Ordinance No. 02-24 CITY OF TIGARD, OREGON
ORDINANCE NO. 02- 9 4
AN ORDINANCE CONSENTING, WITH CONDITIONS, TO THE CHANGE OF CONTROL OF
AT&T CORP.,THE INDIRECT PARENT COMPANY OF TCI CABLEVISION OF TUALATIN
VALLEY, INC. AND DECLARING AN EMERGENCY.
WHEREAS, the Metropolitan Area Communications Commission,hereinafter"MACC," is an
intergovernmental commission formed under ORS Chapter 190,with Washington County and the cities of
Banks,Beaverton, Cornelius,Durham,Forest Grove, Gaston,Hillsboro,King City, Lake Oswego,North
Plains, Rivergrove,Tigard, and Tualatin as members; and
WHEREAS,TCI Cablevision of Tualatin Valley, Inc.,whose indirect parent company is AT&T Corp.,
hereinafter"AT&T,"is the Grantee under a Cable Television Services Agreement approved by MACC and
its member jurisdictions, dated February 1, 1999,hereinafter"Franchise;"and
WHEREAS,AT&T and Comcast have agreed to merge their companies to create the new AT&T Comcast
Corporation. AT&T has requested the consent of the MACC member jurisdictions for a change of control,
by filing a Fedcral Communications Form 394 with MACC and with each member jurisdiction thereof,
pursuant to Section 17.2 of the Franchise; and
WHEREAS, federal law establishes a procedure and criteria for local franchise authorities to review
requests for changes of control to assess the legal,technical, and financial ability of the new controlling
entity to assure their obligations will continue to be performed under the terms and conditions of the
Franchise, as amended; and
WHEREAS,MACC staff has reviewed the Form 394 from AT&T Corp. and has requested and reviewed
certain additional information from both AT&T and Comcast, including assurances made by each entity, in
order to assess the legal,technical, and financial qualification of the Grantee to continue to perform as
required by the Franchise; and
WHEREAS,MACC held a public hearing on May 9, 2002,wherein it received public testimony and
written and electronic communications; and
WHEREAS,MACC has received a letter of assurance from AT&T,wherein AT&T agrees to abide by the
terms and conditions of the Franchise as amended and recognizes significant local issues of concern,which
letter of assurance is attached hereto as Exhibit A; and
ORDINANCE No. 02- Z
Page 1
WHEREAS, following consideration of testimony received during the public hearing and the full record of
those proceedings,the Commission unanimously adopted Resolution No. 2002-04 recommending approval
of the transfer request to its member jurisdictions, attached hereto as Exhibit B; and
WHEREAS, THE City Council deems it to be in furtherance of the public interest and the welfare of its
citizens to consent to the transfer request;
NOW,THEREFORE, THE CITY OF TIGARD ORDAINS AS FOLLOWS:
SECTION 1: The findings of MACC demonstrate that the applicant's legal, technical, and financial
qualifications to perform under the Franchise are adequately assured.
SECTION 2: The City Council hereby consents to the change of control of AT&T Corp. as set forth in
the Federal Communications Form 394,pursuant to Section 17.2 of the Franchise.
SECTION 3: The consent granted herein shall not take effect until all of the following conditions are
met:
a. Grantee shall continue to comply with all local laws, agreements, and Franchise
requirements consistent with applicable federal and state law;
b. Each of the members of MACC has approved the Application for the Change of
Control by a duly authorized enactment of each jurisdiction's governing body;
c. MACC staff's formal written determination that all member jurisdictions have so
consented; and
d. Completion of the merger, as identified in the Form 394,by midnight,May 10,
2003.
SECTION 4: The City Manager or his designee are authorized to execute and file a copy of this
Resolution with MACC.
SECTION 5: The City Council finds that it is necessary that this ordinance become effective by July
2, 2002 to meet the deadline established by federal law. Therefore, an emergency is
declared to exist, and this ordinance shall take effect immediately upon passage by the
City Council, signature by the Mayor and the filing with the City Recorder.
