02-47CITY OF OTSEGO
RESOLUTION 2002.-4 7
RESOLUTION CONDITIONALLY APPROVING
THE FRANCHISE APPLICATION SUBMITTED BY WH LINK
WHEREAS, the City of Otsego ("City") is a municipal corporation organized
under the laws of Minnesota;
WHEREAS, the predecessor to Charter Communications Holding Co., LLC
("Charter") was issued a "line extension permit" authorizing the delivery of cable service
in the City;
WHEREAS, Charter's predecessor requested that the City renew the line
extension permit which expires on or about December 31, 2002, and;
WHEREAS, the City subsequently received an inquiry from WH LINK, LLC
("WH Link") concerning grant of a cable franchise authorizing the delivery of competitive
cable services in the City;
WHEREAS, in response to these requests, the City initiated the cable franchising
process mandated by Minnesota Statutes, Chapter 238, provided notice of its intent to
consider issuance of franchises, received cable franchise applications from Charter and
WH Link, held a public hearing concerning the applications on May 13, 2002, permitted
submission of additional written comments, received timely written comments from WH
Link and no comments from Charter, and considered the applications al7ral separate
Council meetings and a worksession;
WHEREAS, the City Council received and considered a report from its special
cable counsel dated August`21, 2002 concerning the applications;
WHEREAS, on October 14, 2002, the City adopted a cable regulatory ordinance
setting forth certain requirements generally applicable to all providers of cable service
operating in the City;
WHEREAS, the City may require adequate assurance that the applicants have the
financial, technical, or legal qualifications to provide cable service, may consider whether
the applicants' proposals for providing cable service are reasonable and in the public's
interest, and may require each successful applicant to accept a franchise containing
reasonable terms and conditions;
WHEREAS, the City has reviewed and considered the franchise applications,
including the proposals for providing cable service in the City, and proposed franchise
ordinances authorizing the delivery of cable service in the City;
WHEREAS, WH Link is a competitive local exchange carrier ("CLEC") duly
certified by the Minnesota Public Utilities Commission ("MPUC") and an open video
system ("OVS") operator duly certified by the Federal Communications Commission
("FCC")
WHEREAS, WH Link's CLEC certification authorizes the company to construct
and operate a telephone system and/or resell the incumbent telephone company's services
in a service territory that includes all of the City, subject to the City's right-of-way
requirements;
WHEREAS, WH Link's OVS certification authorizes the company to provide
cable services in its "telephone service area" defined as "the area within which such [local
exchange] carrier is offering telephone exchange service" pursuant to 47 U.S.C. § 573(d),
subject to the City's right-of-way requirements;
WHEREAS, WH Link has asserted that its OVS certification, and associated
federal laws governing OVS, preempt and supercede certain state and local requirements
governing cable television systems and service;
WHEREAS, WH Link has specifically asserted that it is not subject to Minnesota
Statutes, Section 238.08(1)(b), which provides:
No municipality shall grant an additional franchise for cable service for an area
included in an existing franchise on terms and conditions more favorable or less
burdensome than those in the existing franchise pertaining to: (1) the area served;
(2) public educational, or governmental access requirements; or (3) franchise fees;
WHEREAS, WH Link's cable franchise application and service proposal
contemplates the operation of a system and provision of cable services to certain selected
subdivisions of the City;
WHEREAS, WH Link's cable franchise application and service proposal further
contemplate the subsequent extension of the system and cable services to the extent WH
Link elects to extend its telephone facilities, or is required to extend such facilities by the
MPUC as a function of its CLEC certification;
WHEREAS, the City's legal counsel requested by letter dated May 17, 2002, that
WH Link further explain its.proposed service area and system extension proposal;
WHEREAS, WH Link responded, among other things, that it was requesting a
cable franchise that effectively adopts any system extension and service area requirements
imposed by the MPUC as a condition of its CLEC certification, rather than independent
cable service area requirements;
WHEREAS, WH Link has advised the City that it will only accept a franchise
containing terms and conditions reflecting its application and service proposal, and will
treat issuance of a franchise on any other terms and conditions as an effective denial of its
application;
WHEREAS, Charter claims that the City may not issue a franchise based on WH
Link's proposal because Charter and its predecessor constructed a system serving the
entire City where there is a dwelling density of at least 9 homes per 1/4 cable mile;
WHEREAS, the City's line extension permit adopts by reference terms and
conditions contained in cable franchises issued by municipalities neighboring the City, and
such franchises require the extension of a system and service based on the above -
referenced dwelling density standard;
WHEREAS, Charter's application contemplates the City's issuance of a franchise
expressly requiring the extension of a system and service based on the above -referenced
dwelling density standard;
WHEREAS, the report issued by the City's legal counsel, incorporated herein by
reference, concludes that WH Link's OVS certification does not exempt the company
from Minnesota's cable statutes, including particularly Section 238.08(1)(b);
WHEREAS, the report further concludes that the Council has discretion in
determining whether WH Link's proposal is "more favorable or less burdensome" than
any current system extension/service area requirements applicable to Charter, and that the
Council should determine whether Charter is subject to the above -referenced dwelling
density standard;
WHEREAS, federal and state laws and regulations encourage competition in the
provision of telecommunications and cable service and the City may not unreasonably
refuse to award an additional competitive franchise;
NOW, THEREFORE, BE IT RESOLVED THAT, WH Link possesses the
requisite legal, technical and financial qualifications to provide cable television services in
the City.
BE IT RESOLVED FURTHER THAT, for the reasons stated in the report of the
City's legal counsel, WH Link is fully subject to Minnesota's cable laws.
BE IT RESOLVED FURTHER THAT, to the extent Charter is subject to an "area
served" requirement as contemplated by Minnesota Statutes, Section 238.08(1)(b), as
evidenced by Charter's current system construction and Charter's proposal for a franchise
expressly requiring system extension and service based on the above -referenced dwelling
density standard, Charter or its predecessor actually completed such system construction
over a period of several years;
BE IT RESOLVED: FURTHER THAT, the service proposal in WH Link's
franchise application contemplates a system extension and service area requirement that
will ensure the availability of competitive cable service to only a relatively small portion of
the City, and will not ensure the availability of competitive cable services throughout the
City based on the above -referenced dwelling density standard applicable to Charter over a
reasonable period of time;
BE IT RESOLVED FURTHER THAT, the service proposal in WH Link's
franchise application is more favorable and less burdensome than the requirement that has
been applied to Charter and therefore fails to comply with Minnesota's cable laws,
including Minnesota Statutes, Section 238.08(1)(b);
BE IT RESOLVED FURTHER THAT, WH Link's application is conditionally
approved subject to the following conditions:
1. WH Link must promptly accept and execute the cable franchise
ordinance offered by the City;
2. WH Link must construct and operate a system, provide services to
residents, and provide other consideration to the City in accordance with
the franchise and franchise application, which shall be incorporated into any
franchise issued by the City, except that WH Link shall extend its system
and service throughout the entire corporate boundaries of the City where
there is a dwelling density of at least 9 homes per 1/a cable mile within seven
(7) years.
3. In the event WH Link fails to timely accept and execute the cable
franchise ordinance offered by the City, WH Link's application shall be
denied.
BE IT RESOLVED FURTHER THAT, this Resolution shall be effective
immediately.
Approved this 2 8 th day of October, 2002 by the City Council of Otsego,
Minnesota.
By_•
Its: Mayor
ATTEST:
By:
Its: Qlp-rk