Res 00-087RESOLUTION NO. 00-087
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF POWAY, CALIFORNIA CONDITIONALLY
APPROVING THE TRANSFER OF CONTROL OF A
CABLE TELEVISION FRANCHISE GRANTED TO
TIME WARNER ENTERTAINMENT COMPANY, L.P. (TWE)
TO AOL TIME WARNER, INC.
WHEREAS, the City Council of the City of Poway (the "City") adopted an
Ordinance establishing regulations for granting and operating cable television systems
(hereinafter referred to as the ("Ordinance"); and
WHEREAS, pursuant to the Ordinance, the City entered into a Franchise
Agreement with Time Warner Entertainment Company, L.P. (TWE) (hereinafter referred
to as the "Franchisee"), (hereinafter referred to as the "Franchise Agreement"). The
Ordinance and the Franchise Agreement constitute, and will be hereinafter referred to
as the "Franchise;" and
WHEREAS, the Ordinance requires City Council consent to any transfer or
change of control of the Franchise or the Franchisee; and
WHEREAS, FCC Regulations (47 CFR Section 76 502(1 )[1]) require that in
order for a cable operator to obtain approval of a transfer or change in control of the
Franchise or the Franchisee, it must submit an FCC Form 394 and any other
information as may be required by the City, and
WHEREAS, the Franchisee has requested the consent of the City to transfer
control of the Franchise and Franchisee to AOL Time Warner, Inc. (The "Transferee");
and
WHEREAS, the Transferee has filed an FCC Form 394 with the City requesting
City Council approval of the transfer of control of the Franchise to the Transferee
(hereinafter referred to as the "Transfer"); and
WHEREAS, in support of its Form 394 Application, the Franchisee and the
Transferee have submitted to the City certain documents which are on file with the City
Clerk, and are collectively referred to as the "Transfer Documents;" and
WHEREAS, the City, through its attorneys and consultants, submitted an
Information Request to the Franchisee and Transferee on or about February 15, 2000
(the "Information Request"); and
WHEREAS, the Franchisee and Transferee have responded to the Information
Request, and
Resolution No. 00-087
Page 2
WHEREAS, the City Council has determined that the combination of Time
Warner, Inc. ("-I-WI") and America Online, Inc. ("AOL") into the Transferee could reduce
competition for both video programming and the provision of Internet Service Provider
("ISP") services over the cable system of the Franchisee and potentially subject
subscribers to a loss or lack of choice in terms of the selection of both video
programming sources and/or the selection of an appropriate ISP; and
WHEREAS, -I-WI and AOL have entered into and executed a Memorandum of
Understanding dated February 29, 2000, regarding Open Access business practices
(the "MOU"); and
WHEREAS, the Franchisee's compliance with the terms and conditions of the
MOU has been relied upon by the City in conditionally approving the Transfer and
constitutes material consideration and inducement thereof; and
WHEREAS, the City Council hereby finds that the Franchisee's compliance with
the MOU constitutes a mitigating factor supporting conditional approval of the Transfer;
and
WHEREAS, the City Council has determined that subscribers' interest in their
ability to select programming sources and ISPs in a free and competitive marketplace
can only and best be protected through the approval of the Transfer based upon the
conditions contained in the MOU; and
WHEREAS, the City and Franchisee have conditionally prepared an agreement
entitled "Agreement Relating to the Consent of the City of Poway, California to the
Transfer of Control of the Franchise Agreement Held by Time Warner Entertainment
Company, L.P. (TWE)," (hereinafter referred to as the "Transfer Agreement"), attached
as Exhibit A; and
WHEREAS, the City Council has determined that the Transfer should not be
approved unless the Franchisee agrees to the conditions contained within the Transfer
Agreement.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Poway, California does order as follows:
Section 1. The City Council hereby approves and consents to the Transfer,
subject to the Franchisee executing, delivering, and complying with the terms and
conditions of this Resolution as provided herein. This approval and consent shall be
deemed effective as of the date of closing of the Transfer.
Resolution No. 00-087
Page 3
Section 2. Unless the Transfer Agreement is executed and delivered to the
City by all parties specified on the signature page thereof, other than the City, on or
before 5 p.m. on October 2, 2000 (the "Acceptance Date"), the Transfer shall be
deemed denied, without further action of the City Council, as of the date of this
Resolution. Staff is hereby authorized and directed to present to the City Council at its
first regularly scheduled meeting subsequent to the Acceptance Date a resolution
setting forth the specific grounds for denial which grounds shall be consistent with the
recitals set forth herein and the requirements set forth in the Transfer Agreement.
Section 3. Upon the close of the Transfer, Transferee shall comply with and
be bound by the following documents.
The Ordinance;
The Franchise Agreement;
The Transfer Agreement and all prior Transfer and Extension
Agreements; and
This Resolution.
Section 4. The City Manager is authorized to execute the Transfer Agreement
attached hereto and incorporated herein with such changes as approved by Special
Counsel. The City Manager, the City Attorney, Special Counsel or their designees,
area hereby authorized and empowered to execute any documents necessary, in their
discretion, to implement the approvals contained herein.
Resolution No. 00-087
Page 4
PASSED, APPROVED, AND ADOPTED by the City Council of the City of
Poway, California, at a regular meeting thereof this 29th day of August, 2000.
AYES: EMERY, GOLDBY,
NOES: NONE
ABSTAIN: NONE
ABSENT: NONE
ATTEST:
~or~,~Anne Peoples, City [~erl~
HIGGINSON, REXFORD, CAFAGNA
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
I, Lori Anne Peoples, City Clerk of the City of Poway, do hereby certify that the
foregoing Resolution No. 00-087 , was duly adopted by the City Council at a
meeting of said City Council held on the 29th day of August, 2000 and that it was so
adopted by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
LoCi Anne Peoples,' City Clerk
City of Poway