R-7312
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CA:RMM:llm091r
City Council Meeting 9-23-86
Santa Monica, California
RESOLUTION NUMBER 7312 (CCS)
(City council Series)
A RESOLUTION OF THE CITY COUNCIL OF SANTA MONICA
TERMINATING THE CITY'S COMMUNITY ANTENNA TELEVISION SYSTEM
FRANCHISE WITH THETA CABLE OF CALIFORNIA AND WITH GROUP W CABLE,
INC. FOR NONCOMPLIANCE WITH ITS TERMS AND DENYING THE REQUEST FOR
APPROVAL OF A FRANCHISE TRANSFER FROM GROUP W CABLE, INC. TO
CENTURY SOUTHWEST COMMUNICATIONS, INC.
WHEREAS, Ordinance Number 734 (eCS) was enacted on March 14,
1967, providing for the granting of CATV franchises in Santa
Monica:
WHEREAS, a non-exclusive franchise was awarded to Theta
Cable on October 24, 1967 pursuant to Ordinance Number 756 (CCS):
WHEREAS, Theta Cable's ten year term was renewed on December
13, 1977 pursuant to Ordinance Number 1074 (CCS):
WHEREAS, section 7(d) of Ordinance Number 734 (CCS) states
that the City I s CATV franchise is a privilege held in personal
trust by the original grantee and that "[i]t cannot in any event
be sold, transferred, leased, assigned or disposed of, in whole
or in part, either by forced or inVOluntary sale, or by voluntary
sale, merger, consolidation or otherwise, without the prior
consent of the Council expressed by resolution, and then only
under such conditions as may therein be prescribed.
n
WHEREAS, Theta, a subsidiary of Teleprompter, was acquired
by and ultimately merged with Westinghouse in 1981 without
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seeking city Council approval as required by section 7 (d) of
Ordinance Number 734 (CCS);
WHEREAS, resolution of the issue of whether Theta's merger
with Westinghouse without prior City approval constituted a
material breach of the franchise agreement and what remedy should
lie has been held in abeyance by mutual agreement pending
negotiations with Group W which were to occur following citizen
input from the Cable Communications Task Force, appointed in
Fall, 1982;
WHEREAS, shortly after initiating the renewal procedures
specified by the Cable POlicy Act of 1984 on June 19, 1985,
Westinghouse informed the City that it intended to sell its cable
interests to a consortium of cable television operators including
American Television & Communications Corporation (ATC); Comcast
Corporation;
Tele-Communications,
Inc.
( TCl) ;
Daniels
&
Associates,
Inc. ;
and
Century
Southwest
Communications
Corporation (Century); and that Century would ultimately be
assigned the Santa Monica franchise;
WHEREAS, the City informed Group W by letter on January 28,
1986 that its impending sale would constitute a transfer or
assignment of the franchise under Section 7(d) of Ordinance
Number 734 (CCS) and therefore required Council approval as well
as adequate information enabling the Council to assess the
transferees' financial capabilities;
WHEREAS, on February 27, 1986, Group W requested approval of
the ultimate transfer of the Santa Monica franchise to Century
but has never requested approval of the stock transfer;
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WHEREAS, on June 19, 1986, without having sought or received
Council approval as required by Section 7(d) of Ordinance Number
734 (CCS), Westinghouse announced that it had "completed the sale
of its cable television business" and had sold the stock of its
Group W Cable subsidiary to a consortium of cable operators,
including American Television & Communications corporation (ATC);
Comcast Corporation; Tele-Communications, Inc. (TCl); Daniels &
Associates,
Inc. ;
and
Century
Southwest
Communications
Corporation (Century);
WHEREAS, Century's operation and management of Santa
Monica's cable system pursuant to a management contract with the
consortium violates section 7(d) of Ordinance Number 734 (CCS);
WHEREAS, despite detailed requests for information from the
city on March 19, 1986, and May 29, 1986, Group W has not
provided adequate information enabling the City to perform the
necessary financial analyis of Century's qualifications nor to
assess
Century's
technical
operational
capabilities
and
responsiveness to consumer needs,
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA
MONICA DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. Theta Cable and/or Group W's CATV franchise
with the city of Santa Monica is hereby terminated effective
December 13, 1987 due to the breach of Section 7(d) of Ordinance
Number 734 (CCS) arising from Teleprompter/Theta's acquisition by
and merger with Westinghouse without prior City Council approval.
SECTION 2. Group W's CATV franchise interests in the
City of Santa Monica are hereby terminated effective December 13,
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1987 due to the breach of section 7 (d) of Ordinance Number 734
(CCS) that occurred when Westinghouse transferred its stock in
Group W Cable, Inc. to the consortium on June 19, 1986 without
Council approval.
SECTION 3. Group W's CATV franchise interests in the
City of Santa Monica are hereby terminated effective December 13,
1987 due to the breach of Section 7 (d) of Ordinance Number 734
(CCS) that occurred when Century began operating and managing the
Group W system pursuant to a management contract with the
consortium.
SECTION 4. Group W's request for City Council approval
of the ultimate transfer of its assets to century is denied due
to Group Wls failure to provide the city with information
adequate to enable assessment of Century's financial and
technical capability to operate the City's cable system and its
responsiveness to consumer needs.
SECTION 5.
The City Clerk shall certify to the
adoption of this Resolution, and thenceforth and thereafter the
same shall be in full force and effect.
APPROVED AS TO FORM:
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ROBERT M. MYERS
City Attorney
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Adopted and approved this 23rd day of September, 1986.
Oick
r--~l
.L-~
Mayor
I hereby certify that the foregoing Resolution No. 7312(CCS)
was duly adopted by the city council of the City of Santa Monica
at a meeting thereof held on September 23, 1986 by the following
Council vote:
Ayes: Councilmembers:
Conn, Epstein, Jennings, A. Katz,
H. Katz, Zane and Mayor Reed
Noes: Councilmembers:
None
Abstain: councilmembers:
None
Absent: Councilmembers:
None
ATTEST:
,
Cl-. 'fh. yjj~
City Clerk