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HomeMy WebLinkAboutMINUTES - 08171999 - SD2 SD4 TO. BOARD OF SUPERVISORS ' FROM: Phil Batchelor, County Administrator DATE. August 5, 1999 SUBJECT: Approve the License Transfer from , Century Communications to Adelphia Communications Corp. PEGIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATION(S): OPTION 1 APPROVE the attached Agreement Relating to the Consent Of Contra Costa County to the Transfer of the Century Communications' Cable television license to Adelphia Communications Corp. under the following conditions; 1.) Payment of $1,500 in full satisfaction of all coats in relation to this proceeding is received within thirty (30) days of the Board's approval of the transfer. 2.) The Agreement has been executed and retuned by all parties within thirty (30) days after approval by the County. 3.) The Licensee represents that the bonds and insurance required by their license and ordinance have been obtained and that there will be no gaps in required coverages or liabilities. 4.) The Transferee unconditionally accepts, acknowledges, and agrees that they will continue to be bound by all the commitments, duties and obligations embodied in the License and the Ordinance. CONTINUED ON ATTACHMENT: �YES SIGNATURE; RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE{S): ACTION of BOARD ON APPROVED AS F2ECOA11MENC3EI3 OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A UNANIMOUS OI9S(ABSENT j TIDE AND CORRECT COPY OF AN AYES: DOES: ACTION TAKEN AND ENTERED ABSENT: ABSTAIN: ON MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN, ATTESTE �ELORE�,, EAK r �� @PHI A OF l OF SUPERVISORS ANIS COUNTY ADMINISTRATOR CAO Century Communications BY EPUTY OPTION 2 ADOPT a resolution to deny without prejudice the application of Century Cornmun!cations to transfer its license to Adelphia Communications Corp. FINANCIAL IMPACT: Modes received will be deposited in the Community Access Trust Fund to reimburse the fund for expenses incurred for the review conducted by Telecommunications Management Corp, and County Counsel. BACKGROUND: On or about April 27, 1999, Century Communications (::Transferor") died with the County an FCC 394 requesti;`,g that the County consent to the transfer of license from the system in the unincorporated area of Kensington and surrounding San Pablo to Adelphia Communications Corp, („Transferee"). Section 66-4.926 of the County Ordinance Code (Ordinance No. 93-66) requires that all proposed transfers of licenses be submitted to the Countyfor review and decision by the Board of Supervisors. Pursuant to Section 617 of the federal Cable Act (47 U.&C. Se:tion 637), the County has 129 days to act upon any request for approval of a transfer. Following receipt of the FCC Form 394, staff hired a consultant to review the legal, technical and financial qualifications of the buyer. Telecommunications Management Corp,was hired and completed the attached review. They concluded that Adelphia Communications Corp. is financially and technically qualified to operate the existing system and that the impact on the County's cable subscribers is likely to be beneficial. Staff has reviewed the current license compliance of Century. There are no apparent areas of non-compliance at this time. however, the Agreement to transfer the license states that the Licensee or any of their successors-in-interest agree not to be relieved of responsibility for past acts or omissions, known or unknown;, or for any obligations or liabilities pursuant to the License documents. Finally, staff has prepared an agreement similar to the one signed by Adelphia Communications Corp. at the AT&T transfer Haat includes conditions for repayment of expenses related to the transfer review. County Counsel has reviewed dais agreement and copies have been faxed to Century Communications and Adelphia Communications Corp. Staff recommends approval of the Agreement and the transfer of the license to Adelphia. AGREEMENT RELATING TO THE CONSENT OF CONTRA COSTA COL`NTY TO THE TRANSFER OF CENTURY COMMUNICATIONS CABLE TELEVISION LICENSE TO ADELPHIA. COMMUNICATIONS CORP. This Agreement (the "Agreement") entered Into this qday of A u v u s r 1999, between and among Contra Costa County ("County") Century Cable of Northern California. d.b.a. Century Communications (the "Transferor"), and Adelphia Communications Corp. (the "Transferee"). WHEREAS, through various previous transfers, acquisitions, and conveyances, all of which were duly approved by the County, the County granted a license (the "License") to operate a cable television system within the County (the "System") to the Transferor pursuant to the provisions of governing County codes (the "Ordinance"). WHEREAS, the Transferor and Transferee filed a written application to the County (the "Application"), wherein they have requested the consent of the County to the transfer of control of the License ("the transfer") to Transferee ; and WHEREAS,the Board of Supervisors of Contra Costa County has reviewed the Application as well as all relevant documents, staff reports, and recozmrendations; and WHEREAS, pursuant to County Ordinance Code Section 58-4.028, the transfer of the License cannot be concluded without the written consent of the County; and WEEREAS, based upon the evidence presented to the Board, it has detennined that it would be in the public interest to conditionally approve the transfer of the License. NOW, THEREFORE, itis agreed by and between the parties as follows: 1. The Board hereby gives its consent and approval to the transfer of the License as described in the Application. 2. The granting of this consent to the transfer of the License does not waive any right the County may have to approve any subsequent transfer of the License or subsequent change in the ownership and/or control of the Transferee, and there shall be no further transfer of the License or material change in the ownership or equity composition of the Transferee which requires prior consent of the County pursuant to the License or the Ordinance without the farther written consent of the Hoard of Supervisors. 