HomeMy WebLinkAboutMINUTES - 01231996 - SD2 TO: BOARD OF SUPERVISORS �•``�" 5''L" °F_ Contra
FROM: Phil Batchelor, County Administrator Costa
County
DATE: January 18; 1996 [D
.:...: '�T
UN
SUBJECT: APPROVE THE TRANSFER OF BAY CABLEVISION, INC. LICENSE TO HERITAGE
CABLEVISION OF DELAWARE, INC. SUBJECT TO THE FOLLOWING TERMS AND
CONDITIONS.
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATION:
1. Subject to the following terms and conditions, CONSENT to the transfer from the Lencomm,Inc., doing
business as Bay Cablevision, Inc. ("Transferor") to Heritage Cablevision of Delaware, Inc.
("Transferee") of the license for the cable system operated by Transferor in the unincorporated
Richmond area:
(a) On or before February 15, 1996, the Transferor shall pay to the County all license fees due for
the period through December 31, 1995, and shall deliver to the County the statement of gross
annual receipts required under Section 58-6.002(f) of the County Ordinance Code. The
Transferee shall be responsible for the payment of license fees accruing after December 31,
1995.
(b) The Transferor and Transferee shall be jointly and severally liable for any license fee under-
payment that occurred prior to the closing date of the transaction between the Transferor and
Transferee ("Closing Date"), including without limitation license fees payable on advertising
revenues received indirectly by the Transferor during the period January 1, 1991 through the
Closing Date.
(c) As provided in the attached agreement, the Transferee will not file a new, amended,
supplemented, or modified cost-of-service showing for a period of four (4) years from the date
of the Written Decision.
CONTINUED ON ATTACHMENT: YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURES:
-79
ACTION OF BOARD ON APPROVED AS RECOMMENDED OTHER
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A TRUE
_ZUNANIMOUS(ABSENT ) AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN.
ATTESTED
Contact: PHIL BA HELOR.CLER F THE BOARD OF
CC: SUPERVI ORS AND COUNTY ADMINISTRATOR
BY DEPUTY
(d) On or before the Closing Date, the Transferee shall file with the Clerk of the Board of
Supervisors its written acceptance of the license, in a form satisfactory to the County Counsel,
together with all required bonds and insurance certificates, and its agreement to be bound by
and to comply with and to do all things required of the Transferee by the provisions of Division
58 of the County Ordinance Code (Ordinance No. 93-55) and license award resolution
(Resolution No. 94/363 adopted July 12, 1994) and to expressly assume all obligations of the
Transferor, as required by Section 58-4.028(1) and (k) of the County Ordinance Code.
(e) The transfer of the license shall not become effective unless the County receives the items
specified in paragraphs (a) and (d) by the applicable deadlines. Should these items not be
submitted on time, this Resolution shall be of no further force or effect and the application for
transfer of ownership shall be deemed to have been denied without prejudice.
2. APPROVE the attached Agreement Relating to the Consent to the Assignment and Transfer of the
License Granted to Lencomm, Inc. and AUTHORIZE the Chair of the Board to execute the agreement
on behalf of the County.
3. At the conclusion of the hearing, ISSUE a written decision ordering the Transferor to credit individual
subscriber accounts with the determined refund and set basic service tier rates as indicated in Exhibit
B.
FINANCIAL IMPACT:
There will be a deduction in the FY1996 franchise fee payment to the County as a result of refunds to
subscribers. This should not amount to more than $1,500.
BACKGROUND:
On October 3, 1995, Bay Cablevision, Inc. (or "Transferor") filed with the County an FCC Form 394
requesting that the County consent to a transfer from Bay Cablevision, Inc. ("Transferor") to Heritage
Cablevision of Delaware, Inc. ("Transferee") of the license for the cable system serving the unincorporated
Richmond area.
Section 58-4.028 of the County Ordinance Code (Ordinance No. 93-55) requires that all proposed transfers
of licenses be submitted to the County for review and decision by the Board of Supervisors. Pursuant to
Section 617 of the federal Cable Act (47 U.S.C. Section 537), the County has 120 days to act upon any
request for approval of a transfer.
