HomeMy WebLinkAboutCOM 0643.001 2018-2020 ORO
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CABLE TELEVISION DIVISION
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DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS
STATE OF HAWAII
In the Matter of the Joint Application of }
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TIME WARNER CABLE INC. and CHARTER DECISION AND ORDER NO. 366
COMMUNICATIONS, INC. CD
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For Approval of the Transfer of Control of } '
Oceanic Time Warner Cable LLC's Cable } *
Television Franchises for the Island of Oahu, } ¢
Island of Kauai, East Hawaii (Hilo), West } -
Hawaii (Dona), County of Maui (excluding } `£
Lahaina), and Lahaina from Time Warner ) �`
Cable Inc. to Charter Communications, Inc. }
DECISION AND ORDER NO. 366
I. INTRODUCTION
On July 15, 2015, Time Warner Gable Inc. ("TWC"), the ultimate parent company
of Oceanic Time Warner Cable LLC ("O C"), and Charter Communications, Inc.
("Charter")'jointly filed a "State of Hawaii Application for Transfer of Cable Television
Franchise" ("State Transfer Application") with the Department of Commerce and
Consumer Affairs ("DCCA") for approval of the transfer of control of all of OTWC's
Cable Franchises in the State of Hawaii ("State") from TWC to Charter. Pursuant to
Hawaii Revised Statutes ("HRS") section 440G-10.1 and Hawaii Administrative Rules
("HA ") chapter 16-133, DCCA hereby approves Applicants' request subject to the
terms, conditions, and requirements provided in this Decision and Order ("D&O").
II. BACKGROUND
On July 15, 2015, Applicants submitted their State Transfer Application with
DCCA and concurrently provided their Federal Communications Commission ("FCC")
Form 394—Application for Franchise Authority Consent to Assignment or Transfer
Control of Cable Television Franchise, dated July 15, 2015 ("Form 394") and certain
' Charter and TWC shall collectively be referred to as the"Applicants.,,
Submitted by: J Yoshimoto, Deputy Corporation Counsel rr
1 • t
Comm.'No.
Ref.To:, PIP FC
Ref. Date lz U 0 3 2019
other information including their Public Interest Statement dated June 25, 2015.1 The
Application requested the Director of DCCA ("Director") to "consent"to or approve the
proposed indirect transfer of contro13 of all of OTWC's Cable Franchises in the State
from TVVC to Charter4pursuant to and consistent with the May 23, 2015 Agreement and
Plan of Mergers ("Merger Agreements") that were entered into by TVVC, Charter, and a
number of other entitieS5 ("Proposed Transaction"). The Application was submitted
pursuant to the Cable Communications Policy Act of 1984, the Cable Television
Consumer Protection and Competition Act of 1992 (the "Cable Act"), 47 United States
Code ("U.S.C.") section 521 et seq., 47 Code of Federal Regulations ("C.F.R.") section
76,502, and applicable State laws and rules.
A. Description of the Proposed Transaction
In their fillings with DCCA, Applicants represent that on May 23, 2015, Charter
and its subsidiary, CCH 1, LLC (which will become "New Charter") entered into Merger
Agreements with Liberty Broadband Corporation ("Liberty Broadband"), Liberty
Interactive Corporation (Liberty Interactive Corporation and Liberty Broadband shall be
collectively referred to as "Liberty"), Advance/Newhouse Partnership
("Advance/Newhouse"), the parent company of Bright House Network ("BHN"),6and
TVVC. TWC will merge into New Charter through a series of mergers, which will result
in TVVC stockholders, other than Liberty, receiving a combination of cash and shares of
New Charter Class A Common Stock in exchange for its shares of TVVC stock. As part
of the Merger Agreements, Charter will acquire BHN for approximately $10.4 billion,
comprised of cash and equity of New Charter. Liberty will invest a total of$5 billion in
connection with the transfer in exchange for additional shares of New Charter Class A
Common Stock.
2 Applicants' State Transfer Application and Form 394 shall collectively be referred to as the
"Application." Instead of filing an Application for each OTVVC Cable Franchise in the State,Applicants
requested that they be allowed to file a consolidated transfer application encompassing all six(6)of
OTWC's Cable Franchises in the State. DCCA approved this request.
3 In the Application,Applicants characterize the transfer of control as being an"indirect"transfer of
control. However, for purposes of D&Os, DCCA does not distinguish between"direct"and'indirect"
transfers of control.
