HomeMy WebLinkAboutReso - CC - 003-2007RESOLUTION NO. 3-2007
A RESOLUTION OF THE COUNCIL OF THE CITY OF
BURLINGAME, CALIFORNIA, ESTABLISHING
CONDITIONS FOR THE APPROVAL OF A TRANSFER OF
A CABLE TELEVISION FRANCHISE FROM RCN
TELECOM SERVICES, INC. TO ASTOUND BROADBAND,
LLC.
WHEREAS, RCN Telecom Services, Inc. ("Franchisee") owns and has a
franchise to maintain a cable system ("System") in the City of Burlingame ("City"); and
WHEREAS, Franchisee has a franchise to provide cable service in the City
pursuant to the terms of a cable system franchise ("Franchise") granted to Franchisee
on August 7, 2000, and effective August 18, 2000; and
WHEREAS, City actions on January 5, 2003 (1st Amendment), October 4, 2004
(2"d Amendment) and January 3, 2005 (3rd Amendment) amended certain terms of the
Franchise; and
WHEREAS, Franchisee and Astound Broadband, LLC ("Astound" or
"Transferee") are parties to an asset purchase agreement ("Purchase Agreement")
pursuant to which the System and the Franchise are to be transferred to Astound; and
WHEREAS, on September 21, 2006, the City received an F.C.C. Form 394
requesting a transfer of the Franchise from Franchisee to Transferee; and
WHEREAS, the City has one hundred twenty (120) days from the receipt of a
complete F.C.C. Form 394 to act upon the transfer request or the request automatically
is deemed to have been approved; and
WHEREAS, the one hundred twenty (120) day review period expires on January
19, 2007, since the FCC Form 394 was received by the City on September 21, 2006;
and
WHEREAS, the Franchise cannot be transferred or assigned without the City
Council's consent; and
WHEREAS, federal regulations permit the City to evaluate the legal, technical
and financial qualifications of Transferee to operate the Franchise; and
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WHEREAS, the legislative history of the Federal Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act") further indicates that
Congress intended that local franchising authorities consider such information as the
effect of the transfer or sale on rates and subscriber services and the Transferee's plans
for expanding or eliminating services to subscribers when assessing an application for
transfer of a cable system franchise; and
WHEREAS, the United States Court of Appeals for the Ninth Circuit, in a case
involving the County of Santa Cruz, California and Charter Communications, found that
local cable franchising authorities should be afforded broad deference in legislative acts
in their role as stewards of the public good; and
WHEREAS, the City, as steward of the public good, believes that the transfer will
be in the best interest of its residents and potential System subscribers provided the
transfer is conditioned in order to safeguard the interests of its residents and potential
System subscribers; and
WHEREAS, the City desires to proceed with the proposed transfer on the terms
and conditions set forth herein.
NOW, THEREFORE, the City Council of the City of Burlingame does hereby
resolve, determine and order as follows:
Section 1. The City hereby, consents to the transfer, subject to the following
conditions:
1. Astound Broadband, LLC, the Transferee, is owned and controlled as indicated
in Exhibit A attached hereto. To the extent required by Section 2.6 of the Cable
Television Franchise between the City and RCN, any change of ownership or
control of Transferee from the ownership and control indicated in Exhibit A shall
be subject to prior City review and consent.
2. The City expressly reserves any and all rights that it may possess under the
Franchise and applicable law with respect to any non-compliance issues on the
part of Franchisee, whether known or unknown, which exist prior to the effective
date of this transfer and Transferee reserves any and all rights and defenses with
respect to any such non-compliance issues.
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In reserving such rights, the City confirms that the Franchisee is materially in
compliance with the provisions of the Franchise and there exists no fact or
circumstance known to the City which constitutes, or which, with the passage of
time or the giving of notice or both, would constitute a material default or breach
under the Franchise or would allow the City to cancel or terminate the rights
hereunder, except upon the expiration of the full term of the Franchise.
