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HomeMy WebLinkAbout1986-11-12; City Council; 8818; CABLE TV FRANCHISEI, ''a z '. c , ' + a W >o CE 2 a 8. g F: 0 1 0 2 3 0 0 a CI~OF CARLSBAD - AGEND~ILL $3 AB#= TITLE: DEPT. HD.. MTG.m CABLE TV FRANCHISE CITY AlTY DEPT.U/M CITY MGR. RECOMMENDED ACTION: If Council concurs, your action is to: Adopt Resolution No. rm / approving transfer of ownership of Carlsbad Cablevision to Daniels Cablevision, Inc. Adopt Resolution No. frfz approving hypothecation of debt of Daniels Cablevision, Inc. Introduce Ordinance No. 6 081 which modifies the franchise ter requirements to continue maintenance and replacement of equipment and continuation of five minutes free air time for the duration o the franchise. ITEM EXPLANATION: Daniels Cablevision, Inc. (DCI), a wholly-owned corporation of Bi Daniels is purchasing Carlsbad Cablevision, a limited partnership DCI owns several cable television operations in North County and this purchase brings all Daniels owned or managed cable enterpris in San Diego County into single ownership. DCI has provided mana ment services to Carlsbad Cablevision since the franchise was originally approved. DCI also purchased La Costa Cable Televisio on September 1, 1986 with Council approval. The consolidation of the properties has also necessitated consolidation of the various debts of the enterprise. Council had previously approved a hypo- from November 19, 1992 to November 19, 1996 and incorporating thecation of Carlsbad Cablevision by Mellon Bank on January 2, 19 The banks are demanding that DCI have a franchise period of at le 10 years to finance the consolidated debt. The original franchis for Carlsbad Cablevision and La Costa Cable Television was Novemb 1977 for a period of fifteen years. The franchises therefore wou expire on November 19, 1992. The 10 year requirement by the bank would extend the franchise period until 1996 or four years. DCI agreed that for the consideration of the extension that they will continue to maintain the public access studio and equipment and f any needed replacements, at the present level (this was never spe fied in our original ordinance) and will continue to provide the first five minutes of any public access programming at no cost (t code requires that this be provided for the first five years only The extension of the franchise and other changes are included in Ordinance No. bop/ . b 9 r 0 -', .I ' . 6' Page 2 of Agenda Bill No. ff/r -. The purpose of the specific term to any franchise is to provide the opportunity for the City and the operator to review the operator performance and to update the system to the current state of the art. There are no operator performance issues nor, based on past performance, is there any reason to believe that that will be an issue in 1992 or in 1996, There also do not appear to be any technical innovations that will be available as soon as 1992 that the city would wish to pursue. Additionally, the Cable Act of 1984, preempts the refranchising procedure originally envisioned by the city and in the view of many in the industry, precludes other operators from competing at the conclusion of the term unless the original franchisee has failed to perform. Failure to perform can be the basis for termination of the franchise at any time, however, so keying such failure to the term of the franchise is of little consequence. Accordingly, extension of the franchise until 1996 is considered to be of minor risk. FISCAL IMPACT: There will be no direct costs nor increased revenues due to these actions. City administrative costs associated with the action are reimbursed through the 3% franchise fee. EXHIBITS : 1. Letter from Carlsbad Cablevision to Roger Greer 2. Resolution No. dated October 28, 1986. 3. Resolution No. zrrC2. 4. Ordinance No. Lor/. w ~~ \r -. Cablevision Communicatiomnter . . q 5720 El Camin0 Real PO. Box 344 (619) 438-7723 ._. Carlsbad, CA 92008 L&>>&jq&) w-vmb.. I October 28, 1986 Mr. Roger Greer City of Carlsbad c/o City Hall 1200 Elm Street Carlsbad, CA 92008 Dear Roger, Per our discussions, please accept this letter in connection with our request before the Carlsbad City Council relating to the purchase of Carlsbad Cablevison, a Limited Partnership by Daniels Cablevision, Inc. Communications and correspondence with you over the past couple of months has covered the various facets of our activity. Daniels Cablevision, Inc. is a Delaware Corporation wholly owned by Mr. Bill Daniels. The corporation was formed in 1977, and as you know, I have been President of DCI since 1979. It is Daniels that has been managing Carlsbad Cablevision and all of our other cable properties in San Diego County. We are now bringing to fruition a plan that has been intended for some