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Council Communication

Title:	First Reading of an "Ordinance Deleting Section 16.20.160 of the Ashland Municipal Code to Remove Requirements for Franchise Assignment Approvals When Corporate Control Is Transferred"
Dept:	Legal Department
Date:	February 5, 2002
Submitted By:	Paul Nolte
Reviewed By: ..............................	Greg Scoles

Synopsis:	This ordinance removes requirements for approval by the city when a change in ten percent of shareholder ownership occurs in a corporate telecommunications franchisee.
Recommendation:	Move to approve ordinance for second reading.
Fiscal Impact:	None
Background:	The city adopted a comprehensive telecommunications franchise code in March 1998.  Significant amendments to the code were made in December 1999 after extensive discussions were made with US West, the predecessor to Qwest.  As a result of those discussions, the December 1999 amendments were to include the deletion of section 16.20.160. Representatives of US West objected to the section on the basis that it imposed a degree of regulatory supervision beyond that permitted by law and that the city did not have the authority to approve change in control of the U S West network or facilities or to regulate transactions between US West affiliates.  While staff did not agree with all of these reasons, staff did agree that this section should be deleted primarily because it would be difficult, if not impossible, to track changes in shareholder ownership and that such control was not necessary for the proper administration of the city's rights of way.  Ultimately the December 1999 amendments included changes to over 100 sections of the telecommunication code and the failure to delete this section at that time was an error in presenting the final amendments to the council following these extensive negotiations with US West. Qwest, the successor to US West, is now raising, in the litigation involving several cities in Oregon - including Ashland, this section as an example of how cities are violating the federal Telecommunications Act of 1996 by regulating telecommunication carriers in a manner not related to a city's control of its rights of way.  It was only after Qwest raised this objection did I realize that the section was still in our code.

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ORDINANCE NO. ___________

AN ORDINANCE DELETING SECTION 16.20.160 OF THE ASHLAND MUNICIPAL CODE TO REMOVE REQUIREMENTS FOR FRANCHISE ASSIGNMENT APPROVALS WHEN CORPORATE CONTROL IS TRANSFERRED

THE PEOPLE OF THE CITY OF ASHLAND DO ORDAIN AS FOLLOWS:

Annotated to show deletions and additions to the code sections being modified. Deletions are lined through and additions are underlined.

SECTION 1. Section 16.20.160 of the Ashland Municipal Code is deleted.

16.20.160 Transactions Affecting Control of Grant. Any transactions which singularly or collectively result in a change of ten percent or more of the ownership or working control of the grantee, of the ownership or working control of a telecommunications franchise, of the ownership or working control of affiliated entities having ownership or working control of the grantee or of a telecommunications system, or of control of the capacity or bandwidth of grantee's telecommunication system, facilities or substantial parts of such capacity or bandwidth, shall be considered an assignment or transfer requiring city approval pursuant to section 16.20.150. Transactions between affiliated entities are not exempt from city approval.

The foregoing ordinance was first read on the ______day of _____, 2002,
and duly PASSED and ADOPTED this ____ day of ____, 2002.

Barbara Christensen, City Recorder

SIGNED and APPROVED this ____ day of ______, 2002.
Alan W. DeBoer, Mayor

Reviewed as to form:
Paul Nolte, City Attorney

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