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HomeMy WebLinkAbout2000-02-22 City Council (13)TO: City of Palo Alto City Manager’s Report HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT:ADMINISTRATIVE SERVICES DATE:FEBRUARY 22, 2000 CMR:155:00 SUBJECT:ENDORSEMENT OF THE CITY MANAGER’S REQUEST TO CABLE CO-OP TO WAIVE FRANCHISE AGREEMENT TIMELINES AND FOLLOW FEDERAL GUIDELINES REGARDING TRANSFER OF OWNERSHIP REQUEST FOR CABLE TELEVISION FRANCHISE RECOMMENDATION Staff recommends that the Council authorize the City Manager to seek a waiver of the timelines set forth in the amended and modified Franchise Agreement with Cable Co-op, as appropriate, after the City determines the transfer application is complete. BACKGROUND In 1983, a Joint Exercise of Powers Agreement (JPA) was entered into by the cities of Palo Alto, Menlo Park, East Palo Alto, the town of Atherton, and counties of Santa Clara and San Mateo for the purposes of.obtaining cable service for the residents, businesses, and institutions within these jurisdictions. The JPA authorized the City of Palo Alto to act on its behalf to award a franchise agreement and to administer the franchise. In 1986, a cable television franchise agreement was executed with Cable Communications Cooperative of Palo Alto, Inc. (Cable Co-op). This agreement was amended in 1991. In April 1999, Cable Co-op announced that its Board of Directors had approved a letter of intent to sell the cable system to AT&T Broadband and Internet Services (AT&T). Subsequently, the Board of Directors and the subscribers of Cable Co-op approved the sale. In order for the cable system to be transferred from Cable Co-op to AT&T, the City must receive a formal transfer request (on Federal Communications Commission Form 394), along with supporting documentation. The documentation must include sufficient detail to enable the City to evaluate the transfer and exercise its reasonable judgment with respect to the transfer. After ensuring the transfer application is complete, the Palo Alto City Council must make a decision to grant or deny the transfer. The City received the formal transfer request on February 14, 2000. CMR: 155:00 Page 1 of 4 Concurrently, the franchise renewal process is underway, with the current franchise set to expire on March 24, 2001. The franchise renewal process is not constrained by the timelines that are applicable to the transfer process. The renewal process has three primary phases. Phase One, which included the development of a renewal plan, has been completed. Phase Two, which includes a review of the past performance of Cable Co-op, is nearing completion. Phase Three, which includes a community-wide needs assessment, has recently begun. Staff plans to update the Council on the status of the renewal process at a study session in March 2000. DISCUSSION Under the Franchise Agreement with Cable Co-op, the timeframe for consideration of a transfer of ownership request is shorter than the timeframe granted by federal law (a total of 90 days versus 120 days). The Franchise Agreement requires that the City Manager submit the formal transfer request to the City Council with a recommendation for action within 15 days of receipt of a completed transfer application. In addition, it requires that a public hearing be scheduled within 30 days of receipt of the completed transfer application. Under federal law, the City would have 30 days to review the transfer request for completeness, and to request any additional information that was needed to make a decision regarding the transfer. Once the transfer request was determined to be complete,, the Council would have 120 days to make a decision. Federal law and the Franchise Agreement allow both parties to agree to an extension. As indicated in a prior staff report (CMR:314:99), the transfer from Cable Co-op to AT&T can only be denied under certain circumstances. Applicable law provides a basis for denial of transfer requests...A franchising authority may deny a franchise transfer based upon the buyer’s unique financial, legal, technical, and character qualifications, and its ability to provide the required cable service. A franchise authority may also deny a transfer request if the proposed transfer would eliminate or reduce competition in the delivery of cable service, if the buyer refuses to accept the terms of the Franchise Agreement, and/or if the buyer refuses to cure any past contract non-compliance issues by the seller. In order to provide sufficient time to evaluate the completed transfer application, the City Manager may request that Cable Co-op waive the time requirements set forth in the Franchise Agreement, and follow the guidelines established by federal law. This waiver would provide City staff with more time to conduct a thorough review of the transfer of ownership request and to make an informed recommendation to the Council than otherwise would be possible under the present circumstances. CMR: 155:00 Page 2 of 4 RESOURCE IMPACT This recommendation will have no impact on City resources. Should Cable Co-op deny the waiver request, staff would attempt to comply with the time requirements established in the Franchise Agreement. POLICY IMPLICATIONS This recommendation does not represent any change to existing City policies. TIMELINE Working with the City’s cable communication and legal consultants, staff has begun the process of determining whether or not the transfer application is complete. As a part of this, staff has begun to compile a list of additional information needed from Cable Co-op and AT&T. At the point the City Manager brings forward a recommendation to Council regarding the transfer request, staff plans to conduct a public hearing on the item. This will provide an opportunity for the community and the other SPA agencies to provide feedback to the Council on the transfer of the cable system to AT&T. ATTACHMENTS: Federal Communications Commission Form 394 PREPARED BY: REVIEWED BY: DEPARTMENT HEAD APPROVAL: Melissa Cavallo, Assistant Director Shannon Gaffney, Senior Financial Analyst Grant Kolling, Senior Assistant City Attorney CARL YEATS Services CITY MANAGER APPROVAL: ~,ity Manager Mr.Russell Averhart, Director of Administrative Services, City of East Palo Alto Mr.Walter Callahan, Deputy Director, Public Works, San Mateo County Ms.Uma Chokkalingam, Finance Director, City of Menlo Park Ms.Jan Dolan, City Manager, City of Menlo Park Mr.Ralph Freedman, Interim City Manager, Town of Atherton Ms.Monica Hudson, City Manager, City of East Palo Alto CMR: 155:00 Page 3 of 4 Mr. John Maltbie, County Executive, County of San Mateo Ms. Jan Thomson, Stanford University Ms. Salani Wen&, City Clerk, City of East Palo Alto Mr. David Wheaton, Asst. City Manager, City of Menlo Park -Mr. Richard Wittenberg, County Executive, County of Santa Clara Mr. Ron Kirkeeng, CEO & General Manager, Cable Co-op . Ms. Nicolasa A. Bloom, Director of Government Affairs, AT&T Broadband & Internet Services Sue Buske, President, The Buske Group CMR: 155:00 Page 4 of 4 Cable Co.op February 8, 2000 Ms. June Fleming City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 00 FEB HI0: VIA CERTIFIED MAIL/RETURN RECEIPT REQUESTED Dear Ms. Fleming We are happy to announce that Cable Communications Cooperative of Palo Alto, Incorporated ("Cable Co-op") has executed an agreement and obtained approval of its members to sell the cable television system serving the communities of Palo Alto, East Palo Alto, Menlo Park, Atherton and portions of unincorporated San Mateo and Santa Clara Counties to TCl Cablevision of California, Inc., dba AT&T Broadband. Cable Co-op is proud to have served the community with distinction during the course of its ownership of the . cable system. Due to changes in the cable television industry, increasing competition, and the inability to obtain financial stability, Cable Co-op’s board of directors determined that the community would be better served by a well funded, nationally recognized company. AT&T Broadband has the financial and technical resources to compete and to expand the services provided to the communi,ty. The advantages of this transaction to the community include; a commitment to upgrade the physical system to a broadband network; improved customer service and technical support; enhanced reliability and quality of service; faster introduction of advanced services and additional channels; and competitive local telephone services. In addition, this transaction will preserve and expand Iocallyproduced, high quality programming of interest to the entire mid-peninsula through the creation of Silicon Valley Community Communications (SVCC). At this time, we respectfully re;quest your consent to assign the franchise from Cable Co-op to TCl Cablevision. of California, Inc. dba AT&T Broadband. Enclosed are three (3) completed FCC Form 394’s, together With all required exhibits and documentation. We believe the enclosed provides you with the information necessary to grant our request for transfer of the franchise agreement. Thank you for giving AT&T the opportunity carry-on the mission of providing the highest level telecommunications services and quality customer service to the community. If you have any questions concerning this transaction or the Form 394, please feel free to contact me at (650) 856-3553. Very truly yours, CABLE COMMUNICATIONS COOPERATIVE OF PALO AL~C~.P. RATED . By:~ _ ~ Ron Kirkeen~t~neral Manager CC (without attachments): City Council Carl Yeats, Director Administrative Services Donna Rogers, City Clerk Grant Kolling0 Senior Assistant City Attorney 415-856-8181 ¯ FAX 415-856-8244 o http://www.cableco-op.com 3200 Park Boulevard ¯ Palo Alto, California 94306 Communi~fions Commission Washington, D.C. 20554 FCC 394 Approved by OMD 3060-0577 Expires 08,3 I/9~ APPLICATION FOR FRANCHISE AUTHORITY CONSENT TO ASSIGNMENT OR TRANSFER OF CONTROL OF CABLE TELEVISION FRANCHISE SECTION I. GENERAL INFORMATION IFOR FRANCHISE AUTHORITY USE ONLY 1.IDATE 2.h, pplication for:[] Assignment of Franchise []Transfer of Control 3.Franchising authority: Joint Powers and The City of Palo Alto, CA 4.Identify community where the system/franchise that is the subject of the assignment or transfer of control is located: Palo Alto, East Palo Alto, Menlo Park, Athetton and certain unincorporated parts of San Mateo and Santa Clara Counties, CA 5.Date system was acquired or (for system’s constructed by the transferor/assignor) the date on which 1986service was provided to the first subscriber in the franchise area: 6. Proposed effective date of closing of the transaction assigning or transferring ownership of the When all conditions to the closing have been met, system to transferee/assignee: currently anticipated to be 120 days from the filing of this Form 394 Community Unit Identification Number: 1433, 1434, 1435, 1436, 1437 and 1523 7.Attach as an Exhibit a schedule of any and all additional information or material filed with this application that is identified in the franchise as required to be provided to the franchising authority when requesting its approval of the type of transaction that is the subject of this application. PART I - TRANSFEROR/ASSIGNOR Exhibit No. 1 1. Indicate the name, mailing address, and telephone number of the transferor/assignor. Legal name of Transferor/Assignor (if individual, list last name first) Cable Communications Cooperative of Palo Alto, Incorporated Assumed name used for doing business (if any) Mailing street address or P,O. Box 3200 Park Boulevard city State ZIP Code [ Telephone No. (include area code)Palo Alto CA 94306 ’(650) 856-3553 (a) Attach as an Exhibit a copy of the contract or agreement that provides for the assignment or transfer of control (including any exhibits or schedules thereto necessary in order to understand the terms thereof). If I Exhibit NO.there is only an oral agreement, reduce the terms to writing and attach. (Confidential trade, business, pricing I 2or marketing information, or other information not otherwise publicly available, may be redacted). (b)Does the contract submitted in response to (a) above embody the full and complete agreement between the transferor/assignor and the transferee/assignee?Yes I~ No If No, explain in an Exhibit. Exhibit No. N/A FCC 394 (Page I) September 1996 PART II - TRANSFEREE/ASSIGNEE 1. (a) Indicate the name,.mailing address, and telephone number of the transferee/assignee. Legal name of Transferee/Assignee (if individual, list last name first) TCI Cablevision of California, Inc. Assumed name used for doing business (if any) AT&T Mailing street address or P.O. Box 12647 Alcosta Blvd., Suite 200 City I State San Rarnon CA ZIP Code 94583 ITelephone No. (include area code) (925) 973-7000 (b) Indicate the name, mailing address, and telephone number of person to contact, if other than transferee/assignee. Name of contact person (list last name first) Ritchie, Susan Firm or company name (if any) TCI Cablevision of California, Inc. Mailing street address or P.O. Box 12647 Al¢osta Blvd., Suite 200 city San Ramon IState ZIP Code CA 94583 (c)Attach as an Exhibit the name, mailing address, and telephone number of each additional person who should be contacted, if any. (d) Indicate the address where the system’s records will be maintained. :street aaaress 12647 Alcosta Blvd., Suite 200 City State San Ramon CA ITelephone No. (include area code) (925) 973-7000 Exhibit No. 3 ZIP Code 94583 2.Indicate on an attached exhibit any plans to change