5 Transfer of Cable FranchiseCITYOF
City Center Drive, PO Box 147
~anhassen, Minnesota 55317
Phone 612.937.1900
~eneral Fax 612.93Z5739
jneering Fax 612.93Z9152
'~lic Safe7 Fax 612.934.2524
;'b www. ci. chanhassen, mn. us
TO:
FROM:
DATE:
SUB J:
MEMORANDUM
Mayor
City Council
Scott A. Botcher, City Manager ~
August 4, 1999
Consider Transfer of Cable Television from Triax Cablevision
to Medicom
On the agenda this evening is a request to formally transfer the cable franchise
from Triax Cablevision to Medicom. Staff is recommending approval of this
transfer. Sufficient safeguards are built into the resolution before you.
To date, I have received insufficient explanation as to the issue of the 84-cent
PEG access charge. Within this resolution, an "explanation" is required (among
other issues) prior to the transfer being effectuated.
Mr. Grogan is having full reports, complete with exhibits, delivered to City Hall
Thursday morning. We will have these delivered to you under se ~arate cover..
Please call me if you have any questions.
g:\userXscottb\cable franchise transfer, doc
5icy of Chanhassen. A growing community with clean lakes, quality schooh, a charming downtown, thriving businesies, and beauti~l parks. A great place to live, work, and play.
RESOLUTION NO.
APPROVING THE TRANSFER AND
ASSIGNMENT OF THE CABLE TELEVISION FRANCHISE
TO MEDIACOMLLC
WHEREAS, on or about , the City of Chanhassen ( C
passed and adopted Ordinance No. 280 granting a Cable Television Franchise
("Franchise") currently held by Triax Midwest Associates, L.P.("Triax .... )," and
WHEREAS, on April 29, 1999, a certain Asset Purchase Agreement
("Agreement") was made and entered into by and among Triax and Mediacom LLC;~nd
WHEREAS, Triax and Mediacom have requested consent by the City to tran~er
the Franchise and the assets comprising the Cable System o Mediacom Minnesota~
( );
LLC "Mediacom" and
WHEREAS, in compliance with the terms of the Asset Purchase Agreement,
name of grantee/franchisee under the Franchise will be changed to Mediacom; and
WHEREAS, under the Franchise and' applicable law, the proposed Transfer
require consent from the City; and
WHEREAS, the C~ty hasrev~ewed the proposed Transfer andthe legal,
technical, and financial qualifications of Mediacom and Mediacom LLC; and
WHEREAS, based on information obtained and on the reports and informati~
received by the City, including the report prepared by the City's cabletelevis~on
consultants, Moss & Barnett, a Professional Association, which is hereby incorporat~:i
by reference, the City has found no reason to disapprove of the proposed Transfer
Mediacom.
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NOW, THEREFORE, the City Council for the City of ..
follows:
1.
2.
Minnesota resolves as
Triax is the lawful holder of the Franchise.
The City hereby consents and approves of the proposed Transfer
subject to:
a. Closing of the transaction contemplated within the
Asset Purchase Agreement pursuant to the terms and conditions
described in information provided to the City by Triax and
Mediacom LLC.
b. Mediacom LLC notifying the City in writing of the
completion of the Transfer within thirty (30) days of the date of
closing of the Transfer.
c. Mediacom, within thirty (30) days of the closing of the
Transfer providing the City with a signed Acceptance of the
Franchise in the form attached hereto and incorporated by
reference [and a Certificate of Good Standing or Existence for
Mediacom for the State of Minnesota.
d. Within in ten (10) days from the date of adoption of
this Resolution, Triax will provide the City with a thorough and
detailed accounting of the PEG access support fees assessed to
Chanhassen subscribers under the Franchise beginning July 7,
1998 to present. Triax will clarify whether the full $.84 PEG access
fee required under the Franchise has been passed through to
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subscribers and what amount of that $.84 fee was offset based
upon fees which were previously built into the subscriber rate base
under the prior Franchise between Triax and the City. Triax will
also provide City with copies of any and all FCC rate regulation
forms (i.e. FCC Form 1200, 1210, 1240 or other) verifying that the
rate increase imposed in 1999 along with the PEG access pass-
through fee was correctly implemented under all applicable laws
and regulations. Triax will identify any applicable credit which must
be provided to Chanhassen subscribers for any overcharges which
may have occurred as a result of any improper allocation of the
PEG access fee on subscribers bills.
e. Pursuant to Section 4.1 of the Franchise, the grantee
is obligated to complete the system upgrade to 750 MHz within
eighteen (18) months from the date Triax executed the Franchise.