Following receipt of the FCC Form 394, staff worked with the Cities of Berkeley, EI Cerrito and Richmond to
hire a consultant to review the legal, technical and financial qualifications of the buyer. Rutan & Tucker
determined that the Transferee was qualified to operate the Richmond system.
Then a compliance review of Bay Cablevision, Inc. was conducted by staff. Bay Cablevision, Inc. had
renewed their license in 1993. A review of their technical and financial qualifications was conducted at that
time. Recently, staff has resolved with Bay Cablevision, Inc. certain issues relating to the payment of license
fees on advertising revenues and late fees. However, an outstanding issue still remains over whether license
fees are payable on those advertising revenues received indirectly by the Grantee (e.g., revenue used for
operating expenses of Bay Cable Advertising and revenue received by the parent(s) of the Grantee). This
same issue is currently being pursued by the County and a consortium of eight local cities with TCI's local
systems. Appropriate. language has been added to this Resolution to enable the County to continue to
pursue this issue with the Transferee.
In addition, staff is aware of another jurisdiction in which a cost-of-service showing submitted for rate
increases after a transfer included costs for goodwill related to the transfer of the system. This increased
basic rates significantly. Currently, FCC regulations exclude the use of goodwill in rate calculations, although
some cable operators continue to include it until their dispute with the FCC over this issue is resolved. To
avoid any significant rate increase in basic service rates because of goodwill as a result of this transfer, staff
has included the attached agreement which conditions the transfer on the Transferee's agreeing not to
submit a cost-of-service showing for four (4) years from the date of the Written Rate Decision.
Staff believes that these conditions are necessary to assure compliance with the County's cable television
ordinance and FCC rate regulations.
CONSEQUENCES OF NEGATIVE ACTION:
If the Board does not take the action recommended above, the application for consent to transfer would be
deemed automatically granted. This could potentially limit the County's ability to recover underpaid license
fees and could possible increase rates by the inclusion of goodwill for the citizens in the unincorporated
Richmond area.
q& S D-
EXHIBIT A
AGREEMENT RELATING TO THE CONSENT OF
THE COUNTY OF CONTRA COSTA TO THE ASSIGNMENT AND TRANSFER OF
THE LICENSE GRANTED TO LENCOMM, INC.
. This Agreement (the "Transfer Agreement") entered into this
30th day of January, 1996, between and among the County of Contra
Costa ("County") , Lencomm, Inc. , dba Bayt'Cabla a.a or ,Inc f (the
"Transferor") and Heritage Cablevsion''of DeYaware, Inc. " (the
"Transferee") .
WHEREAS, on July 12, 1994, the Board of Supervisors (the
"Board") of the County approved by Resolution No. 94/363 the
granting of a community antenna television (CATV) license (the
"License") to the Transferor pursuant to the provisions of the
County Ordinance Code (the "Ordinance") for- a term of ten (10)
years to operate a cable television system within the County (the
"System") ; and
WHEREAS, the Transferor has filed a written application to the
County, dated October 311995 (the "Application") wherein it has
requested the consent of the County to the transfer and assignment
of the License to Transferee (the "Asset Transfer") ; and
WHEREAS, it is the intent of the County to approve the
transaction whereby ownership and control of the License and the
System shall be held by the Transferee (said transaction shall be
referred to herein as the "Transfer") ; and
WHEREAS, the Board of the County has reviewed the Transfer as
well as all relevant documents, staff reports and recommendations;
and
WHEREAS, pursuant to Section 58-4.028 of the Ordinance, the
Transfer is subject. to the written consent of the County; and
WHEREAS, based upon the evidence presented to the Board, it
has determined that it would be in the public interest to
conditionally approve the Transfer.
NOW, THEREFORE, it is agreed by and between the parties as
follows:
, 1. The Board of the County hereby gives its consent and
approval to the Transfer whereby the License and the System,
including all the assets thereof, shall be directly acquired and
held by Transferee.
2 . The granting of this consent to the Transfer does not
waive the right of the County to approve any subsequent change in
the ownership of the License or the ownership or control of the
Transferee and there shall be no further material change, amendment
1
or modification of the ownership or equity composition of the
Transferee which requires prior consent of the County pursuant to
the Ordinance without the further written consent of the Board.
3 . By executing this Transfer Agreement, the Transferee
agrees and acknowledges that (1) this Transfer Agreement and the
approving resolution- is not a new license agreement, the granting
of a license, or the renewal of the existing license, but rather is
exclusively an agreement to transfer and assign the License and
said Transfer Agreement neither affects nor prejudices in any way
the County's rights thereunder; (2) that compliance with the
License and Ordinance, as of the date of closing of the Transfer,
is neither commercially impracticable as the term is used in
Section 625 (e) of the Cable Communications Policy Act of 1984
and/or the Cable Television Consumer Protection and Competition Act
of 1992 (collectively the "Cable Act") nor economically infeasible
upon closing of the Transfer.
4 . By executing this Transfer Agreement, the Transferee
hereby accepts all the terms and conditions of the License, the
Ordinance and any orders and directives of any administrative
agency relating to the License or the System including, but not
limited to the Federal Communications. Commission and this Transfer
Agreement and represents and warrants that it has examined the
requirements of the License, the Ordinance, this Transfer
Agreement, as well -as applicable federal, state or local laws or
regulations and agrees to abide by all the terms and conditions
thereof.
The Transferee agrees and acknowledges that it has found the
Ordinance, the License, and the other documents specified herein to
be legally sufficient, enforceable, valid, and binding and accept
the same without condition or reservation. The Transferee accepts
the License, and all obligations thereof, subject to and assuming
liability for all existing disclosed and undisclosed breaches and
defaults. The Transferee agrees to cooperate and furnish relevant
information in relation thereto. The Transferor agrees to
cooperate and furnish relevant information in relation to any audit
and/or investigation relative to breaches and/or defaults accruing
prior to the Transfer.
. 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 any 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,
or any related person or entity, brought said challenge (s)
including, but not limited to, waiver, estoppel, consent, unclean
hands and accord and satisfaction, as well as any and all defenses
2
4•
l
independently available to the Transferee.
5 . Any violation of this Transfer Agreement shall be deemed
to be a violation of the Ordinance and the License.
6. The County hereby gives the Transferee notice that the
grant or transfer of the License may create a taxable possessory
upon which the Grantee 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 107.6.
. 7. The Parties hereto acknowledge that the County has issued
a Rate Order dated January 23, 1996, a copy of which is attached as
Exhibit B (the "Rate Order") . The Transferor and the Transferee
hereby agree to accept the Rate Order as a lawful and binding rate
order, comply with its terms, agree not to appeal said Rate Order,
and waive and relinquish any and all appeal rights which they
possess in relation thereto and the right to challenge the legality
of the Rate Order, on any grounds, in any judicial or
administrative forum. Further, the parties hereto agree, in
material consideration for approval of this Transfer Agreement by
the County, as follows:
(a) If, and to the extent, the County, the Transferor,
or the Transferee, violates any of the provisions of the Rate
Order, the non-breaching party shall provide the allegedly
breaching party with written notice detailing with
. specifiCounty the alleged breach. The: allegedly breaching
party shall have 30 days following the provision of the notice
to either cure the breach or respond in writing detailing with
specificity why a breach has not occurred. At any time
following this 30-day period, either party may seek relief in
a court of competent jurisdiction. In addition, at any time
following this 30-day period, the County may, at its option
and in addition to any other remedy available to it pursuant
to this Transfer Agreement or applicable law, recommence its
review of the -Cost. of Service Forms and nothing in the Rate
Order shall prejudice either the County or the cable
operator's rights with respect to said proceeding.
Notwithstanding the date upon which written notice is provided
by the County to the Transferor or Transferee, as the case may
be, (the "Operator") that the Operator has breached any or all
, of the provisions of the Rate Order, refund liability based
upon the determination of the Maximum Permitted Rates
contained in the Resolution shall extend back to the dated
date thereof and, to the extent the Commission upholds the
determination of the County as to the Maximum Permitted Rates
for County Regulated Rates, the Operator shall pay refunds, in
3
a manner prescribed by the Rules of the Commission back to the
dated date of. the Rate Order.
