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Home My WebLink About1999 Resolution No. 003•,. • RESOLUTION NO . .,2_ SERIES OF HJ99 A RESOLUTION OF THE GJTY OF ENGLEWOOD, COLORADO CONSENTING TO THE TRANSFER OF CONTROL OF THE CITY'S CABLE TELEVISION SYSTEM FRANCHISE TO AT-&-T CORPORATION. \VHERF;AS, on April 7, 1980, tho City of Englewood, Colorudo 1the "City") granted to Mountain States Video , Inc., ("FrRnchisee''), a Franchiue to own and operate a cable television system in the City as set forth in Ordinance No. 4, Series of 1980, o.nd entered into a Franchise Agreement with the Franchi8ee dated as of April 7, 1980, pursuant to Ordinance NO. 4, Series of 1980; and WHEREAS, Franchisee is a subsidiary of, and ccntrolled by Tele-Communications , Inc., a Delaware corporation ("TCI"); and WHEREAS, Section 23 of the Francnise requires the City's consent to any tra nsfer of ownership or control thereof; and WHEREAS, TC) has entered into an Agreement and Plan of Restructuring and Merger (the "Merger Agreement'') with AT-&-T Corp ., a New York corporation ("AT-&-T"), and Italy Merger Corp ., a Delaware corporation ("Italy") which is a direct wholly owned subsidiary of AT-&-T, for the purposes of the merKer of Italy with and into TC); and . WHEREAS , this merger will effect• change of central of TC! and the Franchise pursuant to the Francltise; ao:! WHEREAS, pursus:it to Section 23 of the Franchise, and 47 U.S.C. §537, as amended . TCJ and AT-&-T hav• requested that the City approve the transfer of control of the Franchise from TCI to AT-&-T; and WHEREAS , the City has investigated both the status of the Franchise, the Franchisee's compliance therewith, and the technical, legal and financial ability of AT-&-T to control the Franchisee 's compliance lrith the Franchise; and WHEREAS, ba·.ed upon the City's investigation and representations made to the City by TCJ and AT-&-T, ,,pon which the City is relying, the City is prepared to approve the transfer of control of the Franchise £rem TC! to AT-&-T, pursuant to the condition,, described herein; NOW , THEREFORE, I.IE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ENGLEWOOI), COLORJ..DO , AS FOLLOWS : ~-The City hereby consenta to and approves the transfer of control of the Franc'tise fro m TCI to AT-&-T. ~-The City confirms that the Franchise is currently in full force and effect and is t>eing extended on a month•to-month basis until a new agreement is finalized . ~-This Resolution appr ·i ng the transfer of central is based in part upon the follo'l\ing representations and ack ledgmenta made by Franchisee, TC) and AT-&-T to the City, all of which are considered material and have been relied upon by the City: • • (•I That the Merger Agreement, and nil of the atlachmenta tu that documet!t. p·1ovided to the City with FCC Form 394 ( except for thoae matariala which have been redacted pursuant to law, •nd are identified b;-title or topic in the Merpr AgreemP.nt and ita attachments) constitutes the entire agreement regardinJ the merger between TCI, Italy and AT-&-T; (b) That additional services provided over the cab!e ayatem to aubacribers in the Franchise area, presently and during the term of the Franchiae and any extensions thereof. shall, to the extent permitted by federol law, be conaidered cable ""rvices. By way of example, and not by limitation, TCl'a @Home content• enriched cable internet access service, currently ie considered a cable service pursuant to Title VI of the Communications Act of 1934, aa amended by the Telecommunications Act of 1996, and is not a telecommurucations 11ervice; (c) That Franchisee shall comply with all lawful ,..quirements with re ,pect to nondiscriminatory access to the Franchisee's cable modem platform for providers nf internet and on-line &!Vices; (d) That all customer service standards adopted by the Greater Metro Telecommunications (',0naortium remain ill full force and effect, and Franchisee will maintain staffing levels neceaaary to meet !hose standards, and all federal regulations regarding technical standards of cable ayotema; (e) That no future il:tra-corporate transfers, mergers, or other changes ,-f ownership or control, affecting the Franchiae, will change the obligations or t,b•.ti ,y of Franchisee to the City with respect to any of the terms, conditions and obligntions of the Franchisee, unle88 prior approval is granted by the City in writing; (f) That if Franchisee receives a written request from the City by June 30, 1999, that on or before Docember 31 , 1999, Franchisee, TC! and/or AT-&-T, shall, at ita sole expense , conclude a review of the f'ranchise, and shall advise the City in writing of any provision of the Franchise which it believe• is no lon3or applicable due to a change in existing law, or for any other reaROn. 