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Home My WebLink AboutRES-1995-041 Resolution Granting the Consent of Orange County to the Transfer of Control of Alert Cable TV of North Carolina, Inc. and its Cable Television System from Cablevision Industries Corporation to Time Warner Inc. V-16 RESOLUTION A RESOLUTION GRANTING THE CONSENT OF ORANGE COUNTY TO THE TRANSFER OF CONTROL OF ALERT CABLE TV OF NORTH CAROLINA, INC. AND ITS CABLE TELEVISION SYSTEM FROM CABLEVISION INDUSTRIES CORPORATION TO TIME WARNER INC. WHEREAS, Alert Cable TV of North Carolina, Inc. ("Alert") has the right to install, construct, own, operate and maintain a cable television system("the System")within Orange County ("the County") pursuant to a cable television franchise issued by the Town(the "Franchise"); and WHEREAS, Alert is currently controlled by Cablevision Industries Corporation("CIC") and CIC's principal shareholder,Mr. Alan Gerry, an individual residing in Liberty, New York("Principal Shareholder"); and WHEREAS, Time Warner Inc. ("TWI")and CIC and the Principal Shareholder have entered into an Agreement and Plan of Merger in which a wholly owned subsidiary of TWI will merge with and into CIC and, upon completion of the transaction, CIC will become a subsidiary of TWT, and TWI will then control Alert and the System(the "Transfer"); all as set forth in the Agreement and the Supplemental Agreement, each dated February 6, 1995; and WHEREAS, TWI, CIC and Alert have jointly submitted to the County an application on Federal Communications Commission Form 394 for consent to the Transfer and have submitted such other information concerning the Transfer as required by the Franchise and applicable law and as reasonably requested by the County (collectively the "Transfer Application"); and WHEREAS,the County has reviewed the Transfer Application, and the report from its Cable TV Consultant and has examined the legal, financial and technical qualifications of TWI, and the County is aware of the debt load already incurred by TWI and the impact additional debt from this transfer may have on Alert's ability to provide service under the existing Franchise, and WHEREAS, recognizing that TWI already controls other franchises in the County and if the Transfer is consummated TWI will be the only cable television operator in the County and therefore this Transfer may eliminate or reduce competition in the delivery of cable service in the County; and WHEREAS, TWI has publicly stated that it intends to cluster its franchises in regional concentrations in order to provide multimedia and switched business and residential telephone/ telecommunications services more efficiently and more effectively; and -1- WHEREAS, TWI has filed an application with the Utilities Commission to provide local exchange and exchange access as well as intra-LATA, interexchange telecommunications services in North Carolina; and WHEREAS, the County recognizes that it may need to purchase additional telecommunication services for municipal purposes and that Alert may desire to provide such services; and WHEREAS, Alert has recently filed, and the County has approved a cost of service rate increase which was based in part upon certain intangible assets. Therefore, Alert represents that this transfer shall not increase the value of Alert's intangible assets for basic rate calculation purposes, and future increases shall comply with FCC rate calculation rules; and WHEREAS, TWI and Alert represent that, notwithstanding this transfer of control, Alert shall be bound by the performance of Alert and CIC under the franchise prior to the transfer. NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners that Orange County hereby approves the transfer application and consents to the transfer to TWI, as described in the transfer application subject to the following conditions which shall become effective if the Transfer is consummated: 1. TWI and Alert: a)agree to cause Alert to be bound by the Cable Television Franchise Ordinance and perform all duties and obligations of the grantee thereunder; b) represent and warrant that Alert is able to provide, and shall agree to provide to the County and its subscribers all services required under said franchise subject to changes or modifications as permitted under the franchise and applicable law; c) acknowledge and agree that they were, and shall be subject to the regulatory authority of the County as set forth by the Federal Communications Commission; d) agree to cooperate fully with the County and to obtain from any governmental agency all licenses, permits and other authority necessary for lawful operation and maintenance of the cable television system; and a) agree to cause Alert to provide basic cable service to all public schools and other government facilities passed by cable to the extent consistent with existing franchise requirements; and 2. TWI and Alert agree, subject to availability on an interconnecting signal transportation network controlled by TWI and subject to available channel capacity, to interconnect the County system with other adjacent TWI systems to distribute regional programs [e.g.; LO and PEG access]; and -2- 3. To enable Alert to recover and earn a return on any financial investment related to these conditions and to allow the County time to monitor Alert [TWI's] performance, Alert and the County agree to extend the Franchise term to June 30, 1998. TWI, Alert and the County also agree, within six months following the closing of this transfer, to establish a plan for refranchising that will include a technology plan for upgrading the system, so that, to the extent feasible, the systems controlled by TWI in this region shall have substantially the same mix, quality and level of services and a time frame for completion of refranchising by June 30, 1997. 4. Alert and TWI agree that it is in the public interest to serve customers who might otherwise be served in a competitive marketplace; therefore service shall be extended as soon as reasonably possible and to the extent economically feasible to areas within the franchise territory where there are 21.4 or more residences per mile; and 5. TWI and Alert agree that within 24 months TWI will merge the system it already controls in Orange County with the System which is the subject of this Transfer and that the resulting system shall serve all of Orange County including Bingham Township in Western Orange County along the Alamance County line, subject to the limitations in paragraph 4 above. 6. It is understood that the agreement to extend the term of the franchise to June 30, 1998 does not in any way serve to prejudice any franchise renewal rights of Alert, nor require the refiling of any notices of intent to renew the instant franchise that have been filed on a timely basis consistent with the term of the existing, unextended franchise. BE IT FURTHER RESOLVED that this resolution shall become effective and continue and remain in effect immediately upon its passage, approval and adoption by the Board of Commissioners and consent by TWI and Alert. In the event TWI and Alert do not consent to this resolution prior to November 1, 1995, then the County denies consent to the transfer. BE IT FURTHER RESOLVED that this action be entered into the Minutes of the Board of Commissioners and that the County Manager is hereby authorized to notify TWI, CIC and Alert of this action in writing by furnishing these companies with an executed copy of this resolution. ADOPTED this 22nd day of August, 1995. -3- ORANGE COUNTY BY: ATTEST: i Chairman County Clerk CONSENT: ATTEST: TIME WARNER, INC. By: "°/30/95 1,9130./95 !/!.<., Pr ident ecretary ALERT CABLE TV OF NORTH ATTEST- CAROLINA, INC. By: / /95 / /95 President Secretary -4- M ORANGE COUNTY BY: ATTEST: Chairman County Clerk CONSENT: ATTEST: TMIE WARNER, INC. By: / /95 - / /95 President Secretary ALERT CABLE TV OF NORTH ATTEST: CAROLINA, INC. By: rzxecc�—�� President Secret -4-