HomeMy WebLinkAboutRES-2000-073 Resolution Transferring Control of a Cable Television Franchise from Time Warner, Inc. to America Online, Inc. 9
sib
2
RESOLUTION NO. 00. %5
A RESOLUTION GRANTING THE CONSENT OF ORANGE COUNTY TO THE
TRANSFER OF CONTROL OF A CABLE TELEVISION FRANCHISE FROM
TDIE WARNER,INC., TO AOL TEVIE WARNER,INC.,AND A TRANSFER OF
CONTROL FROM MEDIA ONE GROUP,INC.,TO AT&T CORPORATION
WHEREAS, Time Warner Entertaintaew-Advw=Newhouse Partnership
("?WEAN")holds three(3)valid, nor-exclusive franchises to operate a cable television
system in Orange County,North Carolina(the "Franchising.Authority");and
W"ERE", TWEAN is a subsidiary of Time Warner,Inc.("TWI");and
VA9[EREA9, Media One Group, Inc., ("Media One") holds a 25.51% interest in
Time Warner Fartertainment Company, L.P., ("TWE") which in turn owns a 66.66'!*
interest in TWEAN;and
WHl!'1iF.AS, a wholly-owned subsidiary of AT&T Corporation ("AT&T") is
acquiring all of the shares of Media One pursuant to an Agreement and Plan of Merger
dated May 6, 1999, ("Transaction No. 1*) so that fallowing closing of the transaction,
AT&T will control an approximate 1T/interest in TWEAN;and
REAS, TWI and America Online, Inc., ("AOL") have entered into an
Agreement and Plan of Merger dated Ia=uy 14,2000("Transaction No.2");and
WHE1tEAS, the merger agreement will result in a stock to stock merger
("Transaction No. 2") in which TWI and AOL will merge with subsidiaries of a newly
formed holding comgat�,and
WHEREAS, as a result of Transaction No. 2, both TWI and AOL will become
wholly owned subsidiaries of the new company, AOL-Time Warner, Inc. ("AOL-TW");
and
WHEREAS, the &arachisee, TWEAN, and TWI, AOL-TW, Media Onq and
AT&T, have requested the consent of the Franchising Authority, if it determines consent
is necessary,to the aforementioned change of control and Transaction No& l and 2;wad
WHEREAS, on or about February 10, 2040, TWI, as transferor, and AOL-TW,
as transfa'eq filed an FCC Form 394 se *ing the consent of the Franchising Authority to
Transaction No. 2;and
WHEREAS, on or about February 18, 2004,Media One, transferor, and AT&T,
transferee, filed a Form 394 with the Franc°sing Authority sealing consent to
Transaction No. 1;and
3
WHEREAS, the franchising'Authority has conducted a thorough review of the
legal, technical and financial qualifications of the applicants and the transferees to own
and operate the cable system; and
WMMA►S, the Franchising Authority has received and reviewed the report of
its cable television consultant concerning the 1ega1, technical and Snaneial qualifications
of the transferees and provided an opportunity for public comments;and
WHEREAS, AT&T and TWI are the two largest cable television operators in the
United States and AOL is the largest and most dominant provider of interact services;
and
WHEREAS, TWI and AOL have entered into a Memorandum of Understanding
dated February 29,2000(the"MOU") (a copy of which is attached hereto as Attachment
A) setting forth significant commitments that AOLITW will undertake to enable cable
modem subscribers to obtain service from affiliated Internet service providers ("ISPs"),
Included among those commitments is the commitment of AOLlTW to operate its cable
systems in a manner that does not discriminate among ISPs based on their affiliation with
AOLnV;and
WHEREAS, following further review and an investigation, the Franchising
Authority has concluded that the transferees have established that they meet the technical,
legal and financial criteria to operate the cable system and have satisfied all criteria set
forth in and/or under all applicable or required local government and federal doanmennts,
law:, rules and regulations, including FCC Form 394 and contingent upon applicants
meeting all of the requirements set forth below,
NOW$ -11: RE,BE IT RESOLVED that in consideration of the foregoing
and the promises set forth herein,the Franchising Authority and the transferees agree to
the following:
1. The Franchising Authority conseats to Transaction Nov. 1 and 2, effective
immediately upon the closing of the transactions contemplated by the agreements,
provided that said closings tape place prior to July 1,2001.
2. The Franchising Authority confirms that:
(a} the three (3)ftnchisea held by the franchisee are valid and in firll
force and effect.
(b) the franchisee will be in material compliance with the Ihmehises
when the other conditions set forth in this Resolution are met.
2
4
3. TWEAN:
(a) agrees to be bound by the three (3) franchises and perform all
duties and obligations thereunder;
(b) represents and warrants that it is able to provide and agrees to
provide all services required under said franchises;
(c) acknowledges and agrees that TWEAN is subject to the regulatory
authority of the grantor as provided by state and federal law,
(d) agrees to cooperate fully with the Franchising Authority and to
obtain from any governmental agency having jurisdiction, all
licenses,permits and other authodty necessary For lawflcl operation
and maintenance of the cable system.
4. The past performance of TWT.AN under the control of TWI pursuant to
the franchise is not waived by the Franchising Authority consenting to this transfer and
adopting this Resolution. TWEAN (under the control of its new.parent, AOL-T'W)
agrees to be responsible for and bound by the breaches and non paformance, if any, of
TWEAN (under the control of TW.F) prior to this transfer. The Franchising.Authority
may, after-oonsummaticm of the Transaction Nos. 1 and 2, consider in any ongoing
renewal proceeding the past paformance of TWEAN(under the control of TW.1) to the
extent permitted under 47 U 5.C. §546, as if it were the past performance of TWEAN
(under the control of AOL-TW)
5. TWEAN and AOL-TW agrees that the revaluation of the cable system
assets, if any,resulting from Transaction Nos. 1 and 2 shall not be the basis for any future
rate muses for any regulated cable service, including, but not limited to, basic cable
service, equipment recitals and installation costs.
6. This Resolution shall become effective on the date of its passage but shall
be automatueally rescinded and the transfer of control denied(1)if not accepted in writing
by TWEAK, within sixty(60) clays of passage; or (2) if any of the conditions of this
consent resolution are determined to be invalid in a final judgment by a court of
competent jurisdiction.
7. Within thirty days following the adoption of this Resolution, TWEAN
shall pay the sum of$2,504 to the Franchising Authority to reimburse the Franchising
Authority for its expenses in connection with this transfer. None of the foregoing
expenses described in this paragraph or TWE."s payment thereof shall constitute an
offset against franchise fees or any other amounts due the Franchising Authority from
TWEAN pursuant to the terms of the Franchise or otherwise.
3
5
S. The Franchising Authority is granting its consent to the transfer of control
of the Franchise in reliance on the commitment of TWI and AOL (as expressed in the
MOU), and Franchisee (as an entity substantially owned by TWI, and proposed to be
substantially owned by AOL/TW), to the principles expressed in and underlying the
MOU.
PASSED,ADOPTED AND APPROVED this day of
.2000.
ORANGE COUNTY
By:
Title: -
ATTEST:
By:
Clerk
WE CONSENT TO AND ACCEPT THE TERMS AND CONDITIONS OF THIS
RESOLUTION.
DATE OF ACCEPTANCE: IBM WARNER ENTERTAINMENT
ADVANCE NEWHOUSE PARTNERSHIP
By .
4