Item 6: Ordinance on Comcast Renewal

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of discussion, both sides agreed to focus on negotiating terms of a renewed franchise that would be mutually acceptable, instead of resorting to litigation to resolve the procedural disagreement. 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 Permit staff, and Metro TV programming staff. A City Council public hearing on this matter was held October 15, 2007; no speakers signed up to provide testimony. A vast majority of the provisions in the current franchise are retained in the draft renewed franchise. The Letter Agreement adds some benefits for the City. New components and amended provisions being recommended for City Council approval for the new 10-year term (previous franchise was for 15 years) are listed below. New 10-year Franchise and Agreement Components • $200,000 payment to three jurisdictions, divided proportionate to subscriber base. Eugene’s proportion would be allocated to the General Fund. • $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 disaster- preparedness related benefit. • A fourth channel would be provided by Comcast for jurisdictional use - scrambled and dedicated for jurisdictional public safety training and communications. Comcast will provide 75 converters to unscramble the channel at no cost to the jurisdictions. • Comcast will provide an additional payment of $50,000 a year for public, education, and government (PEG) access channels for equipment. Federal law allows Comcast to pass on a prorated portion of this cost to their retail customers. • The definition of Gross Revenue would change to exclude - for this term - advertising commission income and program launch fees as revenue for purposes of assessing the five- percent rights-of-way use fee and two-percent telecom/cable tax. This definition remains in dispute nationally. • Jurisdictions will receive one paid full franchise review/audit in the 10-year term instead of one every three years. However, Comcast would provide an additional operational report after the fifth year. • 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 has signed the Letter of Agreement. If the ordinance is adopted, Comcast will also be asked to sign the Acceptance attached to the ordinance. When that has occurred, the City Manager will sign the Letter of Agreement, and franchise renewal will be complete. If the Acceptance is not signed, staff will review its options, including returning to more formal procedure. Staff prefers the suggested ten-year term for the renewal. However, the legal, legislative, and regulatory telecommunications and cable communications environment remains unstable, so it is possible that F:\CMO\2007 Council Agendas\M071022\S0710226.doc