4 Specifically,Applicants have referred to the new reorganized parent company resulting from the
transaction described in the Application as"Now Charter". New Charter will ultimately assume the name
"Charter Communications, Inc."(i.e., "Charter"). See State Transfer Application at 2,
5 See Public Interest Statement, Exhibit B (Agreement and Plan of Merger)at 1.
6 Advance/Newhouse is not a party to this proceeding since BHN does not operate or have a
presence in the State.
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The Proposed Transaction combines the control of Charter, TWC, and BHN into
a single company, referred to as "New Charter".7 There are three components to the
Proposed Transaction, each of which is expected to occur simultaneously upon closing.
First, TWC will become a subsidiary of New Charter through a series of mergers.
According to Applicants, through these mergers, TWC shareholders would be given the
choice to receive, for each share of TWC stock either: (1) a combination of$100 per
share and approximately 0.4891 shares of New Charter Class A common stock, or (2) a
combination of$115 per share and approximately 0.4125 shares of New Charter Class
A common stock.
Second, Charter will merge with a subsidiary of New Charter, and each
outstanding share of Charter Class A Common Stock will subsequently be converted
into 0.9042 shares of New Charter Class A Common Stock. New Charter will assume
the Charter name and its existing NASDAQ Stock Market ticker symbol (CHTR).
Additionally, Liberty will contribute $4.3 billion in cash to New Charter in exchange for
shares of New Charter Class A Common Stock, which would give Liberty an 1 % to
19% interest in New Charter.
Third, subject to separate conditions set forth in Charter's agreement with
Advance/Newhouse, New Charter will acquire BHN, for approximately $10.4 billion,
consisting of (1) approximately $2 billion in cash, (2) one share of New Charter Class B
Common Stock carrying voting rights in New Charter, and (3) common and preferred
units valued at approximately $8.4 billion in a partnership that would be principally held
by New Charter and that would hold all of BHN's assets, as well as assets of Charter
and TWC.
According to Applicants, the Proposed Transaction is in the public interest and
their Application demonstrates that Charter"is financially, legally, and technically
qualified to acquire control of OTWC."a They assert that the Proposed Transaction will
not impact the Cable Systems in the State, and except as provided for in this D&O, the
Applicants have "no current plans to change the terms and conditions of service or
operations of the systems."9 Applicants further state that they are "not requesting and
(have] no current plans to request any changes to the current cable franchise orders."1°
7 For the purposes of this D&O, unless specifically noted otherwise, "Charter"and"New Charter'
may be used interchangeably when referring to the resulting parent company as described in the
Application.
$ See State Transfer Application at 4.
See id.
10 See id. at 5.
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Among other things, Applicants represent that the Proposed Transaction will
"deliver a range of substantial, recognized public benefits."'I Applicants represent that
they will do so by: (1) extending Charter's broadband-focused, highly pro-customer
model to millions of new customers, while deploying the best that each applicant has to
offer in broadband, video, and voice technology; (2) delivering superior services at
competitive prices; and (3) ensuring these services are at the cutting edge of
innovation.12 Through the Proposed Transaction, OTWC customers and Subscribers
shall enjoy innovative, customizable, and interactive video services that will enhance the
customer experience.13
In order to complete the Proposed Transaction, subject to market conditions,
Charter expects to finance part of the consideration with additional indebtedness of
approximately $24 billion.14 The additional indebtedness is expected to be in the form
of new senior secured bank loans, senior secured notes, and unsecured indebtedness
made available to two of Charter's subsidiaries, CCO Holdings, LLC ("CCOH") and
Charter Communications Operating, LLC ("Charter Operating").15 To secure the loans
and secured notes, each existing Charter subsidiary that is already a subsidiary grantor
under an existing April 11, 2012 credit agreement (the "Amended and Restated Credit
Agreement") and, with some exceptions, each of TWC's and BH 's domestic
subsidiaries (including OTWC) will become grantors and "be required to provide lenders
and noteholders a security interest in certain assets and property that are required to be
pledged as collateral under the Amended and Restated Credit Agreement and any other
secured indebtedness issued by Charter Operating in connection with the [Proposed]
Transaction."16 In addition, as part of the Proposed Transaction, Charter Operating and
its subsidiaries (including OTWC) are expected to guarantee approximately $23 billion
11 See Public Interest Statement at 17.
12 See id.
13 See Charter's Testimony before RCCA in Support of the Application, Submitted on September
11, 2015, at 5.
14 See State Transfer Application at 30.
15 Id According to Charter, its subsidiaries have now incurred a significant portion of such
indebtedness in the form of senior secured notes and senior secured term loans, the proceeds of which
are being held in escrow pending the completion of the Proposed Transaction- Charter notes that subject
to market conditions, its subsidiaries may issue additional secured or unsecured notes, draw upon
additional Charter Operating's committed unsecured bridge facilities, or incur additional senior secured
term loans and/or borrowings under Charter Operating's revolving credit facility in order to finance a
portion of the consideration for the Proposed Transaction, Additionally, in order to fund the additional
cash consideration in the event TWC shareholders elect to receive$115 in cash consideration and the
lower number of New Charter shares(as described above), CCOH may, subject to market conditions,
issue additional unsecured notes or draw upon additional unsecured bridge facilities, as needed.
16 Id. at 31,
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in existing indebtedness of TWC and its subsidiaries that will become subsidiaries of
New Charter. Applicants have provided a full description of the financial transactions
involved to complete the Proposed Transaction on pages 30 through 33 of the Mate
Transfer Application.
Applicants assert that the financial elements of the Proposed Transaction are fair
and reasonable. According to Applicants, OTVVC's participation in the financial
arrangements would enable them to engage in the Proposed Transaction itself which,
as described in the Application, serves the public interest. Applicants state that
following the Proposed Transaction, New Charter will "generate more revenue"while
"strengthening its financial and technical qualifications"17, that its pro forma revenue is
anticipated to increase from 19.1 billion to $35.7 billion"18 and that its pro forma
adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (or EBITDA)
will increase from $3.2 billion to $12.9 billion.19 In addition, the Proposed Transaction is
expected to increase Charter's annual operating cash flow to $13.7 billion by 2019, or
fourteen (14) times more than its current levels.20 Applicants assert that the positive
cash flow will support the payment of interest expenses and principal repayments.21
Furthermore, Applicants represent that the Proposed Transaction, will not result in any
change in the day-to-day operations of OTWC, and that the financing elements of the
Proposed Transaction will not adversely affect OTWC's ability to provide cable
television services in the State, as authorized by DCCA. For any changes that New
Charter wishes to make after closing that require regulatory approval, New Charter
commits, through OTWC, to follow all applicable Hawaii filing and notice requirements.
B. Applicants Charter and TWC
Charter, a Delaware corporation with principal offices located in Stamford,
Connecticut, is a provider of voice, broadband internet, video, and business services
with networks and facilities located in twenty-eight (28) states.22 Charter's gross
revenues for the year ending December 31, 2014 were $9.1 billion.23 Charter asserts
that its management team "is considered among the best in the industry.112
17 Id. at 6,
1s Id.
19 See id.
zo See Response to First Set of IRs at 21 (Response to IR 24).
21 See id. at 21-22 (Response to IR-25).
22 See State Transfer Application at 11.
23 Id.at 29,
24 Irl. at 11.
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TWC, a Delaware corporation with principal offices located in New York, New
York, is a provider of video, high-speed data, and voice services to residential and
business class customers in thirty (30) states, including Hawai'i.25 TWC is the ultimate
parent company of OTWC.
C. OTWC and Its Cable Franchises in the State
OTWC, a Delaware limited liability company, is authorized to conduct business in
the State. In 2012, pursuant to D&O No, 355, RCCA authorized the transfer of the
State's Cable Franchises for the island of Oahu, island of Kauai, East Hawai'i (Hilo),
West Hawaii (Kona), County of Maui (excluding Lahaina), and Lahaina from Time
Warner Entertainment Company, L.P. ("TWE") to OTWC in connection to an internal
reorganization or restructuring of TWC's subsidiaries and companies.