(b) The Operator will not file new, amended,
supplemented, or modified Cost of Service forms, by way of a
- new, amended, supplemented or modified FCC Form 1220 (with or
without a related FCC Form 1205 and/or 1210) , or any successor
forms, for a period of four (4) years from the dated date of
the Rate Order (the "Forbearance Period") . During the
Forbearance Period, the Maximum Permitted Rates for County
Regulated Services shall be exclusively adjusted, if at all,
pursuant to the formula and methodology contained in the
current FCC Forms 1210, 1235, and 1240, or their successor
forms (the "Rate Adjustment Forms") and the Operator hereby
waives, relinquishes, and releases any right which it may
possess to seek rate adjustments in excess of the amounts
which would be allowed pursuant to the Adjustment Forms.
(c) Except as expressly provided in the Rate Order and
herein, the Operator and the County shall comply with all
applicable Rules of the - Commission including, without
limitation, the timely filing and review of the various rate
related forms of the Commission including, without limitation,
the Rate Adjustment Forms.
(d) If the Transferor or Transferee, individually or
collectively, or any affiliate or subsidiary or parent
thereof, appeal or otherwise challenge the validity or
enforceability of the Rate Order, as defined in Paragraph 9
hereof, in any judicial or administrative forum, or otherwise
dispute its legal validity or enforceability and is successful
in its asserted position(s) , the Transferor and the
Transferee, as the case may be, shall be deemed in material
breach of the License.
8 . The Transferor shall pay collectively to the County, the
Citie/s of Berkeley, E1 Cerrito, Emeryville and Richmond
(collectively the "Franchising Authorities") or the agents thereof
designated by the Franchising Authorities in writing, within ten
(10) days of the Board's approval of this Transfer Agreement the
sum of Forty Thousand Dollars ($40, 000) in full satisfaction of all
attorney fees and professional consultant fees and costs in
relation to this proceeding. If said amount is not sufficient to
reimburse the Franchising Authorities for all out-of-pocket
expenses, the Franchising Authorities. shall provide written notice
thereof to the Transferor and Transferee of the amount of the
appropriate expense reimbursement (the "Full Amount") . The
Transferor shall pay the Full Amount provided, however, that to the
extent that the Full Amount exceeds $40, 000 .00, the obligation of
4
the Transferor and Transferee to pay refunds pursuant to Section 2
of the Rate Order shall decrease by an equivalent amount so that
the total obligations pursuant to Section 2 of the Rate Order and
this paragraph shall not exceed $340, 000.00 . The County, the
Transferor and the. Transferee expressly agree and acknowledge that
the payment is settlement of a good faith dispute and is not a
"franchise fee" within the meaning of Section 622 (g) (1) of the
Cable Act, and that said payment will not be offset or charged
against any other license fee owing either prior paid or future
owing, or other sum due to the County, and that said payment is a
voluntary payment and not a tax, fee, or assessment imposed by a
franchising authority on a cable operator or cable subscriber, or
both, solely because of their status as such, and that said payment
does not constitute a license requirement . or is, in any way,
subject to "pass-through" , or externality treatment and will not,
under any circumstances, be itemized upon any billing to any
subscriber or added, for the purposes of collection, to any other
lawful rate. The Transferor agrees to bear the full and total
economic burden of this payment.
9. This Transfer Agreement shall be deemed effective upon
the closing of the Transfer so long as it has been executed and
returned by all parties within ten (10) days after approval by the
County (the "Effective Date") . If it is not so executed and
returned within ten (10) days, it shall become null and void and
the Transfer shall be deemed disapproved as of the date of approval
of this Transfer Agreement by the County Board.
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.
COUNTY OF CONTRA C LENCOMM, INC.
By By I
Its V
PHIL BATCHELOR, Clerk of the
Board of Supervisors and County
Administrator By
Its
By
Depu Clerk
5
RECOMMENDED FOR APPROVAL:
APPROVED AS TO FORM:
VICTOR J. WESTMAN, County Counsel HERITAG CABLEVISION OF
DELAWAR INC.
By By
David Schmidt, Deputy County It
Counsel
Phil Batchelor, County By
Administrator Its `c.1
By
Patricia Burke, Cable TV
Administrator
6
STATE OF COLORADO )
) ss.
