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HomeMy WebLinkAbout2006-8 - Cable Television Franchise TransferRESOLUTION NO. 2006- 8 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA CONDITIONALLY APPROVING A TRANSFER OF THE CABLE TELEVISION FRANCHISE, AND /OR CONTROL THEREOF, TO AN ENTITY CONTROLLED BY TIME WARNER INC. WHEREAS, the City of Newport Beach (the "City ") has received a FCC Form 394 (the "Application ") requesting consent of the City Council to the assignment of the cable television franchise, or control thereof, (the "Franchise Agreement') granted to an entity (the "Franchisee ") currently controlled by Adelphia Communications Corporation ( "Adelphia "), to an entity (the "Proposed Transferee ") ultimately controlled by Time Warner Inc. ( "TWI ") (the "Transfer); WHEREAS, the Franchise Agreement has expired as of this date without renewal, extension, or otherwise; WHEREAS, the expiration of the Franchise Agreement was not a result of the City stalling, frustrating, or otherwise interfering with the orderly process for renewal under Section 546 of the Cable Communications Policy Act of 1984, as amended (the "Cable Act") to the detriment and prejudice of the cable operator; WHEREAS, the cable operator possesses no statutory rights pursuant to Section 537 of the Cable Act, or otherwise, to require the approval of the Transfer (Comcast of California 1, Inc., et al. v. City of Walnut Creek, California, Order Denying Plaintiffs' Motion for Preliminary Injunction, pps 10 -13 (N.D. Cal., Case No. C05 -00824 (WHA) (2005)); WHEREAS, the City Council has denied without prejudice the Application for the reasons set forth in Resolution No. 2006 -7 (the "Denial Resolution"); WHEREAS, it is the intent of the City Council that the Denial Resolution remain in full force and effect until each and every one of the contingencies set forth as conditions precedent to this Resolution have been satisfied or until this Resolution has lapsed by its own terms; WHEREAS, although the state of the record as of this date does not justify, in the legislative discretion of the City Council, the unconditional approval of the Transfer, the satisfaction of certain mitigating conditions as set forth herein would cause the public interest to be served through the approval of the Transfer; and WHEREAS, the City Council has determined that it would be in the public interest in the exercise of its legislative discretion to conditionally approve the Transfer at this point in time if certain terms and conditions, as more specifically set forth herein, are satisfied. NOW, THEREFORE, the City Council of the City of Newport Beach does hereby resolve as follows: Section 1. The Recitals are hereby deemed to be true, correct and accurate. Section 2. The Application is hereby conditionally approved on the date that the City Attorney issues a "Certificate of Closing" as defined in Section 3. Until such time as the Certificate of Closing is issued, or if the Certificate of Closing is never issued prior to the lapsing of this Resolution, the Denial Resolution shall, at all times, remain in full force and effect. Section 3. The City Attorney shall issue a written Certificate of Closing ( "Certificate of Closing ") certifying that each and every of the following conditions have been fully and completely satisfied within five (5) business days of their complete satisfaction: (A) The approval of a franchise renewal agreement by the City Council, its execution by the City Council and the cable operator identified therein, and the delivery of the executed franchise renewal agreement, along with an acceptance thereof, in a form acceptable to the City Attorney, to the City Clerk. (B) The execution and delivery by the cable operator of a Settlement Agreement, approved as to substance and form by the City Manager and the City Attorney, which settles all outstanding monetary disputes relating, directly or indirectly, to the cable system, and the payment of any sums identified as settlement payments therein. (C) The execution and delivery of a financial guaranty, approved as to substance and form by the City Attorney, of Time Warner Inc. ( "TWI ") guarantying the performance of all current and future franchise obligations. (D) The execution and delivery of an operational transition plan, approved as to substance and form by the City Manager and the City Attorney, which contains, among other things, agreed upon customer service standards, employee staffing levels, the number and location of call centers, and other operational requirements which, in the opinion of the City Manager, are necessary to ensure that the quality of cable service does not decline based upon the transfer of the cable system to the Proposed Transferee. (E) The execution and delivery of a Change of Control Agreement, approved as to substance and form by the City Manager and the City Attorney, specifying the terms and conditions upon which the Proposed Transferee will accept the documents establishing the legal relationship between the City and the Proposed Transferee in relation to the cable system. (F) The delivery of a written report of the Independent Monitor and /or Independent Examiner, as those two terms are used within the meaning of the Settlement Agreement between the Securities and Exchange Commission and TWI (the "SEC Settlement "), or such other neutral individual or entity unaffiliated with TWI, or any related entity, as approved by the City Manager, stating, in these words or words of equivalent substance, that after a review of the "three cable programming affiliation agreements with related advertising elements," as that phrase is utilized within the meaning of the SEC Settlement, that the cable division of TWI did not commit any violation of law, criminal, civil, or otherwise, in relation to those agreements. Section 4. Upon the issuance of a Certificate of Closing by the City Manager, the approval set forth herein shall become valid and binding. Otherwise, the terms and conditions of the Denial Resolution shall remain in full force and effect. Section 5. Unless a Certificate of Closing is issued by the City Manager within one hundred eighty (180) days of the adoption of this Resolution, the approval set forth herein shall lapse and this Resolution shall be deemed void ab initio without force and effect. PASSED AND ADOPTED by the City Council of the City of Newport Beach at a regular meeting held on the 24tnday of January 2006. cD coff- Mayor ATTEST: K to �s Ai " City Clerk `� ,µ STATE OF CALIFORNIA } COUNTY OF ORANGE } ss. CITY OF NEWPORT BEACH } I, LaVonne M. Harkless, City Clerk of the City of Newport Beach, California, do hereby certify that the whole number of members of the City Council is six (one vacant seat]; that the foregoing resolution, being Resolution No. 2006 -8 was duly and regularly introduced before and adopted by the City Council of said City at a regular meeting of said Council, duly and regularly held on the 241h day of January 2006, and that the same was so passed and adopted by the following vote, to wit: Ayes: Selich, Rosansky, Ridgeway, Daigle, Nichols, Mayor Webb Noes: None Absent: None Abstain: None IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of said City this 25th day of January 2006. (Seal) oa°(�" lei. gdz" City Clerk Newport Beach, California