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Home My WebLink About6.d. Approval of Franchise Extension and Control Change for Charter Cable �CROSEMOLINT EXECUTIVE SUMMARY CITY COUNCIL City Council Regular Meeting: December 16, 2014 AGENDA ITEM: Approval of Franchise Extension and AGENDA SECTION: Control Change for Charter Cable Consent PREPARED BY: Emmy Foster, Assistant City AGENDA NO. Administrator � � ATTACHMENTS: Two Resolutions APPROVED BY: RECOMMENDED ACTION: Approve Resolutions for a 12-month Franchise Extension and Change of Control. ISSUE The franchise granting Charter Communications the right to provide cable television service within Rosemount will expire on December 31, 2014,following an e�ension granted by the City Council earlier this year. Charter has not responded to a proposal by the Apple Valley-Farnungton-Rosemount Cable Commission for a new franchise agreement. Local representatives of the companytold the Cominission last month they were unable to respond to the proposal in a meaningful way in part because of the complexity of the system's conversion to digital distribution and because of uncertainties caused by a proposed corporate merger that may affect ownership and management of the Charter franchises in Minnesota. Because the corporate realignment anticipated in the merger may trigger federal notification requirements, Charter has filed a notice of change of control with the Federal Communications Commission. Cities that have granted Charter a franchise must indicate whether they object to the change. The Cable Commission has recommended that the three cities approve the change with a condition that it does not free Charter from any franchise violations that may have taken place under the current agreements. Company representatives indicate that they should be able to engage in meaningful discussions about new franchises for Rosemount and the other two cities within a few months,when the merger issues are likely to be resolved. The companyhas proposed an e�ension of the current franchise agreement through December 31,2015, and the Commission has endorsed the proposal. Each city must act separately on the agreement. The Commission's attorney has provided draft resolutions for the Rosemount City Council's consideration. Our Attorney Bob Vose discussed these issues with the City Council at the December 9, 2014 City Council Work Session and staff was directed to bring the attached resolutions to this meeting for consideration of approval. RECOMMENDATION Staff recommends approval of the attached resolutions for a 12-month franchise e�ension and change of control. CITY OF ROSEMOUNT RESOLUTION NO._ GRANTING CHARTER A FRANCHISE EXTENSION THROUGH DECEMBER 31, 2015 WHEREAS, Charter Cable Partners, LLC (formerly Marcus Cable Partners) ("Charter") holds a cable franchise in the City of Rosemount, MN, granted by Ordinance No. ("Franchise"); and WHEREAS, Charter has requested that the City extend the term of the Franchise to December 31, 2015 in order to continue Franchise renewal negotiations; and WHEREAS, the City is willing to grant Charter's request to accommodate continued negotiations. NOW, THEREFORE, BE IT RESOLVED: 1. The Franchise is hereby amended by extending its term to December 31, 2015 unless earlier renewed by the parties. 2. Except as specifically modified herein, the Franchise shall remain in full force and effect. 3. Neither party waives any rights either may have under the Franchise or applicable law including federal laws governing cable franchise renewal. 4. This Resolution shall be effective upon passage by the City and acceptance by Charter. PASSED AND APPROVED this day of December, 2014. City of Rosemount Mayor City Clerk ACCEPTED this day of , 201_. Charter Cable Partners, LLC Signature: Name/Title: CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA RESOLUTION 2014- CONSENT TO CHANGE OF CONTROL WHEREAS, Charter Communications, Inc. ("Charter") is the ultimate parent of the holder of a cable communications franchise (the "Franchise") authorizing operation and maintenance of a cable communications system and the provision of cable service in the City of Rosemount, Minnesota (the "City"), all under the terms and conditions of the Franchise and applicable law; and WHEREAS, on February 12, 2014, Comcast Corporation ("Comcast") and Time Warner Cable Inc. ("TWC") entered an agreement to merge; and WHEREAS, on April 25, 2014, Charter and Comcast entered into the Comcast/Charter Transactions Agreement, contingent on the Comcast/TWC