COUNTY OF ARAPAHOE )
On May 13, 1996, personally appeared before me, a Notary Public in and for the State
and County aforesaid, Stephen M. Brett, Vice President/Secretary, and Madonna Guenthner,
Vice President, of Heritage Cablevision of Delaware, Inc., personally known to me to be the
persons whose names are subscribed to the above instrument in such capacities, who
acknowledged that they executed the same.
My commission expires: May 23, 1997. n pyo
[SEAL] Notary blic
f "a3 - ��
Err B J_
WRITTEN DECISION OF THE COUNTY OF
CONTRA COSTA (THE "COUNTY") RELATING
TO CERTAIN REFUND LIABILITY AND THE
PRESCRIPTION OF MAXIMUM PERMITTED
RATES
WHEREAS, the County of Contra Costa (the "County") has been
certified by the Federal Communications Commission (the
"Commission") to regulate rates for the Basic Service Tier ("BST") ,
associated equipment rates, and installation rates; and
WHEREAS, the County provided written notice of said
certification to Lencomm, Inc. , dba Bay Cablevision, Inc. (the
"Operator") ; and
WHEREAS, the County adopted procedural laws, and regulations
applicable to rate regulation proceedings which provide a
reasonable opportunity for consideration of the views of interested
parties; and
WHEREAS, the County delivered a written request to the
Operator to file its schedule of rates for the BST, associated
equipment and installation with the County; and
WHEREAS, the Operator filed with the County FCC Forms 1220 and
1205 dated November 24, 1994 and March 31, 1995 (the "Cost of
Service Forms") ; and
WHEREAS, the County timely issued an order pursuant to Section
76.933 (b) of the Rules and Regulations (the "Rules") of the
Commission stating that it was unable to determine based upon the
materials submitted by the Operator that the existing or proposed
rates were within the Commission's Maximum Permitted Rates and that
the -County was tolling the thirty (30) day deadline found in
Section 76.933 (a) of the Commission's Rules for the purpose of
requesting and/or considering additional information for one
hundred fifty (150) days; and
WHEREAS, the County timely issued an Accounting Order pursuant
to Section 76 .933 (c) of the Rules of the Commission requiring the
Operator to keep an accurate account of all amounts received by the
Operator by reason of the rates and charges for the Basic Service
Tier, associated equipment and installation in effect from July 15,
1994 as found in the Cost of Service Forms and to keep full and
accurate records indicating on whose behalf such amounts were paid;
and
WHEREAS, the County retained the services of Public Knowledge,
Inc. ("PKI") to review the Cost of Service Forms; and
WHEREAS, PKI produced a written report (the "PKI Report") to
the County; and
WHEREAS, the PKI Report concluded that the Maximum Permitted
Rate for the Basic Service Tier, equipment and installation as
contained in the Cost of Service Forms, exceeded appropriate
amounts as calculated under the Rules of the Commission; and
WHEREAS, the Operator disputes the conclusions of the PKI
Report as they relate to the Maximum Permitted Rates; and
WHEREAS, PKI concluded, without dispute from the Operator,
that the Operator was charging equipment and installation rates
higher than the Maximum Permitted Rates specified in the Cost of
Service Forms; and
WHEREAS, a public hearing was held upon the Cost of Service
Forms on January 23, 1996 (the "Public Hearing") ; and
WHEREAS, the Operator was given the opportunity to present
evidence oral and written, in relation to its Cost of Service Forms
and did so present evidence at the Public Hearing; and
WHEREAS, the Public Hearing was closed and the County is now
legally entitled to take final action upon the Cost of Service
Forms; and
NOW, THEREFORE, County does hereby order as of the date
hereof, as follows:
Section i_ The Maximum Permitted Rates and Charges for the
rates subject to the jurisdiction of the County ("County Regulated
Rates") are as indicated on Exhibit 1 to this Agreement. The
Benchmark Adjustment Date shall be June 30, 1995 for the purpose of
any future rate adjustment.
