Title
A Resolution relating to Lexington-Fayette Urban County Government denying approval of the transfer of control of Time Warner Cable to Comcast Corporation. [Council Office Maynard]
Body
WHEREAS, Ordinance No. 163-92 created a fifteen (15) year franchise for a cable television system within the confines of Fayette County, Kentucky; and
WHEREAS, Ordinance No. 164-92 accepted the proposal of Telecable of Lexington, Inc. for a renewal of fifteen (15) year franchise for a cable television system pursuant to Ordinance No. 163-92; and
WHEREAS, Ordinance No. 163-92 has been amended from time to time (Ordinance No.'s 206-93, 183-95, 48-2000, 287-2002, 789-2002, 315-2004 and 301-2007 and Resolution No.'s 532-94, 108-98 and 483-99) to now be collectively known as the "Cable Franchise Agreement"; and
WHEREAS, Resolution No. 532-94 approved the transfer of control from Telecable of Lexington, Inc. to TCI Communications and its parent corporation, Tele-Communications, Inc.; and
WHEREAS, Resolution No. 108-98 approved the transfer of control from TCI Communications to InterMedia Partners of Kentucky, L.P.; and
WHEREAS, Resolution No. 483-99 approved the transfer of control from InterMedia Partners of Kentucky, L.P. to Insight Communications Company L.P. ("Insight"); and
WHEREAS, Ordinance No. 301-2007 authorized the Mayor to enter into an Agreement with Insight to amend Ordinance No. 163-92 ("Franchise Amendment Agreement") to extend and renew the terms of Ordinance No. 163-92 for a term of five (5) years from fifteen (15) years to twenty (20) years with an effective date retroactive to September 3, 2007; and
WHEREAS, Resolution No. 596-2011 approved the transfer of control from Insight to Time Warner Cable Inc. ("Time Warner Cable"), and
WHEREAS, The Lexington-Fayette Urban County Government ("LFUCG") has received an FCC Form 394 Application for Transfer of Control on behalf of Comcast Corporation ("Comcast"), requesting transfer of Time Warner Cable to Comcast; and
WHEREAS, the LFUCG, pursuant Section 42(b) of the Cable Franchise Agreement provides that in making a determination on whether to grant an application for a transfer of control or an assignment, the Urban County Council may consider the financial, technical and other qualifications of the transferee to operate the system; whether the incumbent cable operator is in compliance with this ordinance and, if not, the proposed transferee's commitment to cure such noncompliance; and whether operation by the transferee would adversely affect cable services to subscribers, or otherwise be contrary to the public interest; and
WHEREAS, Section 164 of the Constitution of Kentucky provides that "[n]o county, city, town, taxing district or other municipality shall be authorized or permitted to grant any franchise or privilege, or make any contract in reference thereto, for a term exceeding twenty years. Before granting such franchise or privilege for a term of years, such municipality shall first, after due advertisement, receive bids therefor publicly, and award the same to the highest and best bidder; but it shall have the right to reject any or all bids;" and
WHEREAS, the twenty (20) year franchise created by the Franchise Amendment Agreement expired on September 2, 2012; and
WHEREAS, Section 164 of the Constitution of Kentucky clearly prohibits the LFUCG from extending the Cable Franchise Agreement past September 2, 2012; and
WHEREAS, the LFUCG has repeatedly written to Time Warner Cable regarding its noncompliance with the terms and conditions of the Cable Franchise Agreement; and
WHEREAS, the letters from the LFUCG to Time Warner Cable dated February 24, 2014 and May 8, 2014 are attached hereto as Exhibits A and B respectfully and are incorporated herein by reference; and
WHEREAS, Time Warner Cable continues to be non-compliance with Section 48(b)(2) of the Cable Franchise Agreement; and
WHEREAS, Time Warner Cable continues to be non-compliance with Section 48(b)(3) of the Cable Franchise Agreement; and
WHEREAS, Time Warner Cable continues to be non-compliance with Section 48(b)(4) of the Cable Franchise Agreement; and
WHEREAS, Time Warner Cable continues to be non-compliance with Section 48(b)(6) of the Cable Franchise Agreement; and
WHEREAS, Time Warner Cable continues to be non-compliance with Section 48(b)(8) of the Cable Franchise Agreement; and
WHEREAS, Time Warner Cable continues to be non-compliance with Section 34(e) of the Cable Franchise Agreement; and
WHEREAS, Time Warner Cable continues to be non-compliance with Section 29 of the Cable Franchise Agreement; and
WHEREAS, Time Warner Cable continues to be non-compliance with Section 33(a)(4) of the Cable Franchise Agreement.
WHEREAS, the LFUCG has written to Comcast regarding Time Warner Cable's noncompliance with the terms and conditions of the Cable Franchise Agreement. The letter from the LFUCG to Comcast dated May 8, 2014 is attached hereto as Exhibit C and is incorporated herein by reference; and
WHEREAS, Comcast has failed to provide the LFUCG its commitment to cure the ongoing noncompliance with Sections 48(b)(2), 48(b)(3), 48(b)(4), 48(b)(8), 34(e), 29, and 33(a)(4) of the Cable Franchise Agreement.
NOW, THEREFORE, THE COUNCIL OF THE LEXINGTON-FAYETTE
URBAN cOUNTY GOVERNMENT MAKES THE FOLLOWING FINDINGS OF
FACT:
1. The Time Warner Cable to Comcast transfer of control has yet to be approved by the Federal Communications Commission, or the Department of Justice.
2. The LFUCG, pursuant to Section 42(b) of the Cable Franchise Agreement finds that in light of the fact that the transfer of control from Time Warner Cable to Comcast has yet to be approved by the Federal Communications Commission or the Department of Justice, Comcast is not legally qualified and the approval by the Urban County Council prior to receipt of the above-mentioned federal approvals would be contrary to the public interest.
3. Nationally, Comcast Corporation has poor customer service ratings.
4. The LFUCG, pursuant to Section 42(b) of the Cable Franchise Agreement, finds that in light of Comcast's poor customer service record in other communities, it does not have the required technical qualifications, experience and expertise necessary to provide adequate customer service in Fayette County, KY and that the operation by Comcast would adversely affect cable services to subscribers and would otherwise be contrary to the public interest.
5. Pursuant to Section 164 of the Kentucky Constitution, the Cable Franchise Agreement cannot be extended past September 2, 2012 and Time Warner Cable has no legal right to operate within the confines of Fayette County, KY.
6. The LFUCG, pursuant to Section 42(b) of the Cable Franchise Agreement finds that in light of the fact that the Cable Franchise Agreement cannot be extended past September 2, 2012 and that Time Warner Cable has no legal right to operate within the confines of Fayette County, KY, there can be no transfer to Comcast.
7. In the event that a court of competent jurisdiction finds that the Cable Franchise Agreement can be extended past September 2, 2012 and that Time Warner Cable has a legal right to operate within the confines of Fayette County, KY, Time Warner Cable is not in compliance with the Cable Franchise Agreement as referenced in the letters from the LFUCG to Time Warner Cable dated February 24, 2014 and May 8, 2014 which are attached hereto as Exhibits A and B. Said noncompliance includes, but is not limited to: Time Warner Cable's failure to comply with Sections 48(b)(2), 48(b)(3), 48(b)(4), 48(b)(8), 34(e), 29, and 33(a)(4) of the Cable Franchise Agreement; and
8. In the event that a court of competent jurisdiction finds that the Cable Franchise Agreement can be extended past September 2, 2012 and that Time Warner Cable has a legal right to operate within the confines of Fayette County, KY, the LFUCG, pursuant to Section 42(b) of the Cable Franchise Agreement, finds that in light of the fact that Time Warner Cable is in noncompliance with Sections 48(b)(2), 48(b)(3), 48(b)(4), 48(b)(8), 34(e), 29, and 33(a)(4) of the Cable Franchise Agreement, Time Warner Cable is not in compliance with the terms and conditions of the Cable Franchise Agreement and said noncompliance adversely affects cable services to subscribers and is contrary to the public interest.
9. In the event that a court of competent jurisdiction finds that the Cable Franchise Agreement can be extended past September 2, 2012 and that Time Warner Cable has a legal right to operate within the confines of Fayette County, KY, Comcast has failed to provide the LFUCG its commitment to cure the ongoing noncompliance with Sections 48(b)(2), 48(b)(3), 48(b)(4), 48(b)(8), 34(e), 29, and 33(a)(4) of the Cable Franchise Agreement.
10. In the event that a court of competent jurisdiction finds that the Cable Franchise Agreement can be extended past September 2, 2012 and that Time Warner Cable has a legal right to operate within the confines of Fayette County, KY, the LFUCG, pursuant to Section 42(b) of the Cable Franchise Agreement, finds that Comcast has failed to provide the LFUCG its commitment to cure the ongoing noncompliance of Sections 48(b)(2), 48(b)(3), 48(b)(4), 48(b)(8), 34(e), 29, and 33(a)(4) of the Cable Franchise Agreement and that the operation by Comcast would adversely affect cable services to subscribers and otherwise be contrary to the public interest.
NOW, THEREFORE, BE IT THE RESOLVED BY THE COUNCIL OF THE LEXINGTON-FAYETTE URBAN COUNTY GOVERNMENT:
Section 1 - The Council of the LFUCG hereby finds, determines and
declares that all statements of fact set forth in the preambles to this Resolution and the findings of fact cited above are true and correct in all respects, and such preambles and findings of fact are incorporated into the body of this Resolution by reference as if set forth at length herein.
Section 2 - The Council of the LFUCG further finds, determines and
declares that the denial of approval of the transfer of control from Time Warner Cable to Comcast will be in the best interest of the LFUCG and is in the furtherance of the public purposes and functions of the LFUCG.
Section 3 - The approval of the transfer of control from Time Warner
Cable to Comcast is hereby denied pursuant Section 42(b) of the Cable Franchise Agreement based on the above-mentioned preambles and findings of fact.
Section 4 - This Resolution shall take effect upon its passage and
publication in accordance with applicable law.
PASSED URBAN COUNTY COUNCIL:
__________________________
MAYOR
ATTESTED:
_____________________
CLERK OF URBAN COUNTY COUNCIL