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`F°"`'� City Council Staff Report
DATE: December 12, 2007 Consent Calendar
SUBJECT: APPROVE AN EXTENSION OF THE CABLE TELEVISION FRANCHISE
AGREEMENT WITH TIME WARNER THROUGH JUNE 30, 2008
FROM: David H. Ready, City Manager
BY: Assistant City Manager—Administrative Services
SUMMARY
The City has heretofore entered into two separate franchise agreements for cable
television services. These agreements, which cover two separate areas of the City, were
both for 17 year terms, expiring in late 2004 and early 2005, respectively. The City has
extended these agreements several times over the years to facilitate, in accordance with
Federal law, a renewal process of the cable franchise with the now incumbent cable
operator, Time Warner. The current extension with Time Warner expires on January 2,
2008. Unfortunately, due to extenuating circumstances, including recently enacted State
law (Assembly Bill 2987), which creates a state issued franchise for cable operators, the
City has been unable to negotiate a renewal of the existing cable franchise. The City has
now learned that Time Warner has applied for a state issued franchise to operate a cable
television system. This action would extend the existing cable franchise to June 30, 2008
to enable Time Warner to secure a state issued franchise.
RECOMMENDATION:
1. Adopt Resolution No. Extending the Cable Television Franchise Granted to
Palmer Cablevision under Agreement 2792 through June 30, 2008; and
2. Adopt Resolution No. Extending the Cable Television Franchise Granted to
Warner Cable Communications under Agreement 2535 through June 30, 2008; and
3. Authorize the City Manager to sign all documents necessary to effectuate this
action.
STAFF ANALYSIS:
On January 20, 1988, the City Council adopted Ordinance 1295 providing for the
establishment and the granting of 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 o a 1 r�a�p J�ry 19�/�
with Warner Cable Communications. This agreement was plr
City Council Staff Report
December 12, 2007 -- Page 2
Extension of Cable Television Franchise
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 17 year term,
expiring on November 15, 2004.
Over the years, both franchise agreements have been sold and transferred to different
cable operators. In the mid-1990's, the franchises were finally consolidated under a single
cable operator, Time Warner.
On or about February 15, 2002, Time Warner gave formal notice to the City of its intent to
renew both franchises, pursuant to the provisions of the Cable Communications Policy Act
of 1984, as amended (47 U.S.C. § 546). To facilitate the renewal process, the City Council
has extended the term of the cable franchise with Time Warner several times over the past
few years. The current extension of the cable franchise expires on January 2, 2008.
As part of the renewal process, the City hired a consultant, The Buske Group, to conduct a
comprehensive review of the cable operator's performance under the franchise
agreements. In addition, the City has conducted a telephone survey and a number of
community workshops to ascertain how residents feel about Time Warner and what
services they would like to see in the future.
While the City was doing its due diligence and assembling a needs assessment to help
guide it through the renewal process, the State of California was busy creating a new
paradigm for cable franchising in California,. known as AB 2987. This legislation, which
became law on January 1, 2007, allows any cable operator that currently has a local
franchise to seek a state franchise under the following conditions-
1. When their local franchise expires; or
2. On a date that they mutually agree upon with the local franchising authority (e.g.,
City); or
3. When a competitive video service provider (e.g., AT&T or Verizon) receives a state
franchise and notifies the local franchising authority that it intends to begin providing
video services within all or part of the community.
Under this law, if the incumbent cable operator seeks a state franchise, the franchise
previously issued by the local franchising authority is terminated and replaced by a state
franchise. Until recently, the City did not know whether Time Warner would apply for a
state issued video franchise. The City has now received correspondence from Time
Warner, dated November 16, 2007, indicating that they had submitted an application for a
state issued video franchise.
Since Time Warner will likely be issued a state video franchise to operate a cable
television system sometime over the next few months, it would be meaningless for the City
to continue the renewal process at this time. However, because the current franchise
agreements expire on January 2, 2008, staff recommends that the City Council extend
both franchise agreements with Time Warner to the earlier of (a) June 30, 2008, or (b) the
effective date of any state issued video franchise, pursuant to AB 2987.
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City Council Staff Report
December 12, 2007 -- Page 3
Extension of Cable Television Franchise
This extension will ensure that Time Warner will continue to operate the cable television
system under the terms of the franchise agreement they have with the City until such a
time as they receive a state issued video franchise. Once a video franchise has been
issued by the State, Time Warner will be required to adhere to all terms and conditions set
forth under AB 2987 for the operation of a cable television system.
Resolutions extending the term of both franchise agreements have been prepared and are
attached for your consideration.
FISCAL IMPACT:
The requested action does not have a fiscal impact on the City.