'fhis review will be conducted in good faith by Franchisee, TCI and/or AT-&-T, but by doing so, I•'ranchiaee, TCI •nd/or AT-&-T does not waive the right to challenge in the future any prov'sion in the Franchise aa no longer •pplicable under eriating law, regardleaa of whether such provision was noted in the review . That this review will be undertaken does not require the City's agreement with any opinions or conclusions it may receive from Franchisee, TC! or AT-&-T. Any disagreements between the parties will be eddreaaed as the parties see 6t at that time; (g) That Franchisee, TCI and/or AT-&-T , will comply with all applicable laws regarding rates for cable services within the Franrhise area and all applicable laws covering issues of crose subsidization; (h) That in the event of any failure to comply with these representations and/or acknowledgments , or any misrepreseL...ct.tions 1.X>ncerning the same, the City may enforce any penalty provisions pursuant to t'Je Franchise and exercise any other remedy available to it by law . • fild;iwU. By p-of thia Reoolution. the City maku no repreaentatio1111 concerninJ whether any violationa or non-eompliance i•,_ emt with re1pect to th,, Frt.1 :llile. Nothing in thia Re10lution oball be am,trued by the Franchiaee, TCI, or AT-,.,T, u precluding the City fro.m addreuinc llDY prior act■ of noncompliance by Fran,~11-, purouant to Iha torma of the Fruchiae. ~-Thia Reoolution ,hall t.ake effect upon the clooing of the Mtl'I' \gtffment. ~-Thia Reoolution ia conditionad 1J1,0n approval oi th• tranuctioc between TC!, AT -&-T and Italy, by their respective 1hareholden,, an,! all required federal !IOvernmont agnnciea, in aubatanti.ally Iha same form u the transaction de1e>lbed in the Merpr Agreement, and related documento delivered to the City with TCl'e Form 394 filing, and in documente deliven,d in ,eoponee to the City'■ requeoto for supplemental information. Should the tr&ru1actio.~ "'' approved by the ahareholden and federal government agencieo differ in any material ,upect from that rep,..,.,,nted in the docwnento dcacribed her,,in, thia Resolution eholl be voidable , at the eole option of the City. Within thirty (30) days •,l!owing the cloeing of the Me,.., Agreement. Franchiaee shall file with the City a etatement that tho above conditions have been met. ,\DO::'TED AND APPROVED thia 4th of January, !999. above is 8 true co,>y of Reaolution No.2, Seriee of lflS9. . , /{ !/J ,.,_,.,,.~ '"" ""''""""' '""'q~--..... . '4lt-C½ Lcucriat,a A. Ellia COUNCIL COMMUNICA110N · Date Agtndaltom I subject I T :ans fer of Control of Cable Franchise Agreement lo January 4, 1999 11 C i AT-&-T Corp. Initiated By I Staff Sources City Attorney's Office Nancy Raid, Assistant City Altomey Leigh Ann Hoffhine~. Communications Specialist COUNCIL GOAL AND PREVIOUS COUNCIL ACTION In 1967, 1973 , and 1980, the Englewood City Council approved ordinances relating to cable television franchise agreements. The current cable franchise television agreement with Mountain Slates Video (a TCI subsidiary) has been in effect since April, 1980. In June, 1995, City Council authorized the extension of the current Cable Television System Permit on & month-to-month basis u~III a new agreement is finalized. RECOMMENDED ACTION Staff seeks Council su~:,ort for a resolution consenUng to the transfer of -control of the City's Cable • Tetevislon System Franct1ise lo AT-&-T Corporation. BACKGROUND, ANALYSIS, AND AL TEA NATIVES IDENTIFIED In June of this year, TCI announced its intent to merge with AT-&-T. Englewood's cable franchise agreement requires that approval be obtained from the local franchising authority for this transfer of ~'Ontrol . On September 14, 1898, TCI delivered to the City a request for consent lo cha nge of control associated with the merger. Under federal law, the City has 120 days from that date to take ar:tlon on the request. TCI has granted all Greater Metro.Telecommunications Consortium communities an extension until January 31, 1099 to act on its transfer request. If the City does not take action within the allotted time, consent will be deemert automatically granted. If approved, Englewood's franchise agreement will continue to be held by lk.•Jntain States Video as a subsidiary of TCI, with the uitimate parent company being AT-&-T . On behalt of many metro-area municipalitie, . including Englev.ood, the Greater Metro Telecommunications Consortium (GMTG) has researched tho merger agreement, federal communications law as It Impacts local governments, and the abi!ity of AT-&-T to comply with the technical, legal, and financial obligatic~s of local franchise agreements. The GMTC has developed a "model resolution' that most metro area communities will use to approve the transfer of control. The resolution contains the following cor.dilions that will require TCI and AT-&-T to: -comply with existing fran~hisa obligations • comply with any changes in federal law regardin~ classification of services and rates • maintain existing levels of technical and customer service employees • comply with the Custc;mer Service Standards adopted by all GMTC communities • conduct a logal audit within one year to ensure that all conditions of the franchise agreement are being complied with and are still in accordance with federal law The model resolullon a,:.; Ih a above C0l1dltiona have been lllfllOWd ~-legal counael for TCI . There are interaellng challenges presented by the merger al AT -&-T (a telecommunlcallone company) end a TCI (a cable company). cable services and other types of tllac:ommunica11ona HMCee 1119 governed by dlif..rt parts of the Federal Communlcallons Act, and federal law detennlnN whether a service Is a •cable" service or a "lelecommunlcation t' service . Under Colorado law, loc:al govemmenll can collect franclm feff for cable services, but not for telecommu,1ications services. Because advancing technology allows both services to be provided over the same medium , the dltlnc:tlon between the two is sometimes blurred. The proposed resolution includes language that def11111 to rulemaklnga by the Federal Communications Commission (FCC), the Courts, or Congress In thHe regards . FINANCIAL IMPACT There Is no direct financial Impact as a resutt of this resolution . UST OF ATTACHMENTS Proposed ResolrJllon • •