RESOLUTION NO. ______, SERIES 2014
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CONSENT TO TRANSFER OF CONTROL OF CABLE FRANCHISE (As Amended).
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Sponsored By: Council Members Fleming, Aubrey Welch
WHEREAS, Insight Kentucky Partners II, L.P ("Franchisee") is the duly authorized holder of a franchise, as amended to date (the "Franchise"), authorizing Franchisee to serve Louisville/Jefferson County Metro Government (the "Franchise Authority") and to operate and maintain a cable television system there; and
WHEREAS, on February 12, 2014, Comcast Corporation ("Comcast") and Time Warner Cable Inc. ("TWC"), the ultimate parent company of Franchisee, and Tango Acquisition Sub, Inc. ("Tango"), entered into an Agreement and Plan of Merger, pursuant to which TWC will merge with Tango, a wholly-owned subsidiary of Comcast, with TWC as the surviving company, TWC becoming a wholly-owned subsidiary of Comcast and, Comcast, after the consummation of its merger with TWC, becoming the ultimate parent company of Franchisee (the "Comcast Transaction"); and
WHEREAS, on or about April 9, 2014 Comcast submitted an FCC Form 394 to the Franchise Authority; and
WHEREAS, on April 25, 2014, Charter Communications, Inc. ("Charter") and Comcast entered into the Comcast/Charter Transactions Agreement, and contingent upon Comcast's consummation of its acquisition of TWC, pursuant to which the Franchisee, shall become a wholly-owned subsidiary of Charter (the "Charter Transaction"); and
WHEREAS, Charter has filed an FCC Form 394 with the Franchise Authority with respect thereto; and
WHEREAS, Charter has provided the Franchise Authority a letter dated August 26, 2014 ("Charter Letter"), a letter dated September 5, 2014 ("Charter Letter II"), and a document entitled "Charter Values", all of which are attached hereto and incorporated by reference; and
WHEREAS, the Charter Letter states that "Charter is excited about the eventual rollout of network upgrades in Louisville that will result in a 60 Mbps base broadband speed" and further states "it is Charter's expectation that a 100 Mbps option will also be available in the future"; and
WHEREAS, the Charter Letter states "Charter is pleased to announce its goal of bringing 1 Gbps service to [a multi-dwelling unit] or subdivision in the Louisville area within 24 months of closing the transaction" and further states that "[t]his marks the first time in the company's history that it has announced plans to demonstrate 1 Gbps service in a community"; and
WHEREAS, the Charter Letter states "to improve the quality of the customer experience, Charter has brought its customer care activities from overseas, into the United States, hiring more than 6,000 people in the United States since 2012"; and
WHEREAS, the Charter Letter states that Time Warner Cable has a call center in Louisville and employs approximately 1,500 people total throughout the region and that Charter currently has approximately 1,100 employees at a National Call and Network Operations Center in Jefferson County; and
WHEREAS, the Charter Letter states that currently, Charter has "no plans to decrease these jobs" and that" [i]t is Charter's expectation that we will maintain our employee base in the Louisville metro area, and we actually hope that the number of jobs will increase"; and
WHEREAS, the Charter Letter states that "Charter acknowledges that, pursuant to an April 1998 estoppel letter and a subsequent settlement agreement entered into in September 1999, the franchisee must pay a $50,000 annual PEG payment for as long as the current franchise remains in place, and so long as the Metro Government spends at least the same amount on PEG each year;" and
WHEREAS, the Charter Letter states that "Charter certainly recognizes the importance of Public Safety Support to the Metro Government. After reviewing the information related to the provision of this support, we have no doubt that Charter Business can provide this service at fair and reasonable commercial rates, terms, and conditions;" and
WHEREAS, the Charter Letter states that "Charter takes seriously its impending role as a member of the community in Louisville and greatly values the residents of the metro area. Accordingly, Charter plans to introduce in the near future a major corporate charitable initiative through which Charter expects to make significant contributions to the communities in our footprint;" and
WHEREAS, the Franchise Authority has considered and approves of the Comcast Transaction and the Charter Transaction subject to the conditions set forth in the body of this Resolution.
NOW, THEREFORE, BE IT RESOLVED BY THE LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT AS FOLLOWS:
The foregoing recitals are approved and incorporated herein by reference.
1. The Franchise Authority consents to the Comcast and the Charter Transactions contingent on the receipt of required approvals of the Transactions from the Federal Communications Commission and the United States Department of Justice. Said consent does not constitute and shall not be construed to constitute a waiver of any lawful obligations of the Franchisee, Comcast and/or Charter under the Franchise.
2. The Franchise Authority confirms that the Franchise is valid and outstanding and in full force and effect. Subject to compliance with the terms of this Resolution, all action necessary to approve the transfer of control of the Franchisee to Comcast from Comcast to Charter has been duly and validly taken.
3. Charter or the Franchisee may (a) assign or transfer it assets, including the Franchise, provided that such assignment or transfer is to an entity directly or indirectly controlling, controlled by or under common control with Charter; (b) restructure debt or change the ownership interests among existing equity participants in Charter; (c) pledge or grant a security interest to any lender(s) of Charter's assets, including, but not limited to, the Franchise, or of interest in Charter, for purposes of securing any indebtedness; and (d) sell equity interests in Charter or any of Charter's affiliates.
4. Upon closing of the Comcast and Charter Transactions, the Franchisee shall remain bound by the lawful terms and conditions of the Franchise and the Letter of Estoppel dated April 24, 1998, which is attached hereto and incorporated by reference.
5. New Franchisee agrees to comply with the lawful obligations of the Franchise.
6. This Resolution shall be deemed effective upon adoption.
6. This Resolution shall have the force of a continuing agreement with Charter, Franchisee, and the Franchise Authority shall not amend or otherwise alter this Resolution without the consent of Franchisee and Charter. Further, with respect to the benefits it will derive from the passage of this resolution, Charter shall have a continuing obligation to comply with the commitments and representations made to Metro government and its representatives (see Exhibit A) regarding employment, product offerings, cost and limits on subscriber fees associated with its plan to encrypt its signal in Jefferson County. In that connection Charter shall agree to specific employment targets and limits on costs to subscribers resulting from Charter's transition to an encrypted signal as follows: A) Employment- Charter shall retain the existing 2,500 jobs(1,400 TWC/1,100 Charter) currently in Jefferson County until the latter of 2 years from the date of closing of their purchase of Time Warner Cable or the execution of a new franchise agreement with Louisville Metro. B) Subscriber Costs- Charter shall follow the attached schedule of Digital Box Offerings (see Exhibit B) for any subscribers required to acquire a set-top box as a result of Charter's encryption of its signal. Provided, however, the term of offerings of such boxes on Exhibit B shall not begin until the latter of 2 years from the date of closing of their purchase of Time Warner Cable or the execution of a new franchise agreement with Louisville Metro.
7. This Resolution shall have the force of a continuing agreement with Charter, New Franchisee, and the Franchise Authority shall not amend or otherwise alter this Resolution without the consent of New Franchisee and Charter.
7. This Ordinance Resolution shall take effect upon its passage and approval.
___________________________ H. Stephen Ott Metro Council Clerk |
____________________________ Jim King President of the Council |
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____________________________ Greg Fischer Mayor |
Approval Date: ________________ |
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APPROVED AS TO FORM AND LEGALITY:
Michael J. O'Connell
Jefferson County Attorney
By: ____________________________
Transfer Consent of Cable Franchise Res. ROC bkn 092214 Draft 2 092214
130e6d2d-27b0-4da5-bd2b-0e7b3e1e71ed Rev. Draft 3 pw,bkn 103014
Transfer Consent of Cable Franchise Res. ROC pw, bkn 103014 Draft 3