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Home My WebLink About12/15/2004 - STAFF REPORTS (12) DATE: December 15, 2004 TO: City Council FROM: Assistant City Manager- Administration-'-E�' SUBJECT: Cable Television Franchise Extension RECOMMENDATION: It is recommended that the City Council approve: (1) a Resolution Extending the Cable Television Franchise Granted to Palmer Cablevision under Agreement 2792 through December 31, 2005; and (2) a Resolution Extending the Cable Television Franchise Granted to Warner Cable Communications under Agreement 2535 through December 31, 2005. SUMMARY: The City has heretofore entered into two separate franchise agreements for cable television services. Although these agreements are with the same cable operator, Time Warner, they cover different areas of the community. Time Warner has indicated that they would like to commence informal negotiations with the City for the purpose of renewing the franchise agreements. In order to properly facilitate negotiations, staff is recommending that the franchise agreements be extended through December 31 , 2005. BACKGROUND: On January 20, 1988, the City Council adopted Ordinance 1295 providing for the establishment and granting franchises or privileges for the construction, maintenance, and operation of a cable television system within the City. Pursuant to this Ordinance, the City Council granted a franchise agreement on or about January 20, 1988 with Warner Cable Communications. This agreement was for a 15 year term expiring January 20, 2005. On or about November 15, 1989, the City Council granted a separate franchise agreement to Palmer Cablevision. This agreement was also for a 15 year term expiring on November 15, 2005. Both franchise agreements have been sold and transferred to different cable operators over the years. Time Warner is the current operator of the cable system. Time Warner has provided the City formal notice of intent to renew both franchises, pursuant to the provisions of the Cable Communications Policy Act of 1984 as amended (47 U.S.C. § 546). The procedures for renewing a cable franchise are governed primarily by federal law. Specifically, Section 626 of the Cable Communications Policy Act of 1984, (47 U.S.C. § 546) establishes the requirements for renewal. Under this Act, the City can follow either, or both, of two processes available for franchise renewal: a formal and an informal renewal process. Generally, a cable operator will ask the city to begin formal proceedings at the same time it asks the city to begin to negotiate informally. If informal negotiations fall through, a city and cable operator can then proceed through the formal renewal process. The statutory and procedural standards for denial of renewal differ, depending on the procedure followed. However, the 1984 Act reflects Congress' notion that "a cable operator whose past performance and proposal for future performance meet the standards established by this section [will] be granted renewal." As such, the City may deny the cable operator's request for renewal only if one or more of the following applies: There is substantial noncompliance with terms of the existing franchise agreement. Service quality has not been reasonable in light of community needs. The provider lacks the financial, legal, or technical ability to provide the services, facilities, and equipment needed. The proposal from the provider does not meet cable-related community needs and interests, taking into account the cost of meeting such needs. The renewal process is divided into three phases: 1) development of a timeline and education of City staff regarding the process, laws, and regulations; 2) review of the status of the current cable television system and franchise, and ascertainment of future cable television- related needs; and 3) negotiation of an agreement. The time period typically needed to undertake all phases involved in a franchise renewal process is between 12 to 18 months, depending on the number of issues and the ability of the parties to reach an agreement. Should informal negotiations prove to be unsuccessful, an additional nine months to a year may be required to complete the formal renewal process. Due to the length of time it will take to complete the renewal process, staff is recommending that both franchise agreements be extended through December 31, 2005. Resolutions extending the term of both franchise agreements have been prepared and are attached for your consideration. As previously stated, the franchise renewal process involves numerous tasks and the coordinated effort of City staff, elected officials, and local residents. To successfully complete the renewal process and negotiate a new franchise agreement also requires expertise in areas as diverse as cable programming, PEG access programming, cable regulation and law, public opinion polling and market research, rate setting, the electrical engineering field, and telecommunications systems. Since staff does not have the depth of experience in this area, a cable consultant will be needed. Staff is in the process of soliciting proposals and plans on bringinggaa request to retain the services of a qualified cable consultant in January. Troy .. Butzla , As stant City Manager- Administration APPROVED City Manager Attachments: 1. Resolution Extending Franchise with Palmer Cablevision 2. Resolution Extending Franchise with Warner Cable Communications ,r ai 2 V � RESOLUTION NO. 21160 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS EXTENDING THE CABLE TELEVISION FRANCHISE AGREEMENT WITH PALMER CABLEVISION THROUGH DECEMBER 31, 2005. WHEREAS, the provision of cable services are a critical service for many Palm Springs residents and the public at large; and WHEREAS, provision of cable services necessitates an agreement for use of public right- or-way between the City of Palm Springs ("Grantor") and all cable providers; and WHEREAS, Grantor entered in a cable franchise agreement ("Franchise Agreement') with Palmer Cablevision on or about November 15, 1989; and WHEREAS, the Franchise Agreement with Palmer Cablevision has transferred several times to different cable operators throughout the years; and WHEREAS, Time Warner ("Grantee") is the current operator of the cable television franchise; and WHEREAS, the Franchise Agreement with Grantee will expire on or about November 15, 2005; and WHEREAS, Grantee has filed timely notice of intent to renew its Franchise Agreement with Grantor; and WHEREAS, the Grantor and Grantee desire to negotiate informally in good faith the terms and conditions of a new Franchise Agreement; and WHEREAS, to facilitate negotiations relating to the renewal of the Franchise Agreement the parties have agreed to extend the existing Franchise Agreement through December 31, 2005 or until a new Franchise Agreement is approved; and WHEREAS, the parties agree that it is in the common interest of cable customers to continue to receive cable services under the current Franchise Agreement terms until a new Franchise Agreement is approved. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, as follows: Section 1. Extension of the Term of the Franchise Agreement through December 31, 2005. The Grantor hereby agrees and consents to extend the current Franchise Agreement, granted to Grantee pursuant to Agreement 2792, through December 31, 2005 or until a new Franchise Agreement is approved by both parties, whichever occurs first, subject to the terms and conditions set forth below. Resolution 21160 Page 2 Section 2. Terms and Conditions of Extension of the Agreement. The Grantor's consent to the extension, described above, is subject to, and conditioned upon, the following terms and conditions, all of which are hereby incorporated in the Franchise Agreement: A. All terms and conditions of the existing Franchise Agreement shall remain in full force and effect during the extension period. B. The extension shall have no adverse effect on Grantee's compliance, nor shall the extension be grounds for any change or modification in the remaining terms, conditions and obligations of the Franchise Agreement. Further, the extension of the franchise agreement will not affect, diminish, impair or supercede the binding nature of the existing ordinances, resolutions and agreements applicable to operation of the cable system. C. The Grantor's consent to extend the Franchise Agreement, as set forth herein, shall not be construed, in any manner whatsoever, to constitute a waiver or release of any rights that the Grantor may have under the Franchise Agreement, whether those rights arose before or after the change in control to Grantee and the fact that such deficiencies may have existed prior to the change in control shall not be a defense against correction of the deficiencies or non-compliance. D. Both parties hereby reserve all rights under applicable provisions of the Cable Communications Policy Act of 1984 (The "Cable Act"), including, without limitation, Sections 626 and 635. Nothing herein shall be deemed or construed as a waiver, release or surrender of any right that either party may have under the Cable Act or any applicable law. ADOPTED this 15th day of December 2004. AYES: Members McCulloch, Mills, Pougnet and Mayor Oden NOES: None ABSENT: Member Foat ATTEST: CITY OF PALM SPRINGS, CALIFORNIA By: City Clerk City Manager REVIEWED AND ADOPTED AS TO FORM: