S-934 - 04/12/1999 - AGREEMENT - Ordinances Supporting Documents fi' ".
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VILLAGE OF OAK BROOK �
t 200 OAK BROOK ROAD
OAK BROOK, ILLINOIS 60523-2255
PPONE: 630 990-3000
FAX: 630 990-0376
MEMORANDUM it
DATE: April 9, 1999
TO: Village President and Board of Trustees
SUBJECT: Cable Television Franchise Transfer
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RECOMMENDATION: (1) That the Village Board adopt the attached ordinance
consenting to the transfer of control of the existing cable television franchise from
MediaOne of Northern Illinois, Inc. to TCI TKR of South Dade, Inc. and authorize
the execution of the attached Transfer Agreement.
(2)That the Village Board adopt the attached ordinance consenting to the change of
control of the cable television franchise from TCI TKR of South Dade, Inc. to
AT&T Corp. and authorize the execution of the attached Change of Control
Agreement.
,As we reported to the Board previously, the Village of Oak Brook is in receipt of the Federal
Communications Commission Form 394 containing information intended to establish the
technical, legal and financial qualifications of TCI for taking ownership of the existing cable
television franchise from MediaOne. When TCI decided to reorganize its cable systems
` .a that the Chicago metropolitan area would be one of its prime markets.
nationally, It deteriiE'ua =a. �.- _ g p �.. asset
exchange �.
As such, lengthy negotiations between MediaOne and TCI resulted in a..
agreement that would cause TCI's south Florida properties and some in California to be
exchanged for all MediaOne systems in the Chicago area and some in Michigan.
The franchising authorities in the affected communities are charged with reviewing the FCC
Form 394,to determine whether TCl is technically, legally and financially able to operate the
cable system. The ability to deny such transfer on any of these three bases is extremely
limited. Because the TCI deal affects a vast majority of area municipalities (MediaOne,
Multimedia, Time Wainer and Jones systems are all affected), DIIFage Mayors and Managers
and the other Councils of Government formed a consortium to obtain expert consulting at a vary
reasonable cost. As a result, Dr. Barry Orton and Stuart Chapman were hired to conduct the II
technical, legal and financial review for all affected communities.
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The technical review included,among other things, a physical inspection of the various head-end
sites and an analysis of 'he cable type and size that would be used by TCI. The legal review
dealt primarily with TCI's use of subsidiary corporations as transferee vehicles, as well as any
outstanding claims against the company. Financial data was reviewed to deter--acme whether TCI
had adequate resources to operate the cable systems. The review is complete, and the
consultants have concluded that TCI has sufficiently demonstrated the adequacv of its technical,
financial and legal qualifications within the context of applicable law.
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Concerns about changes in terms and conditions of service and operations, licensing of
transferees, consolidation of operations and customer service, and technical management
personnel were also addressed in the consultants' review. TCI has indicated that it will follow i
the terms and conditions of local franchise agreements, and would license its subsidiary
corporations prior to the transfer. TCI's responses also note that there are no current plans to
consolidate or change operations, and it will handle customer service with the same personnel
who are currently providing the service. The attached ordinance incorporates TCI's
representations that the transfer is not expected to have any effect on cable television service, I�
rates or reduce the quality of customer service or cable service in Oak Brook.
SAT&T ACU�TI��TIC)l�I G1F TCI
In mid-1998 w:m;.le the TCl/MediaOne exchange was moving to its inevitable conclusion, AT&T
began proceedings to acquire TCI. The consortium consultants and many others affected by the
TCUMediaCne exchange viewed this as a positive development since AT&T indicated that it
would require TCI to provide high quality cable infrastructure and service. Additionally, AT&T
is believed to have significantly greater resources to devote to cable television operations.
It appears that the U.S. Department of Justice has approved the transaction between TCI and
AT&T, and we expect to receive the official FCC documents in the near future. In any event,the
consortium consultants have conducted a technical, &T transaction a
financial
the same time as the
review f &
recommend that communities approve the TCU AT
TCUMediaOne exchange. The primary season for passing the ordinances at the same time is to III
afford communities the ability, to work_ directly with AT&T as the ultimate cable franchise
holder. Because TCI has not had an unblemished record as a provider of cable service in the
Chicagoland area, and because AT&T has indicated that it would demand improved performance
of the system, I recommend that the Board also adopt the attached ordinance consenting to the j
transfer of control of the cable television franchise to AT&T from TCL
In conclusion, based on the results of the review of qualifications and the fact, as stated by our
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consultants, that Illinois municipalities have no legal basis upon which to deny approval of
the transfer of their cable franchises from Media®ue to TCI and control of the franchise
from TCI to AT&T,I recommend adoption of the two attached ordinances.
(c hLa e I�ACr o t t Assistant Villa a Manager I
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/Mac
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t
� yes Tmor
Concerns about changes in terms and conditions of service and
operations, licensing of transferees, consolidation of operations and
customer service, and technical management personnel were also
addressed in the consultants' review. TCI has indicated that it will
follow the terms and conditions of local franchise agreements, and i
would license its subsidiary corporations prior to the transfer. TCI's
responses also note that therm are no current plans to consolidate or
change operations, and it will handle customer service with the same
personnel who are currently providing the service. The ordinance
incorporates TCI" representations that the transfer is not expected to
have any effect on cable television service,rates or reduce the quality
of customer service or cable service in Oak Brook.
Motion by Trustee Savino, seconded by Trustee Caleel, to pass
Ordinance 99-AG-CB-EXl-S-933,-An Ordinance Of The Village Of
Oak Brook, Illinois Consenting To The Transfer Of
ms's Of The
Cable Television Franchisee From Media One Of Northern Illinois,
Inc. To TCI TKR Of South Dade, Inc.", as presented and waive the
full reading thereof; and authorize execution of the Transfer i
Agreement. ROLL CALL VOTE: McInerney, avino and
Ayes: 5 - Trustees Caleel, Kenny, Y,
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Shumate..
Nays: 0 - None.
Absent: I - Trustee Bartecki. Motion carried.
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5) RDINANCE 99-Alin-CB-EXI-S-934 AN ORDINANCE OF s-93 99-AG-CB-EX -
THE VILLAGE OF OAK BROOK ILLINOIS CON'5ENTIN CHANGE OF GONTR L
TO THE CHAN E OF ONTI2 L OF THE CABLE of CABLE TELE-
TELEVISION FRANCHISEE FROM TELE- VISION FRANCHIS E
COMMUNICATIONS INC.TO AT&T CORP.: CO TELE-
MMUNICATIONS,
in mid-1998 while the TCl/MediaOne exchange was moving to its INC. To AT&T CO�
proceedings to acquire TCI. The I
AT&T began proceii
inevitable conclusion, others affected by the II
consortium consultants and many
TCl/MediaOne exchange viewed this as a positive development since
AT&T indicated that it would require TCI to provide high quality
cable infrastructure and service. Additionally, AT&T is believed to
have significantly greater resources to devote to cable television
operations.
It app Department ears that the U.S. of Justice has approved the I
a transaction between TCI and AT&T, and the Village may expect to
receive the official FCC documents in the near future. In any event, I'I
the consortium consultants have conducted a technical, legal and
financial review of AT&T and recommend that communities approve
VILLAGE OF OAK BROOK Minutes 10 of 20 April 13, 1999
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the TCI/AT&T transaction at the same time as the TCl/Media.One
exchange. The primary reason for passing the ordinances at the same
time is to afford communities the ability to work directly with AT&'i'
as the ultimate cable franchise holder. Because TCI has not had an
unblemished record as a provider of cable service in the Chicagoland
aiva, and because AT&T has indicated that it would demand
improved performance of the system, Assistant Village Manager
Crotty recommends that the Board also adopt an ordinance
consenting to the transfer of control of the cable television franchise
to AT&T from TCI.
Motion by Trustee Savino, seconded by Trustee Caleel, to pass
Ordinance 99-AG-CB-EXI-S-934,"An Ordinance Of The Village Of
Oak Brook, Illinois Consenting To The Change Of Control Of The
Cable Television Franchisee From Tele-Communications, Inc. To
AT&T Corp.", as presented and waive the full reading thereof, and
authorize execution of the Change of Control Agreement. ROLL
CALL VOTE:
Ayes: 5 - Trustees Cal+eel, Kenny, McInerney, Savino and
Shumate.
Nays: 0 - None.
Absent: I - Trustee Bartecki. Motion carried.
C. AWARD OF CONTRACTS.:
1) ADULT WHIRLPOOL-BATH AND TENNIS CLUB: ADULT WHIRLPWL
BATH & TENNIS CL
The Village Board, at the Regular meeting of January 26, 1999,
directed staff to investigate various whirlpool options for the Bath
and Tennis Club. Following considerable research, Bath and Tennis
Club Manager Sartore is recommending the purchase of a commercial
therapy whirlpool by Wave Length. Among various features of this
pool is a "training" capability that affords adults privacy for lap
swimming, which is presently difficult to offer in the main. pool.
Other features were noted in the spec sheet and brochure attached to
Purchasing Director Kapff s memorandum dated April 7, 1999.
The selected Wave Length whirlpool is only distributed in this area by
TurboTubs of Naperville. As such, there is no reason to advertise for �I
bids. The estimated delivery time is four weeps, which should give
staff adequate time to have the whirlpool installed (by a separate
contractor) before the pool season begins. Funds in the amount of
$30,000 are in the Sports Corr: Improvements Program (52-841)
this project.
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VILLAGE OF (.OAK BROOK,Minutes 11 of 20 April 13, 1999
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