the current terms and conditions of service and operations of the system as a consequence of the transaction for which approval is sought.Exhibit4 No, I FCC 394 (Page 2) September 1996 SECTION I. TRANSFEREE’S/ASSIGNEE’S LEGAL QUALIFICATIONS I.Transferee/Assignee is: Corporation Jurisdiction of incorporation: California b. Date of incorporation: 10/06/83 c.For profit or not-for-profit: Profit Name and address of registered agent in jurisdiction: The Prentice-Hall Corporation System, Inc. 2730 Gateway Oaks Drive Suite 100 Sacramento, CA 95833 1-’] Limited Partnership a..Jurisdiction in which formed:c.. Name and address of registered agent in jurisdiction: b. Date of formation: [] General Partnership [] Individual a.Jurisdiction whose laws govern formation:Date of formation: [] Other: Description in an Exhibit.Exhibit No. N/A List the transferee/assignee, and, if the transferee/assignee is not a natural person, each of its officers, directors, stockholders beneficially holding more than 5% of the outstanding voting shares, general panners, and limited partners holding an equity interest of more than 5%. Use only one column for each individual or entity. Attach additional pages if necessary. (Read carefully- the lettered items below refer to corresponding lines in the following table.) (a) Name, residence, occupation or principal business, and principal place of business. (If other than an individual, also show name, address and citizenship of natural person authorized to vote the voting securities of the applicant that it holds.) List the applicant first, officers, next, then directors and, thereat~er, remaining stockholders and/or partners. (b) Citizenship. (c) Relationship to the transferee/assignee (e.g., officer, director, etc.). (d) Number of shares or nature of partnership interest. (e) Number of votes. (f) Percentage of votes. (a) (b) (c) (d) (e) (0 TCI Cablevision of California. Inc. 12647 Alcosta Blvd., Suite 200 San Ramon, CA 94583 California corporation Transferee/Assignee N/A ¯ See attached page for list of officers and directors and corresponding information requested in (b) through (1). TCI West, Inc. 12647 Alcosta Blvd., Suite 200 San Ramon, CA 94583 Voting Authority:3ohnKop chik, Jr. Voting Authority: U.S. Citizen Stockholder 1,002 shares ofcommon stock N/A 1,002 shares ofcommon stock N/A 100% FCC 394 (Page 3) September 1996 (a) DIRECTORS: Name William R. Fitzgerald John Kopchik, Jr. OFFICERS: Name John Kopchik, Jr. Carl Badger Dahlia Moodie Address 9197 So. Peoria Street Englewood, CO 80112 12647 Alcosta Blvd. Suite 200 San Ramon, CA 94583 Office President Regional Vice President Regional Vice President Address 12647 Alcosta Blvd. Suite 200 San Ramon, CA 94583 12647 Alcosta Blvd. Suite 200 San Ramon, CA 94583 4131 Lakeside Drive Ste. Br. Richmond, CA 94806 LaFawn Vannest Terrel E. Davis Stephen M. Brett Michael P. Huseby Carol O’Keeffe Madonna Guenthner Judi Heady Roger D. Weaver Regional Vice President Vice President and Secretary Vice President and Assistant Secretary Vice President and Assistant Treasurer Vice President Vice President Group Vice President/TCI Media Services Regional Vice President/TCI Media Services 9335 Prototype Drive Reno, NV 89511 9197 So. Peoria Street Englewood, CO 80112 9197 So. Peoria Street Englewood, CO 80112 9197 S. Peoria Street Englewood, CO 80112 9197 So. Peoria Street Englewood, CO 80112 9197 So. Peoria Street Englewood, CO 80112 425 Pacific Avenue San Francisco, CA 94133 425 Pacific Avenue San Francisco, CA 94133 Document Name:Palo Alto -- Exhibits to Form 394 Document #: 26306 Author_ld: PATTYCO Nolan Gookin Joseph A. Gamble Mary M. McChesney Mary S. Willis James Li Paul Riley Brian Stuhr Ephraim Brecher Antoinette Duah Jeffrey Tutnauer George Foss Christopher Vrana Assistant Vice President Treasurer Assistant Secretary Assistant Secretary Assistant Secretary - Treasury Assistant Secretary - Treasury Assistant Secretary - Treasury Assistant Secretary - Tax Assistant Secretary - Tax Assistant Secretary - Tax Assistant Secretary - Real Estate Assistant Secretary - Real Estate 9197 So. Peoria Street Englewood, CO 80112 12647 Alcosta Blvd. Suite 200 San Ramon, CA 94583 9197 So. Peoria Street Englewood, CO 80112 9197 So. Peoria Street Englewood, CO 80112 295 North Maple Avenue Basking Ridge, NJ 07920-1002 295 North Maple Avenue Basking Ridge, NJ 07920-1002 295 North Maple Avenue Basking Ridge, NJ 07920-1002 412 Mt. Kemble Avenue Morristown, NJ 07962-1995 412 Mt. Kemble Avenue Morristown, NJ 07962-1995 412 Mt. Kemble Avenue Morristown, NJ 07962-1995 295 North Maple Avenue Basking Ridge, NJ 07920-1002 295 North Maple Avenue Basking Ridge, NJ 07920-1002 (b) All the officers and directors of Transferee/Assignee are U.S. Citizens. (c) See (a) (d) N/A , (e) N/A (t3 Document Name:Palo Alto -- Exhibits to Form 394 Document #: 26306 Author..Id: PATTYCO 3.If the applicant is a corporation or a limited partnership, is the transferee/assignee formed under the laws of, or duly qualified to transact business in, the State or other jurisdiction in which the system operates? If the answer is No, explain in an Exhibit. 