3. The transfer is expressly contingent upon Transferee reimbursing the City for the
consultant's costs incurred in the processing of the request for transfer, not to
exceed the maximum amount of $20,000 indicated in the "Change of Ownership
Consent Agreement" attached to this Resolution as Exhibit A. Said
reimbursement shall be provided within thirty (30) calendar days of Franchisee's
receipt of an itemized invoice detailing the consultant's costs.
4. All terms of the Franchise agreement remain in full force and effect, including all
terms contained in City of Burlingame actions dated January 5, 2003 (1St
Amendment), October 4, 2004 (2nd Amendment) and January 3, 2005 (3d
Amendment) amending and clarifying certain terms of the Franchise.
5. The Franchise agreement allows the City to require Franchisee to provide up to
two (2) additional Public, Educational and Governmental ("PEG") access
channels. These two (2) PEG access channels will be in addition to the two (2)
PEG access channels currently provided. Transferee agrees to activate and
provide one additional PEG access channel by not later than April 20, 2007. This
access channel may be located on Transferee's digital service tier. No sooner
than twenty four months after the incumbent cable operator implements a third
PEG channel and following receipt of one hundred twenty (120) days advance
written notice, the Transferee shall provide a fourth PEG channel. This channel
may be located on Transferee's digital tier of service. Transferee shall not be
required to carry the third and fourth PEG Channels on the Basic Service tier
until Transferee converts its entire System to a digital format.
6. Transferee shall evidence acceptance of these conditions by signing a copy of
the "Change of Ownership Consent Agreement," in substantially the same form
as attached to this Resolution as Exhibit A, containing the conditions provided to
Transferee and submitting the same to the City Clerk within sixty (60) calendar
days of this approval.
If Transferee fails to submit a signed copy of the "Change of Ownership Consent
Agreement" to the City Clerk within said sixty (60) day period, or otherwise
refuses to accept the conditions placed on the proposed transfer set forth herein,
consent to the transfer shall be automatically withdrawn, effective the date of
adoption of this Resolution, and the request to transfer shall be deemed denied.
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Section 2. Other than with respect to the condition made in Section 1.2 above,
if any sentence, clause, phrase or portion of any condition imposed in Section 1 hereof
if for any reason held by a court of competent jurisdiction to be invalid or unenforceable,
such decision shall not affect the validity of the remaining conditions placed on this
transfer.
The City Council of the City of Burlingame hereby declares that it would have
adopted this Resolution and each and every condition set forth in Section 1 hereof
separately, irrespective of the fact that one or more of these conditions may be declared
invalid or unenforceable.
Section 3. This Resolution shall be deemed effective for the purposes of the
transfer upon adoption by the City Council.
Section 4. Subject to the reservation of rights of Section 1(2) above, the City
hereby releases Franchisee, effective upon the consummation of the transaction
contemplated in the Purchase Agreement (the "Closing Date") from all obligations and
liabilities under the Franchise that accrue on or after the Closing Date. Franchisee shall
remain responsible for all obligations and liabilities under the Franchise that accrue up
to the Closing Date. Transferee shall be responsible for any obligations and liabilities
under the Franchise that accrue on or after the Closing Date.
Section 5. The City Clerk shall certify to the adoption of this resolution and
shall cause the same to be processed in the manner required by law, and shall transmit
a certified copy of this Resolution and Exhibit A hereto to Franchisee, Transferee and
Guarantor.
/v
M yor
I, DORIS MORTENSEN, City Clerk of the City of Burlingame, do hereby certify
that the foregoing resolution was introduced at a regular meeting of the City Council
held on the 16th day of January„ 2007 , and was adopted thereafter by the following
vote:
AYES: COUNCILMEMBERS: sAYLocK, coHEN, KEicriRm, NAGEL, WMAHONY
NOES: COUNCILMEMBERS: NdNE
ABSENT: COUNCILMEMBERS: NONE
City Clerk
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CITY OF BURLINGAME
EXHIBIT A: CHANGE OF OWNERSHIP CONSENT AGREEMENT
Section 1
Terms used in this Change of Ownership Consent Agreement shall be as defined in
Resolution No. 3-20az
Section 2
The City hereby consents to the transfer described in City Resolution No. 3-2007 ,
subject to the following conditions:
1. Astound Broadband LLC, the Transferee, is owned and controlled as indicated in
Figure 1 attached hereto. To the extent required by Section 2.6 of the Cable
Television Franchise between the City and RCN, any change of ownership or
control of Transferee from the ownership and control indicated in Figure 1 shall
be subject to prior City review and consent.
