Item 4: Ordinance Granting Comcast of Oregon II, Inc., an Additional Term and Franchise Renewal

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The attached final draft franchise and accompanying Letter of Agreement is a negotiated compromise of Comcast’s desire for an expedited ‘as is’ 10-year extension and City’s option to implement a formal franchise renewal process. Staff believe the draft provisions provide Eugene with programs and funding that meet the needs of the community and are appropriate in light of rights afforded both Comcast and the franchising authorities by federal and local laws. The Franchise and Letter of Agreement have been reviewed by the City Attorney, Finance staff, Public Works Permitting staff, and Metro TV programming staff. The vast majority of the provisions in the current franchise are retained in the draft renewed franchise. additional The Letter Agreement adds some benefits for the City. New components and amended provisions being recommended for council approval for the new 10-year term (previous franchise was for 15 years) are listed below. New 10-year Franchise Components • $200,000 payment to three jurisdictions, divided proportionate to subscriber base. • $20,000 towards Eugene downtown build-out if business or municipality matches with $20,000. • Basic Service television connections to additional publicly owned buildings which is a homeland security and disaster preparedness related benefit. • A 4th Channel scrambled and dedicated for jurisdictional public safety training and communications. Seventy-five converters to unscramble the channel at no cost to the jurisdictions. • Additional payment of $50,000 a year for Public, Education, and Government (PEG) access channels equipment. Federal law allows Comcast to pass on a prorated portion of this cost to their retail customers. • Changing Definition of Gross Revenue to exclude explicitly advertising commission income and certain programming fee income. • Jurisdictions will receive one paid full franchise review/audit in the 10-year term instead of one every three years. • Additional Comcast-provided operational report after 5th year. • Expedited renewal option language removed (suggested by jurisdictions). • Jurisdictions agree to a limited release of claims clause. The City Attorney believes the release does not adversely impact any claim the City may have against Comcast. Comcast is expected to sign the Letter of Agreement prior to materials being finalized for the October 22 City Council meeting packets. If the ordinance is adopted, Comcast will sign the Acceptance attached to the ordinance. When that has occurred, the City Manager will sign the Letter of Agreement, and the franchise renewal will be complete. If the Letter or Agreement is not signed as expected, staff will review its options. Staff prefers the suggested 10-year term for the renewal. However, the legal, legislative, and regulatory telecommunications and cable communications environment is unstable, so it is possible that some portions of the agreement and ordinance will be rendered less effective or ineffective. Local governments continue their joint efforts to prevent such changes. F:\CMO\2007 Council Agendas\M071015\S0710154.doc