchise,and since Time Warner has not given its written extension until the first Council meeting in January, it is recommended that the transfer be denied without prejudice. Financial Impact: None by this action. If no action is taken,the franchise transfer requests will be deemed approved by operation of law. That inaction might impact the City's ability to collect payments due as a result of audit findings. Recommendation: Adopt resolutions .00T-03-05 11 :20 203 351 2254 P.02 R-340 Job-766 OCT-03-2005 14:29 JC LEGAL 203 351 2254 P.02 2lll Harbor nrivi, Patriela N. McCausland Nrunifiud„ 07706902 Assistant Chiel Counsel,Regulukpry_ lo(203-328-06M legal liu 203-3.51.2234 �rirh mccau�lundC�rH�ub1e rom TIME WARNER CABLE VIA Facsimile 909-384-5238 October 3, 2005 Douglas Calkins City of San Bernardino 300 N. D Street San Bernardino, CA 92418 Re: Adelphia/Time Warner Transaction: City of San Bernardino Dear Mr, Calkins: I am in receipt of Mr. Risk's Ietter of September 22, 2005, proposing an extension of the time regarding the 120-day transfer application approval time period for San Bernardino to act on the FCC Form 394 dated June 10, 2005. Accordingly, without waiving any of their respective rights under federal law, please let this letter serve as Time Warner's consent to an extension of time under FCC regulations for San Bernardino to act on the FCC Form 394 for the franchise held by Adelphia Cablevision of Inland Empire, LLC to the first Council meeting held in December 2005. We look forward to receiving a draft of the proposed transfer documents. Should you have any questions,please feel free to contact nie. Very truly yours, Time Warner cc: Kristy.Hennessey—Time Warner Cable 194925 ,OCT--- 05 11 :2 0 203 351 2254 P 03 R-340 Job-766 OCT-03-2005 14:29 IC LEGAL 203 371 2254 P.03 1vu Hurbnr Drive PatTieia V McCausland Slamlard„ CT 069U2 15.ifBtunt Chef Cniuisr f;Pgululary Tel 203-328-06411 Legal Fax 203-351-2254 trrshnirrausland@IWCah(c'.cont TIME WARNER_ CABLE VIA Facsimile 909-384-5238 October 3, 2005 Douglas Calkins City of San Bernardino 300 N. D Street San Bernardino, CA 92418 Re: Adelphia/Time Warner Transaction: City of San Bernardino Dear Mr. Calkins: I am in receipt of Mr. Risk's letter of September 22, 2005, proposing an extension of the time regarding the 120-day transfer application approval time period for Sari Bernardino to act on the FCC Form 394 dated June 10, 2005. Accordingly, without waiving any of their respective rights under federal law,please let this letter serve as Time Warner's consent to an extension of time under FCC regulations for San Bernardino to act on the FCC l orin 394 for the franchise held by Adelphia Communications Corporation to the first Council meeting held in December 2005. We look forward to receiving a draft of the proposed transfer documents. Should you have any questions, please feel free to contact me, Very truly yours, Time Warner cc: Kristy Hennessey—Time Warner Cable 194925 I RESOLUTION NO. C (OPY 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO DENYING THE TRANSFER OF CONTROL OF THE CABLE 3 TELEVISION FRANCHISE FROM ADELPHIA COMMUNICATIONS CORPORATION TO COMCAST CABLE HOLDINGS, LLC THEREBY DENYING THE ASSIGNMENT OF 4 THE CABLE TELEVISION FRANCHISE BY COMCAST CABLE HOLDINGS, LLC TO CAC EXCHANGE I, LLC; AND THEREBY DENYING A TRANSFER OF CONTROL OF 5 CAC EXCHANGE I, LLC FROM COMCAST CORPORATION TO TIME WARNER CABLE INC. 6 WHEREAS, Century-TCI California, L.P. ("Franchisee") is the authorized holder of a 7 franchise ("Franchise") that authorizes the construction, operation, and maintenance of a cable 8 television system within the City of San Bernardino ("Franchise Authority"); 9 WHEREAS,on April 20, 2005, Comcast Corporation("Comcast")and Time Warner NY 10 Cable LLC ("TWNY"), an indirect subsidiary of Time Warner Cable Inc., each entered into 11 12 separate definitive agreements to acquire, collectively, substantially