96-866Council File # � � 6 _ gb {o
Green Sheet # � �.S�S7
OF SAINT
Presented
Referred To
MINNESOTA
Committee: Date
1
Z
3
4
5 WFIEREAS, on May 3, 1996, Continental Cablevision of Saint Paul, Inc. requested
6 City approval of a transfer of control of the cable franchise from Continental Cablevision, Inc.
7 to U.S. West, Inc.; and
S WHEREAS, federal law provides that such transfer requests are deemed approved if
9 not denied by the local franchising authority with in 120 days, unless an ea�tension is agreed
10 to by the parties; and
11 WHEItEAS, the City needs additional time to evaluate said transfer xequest; and
12 WHEREAS, Continental Cablevision, Inc. has filed a Petition for Special Relief to the
13 Federal Communications Commission (FCC) to temporarily waive federal statutory cross-
14 ownership prohibitions; and
15 WHEREAS, Continental Cablevision of Saint Paul has offered to extend the August
16 31, 1996, 12Q day federal deadline until September 30, 1996, or if the FCC has not acted on
17 the Petition for Special Relief as of September 16, 1996, until two weeks after the FCC has
18 acted on the Petition.
19 NOW THEREFORE, BE IT RESOLVED, that the City hereby agrees to the offer to
20 extend the August 31, 1996, 120 day federal deadline until September 30, 1996, or if the FCC
21 has not acted on the Petition for Special Relief as of September 16, 1996, until two weeks
22 after the FCC has acted on the Petition.
Requested by Department of:
By:
B y' � -
Approved by Mayor: ➢ate � �� �
By: � l3� �U+�CiG�
Form Appr d by City Attorney
By: C
Approved by Mayor Eor Submission to
Council
�
Adopted by Council: Date �� (
Adoption Certified by Council Sec etary
aG-g��
� y�cou�i� � DA7l31/96 GREEN SHEE N_ 35587
INRIAUOATE INrtiAWATE
CONTACTPERSpNBPHONE MEgBYl1 ODEPAflTMENTDIRECTOR QCRYCAUNpL
Sanice Rettman 266-8650 "�'�" �CRYATfORNEY �CRVCIERK
NUYBEA FOX
NUST BE ON Cql1NCIL qGENDA BY (DA"(E) pp�n� O BUDGET DIPECTOR O PIN. & MGT. SERYICES �Ip,
To be brought p nd r onoea MAYOR (OR ASSISTANTJ
suspension on �}-3�-9�. � �
TOTAL # OF SIGNATURE PAGES (CLtP ALL LOCATIONS FOR 51GNATURE)
acTwNAeouesreo: Continental Cablevision of St. Paul, Inc., has requested City approval of a
transfer of control of the Cable Franchise to U.,S West Znc. The City must act within 120
days unless an extension is given. This resolution extends the Federal deadline date.
RECOMMENDAt1pwS: Appove (A} m Rejoct (R) pERSONAL SERVICE CONTRACTS MUST ANSWER THE FOLLOWING UUESTIONS:
_ PLAtiNING CAMMISS70N _ CIV1L SERVECE COMMiSSroN �� Ha5 this perSaNftrtn ever worf�ad untl8r a corttrnc[ fuf this department?
_ CIB CpMMfifEE _ YES NO
2. Has this personttirm ever been a city employee?
— �� — YES NO
_ DISTRIGTCpUflT _ 3. DOCS thiS pEf50nHim1
possess a skill not normally possessed by any cunent city employee?
SUPPOA'TS WHICH CAUNCIL OBJECTIVE? YES NO
Explain all yes answero on separate aheet and attach to green sheet
INITIATING PROBLEM, ISSUE, OPPORTUNITY (4VIro. Whet. Whmn, Where, Why)�
See attached letter dated July 29, 1996 from John F. Gibbs (Attorne� to Martha Larson
�Finance}).
ADVANTAGES IF APPROVEO:
The extension of time will provide a thoughtful, methodical and we11-informed review by
the City Council in a timely fashion.
DISADVANTAGES IPAPPflOVED
None cited.
DISADVANTAGES IF NOT APPAOYED:
The deadline of August 31, 1996, stands. NOTE: No action on the transfer could be
detrimental to the subscribers.
TOTAL AMOUNT OF TRANSACTION $ COST/REVENUE BUDGE7ED (CIRCLE ONE) YES NO
FUNDIqG SOUACE ACTIVITV NUMBER
FINANCIAL INFOFiMATION� (EXPWN)
.ul. %9. 1996 I`L:49Plu� :':?,"NS, f:F.FiA`�. �'ILI,e�SCIfESI 6 Ro. 731 i P. �-�6
ATLANTA
HOSTCN
CMiCnGO
L75 ANGELES
KINNEAP,LIS
CRAnGECOUNTY
541NTPiUL
>>H Fnat�cisco
�+ASHINGTCN� O. C.
7uly 29, 1996
Martha G. Lsrson, Director
Department of Finance and Management Sen�ces
Ciiy of St. k'aul
290 City Hall
15 West Keliogg Boulevard
St. Paul, MN 55102
Re: Continental Cablevision Change of Contrpl
4ur Fiie No.: 024585-0020
Dear Ms. Larson:
9(�-���
SOHS{ F. GmSS
(612) 3/9-5965
4n behalf of oiu client Continenial Cabtevisioz� we are writing in response to your 3uly 19,
i 996 and July 23, 19961etters to Mr_ �'ran Z��, wherein you adrnowle@ged receipt on May 3, 1996
ofthe A,pplicasion for Canaent m Change o£Control of Continental Cablevision, Tac. to U 3 WEST,
Inc. and raised scveral issues and questions regarding that Appticatioa 7'tfis letter will alsa serve as
a follow-up to our meeting oF Tt�ursday, 7uly Z5, 1996 and as confiimation of subseque;nt
understandings you disaused with B�b �tyaa
Nature of TrsnsatEion.
You requested that we i�view the City's understanding that Continental proposes to transfer
the cable &anchise from Coatinental Cabte of St. Paul, Inc- to TJ S WEST, 7ne. In fact, that is not
the case. P.ather, the pac�es are seeking consent to the change of corrtroi o£Cominental Gablevision
af St. Faul, Inc.'s parem company, Continemat Gablevision, Ine. to U 5 WL-'ST, Inc. After t�e
merger transaction, CozrtinexGal Cablec%ision of 5t_ Paul, Tna. will eontinus ta be the holder of the St.
Paul Cable Communications Franchise.
: �f , :t�. � �f i. '�1�.1�_
ROBINS, KAPLAN, Mi LLER £� CI RE51
A7TORNEYS A7 LAW
2800 LAJtLLE ?LA2A
aoo usnu.e n4�NUe
MINLEAP03,]S, N�IN'NESt7fA 55A02-2015
re�errot+e [oiaJ aas-asoo
FnC511.fiLE (612) 3�9d181
Xaur letter of July 19, 1996 coatemplated that the review and consideration of the pending
Form 394 Application wwid include dscussion af ceztain issues such as reuacx�al or e�ctension o£the
�uL 29. 19�6 12:F,OPM Ri2iN5, Y,l�Fl6h, Wi1,LcR&CicE"sl 6 ':io. 7317 P. 3;'6
q� �b�
Maztha G. Lazson
7uly 29, 1995
Page 2
&auclrise and franchise cond'rtions. At tha maeting on Thiu5da9 August 25, i496 it was £iuther
suggested t,�at the transfer c-0nsent consideratian migirt iaclude the �ty's gen�ai obligation to
proiect a"broader pe�b�c interest," consideration of U S WEST's posirifln ia various right-af-aay
pmczedi�s, the C'uy's �ligation to protect the rights of way genezally, and that some poliey makers
aright be inclined to coasider gast relatioashipa with Coatineata2 Cableviseon related tv ] 992 access
programming supportlfi�anchise negotiations.
We must take dvs oppommitp to share rxnth pou that the pendiq,a Farm 394 Applicauon for
Conserrt to the obange of cotrtrol mu� be reviewed independent o£ cflnsideration of the grospective
renewat ofthe St. Yaul Cable Communications Franohise. Federa! law estab3ishes distinet processes
and standards for the re�iew of an application for cansent to transfer o£ comrol as opposed ta an
agplieation for franchise renewaf.
Fusthermore, the City's views regarding policy positioas of U S WEST Communications, Inc_
in otlser gavernmernai proceedings, tbe City's opinion of Continentai Cablevision in Iight of pa�
negotiations, and the City's ransideration of broader public urtexests would alt be autside the
apkropriate scope of the City's reYiew of the pending Appiication,
VVith respe�t to the Form 394 Apglication £ar Consent ta tranafer of ckntrol, the City's
authority to review tlw�xt request and impose conditians on such consent is limited to ihe legal,
teehnieal and financial qualifieations af the franchisee upon uansfer of coimnl. TE�is limitation was
most recently articulated by the FCC on January 12, 1995_ "We created PCC Ftum 344 with the
expectatian that the ittf�m�ation requued by the fvrm wauld establish tEie legal, tectmical sn@ financiai
quali.fications of the proposed transferee or assi�ee." Memexand�Sj�;,e}i�� ��„g er on
Reconsideration of the F�i Renart a+?�! �rd�r I�� Dqcket No. 92-264, FCC 95-21 (adopted
7anuaxy 12, 299i, ieleased 7anuary 3tf, I995), Par. 52. SeE also 47 LJSC 541(s} {4} (c} ("in swarding
a&andrise, the franchismg authority -(c) may require adequate assuraace that the cable operator hag
the frnancial, technicai or legal quali6cations to provide cable setvicz.").
Withrespect to francluse renewal, a apecific proce.qa with estabIished ciiteria for deteiminatian
has beea establislxed by federal statutes at 4? USC Sectian 54b. That statute cantetnplates a process
wlriah begins 30 to 35 months ptior to the expuation of tha franchise and which i»�ludes a variety of
hearings, 6aldimgs, submissions and consideratians. The St. Paul Csble Camtnunications Franchise
expires May 71, 1999. Accordingiy, the renewa! prooess begins nb later than No�>eznber I 1, 1498
and w�l conclude within 30 months of that time. Obviously, such a proCess canuot occur witirin the
fo�r moath statutory time fratne aufharized for cnnsiderarion of an application for consent to transfer
of control.
VUe very much conau with the observation in your 7u1y 14, 199b letter that mutual exc�aages
of infarroa�on snd viewpomts wnuld be bene5ciai to 2ll cor�cemed. Wrth respect to franchise renewai
is5ues, the fed�al renewal provisions as well as the St. Pau! Cab►e Commun'tC3t+on5 Franchise and
1ul.Zg.1996 12:EpFM �'�bi1iS,�r.F1l;P;,,`.iII�E��iRE�] 6 I�o %317 P. 4:'�
Iviartba G. Larson
July 29, 199b
Page 3
enabli� ordinances �ilt be use£uI in guiding us through that process.
: 11 t / I. 1.�1'hl f
Q � -�� Y�
You have raised the issue of complianee with the anti-buyout provision of the
Telecommunications Act of 1996 which was referenced in the May 3, 1995 Applicatioa. At our
meeting on Thursday, we provided pou a copy af a Peti�on fbr Special Relief which was submitted
by Gontinernal Cablevision and U S�'EST to the �'ederal Communicatious Comani asion {"FCC") on
July 12, 194fi and'��Ivch seeks te�nporarg auth�rization w allow TJ S Vu�ST time to divest flwnership
intemsts in c�'tain "m-�gioa" cable teievision systems such as the system senring the City �f St Paul.
