HomeMy WebLinkAbout4/19/2000 - STAFF REPORTS (3) DATE: April 19, 2000
TO: City Council
FROM: Director of Finance &Treasurer
APPROVAL OF CHANGE OF CONTROL OF TIME WARNER CABLE TV FRANCHISE
RECOMMENDATION:
It is recommended that the City Council approve a resolution providing for the
change in control of the Time Warner Cable TV franchise.
BACKGROUND:
Time Warner, Inc., the parent company of Time Warner Cable, recently merged
with America Online(AOL). The Federal communication Commission rules require
that each franchising authority consent to the change in control. Such consent
may not unreasonably be withheld.
None of the terms and conditions of the cable TV franchise are affected, and Time
Warner will continue to be responsible for all obligations under the franchise. The
expiration date of the franchise is February, 2005.
Additional documentation is on file with the City Clerk.
APPROVED BY SUBMITTED BY
Dallas J. Flicek Thomas M. Kanarr
Interim City Manager Director of Finance &Treasurer
ATTACHMENTS:
1. Letter from R. Barlow ��
2. Resolution
CABLE
PALL'. (760J 3-f0-2351
February 9, 2000 3Aa�
It& Tom Kanarr
City Treasurer
City of Palm Springs
P.O. Box 2743
Palm Springs, CA 92263
Dear Mr. Kanarr:
As you know, the City of Palm Springs has granted a franchise to provide cable service to
a subsidiary of Time Warner Inc. ("TWI") (which subsidiary does business as Time Warner
Cable). I am writing to inform you of certain developments regarding TWI.
As you may have read, America Online, Inc. ("AOL") and TWI have announced a stock-
for-stock merger in which each of TWI and AOL will merge with subsidiaries of a newly formed
holding company. As a result of the mergers, both TWI and AOL will become wholly owned
subsidiaries of the new holding company, AOL Time Warner Inc ("AOL Time Warner"), Under
the terms of the definitive merger agreement, TWI and AOL stock will be converted to AOL
Time Warner stock at fixed exchange ratios.
As explained above, both AOL and TWI will continue to exist as wholly owned
subsidiaries of AOL Time Warner. It also should be noted that Time Warner Cable and indirect
subsidiaries and affiliates of TWI and Time Warner Cable, including the current franchisee in your
community, will continue to exist as subsidiaries of AOL Time Warner, Inc. While it is unclear
that this transaction requires your approval, if you conclude that it does, we would appreciate the
consideration and prompt adoption of the accompanying form of resolution. We have enclosed
one (1) original (and two (2) copies) of FCC Form 394 which provides you with the information
required by the FCC rules and commences the review period provided for thereunder.
I would like to take this opportunity to assure you that the merger of AOL and TWI will
have absolutely no adverse impact upon our franchise with your community or the service that we
provide.
• The franchise will continue to be held by the same entity. There will be no transfer of the
franchise.
• Time Warner Cable will continue to be solely and exclusively responsible for the day-to-day
management and operation of the cable television system.
Mr. Tom Kanarr
City of Palm Springs
February 9, 2000
Page 2
• There will be no change in our commitment to provide our customers with the best in
programming choices and customer service at a competitive rate.
• The local management and staff will remain the same,
• Local management will continue to report to the same executives of Time Warner Cable.
We believe this unique new enterprise, the premier global company delivering branded
entertainment and information across rapidly converging media platforms can only benefit our
customers. AOL Time Warner's creative and journalistic talent, technology assets and expertise,
and management experience will enable us to enhance consumer's access to the broadest selection
of high quality entertainment and information.
Please do not hesitate to contact me should you have any questions or if I can be of any
assistance. We certainly value the fine relationship we have with your community.
Very truly yours,
--I' ��
Robert I Barlow
President
Desert Cities Division
Enclosure
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RESOLUTION NO.
OF THE CITY COUNCIL OF THE CITY OF PALM
SPRINGS, CALIFORNIA, APPROVING THE CHANGE IN
CONTROL OF TIME WARNER CABLE TELEVISION
FRANCHISEE
WHEREAS, the City of Palm Springs ("Franchising Authority") has granted a
franchise to a subsidiary (the "Franchisee") of Time Warner, Inc. ("TWI")to provide cable
television service; and
WHEREAS,TWI and America Online, Inc. ("AOL")have entered into an Agreement
and Plan of Merger(the "Merger Agreement") dated as of January 10, 2000; and
WHEREAS, the Merger Agreement will result in a stock-for-stock merger (the
°Transaction") in which TWI and AOL will merge with subsidiaries of a newly formed
holding company; and
WHEREAS, as a result of the Transaction, both TWI and AOL will become wholly
owned subsidiaries of the new company, AOL Time Warner, Inc.; and
WHEREAS, the Franchising Authority has concluded the Transaction will result in
a change of control of the Franchisee.
NOW THEREFORE BE IT RESOLVED by the City Council of the City of Palm
Springs, as follows:
Section 1. To the extent required under the terms of the Franchise, the
Franchising Authority authorizes and consents to any change in
control of the Franchisee resulting from the Transaction_
Section 2. The Franchisee shall remain responsible for all obligations under
the Franchise.
Section 3. The foregoing consent shall be effective upon the closing of the
Transaction.
ADOPTED this day of 2000.
AYES:
NOES:
ABSENT:
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
By 38
City Clerk City Manager
REVIEWED & APPROVED AS TO FORM