ORD 2001-52 NORTHLAND/ATT FRANCHISE TRANSFEROrdinance No. 2001-52
An ordinance of the City of Bainbridge Island, Washington, amending the cable
television franchise of Northland Cable Television, Inc, and by approving the
transfer of the franchise to TCI Cable Partners of St. Louis, L.P., also known as
AT&T Broadband.
Whereas, pursuant to Ordinance No. 70-14, the City of Winslow, Washington, now
known as the City of Bainbridge Island (the "City") issued a cable television franchise
(the "Franchise') to George O. Gregg; and
Whereas, with the consent of the City duly given (1) as of July 29, 1971, George O.
Gregg assigned the Franchise to Kenneth T. Youngren, (2) as of September 12, 1977,
Kenneth T. Youngren assigned the Franchise to Richard J. Dyste, and (3) as of June 28,
1985, Richard J. Dyste assigned the Franchise to Bainbridge Island Cable TV limited
Parmership ("BICTVLP"); and
Whereas, in February 1991 the City annexed certain portions of Kitsap County which
previously had been served by BICTVLP and its managing general partner Northland
Cable Television, Inc. pursuant to franchises issued by Kitsap County on terms and
conditions substantially the same as those set forth in the Franchise; and
Whereas, BICTVLP, by written notice dated July 10, 1992, exercised its option to extend
the term of the Franchise for an additional period of 25 years beyond the original 25 year
term of the Franchise; and
Whereas, with the consent of the City duly given, as of December 29, 1993, BICTVLP
assigned the Franchise to its managing general partner, Northland Cable Television, Inc
("Northland"); and
Whereas, by Ordinance No. 96-22, the City amended the Franchise to increase the license
fee from four pement to five percent; and
Whereas, the City and Northland, subsequent to the annexation, began and continued
discussions regarding whether the annexation required a new franchise or an amendment
to the existing franchise; and
Whereas, the City and Northland concluded negotiations in 1996 for an amendment to the
Franchise to address issues that had not been included in the Franchise originally; and
Whereas, that amendment ordinance was not finally adopted; and
Whereas, Northland has received an unsolicited offer to purchase its assets fi'om TCI
Cable Partners of St. Louis, L.P., also known as AT&T Broadband ("AT&T"); and
Whereas, completion of this purchase requires the City to consent to the transfer of the
Franchise from Northland to AT&T; now, therefore
The City Council of the City of Bainbridge Island do ordain as follows:
Section 1. The Franchise is mended to expire on January 31, 2008, and sections 7 and
19 of the Franchise, and the option to renew exemised by the Licensee pursuant to those
sections in 1992, is superceded accordingly.
The Franchise is further amended such that the Licensee (franchisee) shall pay all
franchise fees and taxes based upon gross revenues including City utility taxes in
accordance with the Franchise and state, federal and local law. "Gross Revenues"
shall mean any revenue received by the franchisee from the operation of the Cable
System to provide cable services in the service area, provided, however, that such
phrase shall not include: (1) unrecovered bad debt; (2) any PEG capital support
recovered from subscribers; (3) franchise fees; and (4) any tax, fee or assessment of
general applicability collected by the franchisee from subscribers for pass-through to
a government agency. Gross Revenues shall include, by way of illustration and not
limitation, monthly fees charged subscribers for basic service; any expanded tiers of
cable service; optional premium services; installation, disconnection, reconnection
and change-in-service fees; leased channel access fees; advertising sales; home
shopping revenue; all cable service lease payments from the cable system; fees,
payments or other consideration received by the franchisee from programmers for
carriage of programming on the cable system and accounted for as revenue under
GAAP; revenues from rentals of converters or other cable system equipment;
revenues from program guides; additional outlet fees; and revenue from the sale or
carriage of other cable services.
All provisions of the Franchise inconsistent with this definition are superceded.
Section 2. The City, Northland Cable Television, Inc., and TCI Cable Partners of St.
Louis, L.P., also known as AT&T Broadband, agree that the Winslow Franchise (Ord.
70-14) will be extended to include all territory within the incorporated boundaries of the
City of Bainbridge Island.
Section 3. The City Council consents to the transfer of the Franchise from Northland
Cable Television, Inc., to TCI Cable Parmers of St. Louis, L.P., also known as AT&T
Broadband, subject to the following terms and conditions:
A. The City and AT&T shall each commit to entering into good faith negotiations in
January 2002 regarding further amendments of the Franchise with the intent to
successfully conclude agreement on the amendments no later than June 30, 2003.
B. AT&T will continue to honor the existing Channel Use Agreement dated as of
November 6, 2001 between Northland Cable Television, Inc. and Bainbridge Island
Broadcasting, Inc. and will not alter the cable system in any way to restrict, reduce or
eliminate the capability of delivering local access programming by the City or its
designated local access provider.
AT&T will develop a transition plan to phase out existing commercial contracts for
programming time space on the local access channel with the objective that the City
or its designated local access provider shall have exclusive use of the local access
channel free of charge for 24 hours per day, seven days per week as a PEG channel,
and shall maintain programming control.
D. AT&T agrees that the live cablecasting capability provided to the City by Northland
via a fiber feed from City Hall will remain in place after the transfer.
E. AT&T will begin an engineering study within six months of this assigmnent to
determine the feasibility of an institutional network in the City.
Section 4.. In the event the sale of the cable television system serving the City does not
close on or before December 27, 2001, this Ordinance shall become null and void.
Section 5. This Ordinance shall take effect and be in force five days from and after its
passage, approval and publication. *'~
Dwi'gt~t'Sutton, Iglt[yor
Attest/Authenticate:
Approved as to Form:
Rod Kaseguma, City Attomey
Filed with the City Clerk:
Passed by the City Council:
Published:
Effective:
Ordinance No.
December 7, 2001
December 12, 2001
December 19, 2001
December 24, 2001
2001-52