HomeMy WebLinkAbout2000-06-26 City Council (12)TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: ADMINISTRATIVE
SERVICES
DATE:JUNE 26, 2000 . "CMR:303:00
SUBJECT: EXTENSION OF DEADLINE RELATED TO CABLE TELEVISION
FRANCHISE TRANSFER FROM CABLE CO-OP TO AT&T AND
CONSIDERATION OF NEW FRANCHISE AGREEMENT
This is an informational report and no Council action is required.
BACKGROUND
In January 2000, it was announced that Cable Co-op’s members approved the sale of
Cable Co-op~s assets to AT&T. In February 2000, Palo Alt0, as the local franchising
authority, received a request to approve the transfer of the franchise from Cable Co-op to
TCI Cablevision of California, Inc, a wholly-owned subsidiary of AT&T Corporation.
Federal law gives local franchise authorities 120 days in which to review a transfer
request, once it has been determined that a complete request has been received. The City
was prepared to promptly consider the transfer of the franchise from Cable Co-op to
AT&T. However, staff soon learned that the sale was predicated on AT&T receiving a
new franchise agreement by June 30, 2000. In .effect, the City was asked to: 1) approve
the transfer of the cable system from Cable Co-op to AT&T; and 2) negotiate a new
franchise agreement with AT&T by June 30, 2000.
Because of Cable Co-op’s financial situation, the City agreed to make every effort to
negotiate a new cable television franchise agreement with AT&T by the end of June
2000. Staff planned to bring forward the new franchise agreement for Council
consideration on June 26, the same night Council was to consider the franchise transfer
from Cable Co-op to AT&T. In so doing, the City significantly accelerated its
negotiation of a new franchise agreement. The City had originally planned to negotiate a
new agreement by March 24, 2001, the expiration date of the current franchise.
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DISCUSSION
Since April 2000, City staff and AT&T have been working expeditiously and diligently
to negotiate a new franchise agreement, Both parties have devoted considerable time to
accomplish this goal, and significant progress has been made. Tentative agreement has
been reached on many of the key terms. However, a franchise agreement covering six
jurisdictions is a complex document, because it must consider the needs of several
agencies, andthe shortened fimeframe has not been sufficient to allow for completion of
the agreement. As a result, on June 23, AT&T and Cable Co-op agreed to extend the
deadline until July 24, before which time staff intends to return with its recommendation
concerning the transfer and new franchise agreement for Council consideration.
One of the important issues still under negotiation is future funding for the City’s
Community Access Organization,. Mid-Peninsula Access Corporation (MPAC). The
sales agreement between Cable Co-op and AT&T relieved AT&T of the obligation to
provide facility and equipment funding for MPAC. That obligation was transferred to
Silicon Valley Community Communications (SVCC), in exchange for a $17 million
charitable gift to SVCC. SVCC is a new nonprofit entity set up by Cable Co-op as part
of the sale. Since staff has been unsuccessful in getting AT&T to commit funding to
preserve the status quo for MPAC, staff is now negotiating an agreement with SVCC
which clearly defines the provision of equipment and facilities for MPAC. Staff intends
to bring forward an agreement with SVCC for Council consideration the same night
Council reviews the new franchise agreement with AT&T.
POLICY IMPLICATIONS
The sales agreement between AT&T and Cable Co-op may be terminated if a new or
amended franchise agreement is not in place by June 30, 2000. At this time, both parties
have indicated they donot intend to terminate the agreement on June 30.
In addition to working diligently to negotiate a new franchise agreement with AT&T by
mid-July, staff will continue to offer a variety of other options to Cable Co-op and AT&T
to allow the sale to close. These offers include: approving the transfer of the existing
franchise agreement while negotiating a new agreement; extending the current agreement
for a period of several years while negotiations continue; and negotiating an amended or
interim agreement with AT&T that addresses the key elements of the new franchise
¯ agreement. Staff has also offered to assist Cable Co-op in obtaining an extension of the
due dates on its loans. To date, these offers have been refused-by AT&T and Cable Co-
op.
CMR:303:00 Page 2 of 3
PREPARED BY:Melissa Cavallo,-Assistant Director, Administrative Services
Shannon Gaffney, Senior Financial Analyst
REVIEWED BY: Grant Kolling, Senior Assistant City Attomey
DEPARTMENT I-~AD APPROVAL:
~"~~L YE~
Director,/Administrative Services
~-- EMILY HARRIS ~’~-
Assistant City Manager
Ms.
Ms.
Mr.
Ms.
Mr.
Ms:
Ms.
Mr.
Mr.
Mr.
Russell Averhart, Director of Administrative Services, City of East Palo Alto
Walter Callahan, Deputy Director, Public Works, San Mateo County
Uma Chokkalingam, Finance Director, City of Menlo Park
Jan Dolan, City Manager, City of Menlo Park
Ralph Freedman, Interim City Manager, Town of Atherton
Monica Hudson, City Manager, City of East Pa[o Alto
John Maltbie, County Executive, County of San Mateo
Jan Thomson, Stanford University
Salani Wendt, City Clerk, .City of East Palo Alto
David Wheaton, Asst. City Manager, City of Menlo Park
Richard wittenberg, County Executive, County of Santa Clara
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
Randy Okamura, Pacific Bell
Needs Assessment Task Force members
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