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HomeMy WebLinkAboutResolution No. 4720 RESOLUTION NO. 4720 A RESOLUTION CONSENTING TO CHANGE IN CONTROL OF TCI CABLEVISION OF OREGON, INC. FROM AT &T TO AT&T COMCAST. The City Council of the City of Eugene finds as follows: A. TCI Cablevision of Oregon, Inc., aka AT&T Broadband, the cable franchise holder ("Franchisee") in the City of Eugene ("Franchise Authority") is an indirect subsidiary of AT&T Corp. ("A T &T"), and AT&T intends to merge its cable systems with Comcast Corporation ("Comcast") to create a new company to be known as AT&T Comcast Corporation ("AT&T Comcast") pursuant to the terms of an Agreement and Plan of Merger dated December 19, 2001, by and among AT&T , AT&T Broadband Corp., Comcast and certain of their respective affiliates, and a Separation and Distribution Agreement dated December 19, 2001, by and between AT&T and AT&T Broadband Corp. (the "Merger"). B. Prior to the Merger, pursuant to an internal corporate restructuring, the stock of the Franchisee, or indirect ownership of the Franchisee, may be transferred through one or more internal transfers or mergers to another direct or indirect subsidiary of AT&T, or Franchisee may elect as permitted by law to convert or reorganize its legal form to a limited company (together with the Merger, the "Transactions"). C. Following the Transactions, the resulting entity will be controlled by AT&T Comcast but will continue to operate the cable system and continue to hold and be responsible for performance of the cable franchise. D. On March 4, 2002, the companies gave notice to the Franchise Authority of the proposed change in control that would result from the merger of AT&T Broadband and Comcast by filing an FCC Form 394, together with attached exhibits ("Application"), and requested that the Franchise Authority consent to the Transactions in accordance with the requirements of the cable franchise and applicable federal law. E. As provided in the franchise agreement of the Franchise Authority, on March 11, 2002, the Franchise Authority requested that the Metropolitan Policy Committee initiate an inquiry into the Merger. F. The franchise provides that AT&T Comcast must show financial responsibility as determined by the Franchise Authority, and that consent of the Franchise Authority will not be unreasonably withheld. G. AT&T Comcast has stated that Franchisee will, following the merger, continue to comply with the lawful terms and provisions of the existing franchise and agreements; H. The Franchise Authority has reviewed the Application, examined the legal, financial and technical qualifications of AT&T Comcast, followed all required procedures in order to consider and act upon the Application. I. The Franchisee and Franchising Authority have, in a separate agreement attached as Exhibit A), noted the existence of certain identified issues, and agreed to exercise good faith efforts to resolve such issues separate and apart from the consent process. J. The Franchise Authority is willing to consent to the Transactions, as set forth below. NOW, THEREFORE, based upon the above findings, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EUGENE, a Municipal Corporation of the State of Oregon, as follows: Section 1. The Franchise Authority hereby consents to the Transactions in accordance with the terms of the franchise and applicable law, subject to the following conditions: 1.1 That Franchisee comply with all valid local laws, agreements and franchise requirements consistent with applicable federal and state law; and 1.2 That the Franchise Authority's consent to the Transactions shall not be construed to constitute a waiver or release of any rights the Franchise Authority has under the franchise, whether those rights arise before or after the change in control to AT&T Comcast. Section 2. This Resolution shall have the force of a continuing agreement with Franchisee and AT&T Comcast, and Franchise Authority shall not amend or otherwise alter this Resolution without the consent of Franchisee and AT&T Comcast. Section 3. This Resolution shall become effective immediately upon its adoption. The foregoing Resolution adopted the 220d day of May, 2002. ~~~ / 7~~ City Recorder Resolution - 2 EXHIBIT A May 22,2002 Mr. James R. Carlson City Manager pro tern City of Eugene 777 Pearl Street Eugene, OR 97401 Dear Mr. Carlson: We understand that the City of Eugene ("Franchising Authority") has several concerns relating to certain compliance matters under the franchise held by TCI Cablevision of Oregon, Inc. aka AT&T Broadband ("Franchisee"). The Franchising Authority has notified Franchisee of its concern that it would not be appropriate to approve a change of control prior to resolution of possible or alleged franchise violations with respect to the following issues, which are in no particular order (collectively "Identified Issues"): (1) Franchisee's dispute resolution policies and procedures relating to disputes between the subscriber and Franchisee; (2) Franchisee's notification that it will not collect or pay franchise fees based on revenues derived from its cable modem Internet service as of April 1, 2002; (3) Use of the Franchising Authority's public right-of-ways, and use of Franchisee's facilities within the Franchise Authority's public right-of-ways by others; and (4) Franchisee's compliance with franchise customer service standards and requirements. In order to successfully complete the consent process currently taking place by the Franchising Authority on the merger of AT&T Broadband and Comcast Corporation ("Merger") by June 3, 2002 as agreed to by the Franchise Authority and the companies, the Franchise Authority and the companies agree to discuss the Identified Issues towards reaching mutually satisfactory resolutions, separate and independent from the consent process. The parties agree to meet within 120 days from the date hereof and to make good faith efforts to resolve the Identified Issues within six (6) months. It is understood that the Franchising Authority's consent to the Merger shall not extinguish the Franchising Authority's right and ability to pursue against Franchisee any remedy available under the franchise with respect to any Identified Issues not mutually resolved. It is also understood and agreed that except for Identified Issues mutually resolved by the parties, the Franchising Authority and Franchisee shall not be deemed or construed to have waived any claims, actions, or defenses with respect to Identified Issues or other possible or alleged franchise violations duly noticed to Franchisee that remain unresolved. Mr. James R. Carlson City of Eugene May 22,2002 Page 2 By signing below the parties acknowledge and agree to the matters described hereinabove. By: City of Eugene ~rt~ City Manager pro tern