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HomeMy WebLinkAbout23-City Manager .' ORIGINAL CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION Dept: City Manager's Office Subject: Resolution granting an extension of the cable franchises with Time Warner Cable, Charter Communications, and Mountain Shadows Cable From: Lori Sassoon, Assistant City Manager Date: November 30, 2006 MCC Meeting Date: December 18, 2006 Synopsis of Previous Council Action: January 2004 - Franchises extended until July 8,2004 by Resolution 2004-18 August 2, 2004 - Franchises extended until January 29, 2005 by Resolution 2004-249 January 24, 2005 - Franchises extended until July 28, 2005 by Resolution 2005-14 July 18, 2005 - Franchises extended until January 13, 2006 by Resolution 2005-236 January 9, 2006 - Franchises extended until July 7, 2006 by Resolution 2006-1 June 19, 2006 - Franchises extended until January 3, 2007 by Resolution 2006-173 November 21,2006 - Legislative Review Committee recommends extension of the franchises through January 2, 2008. Recommended Motion: Adopt resolution. (;lj~ Signature Contact person: Lori Sassoon Phone: 5122 Supporting data attached: slFlff report Ward: all FUNDING REQUIREMENTS: Amount: none Source: (Acct. No.) (Acct. Description) Finance: Council Notes: ~S'o .200 (, - "11..// Agenda Item No. ~ I a.) JfjDfo e e e CITY OF SAN BERNARDINO - REOUEST FOR COUNCIL ACTION STAFF REPORT Subiect: Resolution granting an extension of the cable franchises with Time Warner Cable, Charter Communications, and Mountain Shadows Cable Back2round: As the Mayor and Council are likely aware, the regulation and franchising of cable operators has changed dramatically in California as a result of the recent enactment of AB 2987. This bill, which was originally sought by telecommunications companies to grant them statewide franchises for the provision of video services, was expanded to include traditional cable operators. As a result, as local cable franchises expire across the state in future years, cable companies will have the ability to opt for a new state-issued franchise in lieu of a local one. Applications for state franchises will be available in the spring of2007, and the California Public Utilities Commission (CPUC) will be responsible for administering those franchises. State franchises cannot become effective until after January 2, 2008. In San Bernardino, the impacts of this new law are somewhat unique, as the City's three incumbent cable operators (Charter, Time Warner, and Mountain Shadows) are operating under short-term franchise extensions that will expire on January 3, 2007. A fourth franchise that is also owned by Time Warner will expire in February 2007. Staffs original plan was to pursue new franchises with each of the operators, and also to significantly update Municipal Code Chapter 14.08, which regulates cable television franchises. In fact, those efforts were underway before and also at the saJlle time AB 2987 was being considered. However, in light of the new law and the positions taken by the incumbent cable . operators, staff is recommending a different approach. As noted previously, the three (3) incumbent cable operators have been operating under extended franchises since January 2004. Franchise renewals were delayed first by the work related to the franchise transfer from Adelphia to Time Warner, and resolution and negotiation of the significant findings from the audit of Adelphia in recent years. Following the success of that audit effort, staff had recommended that an audit of Charter Cable be completed prior to the award of a new franchise, and in April 2006 the Mayor and Council approved the hiring of an auditor to complete that review. The Charter audit had been delayed in recent months by . Charter's unwillingness to provide certain documents, but those issues were recently resolved and the audit is moving forward. . While these efforts were underway, AB 2987 was passed. Both Charter and Time Warner have indicated to staff that they are unlikely to agree to a new local franchise during this interim period. Since a new franchise granted in this transitional time must be agreed to by both parties, any effort by the City to negotiate and gain agreement on a franchise is likely to be in vain. Given that situation, the proposed resolution will extend the incumbent franchises through January 2, 2008. This matter was discussed with the Legislative Review Committee on November 21, and the Committee recommended that the franchise extensions be approved. 