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Mediacom Franchise ExtensionMEMORANDUM August 27, 2001 TO: FROM: SUBJECT: The Honorable Mayor and City Council Members Michael C. Van Milligen, City Manager Mediacom Cable Franchise Extension Cable Franchise Administrator Merrill Crawford recommends grantihg a short-term extension of the existing cable television franchise and a concurrent hub site lease to MCC Iowa, Inc. (Mediacom), to expire June 30, 2002, in order to allow for orderly completion of a cable-related needs ascertainment and detailed franchise renewal negotiations, and further recommends that a public hearing be set for September 17, 2001. I concur with the recommendation and respectfully request Mayor and City Council approval. Michael C. Van Milligen MCVM/jh Attachment CC: Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager Merrill Crawford, Cable Franchise Administrator CITY OF DUBUQUE, IOWA MEMORANDUM August 15, 2001 MEMO TO: Michael C. Van Milligen, City Manager FROM: Merrill Crawford, Cable Franchise Administrator SUBJECT: Mediacom Cable Franchise Extension INTRODUCTION: The purpose of this memorandum is to recommend that the City Council, following a public hearing, grant a short-term extension of the existing cable television franchise and a concurrent hub site lease, to MCC Iowa, Inc. (Mediacom), to expire June 30, 2002, in order to allow for ordedy completion of a cable-related needs ascertainment and detailed franchise renewal negotiations. BACKGROUND: The Dubuque cable franchise agreement detailed in Ordinance No. 42-81 is due to expire September 30, 2001. Originally granted to Teleprompter Corporation, the twenty-year franchise has been held by Group W Cable, GWC-106, TCI of Iowa, Inc. (owned first by Telecommunications, Inc. and later by AT&T), now MCC Iowa, Inc. (Mediacom). The City Council approved the transfer of the franchise to Mediacom on June 18, 2001, subject to the terms of an agreement negotiated between the City, AT&T, and Mediacom. The sale of all of AT&T's TCI of Iowa cable systems closed July 18. With the assistance of City legal staff and and the Miller and Van Eaton law firm, I have held preliminary discussions with Mediacom representatives regarding the City's interests and concerns related to a cable franchise renewal. I am pleased to note that one of Mediacom's first actions after the close of the system sale was to restore the position of local system general manager, (which AT&T had eliminated at the end of December). Furthermore, Mediacom has returned former general manager Kathleen McMullen to the position, which is of great benefit to local cable subscribers and should smooth the process of franchise renewal negotiations. Nevertheless, franchise renewal is a detailed and time-consuming process with many technical, legal, and financial elements, particularly in the context of Dubuque's rather unique market and the convergence of cable and telecommunications technologies and services. The September 30 expiration date does not allow sufficient time to work through this process with the new franchisee. A franchise extension of a specified length is a typical step considered in cases where renewal negotiations are underway and where both parties believe that the process can lead to a solid and beneficial result, given a reasonable extension of time. Although our franchise is twenty years old, it has been modified with waivers and side agreements to remain effective in those areas not superseded by Congress and the FCC. In accepting the franchise transfer, Mediacom has agreed to honor those side agreements. There are no elements of the current franchise so needy of revision that the proposed extension would be a problem. In fact, even with our excellent legal and technical advisors, a hasty renewal could increase the risk of overlooking an important benefit that might have been obtained through a more careful process. Concurrent with the extension of the cable television franchise should be the extension of a current lease to Mediacom for a small building on City property at 1585 West Third Street. This building houses the technical equipment comprising the headend of the B-Cable Institutional Network, optical fiber links to the Iowa Communications Network, and equipment serving as an intermediate hub for about one-fourth of the main fiber trunk system serving Dubuque. The term of this lease is set to