RESOLUTION AUTHORIZING THE TRANSFER OF THE CABLE TELEVISION FRANCHISE FROM CENTURY COMMUNICATIONS CORPORATION TO ADELPHIA COMMUNICATIONS CORPORATION

 

Recommendation

Staff recommends that Council:

1. Listen to presentation by Adelphia about their company.
2. Adopt Ordinance #99-____-U amending Ordinance #94-1117, which granted a nonexclusive Franchise for the operation of a cable television system within the City, and declaring the urgency thereof.
3. Adopt Ordinance #99-____amending Ordinance #94-1117, which granted a nonexclusive Franchise for the operation of a cable television system within the City.
4. Adopt the attached Resolution #99-____authorizing the transfer of control of the Cable Television Franchise by Century Communications Corporation to Adelphia Communications Corporation.

 

Background

On April 29, 1999, Century Valley Cable Corp. delivered FCC form 394 to the City, requesting consent for the transfer of the City’s cable television system from Century to Adelphia.

Per FCC guidelines, the City has 120 days to review a Form 394 to determine if a prospective company has the legal, technical, and financial qualifications to serve the requirements of the Franchise. To adequately review information from Adelphia, the City requested and Adelphia approved an extended review period through September 29, 1999. Subsequently, due to scheduling difficulties at Adelpia, the review period was extended to October 13, 1999.

Randy Fisher, General Counsel for Adelphia, will make a presentation to the Council at the meeting, introducing the company and discussing some of the new services that will be offered to Hermosa Beach cable customers.

Analysis

William Rudell, from Richards, Watson & Gershon reviewed the City’s form 394 and requested supplemental information on behalf of Hermosa Beach and the 13 other local franchising authorities the law firm represents.

The City Attorney’s review concluded that Adelphia meets the legal, technical, and financial qualifications required to ensure the performance of the obligations of the existing cable television franchise agreements.

In addition, the City met with representatives of Adelphia to discuss four issues of concern. Issues numbered 1-3 below are addressed with amendments to Ordinance #94-1117 (Attachment B) and the fourth issue has been addressed in a side letter (Attachment D).

1. Internet Services: The City requested free modem installation and monthly Internet service for City Hall and satellite facilities (once the services are available) with no pass through costs assigned to consumers. Adelphia agreed to offer up to 20 modems and monthly service free of charge for the 20 stations to the City without pass through fees.
2. Technical Audit: The City requested and Adelphia agreed to conduct a technical audit to include compliance with City ordinances immediately following the October 1, 1999 system re-build. This audit will check to see that City Public works standards and the technical requirements of the Franchise are met.
3. Open access: With amendments to our existing Ordinance, the City reserves any rights it may have to impose conditions regarding third party access to the cable system for delivering Internet service.
4. Fiber Optic lines: Upon the City’s request, Adelphia will install fiber optic lines at actual cost. The City does not have any current plans to do this, however, we thought it may be prudent to ask for this benefit in the event we may wish to use it in the future (Manhattan Beach has a similar agreement).

The Cities of Manhattan and Redondo Beach are also processing Forms 394 for this proposed transfer. Manhattan Beach has secured the services of cable consultants (Communications Support Group) who are still in discussions with Century/Adelphia about the transfer. Similarly, Redondo Beach has not concluded their review of Form 394. If Council approves the transfer this meeting, it is possible that the other cities may negotiate for additional benefits with a protracted review period.

The questions we forwarded to the applicant were answered with sufficient time for the City Attorney’s office to review. From this and the original application, they were unable to find any information that would preclude the City Council from making findings that the proposed transferee would meet the Franchise requirements.

Since the City’s current Franchise agreement is constructed as an ordinance (often cities do this via resolution), the urgency provision is required in order to complete the transfer agreement within the authorized review period.

 

Fiscal Impact:

1. Per the Franchise Ordinance, the City Attorney’s bill for processing Form 394 (currently estimated at $2,500) will be charged to Century.
2. City Franchise fee: No fiscal impact
3. If the City elects to use free Internet service, there may be annual savings to the General Fund.

Attachments

(A) Ordinance #99-____-U amending Ordinance NO. 94-1117, which granted a nonexclusive Franchise for the operation of a cable television system within the City, and declared the urgency thereof.

(B) Ordinance #99-____amending Ordinance #94-1117, which granted a nonexclusive Franchise for the operation of a cable television system within the City.

(C) Resolution # 99- ____authorizing the transfer of control of the Cable Television Franchise by Century Communications Corporation to Adelphia Communications Corporation.

4. Letter of agreement for fiber optic line installation.
5. Marketing materials from Adelphia Communications Corporation on file in the City Clerk’s Office.

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