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HomeMy WebLinkAboutCC Res 5385 2005-11-14 RESOLUTION NUMBER 5385 I A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEAL BEACH CONDITIONALLY AUTHORIZING THE ASSIGNMENT OF A CABLE TELEVISION FRANCmSE BY ADELPHIA CABLEVISION OF SEAL BEACH, LLC TO TIME WARNER NY CABLE LLC, AN INDIRECT SUBSIDIARY OF TIME WARNER CABLE INC. RECITALS: A. Adelphia Cablevision of Seal Beach, LLC ("Franchisee") is the authorized holder of a franchise ("Franchise") that authorizes the construction, operation, and maintenance of a cable television system within the City of Seal Beach ("Franchise Authority''). 1 B. On April 20, 2005, Time Warner NY Cable LLC ("TWNY"), an indirect subsidiary of Time Warner Cable Inc., and Comcast Corporation ("Comcast"), each entered into separate definitive agreements to acquire, collectively, substantially all of the assets of Adelphia Communications Corporation ("Adelphia'') for a total of $12.7 billion in cash (of which TWNY will pay $9.2 billion and Comcast will pay the remaining $3.5 billion) and 16% of the common stock of Time Warner Cable Inc. At the same time that Comcast and TWNY entered into the agreements to purchase Adelphia's assets, Time Warner Cable Inc., Comcast, and their respective subsidiaries also agreed to swap certain cable systems to enhance their respective geographic clusters of subscribers ("Cable Swaps"). The asset purchase transaction by TWNY that includes the City's cable franchise is not, however, dependent upon the consummation of the Cable Swaps transaction. nor upon certain redemption transactions whereby Time Warner Cable Inc., the parent company of TWNY, will redeem Comcast's 17.9 percent equity interest in Time Warner Cable Inc. in exchange for $1.9 billion in cash plus 100 percent of the common stock of a Time Warner Cable subsidiary that will own cable systems located in four states other than California. C. On June 14, 2005, the Franchise Authority received from the Franchisee and from Time Warner NY Cable LLC ("Transferee"), an application for the assignment of the existing Franchise. This application included FCC Form 394 titled "Application for Franchise Authority Consent to Assignment or Transfer of Control of Cable Television Franchise." Supplemental information was provided to the Franchise Authority by the Transferee on July 25,2005. D. In accordance with Section 6.10.015(4) of Chapter 6.10 of the Seal Beach Municipal Code, the Franchise Authority has the right to review and to approve the financial, technical, and legal qualifications of the Transferee in connection with the proposed assignment ofthe Franchise. I E. The staff of the Franchise Authority has reviewed the documentation that accompanied FCC Form 394 and, based upon the representations set forth in that documentation, has concluded that the proposed Transferee has the requisite financial, technical, and legal qualifications to adequately perform, or to ensure the performance of, all obligations required of the Franchisee under the Franchise, and that the Transferee will be bound by all existing terms, conditions, and obligations of the Franchise as it currently exists or as it may be modified or superseded by the parties prior to the closing of the asset purchase transaction described above in Recital (B). NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SEAL BEACH RESOLVES AS FOLLOWS: Section 1. In accordance with Section 6.10.015(4) of Chapter 6.10 of the Seal Beach Municipal Code, the Franchise Authority consents to and approves the proposed assignment of the Franchise by Adelphia Cablevision of Seal Beach, LLC to Time Warner NY Cable LLC, which, upon the closing of the asset purchase transaction, Resolution Number 5385 wiIl be an indirect subsidiary of Time Warner Cable Inc., and will be qualified to conduct business as a limited liability company in the State ofCalifomia. Section 2. The authorization, consent and approval of the Franchise Authority to the proposed assignment are conditioned upon compliance by the Franchisee or the Transferee with the foIl owing requirements: (a) Within 60 days after the adoption ofthis resolution, the Franchisee and the Transferee will execute and file in the office of the City Clerk an "Assignment and Assumption Agreement" in substantially the form attached to the agenda report as Exhibit A. The Mayor is authorized to execute that document and thereby evidence the written consent of the Franchise Authority to the assignment and assumption of all rights and obligations under the Franchise. I (b) An original or conformed copy of the written instrument evidencing the closing and consummation of the asset purchase transaction involving the proposed assignment of the Franchise must be filed in the office of the City Clerk within 60 days after that closing and consummation. (c) Regardless of whether the asset purchase transaction described in the FCC Form 394 actuaIly closes, the Franchise Authority will be reimbursed for all costs and expenses reasonably incurred by the Franchise Authority in processing and evaluating the information relating to the proposed assignment of the Franchise; provided, however, that those costs and expenses wiIl not exceed the sum of $2500 and will be set forth in an itemized statement transmitted by the City Manager, or the City Manager's designee, to the Franchisee and the Transferee within 45 days after the effective date of this Resolution. The Franchisee or the Transferee must pay to the Franchise Authority the total amount set forth in that itemized statement within 30 days after the date of the statement. I Section 3. If the conditions set forth above in paragraphs (a) and (c) of Section 2 are not satisfied within the period of time specified in each of those paragraphs, then the authorization and consent of the Franchise Authority to the proposed assignment as provided for in this resolution will be revoked and rescinded without further action by the Franchise Authority, and the FCC Form 394 application wiIl be denied in all respects. In such event, the City Manager is authorized and directed to give written notice to all affected parties of that revocation and rescission, which will be deemed to be without prejudice to the right of those parties to submit a new FCC Form 394 to the Franchise Authority if required by the Franchise or local ordinance. Section 4. The City Clerk is directed to transmit a certified copy of this resolution to the following persons: Mr. Roger Keating, President Los Angeles Division Time Warner Cable Inc. 959 South Coast Drive, Suite 300 Costa Mesa, CA 92626 Brad M. Sonnenberg, Esq. Executive Vice President, General Counsel and Secretary Adelphia Communications Corporation 5619 DTC Parkway Denver, CO 80111 I Section 5. The City Clerk is directed to certify to the passage and adoption of this resolution. Resolution Number 5385 PASSED, APPROVED AND ADOPTED by the City Council of the City of Seal Beach this 14th day of November , 2005 by the following vote: 1 AYES: Council Members U~fb (Y)fiA/.UJn I c1t~ Ifhfk., /~ NOES: Council Members ~1/ ABSENT: Council Members ~ ABSTAIN: Council Members ~hl ~~ d'~ Mayor ATTEST: ~- via Ci y Clerk ~-0l1/~' . . STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF SEAL BEACH ) I I, Linda Devine, City Clerk of the City of Seal Beach, California, do hereby certify that the foregoing Resolution is the original copy of Resolution Nu~ber 5385 on file in the office of the City Clerk, passed, approved, and adopted by the City Council of the City of Seal Beach at a meeting thereof held on the 14th day of November , 2005. ~~ nP. ity lerk ~, . I