section 2 _ The Operator shall identify all BST subscribers
as of December 31, 1995 ("Subscribers of Record") in the Cities of
Berkeley, El Cerrito, Richmond and Contra Costa County
-2-
(collectively the "Franchising Authorities") . The Operator shall
pay to Subscribers of Record, by way of direct payment, credit, or
refund and without offset or reduction for any alleged undercharge
or underpayment of any rate whether or not the Operator is or may
be entitled to offset any such refund liability pursuant to the
Rules of the Commission, an aggregate refund of $300, 000 . 00 (the
"Aggregate Refund") , as potentially adjusted pursuant to paragraph
8 of that Transfer Agreement, dated- as of January 23, 1996, among
the Operator, the County, and Heritage Cablevision of Delaware,
Inc. (the "Transfer Agreement") . The amount to be credited to
individual subscriber accounts shall be computed as the Aggregate
Refund divided by the number of Subscribers of Record. Application
of said refund credits to Subscribers of Record shall be made over
30 days commencing no later than March 1, 1996 and ending no later
than April 1, 1996 . The Operator shall provide to the County
written evidence of compliance with the requirements of this
provision no later than May 1, 1996 .
Gention 3 The Operator shall adjust its existing rates
for equipment and installation so as not to exceed the Maximum
Permitted Rates for those items as reflected in Exhibit 1 within
sixty (60) days of the Operative Date hereof as defined herein.
S c ion 4 . This Rate Order shall bind any successor-in-
interest to the Operator and shall be effective upon the Effective
Date of the Transfer Agreement (the "Operative Date") .
Rpntion S. Public notice shall be given of this decision
by posting the attached notice in the County Administration
Building and the text of this decision shall be released upon
request to any interested member of the public, as required by
Section 76 .936 (b) of the FCC Cable Regulations.
Dated: January 23, 1996
ATTEST: Phil Batchelor, Clerk BOARD OF SUPERVISORS, COUNTY
of the Board of Supervisors and OF CONTRA COSTA
County Administrator
,,qq �
By: By:
Depipy Clerk a Chair
-3-
'SENT BY:g1,-rAN & TUCKER 1-10-96 10:50 RUTAN & TUCKER- 15106464098;# 2/ 2
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Exhlbk 1
Bay Cablevialon Munleq railOns
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Basic Rate(including fruchise fee} $12.35
Addressable Convartere 1.80
Non-Addreu#ble Convoftra 0.01
Remotes 0.11
irabdWitpn Rates:
UnvAred h" 35.83
Pro-Mred hoffo 14.18
AddWanal connection of fimm of InIlfrai IrratMIMon 14.13
8sparate trip additlonai oannaction _ 21.20
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Commonwealth of Pennsylvania )
COUNTY OF
On May. 1996, personally appeared before me, a Notary Public in and for the
Commonwealth and County aforesaid, Harry F. Brooks, Vice President, and Samuel W. Morris,
Jr., Secretary, of LenComm, Inc., personally known to me to be the persons whose names are
subscribed to the above instrument in such capacities, who acknowledged that they executed the
same.
My commission expires: 1
AL] r tary Pu li
Notarial seal
Kimberly Ruth,Notary Public
Pottstown Boro,Montgomery County
My Commission FxpiresAug.11,1997
MOMberPennsTaniaAssociation of Notarkc,
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EMIT B
WRITTEN DECISION OF THE COUNTY OF
CONTRA COSTA (THE "COUNTY") RELATING
TO CERTAIN REFUND LIABILITY AND THE
PRESCRIPTION OF MAXIMUM PERMITTED
RATES
WHEREAS, the County of Contra Costa (the "County") has been
certified by the Federal Communications Commission (the
"Commission") to regulate rates for the Basic Service Tier ("BST") ,
associated equipment rates, and installation rates; and
WHEREAS, the County provided written notice of said
certification to Lencomm, Inc. , dba Bay Cablevision, Inc. (the
"Operator") ; and
WHEREAS, the County adopted procedural laws and regulations
applicable to rate regulation proceedings which provide a
reasonable opportunity for consideration of the views of interested
parties; and
WHEREAS, the County delivered a written request to the
Operator to file its schedule of rates for the BST, associated
equipment and installation with the County; and
WHEREAS, the Operator filed with the County FCC Forms 1220 and
1205 dated November 24, 1994 and March 31, 1995 (the "Cost of
Service Forms") ; and
WHEREAS, the County timely issued an order pursuant to Section
76 . 933 (b) of the Rules and Regulations (the "Rules") of the
Commission stating that it was unable to determine based upon the
