Form revised February 22, 2006

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	DOF Analyst/Phone:
DoIT	Tony Perez /386-0070	Aimee Strasko/386-4090

Legislation Title:

AN ORDINANCE related to cable television; authorizing the Mayor to approve the transfer of control, subject to conditions, of the franchises held by Millennium Digital Media Systems, L.L.C. to a new entity, WaveDivision V, L.L.C.; and authorizing the Chief Technology Officer to execute an Assignment of Cable Franchise Consent Agreement for the purpose of implementing and administering the transfer.

· Summary of the Legislation:

Millennium Digital Systems, L.L.C. (“Millennium”) has submitted an application to the City to approve the transfer of control of its Seattle franchises and cable system assets to a new entity, WaveDivision V, L.L.C. (“WaveV”), a Washington limited liability company (to be formed within 5 days prior to the Unit Purchase Agreement closing date), which will be wholly owned by WaveDivision Holdings, L.L.C (“WaveDivision”), a Delaware limited liability company. 

Under federal law, the City must act within 120 days of receipt of a completed application (in this case by August 8, 2006), or its consent to the transfer is implied unless an agreement is reached to extend the date.  The City may not unreasonably withhold its consent, and such consent must be by ordinance.  This ordinance authorizes approval of the transfer subject to the terms and conditions contained in an agreement between the City, WaveV and WaveDivision (Cable Franchise Consent Agreement or “Consent Agreement”). 

· Background: (Include brief description of the purpose and context of legislation and include record of previous legislation and funding history, if applicable):

Millennium provides cable services in certain areas of Seattle pursuant to nonexclusive franchise agreements authorized by Ordinances 117955 and 118361, as amended, and transferred from Summit to Millennium by Ordinance 119295 (collectively, the “Franchises”).  Approximately 15,000 cable and Internet subscribers are served by Millennium in the Central Cable Television Franchise District (Central District and Rainier Valley), the Central Business Franchise District (downtown), and Cable Franchise District One (portions of Queen Anne and Capitol Hill).

On February 8, 2006, Millennium and WaveDivision entered into a Unit Purchase Agreement whereby Millennium agreed to sell to WaveDivision the cable system within the City that Millennium owns and operates pursuant to the Franchises.  The proposed transfer of the Millennium’s Seattle Franchises and cable system assets to WaveDivision involves a two-step process with the ultimate owner of Millennium’s Seattle Franchises and cable system assets being a new limited liability company WaveV, which will be wholly owned by WaveDivision. 

In accordance with SMC 21.60.520, the City may not unreasonably refuse a request to transfer a franchise.  Council must make a decision to approve the transfer, approve it with conditions, or deny the transfer within 120 days (or in this case by August 8, 2006), or the request shall be deemed granted pursuant to federal regulations unless an agreement is reached to extend the date. 

To obtain Council approval, the proposed assignee must demonstrate financial responsibility and the ability to comply with the provisions of SMC Chapter 21.60 (Cable Communications Ordinance), among other things.  After review and analysis by the Office of Cable Communications (“OCC”), with the help of legal, financial, and technical consultants, the OCC recommends approval of the transfer with conditions.  The conditions contained in the Consent Agreement are designed to protect the City’s interests in such areas as ensuring that the cable system meets applicable safety and technical standards and providing for an increased security fund.  In addition, the Consent Agreement contains a voluntary commitment by WaveV to provide complimentary Internet service to up to 50 City-sponsored community technology centers.  

· Please check one of the following:

__X_ This legislation does not have any financial implications. (Stop here and delete the remainder of this document prior to saving and printing.)

____ This legislation has financial implications. (Please complete all relevant sections that follow.)

· Is the legislation subject to public hearing requirements:  (If yes, what public hearings have been held to date, and/or what plans are in place to hold a public hearing(s) in the future.)

Yes.  DoIT will work with Council staff to schedule one public hearing.

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