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HomeMy WebLinkAbout2006-33 cable adelphiaRESOLUTION NO. 2006-33 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UKIAH CONDITIONALLY AUTHORIZING THE ASSIGNMENT OF A CABLE TELEVISION FRANCHISE AND CABLE SYSTEM BY CENTURY MENDOCINO CABLE TELEVISION, INC. D/B/A ADELPHIA CABLE COMMUNICATIONS TO CABLE HOLDCO EXCHANGE V, LLC AND A CHANGE OF CONTROL TO COMCAST OF INDIANA/MICHIGAN/TEXAS, LP, A SUBSIDIARY OF COMCAST CORPORATION WHEREAS: A. Century Mendocino Cable Television, Inc. d/b/a Adelphia Cable Communications ("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 Ukiah ("Franchise Authority"). Franchisee is a subsidiary of Adelphia Communications Corporation ("Adelphia"); and B. On April 20, 2005, Comcast Corporation ("Comcast") and Time Warner NY Cable LLC ("TWNY"), an indirect subsidiary of Time Warner Cable Inc. ("TWC"), each entered into separate definitive agreements to acquire, collectively, substantially all of the assets of Adelphia for a total of $12.7 billion in cash (of which TWNY will pay $9.2 billion and Comcast will pay the remaining $3.5 billion) and 16% of the common stock of Time Warner Cable Inc.; and C. 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 owned by affiliates of Time Warner Cable Inc. or Comcast, respectively, together with certain cable systems to be acquired in the asset purchase transactions. The asset purchase transaction by TWNY that includes the cable franchises of the Franchise Authority is not, however, dependent upon the consummation of these "cable swaps" transactions, nor upon certain redemption transactions between TWC and whereby TWC, the parent company of TWNY, will redeem Comcast's 17.9 percent equity interest in TWC, in exchange for $1.9 billion in cash plus 100 percent of the common stock of a TWC subsidiary that will own cable systems located in four states other than California; and D. On June 15, 2005, the Franchise Authority received two applications relating to proposed transfers of control of the existing Franchise held by Century Mendocino Cable Television, Inc. Each application included a separate Federal Communications Commission (FCC) Form 394 titled "Application for Franchise Authority Consent to Assignment or Transfer of Control of Cable Television Franchise." Together, these applications describe an initial transaction which would transfer the assets of Century Mendocino Cable Television Inc. (the assignor) to Cable Holdco Exchange V LLC (presently a subsidiary of Time Warner Cable, Inc.) ("New Franchisee"). Then, as part of a separate "Exchange Transaction" described in the second FCC Form 394, control over Cable Holdco Exchange V LLC will be transferred from Time Warner Cable Inc. ("Transferor") to Comcast of Indiana/Michigan/Texas, L.P., a Delaware limited partnership ("Transferee"). These two transactions are likely to close contemporaneously and in direct succession. Should both of these transactions occur, the Franchise will have been transferred to Cable Holdco Exchange V, LLC, which will be a subsidiary of Comcast of Indiana/Michigan/Texas, L.P., provided the Franchise Authority has so consented. Supplemental information concerning the Adelphia Transaction and the Exchange Transaction was provided to the Franchise Authority by Time Warner Cable Inc. and by Comcast on July 25, 2005; and E. In accordance with Section 13.1 of an Agreement between the City of Ukiah and Franchisee Granting Nonexclusive Rights to Construct and to Operate a Cable System in the City of Ukiah and Setting Forth Terms and Conditions Relating to the Exercise of those Rights ("Adelphia Franchise Agreement"), the Franchise Authority has the right to review and to approve the financial, technical, and legal qualifications of a proposed transferee in connection with a proposed assignment of the Franchise. The Franchise Authority requested additional information from Time Warner Cable in identifying the legal and technical qualification of Cable Holdco Exchange V, LLC and Comcast of Indiana/Michigan/Texas, LP. The company provided additional disclosures regarding the New Franchisee and Transferee; and F. The staff of the Franchise Authority has reviewed the documentation that accompanied FCC Form 394 and, based upon the representations set forth in that documentation, has concluded that the proposed New Franchisee and Transferee have the requisite financial, technical, and legal qualifications to adequately perform, or to ensure the performance of, all obligations required of the New Franchisee under the Franchise, and that the New Franchisee will be bound by all existing terms, conditions, and obligations of the Franchise as it currently exists or as it may be modified or superseded by the parties.. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF UKIAH RESOLVES AS FOLLOWS: Section 1. In' accordance with Section 13.1 of the Adelphia Franchise Agreement, the Franchise Authority, in this "Franchise Assignment Consent Resolution" consents to and approves the proposed assignment of the Franchise to Cable Holdco Exchange V, LLC, which upon the closing of the asset purchase transaction will be an indirect wholly-owned subsidiary of Time Warner Cable Inc., and will be qualified to conduct business as a limited liability company in the State of California. The Franchise Authority further consents to the proposed transfer of control over Cable Holdco Exchange V, LLC from Time Warner Cable Inc. to Comcast of Indiana/Michigan/Texas, LP. In the event that the New Franchisee and/or any affiliate modify the pertinent transactions in any manner that would result in the Franchise being transferred to any entity other than Cable Holdco Exchange V, LLC, New Franchisee and any contemplated party must first obtain prior written approval from the Franchise Authority, and adhere to all applicable procedures established by law. Section 2. The authorization, consent and approval of the Franchise Authority to the proposed assignment is conditioned upon compliance by the New Franchisee or the Transferee with the following requirements: (a) Within sixty days after the adoption of this resolution, the New Franchisee and the Transferee shall fully execute and file in the office of the City Clerk an "Assignment and Assumption Agreement" in substantially the form attached to this resolution as Exhibit A. Any changes effected upon this Exhibit A shall render the "Assignment and Assumption Agreement," voidable, at the option of the Franchise Authority. In order to be considered complete, this filing of the "Assignment and Assumption Agreement must include a Schedule I executed by Comcast Cable Communications Holding, Inc., in the form attached to this resolution's Exhibit A. The Mayor of the City is authorized to execute that document and thereby evidence the written consent of the Franchise Authority to the assignment and assumption of all rights and obligations under the Franchise. (b) An original or conformed copy of the written instrument evidencing the closing and consummation of the transactions involving the proposed assignment of the Franchise must be filed in the office of the City Clerk within sixty days after that closing and consummation. (c) Approval, by the City Manager, or her designee, that all of the following issues have been adequately addressed to the satisfaction of the City Manager, or her designee within sixty days after the date of closing of the transactions: (i) (ii) (iii) (iv) (v) (vi) Staffing and technical measures have been implemented to ensure adequate telephone call center performance, reporting capabilities, and transition programs to provide service as Time Warner Cable; Staffing and technical measures have been implemented to ensure adequate public, educational, or governmental (PEG) channel signal transmission quality; All necessary insurance policies, endorsements or certificates, as required by the Franchise, including, without limitation, applicable "additional insured" language shall been provided to the City Manager or her designee; All necessary security provisions of the Franchise, including, but not limited to, cash deposits, surety funds, construction bonds, and/or any other security as approved by the City Manager or designee, shall have been provided to the City Manager or her designee; The City Manager or her designee shall have reviewed and approved the location(s) of franchise financial records pertaining to Franchise fee reviews; The City Manager or his designee shall have reviewed and approved the location(s) of other cable system records related to Franchise compliance; (vii) The City Manager or her designee shall have reviewed and approved the location for providing advertising spots; (viii) The New Franchisee shall have demonstrated to the City Manager or her designee activation and testing of Emergency Override system; and (ix) The New Franchisee shall have demonstrated to the City Manager or her designee an adequate program for providing notice to subscribers of, and implementing, account transition, including, without limitation, e-mail account transitioning and domain name changes. Section 3. If any one or more of the conditions set forth above in Section 2 of this Resolution is not satisfied within the period of time specified in that paragraph, then the authorization and consent of the Franchise Authority to the proposed assignment as provided for in this resolution will be revoked and rescinded without further action by the Franchise Authority, and the FCC Form 394 application will be denied in all respects as of the date of adoption of this resolution. Section 4. The parties agree that a breach of this Resolution will constitute a breach of the franchise agreement. Section 5. The City Clerk is directed to transmit a certified copy of this resolution to the following persons: Mr. Roger Keating, President Los Angeles Division Time Warner Cable Inc. 959 South Coast Drive, Suite 300 Costa Mesa, CA 92626 Brad M. Sonnenberg, Esq. Executive Vice President, General Counsel and Secretary Adelphia Communications Corporation 5619 DTC Parkway Denver, CO 80111 Sheila Willard, Senior Vice President Comcast Cable Communications, LLC 1500 Market Street, 28th Floor, West Tower Philadelphia, PA 19102 Section 6. Resolution. The City Clerk is directed to certify to the passage and adoption of this PASSED AND ADOPTED at a regular meeting of the Ukiah City Council on January 18, 2006, by the following roll call vote: AYES: NOES: ABSENT: ABSTAIN: Councilmembers Crane, McCowen, Rodin, Baldwin, and Mayor Ashiku None None None ATTEST: Marie Ulvila, City Clerk /M~rk Ashiku, Mayor