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CC - Item 2A - Res. 98-54 RESOLUTION NO. 98-54 A RESOLUTION OF THE CITY COUNCIL OF THE CI'T'Y OF ROSEMEAD DENYING WITHOUT PREJUDICE THE APPLICATION OF PAUL G. ALLEN AND CHARTER COMMUNICATIONS ENTERTAINMENT H, LLP AND RELATED COMPANIES TO ASSIGN AND TRANSFER CONTROL OF TIE NON-EXCLUSIVE CABLE -TELEVISION FRANCHISE IN THE CITY OF ROSEMEAD TO PAUL G. ALLEN WHEREAS, the City of Rosemead ("CITY") granted to the predecessors of Charter Communications Entertainment H, L.P. a franchise as set torah in the franchise agreement dated June 27, 1985, to own and operate a cable television system in the City of Rosemead; and WHEREAS, on July 29, 1998 Charter entered into a Purchase Agreement (the "Agreement") with Paul G. Allen ("Buyer"); and WHEREAS, the Agreement provides for the sale of stock, transfer of control and the restructuring of Charter; and WHEREAS, Charter and Buyer ("Applicants") filed an FCC Form 394 Application for Franchise Authority Consent to Assignment or Transfer of Control of Cable Television Franchise with CITY on or about August 18, 1998; and WHEREAS, the CITY has duly conducted a thorough review and investigation into the legal, technical and financial qualifications of the Buyer to own and operate the cable television system in light of the above-referenced FCC Form 394; and WHEREAS, the CITY has reviewed the FCC Form 394, all supplemental information submitted in relation thereto, and the various Staff reports and related documents; and WHEREAS, the City has determined that it the Buyer does not have the requisite technical qualifications to own and operate the cable television system; and WHEREAS, the CITY has determined that it would not be in the public interest to approve the Transfer at this point in time and has determined that it would be in the public interest to disapprove the Transfer without prejudice subject to future ar rt n y erq CI�uK i�• tiG�EN NOW, T1iEREFORE, BE IT RESOLVED, that: DEC 151998 SECTION 1. ITEM No. L- A 2' 1. The recitals above are hereby declared to be true, r c an, correct. SENT BY' tl'ALLIN KRESS REISMAN ; 12- 9-98 ; 4:32PM ; 13101 450-0506- 818 307 9218:# 5/ 6 2. The transfer of control of the Franchise and Franchisee from Charter to the Buyer, as described in the FCC Farm, is hereby disapproved for the following reasons: (a) The Applicants have failed to timely provide all necessary additional information requested by the City relating to the Transfer's potential impact upon existing and future rates and the legal, technical and financial qualifications of the Buyer to own and operate the cable television system serving the City (the "System"). (b) The Buyer hes failed to demonstrate that it is a technically qualified applicant for the following reasons: (1) The burden of proof is upon the Buyer to demonstrate its legal, technical, and financial qualifications to assume control of the Franchise and the Franchisee. (2) The Buyer possesses no track record in the operation of cable television systems or the provision of cable television services. The Applicants have failed to present any affirmative evidence demonstrating the Buyer's technical and experience qualifications to own and operate cable systems. Although the Buyer may possess significant experience and expertise in the development of computer software and related products, as well as the operation of professional sports teams, no evidence was presented by the Applicants demonstrating the Buyer's technical and experience qualifications to own and operate cable television systems on a limited or large scale basis. (3) No evidence has been presented by the Applicants as to the Buyer's contractual commitment, long-tern, short-term, or otherwise, to maintain existing Charter management and/or operating policies and procedures. (4) Given the risks associated with the Transfer, as identified above, it will not be in the public interest for the City to unconditionally approve the Transfer at this time. The disapproval of the Transfer contained herein is without prejudice and may be reconsidered by the City Council when and if the Applicants are able to present evidence demonstrating the Buyer's technical suitability. 2 SENT 13Y: WALLIN KRESS REISMAN ;12- 9-98 : 4 :33PM ; ;3101 450-0506- 818 307 9218;5 6/ 6 3. A transfer of the Franchise, transfer of actual or managerial control of the Franchise, and/or transfer of control of the Franchisee, shall be deemed a material breach of the Franchise. SECTION 2. This resolution shall take effect immediately. SECTION 3. The City Clerk shall certify to the adoption of this Resolution. PASSED, APPROVED and ADOPTED by the Rosemead City Council on this day of December, 1998. Robert Bruesch Mayor City of Rosemead ATTEST: Nancy Valderrama City Clerk City of Rosemead 7A G As 3