Title
A Resolution relating to Lexington-Fayette Urban County Government denying approval of the transfer of control of Comcast Corp. to Charter Communications, Inc. [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, Resolution No. ___ -2014 denied approval of the transfer of control Time Warner Cable to Comcast Corporation ("Comcast"); and
WHEREAS, the Lexington-Fayette Urban County Government ("LFUCG") has received an FCC Form 394 Application for Transfer of Control on behalf of Charter Communications, Inc. ("Charter") requesting transfer of Comcast to Charter ; 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 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 A and is incorporated herein by reference; and
WHEREAS, there continues to be non-compliance with Section 48(b)(2) of the Cable Franchise Agreement; and
WHEREAS, there continues to be non-compliance with Section 48(b)(3) of the Cable Franchise Agreement; and
WHEREAS, there continues to be non-compliance with Section 48(b)(4) of the Cable Franchise Agreement; and
WHEREAS, there continues to be non-compliance with Section 48(b)(6) of the Cable Franchise Agreement; and
WHEREAS, there continues to be non-compliance with Section 48(b)(8) of the Cable Franchise Agreement; and
WHEREAS, there continues to be non-compliance with Section 34(e) of the Cable Franchise Agreement; and
WHEREAS, there continues to be non-compliance with Section 29 of the Cable Franchise Agreement; and
WHEREAS, there continues to be non-compliance with Section 33(a)(4) of the Cable Franchise Agreement.
WHEREAS, the LFUCG has written to Charter regarding the above-mentioned noncompliance with the terms and conditions of the Cable Franchise Agreement. The letter from the LFUCG to Charter dated July 3, 2014 is attached hereto as Exhibit B and is incorporated herein by reference;
WHEREAS, Charter 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. Resolution No. ___ -2014 denied approval of the transfer of control Time Warner Cable.
2. The LFUCG finds that in light of the fact that the approval of transfer of control from Time Warner Cable to Comcast was denied by LFUCG, Comcast has no legal right to transfer control to Charter.
3. The Comcast to Charter transfer of control has yet to be approved by the Federal Communications Commission, or the Department of Justice.
4. In the event that a court of competent jurisdiction overturns the LFUCG's denial of the approval of the transfer of control from Time Warner Cable to Comcast, 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 Comcast to Charter has yet to be approved by the Federal Communications Commission or the Department of Justice, Charter 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.
5. Nationally, Charter has poor customer service ratings.
6. In the event that a court of competent jurisdiction overturns the LFUCG's denial of the approval of the transfer of control from Time Warner Cable to Comcast, the LFUCG, pursuant to Section 42(b) of the Cable Franchise Agreement, finds that in light of Charter'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 Charter would adversely affect cable services to subscribers and would otherwise be contrary to the public interest.
7. 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.
8. In the event that a court of competent jurisdiction overturns the LFUCG's denial of the approval of the transfer of control from Time Warner Cable to Comcast, 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 Comcast has no legal right to operate within the confines of Fayette County, KY, there can be no transfer to Charter.
9. In the event that a court of competent jurisdiction overturns the LFUCG's denial of the approval of the transfer of control from Time Warner Cable to Comcast and finds that the Cable Franchise Agreement can be extended past September 2, 2012 and that Comcast has a legal right to operate within the confines of Fayette County, KY, there is not compliance with the Cable Franchise Agreement as referenced in Exhibits A. Said noncompliance includes, but is not limited to: 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
10. In the event that a court of competent jurisdiction overturns the LFUCG's denial of the approval of the transfer of control from Time Warner Cable to Comcast and finds that the Cable Franchise Agreement can be extended past September 2, 2012 and that Comcast 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 there is not in compliance 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, Comcast 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.
11. In the event that a court of competent jurisdiction overturns the LFUCG's denial of the approval of the transfer of control from Time Warner Cable to Comcast and finds that the Cable Franchise Agreement can be extended past September 2, 2012 and that Comcast has a legal right to operate within the confines of Fayette County, KY, Charter 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.
12. In the event that a court of competent jurisdiction overturns the LFUCG's denial of the approval of the transfer of control from Time Warner Cable to Comcast and finds that the Cable Franchise Agreement can be extended past September 2, 2012 and that Comcast 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 Charter 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 Charter 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 Comcast to Charter 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 Comcast to
Charter 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:
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MAYOR
ATTESTED:
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CLERK OF URBAN COUNTY COUNCIL