time. Daniels Cablevision, Inc. is in the process of acquiring Carlsbad Cablevision and North County Cablevision Limited Partnerships. With these purchases and the transfer of appropriate licenses, all of our systems in San Diego County will come under the single common ownership of Daniels Cablevision, Inc Additionally, the transactions will involve new mortgaging and hypothecation arrangements for these systems and DCI. It is expected that the financing arrangements in this activity wi exceed 50% of the asset value of the cable properties, and we, therefore, seek council's approval of that transaction. At this writing, final details are being worked out with the lenders desirous of providing this financing. It is safe to assume, therefore, that the lender will either be The Bank of Bost or Security Pacific National Bank. We are fortunate to have these two prestigious institutions competing for the business. determination is anticipated before November 4th or at least befo~ final council action. A final EXHIBIT I' 1" e e .. . * ' Roger Greer .~ October 28, 1986 Page 2 We have previously provided a draft ordinance to you which hopeful1 properly documents the action to be taken by the council. If changes need to be made, please let me know. I trust this adequately covers our request. We expect to be on the council agenda for November 11th and look foward to seeing you there. Thank you for your attention to this matter. Re spec t f ul1 /F Ton Pr ident DANIELS CABLEVISION, INC. TA/llh .I .. . . .* 1 2 3 4 5 6 7 8 9 10 11 12 13 3.4 15 16 l7 18 19 20 21 22 23 24 25 26 271 28 e 0 RESOLUTION NO. 8881 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD CALIFORNIA, APPROVING THE TRANSFER OF OWNERSHIP OF CARLSBA CABLEVISION TO DANIELS CABLEVISION, INC. WHEREAS, the City of Carlsbad enacted Ordinance No. 6058 on October 18, 1977 granting a cable television franchise to Daniel Properties, Incorporated which subsequently was transferred to Carlsbad Cablevision, a limited partnership,and; WHEREAS, Ordinance No. 6058 became effective on November 19, 1977, and; WHEREAS, Carlsbad Cablevision desires to transfer said franc1 to Daniels Cablevision, Inc. (DCI), a Deleware corporation, and; WHEREAS, such transfer of ownership shall be approved by the City Council; NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Carlsbad as follows: 1. The above recitations are true and correct. 2. The City hereby approves of and consents to the transfei ' and assignment of the franchise and system by Carlsbad Cablevis: ,/ to Daniels Cablevision, Inc. 1 I I ! PASSED, APPROVED AND ADOPTED at a regular meeting of the Carlsbad City Council held on the 18th day of November, 1986 1 the following votes, to wit: AYES: Council Members Lewis, Kulchin, Chick and Pettine NOES: None ABSENT: Council Member Casler CLAUDE A. LEWIS, Mayor Pro-Tern d?&& i ALETHA L. RLEk!%T*#rk .. ’. . .. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 0 RESOLUTION 8882 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING THE MORTGAGING AND HYPOTHECATION OF THE PROPERTY OF DANIELS CABLEVISION, INC. BY THE SECURITY PACIFIC NATIONAL BANK WHEREAS, Section 5.28.140(d) of the Carlsbad Municipal code requires that a mortage or hypothecation of more than fifty percent (50%) of the market value of the property of the franchise be approved by the City Council; and, WHEREAS, Daniels Cablevision, Inc. wishes to enter into certain financial agreements with the Security Pacific National Bank for the mortage and hypothecation which value exceeds fifty percent (50%) of the market value of the propert NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Carlsbad as follows: 1. The above recitations are true and correct. 2. The City hereby approves the mortgage and hypothecatj of Daniels Cablevision, Inc. by the Security Pacific National I Bank. 19 I I PASSED APPROVED AND ADOPTED at a regular meeting of the 21 22 23 24 25 27 26 28 ~ by the following vote, to wit: AYES: Council Members Lewis, Kulchin, Chick and Pettine NOES : None ABSENT : Council Member Casler I CLAUDE A. LEWIS, Mayor Pr ALETHA L. I I I, 1 $9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 19 18 19 20 21 22 23 24 25 26 27 28 0 e ORDINANCE NO. 6081 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA AMENDING TITLE 5 OF THE CARLSBAD MUNICIPAL CODE BY AMENDING SECTION 5.28.030(a)(8) TO REQUIRE THE CABLE FRANCHISEE TO MAINTAIN AND REPLACE EQUIPMENT AND FACILITIES FOR THE TERM OF THE FRANCHISE AND SECTION 5.28.050(a) TO EXTEND THE TERM OF THE FRANCHISE TO NCNEMBER 199 1996. The City Council of the City of Carlsbad, Carlsbad does ordain as follows: section 1: That Title 5, Chapter 5.28, Section 5.28.030 of the (Carlsbad Municipal Code is amended by the amendment of Subsection (a) and (8) to read as follows: (8) When the cable system has reached three thousand five hundred subscribers, the grantee shall maintain a studio and a headend that will be capable of producing live or recorded programming to be cablecast in color and/or black and white for distribution by cable throughout the city. The grantee shall make available equipment and assistance for the production of prgramming at its studio at lease rates for use by access channel users. Additional equipment shall also be made available which will permit access users and grantee to produce programming at locations other than the headend studio. equipment for the duration of the franchise. For public access channel users described in subsection (7) above, grantee shall provide free use of the production facilities and production assistance for the first five minutes of air time for the period of the franchise. Any applicant to operate a system under the provisions of this chapter shall demonstrate in its application 'now it plans to provide and make available the above facilities and services. Grantee shall maintain and/or replace such studio facilities and In the event there are two or more systems in the city and either or both have reached three thousand five hundred subscribers, the grantee may petition the city council and request a modification of this requirement. Th intent and purpose of such request would be to preclude unnecessarily duplicating studio facilities in the city. Grantee shall present the city wi a plan for a suitable equivalent to the studio requirement. Suitable equival to the studio requirement will be determined by the city council which shall a condition of approval of any modification pursuant to this subsection. I Section 2: That Title 5, Chapter 5.28, Section 5.28.050 of the Carlsbad Municipal Code is amended by the amendment of Subsection (a) to read as follows: (a) Th: franchise granted by the Council under this Chapter shall for a term of nineceen years from the effective date of the franchise ordinan Five year extensions may be granted as herein provided. .I I .. u .. .I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 @ e EFFECTIVE DATE; This ordinance shall be effective thirty days aft€ its adoption; and the City Clerk shall certify to the adoption of this ordin: and cause it to be published at least once in the Carlsbad Journal within fifteen days after its adoption. INTRODUCED AND FIRST READ at a meeting of the Carlsbad City Council held on the 18th day of November , 1986 and thereafter. PASSED AND ADOPTED at a meeting of the City Council held on the 2nd day of December , 1986 by the following vote, to wit: AYES: Council Members Lewis, Kulchin, Chick and Pettine NOES: &ne ABSENT: Council Member Casler CLAmE A. LEWIS, Mayor Pro-Tern ATTEST: ALETHA L. RAUTENKRANZ, City Clerk 1 (SEAL) .A - /cr a c p fW t+* L''% .- 0 5.28.030 e e .. * -,* .- . 5.28.030 Cable television service. (a) The cable tele- vision system permitted to be installed and operated hereunder shall: Be operationally capable of relaying to subscrib- er terminals those television and radio broadcast signals for the carriage of which the grantee is now or hereafter autho- rized by the Federal Communications Commission; (2) Be constructed with the capacity for two-way non- voice return communication. Any applicant to operate a system may include a provision for immediate implementation of the two-way capability. Such applicant shall include a demonstra- tion of a plan to implement this capability in the future. The grantee shall provide nonvoice return communication when the city council so directs and the same is economically feas- ible; ceives in color; (1) (3) (4) Have a minimum capacity of twenty channels; (5) Provide at least one channel without charge for (6) Provide at least one channel without charge for (7) Provide at least one channel without charge for Distribute color television signals which it re- local government access; educational access ; use as a public access channel to be scheduled by the grantee within existing or future Federal Communications Commission regulations pertaining to the operation of public-access channels ; When the cable system has reached three thousand five hundred subscribers, the grantee shall maintain a studio and a headend that will be capable of producing live or re- corded programming to be cablecast in color and/or black and white for distribution by cable throughout the city. The grantee shall make available equipment and assistance for the production of programming at its studio at lease rates for use by access channel users. Additional equipment shall also be made available which will permit access users and grantee to produce programming at locations other than the headend studio. For public access channel users described in subsec- tion (7) above, grantee shall provide free use of the produc- tion facilities and production assistance for the first five minutes of air time for a period of five vears after service is. provisions of this chapter shall demonstrate in its applica- tion how it plans to provide and make available the above LB) Any applicant to operate a system under the facilities and services. In the event there are two or more systems in the city and either or both have reached three thousand five hundred subscribers, the grantee may petition the city council and request a modification of this requirement. The intent and purpose of such request would be to preclude unnecessarily duplicating studio facilities in the city. Grantee shall EXHIBIT I' 5 I' 105-4 (Carlsbad 1/15/78) 5.28.030 a 0 I. *. 1 a- present the city with a plan for a suitable equivalent to the studio requirement. ment will be determined by the city council which shall be a condition of approval of any modification pursuant to this subsection. stalled and operated hereunder may also engage in the busi- ness of: received through television broadcast signals; tape programs not received through broadcast television signals, whether or not encoded or processed to permit reception by only selected receivers or subscribers; digital, voice and audiovisual. cost, and as designated by the council, when the system passes within five hundred feet of the lot line or boundary of any of the following facilities: city; for public purposes and not for residential use, fire and police stations excepted. (d) all other cable systems in San Diego County, or elsewhere, as follows: (1) When the system has reached a level of three thousand five hundred subscribers, grantee shall interconnect said system with all other systems within the city. Said interconnection shall provide one channel, one direction, headend-to-headend communication, applying the technical stan- dards contained in Parts 76 or 78 of the Federal Communica- tions Commission Cable Television Regulations. Nothing in this section shall serve to prohibit grantee from implementing the interconnection of the systems above described prior to reaching a level of three thousand five hundred subscribers. (2) Interconnection with other systems shall occur when the council directs and may be done by direct cable con- nection, microwave link, satellite, or other appropriate method. access channels that are determined by grantee and city to be technically and economically feasible. connect, the grantee shall immediately initiate negotiations with the other affected system or systems in order that costs may be shared equally for both construction and operation of the interconnection link. City may grant reasonable extensions of time to interconnect or rescind its request to interconnect upon peti- tion by the grantee to the council. The council shall grant said request if it finds that the grantee has renegotiated in Suitable equivalents to the studio require- (.b) The cable television system permitted to be in- (1) (2) Transmitting television pictures, film and video- Transmitting original cablecast programming not (3) Transmitting and receiving all other signals, The grantee shall provide one connection without (c) (1) Public schools and community colleges within the (2) Buildings owned and controlled by the city, used The grantee shall interconnect the system with any or Interconnection may be required for origination and (3) Upon receiving the directive of city to inter- (4) 105-5 (Carlsbad 1/15/78) I I) 0 5.28.050 ,. '. 4 J* (c) No acceptance of any payment shall be construed as a release or as an accord and satisfaction of any claim the city may have for further or additional sums payable under this chapter or for the performance of any other obligation hereunder. franchise fee rate and the revenues on which such fee is based so as to increase the franchise payments in the event that the current Federal Communications Commission limitations as to the franchise fee rate and the revenues on which such fee may be levied are eliminated or changed as a result of superseding regulations or court action. Any change in franchise fee rate or the revenues on which such fee is based shall be accomplishec by amendment to this chapter and to any ordinance granting a franchise hereunder, provided that such amendments shall be preceded by a public hearing affording due process therein. (Ord. 6057 S5, 1977: ord. 6055 sl(part1, 1976). (d) The city reserves the right to increase both the 5.28.050 Franchise term--Duration, extension, termina- - tion. (a) The franchise granted by the council under this chapter shall be for a term of fifteen vea rs from the date of its acceptance by the grantee. Five-year