all of the assets of Adelphia Communications Corporation ("Adelphia"); 13 14 WHEREAS, in accordance with the provisions of an Exchange Agreement that was also 15 executed on April 20, 2005, Comcast, Time Warner Cable Inc., and their respective subsidiaries 16 agreed upon consummation of the asset purchase agreements referenced above,to exchange certain 17 cable systems including the Century-TCI California, L.P. franchised cable system serving the City; 18 19 WHEREAS, on June 14, 2005, the Franchise Authority received two applications related 20 to proposed transfers of control of the existing Franchise held by Century-TCI California,L.P. Each 21 application included a FCC Form 394 titled "Application for Franchise Authority Consent to 22 Assignment or Transfer of Control of Cable Television Franchise." Supplemental information was 23 provided to the Franchise Authority by Time Warner Cable Inc. and Comcast Corporation on July 25, 2005; 24 25 WHEREAS, on October 3,2005,Time Warner gave written consent to extend the time for 26 the City to act on the Form 394 application until the first council meeting in December; 27 WHEREAS,in accordance with Section 14.08.400 of the San Bernardino Municipal Code, 28 the Franchise Authority has the right to review and to approve the financial, technical, and legal MR:ar[F:\REITER\Municipa]\Cable\Franchise Transfer\Comcasr Transfer Deniallwpd] I I RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO DENYING THE TRANSFER OF CONTROL OF THE CABLE 2 TELEVISION FRANCHISE FROM ADELPHIA COMMUNICATIONS CORPORATION TO COMCAST CABLE HOLDINGS,LLC THEREBY DENYING THE ASSIGNMENT OF 3 THE CABLE TELEVISION FRANCHISE BY COMCAST CABLE HOLDINGS, LLC TO CAC EXCHANGE I, LLC; AND THEREBY DENYING A TRANSFER OF CONTROL OF 4 CAC EXCHANGE I, LLC FROM COMCAST CORPORATION TO TIME WARNER CABLE INC. 5 6 qualifications of the ultimate Transferee in connection with the proposed transfers of control of the Franchisee and the proposed assignment of the Franchise; and 7 8 WHEREAS, the staff of the Franchise Authority has reviewed the documentation that 9 accompanied the FCC Forms 394 and additional information provided by the applicants, and has 10 concluded that the proposed ultimate Transferee does not have the requisite financial, technical, 11 and legal qualifications to adequately perform, or to ensure the performance of, all obligations required of the Franchisee under the Franchise: 12 NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON 13 COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 14 15 SECTION 1. In accordance with Section 14.08.400 of the San Bernardino Municipal 16 Code, the Franchise Authority denies consent to, and disapproves of, the proposed interim 17 assignment of the Franchise, and denies the proposed ultimate transfers of control of the Franchise without prejudice. 18 19 20 21 22 23 24 25 26 27 28 MR:ar[F:\REITER\Municipal\Cable\Franchise Transfer\Comcast Transfer Denia12.wpd] 2 I RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO DENYING THE TRANSFER OF CONTROL OF THE CABLE 2 TELEVISION FRANCHISE FROM ADELPHIA COMMUNICATIONS CORPORATION TO COMCAST CABLE HOLDINGS,LLC THEREBY DENYING THE ASSIGNMENT OF 3 THE CABLE TELEVISION FRANCHISE BY COMCAST CABLE HOLDINGS, LLC TO CAC EXCHANGE I, LLC; AND THEREBY DENYING A TRANSFER OF CONTROL OF 4 CAC EXCHANGE I, LLC FROM COMCAST CORPORATION TO TIME WARNER CABLE INC. 5 6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 7 Common Council of the City of San Bernardino at a meeting 8 thereof, held on the day of , 2005, by the following vote, to wit: COUNCIL MEMBERS: AYES NAYS ABSTAIN ABSRNT 9 10 ESTRADA LONGVILLE 11 MCGINNIS 12 DERRY 13 14 KELLEY JOHNSON 15 MCCAMMACK 16 17 CITY CLERK 18 19 20 The foregoing Resolution is hereby approved this day of , 2005. 21 22 JUDITH VALLES, Mayor 23 City of San Bernardino Approved as to form and 24 legal content: 25 By: 26 JAMES PENMAN City Attorney 27 28 MR:ar[F:\REITER\Municipal\Cable\Franchise Transfer\Comcwt Transfer Deniallwpdi 3 I RESOLUTION NO. 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO DENYING THE ASSIGNMENT OF A CABLE TELEVISION 3 FRANCHISE BY ADELPHIA CABLEVISION OF INLAND EMPIRE, LLC TO TIME WARNER NY CABLE LLC, AN INDIRECT SUBSIDIARY OF TIME WARNER CABLE 4 INC. 5 WHEREAS, Adelphia Cablevision of Inland Empire, LLC ("Franchisee") is the 6 authorized holder of a franchise ("Franchise") that authorizes the construction, operation, and 7 maintenance of a cable television system within the City of San Bernardino ("Franchise Authority"); 8 9 WHEREAS,on April 20, 2005, Comcast Corporation("Comcast")and Time Warner NY 10 Cable LLC ("TWNY"), an indirect subsidiary of Time Warner Cable Inc., each entered into separate definitive agreements to acquire, collectively, substantially all of the assets of Adelphia 11 12 Communications Corporation ("Adelphia"); 13 WHEREAS,on June 14, 2005, the Franchise Authority received from the Franchisee and 14 from Time Warner NY Cable LLC ("Transferee"), an application for the assignment of the 15 existing Franchise. This application included FCC Form 394 titled "Application for Franchise 16 Authority Consent to Assignment or Transfer of Control of Cable Television Franchise." 17 Supplemental information was provided to the Franchise Authority by the Transferee on July 22, 2005; 18 19 WHEREAS,on October 3,2005,Time Warner gave written consent to extend the time for 20 the City to act on the Form 394 application until the first council meeting in December; 21 WHEREAS,in accordance with Section 14.08.400 of the San Bernardino Municipal Code, 22 the Franchise Authority has the right to review and to approve the financial, technical, and legal 23 qualifications of the Transferee in connection with the proposed assignment of the Franchise; and 24 WHEREAS, The staff of the Franchise Authority has reviewed the documentation that 25 accompanied the FCC Form 394 and additional information provided by the applicant, and has 26 concluded that the proposed Transferee does not have the requisite financial, technical, and legal 27 qualifications to adequately perform, or to ensure the performance of, all obligations required of the Franchisee under the Franchise: 28 M R:ar[F:\REITER\Municipal\Cable\Franchise Transfer\Time Wamer Denia12 wpd] 1 I RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO DENYING THE ASSIGNMENT OF A CABLE TELEVISION 2 FRANCHISE BY ADELPHIA CABLEVISION OF INLAND EMPIRE, LLC TO TIME WARNER NY CABLE LLC, AN INDIRECT SUBSIDIARY OF TIME WARNER CABLE 3 INC. 4 NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON 5 COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 6 SECTION 1. In accordance with Section 14.08.400 of the San Bernardino Municipal 7 Code, the Franchise Authority denies consent to, and disapproves of, the proposed assignment of 8 the Franchise without prejudice. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MR:ar[F:\REITER\Municipa]\Cable\Franchise Transfer\Time Warner Deniallwpd] 2 I RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO DENYING THE ASSIGNMENT OF A CABLE TELEVISION 2 FRANCHISE BY ADELPHIA CABLEVISION OF INLAND EMPIRE, LLC TO TIME WARNER NY CABLE LLC, AN INDIRECT SUBSIDIARY OF TIME WARNER CABLE 3 INC. 4 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 5 Common Council of the City of San Bernardino at a meeting 6 thereof, held on the day of , 2005, by the following vote, to wit: 7 COUNCIL MEMBERS: AYES NAYS ABSTAIN ABSENT 8 ESTRADA 9 LONGVILLE 10 MCGINNIS 11 DERRY 12 KELLEY 13 JOHNSON 14 MCCAMMACK 15 16 CITY CLERK 17 18 19 The foregoing Resolution is hereby approved this day of , 2005. 20 21 JUDITH VALLES, Mayor 22 City of San Bernardino Approved as to form and 23 legal content: 24 25 By: - JAMES F. PENMAN 26 City Attorney 27 28 MR:ar[F:\REITER\Municipal\Cable\Franchise Transfer\Time Warner Deniallwpd] 3