1 tit tit tit CITY OF SAN BERNARDINO - REOUEST FOR COUNCIL ACTION STAFF REPORT - Continued If the incumbent operators apply for and are granted state franchises during the extension period, which is the action that staff would anticipate, those state franchises would likely become operative on January 2, 2008. The City's smallest cable provider, Mountain Shadows Cable, may elect for a local franchise due to the cost associated with applying for a state franchise. Staff has been in contact with them to see if they would be interested in a local franchise, and will proceed as appropriate. It should also be noted that in the near future, an update to the City's cable regulatory ordinance will be recommended to the Legislative Review Committee and then to the Mayor and Council. The City Attorney's Office has been working with the City's consultant and outside counsel to develop the ordinance. The ordinance needs updating in light of the significant changes in state law. Financial Impact: None by this action. Recommendation: Adopt resolution. 2 e e e 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO GRANTING AN EXTENSION OF THE CABLE FRANCHISES WITH TIME WARNER CABLE, CHARTER COMMUNICATIONS, AND MOUNTAIN SHADOWS CABLE. WHEREAS, Time Warner Cable, Charter Communications, and Mountain Shadows Cable (hereinafter "the Cable Companies") are duly authorized to operate cable television systems in the City of San Bernardino pursuant to Franchise Agreements granted by the City of San Bernardino; and WHEREAS, the Cable Companies have requested that the Franchises they hold to provide cable television service in the City of San Bernardino be renewed; and WHEREAS, the Franchise rights granted under the respective Franchise Agreements expired on December 31, 2003; and they were renewed by Resolution No. 2004-18 on January 20, 2004; by Resolution No. 2004-249 on August 2, 2004; by Resolution No. 2005-14 on January 24, 2005; and by Resolution No. 2005-236 on July 18,2005; by Resolution No. 2006-1 on January 9, 2006; and by Resolution No. 2006-173 on June 18,2006; and WHEREAS, the Franchise rights granted to Time Warner Cable dated February 21, 1997, under the authority of Ordinance MC 990, will expire on February 25, 2007; and WHEREAS, the City and the Cable Companies have been in the Franchise renewal process until recently, when the State's passage of AB 2987, the Digital Infrastructure and Video Competition Act of 2006, has made it unlikely that the parties will agree to a new Franchise before January 2, 2008; and WHEREAS, a state franchise issued to any incumbent cable operator shall not become operative prior to January 2, 2008; and Y1o,e?7. /~/ 18/~b e e e 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO GRANTING AN EXTENSION OF THE CABLE FRANCHISES WITH TIME WARNER CABLE, CHARTER COMMUNICATIONS, AND MOUNTAIN SHADOWS CABLE. WHEREAS, pursuant to Section 5930(b) of Division 2.5 of the Public Utilities Code, when an incumbent cable operator is providing service under an expired franchise or a franchise that expires before January 2, 2008, the local entity may extend that franchise on the same terms and conditions through January 2, 2008; and WHEREAS, the City is willing to grant an additional extension of the current Franchises through January 2, 2008, if the Cable Companies agree to abide by the terms and conditions of the existing Franchises during any such extension; NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS FOLLOWS: SECTION I. The Franchise rights granted to Time Warner Cable under the Franchise Agreement dated May 12, 1980 under the authority of Ordinance No. 3934, to Time Warner Cable dated February 21, 1997, under the authority 'of Ordinance MC 990, to Charter Communications under the Franchise Agreement dated November 12, 1961 under the authority of Ordinance No. 2395, and to Mountain Shadows Cable under the Franchise Agreement dated October 25, 1983 under the authority of Ordinance MC 319, are hereby extended through January 2, 2008, from the date of this Resolution under the existing terms and conditions, subject to the conditions below. SECTION 2. Under the extension granted herein, the Cable Companies shall be obligated to perform and comply with all terms, conditions, requirements, and limitations contained in their Franchise Agreements. SECTION 4. This Resolution shall take effect upon its adoption. . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 . . RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO GRANTING AN EXTENSION OF THE CABLE FRANCHISES WITH TIME WARNER CABLE, CHARTER COMMUNICATIONS, AND MOUNTAIN SHADOWS CABLE. 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 , 2006 by the following vote, to wit: COUNCIL MEMBERS: AYES NAYS ABSTAIN ABSENT ESTRADA BAXTER BRINKER DERRY KELLEY JOHNSON MCCAMMACK CITY CLERK The foregoing Resolution is hereby approved this _ day of ,2006 PATRICK J. MORRIS, Mayor City of San Bernardino Approved as to form: INTER OFFICE MEMORANDUM OFFICE OF THE CITY ATTORNEY CITY OF SAN BERNARDINO TO: Mayor and Common Council FROM: James F. Penman, City Attorney DATE: December 18, 2006 RE: Agenda Item Number 23 CC: Rachel Clark, City Clerk A clarification needs to be made on Agenda Item Number 23 regarding Time Warner Cable's extension ofthe Cable Franchise. The item should state the entity's name as "Time Warner, New York, LLC, an indirect subsidiary of Time Warner Cable, Inc." rather than only Time Warner Cable. 