Res 2015-07
RESOLUTION NO. 2015-07
APPROVING THE TRANSFER OF THE CABLE FRANCHISE
AND CHANGE OF CONTROL OF THE GRANTEE
WHEREAS,
Comcast of Arkansas/Florida/Louisiana/Minnesota/Mississippi/Tennessee,
Inc. (“Grantee”), currently holds a cable television franchise (“Franchise”) granted by the City of
Fridley, Minnesota (“City”); and
WHEREAS,
Grantee owns, operates and maintains a cable television system in the City
(“System”) pursuant to the terms of the Franchise; and
WHEREAS,
on February 12, 2014, Comcast Corporation ("Comcast") and Time Warner
Cable Inc. ("TWC") entered into an Agreement and Plan of Merger; and
WHEREAS,
on April 25, 2014, Comcast and Charter Communications, Inc. ("Charter")
entered into the Comcast/Charter Transactions Agreement (the "Agreement"), pursuant to which
the Grantee, through a restructuring under Comcast's ownership, will become Comcast of
Minnesota, LLC ("New Grantee") and immediately thereafter will become a wholly-owned
subsidiary of Midwest Cable, Inc. ("Midwest Cable") (the "Transaction"); and
WHEREAS,
on or about June 17, 2014 the City received from Grantee, FCC Form 394 -
Application for Franchise Authority Consent to Assignment or Transfer of Control of Cable
Television Franchise (“Application”); and
WHEREAS,
Federal law and the terms of the Franchise require that the City take action
to consider the Application within one hundred twenty (120) days of the date of receipt, or on or
before October 15, 2014; and
WHEREAS,
on or about August 22, 2014 Comcast and Midwest Cable agreed to extend
the Application review period for sixty (60) days until December 15, 2014 to allow the City time
to review the additional information concerning the qualifications of Midwest Cable provided to
the City on September 30, 2014; and
WHEREAS,
on or about September 30, 2014 Comcast and Midwest Cable agreed to a
further extension of the Application review period for thirty (30) days until January 15, 2015 to
allow the City to review certain service agreements related to the Transaction as well as certain
SEC financial filings to be made available for review on October 31, 2014; and
WHEREAS,
on or about December 23, 2014 Comcast and Midwest Cable agreed to a
further extension of the Application review period through and including January 30, 2015.
Resolution No. 2015-07 Page 2
WHEREAS,
Section 405A.12 of the City Code requires the City’s advance written
consent prior to the Grantee’s transfer of the Franchise; and
WHEREAS,
as a result of the proposed Transaction Grantee has requested consent from
the City to the proposed transfer of the Franchise; and
WHEREAS,
the City has reviewed the proposed Transaction, and based on information
provided by Grantee and Midwest Cable, the City has elected to approve the proposed
Transaction subject to certain conditions as set forth herein; and
WHEREAS,
the City retained Front Range Consulting, Inc. (“FRC”) to conduct a review
of the franchise fees and PEG fees paid by Grantee to the City for the period beginning January
1, 2011 through December 31, 2013 (“Review Period”); and
WHEREAS,
FRC submitted its findings and recommendations in its January 2015
Report (“Report”) to the City and thereafter FRC provided Grantee with a copy of the Report;
and
WHEREAS,
as part of this proceeding the City and Grantee desire to conclude and settle
all disputes arising out of or relating to Grantee’s payment of franchise fees and PEG fees during
the Review Period.
NOW, THEREFORE
, the City of Fridley, Minnesota hereby resolves as follows:
1.All of the above recitals are hereby incorporated by reference as if fully set forth herein.
2.The Franchise is in full force and effect and Grantee is the lawful holder of the Franchise.
3.New Grantee will be the lawful holder of the Franchise after completion of the
Transaction.
4.The City hereby consents and approves of the proposed Transaction subject to the below
conditions.
a.New Grantee agreeing to assume any and all liabilities, known and unknown,
under the Franchise.
b.Within twenty (20) days of the date of adoption of this Resolution, New Grantee
shall execute and file with the City the Acceptance and Agreement attached
hereto to verify New Grantee’s compliance with the terms and conditions of this
Resolution; and
Resolution No. 2015-07 Page 3
c.Within thirty (30) days following close of the Transaction, Midwest Cable (also to
be known as GreatLand Connections Inc.) shall execute and provide the City with
the Corporate Parent Guaranty attached hereto and incorporated by reference.
d.New Grantee will participate in quarterly meetings with members of the City or
the City’s designees for the first two (2) years following the close of the
Transaction to verify that subscriber issues and concerns are being addressed by
New Grantee or any other entity that may have interaction with subscribers within
the City. If issues are not being addressed, New Grantee agrees to meet with the
City, as directed, to explain steps being undertaken to address subscriber concerns
and New Grantee will provide regular and timely updates to the City to provide
verification of corrective actions being undertaken to address unresolved issues.
e.New Grantee will maintain an “escalated complaint program” to escalate
unresolved cable television complaints from subscribers. One or more
specifically identified employee(s) of New Grantee shall be available to City via
email for reporting issues. These specifically identified employee(s) of New
Grantee will have the ability to escalate service issues to a senior officer of New
Grantee or New Grantee’s parent company when necessary. New Grantee will
follow-up with City by email or by phone with a summary of the results of the
complaint(s).
f.Grantee shall, within twenty (20) days of the date of adoption of this Resolution,
submit payment to the City in the amount of Two Thousand Two Hundred
Twenty and 96/100 Dollars ($2,220.96) (“Payment”). The City and Grantee agree
that the Payment represents full and complete satisfaction and compromise of any
and all Claims during the Review Period. It is further agreed that the Payment
shall not constitute “gross revenue” in whole or in part as that term is defined in
the Franchise.
g.New Grantee’s compliance with the requirements of paragraphs c, d, e and f of
this Resolution shall be handled under the Franchise. New Grantee shall be
subject to available enforcement procedures and remedies as if these obligations
were set forth in the Franchise.
h.Comcast shall, within twenty (20) days of the date of adoption of this Resolution,
fully reimburse City for all of the City’s reasonable costs and expenses in
connection with the City’s review of the proposed Transaction, including without
limitation, all costs incurred by the City for experts and attorneys retained by the
City to assist in the review as well as notice and publication costs
(“Reimbursement”).
i.The Reimbursement shall not be deemed to be “Franchise Fees” within the
meaning of Section 622 of the Cable Act (47 U.S.C. §542), nor shall the
Reimbursement be deemed to be (i) “payments in kind” or any involuntary
Resolution No. 2015-07 Page 4
payments chargeable against the Franchise Fees to be paid to the City by
New Grantee pursuant to the Franchise.
ii.The Reimbursement shall be considered a requirement or charge
incidental to the awarding or enforcing of the Franchise.
iii.It is understood that the language in this paragraph 4.h has been agreed to
solely for the purpose of this Resolution and this Reimbursement, and
does not prejudice any party from taking a different position regarding the
Franchise Fee issues in the future.
5.In the event the proposed Transaction contemplated by the foregoing resolution is not
completed, for any reason, the City’s consent shall not be effective. If any of the
conditions set forth herein are not met, the City’s consent to the proposed Transaction
shall be null and void and of no effect.
This Resolution shall take effect and continue and remain in effect from and after the date
of its passage, approval, and adoption.
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS
TH
26 DAY OF JANUARY 2015.
____________________________________
SCOTT J. LUND, MAYOR
ATTEST:
________________________________________
DEBRA A. SKOGEN – CITY CLERK
Resolution No. 2015-07 Page 5
ACCEPTANCE AND AGREEMENT
Comcast of Minnesota, LLC hereby accept this Resolution No. 2015-07 (“Resolution”)
and any attachment incorporated by reference in the Resolution and agrees to be bound by the
terms and conditions of this Resolution and the terms and conditions of the Franchise
referenced within the Resolution.
Dated this day of , 2015.
COMCAST OF MINNESOTA, LLC
By:
Its:
SWORN TO BEFORE ME this
___ day of ___________,2015.
NOTARY PUBLIC
Resolution No. 2015-07 Page 6
CORPORATE PARENT GUARANTY
THIS AGREEMENT
is made this day of , 201
(this “Agreement”), by and among GreatLand Connections Inc. (f/k/a Midwest Cable, Inc.), a
Delaware corporation (the “Guarantor”), the City of Fridley, Minnesota (“Franchising Authority”),
and , a (“Company”).
WITNESSETH
WHEREAS
, on November 7, 2005, the Franchising Authority adopted Ordinance No.
1210 granting a Cable Television Franchise which is now held by Comcast of
Arkansas/Florida/Louisiana/Minnesota/ Mississippi/ Tennessee, Inc. (the “Franchise”), pursuant
to which the Franchising Authority has granted the rights to own, operate, and maintain a cable
television system (“System”); and
WHEREAS
, pursuant to the Comcast/Charter Transaction Agreement dated April 25,
2014 by and between Charter Communication, Inc., a Delaware corporation, and Comcast
Corporation, a Pennsylvania corporation, (“Agreement”), the Franchise will be transferred to the
Company and the Guarantor will acquire control of the Company as an indirect subsidiary of
Guarantor as a result of Comcast Corporation’s contribution and spin off of certain cable
television systems pursuant to the Agreement (“Change in Control”); and
WHEREAS
, Company and Comcast Corporation have requested the consent to the
Change of Control in accordance with the requirements of Section 405A.12 of the City Code;
and
WHEREAS
, pursuant to Resolution No. 2015-07, dated January 26, 2015, Franchising
Authority conditioned its consent to the Change of Control on the issuance by Guarantor of a
corporate parent guaranty guaranteeing certain obligations of Company under the Franchise.
NOW, THEREFORE
, in consideration of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, in
consideration of the approval of the Change of Control, Guarantor hereby unconditionally and
irrevocably agrees to provide all the financial resources necessary for the observance,
fulfillment and performance of the obligations of the Company under the Franchise and also to
be legally liable for performance of said obligations in case of default by the Company.
This Agreement, unless terminated, substituted, or canceled, as provided herein, shall
remain in full force and effect for the duration of the term of the Franchise.
Resolution No. 2015-07 Page 7
Upon substitution of another Guarantor reasonably satisfactory to the Franchising
Authority, this Agreement may be terminated, substituted, or canceled upon thirty (30) days
prior written notice from Guarantor to the Franchising Authority and the Company. Such
termination shall not affect liability incurred or accrued under this Agreement prior to the
effective date of such termination or cancellation.
GREATLAND CONNECTIONS INC.
(F/K/A MIDWEST CABLE, INC.)
By:
Its:
SWORN TO BEFORE ME this
_______ day of ________________, 2015.
_______ ____
NOTARY PUBLIC