materials submitted by the Operator that the existing or proposed
rates were within the Commission's Maximum Permitted Rates and that
the -County was tolling the thirty (30) day deadline found in
Section 76 . 933 (a) of the Commission's Rules for the purpose of
requesting and/or considering additional information for one
hundred fifty (150) days; and
WHEREAS, the County timely issued an Accounting Order pursuant
to Section 76 .933 (c) of the Rules of the Commission requiring the
Operator to keep an accurate account of all amounts received by the
Operator by reason of the rates and charges for the Basic Service
-Tier, associated equipment and installation in effect from July 15,
1994 as found in the Cost of Service Forms and to keep full and
accurate records indicating on whose behalf such amounts were paid;
and
WHEREAS, the County retained the services of Public Knowledge,
Inc. ("PKI" ) to review the Cost of Service Forms; and
WHEREAS, PKI produced a written report (the "PKI Report") to
the County; and
WHEREAS, the PKI Report concluded that the Maximum Permitted
Rate for the Basic Service Tier, equipment and installation as
contained in the Cost of Service Forms, exceeded appropriate
amounts as calculated under the Rules of the Commission; and
WHEREAS, the Operator disputes the conclusions of the PKI
Report as they relate to the Maximum Permitted Rates; and
WHEREAS, PKI concluded, without dispute from the Operator,
that the Operator was charging equipment and installation rates
higher than the Maximum Permitted Rates specified in the Cost of
Service Forms; and
WHEREAS, a public hearing was held upon the Cost of Service
Forms on January 23, 1996 (the "Public Hearing") ; and
WHEREAS, the Operator was given the opportunity to present
evidence oral and written, in relation to its Cost of Service Forms
and did so present evidence at the Public Hearing; and
WHEREAS, the, Public Hearing was closed and the County is now
legally entitled to take final action upon the Cost of Service
Forms; and
NOW, THEREFORE, County does hereby order as of the date
hereof, as follows :
RectIan 1 The Maximum Permitted Rates and Charges for the
rates subject to the jurisdiction of the County ("County Regulated
Rates") are as indicated on Exhibit 1 to this Agreement. The
Benchmark Adjustment Date shall be June 30, 1995 for the purpose of
any future rate adjustment.
section 2— The Operator shall identify all BST subscribers
as of December 31, 1995 ("Subscribers of Record") in the Cities of
Berkeley, E1 Cerrito, Richmond and Contra Costa County
-2-
(collectively the "Franchising Authorities") . The Operator shall
pay to Subscribers of Record, by way of direct payment, credit, or
refund and without offset or reduction for any alleged undercharge
or underpayment of any rate whether or not the Operator is or may
be entitled to offset any such refund liability pursuant to the
Rules of the Commission, an aggregate refund of $300, 000 . 00 (the
"Aggregate Refund") , as potentially adjusted pursuant to paragraph
8 of that Transfer Agreement, dated as of January 23, 1996, among
the Operator, the County, and Heritage Cablevision of Delaware,
Inc. (the "Transfer Agreement" ) . The amount to be credited to
individual subscriber accounts shall be computed as the Aggregate
Refund divided by the number of Subscribers of Record. Application
of said refund credits to Subscribers of Record shall be made over
30 days commencing no later than March 1, 1996 and ending no later
than April 1, 1996 . The Operator shall provide to the County
written evidence of compliance with the requirements of this
provision no later than May 1, 1996 .
Section 3 . The Operator shall adjust its existing rates
for equipment and installation so as not to exceed the Maximum
Permitted Rates for those items as reflected in Exhibit 1 within
sixty (60) days of the Operative Date hereof as defined herein.
Section 4 . This Rate Order shall bind any successor-in-
interest to the Operator and shall be effective upon the Effective
Date of the Transfer Agreement (the "Operative Date") .
Section 5 . Public notice shall be given of this decision
by posting the attached notice in the County Administration
Building and the text of this decision shall be released upon
request to any interested member of the public, as required by
Section 76 . 936 (b) of the FCC Cable Regulations .
Dated: January 23, 1996
ATTEST: Phil Batchelor, Clerk BOARD OF SUPERVISORS, COUNTY
of the Board of Supervisors and OF CONTRA COSTA
County Administrator
By: By:
,54-uty Clerk P�a(dl-4 Chair
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