Loading...
HomeMy WebLinkAbout12/16/1993, C-5 - SONIC CABLE FRANCHISE RENEWAL EXTENSION II'Ip���l�l„II^�I Il MEETING GATE: �W II II I�I� cityo San Luis OBtspo - 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 g:cable.ext 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 g:sonic.agr L'-5-3