Loading...
HomeMy WebLinkAboutUtilities 2009-01-27 Item 3A - Ordinance - Comcast Franchise Agreement Amendment for Time Extension City of Tukvvila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM DATE: Mayor Haggerton Utilities Committee Public Works Direct~ January 21, 2009 TO: FROM: SUBJECT: Comcast Franchise Aqreement Amend Ordinance No. 1688 for a Time Extension ISSUE Approve Comcast Franchise Extension and amend Ordinance No. 1688. BACKGROUND Comcast, formerly Telecommunications Inc. of Seattle was granted a 15-year non-exclusive Franchise by the City for the construction, operation, and maintenance of a cable system within the City by Ordinance No. 1688. Unless the timeline on the franchise agreement is extended, the franchise agreement will expire on February 1, 2009. DISCUSSION Throughout the Franchise term, Comcast has been a good business partner and has maintained a professional relationship with the City. Through the Franchise Agreement, the City received significant benefits; including installation of the City's institutional fiber network, free cable television services at City facilities and an upgraded cable system infrastructure to accommodate City Channel 21. Comcast and the City have begun preliminary discussions for a Franchise renewal. Due to technological changes and mandates by the Federal Communications Commission (FCC), the current Franchise Agreement needs to be significantly changed. Staff needs more time to conduct research, evaluate Comcast's proposal and complete negotiations. A one-year extension on the existing Franchise term to February 1, 2010 will allow staff and Comcast to complete all tasks associated with the franchise renewal. RECOMMENDATION The Council is being asked to amend Ordinance 1688 to extend the expiration date to February 1, 2010 and consider this item at the February 2, 2009 Regular Meeting (due to time constraints ). Attachments: Ordinance No. 1688 Draft Ordinance P:\PROJECTS\Franehise\Infomation Memo-Comeast Franchise Amendment - Final.doc _-..-.......;$~~~~:$~ -"4":,,,'lILA. 1-1/'" ",' ';)T'" ...............'-</ Ii .<<'" .---:;..t") ...... <.I'-sc If ff /j / D:? "'\i%. ~..J:~( \' lGlO t~\ -.- jd~ '^ 01..... '\ ' ,/ <:/j ,,-li...:............................;f' l~~).,!~_~~~:::~~ WHEREAS, the City of Tukwila is authorized to grant nonexclusive franchises for the operation of cable syslems within the City rights-of-way; and City of Tukwila Washington Ordinance No. /10 g g AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, GRANTING A NON-EXCLUSIVE FRANCHISE TO TELECOMMUNICATIONS, INC. OF SEATI1..E FOR THE CONSTRUCTION, OPERATION, AND MAINTENANCE OF A CABLE SYSTEM '\^/1THINTHE CITY LIMITS, PROVIDING FOR SEVERABILITY, ~ND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, Telecommunications, Incorporated of Seattle has applied for such a franchise to construct, operate, and maintain a cable system within the jurisdictional bOll.'1daries of Tukwila; and WHEREAS, the City has conducted a Community Needs Assessment to determine how such a franchise can best address the existing cable services needs for public access, education, and government within the City; and WHEREAS, a public hearing has been conducted in accordance with the Master Cable Ordinance (Section 4), during which any and all interested parties were allowed to provide statements regarding the grant of the franchise rights contained herein; and WHEREAS, the terms, conditions, and obligations provided herein are necessary to protect the safety and welfare of the citizens of Tukwila and provide for the cable services needs of the community; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY ORDAINS AS FOLLOWS: Section 1: Purpose. This Ordinance, shall establish a non-exclusive Franchise, which constitutes an agreement between the City of Tukwila (hereinafter the "City") and Tel Seattle, Inc. (hereinafter the "Operator':). The Operator agrees to construct, maintain, and operate a cable television system for the distribution of television and other electronic signals pursuant to the terms of this Franchise. The City agrees to grant the Operator all necessary rights and privileges to use public rights of way necessary for a cable television system. This agreement shall, as of its effective date, supersede and replace all existing franchises previously granted by the City of Tukwila to the Operator or any of its predecessors, subsidiaries or affiliated companies, and shall incorporate all provisions of Ordinance #/68L the Master Ordinance, which is hereby made a part of this ordinance by this reference. Section 2: Length of Franchise. The length of this Franchise shall be for a term of fifteen (15) years from ~/9' ~ through midnight ~I/ I II,..:? () () 9 . .; Section 3: Service Area. The Operator's service area shall be the entire incorporated area of the City of Tukwila, in its present incorporated form or in any later reorganized, consolidated, enlarged, or re-incorporated form. .s."~tl0n 4: Franchise Fee. The Operator shall pay to the City quarterly, on or before the thirtieth (30th) day of each January, April, July and October, a sum equal to five percent (5%) or greater of gross revenues, for the preceding three calendar months, as defined in Ordinance Ifp g 7 . Revenues that are derived as a portion of a national or regional service shall be computed on a per subscriber basis if such determination cannot be achieved by other means. The City may raise the franchise fee, if so permitted by Federal and State law. Prior to implementation of any increase in franchise fees the Operator may request a public hearing by the City Council to discuss said increases. Following such a hearing the City Council may require the implementation of such increase in accordance with the provisions of this Ordinance. (a) Late Pavment. Any quarterly franchise fee not paid by the Operator within thirty (30) days of the end of a quarter shall bear interest at the rate of hvelve percent (12%), per annum or whatever maximum amount is allowed under State law, whichever is greater, from the due date until paid. (b) Financial Reports. Each franchise fee payment shall be accompanied by a financial report on a form provided by the City showing the basis for the Operator's computation and separately indicating revenues received by the Operator within the City from basic service, pay TV service, other applicable sources of revenue, and such other information directly related to confirming the amount of the Operator's gross revenues as may be reasonably required by the City. (c) Audit by City. The City shall have the right, upon reasonable notice or no less than two (2) working days, to inspect the books and records of the Operator during normal business hours, for the purpose of ascertaining the actual gross revenues collected by the Operator. In the event that such audit discloses a discrepancy of more than ten percent (10%) behveen the financial report submitted by the Operator with a quarterly payment and the actual gross revenues collected by the Operator, the Operator agrees to pay to the City the costs of such audit. In the event that such audit results in a determination that additional franchise fees are due the City, the Operator further agrees to pay any additional franchise fees plus interest as required for late payment on such additional franchise fees, computed from the date on which such additional franchise fees were due and payable. (d) Non-waiver. Acceptance of any franchise fee payment by the City shall not be construed as an agreement by the City that the franchise fee paid is in fact the correct amount, nor shall acceptance of payment by the City be construed as a release or waiver of any claim the City may have for further or additional sums payable under the provisions of this Ordinance. (e) Taxes. Nothing in this Section shall limit the Operator's obligation to pay applicable local, State, or Federal taxes. Section 5: Future Provisions The City and the Operator acknowledge that the City should be provided with a cable ./ system that has at least the same general capabilities and capacity as those provided other cities. served by the Operator in the King-Pierce-Snohomish County area of the State of Washington. The City may, at its discretion, require that the Operator provide such interactive services as addressability, security, computer interaction, banking, shopping, voice and data transmission, High Definition Television (HDTV), fiber optic and other such features, as well as upgrades capable of carrying at least fifty-four (54) channels, within twenty-four (24) months of any of the following occurrences: Provision by the Operator of any of the same services identified above to a preponderance of the system; . (a) Within the CitY of Seattle system; or, (b) Within any community adjacent to Tukwila; or, (c) In forty percent (40%) of the municipalities in the King, Pierce, and Snohomish Counties. Notvvithstanding the above, the Operator shall complete the upgrade to fifty-four (54) channels, provide the facilities in Section 8 Regional Public Access, and have the capability of implementing these enhanced services within forty-eight (48) months from the effective date of this franchise. Prior to implementation of any such service, the Operator may request a public hearing by the City Council, to discuss the benefits of said features to the citizens of the City. Upon a finding by the City Council that such features are reasonably requlred to meet community needs, taking into consideration the expense of providing such services and the potential costs to st:bscribers, the City Counc.:.nay require the implementation of:'h features in accord with the prvvisions of this agreement. If the Council deem it necessary, it may, at its own option by a majority vote, extend the time requirements established in this section. Section 6: Access Channels Upon completion of the upgrade conditions the City shall be provided with thr~ .... c.~a:'r:.els,.~e of which shall .be capabl~ of b,roa~casting live iron: .City Hall. The Ci.ty may InitIallY snare a common public access cnannel v;lth other cC:::'.::'.'..:.mties, h0'Luever.. the Clty InilY elect, at its option, to provide programming over an individual public access c.~annel for the City's sole use. Additional channels over and above the three (3) designated chap.nels shall be made available for Public access, Education and Government (PEG) or City purposes when any of the three (3) designated channels is in use for access purposes with programming during fifty percent (50%) of the hours between 10:00 a.m. and 10:00 p.m., during any consecutive ten (10) week period. The Operator shall, within six (6) months following a request by the City, subject to the restrictions above, provide another designated access channel for this purpose. The Operator shall continue to provide additional channels under the same conditions described above. Programming on additional channels shall be distinct and non-repetitive of the previous channel. If additional channels are designated for community use, but, after one year, such channe1(s) are not utilized at least twenty-five percent (25%) of the hours between 10:00 a.m. and 10:00 p.m. with programming, the access users will, within six (6) months of receiving written notice from the Operator, group their programming into one contiguous block of time of their choosing. The remaining broadcast time on such channel shall then revert to the Operator for its unrestricted use within the terms and conditions of this ordinance. Contributions to PEG access will not be considered in lieu of a franchise fee or other obligations to the City. Section 7: Government Access Equipment The Operator shall provide, maintain, and install the necessary equipment for local / government cablecasting within twelve (12) months of a request of the City, unless extended by mutual written agreement. Such equipment shall not be less in quantity nor equivalent quality than those listed in Appendix A, and all pieces shall be in new or like new condition. Section 8: Regional Public Access The Operator, upon completion of the upgrade or by the expiration of the forty-eight (48) month period as prescribed in Section 5 Future Provisions, shall provide, maintain and operate a / regional public access studio to serve South King County at a location mutually agreeable to all V parties. Such facilities shall be subject to approval by the City as suitable. Such approval shall not be unreasonably withheld. Section 9: Institutional Networks N Upon completion of the cable system upgrade the Operator's system shall have the capability Vof bi-directional Institutional Networks for educational and public safety communications. An entity desiring activation of such feature(s) will provide the City Council demonstrated need of such use. Prior to implementatiqn of any such service the Operator may request a public hearing by the City Council, to discuss the benefits of said features to the citizens of the City. Upon a finding by the City Council that such features are reasonably required to meet community needs, taking into consideration the expense of providing such services and the potential costs to subscribers, the Oty Council may require the implementation of such features in accord with the provisions of this agreement. Section 10: Emergency Override Upon completion of the system upgrade subject to the conditions of Section FS, Future Provisions the Operator shall make provisions for an emergency alert system. The Operator shall establish a process which will provide a character generated scroll and will make its best effort to furnish a voice override notifying viewers and listeners of an emergency. Subject to Federal and State laws and regional planning authorities, control of these emergency override facilities shall be the responsibility of the City. The City shall hold Operator, its agents, employees, officers, and assigns harmless from any claims arising out of the emergency use of its transmitting facilities by the City. The City, at its option may elect to shar"e this service with adjoining communities. Section 11: Emergency Power Operator shall provide a standby power system to automaticaliy activate equipment at the headend and hubs,"if applicable, in event of a primary electrical failure. Section 12: Coverage. The City shall be provided with cable television service in the entire Franchise area. If such a condition does not now exist the Operator shall complete such wiring and be in a position to offer cable reception to all residents within twelve (12) months from the grant of the Franchise. Areas subsequently annexed shall be provided with cable availability within twelve (12) months, subject to the terms in Section F14 Extraordinary Installation. Section 13: Cable Availability Cable service shall not be denied to any group of potential residential cable subscribers because of the income of the residents of the local area in which such group resides. Section 14: Extraordinary Installation All residents requesting cable service and living within one hundred fifty (150) feet of existing cable distribution lines shall have the cable installed at the prevailing published installation rate. In the event a request is made f6r service and the residence is more than one hundred fifty (150) feet from an existing cable distribution line, such installation shall be completed on a time and material cost basis for that portion of the service line extending beyond one hundred fifty (150) feet. Section 15: Distribution Line Extension Charges Cable Service shall be available to all residents within the City provided there are at least thirty five (35) dwelling units per street mile. In the event a request is made for service by a resident(s) living in an area not meeting such criteria, the Operator. shall enter into a contractual agreement with the resident(s) requesting service wherein the Operator shall be reimbursed for its construction costs. Whenever any subsequent subscriber who did not contribute to the original cost of the extension connects to the extended distribution service line, that subscriber shall pay his/her pro rata share directly to the Operator prior to obtaining cable service. The Operator shall then promptly tender such payment to the original subscriber so long as the agreement remains in force. Reimbursement shall be calculated on a front foot basis as a percentage of the total cost of the service line extension. Reimbursements shall be made to the original subscriber for a period of up to five (5) years or to the point when the Operator has recovered its incremental costs to construct the distribution service line. The Operator may, at its option, record its contractual agreement with the original subscriber in the office of the King County Recorder prior to the time any subsequent subscriber connects to the extended service line. Section 16: Public Buildings. The Operator shall provide without charge for installation or monthly rate, basic service, one outlet, and converter, if needed, at such public buildings and schools as specified in Appendix "B" and "CO as well as other such buildings that may be constructed during the period of the Franchise that are passed by cable and within one hundred fifty (150) feet of the trunk or distribution system. Section 17: Penalties. The City shall notify the Operator in writing stating the nature of a perceived deficiency in the operation of the cable system and setting forth the time the Operator will be allowed to rectify such alleged improper condition. The Operator may request an extension of time if construction is suspended or delayed by the City, or where unusual weather, acts of God (e.g. earthquakes, floods, etc.), extraordinary acts of third parties, or other circumstances which are reasonably beyond the control of the Operator, delay progress. The Operator shall nol, .hrough its own actions or inaction.. substantially contribute to the delay and the amount of time allowed shall be reasonable as determined by the City. The extension of time in any case should not be less than the extent of the actual delay experienced by the Operator in such cases where the City finds that the delay was beyond the control of the Operator. Failure of the Operator to correct these deficiencies; except in those circumstances cited above, . . .. __.. ,," 1 . L.....1 ~ ,,~ ~.'. - '- 1..J 't.... rl ~ may result In tne Llry calling a neanng ,0 ue,ermme It pename:; s"oU~c.:. ue lmpose~, upon t!'.€' Operator or if a material violation of the franchise has occurred. If, following such hearing, it is determined by the City Council that the Operator has failed to comply with the schedule set forth in the Franchise, monetary penalties shall be imposed as set forth below for each day beyond thirty (30) days that the Operator has not fulfilled the requirement(s) for: a. Upgrade improvements and regional PEG facilities required by Section 5 Future Provisions and Section 8 Regional Public Access, $200.00 per day; b. Equipment and channels committed by the Operator to the City for access purposes as well as I-Net activation. Sections 6 Access Channels: 7 Government Access Eauipment and 2 Institutional Networks, $200.00 per day; or, c. Coverage of annexed areas where such is not completed as required by Section 1? CoverageJ $200.00 per day. Any late payment of these penalties shall be subject to the provisions of Section 4 Franchise Fee. subsection (a) Late Payment, contained herein. Monetary penalties may be assessed retroactive to the date that notification was provided to the Operator in such cases where the Operator has been non-responsive in correcting the situation or in the case of flagrant violations. Termination of the Franchise pursuant to the procedure outlined in Section 32 Removal & Abandonment of Property of Franchisee of Ordinance NoJtJ.1 may be imposed for any violation of one or more of the above listed items. The Operator and the City agree that any of the above described violations, unless excused, or not corrected by the Operator within the time allotted, shall constitute failure to comply with a material provision of the Franchise. No penalty, bond, forfeiture, or termination shall be imposed for delays where such delays are the result of causes beyond the reasonable control and/or without substantial fault or negligence of the Operator, as reasonably determined by the City. Section 18: Independent Contractors. This agreement shall not be construed to provide that the Operator is the agent or legal representative of the City for any purpose whatsoever. The Operator is not granted any express or implied right or authority to assume or create any obligation or responsibility on behalf of or in the name of the City or to bind the City in any manner or thing whatsoever. Section 19: Entire Agreement. This agreement, including the Master Cable Ordinance and exhibits that are attached hereto and incorporated herein by reference represents all of the covenants; promises, agreements, and conditions, both oral and written, between the parties. However, the City reserves the right to waive any of these sections without affecting the applicability of other sections not so specifically waived. Waiver of any Franchise requirement or Ordinance Sections by the City shall be in writing in order to be effective. Section 20: Successors or Assigns. This Franchise Agreement, including all addenda, and the City's Master Cable Ordinance shall be binding on the Operator, its heirs, successors, and assigns. Section 21: Acceptance. This grant of Franchise and its terms and provisions shall be accepted by the Operator by the submission of a written instrument, executed and sworn to by a corporate officer of the Operator before a Notary Public, and filed with the City Clerk within sixty (60) days after the effective date of this Franchise. Such instrument shall evidence the unconditional acceptance of this Franchise and the promise to comply with and abide by all its provisiOns, terms and conditions. Se:ti(\n 22: Effective Date. This Ordinance shall take effect five (5) days from the date of pubiication, rollowing adoption by City Council. The Franchise granted by this Ordinance shall not become effective until the . Operator files written acceptance thereof. Section 23: Severability. ~~r'h Cl3rti{"\n C::l1hc:prt-lnn or other norHon of thi:; Ordinance shall bp- severable and the .........._.. .,....._............1 ...------...--. - r .- -- - - - invalidity or any section, subsection, or other portion shall not invalidate the remainder. Section 24: Notice. Written notices shall be deemed to have been duly served if delivered in person to the individual or entity for whom it was intended, or if delivered at or sent by registered or certified United States mail to the last business address known to the party who gives the notice. All notices and requests shall be addressed to the City of Tukwila and the Operator as rollows: CITY: City Clerk City or Tukwila 6200 Southcenter Blvd. Tukwila, W A 98188 OPERATOR: TCl Seattle, Inc. 15241 Pacific Hwy. S. Seattle, W A 98188 ADDITIONAL NOTICE: TCI or Was rung ton, Inc. Attn: Legal Department P.O. Box 5630 Terminal Annex Denver, CO 80217 PASSED. BY THE CI~ COU~L OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereor this J f day or ~ ~( ,1994. , 0 iJ 'J '\'vL ~cl. ~v~(/L, W. Rants, Mayor ATTEST / AUTHENTICATED: ~L J ne E. Cantu, City Clerk APPROVED AS TO FORl'v1: BY~~/~ ./! Ch__ Office or the City Attorney FILED WITH THE CITY CLERK: / / ~ / '1 Y PASSED BY THE CITY COUNCIL: / P. 'I/? ~ (..5i.~ 0/.......) PUBLISHED: /~. EFFECTIVE DATE: ORDINANCE NO.: / ~ g Z franchis.doc o ..._,,-e: ORDINA1~CE NO: A1~ ORDINA1.~CE OF THE CITY COlJ"'NCIL OF THE CITY OF TUKWILA, WASHINGTON, GRk~TL.~G A CABLE TELEVISION SYSTEM FR.AJ.~CHISE EXTENSION TO COMCAST OF WASHINGTON IV, INCORPORATED; PROVIDING FOR SEVERABILITY; Ai"ll) ESTABLISHING A1~ EFFECTIVE DATE. WHEREAS, on February 2, 1994, the City of Tukwila (the "City") granted Telecommunications Incorporated of Seattle ("TCI"), a fifteen (15) year non-exclusive Franchise (Ordinance No. 1688) to construct, operate, a maintain a cable system within the City rights-of-way; and; WHEREAS, the legal name of the cable system operator changed from TCI to Comcast of Washington N, Incorporated ("Comcast"); and; W1IEREAS, the City has determined the need for a one-year time extension to evaluate Comcast's franchise renewal proposal, and complete negotiations; and; WHEREAS, neither party waives any right which it enjoys under law as a result of agreeing to this extension; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, DO ORDAIN AS FOLLOWS: Section 1. The City Council hereby grants to Comcast of Washington N, Inc. a Franchise extension to construct, operate, and maintain a cable system within the City limits. The terms and conditions of said Franchise extension shall be set forth in Ordinance No. 1688, as amended. Said Franchise extension shall commence on the effective date of this Ordinance and expire on February 2,2010. Section 2: Len2th of Franchise The length ofthe Franchise shall be for a term of sixteen (16) years from February 2, 1994 through midnight February 1,2010. If any section, subsection, paragraph, sentence, clause or phrase of this ordinance or its application to any person or situation should be held to be invalid or unconstitutional for any reason by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of the remaining portions of this ordinance or its application to any other person or situation. Section 3. Effective Date. This ordinance or a summary thereof shall be published in the official newspaper of the City, and shall take effect and be in full force five days after passage and publication as provided by law. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of ' 2009. ATTEST/AUTHENTICATED: Jim Haggerton, Mayor City Clerk Office of the City Attorney Filed with the City Clerk: Passed by the City Council: Published: Effective Date: Ordinance Number: APPROVED AS TO FORiV1 BY: