6.5A. SR 02-22-1999
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Item 6.5a.
MEMORANDUM
TO:
Mayor and City Council
FROM:
Sandra Peine, City Clerk
DATE:
February 22, 1999
SUBJECT: Transfer of Cable TV Franchise
6.5a. Transfer of Cable TV Franchise
THE REQUEST
The Council is requested to consider authorizing a transfer of
control and ownership interests from Jones Intercable, Inc. to
Bresnan Telecommunication Company, LLC.
tt BACKGROUND
The Sherburne Wright Cable Commission met on February 3, 1999, to
discuss this transfer. Tom Creighton, attorney for the Cable
Commission, has reviewed the issue and is recommending approval
based on the stipulations in the resolutions. The Cable Commission
voted to approve the transfers and all commissioners will be
presenting resolutions to their respective City Councils for approval
of this transfer.
The actual request is for the transfer of control and ownership
interest of Jones Intercable to Comcast Cable Communications (a
subsidiary of Jones). Following that transfer there will be another
transfer of control of cable television franchise from Comcast to
Bresnan Telecommunications Company, LLC (who will be the
ultimate owner of the system). Because there are actually two
separate transfers, two resolutions must be adopted.
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One of the stipulations in the resolution is for Bresnan to provide a
plan for narrowcasting of all government channels. The City of Elk
River will be one of the first (if not the first) city to be able to
provide narrow casting. The necessary work has been scheduled to
begin in Elk River this construction season. Therefore, it is
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330. TDD & Phone: (612) 441-7420. Fax: (612) 441-7425
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anticipated that Elk River could be narrow casting by the end of this
year.
Narrowcasting allows for live playback of city meetings. It will also
require the City of Elk River to have the total responsibility for
programming of the government access channel. This opens up a
whole new wave of communication to the public. There will be
ample opportunities to keep citizens informed of city happenings
and events. It is anticipated that live playback will improve visual
and sound quality.
ACTION REQUESTED
Council motion adopting the attached resolutions in the following
order:
1. A Resolution conditionally consenting to the transfer of
control of, and certain ownership interests in, a cable television
franchise to Comcast Corporation and its wholly owned subsidiary,
Comcast Cable Communications, Inc.
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2. A Resolution conditionally consenting to the transfer of
control of, and certain ownership interests in, a cable television
franchise to Bresnan Telecommunication Company, LLC.
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RESOLUTION 99 -
A RESOLUTION OF THE CITY OF ELK RIVER
A RESOLUTION CONDITIONALLY CONSENTING TO THE
TRANSFER OF CONTROL OF AND CERTAIN OWNERSHIP
INTERESTS IN A CABLE TELEVISION FRANCHISE TO COMCAST
CORPORATION AND ITS WHOLLY OWNED SUBSIDIARY, COMCAST
CABLE COMMUNICATIONS, INC.
WHEREAS, the cable television franchise (the "Franchise") of the City of
Elk River, Minnesota (the "Authority") is currently owned and
operated by Cable TV Fund 14-A, Ltd., doing business as
Jones Intercable, Inc. ("Jones"); and,
WHEREAS, Jones Intercable, Inc. ("Intercable") is the general partner of
Jones; and,
WHEREAS, Jones International, Ltd. And certain of its affiliates (the
"Jones Entities") currently own, directly or indirectly, more
than 50% of the Common Stock of Intercable (the "Control
Shares") and, consequently, are entitled, in the aggregate, to
elect 75% of the Board of Directors of Intercable; and,
WHEREAS, on August 12, 1998, the Jones Entities entered into an
Agreement with Comcast Corporation ("Comcast") to sell the
Control Shares to Comcast (the "Jones/Comcast Agreement");
and,
WHEREAS, pursuant to the Jones/Comcast Agreement, Grantor has
received a request to approve the change of control of Jones
from the Jones Entities to Comcast and, subsequently, to its
wholly-owned subsidiary, Comcast Cable Communications,
Inc. (together, the "Change of Control"); and,
WHEREAS, Comcast and Intercable have represented and agreed that the
Jones/Comcast Agreement will not alter any existing title,
asset ownership, or management agreement of Jones and
Jones will continue to hold the Franchise; and,
WHEREAS, the Authority has received a request for consent to the Change
of Control; and,
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WHEREAS,
no notice of breach or default under the Franchise has been
issued by the Authority within the past 12 months and none is
outstanding; and,
WHEREAS,
the Authority has determined that subject to certain
conditions which must be met, Comcast possesses the
requisite legal, technical, and financial qualifications.
NOW, THEREFORE, BE IT RESOLVED, that the Change of Control is
hereby consented to by the Authority and permitted conditioned upon:
1. Securing all necessary federal, state, and local government waivers,
authorizations, or approvals relating to Comcast's acquisition and
operation of the system to the extent provided by law; and,
2. Acceptance by the Authority of a plan to provide narrowcasting of all
government channels; and,
3. The successful closing of the Transaction described in the
Jones/Comcast Agreement; and,
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4.
The willingness of Comcast to acknowledge and accept the current cable
franchise of Jones; and,
5. Payment of the $15,000.00 reserved equipment grant; and,
6. Non-waiver by City of any unknown yet existing franchise non-
compliance issues; and,
7. Non-waiver by City of any right to dispute here-to-date unaudited
franchise fee payments; and,
8. Non-waiver by City of any right to require fra;nchise fee payments
lawfully imposed on services delivered by Jones via the cable system;
and,
9. Reimbursement of all reasonable fees incurred in the Authority's review
of the proposed transaction.
BE IT FURTHER RESOLVED, that nothing herein shall be construed or
interpreted to constitute any approval of, consent to, or support for any
proceeding currently pending before the FCC, or any other federal, state, or
local government waivers, authorizations, or approvals, other than that
. transaction described above.
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BE IT FURTHER RESOLVED, that Comcast may, from time to time,
assign, grant, or otherwise convey one or more liens or security interests in its
assets, including its rights, obligations, and benefits in and to the Franchise
(the "Collateral") to any lender providing financing to Jones ("Secured Party"),
from time to time. Secured Party shall have no duty to preserve the
confidentiality of the information provided in the Franchise with respect to
any disclosure (a) to Secured Party's regulators, auditors, or attorneys, (b)
made pursuant to the order of any governmental authority, (c) consented to by
the Authority or (d) any such information which was, prior to the date of such
disclosure, disclosed by the Authority to any third party and such party is not
subject to any confidentiality or similar disclosure restriction with respect to
such information subject, however, to each of the terms and conditions of the
Franchise.
BE IT FURTHER RESOLVED, that this Resolution amends by replacement
and supercedes any prior Resolution concerning these matters.
Passed and adopted by the City Council of the City of Elk River, Minnesota,
this _ day of February, 1999.
Stephanie A. Klinzing, Mayor
ATTEST:
Sandra A. Peine, City Clerk
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Resolution 99 -
A RESOLUTION OF THE CITY OF ELK RIVER
A RESOLUTION CONDITIONALLY CONSENTING TO THE
TRANSFER OF CONTROL OF AND CERTAIN OWNERSHIP
INTERESTS IN A CABLE TELEVISION FRANCHISE TO BRESNAN
TELECOMMUNICATION COMPANY, LLC
WHEREAS, the cable television franchise (the "Franchise") of the City of Elk
River, Minnesota (the "Authority") is currently owned and
operated by Cable TV Fund 14-A, Ltd., doing business as Jones
Intercable, Inc. ("Jones"); and,
WHEREAS, Bresnan Communications Company Limited Partnership
("BCCLP") and Jones entered into an Asset Purchase
Agreement By and Between BCCLP and Jones dated as of
November 6, 1998. As a result of the agreement, BCCLP will
acquire substantially all of the assets of Jones, including its
cable television systems in Minnesota. The cable system will
then be transferred to Bresnan Telecommunications Company
LLC ("Bresnan"), a wholly owned subsidiary of BCCLP (the
"Jones/Bresnan Agreement"); and,
WHEREAS, Jones and Bresnan have represented and agreed that the
Jones/Bresnan Agreement will not alter any existing title, asset
ownership, or management agreement of Jones and Jones will
continue to hold the Franchise; and,
WHEREAS, the Authority has received a request for consent to the transfer
of Jones to Bresnan (the "Jones/Bresnan Transfer"); and,
WHEREAS, no notice of breach or default under the Franchise has been
issued by the Authority within the past 12 months and none is
outstanding; and,
WHEREAS, the Authority has determined that subject to certain conditions
which must be met, Bresnan possesses the requisite legal,
technical, and financial qualifications.
NOW, THEREFORE, BE IT RESOLVED, that the Jones/Bresnan Transfer
is hereby consented to by the Authority and permitted conditioned upon:
1.
Execution and delivery of a Corporate Guaranty of BCCLP acceptable to
the Authority in the form attached hereto; and,
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2.
Securing all necessary federal, state, and local government waivers,
authorizations, or approvals relating to Bresnan's acquisition and
operation of the system to the extent provided by law; and,
3. The successful closing of the Transaction described in the
Jones/Bresnan Agreement; and
4. The willingness of Bresnan to acknowledge the current cable franchise;
and
5. Non-waiver by City of any unknown yet existing franchise non-
compliance issues; and
6. Non-waiver by City of any right to dispute here-to-date unaudited
franchise fee payments; and
7. Non-waiver by City of any right to require franchise fee payments
lawfully imposed on services delivered by the Grantee via the cable
system; and
8.
Reimbursement of all reasonable fees incurred in the Authority's review
of the proposed transaction; and
9. Payment of the $15,000.00 reserved equipment grant; and
10. City's acceptance of a plan to provide narrowcasting of all government
channels.
BE IT FURTHER RESOLVED, that Bresnan may, from time to time,
assign, grant, or otherwise convey one of more liens or security interests in its
assets, including its rights, obligations, and benefits in and to the Franchise
(the "Collateral") to any lender providing financing to Bresnan ("Secured
Party"), from time to time. Secured Party shall have no duty to preserve the
confidentiality of the information provided in the Franchise with respect to
any disclosure (a) to Secured Party's regulators, auditors, or attorneys, (b)
made pursuant to the order of any governmental authority, (c) consented to
, the by the Authority or (d) any of such information which was, prior to the
date of such disclosure, disclosed by the Authority to any third party and such
party is not subject to any confidentiality or similar disclosure restriction with
respect to such information subject, however, to each of the terms and
conditions of the Franchise.
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BE IT FURTHER RESOLVED, that this Resolution amends by replacement
and supercedes any prior Resolution concerning these matters.
Passed and adopted by the City Council of the City of Elk River this _ day
of February, 1999.
Stephanie A. Klinzing, Mayor
ATTEST:
Sandra A. Peine, City Clerk