Loading...
Cable Franchise transferCITY OF DUBUQUE, IOWA MEMORANDUM June 14, 2001 TO: FROM: SUBJECT: The Honorable Mayor and City Council Members Michael C. Van Milligen, City Manager AT&T Broadband Cable Franchise Transfer to Mediacom AT&T Broadband has requested the consent of the City to transfer the Dubuque cable television franchise held by AT&T subsidiary TCI of Iowa, Inc. to Mediacom Communications Corporations. This is part of a widely publicized sale of all AT&T Broadband cable properties in Iowa, and a large number of similar franchises in Illinois, Missouri and Georgia. In accordance with provisions of federal law pertaining to the transfer of cable television franchises, we have been assisted by Frederick EIIrod of the Miller and Van Eaton law firm of Washington, D.C. in a review of the technical and legal qualifications of Mediacom to operate the Dubuque system. We have also partnered with the City of Des Moines in research into Mediacom's financial qualifications to operate the system, and have worked with other cities in Iowa through the Iowa League of Cities to research the qualifications of Mediacom. Cable Franchise Administrator Merrill Crawford believes that the proposed transfer of the franchise from AT&T to Mediacom would be in the best interest of Dubuque cable subscribers and the community as a whole, and is recommending the approval of the cable franchise transfer request. I concur with the recommendation and respectfully request Mayor and City Council approval. Michael C. Van Milligen MCVMIjh Attachment cc: Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager Merrill E. Crawford, Cable Franchise Administrator CITY, OF DUBUQUE, IOWA MEMORANDUM June 13, 2001 MEMO TO: Michael C. Van Milligen, City Manager FROM: Merrill E. Crawford, Cable Franchise Administrator SUBJECT: AT&T Broadband (TCI of Iowa) Cable Franchise Transfer to Mediacom INTRODUCTION: The purpose of this memorandum is to recommend that the City Council consent to the transfer of the AT&T Broadband (TCI of Iowa, Inc.) Dubuque cable television franchise to MCC Iowa LLC. BACKGROUND: On February 27, 2001, representatives of AT&T Broadband requested the consent of the City Council to transfer the Dubuque cable television franchise held by AT&T subsidiary TCI of Iowa, Inc. to Mediacom Communications Corporation, including its designated affiliate, MCC Iowa LLC. This is part of a widely-publicized sale of all AT&T Broadband cable properties in Iowa, and a large number of similar franchises in Illinois, Missouri, and Georgia. In accordance with provisions of federal law pertaining to the transfer of cable television franchise transfers, we have been assisted by Frederick El/rod of the Miller and Van Eaton law firm of Washington, D.C. in a review of the Techrfical and Legal qualifications of Mediacom to operate the Dubuque system. We have also partnered with the City of Des Moines in research into Mediacom's financial qualifications to operate the system. As the Dubuque franchise term is near expiration and the renewal process has been additionally complicated by the proposed transfer, Mr. Ellrod and I have met with Mediacom officials to assure that important elements of the franchise which have been modified, or to which side agreements have been added, are understood and will he honored by Mediacom via the transfer. The result of our negotiations is formalized in the proposed Franchise Transfer Agreement between the City of Dubuque and the companies. We have exchanged information with the Iowa League of Cities, certain individual Iowa cities considering the transfer, amd other Iowa cities who have been served by Mediacom for several years. I have also monitored national information resources affiliated with the National Association of Telecommunications Officers and Advisors (NATOA), who have had firsthand experience with Mediacom as a local cable operator. We conclude that the proposed transfer of the franchise from AT&T to Mediacom would be in the best interest of Dubuque cable subscribers and the community as a whole. RECOMMENDED ACTION: The Recommended Action is that the City Council adopt the proposed resolution consenting to the transfer of the existing cable franchise to MCCIowa LLC and approving and authorizing the City Manager to sign the transfer agreement. cc: Barry Lindahl, Corporation Counsel Tim O'Brien, Assistant City Attorney Cable TV Regulatory Commission Preparer: Merrill Crawford Address: 1300 Main St. Dubuque IA 52001 Telephone: 589-4117 RESOLUTION NO. 275-01 A RESOLUTION OF THE CITY OF DUBUQUE CONSENTING TO THE TRANSFER OF AN EXISTING CABLE TELEVISION SERVICES FRANCHISE TO MEDIACOI~I COMMUNICATIONS, INC. WHEREAS, AT&T Broadband, d/b/a TCI of Iowa, Inc. is the current holder of a Cable Television Services franchise granted October 1, 1981 by Ordinance No. 42-81, and WHEREAS, AT&T Broadband desires to sell its Dubuque cable system and transfer its Dubuque franchise to MCCIowa LLC, an affiliate of Mediacom Communications, Inc. and in accordance with Ordinance No. 42-81 has requested the consent of the Dubuque City Council to the transfer, and WHEREAS, City staff, with the assistance of consulting attorneys and accountants, have reviewed the legal, technical and financial qualifications of MCCIowa LLC to operate the Dubuque system, and have negotiated terms of a franchise transfer agreement to protect and continue the requirements and benefits of the franchise and several related side agreements in the transfer, and WHEREAS, MCCIowa LLC agrees to honor and perform the requirements of the existing cable television franchise and the related side agreements, and to enter into timely and good faith negotiations regarding renewal of the franchise, NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the transfer of the Cable Television Services Franchise to from TCI of Iowa, Inc. to MCCIowa LLC is hereby consented to. Section 2. That the attached Franchise Transfer Agreement is hereby approved and the City Manager is authorized to sign and administer this agreement on behalf of the City of Dubuque. Passed, approved and adopted this 18th day of June, 2001. Terrance M. Duggan, Mayor Attest: Jeanne F. Schneider, City Clerk TRANSFER AGREEMENT Pa~e 1. DEFINITION ................. : ............................................... : .............................................. 2.... 2 2. TRANSFER OF FRANCHISE ........................................................................................... 2 3. ACCEPTANCE OF FRANCHISE OBLIGATIONS ......................................................... 3 4. RESERVATION OF RIGHTS ........................................................................................... 3 5. REPRESENTATIONS AND WARRANTIES ................................................................... 4 6. RELATED AGREEMENTS .............................................................................................. 6 7. INDEMNIFICATION ......................................................................................................... 6 8. ADDITIONAL CONDITIONS .......................................................................................... 7 9. BREACI-IES ........................................................................................................................ 8 10. MISCELLANEOUS PROVISIONS ................................................................................... 8 TRANSFER AGREEMENT THIS AGREEMENT is made this day of , ____, by and between: (1) City of Dubuque, Iowa, an Iowa murficipal corporation ("City"); (2) TCI of Iowa, Inc., an Iowa corporation ("TCI"); and (3) MCC Iowa LLC, a corporation ("Mediacom"). Mediacom and TCI may be referred to jointly herein as "Companies". RECITALS WHEREAS, TCI currently holds a cable franchise (the "Franchise") from the City subject to Ordinance No. 42-81 ("Dubuque Cable Services Franchise"), Resolution No. 110-87, Resolution No. 284-88, Resolution No. 349-94, Resolution No. 521-98, Resolution No. 445-99, and Resolution No. 108-00; and to Ordinance No. 69-93, all of which documents, as any of them may lawfully be or may have been amended from time to t/me, are collectively referred to as the "Franchise Documents"; and WHEREAS, pursuant to an Asset Purchase Agreement among Mediacom Communications Corporation, on the one hand, and TCI and other affiliated entities, on the other hand, dated as of February 26, 2001 (Iowa/Illinois), Mediacom will acquire the Franchise currently held by TCI and the cable system serving the City ("System") (the "Proposed Transaction''); and WHEREAS, Section 4.4 of the Dubuque Cable Services Franchise provides that the prior approval of the City is required for the Proposed Transaction; and WHEREAS, on or about February 27, 2001, TCI and Mediacom filed an FCC Form 394 with the City and requested that the City approve the Proposed Transaction (the "Transfer Application"); and WHEREAS, Mediacom has agreed to comply with the Franchise Documents and applicable law from and after the completion of the Proposed Transaction; and WHEREAS, the Franchise is currently scheduled to expire on September 30, 2001, and Mediacom has represented to City its intention and desire to continue good-faith negotiations with respect to renewal of such Franchise, provided that all parties to the renewal reserve all their fights under federal law with respect to the renewal; and WHEREAS, relyfi~g on TCI's and Mediacom's representations, the City is willing to grant its consent to the Proposed Transaction, subject to the terms and conditions set forth herein; NOW, THEREFORE, in consideration for the City's consent to the Proposed Transaction, and subject to the terms and conditions of this Agreement and of the City's Resolution consenting to the Proposed Transaction ("Transfer Resolution"), THE PARTIES DO HEREBY AGREE as follows: 1. DEFINITION 1.1.For purposes of this Agreement, "Franchisee" shall mean TCI prior to the effective date of the Proposed Transaction, and Mediacom on and after that date. 2. TRANSFER OF FRANCHISE 2.1.The foregoing recitals are tree and correct and are incorporated herein by reference. 