4.Has |he transferee/assignee had any interest in or in connection with an application which has been dismissed ordenied by any franchise authority? If the answer is Yes, describe circumstances in an Exhibit. Has an adverse finding been m~de or an adverse final action been taken by any court or administrative body with respect to the transferee/assignee in a civil, criminal or administrative proceeding, brought under the provisions of any law or regulation related to the following: any felony; revocation, suspension or involuntary transfer of any authorization (including cable franchises) to provide video programming services; mass media related antitrust or unfair competition; fraudulent statements to another governmental unit; or employment discrimination? If the answer is Yes. attach as an Exhil~it a full description of the persons and matter(s) involved, including an identification of any court or administrative body and any proceeding (by dates and file numbers, if applicable), and tile disposition of such proceeding. Are there any documents, instruments, contracts or understandings relating to ownership or future ownership rights with respect to any attributable interest as described in Question 2 (including, but no~t limited to, non-voting stock interests, beneficial stock ownership interests, options, warrants, debentures)? If Yes, provide particulars in an Exhibit. Do documents, instruments, agreements or understandings for the pledge of stock of the transferee/assignee, as security for loans or contractual performance, provide that: (a) voting rights will remain with the applicant, even in the event of default on the obligation; (b) in the event of default, there will be either a private or public sale of the stock; and (c) prior to the exercise of any ownership rights by a purchaser at a sale described in (b), any prior consent of the FCC and/or of the franchising authority, if required pursuant to federal, state or local law or pursuant to the terms of the franchise agreement will be obtained? If No, attach as an Exhibit a full explanation. SECTION III - TRANSFEREE’S/ASSIGNEE’S FINANCIAL QUALIFICATIONS The transferee/assignee certifies that it has sufficient net liquid assets on hand or available from committed resources to consummate the transaction and operate the facilities for three months. Attach as an Exhibit the most recent financial statements, prepared in accordance with generally accepted accounting principles, including a balance sheet and income statement for at least one full year, for the transferee/assignee or parent entity that has been prepared in the ordinary course of business, if any such financial statements are routinely prepared. Such statements, if not otherwise publicly available, may be marked CONFIDENTIAL and will be maintained as confidential by the franchise authority and its agents to the extent permissible under local law. SECTION IV - TRANSFEREE’S/ASSIGNEE’S TECHNICAL QUALIFICATIONS Set forth in an Exhibit a narrative account of the transferee’s/assignee’s technical qualifications, experience and expertise regarding cable television systems, including, but not limited to, summary information about appropriate management personnel that will be involved in the system’s management and operations. The transferee/assignee may, but need not, list a representative sample of cable systems currently or formerly owned or operated. [] Yes [] No ExhibitN/ANO. I [] Yes [] No Exhibit No, N/A [] Yes ~]’ No Exhibit No. I N/A [] Yes [] No Exhibit No. N/A Yes [] No Exhibit No. N/A [] Yes [] No Exhibit5 No. I Exhibit No. 6 FCC 394 (Page 4) September 1996 SECTION V - CERTIFICATIONS WILLFUL F,~LSE 5T,~T’E’MENTS MADE ON:THIS FORM ~ PIJN[SHABLE BY FTNE .,~J~D/OR IMPRISONMENT U.S. CODE, TITLE 18.5ECTIOP, I 1Ooi. or~in~,-~.Q ~lla ’ ’ ~ FEB 7 2000 (In~li~ Senior Vice .~ohn Kop~ik, Jr. [~ Od~er. Explain: