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RESOLUTION AUTHORIZING EXTENSION OF CURRENT CABLE FRANCHISE AGREEMENT WITH CHARTER COMMUNICATIONS THROUGH DECEMBER 31, 2016.
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CITY PROPOSAL:
WHEREAS, on May 8, 2006, the city adopted a cable franchise to, and agreement with, CC VIII Operating, LLC, d/b/a Charter Communications (“Charter”), pursuant to city Ordinance No. 9775, File No. 06-013-O, titled “AN ORDINANCE GRANTING A FRANCHISE TO CC VIII OPERATING, LLC, D/B/A CHARTER COMMUNICATIONS, ITS SUCCESSORS, AND ASSIGNS, TO CONSTRUCT, OPERATE, AND MAINTAIN A CABLE SYSTEM IN THE CITY OF DULUTH SETTING FORTH CONDITIONS ACCOMPANYING THE GRANT OF THE FRANCHISE; PROVIDING FOR REGULATION AND USE OF THE SYSTEMS AND PUBLIC RIGHTS-OF-WAY; AND PRESCRIBING PENALTIES FOR THE VIOLATION OF THE PROVISION THEREIN (“Franchise”);
WHEREAS, the initial term of the Franchise expired on July 9, 2016;
WHEREAS, Charter and the city are in negotiations for a new cable franchise agreement that will be retroactive to July 10, 2016;
WHEREAS, the City and Charter desire to temporarily extend the term of the Franchise until the new cable franchise agreement terms can be negotiated, finalized, and approved via city ordinance;
WHEREAS, the Franchise is silent regarding whether after Franchise expiration the terms of the existing Franchise shall continue in effect and shall be enforceable upon both parties;
WHEREAS, industry practice when both parties wish to continue the cable franchise relationship is for the parties to honor the current Franchise during negotiations for a successor cable franchise agreement retroactive to the Franchise expiration.
THEREFORE, BE IT RESOLVED, that the proper city officials are hereby authorized to extend and administer the Franchise, Ordinance No. 9775, File No. 06-013-O, through and including December 31, 2016, or the effective date of a new cable franchise agreement with Charter approved via city ordinance, whichever date occurs sooner;
BE IT FURTHER RESOLVED that the proper city officials are hereby authorized and encouraged to negotiate a new cable franchise agreement with Charter retroactive to July 10, 2016, to be approved via city ordinance;
BE IT FURTHER RESOLVED in granting this extension, the city does not waive any right under the Franchise or applicable law; and
BE IT FURTHER RESOLVED that this Resolution shall become effective upon Charter’s written acceptance of the Franchise extension through December 31, 2016.
Statement of Purpose
STATEMENT OF PURPOSE: The City’s cable franchise with Charter Communications expired on July 9, 2016. In November of 2015, the City’s consultant initiated a desk review to determine whether Charter has been paying the City the amounts required under the current cable franchise agreement. During the review, the consultant requested more financial data from Charter. Charter has provided some, but not all, of the City consultant’s requested information necessary to complete his desk review. Meanwhile, Charter, the City’s consultant, and City staff have engaged in informal franchise renewal negotiations. After Charter provides the information necessary for the City’s consultant to complete his review, formal cable franchise negotiations will begin. The purpose of this resolution is to extend the term of the franchise to provide for completion of the desk review and the negotiations with Charter. The goal of City staff is to negotiate a long-term cable franchise agreement retroactive to July 10, 2016.