coincide with the term of the cable franchise. RECOMMENDED ACTION: The Recommended Action is that the City Council set a public hearing for September 17, 2001, and following the public hearing adopt an ordinance extending the term of the cable television franchise and the concurrent hub site lease to June 30, 2002. Cc: Cable TV Regulatory Commission Cable Community Teleprogramming Commission RESOLUTION NO. 388-01 A RESOLUTION OF THE CITY'S INTENT TO GRANT A SHORT-TERM EXTENSION OF AN EXISTING CABLE SERVICES FRANCHISE AND AN EXISTING HUB SITE LEASE TO MCCIOWA EEC. Whereas, Whereas, MCCIowa, EEC. (Mediacom) is the current holder of a cable services .franchise, embodied in Ordinance No. 42-81, as modified by a series of waivers and side agreements, and acquired from TCI of Iowa, Inc. via a transfer approved by the Dubuque City Council on June 18, 2001; and Whereas, one of the side agreements is a lease to Mediacom to build and maintain a network hub on City-owned property located at 1585 West Third Street in Dubuque; and Whereas, the terms of the franchise and of the lease will expire September 30, 2001; and Whereas, representatives of the City of Dubuque and of Mediacom have entered into good faith negotiation of terms and conditions for the renewal of the franchise and the lease. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the City of Dubuque intends to extend the term of the cable services franchise and the term of the lease to June 30, 2002 under the same terms and conditions as currently in effect; and Section 2. That the City Clerk is hereby authorized and directed to cause noticed to be published of the proposed extension in the manner prescribed by law. Passed, approved and adopted this 4th day September, 2001. Terrance M. Duggan, Mayor Attest: Jeanne F. Schneider, City Clerk AGREEMENT EXTENDING THE TERM OF THE CABLE SERVICES FRANCHISE GRANTED TO MCC IOWA LLC This Agreement, made this day of September, 2001, by and between the City of Dubuque, Iowa, an Iowa municipal corporation (hereinafter the "City"), and MCC Iowa LLC, a Delaware corporation (hereinafter "Mediacom"). WITNESSETH: WHEREAS, Mediacom currently holds a cable franchise (the "Franchise") from the City subject to Ordinance No. 42-81 ("The Dubuque Cable Services Franchise~), Resolution No. 110-87, Resolution No. 284-88, Resolution No. 349- 94, Resolution No. 521-98, Resolution No. 445-99, Resolution NO. 108-00, and Resolution No. 275-01 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 time, are collectively referred to as the "Franchise Documents"; and WHEREAS, the parties are currently negotiating the renewal of the Franchise; and WHEREAS, the parties have agreed that an extension of the current Franchise, in order to complete negotiations, and to take such other actions as may be appropriate to resolve renewal issues, is to the benefit of both parties; and WHEREAS, Mediacom has consented to the terms of this extension; NOW, THEREFORE, in consideration of the promises and undertakings herein, the receipt and accuracy of which are hereby acknowledged, the parties hereby agree as follows: Section 1. The Franchise, which was scheduled to expire on Septemberr 30, 2001, is extended from that date until June 30, 2002 (the "extension period"). Section 2. During the extension period, and any subsequent extension periods, if any, all the terms and conditions set forth in the Franchise Documents shall continue in full force and effect. Section 3. This extension shall be without prejudice to arty rights of either party under the Cable Communications Policy Act of 1984, as amended. For example, and by way of illustration and not limitation, any rights Mediacom may have already asserted properly under 47 U.S.C. __ 546(a) need not be asserted again, and are not affected by the extension. Similarly, the extension will not be read to give Mediacom additional rights or opportunities to trigger the provisions of 47 U.S.C. __ 546(a)-(g), or to require the City to reconduct hearings or other actions properly taken in conjunction with any renewal proceedings under either or both of the Franchises. No claim that either party may have against the other shall be released or otherwise affected by this extension. IN WITNESS WHEREOF, the parties hereto have set their respective hands and seals on the day first above written. CITY OF DUBUQUE, IOWA By Michael C. Van Milligen, City Manager MCC IOWA LLC By.