As you Imow, submission of the Petition to the FCC triggers a review pracess whereby the FCC
provides potice and seeks comment on the Petitioa We understand that you also received a capy af
tbat Petition iast week froro the Northern Dxkota County Cable Communicaaans Camrnissian and
have been discussing u�th other local gavemments a possib]e filing. If we can provide in£ormation
which will be of assistance as you confmue that consideration, please do not hesitate to cvTrtact us
We now understand that the FCC is likely to issue a Public Notice regarciing the Petition
during the wcek of Iuly 29, 144b and that there will be 20 days from t1,at Public IVotice date to file
commeat or abjectious. I� after the came�ent period, the Perition is granted, Co�n�tal
Cablevision/U S WEST will ha�re the requisite legal qualificatians with resgect to the anti-
buyouUcross-awnersbip provisions r�ed in your leUer and set forth in the Telecommunic&tions
Act of 1996.
�
.� � I I i ;A M_ 1
Yw have raised questions regerding the veIidity and tinning pf the Farm 394 Application and
review process in light of othar required governmartat approvats including the Petition discussed
above.
On May 3, 1996, the City reeeived a completed Forrn 344 Agplication which met all
requirements ofthe Form 394, irs insuuctions, FCC rules, IvCu�tuesota Stasutes and the St. Paul Cable
Communications Francluse. Accordin�y, the time frame for the �ty's review of the Form 394
Applicetion began on May 3, 1996, is subjeck ta a variety of deadlines established by Federal Law,
Mmnesots Statules snd the Franclrise and mns through A,ugust 31, 1446.
In addition to conseut from the CitS�, the pending Carninental CablevisionlU 5 WEST
transastion requires cons�+ss, to the ehange of fraachise cantrol fram agpmaiimately 440 othei'
franahising authorities. FCC consenk to other types of licenses is also requ;red 'm conjunction with
the merger. These conserns include the tr�ttsfer of control to LT S WEST of Cantincrnal's FCC
CARS microw�ave licenses, televASion translator station 1iCenses, and basiz�ess radio and OFS
microwave licenses. Tran.4fer applications are currently pending for these licenses.
dui. �9. i496 12 F?FiJ :i�;1;5,'r;r.F'1�.5 6' lLe'F�::�ES; 6 Pdo 7iI7 F. �;'�
Martha G. Lazson
July 29, 1�96
Page 4
/ , �
That the variaus gwernn�tal re�iew timetables must nm sim��ltaneously or "in tandem" sad
that the ��C estabiished the 124 day loca! fraaclusing autharity review pexeod deac�ine in order w
streacnline and facilitaze the recnew process is wiihout questioa Tn its Ianuary 3�, 149�
Memornndum Opit�ion s.nd Order, the FCC assested:
"In ena� SecYion fi17 {e�, Congress imposed a 12A-day appraval period on the sale
or transfer af cabie systems held fnr three or more years because Congress wazrted ta
enstue tltat the lor,al fi�snc}vse approval process not unduly delay the consummation
of transactions ... The IAnguage of the statute and lagislative history reflect
Congress' e�pec�vans tBat the Gommissian establish regulatious desigied to ensiue
tUat franchising aathorit3es that possess the right to reriew transfer requests teceive
the inforn�ation required t� hegin an eva�uation of a request for approval of a sa]e or
transfex a#'such a cabk s}5te�a. . We believe Gon,a,ress sought to pzovide a degree of
r�gulatrny certaiaty to cable operators when it eslabGshed the 120 day time period for
franchising 8uthority actiDn on ttansfer requests ..:' Memorandum OFinion and
Order on Rec�nsideration of the First Report and Order MN Dncicet No. 92-264,
FCC 95-21(released January 3Q, 1495), Paragraph 52, 53..
Tn ats 1993 Report and Order regardzng fz'anchise transfer consent processes, the FCC well
moog�ized that the variaus 2pproval processes wrnild work in tandem Noting that the 1992 Cabie
Ad prolnbited the FCC from �sutiag catain Qublic interest vvaivets unless local franchising authotity
approvat hsd be� obtained, (by analogy, the flip side of the circumstances at hand), the FCC noted
that, although im most cases locat approvai is required prioz to the cansUmmation af a transf'er,
". .. We conclude that tLe [FCC} may grant waivers in agpropriace cases prior ta the
garn of such appravai, provided such waivers are cunditioned upon the grant o£7oca1
transfer appxaval [FCCj waivers issue�i in �dvance of 1oc81 transfer approval will not
become effeeiive unless sach approval is u]timateIy obtained and wi.ti in no way affect
the discretion of locsl franchismg authorities w decide such uansfer raquests. We
conolude tlxat the grant of such condit6anal waivers will enhance the speed astd
efficiency of the waive�r process, without under�rung the discretion of the local
franchise authority to approve or disapprove a proposed transfer, especia!(y where
multiple feaaclri�ng authorlty �pprovals are aecessasy.° �ort a*+�
Fnrther NotiFe nfPr000� Rnlem Ir:nv. �g( ppGket 92-�fi4, FCC 93-322 (released
7,�y2�, lss�).
The rationale set fartfi above (though the re�rerse situation) is analagous end the poGcy af
authoriziqg t'wo reviews to pro�etl &imuhaneously applies equally to the instant situatioa For the
various governmeirtai reviews to ap�ate in any manner other than satnukaneously wauld cause an
intr "chicken-aad-e�' situation which wau2d paratyze aay governmentai review or prapose�
J�l
Martha G. Larson
July 24, 1996
Page 5
trausacbon.
�[ 6 "� `o `/i
Gramt of the authorization from tt�e FCC v.till establish the legal qualificaLions R�ith respect to
the anti-buyout provisions ofthe Te(ecommunicaiions �ct of 199b and that autharizaiion will occur
prior to the closing o£the transactian. Vl'e recogrize, ho�ovever, that given the I2D day deadline., the
Petitiou for Sgecial Retief pending at the FCC mig�rt nnt be g�ted as of the time the City of St. Paul
weuld be scheduled to take action on t�e g�ding Focm 394 Appfication. To that end, we tiave
suggested that effectiveness of :he consent af the C1ty of St. Paul s.he�atd go forv�ra.*d, but may
appropriately be conditioned upon the grant of the pending Petztion £or Speeial Relief by the FCC.
'We understand hawever, that, although no conceras have been razsed with resped to the
tmancial or technicai quali5cations afthe t�ans�feree, there will be an oprn issue �uith rc�eet to the
legal qualifications imtil ihe Petition is granted and t1�at City staff is uncomfotYable recommending
consent, even a contiitianal consem, umi� tfie FCC #�as acted. Accordiugiy, this will confirm that
Continental Cablevision has ageed to an extension of the Angust 31, 1996 12Q dap federal statutary
deadline vtttit September 30, 1996 or, if the FCC has not acted on the Peticion as of 5eptember t b,
1996, until two weeks after the FCG hPS acted on the Petition. This would aiford the City tLe
oppomm�ty to complete ariv furth� z�ured hearings and make its fsnsl deberntination in laght of the
FCC adion-
Hopefullp this tetter and the eaclosed documems are respoasive to your 7uly 19, 1996 and
July 23, 1996 letters and wiU be usefiit as we cbminua the dislogue regarding pendin� cat+le televisi.on
issues ¢� 5t Paut Ifyou wauld lil�e to disGUSS any ofthese matters fiuther, g[ease do not hesitate to
contact us_ •
Vei]' �Y Y��
R�BINS, ICA.PLAN,� ji3II,LER & C�RESI
Gibbs
.TFGd'ch
cc: ]VIr. Fran ZeuIi
Mr. Robert Ryan
h�ir. Randall Coteman
Ms. Holly Yerigan
Mr. .Cierald T_ Hendrickson