2.2.The City has consented through the Transfer Resolution to the Proposed Transaction as specified in the Transfer Application, in consideration for the promises and performances of TCI and Mediacom as expressed in this Transfer Agreement. 3. ACCEPTANCE OF FRANCHISE OBLIGATIONS 3.1. Mediacom hereby accepts, acknowledges, and agrees that, after the Proposed Transaction, it will continue to be bound by all the commitments, duties, and obligations, present, continuing and future, of TCI embodied in the Franchise Documents, and that the Proposed Transaction will have no effect on these obligations. 3.2. The Companies shall ensure that all records pertaining to the Franchise, including financial records, shall continue to be available after the Proposed Transaction in a manner consistent with the Franchisee's obligations under the Dubuque Cable Services Franchise and applicable law. 3.3. Mediacom shall execute and submit to the City an Acceptance of Franchise in substantially the form attached hereto as Exhibit 1. 3.4. Actions of corporate parents of Mediacom affecting Mediacom's obligations under this Transfer Agreement and the Franchise Documents shall be deemed to be those of Mediacom for purposes of this Transfer Agreement and the Franchise Documents. 3.5. Mediacom agrees to provide a parent company guarantee from the entity specified in Exhibit 2, acceptable to the City, guaranteeing performance by Mediacom of all of Mediacom's obligations under the Franchise Documents and this Transfer Agreement. The signed guarantee must be provided within ten days of the closing of the Proposed Transaction. A form of such a guarantee is attached as Exhibit 2. 4. RESERVATION OF RIGHTS 4.1. The City reserves all tights not expressly granted in this Transfer Agreement, including without limitation those specified below. 3 4.2. The City waives none of its rights with respect to compliance by TCI (before the Proposed Transaction) or Mediacom (after the Proposed Transaction) with the requirements set forth in the Franchise Documents. The City's approval of the Proposed Transaction shall in no way be deemed a representation by the City that the Franchisee is in compliance with all of its obligations under the Franchise Documents. 4.3. Neither this Transfer Agreement, nor any other action or omission by the City at or before the execution of this Transfer Agreement, shall be construed to grant the City's consent to any furore transfer of the Franchise and/or the System, and/or any future change in ownership and/or control of the Franchise and/or the System, or to mean that the City's consent to any future transaction is not required. 4.4. Any consent given by the City to the Proposed Transaction is made without prejudice to, or waiver of, the City's right to investigate and take into account any lawful considerations during any franchise renewal or any future transfer process. 4.5. This Transfer Agreement does not affect and shall not be constnted to affect any lawful rights and authority the City may have to regulate or authorize, by ordinance, license or otherwise, use of the public rights-of-way for purposes other than for cable service. 5. REPRESENTATIONS AND WARRANTIES 5.1. Each of the Companies hereby represents and warrants that at the time of the execution of this Transfer Agreement: (a) it is a corporation or partnership duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized; (b) the Franchise Documents and, assuming due execution hereof by the other parties hereto, this Transfer Agreement constitute legal, valid and binding obligations enforceable in accordance with their terms; (c) the execution and delivery of, and performance by such Company under, 4 this Transfer Agreement and the Franchise Documents, where applicable, are within such Company's power and authority without the joinder or consent of any other party and have been duly authorized by all requisite corporate or partnership action on the part of such Company and are not in contravention of such Company's partnership agreement, charter, bylaws, and/or other organizational documents; and (d) no representation made to the City by such Company is incomplete, untrue or inaccurate in any material respect.. 5.2. The Companies represent and warrant that neither the Proposed Transaction nor this Transfer Agreement will result in any increase in subscriber rates, l/rovided, however, that Mediacom reserves the right to make lawful changes in subscriber rotes in the ordinary course of business. 5.3. Mediacom represents and warrants that neither the Proposed Transaction nor this Transfer Agreement will adversely affect its ability to meet the requirements of the current Franchise Documents, or to meet the City's furore cable-related needs and interests in a renewal franchise. 5.4. The Companies represent and warrant that the Proposed Transaction will not have any adverse financial effect on the System, or adversely affect performance. Mediacom represents and warrants that after the Proposed Transaction, Mediacom's financial qualifications will be such as shall enable it to maintain and operate its system in the City. 5.5. Mediacom represents and warrants that the Proposed Transaction will not in any respect reduce the quality of customer service in the City. 5.6. Mediacom represents and warrants that the Proposed Transaction will not reduce the quality of existing system maintenance or repair. 