Memorandum

City of Lawrence

Legal Services Department

 

TO: 

David L. Corliss, City Manager

 

FROM:

Toni Ramirez Wheeler, Director of Legal Services

John Jay Miller,  Staff Attorney

 

 

Date:

September 3, 2010

 

RE:

Transfer of Telecommunications Franchise from World Net L.L.C. to Knology Of Kansas, Inc.

 

 

 

 

The World Company, d/b/a/Sunflower Broadband, (Sunflower) has entered into an agreement with Knology of Kansas, Inc., d/b/a Knology (Knology) to transfer its telecommunications systems, including its telecommunications franchise agreement with the City.  Sunflower is requesting a two-step transfer where the City agrees to transfer the telecommunications franchise with WorldNet, L.L.C., a subsidiary of The World Company, to the World Company and then from The World Company to Knology. 

 

On August 31, 2010, Sunflower and Knology provided the City Manager’s Office written notice of this transaction and requested the transfer of the telecommunications franchise agreement.  The expected closing date of the transaction is November 30, 2010.  After providing a brief overview of the City’s franchise agreement with the WorldNet L.L.C., this memorandum will outline the process to assign the telecommunications franchise to Knology of Kansas, Inc. pursuant to federal, state and local law.

 

Franchise Agreement with World Net L.L.C.    

A telecommunications contract franchise ordinance is a non-exclusive right to construct use and maintain cables, lines and other facilities in the public right-of-way to provide telecommunications services to residents of the city. The franchise does not include wireless communication services.    The authority to enter into the contract franchise ordinance is pursuant to K.S.A. 12-2001 et seq.

 

The City has had a telecommunications franchise with WorldNet L.L.C since 2001.  The franchise was amended in 2006 with Ordinance 8058 to increase the franchise fee to five percent (5%) of gross revenue derived from the operation of the WorldNet’s local exchange telecommunications service.

 

Transfer of Franchise Agreement to Knology, Inc.

Staff will review federal and state law to insure that the appropriate substantive and procedural steps are taken to transfer the telecommunications franchise to Knology. 

Ordinance 7359, and amendments thereto, granted the telecommunications franchise to World Net L.L.C. and prescribes the method for assigning the telecommunications system franchise.  Section 151of the ordinance states:

 

  1. The telephone company shall seek approval from the City to transfer the franchise.

 

  1. The telephone company shall notify the City in writing of its request to assign the franchise. 

 

  1. The franchise cannot be assigned until the City approves of the assignment in writing.

 

  1. The franchise can only be assignable if it complies with federal, state and local law. 

 

The applicants are requesting that the City Commission adopt an ordinance to approve the transfer of the telecommunications franchise.  The ordinance will constitute the written permission of the telecommunications franchise transfer.  The proposed ordinance submitted in the August 31 application is currently under review by legal staff.  Staff may recommend revisions to the draft ordinance.   

 

Action Requested:  Direct staff to review the submitted request to transfer the telecommunications franchise to Knology and prepare the appropriate ordinance for the City Commission to consider on a future agenda.