ORDINANCE No. 02-24
Page 2
PASSED: By 110/111I)OWS ote of all Council members present after being read by number and
title only,this ��day of Jlkll b
fes : -Cl/ C
Greer A. Gaston,Deputy City Recorder
APPROVED: By Tigard City Council this 2AAay of _�11_L9L�"'_ E462
YmIes E. G ffi yor
A proved as to form:
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Attorney
Date
IAADM\ORDINANC\ATT-COMCAST MERGER.DOC
ORDINANCE No. 02---L-{
Page 3
EXHIBIT A
May 1, 2002
Mr. Bruce Crest
MACC Administrator
1815 NW 169th Place, Suite 6020
Beaverton, OR 97006
RE FCC Form 394 Filed March 4, 2002 - MACC
AT&T Corp. Merger Transaction
Dear Mr. Crest:
We understand that the Metropolitan Area Communications Commission and its
member jurisdictions ("Franchising Authority") have several concerns relating to certain
compliance matters under the franchise held by TCI Cablevision of Tualatin Valley, Inc.,
a.k.a_ AT&T Broadband ("Franchisee"). The Franchising Authority has notified
Franchisee of its concern that it would not be appropriate to approve a change of control
prior to resolution of alleged franchise violations with respect to the following issues_
There are two categories of issues needing documentation: first, those issues the
Franchisee has received notice of pending violations; and second, those issues that
may be noncompliance issues. The issues are more specifically set forth below:
Current pending franchise violations:
(1) Credit of 30 cents per month for each subscriber whose service has not been
upgraded as required under the franchise;
(2) Franchisee's compliance with franchise customer service standards and
requirements, particularly telephone answering violation of 4th Quarter 2001
standard is not yet cured; and
(3) System design of the Upgraded PCN was not built as required by the Franchise
Agreement and serviceability.
Potential noncompliance issues:
(4) Franchisee's notification that it will not collect or pay franchise fees based on
revenues derived from its cable modem Internet service as of April 1, 2002;
(5) Franchisee's dispute resolution policies and procedures relating to disputes
between the subscriber and Franchisee;
Mr. Bruce Crest
May 6, 2002
Page 2
(6) Use of the Franchising Authority's public rights-of-ways, and use of
Franchisee's facilities by others within the Franchise Authority's public rights-of-
way;
(7) Franchisee's decision to recover the cost of franchise fees on certain non-
residential subscriber revenues from residential subscribers (the so-called
"Pasadena pass-through"), and
(8) Reporting related to the Upgraded PCN regarding system problems (e.g.
"trouble tickets").
In order to successfully complete the consent process currently taking place by
the Franchising Authority on the change of control of AT&T Broadband and Comcast
Corporation ("Merger") by July 2, 2002, as agreed to by the Franchise Authority and the
companies, the Franchise Authority and the companies agree to discuss the identified
issues towards reaching mutually satisfactory resolutions, separate and independent
from the consent process. The parties agree to meet within 120 days from May 9, 2002,
and make good faith efforts to resolve the identified issues within six(6) months.
It is understood that the consent to the change of control of this Franchise shall
not extinguish the Franchising Authority's right and ability to pursue any remedy against
Franchisee available under the Franchise with respect to any compliance issues not
mutually resolved. This letter may be referenced in any action taken by the Franchising
Authority concerning the proposed change of control or Franchise compliance.
It is also understood and agreed that the Franchising Authority and the
Franchisee shall not be deemed or construed to have waived any claims, actions, or
defenses with respect to identified issues, or other possible or alleged Franchise
violations that remain unresolved.
By signing below the parties acknowledge and agree to the matters described
herein above.
By: MACC By: TCI Cablevision of Tualatin Valley, Inc.
Bruce Crest -Administrator Curt Henninger- Senior Vice-President
EXHIBIT B
METROPOLITAN AREA COMMUNICATIONS COMMISSION
RESOLUTION NO. 2002-04
A RESOLUTION CONSENTING TO THE CHANGE OF CONTROL OF AT&T
CORP., THE INDIRECT PARENT COMPANY OF TCI CABLEVISION OF
TUALATIN VALLEY, INC., WITH CONDITIONS, AND RECOMMENDING
APPROVAL OF THE CHANGE OF CONTROL, WITH CONDITIONS, BY THE
MACC MEMBER JURISDICTIONS
WHEREAS, the Metropolitan Area Communications Commission, hereinafter
"MACC", is an intergovernmental commission formed under ORS Chapter 190, with
Washington County and the cities of Banks, Beaverton, Cornelius, Durham, Forest
Grove, Gaston, Hillsboro, King City, Lake Oswego, North Plains, Rivergrove,
Tigard, and Tualatin as members; and
WHEREAS, TCI Cablevision of Tualatin Valley, Inc., whose indirect parent
company is AT&T Corp., hereinafter"AT&T", is the Grantee under a Cable
Television Services Agreement approved by MACC and its member jurisdictions,
dated February 1, 1999, hereinafter"Franchise"; and
WHEREAS, on March 4, 2002, MACC received a Federal Communications
Commission ("FCC") Form 394, by which AT&T requested approval by MACC and
its member jurisdictions of a change of control. Under the proposal, the ultimate
parent of the Grantee will be merged with Comcast Corporation to form a new
ultimate parent corporation, AT&T Comcast Corporation; and
WHEREAS, following completion of the transactions forming the change of control,
the Grantee will be controlled by AT&T Comcast but will continue to operate the
cable system and continue to hold and be responsible for performance of the cable
franchise; and
WHEREAS, Federal law and Section 17.2 of the Franchise authorize MACC and its
member jurisdictions to review any proposed change, transfer, or acquisition of
control, including the proposed transaction, in order to determine the impact on the
Grantee's ability to perform the Franchise obligations based on the legal, financial
and technical qualifications of the transferee; and
WHEREAS, the Section 17.2 of the Franchise further authorizes MACC and its
member jurisdictions to address the resolution of any outstanding issues of
noncompliance with the terms and conditions of the Franchise in conjunction with
any request for change of control; and
WHEREAS. AT&T Comcast has stated that the Grantee will continue to comply with
the lawful terms and provisions of the existing Franchise and agreements following
the Merger, and all parent guarantees will remain in place, and
2
WHEREAS. the Grantee and MACC have, in a separate agreement (attached
hereto as Exhibit A), documented the existence of certain relevant issues
concerning the Grantee's performance under the Franchise, and the Grantee has
committed to exercise good faith efforts to resolve such issues separate and apart
from the consent process; and
WHEREAS, MACC staff and consultants have reviewed the proposal pursuant to
the above criteria and commitments, and have recommended approval of the
proposal, provided certain assurances and considerations are obtained from AT&T
in the public interest and contingent on approval by MACC member jurisdictions,
and
WHEREAS, the Commission conducted a duly noticed public hearing on May 9,
2002;
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS
OF THE METROPOLITAN AREA COMMUNICATIONS COMMISSION_
Section 1. Commission Action on Form 394 Application.
The Commission hereby approves the Application for Change of Control, as
submitted March 4, 2002, subject to the conditions contained herein.
Section 2. Recommendation to Member Jurisdictions.
The Commission hereby recommends that each of the member jurisdictions
approve the Application for Change of Control by duly authorized enactment of each
jurisdiction's governing body, subject to the conditions set forth in Section 3, below.
Section 3. Conditions
A. The approval recommended herein shall not take effect until such time as each
of the following conditions are met-
1)
et_1) MACC and its member jurisdictions' consent to the change of control shall
not be construed to constitute a waiver or release of any rights they may
have under the Franchise and any separate written agreements with the
Grantee; and
2) Grantee shall continue to comply with all valid local laws, agreements,
and Franchise requirements consistent with applicable federal and state
law, and
3) Grantee and the Guarantor of the Franchise acknowledge the conditions
of transfer approval in writing; and
3
4) Each of the members of MACC has approved the Application for Change
of Control by duly authorized enactment of each jurisdiction's governing
body; and
5) The merger transaction between AT&T Corp. and Comcast Corporation
shall close consistent with the terms identified in the Form 394 and the
supplemental information provided by the Grantee through the request for
information process undertaken by MACC.
B. Approval of the Change of Control will be null and void if the merger transaction
between AT&T Broadband and Comcast Corporation does not close by midnight,
May 10, 2003_
ADOPTED BY THE BOARD OF THE METROPOLITAN AREA
COMMUNICATIONS COMMISSION this 9th day of May, 2002_
Ox, L'
Dean Gibbs, Chair
Attachment: Exhibit A
EXHIBIT A TO MACC RESOLUTION 2002-04
May 7, 2002
Mr. Bruce Crest
MACC Administrator
1815 NW 169th Place, Suite 6020
Beaverton, OR 97006
RE: FCC Form 394 Filed March 4, 2002 - MACC
AT&T Corp. Merger Transaction
Dear Mr. Crest:
We understand that the Metropolitan Area Communications Commission and its
member jurisdictions ("Franchising Authority") have several concerns relating to certain
compliance matters under the franchise held by TCI Cablevision of Tualatin Valley, Inc.,
a.k.a. AT&T Broadband ("Franchisee"). The Franchising Authority has notified
Franchisee of its concern that it would not be appropriate to approve a change of control
prior to resolution of alleged franchise violations with respect to the following issues.
There are two categories of issues needing documentation: first, those issues the
Franchisee has received notice of pending violations; and second, those issues that
may be noncompliance issues. The issues are more specifically set forth below.-
Current
elow:Current pending franchise violations:
(1) Credit of 30 cents per month for each subscriber whose service has not been
upgraded as required under the franchise;
(2) Franchisee's compliance with franchise customer service standards and
requirements, particularly telephone answering violation of 4th Quarter 2001
standard is not yet cured; and
(3) System design of the Upgraded PCN was not built as required by the Franchise
Agreement and serviceability.
Potential noncompliance issues:
(4) Franchisee's notification that it will not collect or pay franchise fees based on
revenues derived from its cable modem Internet service as of April 1, 2002;
(5) Franchisee's dispute resolution policies and procedures relating to disputes
between the subscriber and Franchisee;
Mr. Bruce Crest
May 6, 2002
Page 2
(6) Use of the Franchising Authority's public rights-of-ways, and use of
Franchisee's facilities by others within the Franchise Authority's public rights-of-
way-,
(7) Franchisee's decision to recover the cost of franchise fees on certain non-
residential subscriber revenues from residential subscribers (the so-called
"Pasadena pass-through"); and
(8) Reporting related to the Upgraded PCN regarding system problems (e.g.
utrouble tickets").
In order to successfully complete the consent process currently taking place by
the Franchising Authority on the change of control of AT&T Broadband and Comcast
Corporation ("Merges") by July 2, 2002, as agreed to by the Franchise Authority and the
companies, the Franchise Authority and the companies agree to discuss the identified
issues towards reaching mutually satisfactory resolutions, separate and independent
from the consent process. The parties agree to meet within 120 days from May 9, 2002,
and make good faith efforts to resolve the identified issues within six(6) months.
It is understood that the consent to the change of control of this Franchise shall
not extinguish the Franchising Authority's right and ability to pursue any remedy against
Franchisee available under the Franchise with respect to any compliance issues not
mutually resolved. This letter may be referenced in any action taken by the Franchising
Authority concerning the proposed change of control or Franchise compliance.
It is also understood and agreed that the Franchising Authority and the
Franchisee shall not be deemed or construed to have waived any claims, actions, or
defenses with respect to identified issues, or other possible or alleged Franchise
violations that remain unresolved_
By signing below the parties acknowledge and agree to the matters described
herein above.
By: MACC By: TCI Cablevision of Tualatin Valley, Inc.
Bruce Crest-Administrator Curt Henninger- Senior Vice-President