03-883i `�, �i�C/Gr�7�/ — C1�5'yJ /'f. �D�/�
RESOLUTION
CTTY OF SAINT PAUL, MII�tNESOTA
Council File # b ' 3
Green Sheet # 200989
Referred To
Date
1 WHEREAS, Art�'.bI § 109(e) of the franchise held by Comcast of St. Paul Ina ("ComcasY') provides that
2 "Intemet service sh be treated as a cable service for purposes of this franchise and a franchise fee paid
3 on all revenues therefr unfil such time as court or agency of competent jurisdicrion over this franchise
4 rules that the service is n t a cable service and all appeals from the decision have been exhausted;" and
5 WHEREAS, the status of Inte et service provided via cable systems (so-called "cable modem service") is
6 in dispute, and appeals with res ct to the status of cable modem service have not been exhausted; and
7 WHEREAS, Comcast's predecessors 'd pay a fee on cable modem service pursuant to Section 109(e)
8 through at least March 31, 2002, but C cast has stopped paying the fee on cable modem service;
9 WHEREAS, on June 26, 2003, the City iss d a"Violation Notice and Written Demand" to Comcast
10 demanding that it comply with Section 109(e • and
11 WHEREAS, on July 25, 2003, Comcast submitte its "Notice of Dispute" in response to the Violation
12 Norice, and the matter was properly noticed and se or hearing before the City Council on August 27" ;
13 and
14 WHEREAS, the hearing was continued until October 1, 03 to provide time for Comcast and members
15 of the public to submit comments on the issue; and
16 WHEREAS, the City hauing considered all of the arguments ra' ed for and against finding a violation of
17 Section 109(e), including public comment, oral presentations an written submissions from Comcast, and
18 finding persuasive the factual and legal discussion in the Notice of iolation, the August 19, 20031etter
19 from Holly Hansen to William Wright, and the September 24`� staff tter to Comcast; and
20 WHEREAS, the City concludes after considering the foregoing, that the
21 comply with Art. I Section 109(e) of the Franchise, and that obligation h
22 Art. II Section 202 of the Franchise or by applicable law; and
23 WHEREAS, the City finds that Comcast has not complied with Art. I Section
and
24 WHEREAS, the City further finds as a sepazate basis for decision that Comcast ma�not challenge the
25 validity or applicability of Art. I Section 109(e); and �
26 WHEREAS, while not necessary to the decision in light of the foregoing, the City finds th under the
27 franchise and applicable state and local law, the City would have the authority to impose a f on cable
28 modem service if it were not a cable service; if it is a cable service, the City could also require e
29 company to pay a franchise fee on the service; so that under these circuxnstances, the agreement p vid�
30 simple and appropriate mechanism for the parties to provide for the payment of a franchise fee pendi3�g
31 clarificarion of the status of the service; and
my has an obligation to
been vitiated or limited by
a
03- g�3
1 WHEREAS, while not essential to its decision in light of the foregoing, the City further finds that it is in
2 the public 'mterest to require Comcast to pay the fee as agreed, for reasons suggested in the September 24�'
3 staff lettei o Comcast, noting particularly that the City is not establishing a new fee, but merely enforcing
4 an agreed up fee.
5 BE Tf HEREBY R]
VED BY TI� CTTI' COUNCIL OF TI� CITY OF ST. PAUL
Section 1. The City her�y finds and deterniines that Comcast has substantially violated Art. I,
Secrion 109(e) of its franchise.�
8 Section 2. City Staff is hereby direc to take the necessary steps to enforce remedies under the
9 franchise and applicable law, including but t limited to providing notice to the company of the City's
10 intention to assess penalfies, and scheduling suc er hearings as may be required under the franchise
11 or applicable law.
12 Section 3. Section 202 of the franchise perxnits the City modify the franchise under certain
13 circumstances to secure the benefits of the performance promis by Comcast. In light of Comcast's claim
14 (made in its August 26 Memorandum from Todd G. Hartman to The ayor and City Council) that it
15 provided notice under Section 202, staff is directed to take appropriate s s to recommend acrions, if any
16 that should be taken, under that Sec6on to protect the City.
Adopted by Council: Date
Adoprion Certified by Council Secretary
�
Approved by Ma�ok:
�
Requested by Deparhnent of
Technology & Management Services:
Form Approved by City Attomey
By: �Ii6� r�i . 0.���J
B r��cur. �1v�-��,� �
n-� ,Gd2
VJ OU,�
D�partrn�UofficelwunGl: Date �n-itiated Green Sheet No 200989
Office of Cable Communications. 9/24/03
CAntaU Pe�SOf18 PhOne: IniFiaY InitiaUda4
HollyAansen266-8875 � i
c�ry c�
Fi�xwialSavl)ir. FinancialServ/acctg
Must Be on Counal Agenda 6Y (Date) Number 3 Ma1w(OrA�c) Civil Service Commisa�
For
RouUng
October 1, 2003 0�
Total#MSignaturePa9�? (CIipNlLOCationsforSignature)
action 2eyueseea: Approve resolution for submission to City Council for October 1 continuation of public hearing on Comcast
franchise violation regarding non payment of franchise fees on cable modem service.
Recommendations: Approve (A) w Reject �) Personal Service Contracts Must Mswer the Following Questionr. '�
1. Has Nis persoNfirm ever worked under a contractfor this department?
Planning Commission Yes No
CIB Committee 2. Has this perso�rtn ever been a city employee?
Civil Service Commission Yes No
3. Does tliis perso�rtn possess a skill not normaily possessed by any curterrt city
employee? Y� No
Explain all yes answers on separete sheet and attach to green sheet
Initiating Problem, lssue, Opportunity (Who, What, When, Where, Why)
The City Council held a public hearing on August 27 regarding a Notice of Violation that was sent to Comcast regarding
their non-payment of franchise fees on cable modem service. The hearing was continued until October 1 to allow time for
additional comments and review of materials related to the issue. Staff has prepared the attached resolution and
recommends that the City Council find Comcast in violaflon of Article 1 Section 109 (e) of the franchise.
aavan�ages nai,Pro�ea: The City Council will vote on the resolurion and make the final determinarion; this green sheet is
just for submission of the resolu6on to the City Council. Approval of the resolution will permit the City to take further
steps necessary to enforce the company's obligation to pay a franchise fee on cable modem fees, or to obtain substitute
perfoiinance. Tt also avoids any claim that the City has somehow waived its rights to the fees.
oisaavana9as �f aPPm�ea: None. But if the Resolurion is approved by the City Council, then Comcast may bring suit
against the City, as it has against surrounding communiries.
oisaavan�a9es it Not avPro�ed: The resolution would not be submitted to the City Cauncil by the Administration, but could be
submitted by Council staff. If not submitted, there is a risk that the company will azgue that the City has lost rights with
respect to cable modem fees that it xnight otherwise have had.
�.0#t��t� }�03P,�tr�7 ('.anfpl
SEP 2 4 �
Totai AmouM of Transaction: N/A Cost/Revenue Budgeted:
Funding Source: Activity Number.
Financial infortnation: (Explain) � - , _
G:�Sba�edrCe`Ce6kU:a6k EnrcM1'vcMbk �mden videtlw.mduaw gan aira 6iml.wpd