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HomeMy WebLinkAboutLetter from Time Warner Cable Proposed Redemption of Comcast's OwnershipSIl S CITY OF PALM DESERT Community Services Division Staff Report REQUEST: CONSIDERATION OF LETTER FROM TIME WARNER CABLE RELATIVE TO PROPOSED REDEMPTION OF COMCAST'S OWNERSHIP INTERESTS IN TIME WARNER CABLE, INC., AND TIME WARNER ENTERTAINMENT COMPANY, L.P. SUBMITTED BY: Sheila R. Gilligan, Assistant City Manager for Community Services DATE: January 12, 2006 CONTENTS: 1. Letter from Time Wamer Cable dated November 7, 2005 2. Response from City's Legal Counsel RECOMMENDATION: By Minute Motion, receive and file the letter from Time Warner Cable dated November 7, 2005. BACKGROUND: We were advised by Time Warner Cable that Time Warner, Inc. recently entered into an agreement with Comcast to redeem Comcast's interests in Time Warner Cable, Inc., and Time Warner Entertainment Company, L.P. I have reviewed this with our legal counsel on cable relations, and he indicates no action is required by the City Council. We are submitting this for your information with a recommendation that it be received and filed for future reference. SHEILA R. GILLIGAN ACM/COMMUNITY SI SRG:mpg Approved: 14211�r- CARLOS L. CITY MANAGER CITY 01 P 11 1 M OESERT 73-510 FRED WARING DRIVE PALM DESERT, CALIFORNIA 92260-2578 TEL: 760 346-o6n FAX: 760 340-0574 info@palm-desert.org November 3, 2005 Mr. William B. Rudell Williams, Watson & Gershon 355 South Grand Avenue, 40"' Floor Los Angeles, California 90071-3101 Dear Bill: I am not sure that you even know that Bob Kohn retired from the City of Palm Desert a few months ago. Ms. Frankie Riddle and I have assumed responsibility for the administration of the cable franchise in the interim. Attached is a letter I received yesterday from Time Warner Cable, which looks like something you might need to review and provide direction to us. I think it is just another one of those name changes, Bill, but you are the expert. Hope all is going well with you. It has been a long time since we spoke, and I will look forward to getting your response. I am going on vacation beginning Thursday, November 17t', returning on Monday, November 28"'. If this is pressing, please call Ms. Riddle in my absence. Sincerely, 1X_ �4 SHEILA R. GILLIGAN ASSISTANT CITY MANAGER FOR COMMUNITY SERVICES SRG:mpg Attachment (as noted) cc: Frankie Riddle, Senior Management Analyst Sun !)te p, Dil item - !)rtevt ('uir rm 4l-715 Crend' Streit Palm l ewa. (A 9221! Tr1 700- ia0-1 i 1? hi 700-340-2314 u tru'.tnnr+rurne'rc ubk .e not/!)ctrrt('ili<'t 14PTIME WARNER CABLE — — November 7, 2005 Via Certified Mail/ Return Receipt Requested Sheila Gilligan Assistant City Manager City of Palm Desert Palm Desert, CA 92260 Dear M igan:./X& 0 C ry N I am writing as part of our ongoing efforts to keep you apprised of developments involving your local cable system. As you know, an affiliate of Time Warner Cable Inc. ("TWCI") operates a cable television system in your community (the "System") and does business as Time Warner Cable. Time Warner Cable is a subsidiary of, and controlled by, Time Warner Inc. ("TWI"). As you may have read, TWI recently entered into an agreement with Comcast to redeem Comcast's interests in TWO and an affiliate, Time Warner Entertainment Company, L.P., that are currently held in FCC -mandated trusts pending divestiture (the "Transaction"). Upon completion of the Transaction, TWO will become a publicly - traded company. The Transaction will have absolutely no impact on the System and its operations or local management. In particular: TWO will become a publicly -traded company, with TWI owning stock representing approximately 84% of the equity in Time Warner Cable and 90% of the voting power. The remaining 16% of the equity will be held by public shareholders. • There will be no transfer of the System, or any applicable local franchise, which will continue to be held by the same affiliate of Time Warner Cable. • The local management and staff will remain the same. • There will be no change in control. TWO will continue to be solely and exclusively responsible for the day-to-day management and operation of the System, and TWI will continue to hold ultimate control of TWCI. • There will be no change in our commitment to provide our customers with the best in programming choices and customer service at a competitive rate. November 7, 2005 City of Palm Desert Page 2 of 22 • This Transaction will have absolutely no impact on our business policies or practices. Local management will continue to report to the same executives of Time Warner Cable. This Transaction does not require any action on your part. Please do not hesitate to contact me should you have any questions or if I can be of any assistance. We certainly value the fine relationship we have with your community. Very truly yours, K thi Jacobs irector, Government & Community Relations GGillian, Sheila From: William B. Rudell (WRudell@rwglaw.com] Sent: Tuesday, November 29, 2005 3:18 PM To: Gilligan, Sheila Subject: FW: City of Palm Desert --Time Warner Cable Inc.: Internal Restructuring Sheila: Based upon the representations from Kathi Jacobs of Time Warner Cable, I believe that her November 7, 2005, letter can be "received and filed" and that no further action is necessary. P.S. I had no idea that Bob Kohn had retired. I'll look forward to working with his replacement. -----Original Message --- From: Jacobs, Kathi[mailto:kathi.jacobs@twcable.com] Sent: Tuesday, November 29, 2005 2:46 PM To: William B. Rudell Cc: Sheila Gilligan (E-mail) Subject: RE: City of Palm Desert --Time Warner Cable Inc.: Internal Restructuring 23 I have just received confirmation that there will be no change of control in TWEAN, nor an assignment of any franchise held by TWEAN to another TW entity. Please let me know if I can be of any further assistance. Regards, Kathi Jacobs Director Government & Community Relations Time Warner Cable - Desert Cities PH: (760) 674-5377 FAX: (760) 674-2392 -----Original Message ---- From: William B. Rudell [mailto:WRudell@rwglaw.com] Sent: Monday, November 21, 2005 5:18 PM To: Jacobs, Kathi Cc: Sheila Gilligan (E-mail) Subject: City of Palm Desert --Time Warner Cable Inc.: Internal Restructuring Kathi: I have reviewed your letter dated November 7, 2005, to Sheila Gilligan, Assistant City Manager of Palm Desert, which relates to the proposed redemption of Comcast's ownership interests in Time Warner Cable Inc. and Time Warner Entertainment Company, L.P. You have represented to the City of Palm Desert that this redemption transaction will not result in any transfer of the Palm Desert cable system or cable franchise, nor any change of control of the current franchisee. Other cities served by subsidiaries of Time Warner Cable Inc. are receiving FCC Form 394s requesting consent to an "internal restructuring" within companies owned by and including Time Warner Cable Inc. Under this restructuring, certain cable systems, and franchises associated with those systems, will be assigned by Time Warner Cable Inc. to one of its wholly -owned subsidiaries, TWE Holding I LLC. According to my records, the Palm Desert cable franchise is currently owned and operated byTime Warner Entertainment --Advance Newhouse Partnership, a New York partnership, doing business as Time Warner Cable. Please confirm that this entity is not involved in the "internal restructuring" referenced above and that neither the Palm Desert cable system nor the Palm Desert franchise will be assigned or transferred to TWE Holding I LLC, or to any other entity. Thank you for your anticipated response to this request. NOTICE: This communication may contain privileged or other confidential information. If you are not the intended recipient of this communication, or an employee or agent responsible for delivering this communication to the intended recipient, please advise the sender by reply email and immediately delete the message and any attachments without copying or disclosing the contents. Thank you.