1 RESOLUTION NO. 2006-441 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO GRANTING AN EXTENSION OF THE CABLE FRANCHISES WITH 3 TIME WARNER, NEW YORK, LLC, AN INDIRECT SUBSIDIARY OF TIME WARNER CABLE, INC., CHARTER COMMUNICATIONS, AND MOUNT AIN SHADOWS CABLE. 4 5 WHEREAS, Time Warner, New York, LLC, an indirect subsidiary of Time Warner 6 Cable, Inc., Charter Communications, and Mountain Shadows Cable (hereinafter "the Cable 7 Companies") are duly authorized to operate cable television systems in the City of San Bernardino 8 pursuant to Franchise Agreements granted by the City of San Bernardino; and 9 WHEREAS, the Cable Companies have requested that the Franchises they hold to 10 provide cable television service in the City of San Bernardino be renewed; and 11 WHEREAS, the Franchise rights granted under the respective Franchise Agreements 12 expired on December 31,2003; and they were renewed by Resolution No. 2004-18 on January 20, 13 2004; by Resolution No. 2004-249 on August 2,2004; by Resolution No. 2005-14 on January 24, 14 2005; and by Resolution No. 2005-236 on July 18,2005; by Resolution No. 2006-1 on January 9, 15 2006; and by Resolution No. 2006-173 on June 18.2006; and 16 WHEREAS, the Franchise rights granted to Time Warner, New York. LLC, an indirect 17 subsidiary of Time Warner Cable, Inc. dated February 21,1997, under the authority of Ordinance 18 MC990, will expire on February 25,2007; and 19 WHEREAS, the City and the Cable Companies have been in the Franchise renewal 20 process until recently, when the State's passage of AB 2987, the Digital Infrastructure and Video 21 Competition Act of2006, has made it unlikely that the parties will agree to a new Franchise before 22 January 2, 2008; and 23 WHEREAS, a state franchise issued to any incumbent cable operator shall not become 24 operative prior to January 2,2008; and 25 WHEREAS, pursuant to Section 5930(b) of Division 2.5 of the Public Utilities Code, 26 when an incumbent cable operator is providing service under an expired franchise or a franchise that 27 expires before January 2, 2008, the local entity may extend that franchise on the same terms and 28 conditions through January 2, 2008; and TimeWarnerCable,Reso 1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO GRANTING AN EXTENSION OFTHE CABLE FRANCHISES WITH 2 TIME WARNER, NEW YORK, LLC, AN INDIRECT SUBSIDIARY OF TIME WARNER CABLE, INC., CHARTER COMMUNICATIONS, AND MOUNTAIN SHADOWS CABLE. 3 4 WHEREAS, the City is willing to grant an additional extension ofthe current Franchises 5 through January 2, 2008, if the Cable Companies agree to abide by the terms and conditions of the 6 existing Franchises during any such extcnsion; 7 NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON 8 COUNCIL OF THE CITY OF SAN BERNARDINO, AS FOLLOWS: 9 SECTION 1. The Franchise rights granted to Time Warner, New York, LLC, an indirect 10 subsidiary of Time Warner Cable, Inc. under the Franchise Agreement dated May 12, 1980 under 11 the authority of Ordinance No. 3934, to Time Warner, New York, LLC, an indirect subsidiary of 12 Time Warner Cable, Inc. dated February 21, 1997, under the authority of Ordinance MC 990, to 13 Charter Communications under the Franchise Agreement dated November 12, 1961 under the 14 authority of Ordinance No. 2395, and to Mountain Shadows Cable under the Franchise Agreement 15 dated October 25, 1983 under the authority of Ordinance MC 319, are hereby extended through 16 January 2, 2008, from the date of this Resolution under the existing terms and conditions, subject 17 to the conditions below. 18 SECTION 2. Under the extension granted herein, the Cable Companies shall be obligated 19 to perform and comply with all terms, conditions, requirements, and limitations contained in their 20 Franchise Agreements. 21 SECTION 3. This Resolution shall take effect upon its adoption. 22 III 23 I I I 24 I I I 25 I I I 26 I I I 27 III 28 III TimcWarnerCable,Reso 2 1 RESOLUTION OF THE MA YORAND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO GRANTING AN EXTENSION OF THE CABLE FRANCHISES WITH 2 TIME WARNER, NEW YORK, LLC, AN INDIRECT SUBSIDIARY OF TIME WARNER CABLE, INC., CHARTER COMMUNICATIONS, AND MOUNT AIN SHADOWS CABLE. 3 4 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and Common Council of the City of San Bernardino at a Joint regular meeting thereof, held on the 18th day of December , 2006 by the following vote, to-wit: 5 6 7 COUNCIL MEMBERS AYES NAYS ABSTAIN ABSENT ESTRADA ~ BAXTER ----1L BRINKER ----X- DERRY ----X- KELLEY ---X- JOHNSON ----X- MC CAMMACK ----1L 8 9 10 11 12 13 14 15 y 16 ! / 1"~ayr7'J~~e~::CCl:~,;~:~k/ i). r '.i ~ 17 The foregoing resolution is hereby approved this J.'~. 18 ~_.-'\'''r----l?:-'''-'--'/ PAT CK J. MQR!{IS,l)'ayor . f San B~rnardihtr 19 20 Approved as to form: 21 22 23 24 25 26 27 28 TimeWarncrCablc,Reso ]