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HomeMy WebLinkAboutSettlement Agreement -07-061 CAG-07-061 law ter+ SETTLEMENT AGREEMENT This Settlement Agreement is entered into this,�X • day of 14f a , 2007, between the City of Renton, Washington("City"), Comcast Cable Communications, LLC and Comcast of Washington IV, Inc. (collectively, "Comcast"or the "Company"). The City and Comcast are collectively referred to herein as the "Parties." Recitals WHEREAS, the City is certified as a rate regulation authority pursuant to rules of the Federal Communications Commission (hereinafter "FCC"); and WHEREAS, Comcast filed with the City a"pre-approval' FCC Form 1235 with the City on or about March 1, 1999, purporting to set forth and justify a $1.16 network upgrade add-on to recover the costs of a network upgrade for the City that was completed in June 1999 (the "Preliminary FCC Form 1235")• and WHEREAS, the $1.16 network upgrade add-on is based on projected cost data; and WHEREAS, Comcast has not filed a final FCC Form 1235 with the City that includes actual network upgrade cost data; and WHEREAS, Comcast could attempt to add the $1.16 network upgrade add-on to the basic service rate each month through the year 2014; and WHEREAS, Comcast filed with the City an FCC Form 1240 on or about April 1, 2006, purporting to set forth and justify the rate it could charge to subscribers in the City for basic service programming (hereinafter the "2006 FCC Form 1240"); and WHEREAS, the City retained rate analysts to review the Preliminary FCC Form 1235 and the 2006 FCC Form 1240; and WHEREAS, the rate analysts identified certain disputed issues concerning the Preliminary FCC Form 1235 and the 2006 FCC Form 1240; and WHEREAS, Comcast has proposed to settle the outstanding issues identified by the rate analysts, as set forth in a January 23, 2007, letter from Comcast to the City; and WHEREAS, the City believes it is in the public interest to avoid the delay, uncertainty and costs associated with the continued review of the 2006 FCC Form 1240 and the Preliminary FCC Form 1235, and any subsequent litigation before the FCC. NOW, THEREFORE, in consideration of premises, promises, undertakings and mutual covenants of the Parties and other good and sufficient consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree to the terms below: Agreement FCC Form 1235 1. The Preliminary FCC Form 1235 and its calculated $1.16 network upgrade add- on shall be considered the "Final" FCC Form 1235 for purposes of complying with FCC rules and the instructions for FCC Form 1235, and the Company agrees that it is barred from filing any additional FCC Forms 1235 addressing costs incurred with respect to the network upgrade identified in the Preliminary FCC Form 1235. Comcast represents and agrees that the upgrade costs for the Renton, Washington cable system have been fully recovered for the applicable period represented in the Preliminary FCC Form 1235. Comcast also agrees that it shall at no time charge the network upgrade add-on set forth in the Preliminary FCC Form 1235. The City hereby releases Comcast from any and all future refund liability arising out of the Preliminary FCC Form 1235. FCC Form 1240 2. The City approves by default the 2006 FCC Form 1240 that derived a maximum permitted rate of$14.3566, which rate includes the Business & Occupational (`B&O") taxes but excludes the FCC Regulatory Fees and Preliminary FCC Form 1235 add-on amount. The City hereby releases Comcast from any and all refund liability attributable to its treatment of the B&O tax in prior rate filings and in the 2006 FCC Form 1240. 3. Comcast shall maintain its current Basic Service Rate of$12.48, exclusive of franchise fees and the FCC Regulatory Fees, until at least July 1, 2007. Comcast may charge basic programming rates less than $12.48, exclusive of franchise fees and FCC Regulatory Fees, as long as such rates are consistent with applicable law and are applied in a uniform and nondiscriminatory way, pursuant to applicable federal, state, and local laws and regulations. 4. The Company agrees to modify the FCC Form 1240 to be filed with City on or about April 1, 2007 (the "2007 FCC Form 1240") as follows: a. Module A, Line A1, Current Maximum Permitted Rate shall be reduced to $13.4066. b. Worksheet 7, External Costs for the True-up and Projected Period, Line 708, Commission Regulatory Fees for Period, shall be completed with the FCC Regulatory Fees appropriate for each period in the 2007 FCC Form 1240, and all subsequent FCC Forms 1240 shall reflect, subject to applicable FCC regulations then in effect, the actual total FCC Regulatory 2 Fee payment made by Comcast for the applicable true up period and Comcast's projection of the total FCC Regulatory Fee payment in the applicable projected period. c. Worksheet 8, True-Up Rate Charged, Lines 801-812, shall include the current basic service rate and FCC Regulatory Fees. The B&O tax amount of$0.95 included in the 2006 FCC Form 1240 shall be excluded from the 2007 FCC Form 1240. B&O taxes shall be excluded from all future FCC Forms 1240 filed with the City. 5. The City reserves all of its rights and remedies with respect to the 2007 FCC Form 1240, except those rights that are explicitly waived in this Settlement Agreement. Franchise Fee Audit Document Request 6. The Company shall agree pursuant to a separate side letter that, upon City execution of this Settlement Agreement, it shall provide to Front Range Consulting, Inc., no later than two business days after the date of said execution, the gross monthly amount of the advertising revenues (advertising revenue plus advertising sales commissions) for the audit period where Comcast Corporation and/or the Company is affiliated with an advertising agency that receives commissions, such as National Cable Communications (NCC) and the applicable regional advertising entity, and the net amount (advertising revenue) where Comcast Corporation and/or the Company does not have such an affiliated interest. The provision of this information to Front Range Consulting, Inc. shall be without prejudice to the Company's right to dispute any audit findings, or the requirement of Comcast to pay franchise fees based on the provision of such information provided to Front Range Consulting, Inc. The City, however, reserves all of its rights and remedies with respect to Comcast's compliance with franchise provisions and applicable laws and decisions pertaining to the payment of franchise fees. General Terms and Conditions 7. Neither Comcast nor any of its affiliates or subsidiaries will take any action to challenge any provision of this Settlement Agreement as contrary to or unenforceable under applicable laws or regulations, nor will they participate with any other person in any such challenge. 8. The Parties agree that this Settlement Agreement does not constitute an admission of error on the part of either party and shall not be deemed to be an admission of any such error by either party in any civil or administrative proceeding. 3 R 9. This Settlement Agreement shall be binding upon and shall inure to the benefit of the Parties hereto, and their successors in interest, assigns, personal representatives and heirs. 10. This Settlement Agreement is freely and voluntarily entered into by the Parties, without any duress or coercion, and after each party has consulted with its counsel. Each party hereto has carefully and completely read all of the terms and provisions of this Settlement Agreement. 11. This Settlement Agreement shall be governed by and construed in accordance with the laws of the State of Washington. 12. The Parties further agree that this Settlement Agreement may be executed in multiple counterparts. COMCAST CABLE M ICATIONS, LLC By: Its: SVP) t"j Y14A C-C COMCAST OF HI GTON IV, INC. By: Its: y Cjc_-� CITY OF RENTON, WASHINGTON By: yx� Kathy Keilker Its: Mayor Attest: �¢ J GZ)U ice--' Bonnie I. Walton, City Clerk 4