City Council Study Session Agenda and Packet 2013 06 11

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Page 2 KISSINGER & FELLMAN, P.C. ∙ 3773 Cherry Creek North Drive, Suite 900, Denver, CO 80209 ∙ (303) 320-6100 ∙ FAX: (303) 327-8601 B. Federal Entitlement of Franchise Renewal. Under federal law, Comcast is entitled to a franchise renewal if it offers and has the legal, technical, and financial ability to comply with a franchise agreement that meets the future cable-related needs of the City. Since Comcast clearly has the capability to comply with almost any franchise condition, the foundational question becomes whether Comcast will agree to a franchise document that will meet the City’s future cable-related needs. Some local jurisdictions attempt to determine future cable-related needs through data developed in informal conversations, community feedback from public meetings, community focus groups, and/or a survey to citizens within the community. This process is described in more detail in Section D below. There is not one “correct” way to do it. Aurora’s new franchise will come to its Council for first reading in early July. Due to some Denver-specific issues, Denver is about a month or so behind that schedule. Comcast has agreed to work with me on a “generic” version of the Aurora agreement, and that document will be shared with Louisville and a number of other Colorado communities about to begin their renewal negotiations. While all it may not be appropriate for all communities in the area to have the same provisions as Aurora (for example, the number of PEG channels will differ in each community), Comcast will be willing to offer most of the terms in the new Aurora franchises to other Colorado communities. Both Denver and Aurora conducted community needs assessments prior to their negotiations, and to the extent that their franchise terms are acceptable to Louisville, it will likely not be necessary for Louisville to undertake the comprehensive needs assessment described in Section D below. However, if the City believes it has unique interests that need to be met in a franchise agreement, we will want to discuss how to demonstrate those needs to Comcast through the needs assessment process. Federal law provides for two types of franchise renewals. The first, and more common, is an informal renewal process. In an informal process, the parties meet and negotiate a mutually acceptable franchise. The informal process is less structured, usually less confrontational, and less costly. If the City and Comcast are unable to informally negotiate an acceptable franchise, under the federal Cable Act, either party may pursue a formal franchise renewal. To commence a formal franchise renewal proceeding, a cable operator may make a written demand for formal proceedings. Within a very structured and limited time period, the franchising authority determines its future cable- related needs and submits that information to the cable operator. The cable operator then submits a proposed franchise. The franchising authority, within four months of the submission date, must make a preliminary assessment of whether it will accept or deny the cable operator’s offered franchise. If the franchising authority does not accept the proposed franchise, the end result, in all likelihood, is federal court litigation. It is not uncommon however, that even when the parties are proceeding through a “formal” renewal process, they will continue to negotiate informally, and the threat of litigation at the end of the process often leads to an eventual “informal” resolution. C. Federal Limitations on City Authority. It is important to understand the limitations imposed by federal law. The City may require an upgrade of the cable system to provide certain cable services and may require that the cable operator 6