2016-001 Regarding an Ordinance Granting a Competitive Cable Franchise for Qwest Broadband Services, Inc., d/b/a Century Link EXHIBIT 3
Findings of Fact
CITY OF HOPKINS, MINNESOTA
RESOLUTION NO. 2016-01
Regarding an Ordinance Granting a Competitive Cable Franchise
for Qwest Broadband Services, Inc., d/b/a CenturyLink
RECITALS:
WHEREAS, the City of Hopkins,Minnesota makes the following FINDINGS OF
FACT:
1. In October 2014, Qwest Broadband Services, Inc., d/b/a CenturyLink, Inc.
("CenturyLink") requested that the City of Hopkins, Minnesota ("City") initiate
proceedings to consider awarding it a franchise to provide cable communications services
in the City ("Service Territory").
2. Comcast of Arkansas/Florida/Louisiana/Minnesota/Mississippi/Tennessee, Inc.
("Comcast") holds a non-exclusive cable communications franchise for the Service
Territory ("Comcast Franchise").
3. The Comcast Franchise, which the City last renewed in August 2012, is currently the
only cable communications franchise for the Service Territory.
4. The monopoly held by a sole cable communication provider in a particular market is a
barrier to entry for additional providers, which does not have a captive market but must
instead"win" every subscriber.'
5. The presence of a second cable operator in a market improves the quality of service
offerings and drives down prices by approximately 15%.2
6. On March 26 and April 2, 2015, the City published a Notice of Intent to Franchise a
Cable Communications System ("Notice") in the Sun Sailor, a newspaper of general
circulation in the Service Territory.
7. The Notice indicated that the City was soliciting franchise applications and provided
information regarding the application process, including that applications were required
1 In the Matter of Section 621(a)(1) of the Cable Communications Policy Act of 1984 as amended by the Cable
Television Consumer Protection and Competition Act of 1992, Report and Order and Further Notice of Proposed
Rulemaking,MB Docket No. 05-311,at¶ 138 (Rel.Mar. 5,2007)("621 Order").
2 Id at¶¶2,50.
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to be submitted on or before April 15, 2015 and that a public hearing to hear proposals
from applicants would be held May 19, 2015 at 7:00 PM.
8. The City also mailed copies of the Notice and application materials to CenturyLink and
Comcast.3
9. On April 15, 2015, the City received an application from CenturyLink (the "CenturyLink
Application"). The City did not receive any other applications.
10. As provided by the Notice, on May 19, 2015 the City held a public hearing during the
City Council's regularly scheduled meeting to consider CenturyLink's application and
qualifications.
11. On May 4, 2015, Comcast submitted a letter to the City setting forth its position
regarding the CenturyLink Application ("Comcast Letter").4
12. The Comcast Letter expresses concern about how CenturyLink's proposal compared to
particular provisions of the existing Comcast Franchise.5
13. The Comcast Letter also summarizes Comcast's position regarding build-out
requirements and other proposed terms related to competition in the cable industry.6
14. During the hearing, CenturyLink presented its proposal and all other interested parties
were provided an opportunity to speak and present information to the City Council
regarding the CenturyLink Application.
15. Following the hearing, the law firm of Moss & Barnett, a Professional Association
prepared a report, dated June 1, 2015 ("Franchise Report"), reviewing and analyzing the
City's franchising procedures, the CenturyLink Application and other information
provided by CenturyLink in connection with the May 19, 2015 public hearing.'
16. The Franchise Report identifies and discusses federal and state legal requirements
relevant to the City's consideration of the CenturyLink Application, including laws
pertaining to franchising procedures and competition between providers.8
17. The Franchise Report also analyzes information provided by CenturyLink to establish its
qualifications to operate a cable communications franchise in the Service Territory.9
3 Notice by the City of Hopkins,Minnesota of Its Intent to Consider An Application for a Franchise and Request for
Proposals-Official Application Fonn
4See May 4, 2015 letter from Emmett Coleman to Brian Grogan, Franchise Administrator of the Southwest
Suburban Cable Commission regarding CenturyLink Video Franchise Application.
51d. at 2.
61d. at 1-2.
Report to the Southwest Suburban Cable Commission Regarding Qwest Broadband Services, Inc. d/b/a/
CenturyLink—Proposal for a Cable Communication Franchise,June 1,2015.
8 Franchise Report at 2-9.
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18. At its meeting on October 28, 2015, the Southwest Suburban Cable Commission
("Commission") considered the Franchise Report along with the information and
documentation it had received regarding the CenturyLink Application, and adopted
Resolution 2015-1 finding and concluding that the CenturyLink Application complied
with the requirements of Minn. Stat. § 238.081 and that CenturyLink is legally,
technically, and financially qualified to operate a cable communications system within
the Service Territory.
19. In Minnesota, both State and federal law govern the terms and conditions of an additional
cable communications franchise in an already-franchised service area.10
20. The franchising authority may not grant an exclusive franchise or unreasonably refuse to
award an additional competitive franchise."
21. The franchising authority must allow an applicant reasonable time to become capable of
providing cable service to all households in the service area.'2
22. The franchising authority may grant an additional franchise in an already-franchised
service area if the terms and conditions of the additional franchise are not "more
favorable or less burdensome than those in the existing franchise" regarding the area
served, the PEG access requirements, and franchise fees.'
23. The additional franchise must also include, among other things, "a schedule showing . . .
that the construction throughout the authorized franchise area must be substantially
completed within five years of the granting of the franchise."14
24. In order to ensure that any additional franchise granted to CenturyLink would contain
substantially similar service area, PEG access requirements, and franchise fees to the
Comcast Franchise, the City used the Comcast Franchise as the base document for its
negotiations.
25. On December 24, 2015, the City Council gave notice that it intended to introduce an
ordinance granting a cable communications franchise to CenturyLink.
26. On January 5, 2016 the City Council introduced Ordinance No. 2016-1103, an Ordinance
of the City of Hopkins Granting a Cable Communications Franchise to Qwest Broadband
Services, Inc. d/b/a CenturyLink("CenturyLink Franchise").
27. Copies of the CenturyLink Franchise were made available to the public, including
Comcast, on December 18, 2015.
91d. at 11-12.
10 See 47 U.S.C. §541(a)(1);Minn. Stat. §§238.08, .084;see also Franchise Report at 2-8.
11 47 U.S.C. § 541(a)(1).
12 47 U.S.C. § 541(a)(4).
13 Minn. Stat. §238.08,subd. 1(b).
14 Minn. Stat. §238.84,subd. 1(m).
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28. The CenturyLink Franchise encompasses the same Service Territory encompassed by the
Comcast Franchise.'5
29. The franchise fees required by the CenturyLink Franchise are identical to those required
by the Comcast Franchise. 16
30. The PEG access requirements in the CenturyLink Franchise mandate certain obligations,
such as HD channel capacity for all PEG channels that go beyond the commitments made
in the Comcast franchise.''
31. The City recognizes that CenturyLink, which currently offers no cable communications
services in the Service Territory, cannot justify a large initial deployment because it
"realistically cannot count on acquiring a share of the market similar to Comcast's share .
. . [and] must begin offering service within a smaller area to determine whether it can
reasonably ensure a return on its investment before expanding."18
32. The CenturyLink Franchise therefore requires CenturyLink's initial deployment to be
capable of serving at least 15% of the living units in the Service Territory within two
years.
33. The CenturyLink Franchise permits the City to monitor CenturyLink's progress and
compliance with build-out requirements via quarterly meeting and accelerates the build-
out schedule if CenturyLink has market success,with the goal and expectation that build-
out will be substantially complete before the CenturyLink Franchise's five-year term
expires.'9
34. During its regularly scheduled meeting on January 5, 2016, the City Council will hold a
public hearing at which all interested parties are provided an opportunity to speak and
present information regarding the proposed CenturyLink Franchise.
WHEREAS, the City has considered these facts and the cable-related needs and interests
of the community:
NOW THEREFORE, the City Council for the City of Hopkins, Minnesota hereby
resolves as follows:
1. The foregoing findings are adopted as the official findings of the City Council and made
a part of the official record.
2. The City has authority to adopt an ordinance granting a cable communications franchise
to CenturyLink for the Service Territory.
15 CenturyLink Franchise §2.4;Comcast Franchise §2.4.
16 CenturyLink Franchise § 16.1;Comcast Franchise § 16.1.
17 CenturyLink Franchise § 7;Comcast Franchise§7.
18 621 Order at¶35.
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CenturyLink Franchise §2.6.
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3. The City may not unreasonably refuse to award a competitive cable communications
franchise to CenturyLink.
4. The City and its residents will benefit from adoption of the CenturyLink Franchise, which
will introduce facilities-based competition into the cable communications market in the
Service Territory and thereby reduce costs to consumers and increase the quality and
availability of services.
5. CenturyLink is legally, technically, and financially qualified to operate a cable
communications system in the Service Territory and has complied with all application
requirements.
6. The City has complied with all franchise application requirements imposed by State and
federal law, including those identified herein or in the Franchise Report.
7. The terms and conditions of the CenturyLink Franchise pertaining to service area, a PEG
access requirement, and franchise fees are not more favorable or less burdensome than
the corollary terms of the Comcast Franchise.
8. The CenturyLink Franchise's initial deployment requirement of 15% within two years
and 5-year timeline for substantially completing build-out provides a reasonable period of
time for CenturyLink to become capable of reaching full deployment and is therefore
consistent with both State and federal law.
9. The Ordinance Granting a Cable Communications Franchise for Qwest Broadband
Services, Inc., d/b/a CenturyLink is formally and finally adopted.
10. The City finds and concludes that its actions are appropriate, reasonable, and consistent
in all respects with the mandates set forth in Chapter 238 of Minnesota Statutes and
applicable provisions of federal law, including 47 U.S.C. § 541(a).
PASSED AND ADOPTED in regular session of the City Council of the City of Hopkins,
Minnesota this 5th day of January, 2016.
Molly Cummings
Mayor of the City of Hopkins
ATT ST:
/, 1226(At --P,f 1
Amy Domeier, City Clerk
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