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COUNTY OF SAN MATEOInter-Departmental Correspondence |
Department of Public Works |
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DATE: |
June 11, 2002 |
BOARD MEETING DATE: |
June 25, 2002 |
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TO: |
Honorable Board of Supervisors |
FROM: |
Neil R. Cullen, Director of Public Works |
SUBJECT: |
Request for Consent to Change of Control - Cable Television Franchise Agreements - Merger of AT&T Broadband and Comcast Corporation |
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Recommendation |
Adopt a resolution Consenting to a Change of Control from AT&T Broadband to AT&T Comcast for six Cable Television Franchise Agreements covering various unincorporated areas. |
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Previous Board Action |
Approved the transfer of six cable television franchise agreements from TCI Cablevision and USA Media to AT&T for the following County unincorporated areas: |
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Burlingame Hills |
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Broadmoor |
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North Fair Oaks |
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Skyline/King's Mountain, Skylonda, Los Trancos |
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San Mateo Highlands, Emerald Lake Hills, Devonshire Canyon |
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Moss Beach, Montara, El Granada, La Honda, Pescadero |
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Key Facts |
1. |
AT&T Broadband filed a Federal Communications Commission Form 394, "Application for Franchise Authority Consent to Assignment or Transfer of Control of Cable Television Franchise," with the County on February 25, 2002. The County has 120 days to act on the application. If the County does not approve or deny the application within 120 days, the transfer of control is approved. |
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2. |
San Mateo County's franchise agreements require your Board's consent to any corporate change of control. The proposed AT&T Comcast merger is a corporate change of control. |
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3. |
The San Mateo County Telecommunications Authority (SAMCAT) retained Moss and Barnett (consultant) to evaluate AT&T's request for change of control. The consultant prepared a comprehensive report that concluded that AT&T Comcast Corporation possesses the necessary legal and technical qualifications to assume control of the cable franchises. |
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Discussion |
AT&T is the sole cable television franchisee in the unincorporated areas of San Mateo County except for RCN, a company which provides competitive cable television service in some areas under an Open Video System Agreement, which is similar to a cable television franchise. AT&T holds separate franchise agreements for each of the six areas listed above, and the County is currently engaged in franchise renewal negotiations with AT&T for all six franchises through the SAMCAT JPA. SAMCAT has retained a consultant to conduct the franchise renewal negotiations. |
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Under the terms of their proposed merger, AT&T Comcast Corporation would become the parent company of AT&T Broadband. The Federal Communication Commissions' (FCC) criteria for evaluating requests for change of control are the legal, technical and financial qualifications of the proposed new owners. The consultant conducted a comprehensive analysis of the legal, technical and financial qualifications of the proposed ATT Comcast Corporation and found them qualified to operate a cable television franchise and therefore, we are recommending that your Board consent to the proposed change of control. |
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All of the County's cable television franchise agreements require the cable operator to provide one channel for Public, Educational and Government (PEG) use. The consultant has negotiated a second PEG channel for several SAMCAT member agencies in connection with approval of the change of control. AT&T Comcast is willing to provide a second PEG channel in the Broadmoor, North Fair Oaks and the Burlingame Hills areas. The systems in the other unincorporated areas require an upgrade of the physical plant before AT&T is willing to provide a second PEG channel. The resolution consenting to the change of control recognizes AT&T's commitment to provide a second PEG channel in Broadmoor, North Fair Oaks and Burlingame Hills. The upgrade of the cable systems in the other County areas will be a primary objective in the franchise renewal negotiations. |
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Vision Alignment |
We believe that our recommendation is consistent with the Shared Commitment of "responsive, effective and collaborative government;" and Goal Number 22, "County and local governments effectively communicate, collaborate and develop strategic approaches to issues affecting the entire County," as the change of control request from AT&T was evaluated by the San Mateo County Telecommunications Authority (SAMCAT), a joint powers authority which enables the County and cities to collaborate in dealing with telecommunications issues. |
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Fiscal Impact |
There is no impact to any County fund associated with consenting to this corporate change of control. |
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A form of resolution has been approved by County Counsel. |