AN ORDINANCE related to cable television; authorizing the Mayor to approve the transfer of franchises held by Summit Communications, Inc. to Summit Cablevision LP, and the subsequent purchase of a controlling interest in Summit Cablevision LP by Millennium Digital Media Systems, L.L.C.

WHEREAS, Summit Communications, Inc. provides cable service in Seattle to subscribers in the Central Cable Television Franchise District pursuant to Seattle City Ordinance No. 118361 (passed on November 4, 1996), and in the TCI-1 franchise area pursuant to Ordinance No. 117955 (passed on December 18, 1995) (collectively, the "Franchise Agreements"); and

WHEREAS, Summit has entered into a purchase and sale agreement with Millennium Digital Media Systems, L.L.C. ("Millennium"), dated July 2, 1998, providing for the transfer of all of the assets of the cable system, including all of the rights and obligations under the Franchise Agreements, to Summit Cablevision LP ("LP"), and further providing for the subsequent acquisition of all of Summit's interest in LP by Millennium; and

WHEREAS, under the Franchise Agreements, Summit must obtain the City's consent before it may transfer its Seattle cable assets to LP and Millennium; and

WHEREAS, Summit and Millennium, on September 9, 1998, filed with the City an FCC Form 394, requesting the City's consent to transfer its Seattle cable assets to LP and Millennium; and

WHEREAS, the City, through its Office of Cable Communications, pursuant to its authority under SMC Ch. 21.60 (the Cable Communications Ordinance), the Franchise Agreements and federal law has requested information from Summit and Millennium necessary to evaluate that request; and

WHEREAS, Summit and Millennium have supplied certain information as requested, via correspondence and attachments dated October 12, 1998, November 9, 1998, November 12, 1998 and November 16, 1998; and

WHEREAS, Millennium states that it is not seeking any modification of the terms and conditions of the Franchise Agreements in connection with this transfer; and

WHEREAS, Millennium and LP state their intent to comply fully with all franchise provisions and to meet or exceed all applicable federal, state and local operation requirements, including but not limited to those relating to rebuild and buildout requirements, customer service standards, Internet access, franchise fees, PEG obligations, and system's technical standards; and

WHEREAS, Millennium and Summit's policies regarding access to its cable communications system for the purpose of delivering high speed Internet services may be affected by the overall assessment of industry policies on this issue that is presently being conducted at the national and local levels; and

WHEREAS, Millennium has given evidence of financial responsibility, and its ability to comply with the relevant provisions of the Franchise Agreements and SMC 21.60; and

WHEREAS, the proposed transfer is not contrary to the public interest; Now, Therefore,

BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:

Section 1. The Mayor is authorized to approve the transfer of the franchises to operate a cable system in the TCI-1 and Central District franchise areas from Summit Communications, Inc. to Summit Cablevision LP, and the subsequent purchase of a controlling interest in LP by Millennium Digital Media Systems, L.L.C., subject to the following conditions.

a. Millennium and LP shall comply with all requirements of Seattle Municipal Code 21.60, Franchise Ordinances Nos. 118361 and 117955, and all related applicable orders, contracts, agreements, commitments, side letters and regulatory actions.

b. Millennium and LP shall take steps to ensure a continued local management presence within King County by maintaining management level positions in network administration, customer service and support, construction engineering, and high speed data services, and support staff sufficient to fulfill all franchise responsibilities.

c. Millennium acknowledges that the issue of open access to its high speed cable modem services by Internet and On-Line service providers is currently being assessed at the national and local levels. To protect the City's role in that assessment, Millennium agrees that restrictions on open access to the cable system may, at the City's discretion, constitute an occurrence that shall be grounds for the City to reopen the franchise agreements under Section 20 of the Franchise Agreements, but only to the extent permitted under federal law.

d. Millennium agrees to assume responsibility for any and all non-compliance under the Franchise Agreements that may now exist or may later be discovered to have existed during the terms of the Franchise Agreements, even if prior to the closing of this transaction.

e. Millennium agrees to comply fully with all franchise provisions and to meet or exceed all applicable federal, state and local requirements, including but not limited to those relating to franchise fees and taxes, rebuild and buildout requirements, customer service standards, Internet access, PEG obligations, and the system technical standards.

f. Millennium agrees that within thirty days of the completion of this transfer, it will submit an updated corporate organization chart identifying the roles of the current Summit managers in the new Millennium organization.

Section 2. This consent to transfer granted under this ordinance shall not become effective for any purpose unless and until Millennium accepts the conditions of this ordinance and such acceptance is filed with the City Clerk and Office of Cable Communications. Such acceptance shall be in writing, shall be in a form and substance approved by the City Attorney, and shall be and operate as an acceptance of each and every term and condition and limitation contained in this ordinance, SMC Ch. 21.60, or in the Franchise Agreements, or otherwise specified as provided in this section.

Section 3. In the event that the transaction or transactions which are the subjects of this ordinance do not close for any reason, or in the event that such transaction or transactions close on terms substantially and materially different from the terms described in the FCC Form 394 and subsequent information provided to the City by Summit and Millennium and relied upon by the City, then the consent provided for in Section 2 shall be null and void.

Section 4. Any acts consistent with and prior to the effective date of this Ordinance are hereby ratified and confirmed.

Section 5. This ordinance shall take effect and be in force thirty (30) days from and after its approval by the Mayor, but if not approved and returned by the Mayor within ten (10) days after presentation, it shall take effect as provided by Municipal Code Section 1.04.020.

Passed by the City Council the _____ day of ____________, 1998, and signed by me in open session in authentication of its passage this _____ day of _________________, 1998. _____________________________________ President of the City Council

Approved by me this _____ day of _________________, 1998. _______________________________________ Mayor

Filed by me this _____ day of ____________________, 1998. ___________________________________________ City Clerk V #1