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ORIGINAL
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
Dept: CITY ATTORNEY
Subject: RESOLUTION OF THE MAYOR AND
COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO DENYING THE TRANSFER OF
CONTROL OF THE CABLE TELEVISION
FRANCHISE FROM ADELPHIA
COMMUNICA TIONS CORPORA TION TO
COM CAST 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
INe.
From: JAMES F. PENMAN
City Attorney
Date: September 29,2005
Synopsis of Previous Council Action:
None.
Recommended motion:
Adopt Resolution.
Contact person: Michael Reiter
Supporting data attached: Staff Report
Ward:
All
FUNDING REQUIREMENTS: Amount:
Source:
CouncIl Notes:
1AbJ~_l_
Finance:
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Agenda Item No.
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STAFF REPORT
Council Meeting Date: October 3. 2005
TO: Mayor and Common Council
FROM: James F. Penman, City Attorney
DATE: September 29, 2005
AGENDA ITEM: RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO 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.
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. A
separate application was filed for another Adelphia controlled Cable Television Franchise within the
City.
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. Ifno action is taken, the franchise transfer is deemed approved by operation oflaw. The
1 20th day is October 7, 2005.
The City of San Bernardino commissioned an audit of Adelphia's franchise fees and utility
users' tax payments and the results are expected in late October. It is recommended that all of the
franchisee's obligations be met prior to the transfer of the Franchise.
The City of San Bernardino, through its outside counsel and consultants, have requested an
extension ofthe 120 day period from Time Warner. However, no such extension has been granted
in writing.
Since Adelphia has not met its obligations under the existing Franchise, and since Time
Warner has not given its written extension ofthe 120 day period, it is recommended that the transfer
be denied without prejudice.
It is requested that the following floor motion be adopted:
"That the Mayor and Common Council ofthe City of San Bernardino approve the 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 ofCAC Exchange I, LLC from Comcast Corporation to Time Wamer
Cable Inc."
1
RESOLUTION NO.
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.
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WHEREAS, Century- TCI California, L.P. ("Franchisee") is the authorized holder of a
franchise ("Franchise") that authorizes the construction, operation, and maintenance of a cable
television system within the City of San Bernardino ("Franchise Authority");
WHEREAS, on April 20, 2005, Comcast Corporation ("Comcast") and Time Warner NY
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
Communications Corporation ("Adelphia");
WHEREAS, in accordance with the provisions of an Exchange Agreement that was also
executed on April 20, 2005, Comcast, Time Warner Cable Inc., and their respective subsidiaries
agreed upon consummation of the asset purchase agreements referenced above, to exchange
certain cable systems including the Century- TCI California, L.P. franchised cable system serving
the City;
WHEREAS, on June 14, 2005, the Franchise Authority received two applications related
to proposed transfers of control of the existing Franchise held by Century- TCI California, L.P.
Each application included a FCC Form 394 titled "Application for Franchise Authority Consent
to Assignment or Transfer of Control of Cable Television Franchise." Supplemental information
was provided to the Franchise Authority by Time Warner Cable Inc. and Comcast Corporation on
July 25,2005;
WHEREAS, in accordance with Section 14.08.400 of the San Bernardino Municipal Code,
the Franchise Authority has the right to review and to approve the financial, technical, and legal
qualifications of the ultimate Transferee in connection with the proposed transfers of control of
the Franchisee and the proposed assignment of the Franchise; and
MR:ar [P:\REITER\Municipal\Cable\Franchise Transfer\Comcast Transfer Denial.wpd] 1
1 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.
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WHEREAS, the staff of the Franchise Authority has reviewed the documentation that
accompanied the FCC Forms 394 and additional information provided by the applicants, and has
concluded that the proposed ultimate Transferee does not have the requisite financial, technical,
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and legal qualifications to adequately perform, or to ensure the performance of, all obligations
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required of the Franchisee under the Franchise:
NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON
COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:
SECTION 1. In accordance with Section 14.08.400 of the San Bernardino Municipal
Code, the Franchise Authority denies consent to, and disapproves of, the proposed interim
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assignment of the Franchise, and denies the proposed ultimate transfers of control of the Franchise
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without prejudice.
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1 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.
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I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
Common Council of the City of San Bernardino at a
meeting thereof,
held on the day of
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COUNCIL MEMBERS: AYES
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ESTRADA
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LONGVILLE
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MCGINNIS
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DERRY
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KELLEY
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JOHNSON
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MCCAMMACK
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, 2005, by the following vote, to wit:
NAYS
ABSTAIN ABSENT
CITY CLERK
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The foregoing Resolution is hereby approved this
day of
,2005.
JUDITH V ALLES, Mayor
City of San Bernardino
Approved as to form and
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