3. By executing this Agreement, the Transferor and Transferee agree and acknowledge that (I) this Agreement and the approving resolution is not a new franchise, the granting of a franchise,or the renewal of the existing License, but rather is exclusively an agreement g,wernmg the transfer of the License, and said Agreement neither affects nor prejiudices in any shay the County's rights thereunder; (2) that compliance with the License and Ordinance. as o¢. the date of closing of the transfer of the License, is neither commercially impracticable nor economically infeasible as those terms are used in Section 625(e) of the Cable Communications P-licy Act of 1984 84 and/or the Cable Television Consumer Protection: and. Competition Act of '392 (collectively the "Cable .Act"). Transferee agrees that in Judging, whether particular obligations are commercially impracticable. the parties will not consider the economic burden of debt service, debt service coverage, or equity require-rents incurred directly or indirectly to fund the transfer of License to the extent such debt service, debt service coverage, or equity exceeds the debt ser.tice, debt service coverage, or equity requirements of the Transferee or any related entity, as they existed prior to the transfer of the License. 4, By executing this Agreement, the Transferee hereby unconditionally accepts, acknowledges, and agrees that, after the transfer, it will continue to be bound by all the cOnamitments, duties, and obligations, past, present, continuing, and future, of the Licensee embodied in the License, the Ordinance, the Agreement, any orders and directives of any administrative agency relating to the License or the System, including, but not limited to, the ederal Communications Commission (the "Commission") (collectively, the "Franchise Documents"), to the maximum extent required by law, and that the transfer will have no effect on these obligations. The Transferee acknowledges its review and understanding of the Franchise Documents, The County represents that it presently is unaware of any breach by the Transferor of the Franchise Documents. The Transferor and the Transferee agree and acknowledge that neither the transfer nor the County's approval of the Application shall in any respect relieve the Transferor, Transferee,or any of their successors-in-interest of responsibility fcr any pre-transfer acts or omissions, known or unknown, or for any pre-transfer obligations or liabilities pursuant to the Franchise Documents, including but not limited to franchise fee underpayments, if any, so long as the County, within: three years of the effective date of the transfer, gives notice to the Transferor and the Transferee of any pretransfer liability. With respect to any such pre transfer liability, the Transferee shall have available to it any and all dot}enses that otherwise would be available to the Transferor if the Transferor had not transferred the System, including but not limited to the statute of limitations and laches. To the extent that the Transferee or any related person or entity, challenges the validity or interpretation of said above listed documents in the future in stay administrative proceeding or court of law, such a challenge shall be subject to all defenses which would have been available to the County had the Transferor, 'Transferee, or any related person or entity, brought said challenges including, but not limited to, waiver, estoppel, consent, unclean hands, and accord and satisfaction, as well as any and all defenses independently available against the Transferee. Any material violation of this Agreement shall be deemed to be a violation of the C.dinance and the License. 2 6� The County hereby gives the Transferor and Transferee notice that the grant or transfer of the License may create a taxable possessory interest upon which. the Transferor and Transferee may be liable for the payment of certain taxes. The Transferee hereby acknowledges that it has received actual notice as required by Revenue and Taxation Code Section 1037.6. T The Transferee agrees that the transfer itself shall not result in an increase in the rates for basic cable service and that the Transferee shall not rely upon the acquisition costs associated with the transfer or an increase in debt service or a change in debt service coverage, if any, that results from the transfer to justify an increase in rates for basic cable service. The Transferee agrees that the transfer'or any agreements associated with the transfer shall not be structured in a way that would adversely affect the financial position of the Transferee, or limit the funds available to it. 8. The Transferor shall away to the County within thirty(ifs)days of the Board's approval of this Transfer Agreement the sura of one thousand five hundred dollars($1,5€30) in full satisfaction of all costs in relation to this proceeding in accordance with Section? 58-4,0201(b)of the County Ordinance Code. 9. This Agreement shall be deemed effective upon the closing of the transaction contemplated by the Merger Agreement attached to the form 394 received by the County on or about April 27, ;999(the "Closing") so long as the Agreement has beet, executed by the Transferor and Transferee and returned to the County within thirty(30)days ofthe approval of this Agreement by the Board of Supervisors. The Transferee shall file with the Clerk of the Board all required bonds and insurance certificates,as required by Section 58-4.O28(i) ofthe County Ordinance Code, within thirty(30)days of the Closing. lfthe Agreement is not executed within the specified time limit, the Board's consent to transfer of the Lice rse shall be become null and void and the transfer of the License shall be deemed disapproved as of the date of approval of this Agreement by the Board of Supervisors. The Transferor and the Transferee agree that all bonds and insurance required by the Franchise Documents will be obtained as of the date of the Closing and that there will be no gaps in required coverages. l 0. (a)The County acknowledges that the Transferor has paid $7,755 to the County, which the Trat:sferor represents and warrants is full and complete payment for all franchise fee underpayments relating to the deduction; of the franchise fee from: Cross Annual Receipts for the purpose of calculation and payment of the franchise fee(the "5-or.-5 Issue")for calendar years 1995 through 1998. In the event that the County subsequently determines that there has been an underpayment of franchise fees on the 5-on-5 Issue or on any other Cross Annual Receipts of the Transferor, such matters shall be subject to Section 4 of this Agreement. (b) If, and only if, Transferor. Transferee,or any related entity,attempts,or actually passes through, line-itemizes, surcharges,or otherwise increases any otherwise lawful regulated rnaximurn permitted rate to recover all or a portions of the amounts paid to the County pursuant to Paragraph (a) above, the County may, if it so chooses, pursue actions, administrative,judicial, or otherwise, against Transferor and/or Transferee for non-compliance with the License, interest, penalties, or any other remedy available to the County. Nothing herein shall constitute an admission or evidence of liability on the part of the Transferor or the Transferee. 11. Transferor and Transferee each agrees to defend, indemnify, and held the County, its governing board, officers, and employees harmless against any loss, claim, damage, liability, or expense ,including, without limitation, reasonable attorney's fees)arising out of this Agreement and/or incurred as a result of any representation or warranty made by it herein or in the Application or in connection with the County's review of the transfer of License which proves to be untrue or inaccurate in any material respect. In the event the County receives any such notice of loss, claim,damage, liability or expense, the County shall promptly notify Transferor and Transferee, which shall,at the sole discretion of the County, assume sole and direct responsibility for defending against any such loss, claire, damage, liability, or expense. 1 Any consent given by the County in*his Agreement and in any resolution approving the transfer of License is not an affirmation: that Transferee. Transferor, or any predecessor in interest is in compliance with, or previously complied with the License. Any consent is made without prejudice to or waiver of the County's fight to obtain full remedy for any past neon-compliance. Any consent given by the County in this Agreement and any resolution approving this Agreement is not a finding that, after the transfer of License, Transferee will be financially,technically, or legally qualified, and no inference will be drawn, positively or negatively, as a result of the absence of finding on th is issue. Any consent is therefore made without prejudice to, or waiver of, the County's right to fully investigate and consider Transferee's financial, technical, and legal qualifications and any other relevant considerations during any proceeding including, by way of example and not limitation,any pending renewal proceeding. Without limiting the foregoing, any approval of the transfer of License is not a finding or representation that the License will be renewed or extended (and approval shall not create an obligation to renew or extend the License);that the Transferee is financially,technically or legally qualified to hold a renewed License, or that any other renewal issue that may arise with respect to past performance or future cable- related needy and interests will be resolved in. a manner favorable to Transferee. Unless provided for within this Agreement, nothing in this Agreement shall constitute a waiver of any of Transferor's or Transferee's rights or remedies under-federal, state, or local law. 13. Transferee represents and warrants that it does not hold a Certificate of Public Convenience and Necessity from the California Public Utilities Commission to provide telecommunications services or any other services in the State of California. The signatories hereby affirm. that this Transfer Agreement has been entered into on a voluntary basis without duress and has been undertaken in a manner consistent with federal,state,and local law. The signatories to this agreement further represent and warrant that they possess full legal authority on behalf of their principals to enter into this Transfer Agreement. 4 CONTRA COSTA CC: NI TY CE.N,,Ttr9J Y CABLE €F NORTHERN CAL I¢y4.f } By ~' ~. Y. Name. 4. sck Eiz��?� :? C ir Title; �. A a T ST: Phil Batchelor, Clerk sof sloe Board Ser�:s€rs and County Administrator By: 1/17 Name: a Deputy API�IR VED AS TO FOR_MI: Victor J. Westin a , County Counsel BY: '' { Deputy .. s f if Name: Pn n I rk < n vPUN _�- aJ;..li�Sa' # By: f ;)Y S 3 e;?3F3 i X fit b J`4d' s..� .E Name. b,pyy State of Connecticut ss: New Canaan County of Fairfield } Can this 1st day of September, 1999,before ane, Maureen Sheveland,the undersigned officer, personally appeared Scott N. Schneider, who acknowledged himself to be the Chief Financial Officer of Century Cable of Northern California, a corporation, and that he as such Chef Financial Officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained,by signing the name of the corporation by himself as Chief Financial Officer and Bernard P. Gallagher,who acknowledged himself to be the President of Century Cable of Northern California, a corporation,and that he as such Pr6sident,being duly authorized to do so, executed the foregoing instrument for the purposes therein contained,by signing the name of the corporation by himself as President. In witness whereof I hereunto set my hand, Aq Maureen Sb veland My Commission expires: #31 , ��