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HomeMy WebLinkAbout2687 RESOLUTION NO. 2687 A RESOLUTION approving the change of control of TCI Cablevision of Washington, Inc., holder of a Cable Franchise in Bremerton, Washington, to AT&T with conditions. 1. AT&T ("Transferee") has agreed to acquire Tele-Communications, Inc. ("TCI") pursuant to an Agreement and Plan of Merger, dated June 23, 1998. 2. TCI is the parent corporation of TCI Cablevision of Washington, Inc. CFranchisee") which presently owns and controls a cable franchise originally issued by the City of Bremerton ("City") by Ordinance No. 4598 passed by the City Council on July 12, 1997 ("TCI/Bremerton franchise"). 3. Section 2.7 and 2.8 of the TCI/Bremerton franchise prohibit a franchise transfer or change in control without the prior written consent of the City of Bremerton. Section 2.7 of the franchise provide that the City of Bremerton may condition a transfer upon such terms and conditions related to the technical, legal, and financial qualifications of the prospective transferee to perform according to the terms of the Franchise as the City deems appropriate, including those conditions deemed necessary by the City to ensure the strict performance of the requirements of the franchise. 4. The proposed change in control of TCI is subject to the requirements of the Cable Communications Policy Act of 1992 C1992 Cable Act"), and applicable implementing regulations of the Federal Communications Commission ("FCC"). TCI and Transferee filed FCC Form 394 pursuant to the 1992 Cable Act and FCC regulations, which was received by the City of Bremenon on September 4, 1998. In conjunction with such filing, TCI and AT&T have stated that the filing involves only a change in control at the parent level of TCI, that the Franchisee will continue to hold the TCI/Bremerton franchise, that local management and employees of TCI will remain in place after the change in control, and that all commitments, obligations, and liabilities will remain in place, whether or not such commitments, obligations, or liabilities pre-dated the consummation of the proposed change in control. 5. It is recommended that the City approve the change of control subject to certain conditions, including: (a) assurances regarding Transferee's obligation to cause Franchisee to comply with all existing TCI/Bremerton franchise requirements; (b) documentation of Transferee and TCI corporate organization and proxy statements issued in connection with the merger; (c) assurances regarding completion of current TCI/Bremerton upgrade; (d) assurances regarding construction and completion of Bremerton institutional network commitments; (e) commitments to comply with all applicable laws regarding nondiscriminatory access to Franchisee's proposed internet cable modern platform and services; (f) commitments to comply with all applicable laws regarding commercial leased access; (g) reimbursement of all direct, out-of-pocket costs of the City incurred in analyzing and acting upon change of control request; and (h) compliance with all other applicable legal requirements, including carriage of broadcast digital and high definition television signals, and interconnection of cable system with potential competitors for purposes of sharing cable PEG channels, to the e,xtent required by the TCUBremerton franchise agreement. 6. The City should approve the change in control of the TCI/Bremerton franchise to Transferee subject to the formal acceptance by Transferee of the conditions set forth in this Resolution. BE IT RESOLVED by the City Council of the City of Bremerton that: a. The City of Bremerton hereby approves the change of control of the cable franchise of TCI Cablevision of Washington, Inc., Ordinance No. 4598 passed by the Council July 23, 1997 to Transferee subject to the following conditions: (1) Compliance with franchise. Transferee shall cause Franchisee to comply, with the lawful requirements of the TCI/Bremerton franchise, including all applicable ordinances, orders, contracts, agreements, commitments, side letters, and regulatory actions taken pursuant thereto, including but not limited to system upgrade commitments, support for Public, Educational, and Governmental (PEG) cable access; and institutional network construction requirements in all respects and without exception. (2) Organization and proxy statements. Within thirty (30) days of the earlier of closure of the merger transaction or public release of the requested information, Transferee shall submit (a) updated Transferee and TCI corporate organization charts identifying the roles, specifically, of AT&T Consumer Services and AT&T Business or Network Services; and (b) all publicly available proxy statements issued in connection with the merger. (3) Non-discriminatory access to cable