Resolution No. 10-03 CITY OF TIGARD, OREGON
TIGARD CITY COUNCIL
RESOLUTION NO. 10-os'
A RESOLUTION CONSENTING TO THE TRANSFER OF CONTROL OF THE
FRANCHISEE AND OF THE CABLE FRANCHISE GRANTED TO VERIZON
NORTHWEST, INC.TO FRONTIER COMMUNICATIONS CORPORATION,WITH
CONDITIONS
WHEREAS, the Metropolitan Area Communications Commission,hereinafter"Iv1ACC,"is an
intergovernmental commission formed under ORS Chapter 190,with the membership of Washington
County and the cities of Banks,Beaverton, Cornelius, Durham,Forest Grove, Gaston, Hillsboro, King City,
Lake Oswego, North Plains, Rivergrove,Tigard and Tualatin; and
WHEREAS,Verizon Northwest, Inc., a subsidiary of Verizon Communications, Inc. is the Franchisee
under a Cable Franchise Agreement approved by MACC and granted by the City in 2007 for a period of 15
years;and
WHEREAS, on June 1, 2009 MACC and the City received a Federal Communications Commission Form
394 Application by which Verizon Communications, Inc.,the corporate parent of Franchisee, and Frontier
Communications Corporation ("Frontier" or"Transferee") requested approval from MACC and the
affected member jurisdictions of a proposed transfer of control of the Franchisee and its fianclise to
Frontier; and
WHEREAS, following the completion of the transactions constituting die transfer of control,Frontier
would assume control of the local cable operations of the Franchisee, but must also secure certain other
facilities and agreements to provide a comparable cable service to that currently provided by Franchisee;and
WHEREAS, Federal law and Section 11 of the Franchises authorize MACC and its member jurisdictions to
review any proposed transfer of control,including die proposed transaction as described in the Application
and as clarified in answers to questions presented by MACC to the Franchisee and Frontier to determine the
impact on due Franchisee's ability to perform the Franchise obligations based on the legal, financial, and
technical qualifications of the transferee; and
WHEREAS,Section 11 of the Franchises also authorizes MACC and its member jurisdictions to condition
approval of a transfer upon such terms and conditions as they deem reasonably appropriate within tine legal,
fmancial, and technical framework provided by the Franchise and federal law; and
WHEREAS, 1NLACC has reviewed the materials provided by the Franchisee and Frontier in the Application
and in response to an RFI originally provided to the companies on June 25,2009 and subsequently revisited
and further investigated on numerous occasions trough October 30, and undertook additional joint review
of the proposed transferee's financial qualifications in cooperation with die Mt. Hood Cable Regulatory
Commission (IvfHCRC); and
WHEREAS,MACC conducted a dully noticed public hearing concerning the proposed transfer on
November 20,2009 wherein it received public testimony and written communications;and
WHEREAS, the review now being completed except for certain issues necessarily addressed in a
prospective manner through conditions, tine IvfACC Cotmnission adopted Resolution No. 2009-05
RESOLUTION NO. 10 -6_3
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recommending that the affected member jurisdictions approve the Application,provided those conditions
and assurances are obtained from die companies,which Resolution is attached hereto as Exlubit A; and
WHEREAS, pursuant to Section 4(E) of the MACC Intergovernmental Agreement, final approval would be
granted only if all eleven affected jurisdictions also approve the Application as recommended by MACC;
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, subject to appropriate conditions.
NOW,THEREFORE,BE IT RESOLVED by the Tigard City Council that:
SECTION 1. Legal Technic al and Financial Qualifications of tine Transferee
The findings of MACC in tine attached Exhibit A demonstrate that die Franclvsee and
Transferee have the necessary legal, technical and financial qualifications to perform the
required duties under the Franchise Agreement,provided certain conditions are unposed on
the proposed transfer of control.
SECTION 2. Consent to the Transfer of Control.
The City of Tigard hereby consents to die transfer of control of the franchisee and of the
franchise as set fords in the Federal Communications Cormnission Form 394, subject to tine
conditions set forth in Section 3,below.
SECTION 3. Conditions to the Transfer of Control.
The approval of the proposed transfer of control shall not take effect until such tune as each
of the following conditions is met:
1. All eleven affected MACC member jurisdictions consent to the transfer of control,
as determined by MACC staff in a formal written certification.
2. The Verizon/Frontier merger transaction must close with all material terns
substantially consistent with die Merger Agreement,as well as the information
provided to MACC or the Mount Hood Cable Regulatory Commission (rMHCRC) in
public documents and responses to Requests for Information submitted by MACC
and the MHCRC.
3. The Verizon/Frontier merger transaction is approved by all required federal agencies
and die Oregon Public Utility Cormnission.
4. Franchisee,under the control of Transferee,agrees to remedy any franchise non-
compliance issues,including any underpayment of franchise and PLG fees by
Verizon,regardless of whether such non-compliance issues are discovered prior to
or following the close of the Transfer of Control. Franclusee, under the control of
Transferee, shall remain responsible for any and all Franchise requirements
(including but not limited to payment of Franchise fees and other amounts due
under the Franchise,and indemnification of the Grantor as provided in the
Franchise) and non-compliance issues under the Franchise or any obligation that
RESOLUTION NO. 10- O 3
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may now exist or may later be discovered to have existed during the term of the
Franchise, even if prior to the closing of this Transfer.
5. Franchisee shall comply with all valid local laws, agreements, and Franchise
requirements consistent with applicable federal and state Inv including all terms of
the NLACC/Verizon Franchise Agreement. In all respects and without exception,
Franchisee, under the control of Transferee agrees to continue to abide by nll terns
of the existing Franchise and acknowledges that the transfer of control will not
affect, dunvnish,impair or supersede the binding name of the Franchise and any
other valid ordinances,resolutions,and agreements applicable to the operation of die
cable system in the NLACC member jurisdictions.
6. In addition to the current obligations of tine franchise Section 13.6, "Letter of
Credit", Franchisee,under the control of Transferee,provides and maintains an
irrevocable letter of credit or performance bond in a form acceptable to MACC in
the amount of$250,000, to secure the payment of franchise fees and any penalties,
fora period of five years after closing of the Verizon/Frontier merger transaction.
7. Verizon has paid MACC all reimbursement costs due as a result of review of die
transfer of control application,consistent with die separate agreements concerning
those costs.
S. Transferee provides current contact information for notice recipients under Section
16.5 of the Franchise.
9. Transferee provides a new Exhibit E, "Franchisee Parent Stricture."
10. MACC and its member jurisdictions'consent to the transfer of control shall not be
constried to constitute a waiver or release of any rights they may have under the
Franchise and any separate written agreements with the Franchisee and Franchisee's
lawful successors.
11. During the week ending January 15, 2010,Transferee will provide NIACC with a
progress report of its acquisition of content, including a listing of national and local
content providers and their associated channels, and video on demand providers,
with which: (1) Transferee has signed agreements; (2)Transferee has pending
agreements being negotiated;and (3) Transferee is pursuing agreements. By March
31, 2010,Transferee shall have delivered certification by a Corporate officer that it
has acquired rights to distribute linear video,broadcast, and video on demand
programming content from vendors,which rights: (a) include at least 75% of the
channels provided by Franchisee on November 1, 2009; (b) include all nine Portland
area local broadcasters; and (c) include commitments to carrying die majority of this
content for a period of not less than two years. Transferee will provide MACC with
a complete projected channel lineup no later than 30 days prior to die close of tine
transaction.
12. Transferee acknowledges these conditions of approval of the transfer of control in
writing in a form and by a date acceptable to MACC.
RESOLUTION NO. 10- 0 3
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13. Approvals granted by MACC and its member jurisdictions shall be valid until the
Verizon/ Frontier mergers Hart-Scott-Rodino Approval ("HSR") expires.
Currently, the HSR expires on September 1, 2010. If the merger is not completed
prior to the expiration of the HSR,Verizon and Frontier shall meet with MACC
representatives and advise them on the status of the merger. NIACC and its member
jurisdictions shall consider the information provided by Verizon and Frontier and
consider whether to extend the previously granted approvals. Such extensions shall
not be unreasonably withheld.
SECTION 4. Authorization to Execute and File Resolution.
The City Manager or his designee(s) are authorized to execute and Erle a copy of this
Resolution with bL\CC.
SECTION 5. Effective Date.
This resolution is effective immediately upon passage.
PASSED: This f f 4` day of st 2010.
Ml-,yo'City of Tigard
ATTEST:
City Recorder-City of Tigard v
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RESOLUTION NO. 10 -t73
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