5.7. The Companies represent and warrant that they understand that the Fradchise is scheduled to expire on September 30, 2001, unless renewed or extended; that the Proposed Transaction is not based on any assumption that the Franchise.will be renewed or extendedi and that they take all risks associated with any future non-renewal or non-extension of the Franchise. 6. RELATED AGREEMENTS Mediacom hereby accepts, acknowledges, and agrees that, after the Proposed Transaction, it will continue to be bound by all the commitxnents, duties, and obligations, present, continuing and future, of TCI embodied in the following separate agreements related to the Franchise, and that the Proposed Transaction will have no effect on these obligations: (1) Lease Agreement dated October 19, 1987, as amended February 25, 1988 (1988 Lease of Space on City Property at 1585 W. 3rd Street to TCI for 1-Net Hub); (2)Agreement dated April 27, 1995, pursuant to Resolution No. 349-94; (3)Resolution No. 445-99 (Customer Billing Practices); (4) 2000 Easement Agreement dated April 10, 2000, pursuant to Resolution No. 108- 00. 7. INDEM2NIFICATION 7.1. Each of the Companies agrees to indemnify and hold the City harmless against any loss, claim, damage, liability or expense (including, without limitation, reasonable attorneys' fees) caused by any representation or warranty made by that Company herein which is determined by a court of competent jurisdiction or by the parties to be unlrue or inaccurate in any material respect. 6 7.2. Mediacom shall indemnify and hold the City harmless against any loss, claim, damage, liability or expense (including, without limitation, reasonable attorneys' fees) incurred by the City in connection with any action or proceeding wherein any of the claims or defenses waived herein are asserted, whether offensively or defensively, by either of the Companies or by any affiliate or third party claim'mg or asserting any interest in the Franchise or the System through, on behalf of, by contract with, or as successor or assign of such Companies. 7.3. Mediacom shall indemnify and hold the City harmless against any loss, claim, damage, liability or expense (including, without limitation, reasonable attorneys' fees) incurred by the City in connection with any action or proceeding commenced by a third party (not one of the parties to this Transfer Agreement) claiming or asserting any liability of the City relating to or arising from the Proposed Transaction or this Transfer Agreement. 8. ADDITIONAL CONDITIONS 8.1. In the event the transfer does not close by December 31, 2001, or closes on terms that are in any materiai respect different from the terms disclosed to the City in writing, then any City consent to the Proposed Transaction shall be void and of no force or effect, and the Proposed Transaction deemed to have been timely den/ed. 8.2. The Companies hereby waive any and all claims that they may have that any denial of the Transfer ApPlication that results from failure ~f the conditions in Section 8.1 fails to satisfy the deadlines established by applicable law including, without limitation, claims based on, arising out of, or relating to 47 U.S.C. § 537, as amended, and agree that they shall be deemed to have agreed to an extension of the time to act on the Transfer Application as required to make any denial effective. 7 9. BREACHES Any breach of this Transfer Agreement shall be deemed a breach of the Dubuque Cable Services Franchise and shall be subject to all remedies available for a breach of the Dubuque Cable Services Franchise, in addition to any other remedies the parties may have under this Transfer Agreement at law or equity. 10. MISCELLANEOUS PROVISIONS. 10.1. Effective Date: This Transfer Agreement shall be effective and binding upon the signatories once it has been signed by all signatories. 10.2. Binding Acceptance: This Transfer Agreement shall bind and benefit the parties hereto and their respective heirs, beneficiaries, administrators, executors, receivers, trustees, successors and assigns, and the promises and obligations herein shall survive the expiration date hereof. Any purported assignment of this Transfer Agreement is void without the express written consent of the signatories. 10.3. Voluntary Agreement: This Transfer Agreement is freely and voluntarily given by each party, without any duress or coercion, and after each party has consulted with its counsel. Each party has carefully and completely read all of the terms and provisions of this Transfer Agreement. 10.4. Severability: If any term, condition, or provision of this Transfer Agreement shall, to any extent, be held to be invalid, preempted, or unenforceable, the remainder hereof shall be valid in all other respects and continue to be effective. 10.5. Counterparts: This Transfer Agreement may be executed in several counterparts, each of which when so executed shall be deemed to be an original copy, and all of 8 which together shall constitute one agreement binding on all parties hereto, notwithstanding that all parties shall not have signed the same counterpart. 10.6. Conforming Amendments to Dubuque Cable Services Franchise: Mediacom agrees to cooperate with the City in formulating any amendments of the Dubuque Cable Services Franchise that may be necessary to reflect the Proposed Transaction or the provisions of this Transfer Agreement. 10.7. Governing Law: This Transfer Agreement shall be governed in all respects by the law of the State of Iowa. 10.8. Captions and References: The captions and headings of sections throughout this Transfer Agreement are intended solely to facilitate reading and reference to the sections and provisions of this Transfer Agreement. Such captions shall not affect the meaning or interpretation of this Transfer Agreement. AGREED TO THIS DAY OF CITY OF DUBUQUE, IOWA, an Iowa murdcipal corporation By: Michael C. Van Milligen, City Manager ATTEST: CityClerk TCI OF IOWA, INC. By: MCC IOWA, LLC APPROVED AS TO FORM: City Attorney 4253xt)6~FEE014 t9.DOC 10 EXH~i ACCEPTANCE OF FRANCHISE BY THE FRANCHISEE MCC Iowa LLC ("Mediacom") hereby accepts the franchise to erect, construct, maintain, and operate a cable system offered by Ordinance No. 42-81 of the City of Dubuque, Iowa ("City"), as amended ("Franchise Ordinance"). By this acceptance, Mediacom agrees that it shall be bound by the terms and conditions of the Franchise Ordinance, as assigned and modified by Resolution No. 110-87, as modified by Resolution No. 284-88, as modified by Resolution No. 349-94, as transferred to control of AT&T Corporation by Resolution No. 521-98, as modified by Resolution No. 445-99, as modified by Resolution No. 108-00; Ordinance No. 69-93; and the Transfer Agreement of ,2001 (collectively, the "Franchise Documents"). By accept'rog the franchise, Mediacom fitrther: (1) acknowledges and accepts the City's legal right to issue and enforce the franchise; (2) agrees that it will not oppose the City's intervention in any proceeding affecting its franchise or obligations thereunder; (3) accepts and agrees to comply with each and every provision of the Franchise Documents; and (4) agrees that the franchise was granted pursuant to processes and procedures consistent with applicable taw, and that it will not raise any cla'un to the contrary. Mediacom declares that it has carefully read ail of the terms and conditions of the Franchise Documents, and accepts and agrees to abide by same. AGREED TO THIS DAY OF MCC IOWA LLC By: Its: 2 STATE OF IOWA: I HEREBY CERTIFY, that on this day of , , before me, the subscriber, a Notary Public of the State of Iowa, in' and for County, Iowa, aforesaid personally appeared of MCC Iowa LLC ("Mediacom") and acknowledged the foregoing Acceptance of Franchise by Mediacom in County, Iowa, to be the act and deed of said company. County, Iowa AS WITNESS my hand and Notary Seal Notary Public My Commission Expires: 3 EXHIBIT 2 GUARANTEE WHEREAS, MCC Iowa LLC ("MCC Iowa") has requested that the City approve an application for the transfer of its cable franchise from the current franchisee to MCC Iowa; and WHEREAS, the franchise to be assigned is subject to the provisions of Ordinance No. 42-81 ("Dubuque Cable Services Franchise"), Resolution No. 110-87, Resolution No. 284-88, Resolution No. 349-94, Resolution No. 521-98, Resolution No. 445-99, and Resolution No. 108- 00; and to Ordinance No. 69-93, ail of which documents, as any of them may lawfully be or may have been amended from time to time, are collectively referred to as the "Franchise Documents"; and WHEREAS, Mediacom Communications Corporation ("Guarantor") is an indirect parent of MCC Iowa and will have a substantial interest in the cable franchise, in the conduct of MCC Iowa, and in the Franchise Documents, which are incorporated herein by this reference; NOW, THEREFORE, the Guarantor hereby unconditionaily guarantees the due and timely performance of any and ail obligations of MCC Iowa required by the Franchise Documents. This Guarantee, unless terminated, substituted or canceled as hereinafter provided, shail remain in full force and effect for the term of the franchise, as it may be extended prior to renewai; provided, however, that upon the City's prior written approvai of a substitute guarantor, which approval shall not be unreasonably withheld, this Guarantee may be terminated, substituted or canceled upon written notice from the Guarantor to the City and MCC Iowa. Any such substitution of the Guarantor will be implemented in a manner that ensures that the substitute guarantee is in place and effective prior to or contemporaneously with the termination, substitution or cancellation of this Guarantee so that there is no breach in coverage. Any such notice to be given hereunder shail be addressed to the City Manager or his designee with a copy to MCC Iowa. Such termination shail not affect liability incurred or accrued under this Guarantee prior to the effective date of such termination or cancellation. By: Name: Title: