HomeMy WebLinkAbout2002-064-06/11/2002-CONSENTING TO THE TRANSFER OF CONTROL OF THE CITYS CABLE TELEVISION SYSTEM FRANCHISEE TO AT&T COMCAS RESOLUTION 2002-064
OF THE COUNCIL OF THE CITY OF FORT COLLINS, COLORADO,
CONSENTING TO THE TRANSFER OF CONTROL OF
THE CITY'S CABLE TELEVISION SYSTEM FRANCHISEE
TO AT&T COMCAST CORPORATION
WHEREAS, on October 19, 1993, the Council of the City of Fort Collins (hereinafter
referred to as "the Council") adopted Ordinance No. 115, 1993, pursuant to which it granted a
cable television franchise (hereinafter referred to as "the Franchise") to THE WORLD
COMPANY, a Kansas corporation, doing business as COLUMBINE CABLEVISION
(hereinafter referred to as "Columbine"); and
WHEREAS, the Franchise was granted to Columbine subject to certain terms and
conditions which are contained in that certain Franchise Agreement dated November 2, 1993,
entered into by and between the City and Columbine (hereinafter referred to as "the Franchise
Agreement"); and
WHEREAS, in 1995, Columbine notified the City of its intent to sell its cable television
system to HERITAGE CABLEVISION OF DELAWARE, INC., a Delaware corporation, doing
business as TCI OF FORT COLLINS (hereinafter referred to as "Franchisee"), and on December
19, 1995, the Council adopted Resolution 95-178 approving said sale of Columbine's cable
television system; and
WHEREAS, on February 16, 1996, Columbine transferred all of its interest in its cable
television system and assigned to Franchisee the Franchise Agreement; and
WHEREAS, the City and Franchisee entered into the First Addendum to Franchise
Agreement on October 26, 1998, amending the Franchise Agreement, pursuant to Ordinance No.
169, 1998, in order to settle a dispute regarding whether the use of digital compression
technology to upgrade the cable television system satisfied the requirements of the Franchise
Agreement (which First Addendum is hereinafter incorporated by reference as a part of the
Franchise Agreement); and
WHEREAS, in 1999, Franchisee became a subsidiary of, and became controlled by,
AT&T Corp., a New York corporation ("AT&T") and began doing business as AT&T
Broadband; and
WHEREAS, Section XXVI of the Franchise Agreement requires the City's consent to
any transfer of ownership or control thereof; and
WHEREAS, AT&T and Comcast Corporation, a Pennsylvania corporation ("Comcast"),
together with AT&T Broadband and certain of their respective affiliates have entered into an
Agreement and Plan of Merger, and AT&T and AT&T Broadband have entered into a
Separation and Distribution Agreement, both dated December 19, 2001 (the "Merger
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Agreement"), to create a new company to be known as AT&T Comcast Corporation ("AT&T
Comcast"); and
WHEREAS, this merger will effect a change of control of AT&T and Franchisee
pursuant to the Franchise Agreement; and
WHEREAS, pursuant to Section XXVI of the Franchise Agreement, and 47 U.S.C. Sec.
537, as amended, AT&T and Comcast have requested that the City approve of the transfer of
control of the Franchisee from AT&T to AT&T Comcast; and
WHEREAS, the City has investigated the status of the Franchise Agreement, the
Franchisee's compliance therewith, and the technical, legal and financial ability of AT&T
Comcast to control the Franchisee's compliance with the Franchise Agreement; and
WHEREAS, based upon the City's investigation, and representations made to the City
and advisors to the City by AT&T and Comcast, upon which the City is relying, the City is
prepared to approve the transfer of control of the Franchise from AT&T to AT&T Comcast,
pursuant to the conditions described herein.
NOW THEREFORE, be it resolved by the City Council of the City of Fort Collins,
Colorado, as follows:
1. The City hereby consents to and approves the transfer of control of the Franchisee
from AT&T to AT&T Comcast.
2. The City confirms that the Franchise is currently in full force and effect and
expires on November 2, 2005.
3. This Resolution approving the transfer of control is based in part upon the
following representations and acknowledgments made by Franchisee, AT&T and AT&T
Comcast to the City, all of which are considered material and have been relied upon by the City:
(a) That the Merger Agreement, and all of the attachments to that document,
provided to the City with FCC Form 394 (except for those materials which have
been redacted pursuant to law, and which are identified by title or topic in the
Merger Agreement and its attachments) constitutes the entire agreement regarding
the merger between AT&T, AT&T Broadband and Comcast;
(b) That all customer service standards adopted by the City remain in full
force and effect, and Franchisee will maintain staffing levels necessary to meet
those standards, and all federal regulations regarding technical standards of cable
systems;
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(c) That Franchisee remains obligated to comply with all lawful terms,
conditions and obligations of the Franchise Agreement and any other existing
contractual agreement between the Franchisee and the City;
(d) That AT&T Comcast will take no actions that will negatively impact
Franchisee's ability to comply with its obligations under the Franchise;
(e) That no future intra-corporate transfers, mergers, or other changes of
ownership or control that affect Franchisee will change the obligations or liability
of Franchisee to the City with respect to any of the terms, conditions and
obligations of the Franchise, unless prior approval is granted by the City in
writing;
(f) That Franchisee will comply with all applicable laws regarding rates for
cable services within the Franchise area and all applicable laws covering issues of
cross subsidization;
(g) That during the term of the Franchise, and any extension thereto,
Franchisee will continue to pay franchise fees on gross revenues generated by sale
of cable services, regardless of how cable services and non-cable services may be
bundled together and sold to subscribers. Franchisee shall not take any action to
evade or avoid payment of franchise fees based upon the reasonable value of the
revenues received for cable services from paying subscribers. The City and
Franchisee continue to reserve all rights, claims, defenses and remedies regarding
the City's authority to impose and/or enforce requirements related to the revenue
allocation methodology to be used when cable services and non-cable services are
bundled together for the purpose of calculating franchise fees; and
(h) That in the event of any failure to comply with the terms, conditions,
representations and/or acknowledgments contained in this Resolution, or any
material misrepresentations concerning the same, the City may enforce any
damages or penalty provisions pursuant to the Franchise Agreement and exercise
any other remedy available to it by law;
4. By passage of this Resolution, the City makes no representations concerning
whether any violations or non-compliance issues exist with respect to the Franchise Agreement.
Nothing in this Resolution shall be construed by the Franchisee, AT&T, or AT&T Comcast as
precluding the City from addressing any prior acts of noncompliance by Franchisee, pursuant to
the terms of the Franchise Agreement.
5. This Resolution shall take effect upon the closing of the Merger Agreement.
6. This Resolution is conditioned upon approval of the transaction between AT&T,
Comcast and AT&T Comcast, by their respective shareholders, and all required federal
government agencies, in substantially the same form as the transaction described in the Merger
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Agreement, and related documents delivered to the City/County with AT&T's and Comcast's
Form 394 filing, and in documents delivered in response to the City's requests for supplemental
information. Should the transaction as approved by the shareholders and federal government
agencies differ in any material respect from that represented in the documents described herein,
this Resolution shall be voidable, at the sole option of the City.
7. Within thirty (30) days following the adoption of this Resolution, Franchisee and
AT&T Comcast shall give written notice to the City that it unconditionally agrees with and shall
be bound by all terms contained in this Resolution.
8. Within thirty (30) days following the closing of the Merger Agreement,
Franchisee shall file with the City a written representation that the above conditions have been
met. , ..
Passed and adopted at an adjourned meeting of the Council of the City of Fort Collins
held this 1 Ith day of June, A.D. 2002.
,r
Mayor
ATTEST:
City Clerk
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