ITEM 4.1 Charter CommunicationsW
OtsTe F o
MINNESOTA V
DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT:
REQUESTOR:
MEETING DATE:
Legal
Andy MacArthur, City Attorney
February 9, 2015
PRESENTER(s):
REVIEWED BY:
ITEM #:
City Attorney
City Administrator Johnson
4.1
AGENDA ITEM DETAILS
RECOMMENDATION:
Staff recommends that the attached letter be approved and transmitted to Charter Communications
relative to the requested Franchise renewal.
ARE YOU SEEKING APPROVAL OF A CONTRACT?
IS A PUBLIC HEARING REQUIRED?
No.
No.
BACKGROUND/JUSTIFICATION:
The City received the attached correspondence from Charter Communications relative to the current
cable franchise which expires November 21, 2017. Under Federal Law the cable companies need to
make the initial renewal request three years prior to the expiration date of the Franchise. The City must
invoke the renewal procedure under the Federal statute within six (6) months after receipt of request
for renewal by the operator. There is an extensive formal procedure for the franchise renewal. The
parties can also enter into an informal process, which is what is suggested in the letter. The City has until
May 9 to commence the formal Federal procedures.
In the meantime, Charter has requested a meeting to discuss the Franchise renewal procedure. The
attached letter acknowledges receipt of their request and agrees to meet with Charter regarding
Franchise renewal. It would be best to have at least one Council Member involved in these discussions
and any subsequent negotiations with Charter.
I am requesting that the Council approve the attached letter response to Charter to be sent out on City
letterhead. I am also requesting that the Council consider appointing one or more Council Members to
be involved in initial discussions and ongoing negotiations regarding the Franchise renewal.
SUPPORTING DOCUMENTS: x ATTACHED ❑ NONE
• Letter from Charter.
• Proposed letter to Charter.
• Federal statutes related to renewal.
MOTION: (Please word motion as you would like it to appear in the minutes.)
Motion to approve attached letter response to Charter Communications.
BUDGET INFORMATION
FUNDING: BUDGETED: ❑ YES
NA o NO
ACTION TAKEN
❑ APPROVED AS REQUESTED ❑ DENIED ❑ TABLED ❑ OTHER (List changes)
COMMENTS:
(C h a r ter
COMMUNICATIONS
December 9, 2014
CERTIFIED ACAJURETURN RECEIPT
Mr. Michael Robertson, City Administrator
City of Otsego
City Hall
13400 90th Street NE
Otsego, MN 55330
Re: City of Otsego Franchise Renewal
CUID MN 0502
Dear Mr. Robertson:
CC VIII Operating, LLC, lka Charter Communications ("Charter") has appreciated the opportunity to
serve the City of Otsego and its residents over the years. Therefore, as we are sure you can appreciate,
Charter Communications is taking the proper steps well in advance toward the renewal of our franchise
agreement with you, which is due to expire on November 21, 2017. We are now looking forward to the
renewal of our franchise.
As you may know, Section 626 of Title VI of the Communications Act of 1934, as amended (the "Cable
Act") contains provisions that detail a procedure for the renewal of franchises. In order to comply with
these provisions, Charter requests that the City of Otsego commence renewal proceedings in accordance
with the requirements of Section 626(a) through (g) of the Cable Act.
However, Section 626(h) of the Cable Act provides for renewal of franchises without going through the
extensive, formal procedure specified in Sections 626(a) through (g). We believe that this informal
process ' may be preferable for all concerned. We would like to meet with you at your earliest
convenience to discuss the renewal proceedings outlined in the Cable Act.
We look forward to meeting with you in the near future and to a continuing, mutually beneficial
relationship.
