9.B.
City Council Meeting - FINAL
- Meeting Date:
- 10/06/2015
- Co-Submitter:
- Anja Wendel, Senior Assistant City Attorney AW
- From:
- Kimberly Ott, Public Information Officer
Information
TITLE:
Consideration and Approval of: Consent to Transfer Control of Cable License Agreement
RECOMMENDED ACTION:
Consent to Transfer Control of Cable License Agreement from Cequel Corporation to Altice N.V.; and authorize the Mayor to execute the necessary documents.
Executive Summary:
Flagstaff City Code and the Cable License Agreement between the City and NPG Cable, LLC doing business as Suddenlink requires the City of give prior consent for transfer of control from the parent company Cequel Corporation to the new equity investor Altice N.V.
Financial Impact:
No costs to the City are associated with the proposed transfer.
Connection to Council Goal and/or Regional Plan:
Provide sustainable and equitable public facilities, services, and infrastructure systems in an efficient and effective manner to serve all population areas and demographics
Foster relationships and maintain economic development commitment to partners
Foster relationships and maintain economic development commitment to partners
Has There Been Previous Council Decision on This:
Yes. Council approved a transfer of control in November 2012 from the licensee’s parent company Cequel Communications Holdings, LLC to Nespresso Acquisition Corporation (“Nespresso”). Nespresso subsequently changed its corporate name to Cequel Corporation.
Options and Alternatives:
a. Approve Consent to Transfer of Control of the Cable Television License from parent company Cequel Corporation to Altice N.V., based upon representations that the Licensee NPG Cable, LLC doing business as Suddenlink will continue to meet the legal, financial and technical qualifications for operating the cable system in the City; or
b. Take no action on the application, in which case the application shall be deemed approved; or
c. Deny the application, if the City Council finds that transfer of control of the License will adversely affect the Licensee’s abilities to perform.
b. Take no action on the application, in which case the application shall be deemed approved; or
c. Deny the application, if the City Council finds that transfer of control of the License will adversely affect the Licensee’s abilities to perform.
Background/History:
Cable Television License Agreement
On February 5, 2007 the City issued a Cable License Agreement to NPG Cable, Inc. The Cable License Agreement allows the licensee to use the city rights-of-way for maintenance and operation of a cable television system.
On February 15, 2011 the City approved transfer to the Cable License Agreement from NPG Cable, Inc. to NPG Cable, LLC doing business as Suddenlink.
On or about July 26, 2012 the City received an application for transfer of control of the Cable Television License from Cequel Communications Holdings, LLC (“Cequel”), as parent company of Suddenlink, to Nespresso Acquisition Corporation (“Nespresso”). Suddenlink remained the actual Licensee responsible for operating the cable system in the City of Flagstaff.
On or about June 3, 2015 the City received an application for transfer of control of the Cable Television License from parent Cequel Corporation to Altice SA. On or about August 19, 2015 City received clarification that new parent would be Altice N.V. Suddenlink will remain the actual licensee responsible for operation the cable system in the City of Flagstaff.
The application is in Form 394 as required by the Federal Communications Commission (“FCC”). A copy of Form 394 is on file with the City Clerk’s Office.
City staff has reviewed the application. The transaction will result in a substitution of equity investors. Based on the representations contains therein, it appears that the Licensee’s legal, financial and technical operations will not be adversely affected. Licensee’s performance to date is satisfactory.
The process for transfer is governed by City Code Section 3-09-002-0009. This section provides that the City shall not grant a transfer unless the new parent accepts the License. The proposed Consent to Transfer of Control requires the new parent and License to affirm Licensee’s performance under the License and Broadband Network Agreement shall not be adversely affected by the transfer.
Pursuant to federal regulations, if the City does not act within 120 days from receipt of an application, the application is deemed approved. Although the City Council may simply take no action on the application, formal approval of the transfer provides additional legal protections to the City and the Licensee has advised it seeks formal action.
A chart showing change in the Licensee’s corporate relationships since 2007 is attached for convenience.
On February 5, 2007 the City issued a Cable License Agreement to NPG Cable, Inc. The Cable License Agreement allows the licensee to use the city rights-of-way for maintenance and operation of a cable television system.
On February 15, 2011 the City approved transfer to the Cable License Agreement from NPG Cable, Inc. to NPG Cable, LLC doing business as Suddenlink.
On or about July 26, 2012 the City received an application for transfer of control of the Cable Television License from Cequel Communications Holdings, LLC (“Cequel”), as parent company of Suddenlink, to Nespresso Acquisition Corporation (“Nespresso”). Suddenlink remained the actual Licensee responsible for operating the cable system in the City of Flagstaff.
On or about June 3, 2015 the City received an application for transfer of control of the Cable Television License from parent Cequel Corporation to Altice SA. On or about August 19, 2015 City received clarification that new parent would be Altice N.V. Suddenlink will remain the actual licensee responsible for operation the cable system in the City of Flagstaff.
The application is in Form 394 as required by the Federal Communications Commission (“FCC”). A copy of Form 394 is on file with the City Clerk’s Office.
City staff has reviewed the application. The transaction will result in a substitution of equity investors. Based on the representations contains therein, it appears that the Licensee’s legal, financial and technical operations will not be adversely affected. Licensee’s performance to date is satisfactory.
The process for transfer is governed by City Code Section 3-09-002-0009. This section provides that the City shall not grant a transfer unless the new parent accepts the License. The proposed Consent to Transfer of Control requires the new parent and License to affirm Licensee’s performance under the License and Broadband Network Agreement shall not be adversely affected by the transfer.
Pursuant to federal regulations, if the City does not act within 120 days from receipt of an application, the application is deemed approved. Although the City Council may simply take no action on the application, formal approval of the transfer provides additional legal protections to the City and the Licensee has advised it seeks formal action.
A chart showing change in the Licensee’s corporate relationships since 2007 is attached for convenience.
Key Considerations:
The City’s primary consideration is to ensure the Licensee continues to operate and maintains its cable system in the public rights-of-way in accordance with the License and the City Code.
Community Benefits and Considerations:
The community benefits from the continued operation of a cable television business within the City.