HomeMy WebLinkAbout12/16/1993, C-5 - SONIC CABLE FRANCHISE RENEWAL EXTENSION II'Ip���l�l„II^�I Il MEETING GATE:
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COUNCIL AGENDA REPORT ITEM NUMBERn.:r
FROM: Ken Hampian, Assistant City Administrative Officer
Prepared by: Deb Hossli, Administrative Analyst---
SUBJECT. Sonic Cable Franchise Renewal Extension
CAO RECOMMENDATION: Approve and authorize the Mayor to execute a three month
extension to the City's franchise agreement with Sonic Cable Television.
DISCUSSION:
In September of this year, the Council authorized the City Administrative Officer to extend
the City's franchise agreement with Sonic Cable Television on a month-to-month basis
through December 31, 1993 to provide staff with time to conclude franchise renewal
negotiations. At that time, staff reported that negotiations were not progressing smoothly.
Staff outlined the issues that the City and Sonic were still far from reaching agreement on
(e.g., cable system upgrade,funding for PEG access,payment of business tax, reimbursement
for cable advisor costs and length of franchise term, etc.) and indicated that even the
December timeframe may be unrealistic for concluding negotiations given Sonic's position
on the above referenced issues.
On the advice of our cable advisor (Carl Pilnick), the City subsequently sent two letters to
Sonic. One requested immediate payment of $25,000 in past due franchise fees (due to
improper fee calculations on the part of Sonic). The second letter outlined the status of the
franchise renewal negotiations and advised Sonic of the actions the City could take if Sonic
is unwilling to change its position. Sonic responded by paying the $25,000 in franchise fees
and moving slightly on the cable system upgrade issue (they are now willing to upgrade the
system to 70 channels without any rate of return guarantees).
Based on these two concessions, staff believes that we should continue to negotiate with
Sonic (a meeting has already been scheduled for late December). As such, staff requests
Council approval of a three month extension to the franchise agreement(to March 31, 1994)
so that we can continue negotiations with Sonic. It is important to emphasize, however, that
cable law still largely favors cable companies in franchise renewal proceedings. Therefore,
staffs ability to conclude negotiations with Sonic by March 31, 1994 is largely dependent on
the level of cooperation we receive from Sonic. Staff will continue to provide the Council
with interim updates on our progress.
ATTACHMENT:
Resolution Extending Franchise
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EXTENSION OF FRANCHISE AGREEMENT
This Agreement is made and entered into this _ day of , 1993, by
and between the City of San Luis Obispo, a duly authorized municipal corporation (the "City")
and Sonic Cable Leasing Corporation, an Alaska corporation ("Sonic").
WHEREAS, Sonic has operated a cable television system ("System") in the City pursuant
to a franchise agreement ("Franchise Agreement") entered into between the City and Sonic Cable
TV, a California corporation, by Ordinance No. 790, passed December 19, 1978, and effective
retroactively April 1, 1978, and transferred to Sonic Leasing Corporation by Resolution No.
6728, dated December 5, 1989; and
WHEREAS, the franchise under which Sonic has operated its system expires on
December 31, 1993; and
WHEREAS, Sonic has requested that its franchise be renewed by the City; and
WHEREAS, the City has determined that the public interest would be served by
negotiating a renewal of the franchise to Sonic; and
WHEREAS, Sonic and the City are in the process of negotiating and drafting a renewal
franchise agreement; and
WHEREAS, the City has determined that the public interest would be served by granting
to Sonic an extension of the franchise pending finalization of the renewal franchise agreement.
NOW, THEREFORE, the City and Sonic do hereby agree as follows:
1. The City hereby grants to Sonic an extension of the franchise to and including March 31,
1994.
2. Except as otherwise provided herein, all terms and conditions set forth in the Franchise
Agreement shall remain in full force and effect.
3. It is mutually agreed by the City and Sonic that when a renewal franchise agreement is
reached and entered into by the City Council of San Luis Obispo and Sonic, the term of
this Extension shall immediately expire.
SONIC CABLE LEASING CORPORATION
By:
Steve Burrell, General Manager
1
Page 2
Sonic Agreement
CITY OF SAN LUIS OBISPO
By:
Peg Pinard, Mayor
ATTEST:
By:
Diane Gladwell, City Clerk
APPROVED AS TO FORM:
By:
rge sen, ity® ttorney
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