Very truly yours,
CC VIII Operating, LLC Ika Charter Communications
LeeAnn Herrera
Director Government Relations MN/NE KMA
Charter
cc: Owen Imachukwu
Angela Dierolf
LH/bo
952-367-4233 116900 Cedar Avenue
LeeAnn.Herrera@charter.com Rosemount, MN 65068
February 10, 2015
LeeAnn Herrera
Director Government Relations
Charter Communications
16900 Cedar Avenue
Rosemount, MN 55068
RE: CITY OF OTSEGO- Franchise Renewal
Dear Ms. Herrera:
The City of Otsego acknowledges receipt of your correspondence dated December 9, 2014 and received
by the City on December 11, 2014.
In that letter you officially request that the City commence renewal proceedings in accordance with
Section 626 (a) through (g) of Section 626 of Title VI of the Communications Act of 1934. You further
suggest that the City consider going through the more informal procedures as set forth in Section 626(h)
of the Act. You have suggested that the parties meet to discuss the renewal procedure.
Prior to making a decision as to how to proceed under the Act, the City does wish to meet with Charter
representatives regarding renewal. The meeting would take place at the Otsego City Hall at date in the
near future agreeable to both parties. The City will need a couple of weeks prior to the meeting to
review the current franchise and to identify any issues with current cable service and the Franchise.
Could you please provide us with dates that you have available for such a meeting in late February or
early March?
If you have any questions please feel free to contact me.
Very truly yours,
Lori Johnson
OTSEGO CITY ADMINISTRATOR
Communications Act of 1934
(2) such service is available to the operator only upon the payment
of a royalty required under section 801(b)(2) of title 17, United States
Code, which the cable operator can document --
(A) is substantially in excess of -the amount of such payment
required on the date of the operator's offer to provide such service,
and
(B) has not been specifically compensated for through a rate
increase or other adjustment.
(d) Notwithstanding subsections (a) and (b), a cable operator may take
such actions to rearrange a particular service from one service tier to another, or
otherwise offer the service, if the rates for all of the service tiers involved in such
actions are not subject to regulation under section 623.
(e) A cable operator may not obtain modification under this section of any
requirement for- services relating to public, educational, or governmental access.
(f) For purposes of this section, the term "commercially impracticable"
means, with respect to any requirement applicable to a cable operator, that it is
commercially impracticable for the operator to comply with such requirement as a
result of a change in conditions which is beyond the control of the operator and the
nonoccurrence of which was a basic assumption on which the, requirement was
based.
SEC. 626. [47 U.S.C. 5461 RENEWAL.
(a)(1) A franchising authority may, on its own initiative during the 6 -month
period which begins with the 36th month before the franchise expiration,
commence a proceeding which affords the public in the franchise area appropriate
notice and participation for the purpose of (A) identifying the future cable -related
community needs and interests, and (B) reviewing the performance of the cable
operator under the franchise during the then current franchise term. If the cable
operator submits, during such 6. -month period, a written renewal notice requesting
the commencement of such a proceeding, the franchising authority shall commence
such a proceeding not later than 6 months after the date such notice is submitted.
(2) The cable operator may not invoke the renewal procedures set forth in
subsections (b) through (g) unless --
(A) such a proceeding is requested by the cable operator by timely
submission of such notice; or
(B) such a proceeding is commenced by the franchising authority on
its own initiative.
(b)(1) Upon completion of a proceeding under subsection (a), a cable
operator seeking renewal of a franchise may, on its own initiative or at the request
of a franchising authority, submit a proposal for renewal.
(2) Subject to section 624, any such proposal shall contain such material as
the franchising authority may require, including proposals for an upgrade of the
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Communications Act of 1934
cable system.
(3) The franchising authority may establish a date by which such proposal
shall be submitted.
(c)(1) upon submittal by a cable operator of a proposal to the franchising
authority for the renewal of a franchise pursuant to subsection (b), the franchising
authority shall provide prompt public notice of such proposal and, during the 4 -
month period which begins on the date of the submission of the cable operator's
proposal pursuant to subsection (b), renew the franchise or, issue a preliminary
assessment that the franchise should not be renewed and, at the request of the
operator or on its own initiative, commence an administrative proceeding, after
providing prompt public notice of such proceeding, in accordance with paragraph
(2) to consider whether --
(A) the cable operator has substantially complied with the material
terms 6f -the existing franchise and -with applicable lave;
(B) the quality of the operator's service, including signal quality,
response to consumer complaints, and billing practices, but without regard
to the mix or quality of cable services or other services provided over the
system, has been reasonable in light of community needs;
(C) the operator has the financial, legal, and technical ability to-
provide
oprovide the services, facilities, and equipment as set forth in the operator's
proposal; and
(D) the operator's proposal is reasonable to meet the future cable -
related community needs and interests, taking into account the cost of
meeting such needs and interests.
(2) In any proceeding under paragraph (1), the cable operator shall be
afforded adequate notice and the cable operator and the franchise authority, or its
designee, shall be afforded fair opportunity for full participation, including the right
to introduce evidence (including evidence related to issues raised in the proceeding
under subsection (a)), to require the production of evidence, and to. -question
witnesses. A transcript shall be made of any such proceeding.
(3) At the completion of a proceeding under this subsection, the franchising
authority shall issue a written decision granting or denying the proposal for
renewal based upon the record of such proceeding, and transmit a copy of such
decision to the cable operator. Such decision shall state the reasons therefor.
(d) Any denial of a proposal for renewal that has been submitted in
compliance with subsection (b) shall be based on one or more adverse findings
made with respect to the factors described in subparagraphs (A) through (D) of
subsection (c)(1), pursuant to the record of the proceeding under subsection (c). A
franchising authority may not base a denial of renewal on a failure to substantially
comply with the material terms of the franchise under subsection (c)(1)(A) or on
events considered under subsection (c)(1)(B) in any case in which a violation of
the franchise or the events considered under subsection (c)(1)(B) occur after the
292
Communications Act of 1934
effective date of this title unless the franchising authority has provided the operator
with notice and the opportunity to cure, or in any case in which it is documented
that the franchising authority has waived its right to object, or the cable operator
gives written notice of a failure or inability to cure and the franchising authority
fails to object within a reasonable time after receipt of such notice.
(e)(1) Any cable operator whose proposal for renewal has been denied by a
final decision of a franchising authority made pursuant to this section, or has been
adversely affected by a failure of the franchising authority to act in accordance
with the procedural requirements of this section, may appeal such final decision or
failure pursuant to the provisions of section 635.
(2) The court shall grant appropriate relief if the court finds that --
(A) any action of the franchising authority, other than harmless
error, is not in compliance with the procedural requirements of this section;
oP
(B) in the event of a final decision of the franchising authority
denying the renewal proposal, the operator has demonstrated that the
adverse finding of the franchising authority with respect to each of the
factors described in subparagraphs (A) through (D) of subsection (c)(1) on
which the denial is based is not supported by a preponderance, of the
evidence, based on the record of the proceeding conducted under
subsection (c).
(f) Any decision of a franchising authority on a proposal for renewal shall
not be considered final unless all administrative review by the State has occurred
or the opportunity therefor has lapsed.
(g) For purposes of this section, the term "franchise expiration" means the
date of the expiration of the term of the franchise, as provided under the franchise,
as it was in effect on the date of the enactment of this title.
(h) Notwithstanding the provisions of subsections (a) through (g) of this
section, a cable operator may submit a proposal for the renewal of a franchise
pursuant to this subsection at any time, and a franchising authority may, after
affording the public adequate notice and opportunity for comment, grant or deny
such proposal at any time (including after proceedings pursuant to this section
have commenced). The provisions of subsections (a) through (g) of this section
shall not apply to a decision to grant or deny a proposal under this subsection. The
denial of a renewal pursuant to this subsection shall not affect action on a renewal
proposal that is submitted in accordance with subsections (a) through (g).
(i) Notwithstanding the provisions of subsections (a) through (h), any
lawful action to revoke a cable operator's franchise for cause shall not be negated
by the subsequent initiation of renewal proceedings by the cable operator under
this section.
SEC. 627. [47 U.S.C. 5471 CONDITIONS OF SALE.
293 -