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T oy .. Butzla III A istant City Manager David H. Ready, et�-
Attachments:
Resolutions (2)
000003
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS EXTENDING THE CABLE TELEVISION
FRANCHISE AGREEMENT GRANTED TO WARNER CABLE
COMMUNICATIONS UNDER AGREEMENT NO. A2535
THROUGH JUNE 30, 2008
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 Warner Cable Communications ("Grantee") on or about January 20,
1088; and
WHEREAS, the term of the Franchise Agreement was for a 17 year period
expiring on January 20, 2005; and
WHEREAS, Grantee has filed timely notice of intent to renew its Franchise
Agreement with Grantor; and
WHEREAS, on or about December 15, 2004, the City Council adopted
Resolution No. 21159 extending the term of the Franchise Agreement through
December 31, 2005 to allow the parties to complete the renewal process and to
negotiate the terms and conditions of a new franchise; and
WHEREAS, on or about December 7, 2005 the City Council adopted
Resolution 21472 extending the term of the Franchise Agreement through December
31, 2006 to allow the parties to continue the franchise renewal process and to
negotiate the terms and conditions of a new franchise; and
WHEREAS, last year the State of California enacted new legislation, AB 2987,
which specifically impacts the franchise renewal process and authorizes cable
operators to obtain a state issued permit; and
WHEREAS, on or about November 15, 2006 the City Council adopted
Resolution 21771 extending the term of the Franchise Agreement through January 2,
2008 to enable the parties to continue to either negotiate a local franchise or allow
Time Warner to apply for a state issued permit to operate a cable television system
within the City; and
000004
WHEREAS, Time Warner has applied and is currently waiting for a state
issued permit to operate a cable television system, and
WHEREAS, once the State has issued a permit, Time Warner will no longer
need a local franchise from the City to operate a cable television system; and
WHERERAS, the City is willing to extend the franchise to the earlier of (a)
June 30, 2008, (b) the date when Time Warner is issued a renewed local franchise,
or (c) the effective date of any state franchise issued to Time Warner pursuant to AB
2987; and
WHEREAS, the City is willing to extend the franchise to the date as indicated
above so long as Time Warner abides by the terms and conditions of all franchise
commitments during any such extension, and neither Time Warner nor the City is
otherwise prejudiced by the extension.
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
The Grantor hereby agrees and consents to extend the current Franchise
Agreement, granted to Grantee pursuant to Agreement 2535 to the earlier of (a) June
30, 2008, (b) the date when Time Warner is issued a renewed local franchise, or (c)
the effective date of any state franchise issued to Time Warner pursuant to AB 2987.
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.
000005
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 day of 2007.
AYES:
NOES:
ABSENT:
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
By.
City Clerk City Manager
REVIEWED AND ADOPTED AS TO FORM:
OD000c)
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS EXTENDING THE CABLE TELEVISION
FRANCHISE AGREEMENT GRANTED TO PALMER
CABLEVISION UNDER AGREEMENT NO. A2792
THROUGH JUNE 30, 2008
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 ("Palmer") on or about November 15, 1989;
and
WHEREAS, the Franchise with Palmer has been transferred several times to
different cable operators throughout the years; and
WHEREAS, Time Warner ("Grantee") is the current holder of the cable
television franchise, and
WHEREAS, Grantee has filed timely notice of intent to renew its Franchise
Agreement with Grantor; and
WHEREAS, on or about December 15, 2004, the City Council adopted
Resolution No. 21160 extending the term of the Franchise Agreement through
December 31, 2005 to allow the parties to complete the renewal process and to
negotiate the terms and conditions of a new franchise; and
WHEREAS, on or about December 7, 2005 the City Council adopted
Resolution 21471 extending the term of the Franchise Agreement through December
31, 2006 to allow the parties to continue the franchise renewal process and to
negotiate the terms and conditions of a new franchise; and
WHEREAS, last year the State of California enacted new legislation, AB 2987,
which specifically impacts the franchise renewal process and authorizes cable
operators to obtain a state issued permit; and
WHEREAS, on or about November 15, 2006 the City Council adopted
Resolution 21770 extending the term of the Franchise Agreement through January 2,
2008 to enable the parties to continue to either negotiate a local franchise or allow
0000017
Time Warner to apply for a stale issued permit to operate a cable television system
within the City; and
WHEREAS, Time Warner has applied and is currently waiting for a state
issued permit to operate a cable television system; and
WHEREAS, once the State has issued a permit, Time Warner will no longer
need a local franchise from the City to operate a cable television system; and
WHERERAS, the City is willing to extend the franchise to the earlier of (a)
June 30, 2008, (b) the date when Time Warner is issued a renewed local franchise,
or (c) the effective date of any state franchise issued to Time Warner pursuant to AB,
2987; and
WHEREAS, the City is willing to extend the franchise to the date as indicated
above so long as Time Warner abides by the terms and conditions of all franchise
commitments during any such extension, and neither Time Warner nor the City is
otherwise prejudiced by the extension.
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
The Grantor hereby agrees and consents to extend the current Franchise
Agreement, granted to Grantee pursuant to Agreement 2792 to the earlier of(a) June
30, 2008, (b) the date when Time Warner is issued a renewed local franchise, or (c)
the effective date of any state franchise issued to Time Warner pursuant to AB 2987.
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 farce 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
000003
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 day of 2007.
AYES:
NOES:
ABSENT:
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
By:
City Clerk City Manager
REVIEWED AND ADOPTED AS TO FORM:
000009