modem platform. Transferee shall comply, and cause Franchisee to comply with all federal, state and local legal requirements with respect to nondiscriminatory access, to the Franchisee's cable modern platform for proriders of Internet and on-line services, whether or not such providers are affiliated with Transferee or the Franchisee. So long as cable modem services are deemed to be "cable services", as provided under Title VI of the Communications Act of 1934, as amended, Transferee and the Franchisee shall comply with all lawful requirements regarding such services, including but not limited to, the inclusion of revenues from cable modem services and access within the gross revenues of the Franchisee's cable franchise. (4) Commercial Leased Access. Transferee shall comply and cause Franchisee to comply with all lawful federal, state and local requirements with respect to commercial leased access. (5) Reimbursement of costs. Upon invoice by the City, the Franchisee shall within thirty (30) days of the invoice reimburse all direct, out-of-pocket costs of the City incurred in analyzing and acting upon Transferee's change of control request. Payment of such reimbursement shall accompany the form of written acceptance, as provided in subsection c., below. (6) Compliance with all other applicable legal requirements. Transferee shall cause the Franchisee to comply, with all other applicable legal requirements that are now or may hereat~er apply to the Franchisee's cable operations, including, but not limited to, carriage of broadcast digital and high definition television signals, interconnection of cable system with potential franchised cable competitors for purposes of sharing cable PEG channels, and adherence to applicable federal and state emergency notification provisions to the extent required by the TCUBremerton Franchise agreement. (7) Responsibility for any non-compliance by franchisee. Transferee acknowledges that the legislative history of the 1992 Cable Act contemplates that the City should address any deficiencies in service, including non-compliance, at the time of transfer. Transferee agrees that the Franchisee remains responsible for any and all non-compliance under the TCI/Bremerton franchise that may now exist or may later be discovered to have existed during the term of the franchise, even if prior to the closing of this transaction. b. Written acceptance. (1) This resolution shall not be effective until accepted in writing by Transferee. The acceptance, which shall be contingent upon final dosing of the transaction shall be substantially similar in form to that attached hereto as Exhibit I. (2) Within thirty (30) days after passage of this resolution by the Council, Transferee shall file in the Office of the Administrative Services Director such written acceptance of this resolution meeting the approval of the City Attorney. (3) A failure on the part of Transferee to file such written acceptance within such time shall be deemed an abandonment and rejection of the fights and privileges conferred hereby and this resolution shall thereupon be null and void. Such acceptance shall be unqualified and shall be construed to be an acceptance of all the terms, conditions and restrictions contained in this resolution. c. Automatic nullification in event of failure to close or closure on materially different terms. In the event the transaction which is the subject of this resolution is not consummated or does not reach final closure for any reason, or in the event such closure is reached on terms substantially and materially different to the terms described in the FCC Form 394 and subsequent information provided by the Transferee and relied upon by the City, then this resolution, together with the written acceptance provided hereunder, shall be null and void. PASSED by the City Council of the City of Bremerton this 13th day of January, 1999. Council President ACCEPTANCE Director of Administrative Services City of Bremerton 239 Fourth Street Bremerton, Washington 98337 This is to advise the City of Bremerton, Washington that AT&T hereby accepts the terms and provisions of Resolution No. 2687, passed by the City Council on January 13, 1999, consenting to a change of control of Tele-Communications, Inc. to AT&T, with conditions. AT&T agrees to abide by, and to cause TCI and its subsidiaries and affiliates to abide by, each and every provision of the franchise agreements, including all applicable ordinances, orders, contracts, agreements, side letters, commitments, and regulatory actions taken pursuant hereto, as applicable, and without exception. By: Title: Date: State of: This Acceptance was acknowledged before me on the 8th day of February, 1999, by as , a duly authorized as a duly authorized representative of AT&T. Notary Public My commission expires: