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HomeMy WebLinkAboutRES 2006-58RESOLUTION NO. 2006- 58 A RESOLUTION OF THE CITY OF DIAMOND BAR, PROVIDING FOR THE TRANSFER OF CONTROL OF THE CITY'S CABLE TELEVISION FRANCHISE FROM ADELPHIA COMMUNICATIONS TO COMCAST CORPORATION, WHO WILL THEN TRANSFER CONTROL OF THE FRANCHISE TO TIME WARNER CABLE WHEREAS, the City of Diamond Bar ("Franchising Authority") has granted a cable television franchise (the "Franchise") to Century -TCI California, L.P., an entity (the "Franchisee") presently controlled by Adelphia Communications Corporation, which is currently in Chapter 11 bankruptcy proceedings; WHEREAS, pursuant to an Asset Purchase Agreement dated April 20, 2005 between Adelphia and Comcast Corporation ("Comcast"), an indirect wholly-owned subsidiary of Comcast will acquire Adelphia's interest in the Franchisee (the "Adelphia Transaction"); WHEREAS, pursuant to an Exchange .Agreement between Time Warner Cable Inc. ("Time Warner Cable") and Comcast dated April 20, 2005, Comcast is to cause the Franchisee to assign the Franchise to CAC Exchange I, LLC (the "New Franchisee") and the New Franchisee will become an indirect subsidiary of, and will do business as, Time Warner Cable (the "Exchange"); and WHEREAS, through the Adelphia Transaction and the Exchange (collectively, the "Transaction"), the Franchise will be removed from Adelphia's bankruptcy proceeding, and control of the Franchise and operation of the cable system assigned to the New Franchisee; WHEREAS, Franchisee and Time Warner Cable have submitted to the City an FCC Forms 394 regarding the Adelphia Transaction and the Exchange; WHEREAS, the Franchising Authority has concluded the Adelphia Transaction and the Exchange will result in a change of control of the Franchisee; WHEREAS, the Franchising Authority delegated the authority to deny without prejudice the Adelphia Transaction and Exchange to the City Manager pursuant to Resolution No. 2005-49; WHEREAS, by way of letter dated February 22, 2006, the City Manager denied without prejudice the Adelphia Transaction and the Exchange; WHEREAS, the Franchising Authority has determined that it will now consent to the Adelphia Transaction and Exchange in accordance with the provisions of this Transfer Resolution WHEREAS, the Franchising Authority has identified certain past compliance issues and Franchisee has indicated it willingness to resolve these issues and therefore, Franchisee and Franchising Authority have entered into a separate Settlement and Mutual Release Agreement dated as of June 20, 2006 (the "Settlement Agreement"); and NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Diamond Bar does hereby determine and find as follows: 2006--58 To the extent required under the terms of the Franchise and applicable law, the Franchising Authority hereby authorizes and consents to the Adelphia Transaction and the Exchange. 2. From and after the close of the Exchange, the New Franchisee shall assume and be responsible for all obligations under the Franchise. 3. The authorizations and consents granted herein shall be effective upon the closing of the Transaction. Notwithstanding the foregoing, if the Transaction should not close by 5:00 P.M. Pacific Standard Time on December 31, 2006, then the Franchising Authority's authorization and consent shall lapse and expire as to any such transaction that has not closed by such time. 4. This authorization and consent is conditioned upon (a) payment of the amount due under the Settlement Agreement in accordance with the terms thereof and (b) the parties to the Adelphia Transaction and the Exchange, and any other reviewers of the Adelphia Transaction and the Exchange (for example, the Federal Communications Commission) approving the Adelphia Transaction and the Exchange in a form not materially different from the form reviewed, authorized and consented to by the Franchising Authority. 5. Nothing in this Resolution shall be considered or construed to limit the Franchising Authority's right to regulate or charge a fee upon the New Franchisee related to the cable or non -cable services provided by the New Franchisee, so long as the regulation or fee complies with applicable federal, state, and local law. 6. The Franchising Authority hereby gives the New Franchisee notice that the Transaction may create taxable possessory interests upon which Franchisee may be liable for certain property taxes. New Franchisee shall acknowledge that it has received actual notice as provided by California Revenue and Taxation Code section 107.6. 7. Within thirty (30) days of consummation of the Exchange, the New Franchisee shall execute and return to the Franchising Authority an acceptance of this Resolution in a form substantially similar to the form attached to this Resolution. 8. Failure of the Franchisee to comply with any condition of this Resolution shall render this Resolution subject to rescission, in which case Franchisee's request for a change of control shall be considered denied. Prior to any such rescission, Franchisee shall be provided reasonable notice and opportunity to cure any alleged failure to comply with any condition of this Resolution. 9. Nothing in this Resolution shall be considered or construed to grant the Franchising Authority's consent that may be required under the Franchise for any future change of control, transfer, or any other transaction, including any transfer of the Franchise to any subsidiary or affiliate of the Franchisee, the New Franchisee, or their corporate parent(s). The Franchising Authority expressly reserves all of its rights regarding any future transactions. 2006--58 PASSED, APPROVED, AND ADOPTED THIS 20th DAY OF JUNE, 2006. jk" Carol Herrera, Mayor 1, Tommye Cribbins, City Clerk of the City of Diamond Bar, do hereby certify that the foregoing Resolution was passed, adopted and approved at a regular meeting of the City Council of the City of Diamond Bar held on 20th day of June, 2006, by the following vote: AYES: COUNCIL MEMBERS: Chang, Tanaka, Tye, M/Herrera NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: MPT/zirbes ABSTAINED: COUNCIL MEMBERS: None ATTEST: Tommye Cribbins, City Clerk City of Diamond Bar 1 2006-58