extensions may be granted as hereinafter provided. to the provisions of this chapter in the event of the wilful failure, refusal or neglect by grantee to do, or comply with, any material requirement or limitation contained in this chapte or any material rule or regulation of the council or city manager adopted pursuant to this chapter. grantee do, or comply with, any such requirement, limitation, term, condition, rule or regulation. If the failure, refusal or neglect of the grantee continues for a period of thirty days following such written demand, the city manager will place his request for termination of the franchise on the agenda of the next regular council meeting. The city manager shall cause to be served upon such grantee, at least ten days prior to the date of such council meeting, a written notice of his intent to request such termination and the time and place of the meeting, notice of which shall be published by the city clerk, at least once ten days prior to the meeting, in a news- paper of general circulation within the city. manager and shall hear any persons interested therein, and shal determine, in its discretion, whether or not any failure, re- fusal or neglect by the grantee was with just cause. (e) If the council determines that such failure, refusal or neglect by the grantee was with just cause, the council may direct the grantee to comply within such time and manner and up such terms and conditions as are reasonable. (b) The city may terminate any franchise granted pursuant (c) The city manager may make written demand that the (d) The council shall consider the request of the city 105-8 (Carlsbad 1/15/78) .; fY ,- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 E5 16 17 18 19 26 21 22 23 24 25 26 27 28 0 ORDINANCE NO. 6081 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA AMENDING TITLE 5 OF THE CARLSBAD MUNICIPAL CODE BY AMENDING SECTION 5.28.030(a)(8) TO REQUIRE THE CABLE FRANCHISEE TO MAINTAIN AND REPLACE EQUIPMENT AND FACILITIES FOR THE TERM OF THE FRANCHISE AND SECTION 5.28.050(a) TO EXTEND THE TERM OF THE FRANCHISE TO NOVEMBER 19, 1996. The City Council of the City of Carlsbad, Carlsbad does ordain as follows: Section 1: That Title 5, Chapter 5.28, Section 5.28.030 of the [Carlsbad Municipal Code is amended by the amendment of Subsection (a) and (8) to read as follows: (8) When the cable system has reached three thousand five hundred subscribers, the grantee shall maintain a studio and a headend that will be capable of producing live or recorded programming to be cablecast in color and/or black and white for distribution by cable throughout the city. The grantee shall make available equipment and assistance for the production of prgramming at its studio at lease rates for use by access channel users. Additional equipment shall also be made available which will permit access users and grantee to produce programming at locations other than the headend studio. htee sh-r r-rh st- described in subsection (7) above, grantee shall provide free use of the production facilities and production assistance for the first five minutes of air time for the Deriod of the fr- Any applicant to operate a system under the provisions of this chapter shall demonstrate in its application how it plans to provide and make available the above facilities and services. ... t for the durat ion of the franchise. For public access channel users In the event there are two or more systems in the city and either or both have reached three thousand five hundred subscribers, the grantee may petition the city council and request a modification of this requirement. Thc intent and purpose of such request would be to preclude unnecessarily duplicating studio facilities in the city. Grantee shall present the city wit .a plan for a suitable equivalent to the studio requirement. Suitable equivalc to the studio requirement will be determined by the city council which shall t a condition of approval of any modification pursuant to this subsection. I Section 2: That Title 5, Chapter 5.28, Section 5.28.050 of the Carlsbad Municipal Code is amended by the amendment of Subsection (a) to read as follows: (a) The franchise granted by the Council under this Chapter shall b for a term of nineteen years from the effective date of the franchise ordinanc Five year extensions may be granted as herein provided. EXHIBIT I' 5" 4‘ J ..” ‘e- W W c I1 TELEPH (61 9) 438 1200 ELM AVENUE CARLSEAD, CA 92008-1989 Office of the City Clerk Cltp of darI8’bab December 8, 1986 Daniels Cablevision, Inc. P.O. Box 344 Carlsbad, CA 92008 Enclosed €or your records, please find a copy of the Ordinance No. 6081 f o 1 lowing Carlsbad City Council on , adopted by the December 2, 1986 da LEE RAUTENKRANZ fly City Clerk LR: lw Enclsoure (1) -..