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HomeMy WebLinkAbout05-177 - ADMIN Resolution - City Council - 2005/12/19RESOLUTION NO. 05-177 A RESOLUTION APPROVING THE PROPOSED CHANGE OF CONTROL OF TIME WARNER WHEREAS, on or about February 13, 1989, the City of St. Louis Park, Minnesota ("City") passed and adopted a Cable Communications Franchise Ordinance ("Franchise"), currently held by Time Warner Cable Inc. ("Franchisee"). WHEREAS, on or about June 15, 2005, Franchisee submitted to the City FCC Form 394, Application for Franchise Authority Consent to Assignment or Transfer of Control of Cable Television Franchise ("Form 394"). WHEREAS, Form 394 constitutes Franchisee's application to transfer the system to MOC Holdco II, Inc. which will wholly own Cable Holdco II Inc. ("Proposed Franchisee"). WHEREAS, pursuant to a Redemption Agreement, dated April 20, 2005, by and among Comcast Cable Communications Holdings, Inc.; MOC Holdco II, Inc.; TWE Holdings I Trust, TWE Holdings II Trust; Cable Holdco II Inc., Time Warner Cable Inc. and other related parties. (a) the Franchisee cable system and Franchise will be assigned to a wholly-owned subsidiary of Franchisee, Cable Holdco II Inc. and (b) immediately thereafter, pursuant to the same Redemption Agreement, all of the stock of Cable Holdco II Inc. will be acquired by MOC Holdco II, Inc., an indirect wholly-owned subsidiary of Comcast Cable Communications Holdings, Inc. The assignment and change of control described herein shall collectively be referred to as the "Transaction." WHEREAS, under the City's Franchise and applicable law, the Transaction requires consent from the City. WHEREAS, the City has reviewed the Transaction and the legal, technical, and financial qualifications of MOC Holdco II, Inc. and its corporate parent entities. WHEREAS, the City has retained Front Range Consulting, Inc. ("FRC") to review the franchise fee payments made by the Franchisee for the period January 2002 through December 2004 ("Accounting Penod"). WHEREAS, the City received a report from FRC alleging that the Franchisee has underpaid the City for Franchisee's franchise fee obligations during the Accounting Penod. WHEREAS, the City desires to reach mutually acceptable resolution of the alleged underpaid franchise fees with Franchisee. Resolution No. 05-177 -2- WHEREAS, the City has also been engaged in informal renewal negotiations with Franchisee and the City has extended the term of the Franchise on several occasions in an attempt to provide additional time for the parties to reach mutually acceptable language for the renewal of the Franchise. WHEREAS, both the City and Franchisee have retained all rights each may have under federal law to conduct the renewal via the formal renewal process found at 47 U.S.C. 546 should the parties be unable to reach an informal agreement. WHEREAS, the City has expressed concerns that the Transaction may adversely impact the City's ability to properly conduct a formal renewal proceeding, if necessary, in a timely manner. WHEREAS, based on information obtained and on the reports and information received by the City, the City has elected to consent to the Transaction with certain conditions imposed upon the approval. NOW, THEREFORE, the City of St. Louis Park, Minnesota hereby resolves as follows: 1. The Franchise is in full force and effect, and Franchisee is the lawful holder of the Franchise. 2. Each of the foregoing recitals is hereby incorporated by reference. 3. The City hereby consents and approves of the Transaction as contemplated under the Redemption Agreement, subject to: a. Closing of the Transaction described in information provided to the City by Franchisee and MOC Holdco II, Inc. b. MOC Holdco II, Inc., within thirty (30) days of the date of closing, notifying the City in writing of the completion of the Transaction. c. Cable Holdco II Inc., within thirty (30) days of the date of closing, providing the City with a signed acceptance of this Resolution in the form attached hereto and incorporated by reference. d. Cable Holdco II Inc., within thirty (30) days of the date of closing, providing the City with a Certificate of Authority to conduct business in the State of Minnesota. 4. The City hereby waives any nght of first refusal which the City may have to purchase the Franchise, or the cable system serving the City, but only as such right of first refusal applies to the request for approval of the Transaction now before the City. 5. By this consent the City does not make any representation that Franchisee is in compliance with its obligations under the Franchise. • Resolution No. 05-177 -3- 6. By this consent the City does not waive any of Franchisee's commitments, duties and obligations under the Franchise, including any accrued and unfulfilled obligation of the Franchisee, whether known or unknown, relating to the Franchise. 7. In the event' the Transaction contemplated under the Redemption Agreement is not completed, for any reason, or is modified in any material manner, the City's consent provided hereunder shall not be effective. 8. This Resolution shall take effect and continue and remain in effect from and after the date of its passage, approval, and adoption. Revii -d •r Administration: 1 City Ma ager Attest: City Clerk Ade , ed by the City Council December 19, 2005 Mayo