Section 2.3 of the Franchise required acceptance by Triax within
thirty (30) days of the date of approval by the City council. The City
council approved the Franchise on or about June 7, 1998 thus Triax
had until July 7, 1998 to accept the Franchise. Eighteen (18)
months from July 7, 1998 is January 7, 2000. Therefore Triax and
Mediacom hereby agree that the system upgrade to 750 MHz shall
be completed on or before January 7, 2000 or it will constitute a
material violation of the Franchise which may be enforced by the
City in accordance with all applicable Franchise provisions.
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f. On or before January 7, 2000, Triax and/or Mediacom
hereby agree to provide free of charge to the City two-way
capability from City Hall to the headend facility so that live
programming may be cablecast by City from City Hall on to one or
more PEG channels. Any and all fees associated with the provision
of this two-way return line will be the sole responsibility of Triax
and/or Mediacom. Triax will also provide free of charge to the City
all required equipment to facilitate playback for the City's PEG
access channel(s). Included in the equipment to be provided by
Triax and/or Mediacom to facilitate playback will be a computer
based character generator which will allow the City to cablecast.
messages on the PEG access channel when live or taped
programming is not being cablecast. Any and all fees and costs
associated with the provision of the playback equipment and the
computer based character generator shall be the sole responsibility
of Triax and/or Mediacom.
The City hereby waives any right of first refusal which the City may
have to purchase the Franchise, or the cable television system
serving the City, but only as such right of first refusal applies to the
request for approval of the Transfer now before the City.
In the event the Transfer from Triax to Mediacom contemplated by
the foregoing resolutions is not completed, for any reasons, the
City's consent shall not be effective.
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5. Mediacom may, at any time and from time to time, assign, grant, or
pledge or otherwise convey one or more liens or security interests
in its assets, including its rights, obligations and benefits in and to
the Franchise to any lender providing financing to Mediacom.
6. To the maximum extent permitted by all applicable local, state and
federal laws, this Resolution shall not be construed to in any way
relieve Triax nor limit Mediacom from any liability under the
Franchise.
This Resolution shall take effect and continue and remain in effect from and after
the date of its passage, approval, and adoption.
A motion to approve the foregoing Resolution No. was made by
Council Member and duly seconded by Council Member
The following Council Members voted in the affirmative:
The following Council Members voted in the negative:
Passed and adopted by the City Council for the City of Chanhassen this __
day of ,1999.
ATTEST:
CITY OF CHANHASSEN
By:, By:
Its:
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Additional Issues
The City has raised three (3) additional issues as part of this Transfer process
which must be addressed in any Resolution to be considered by the City. These issues
are as follows:
The $.84 PEG access pass through fee issue must be clarified so that
subscribers receive credit for $.54 which was already built into the rate base and
only receive a thirty cent ($.30) increase in the subscriber bill. Any appropriate
credit/refund must also be provided by Triax to subscribers for any overcharges
which may have occurred.
Pursuant to Section 4.1 of the Franchise, Triax is obligated to complete the
system upgrade within eighteen (18) months from the date Triax executed the
Franchise. Section 2.3 of the Franchise required acceptance by Triax within
thirty (30) days of the date of approval by the City council. The City council
approved the Franchise on or about June 7, 1998 which means Triax had until
July 7, 1998 to accept the Franchise. Eighteen (18) months from July 7, 1998 is
January 7, 2000. Therefore the system upgrade must be completed on or before
January 7, 2000 or it will constitute a material violation of the Franchise.
The City needs a return line to be provided to City Hall so that it may provide its
own playback of PEG access programming from City Hall. In addition, Triax is to
pay all costs associated with the provision of that service including any computer
and/or related equipment necessary to facilitate playback and character
generated programming.
Each of these issues has been addressed in the Resolution attached hereto as
Exhibit D.
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