2. The City expressly reserves any and all rights that it may possess under the
Franchise and applicable law with respect to any non-compliance issues on the
part of Franchisee, whether known or unknown, which exist prior to the effective
date of this transfer and Transferee reserves any and all rights and defenses with
respect to any such non-compliance issues.
In reserving such rights, the City confirms that the Franchisee is materially in
compliance with the provisions of the Franchise and there exists no fact or
circumstance known to the City which constitutes, or which, with the passage of
time or the giving of notice or both, would constitute a material default or breach
under the Franchise or would allow the City to cancel or terminate the rights
hereunder, except upon the expiration of the full term of the Franchise.
3. The transfer is expressly contingent upon Franchisee reimbursing the City for the
consultant's costs incurred in the processing of the request for transfer, not to
exceed the maximum amount of $20,000 indicated in this Change of Ownership
Consent Agreement. Said reimbursement shall be provided within thirty (30)
calendar days of Transferee's receipt of an itemized invoice detailing the
consultant's costs.
4. The Franchise agreement allows the City to require Transferee to provide up to
two (2) additional Public, Educational and Governmental ("PEG") access
channels. These two (2) PEG access channels will be in addition to the two (2)
PEG access channels currently provided. Transferee agrees to activate and
provide one additional PEG access channel by not later than April 20, 2007. This
access channel may be located on Transferee's digital service tier. No sooner
than twenty four months after the incumbent cable operator implements a third
PEG channel and following receipt of one hundred twenty (120) days advance
written notice, the Transferee shall provide a fourth PEG channel. This channel
may be located on Transferee's digital tier of service. Transferee shall not be
required to carry the third and fourth PEG Channels on the Basic Service tier
until Transferee converts its entire System to a digital format.
5. Transferee shall evidence acceptance of these conditions by signing a copy of
this "Change of Ownership Consent Agreement," and submitting the same to the
City Clerk within sixty (60) calendar days of the Closing Date. If Transferee fails
to submit a signed copy of this "Change of Ownership Consent Agreement" to
the City Clerk within said sixty (60) day period, or otherwise refuses to accept the
conditions placed on the proposed transfer set forth herein, consent to the
transfer shall be automatically withdrawn, effective the date of adoption of City of
Burlingame Resolution No.3-2007_, and the request to transfer shall be
deemed denied.
Section 3
Other than with respect to the promise made in Section 2(3) above, if any sentence,
clause, phrase or portion of any condition imposed in Section 2 hereof if for any reason
held by a court of competent jurisdiction to be invalid or unenforceable, such decision
shall not affect the validity of the remaining conditions placed on this transfer. The City
Council of the City of Burlingame hereby declares that it would have entered into this
"Change of Ownership Consent Agreement" and each and every condition set forth in
Section 2 hereof separately, irrespective of the fact that one or more of these conditions
may be declared invalid or unenforceable.
Section 4
Subject to the reservation of rights of Section 2(2) above, the City hereby releases
Franchisee, effective upon the consummation of the transaction contemplated in the
Purchase Agreement (the "Closing Date") from all obligations and liabilities under the
Franchise that accrue on or after the Closing Date. Franchisee shall remain responsible
for all obligations and liabilities under the Franchise that accrue up to the Closing Date.
Transferee shall be responsible for any obligations and liabilities under the Franchise
that accrue on or after the Closing Date.
MOOM
Section 5
This Agreement shall be effective upon the Closing Date at which time Franchise and
System ownership shall have transferred from Franchisee to Transferee.
"City"
City of Burlingame, CA
Terry Nagel, Mayor
Attest:
Doris Mortensen, City Clerk
Approved as to Form:
Larry Anderson, City Attorney
"Transferee"
Astound Broadband, LLC
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Its:
Date:
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