merger, requiring Charter to restructure and establish "New Charter;" and WHEREAS, New Charter will be formed by completion of a multi-step corporate restructuring resulting in Charter shareholders receiving New Charter shares ("Corporate Restructuring"); and WHEREAS, as a result of the Corporate Restructuring, New Charter will become the ultimate parent of the franchise-holding entity; and WHEREAS, pursuant to the Comcast/Charter Transactions Agreement, Comcast will divest certain systems to a newly formed company, Midwest Cable (to be renamed GreatLand Connections)("GreatLand"), in which Charter will be a 33% owner; and WHEREAS, Comcast's divestiture will include its systems serving 550,000 subscribers in Minnesota, primarily in the Twin Cities metro area; and WHREAS, the Comcast/Charter Transactions Agreement provides for establishment of a Services Agreement between New Charter and GreatLand ("SA") pursuant to which New Charter will assist in operation and management of GreatLand's systems including those in Minnesota; and WHEREAS, under the terms of the Franchise, and pursuant to Minnesota Statutes, Section 238.083, subds. 1 and 2, the Corporate Restructuring constitutes a "fundamental corporate change" which, by law, "requires the written approval of the franchising authority." 454138v1 RJV AP155-2 1 WHEREAS, Minnesota Statutes, Section 238.083, subd.4, provides: "[t)he franchising authority shall approve or deny in writing the [request]. The approval must not be unreasonably withheld." WHEREAS, on ar about August 29, 2014, Charter filed an FCC Form 394 with the City seeking approval of the Corporate Restructuring; and WHEREAS, the City's cable counsel reviewed the FCC Form 394, requested additional information concerning the Corporate Restructuring, and communicated with Charter representatives several times about these issues; and WHEREAS, the City has received a report from its cable counsel dated November 20, 2014 ("Report"), which is incorporated herein by reference; and WHEREAS, as described in the Report, New Charter's operations in Minnesota will be impacted as a result of the Corporate Restructuring relative to current operations; and WHEREAS, the existence of any prior or current Franchise violations, including any violation notices considered and approved contemporaneous herewith, are incorporated herein by reference. NOW, THEREFORE, BE IT RESOLVED BY THE CITY AS FOLLOWS: 1. The foregoing recitals are incorporated herein by reference. The City conditionally consents to the Corparate Restructuring. 2. Within thirty (30) days of receipt of a copy of this Resolution, Charter or Franchisee shall provide copies of the bond(s), letter of credit, and certificate of insurance required by the Franchise, or other evidence compliance with the associated Franchise requirements. 3. New Charter shall notify the City in writing within ten (10) days of completion of the Corporate Restructuring. Such notice shall include the certification provided in FCC Form 394, Section V, Part II(c), stating that New Charter: Will use its best efforts to comply with the terms of the franchise and applicable state laws or local ordinances and related regulations, and to effect changes, as promptly as practicable, in the operation of the system, if any changes are necessary to cure any violations thereof or defaults thereunder presently in effect or ongoing. Such certification shall be provided by, and executed on behalf of, New Charter. 4. Charter, New Charter or the Franchisee shall reimburse the City's legal fees and other costs incurred in review of the FCC Form 394 within thirty (30) days of receipt of an invoice detailing such fees and costs. 454138v1 RJV AP155-2 2 5. The City makes no findings or representations regarding the continuing validity and enfarceability of the Franchise, nor any Franchise compliance matters. The City expressly reserves and does not waive authority to enforce the Franchise with respect to any Franchise violations or compliance matters whether arising before or after the date of this Resolution, and whether known or unknown as of the date hereof. 6. This Resolution shall be effective upon adoption. Any violation of this Resolution shall render the City's consent to the Corporate Restructuring null and void. The City shall endeavor to provide written notice of any violation of this Resolution to the Franchisee. PASSED, ADOPTED AND APPROVED this day of December, 2014. William H. Droste, Mayor ATTEST: Clarissa Hadler, City Clerk 454138v1 RJV AP155-2 3