12-01-1998 CC RPT 33 - Laserfiche WebLink

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People Serving People CITY OF RIVERSIDE CITY COUNCIL MEMORANDUM Riverside 1998 HONORABLE MAYOR AND CITY COUNCIL DATE: December 1, 1998 ITEM NO.: 3 3 SUBJECT: CABLE TELEVISION FRANCHISE TRANSFER BACKGROUND: On June 16, 1998, the City Council adopted Ordinance No. 6437 renewing a cable television franchise with Charter Communications Entertainment II, L.P. CFranchisee") for a ten year term with up to a five year extension. The extension was conditioned on the upgrade of the cable television system within a specified period of time. On July 16, 1998, it was reported in the Los Angeles Times that Paul G. Allen, co-founder of Microsoft, intended to purchase Charter Communications, Inc. ("Charter") in a transaction valued at $4.46 billion. Mr. Allen' s proposed purchase of Charter would elevate Charter from the 10th largest cable company to the seventh largest in the United States. Charter manages and indirectly partially owns the Franchisee. Kelso Investment Associates V, L.P. owns 85% of the outstanding equity in the general partner of the Franchisee and thus controls the Franchisee. Charter has requested the City's consent to the assignment or transfer of control of the cable television franchise from Kelso Investment Associates V, L.P. to Mr. Paul Allen. The proposed transfer of control, if approved, would be an assumption of the existing franchise terms and conditions unless altered by City Council. This report also requests City Council approval of the conversion of the Franchisee from a limited partnership to a limited liability company. Section 13.1 of the City's franchise agreement with the Franchisee requires that the City Council give its prior written consent by resolution after a public hearing on the sale, transfer, lease or assignment or other disposition of the franchise. Notice of a public heating today at 2:00 P.M. seeking public comments on this proposed transfer of control of the cable television franchise has been duly posted and published in a newspaper of general circulation in the City. The City has 120 days under Federal Communications Commission (FCC) regulations to approve or deny the transfer of ownership. If the City fails to act within that period of time, the transfer of control is deemed approved. Under FCC regulations, no extensions of time are permitted to address the transfer approval. However, the cable operator and the franchising authority could extend the time by mutual agreement. 33-1