TWE, OTVVC's predecessor-in-interest, had begun providing Cable Service in the
State in 1992 on Oahu as Oceanic Time Warner Cable and then later expanded its
service to encompass the entire State through the acquisition of Cable Franchises in the
other Counties. The latest acquisitions for TWE in the State were the 2002 acquisitions
of the Cable Franchises formerly held by G Force, LLC and Kaua'i Cablevision serving
the island of Kaua'i. These two Cable Franchises were subsequently combined, and
OTWC now provides Cable Service on the island of Kaua'i under a single Cable
Franchise.21
OTWC currently holds the following six (6) separate Cable Franchises covering
the entire State:
(1) East Hawaii (Hilo): D&O Nos. 185, 242, 261, 335, 355, and 357;
(2) West Hawaii JKona : D&O Nos. 173, 244, 261,318, 322, 355, and 358;
(3) Maui County (excluding Lahaina): D&O Nos, 241, 261, 317, 355, and 360;
(4) Lahaina: D&O Nos, 174, 245, 261, 355, and 359;
(5) Kaua'i: D&O Nos. 291, 319, 355, and 356; and
(6) Oahu: D&O Nos. 346 ("O'ahu D&O") and 355.
Collectively, these Cable Franchises shall be referred to as the "Franchise D&Os."
25 See id. at 1.
26 See D&O No, 291, issued on July 12, 2002.
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Certain previsions of these Franchise D&Os have been amended by the Director
through subsequent D&Os, Orders, Letter Orders, and other directives that have been
issued periodically to address specific needs and requirements consistent with the
provisions of the Franchise D&Os and State law. In addition, OTWC (and its
predecessor-in-interest, TWE) entered into various stipulations and agreements
impacting its services in the Cable Franchise areas.27
On April 27, 2009, OTWC notified DCCA of its intent to renew its East Hawai'i
(Hilo) and West Hawaii (Kona) franchises, and filed a written consolidated application
on July 20, 2011, incorporating the renewal of both Cable Franchises into a single
Hawai°i Island Cable Franchise. The East Hawaii (Hilo) franchise, which was
scheduled to expire on December 31, 2011, and the West Hawaii (Kona) franchise,
which was scheduled to expire on December 31, 2011, have been extended to January
20, 2016, pending final disposition of the renewal application.
On June 2, 2011, OTWC notified LCCA of its intent to renew its Maui County
(excludingLahaina) and Lahaina Cable Franchises, and filed a written consolidated
application on August 30, 2013, incorporating the renewal of bath franchises into a
single Maui Cable Franchise. The Maui County (excluding..: Lahaina) Cable Franchise,
which was scheduled to expire on December 31, 2013, and the Lahaina Cable
Franchise, which was scheduled to expire on December 31, 2013, have been extended
to June 30, 2016, pending final disposition of the renewal application.
On April 24, 2014, OTWC notified DCCA of its intent to renew its Kauai Cable
Franchise, which is scheduled to expire on December 31, 2016. DCCA is presently
proceeding through the renewal process for OTWC's Kauai Cable Franchise.
The Oahu Cable Franchise was renewed on January 1 , 2010 and is scheduled
to expire on January 13, 2030.
D. Public Hearings and Other Procedural Matters
Pursuant to HRS sections 440G-10.1 and 440G-7, DCCA conducted public
hearings in an effort to obtain written or oral comments, views, and/or arguments from
OTWC's customers, interested persons, and the general public regarding the Proposed
Transaction. Public hearings were held in each of the six (6) Cable Franchise areas,
consistent with State laws and rules, as follows;
Lahaina -- September 8, 2015, at 4;30 p.m., West Maui Senior Center, in
Lahaina,
Oahu -- September 9, 2015, at 4.30 p.m., King Kalakaua Building, in
Honolulu;
27 HRS section 440G-3 defines a"franchise area"or"service area"as"the geographic area for
which a cable operator has been issued a cable franchise.,,
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• East Hawaii (Hilo) -- September 9, 2015, at 4:30 p.m., Aupuni Center
Conference Room, in Hilo;
• West Hawaii (Kona) --September 10, 2015, at 4:30 p.m., West Hawaii
Civic Center, in Kailua-Kona;
• Maui County (except for Lahaina):
• September 11, 2015, at 4:30 p.m., Cameron Center Auditorium, in
Wailuku;
• September 15, 2015, at 12:00 p.m., Lanai Senior Center, in Lanai City;
• September 16, 2015, at 12:00 p.m., at Hana Community Center Hall, in
Hana;
• September 17, 2015, at 4:00 p.m., at Kaunakakai Gym Conference
Room, in Kaunakakai; and
• Kaua'i -- September 11, 2015, at 5:00 p.m,, Lihue Civic Center, in Lihue.
Notices of the public hearings were published on August 16 and August 23, 2015
in the Honolulu Star-Advertiser, The Maui News, Hawaii Tribune Herald, and the
Garden Island. Copies of the Application, all supporting documents, and any submitted
supplemental information were made available for review during normal business hours
at OTWC's offices in each Cable Franchise area in the State and at DCCA's Cable
Television Division ("CATV") office. This information was also posted on CATV's
webpage. RCCA established September 25, 2015, 4:30 p.m., as the deadline for the
receipt of public comments concerning the Proposed Transaction. Comments received
during the public hearings were varied. Some participants expressed support, while
others expressed numerous and diverse concerns regarding the Proposed Transaction.
Written testimonies and comments filed by OTV\/C's customers, interested persons, the
general public, institutional organizations, and community leaders regarding the
Proposed Transaction can be viewed at the CATV's webpage located at:
hftp://cca.hawaii.gov/catv/cable operators/charter-time-warner-cable-merger/.
The Proposed Transaction was placed on the agenda of the October 6, 2015,
meeting of the Cable Advisory Committee ("CAC"). At the meeting, CAC members
expressed a few concerns and asked for clarification of some procedural matters, but
did not object to approving the Proposed Transaction.
As part of DCCA's review and for purposes of clarification, RCCA issued two (2)
sets of information requests ("IRs"),to Applicants. RCCA issued its first set of IRs on
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August 14, 2015, and Applicants filed their responses on August 24, 2015 ("Responses
to First Set of[Rs"), DCCA issued its second set of lRs on October 8, 2015, and
Applicants filed responses on October 19, 2015 ("Responses to Second Set of IRs"),
In addition, DCCA had numerous discussions with Applicants regarding the Proposed
Transaction. Applicants responses to the filed IRs can be viewed at the CATV's
website located at: hftp:llcca.hawaii,gov/caty/cable operatorslcharter-time-wamer-
cable-merg_erl.
Ill, APPLICABLE LAW
A. Federal Law
Federal laws and regulations authorize local franchising authorities ("LFAs"),
including the State, to act on an application to transfer control of a Cable System.21, As
such, the transfer of a Cable Franchise is made under the authority of State law, which
is detailed in the section below, and is consistent with the federal Cable Act.
Among other things, section 624 of the Cable Act authorizes LFAs to impose
certain requirements on cable-related facilities and equipment, including but not limited
to Channel capacity, system configuration, and institutional and Subscriber networks.
Section 611 of the Cable Act permits LFAs to require Channel capacity be designated
for Public, Educational, or Governmental ("PEG") access use. In addition, section 622
of the Cable Act allows LFAs to assess franchise fees up to five percent (5%) of the
cable operator's annual gross revenues, any portion of which may be used for PEG
access or any other purpose.
Federal regulations require LFAs to act within one hundred twenty (120) days of
the submittal of the FCC's Form 394, various exhibits, and any additional information
required by the terms of the franchise agreement and state laws; and if an LFA fails to
act within that prescribed time, the transfer is deemed approved.19 Because the
Application was submitted on July 15, 2015, the end of the one hundred twenty (120)
day review period ends on November 12, 2015, unless otherwise extended by mutual
agreement. On November 6, 2015, DCCA and Applicants agreed to extend the review
period to November 18, 2015 to give DCCA additional time to complete its review of the
Proposed Transaction and issue a D&O. Thereafter, Applicants and DCCA mutually
agreed to extend the review period three additional times. The final agreement was to
extend the review period from December 2, 2015 to December 17, 2015.
28 See section 817 of the Cable Act. See also 47 U.S.C. section 537, and 47 C.F.R. section
78.502(a). Pursuant to HRS section 440G-4,the Director of DCCA is authorized to issue Cable
Franchises, and administer and enforce HRS chapter 440G.
29 See section 817 of the Cable Act. See also 47 U.S.C. section 537, and 47 C.F.R. section
78.502(a)and (c).
B. State Law
The regulatory powers of the Director regarding the transfer of a Cable Franchise
are set forth in NRS sections 440G-7, 440G-8, 440G-10.1, and 440G-12, In particular,
NRS section 440G-10.1(a) states that:
No cable franchise, including the rights, privileges, and
obligations thereof, may be assigned . . . or otherwise
transferred, voluntarily or involuntarily, directly or indirectly,
including the transfer of control of any cable system, whether
by change in ownership or otherwise, except upon written
application to and approval by the director. (Emphasis
added).
HRS section 440G-10.1(b) further states that the provisions of HRS sections 440G-7
and 440G-8 also apply to the transfer of Cable Franchises. HRS section 440G-8(b)
establishes the criteria to be considered by the Director prior to issuing a Cable
Franchise, and states in pertinent part:
The director, after a public hearing as provided in this chapter,
shall issue a cable franchise to the applicant when the director
is convinced that it is in the public interest to do so. In
determining whether a cable franchise shall be issued, the
director shall take into consideration, among other things, the
content of the application or proposal, the public need for the
proposed service, the ability of the applicant to offer safe,
adequate, and reliable service at a reasonable cost to the
subscribers, the suitability of the applicant, the financial
responsibility of the applicant, the technical and operational
ability of the applicant to perform efficiently the service for
which authority is requested, any objections arising from the
public hearing, the cable advisory committee established by
this chapter, or elsewhere, and any other matters as the
director deems appropriate in the circumstances. (Emphasis
added).
Based on the above, Applicants are required to satisfactorily demonstrate to the
Director that the transfer of control of OTWC's six (6) Cable Franchises in the State
from TWC to Charter is in the public interest.
C. The Privilege of a Franchise
The grant of a Cable Franchise gives the recipient a non-exclusive right to use
and occupy certain limited and scarce public places, public highways, and rights-of-way
for the construction, use, operation, and maintenance of a Cable System for a fixed
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period. Substantial economic benefits may flow to the recipient as a consequence of
this privilege; however, the franchise confers no right, title, or interest in any public
places, public highways, and rights-of-way beyond those expressly conferred herein
and in the applicable Cable Franchise Orders.
The privilege of a Cable Franchise also carries with it associated obligations.
The franchisee (and Applicants) should recognize that there are certain responsibilities
assumed when issued or transferred a Cable Franchises). These include operating
Cable Systems that are reliable, responsive, and responsible to the public that the
franchisee serves. In addition, the franchisee is responsible for providing the widest
possible diversity of information and services to Subscribers at reasonable costs and
enhancing communications capabilities to the communities it serves by supporting
institutional network ("INET") connections, public television, and PEG access
programming.
IV. DISCUSSION,
A. Introduction
DCCA has thoroughly reviewed and considered Applicants" representations in
the filed State Transfer Application, Form 394, various exhibits and documents, and
subsequently submitted supporting materials, including their responses to the issued
IRs. DCCA has also considered Applicants' representations at the public hearings and
the CAC meeting, and the comments received from the general public, government
agencies, educational institutions and administrators, community organizations and
leaders, and CAC members.
After reviewing the information provided, DCCA determines that Charter has
demonstrated the requisite financial, legal, and technical ability to operate and maintain
the Cable Systems and to provide the services, facilities, and equipment as required in
OTWC's Cable Franchise agreements.
Charter is a telecommunications company initially founded in St. Louis, Missouri,
in 1993, and has grown to serve over 5.8 million residential customers and 386,090
business customers throughout twenty-eight (28) stafies,30 Upon completion of the
Proposed Transaction, OTVVC as an indirect subsidiary of New Charter (hereafter
referred to as "Charter/O C", whenever applicable) shall continue to be owned and
controlled by T VC, and TVVC shall be a subsidiary of New Charter.31 Nonetheless,
30 See Public Interest Statement at T
31 See State Transfer Application at 2.
O would continue to be the franchisee and cable operator in the six (6) Cable
Franchise areas in the State.32
Based on the material representations made by Applicants,31 DCCA reasonably
concludes that Charter appears to be able to continue operations and maintenance of
the Cable Systems at the same levels of service to Subscribers throughout the State,
and that the management, operations, systems, and financial obligations of
Charter/OTVVC, at least in the short-term, should remain materially unchanged,
However, DCCA is cognizant of various concerns and issues raised by the general
public, educational institutions, governmental agencies, and community leaders during
the course of this transfer proceeding.31 Many of the issues and concerns raised by the
general public, educational institutions, governmental agencies, and community leaders,
although significant, fall outside of DCCA's jurisdiction in this transfer proceeding.
Nevertheless, DCCA raised many of the concerns in discussions with Charter during the
federally mandated review period and attempted to obtain Charter's commitments on
these significant issues.
In addition, Charter made various representations with respect to investments in
infrastructure and accelerated deployment of innovative and advanced technologies and
services; however, Charter initially provided few details and was unable to give any
specific commitments regarding these purported public benefits. Later, Charter
provided some additional information and commitments, a few of which are described
below.
Accordingly, DCCA has determined that the following terms, conditions, and
requirements shall be imposed on Charter and/or Charter/OTWC, as applicable, to
ensure that the Proposed Transaction is in the public interest,
B. Franchise Obligations
In addition to State statutory and administrative requirements, upon completion of
the Proposed Transaction, Charter/OTVVC shall continue to fully adhere to and comply
with the franchise obligations set forth in the Franchise D&Os.
Consistent with the provisions of the Franchise D&Os and federal and State
laws, Charter/OTWC agrees to assume and be bound by all of the terms, conditions,
and requirements of the various D&Os, Orders, Letter Orders, and any other directives
that have been issued by the Director to address specific needs and requirements by
amending certain obligations.
32 Id. at 4,
33 DCCA notes that all representations made by Applicants in connection with the Proposed
Transfer and State Transfer Application are considered to be material representations.
34 See hftp://cca.hawaii.qov/catv/cable operators/charter-time-warner-cable-merge which is the
link to the written comments submitted on the Application.
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Charter/OTWC also agrees to assume and be bound by all of the terms,
conditions, and requirements of all agreements of any type entered into between OTWC
(and its predecessor-in-interest, TWE) and the State (including but not limited to
educational and/or governmental agencies of the State), in connection with and arising
out of OTWC's franchise obligations for the various Cable Franchise areas.
Charter/OTWC voluntarily agrees to assume and be bound by all of the terms,
conditions, and requirements in this D&O, recognizing that such commitments benefit
Charter/OTWC by fostering goodwill and enhancing the public interest.
Franchise obligations related to system upgrades, INET connections, franchise
fee contributions, PEG access, Hawaii Public Television Foundation, and other
franchise related matters are set forth in the Franchise D&Os, and these obligations
remain and shall continue to be binding on Charter/OTWC.
In addition, OTWC (and, later Charter/OTWC), consistent with the provisions of
the Franchise D&Os and federal and State laws, shall fully adhere to and comply with
all of the D&Os, Orders, Letter Orders, and any other directives that have been issued
by DCCA regarding OTWC's Hawaii Cable Franchises during the interim period
between the issuance of this D&O and the completion of the Proposed Transaction.
C. Material Representations and Commitments Made by Charter
During this transfer proceeding, Charter made certain representations and
commitments in its Application and other filings regarding the Cable Franchise
obligations and the operation and management of Charter/OTWC's Cable Systems in
the State and the public benefits related to the Proposed Transaction including, among
other things, that:
1. OTWC shall remain the cable franchisee in the State and "[t]he change of
indirect ownership of OTWC will not result in any disruption of service to
Hawaii customers.1135
Z Except as otherwise provided herein, Charter/OTWC has "no current
plans to change the terms and conditions of service or operations of the
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systems."
3. Charter/OTWC is not requesting and has no current plains to request any
changes to the current Franchise D&Os.37
35 See State Transfer Application at 4.
36 Id.
37 Id. at 5.
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4. Charter's acquisition of control of OTWC will not affect OTWC's
obligations under the Franchise D&Os and Charter has no current plans to
make any changes that would be adverse to OTWC customers and
Subscribers.38
5. The Proposed Transaction shall not impact any ongoing franchise renewal
negotiations and if the franchises are not renewed by the close of the
Proposed Transaction, Charter/OTWC "will cooperate and continue to
work with the DCCA."39
6. With respect to the State's INET, after the Proposed Transaction is
completed, Charter's "acquisition of control of OTWC will not affect
OTWC's obligations under its franchise agreements and New Charter has
no current plans to make any changes."411
7, The Proposed Transaction will not affect OTWC's PEG obligations under
the Franchise D&Os, and Charter/OTWC does not have any current plans
to make any changes.41
8. The Proposed Transaction shall "provide innovative, high-quality services
in Hawaii.1142
9, The Proposed Transaction will expand broadband functionality and data
options for consumers on their mobile devices by investing significantly in
both in-home and out-of-home WiFi networks,43
10, Charter/OTWC will "transition virtually all TWC cable systems to 100% all-
digital delivery within 30 months of the close of the Proposed Transaction,
including the systems in Hawai)."41
38 See State Transfer Application at 40.
39 Id, at 5.
40 Id. at 39.
41 Id. at 40; Response to First Set of IRs at 15(Response to IR-14).
42 State Transfer Application at 6.
43 See id. at 7.
44 State Transfer Application at 37.
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11. Within twelve (12) months of the closing of the Proposed Transaction, i
Charter/OTWC shall bring its base level 60 Megabits per second ("Mbps")
broadband service to Hawaii consumers in areas where all-digital Cable
Systems are availale. 5
12. Charter/OTWC will continue to be bound by its line extension obligations
under the Franchise D&Os.¢6
13. Charter commits to providing open Internet protection in the State for at a
least three (3) years after the closing of the Proposed Transaction,
regardless of the pending judicial appeal of the FCC's Open Internet
Order,
14. Charter/OTVVC shall permit the continuation of O C's "$14.90 Everyday
Low Price" stand-alone Internet service to customers following the close of
the Proposed Transaction. Charter/OTWC has no plans to change this
service for existing customers,41 and commits to extending this service for
existing customers that continue to subscribe for a period of at least two
(2) years after the close of the Proposed Transaction.
15. Charter has certified that it will cause Charter/OTWC to "use its best
3
efforts to comply with the terms of the franchise and applicable state laws
or local ordinances and related regulations, and to effect changes, as
promptly as practicable, in the operation system, if any changes are
necessary to cure any violations thereof or defaults thereunder presently
in effect or ongoing.114
16. Charter is extending its "policy of not imposing early termination fees or
requiring customers to sign long term contracts to all customers of the
merged entities,"50 and has no current plans to change such policy.
45 See Public Interest Statement at 19.
46 See State Transfer Application at 37.
47 See charter's Testimony before LCCA in Support of the Application Submitted September 11,
2015, at 7. See also Public Interest Statement at 19.
48 See Response to First Set of IRs at 14{response at Response to )R-11).
49 Form 394 at 5, Section V, Part II(C).
50 State Transfer Application at 40.
15
17. Charter is extending its customer-friendly practice of"no data caps or
usage-based billing"51, and has no current plans to change such policy.
18. Charter is extending its customer-friendly practice of no modem lease
feeS52, and has no current plans to change such policy.
Since DCA considers all of the representations and commitments made by Charter in
its Application and other filings for this Proposed Transaction, including but not limited to
those enumerated above, to be material representations, it is appropriate, reasonable,
and in the public interest to hold Charter, 0TWC, and Charter/0TWC, as applicable, to
all of the representations and commitments made in this proceeding.
D. Broadband Service for Low-Income Consumers
Access to the Internet and broadband service has increasingly become important
in the lives of Americans and has been viewed as an essential service. Many people
rely on and use the Internet for work, education, family, and entertainment. The
importance of broadband to the State, its residents, visitors, and businesses is captured
in the following quote:
Like electricity a century ago, broadband is a foundation for
economic growth, job creation, global competitiveness and a
better way of life. It is enabling entire new industries and
unlocking vast new possibilities for existing ones. It is
changing how we educate children, deliver health care,
manage energy, ensure public safety, engage government,
and access, organize and disseminate knowledge.13
The State has long since recognized the importance of broadband service. In
December 2012, the State issued the "Hawaii Broadband Strategic Plan" setting forth
goals and specific objectives, and work plans to increase broadband adoption and use
of the Internet with the ultimate purpose of ensuring that all Hawaii citizens have
access to high-speed broadband service at affordable rates.
As part of the Proposed Transaction, Charter states that it intends to offer
broadband service to low-income consumers. The Charter/0TWC low-income
broadband service shall be uniform and national in scope. Within three (3) years after
the close of the Proposed Transaction, Charter/OTWC's low-income broadband
51 Public Interest Statement at 22.
52 See id.
53 See Hawaii Broadband Strategic Pian, issued on December 2012 at I (quoting from the Omnibus
Broadband Initiative(OBI), FCC, Connecting America:The National Broadband Plan, GN Docket No.09-
51 at 3-5, 129(2010)at xi).
16
program will be available in all six (6) Cable Franchise areas where it provides Internet
service to residential customers.
Charter shall offer its low-income program to both: (1) households with children
that have a student participating in the National School Lunch Program ("NSL ") and
(2) senior citizens age 65 and older who are eligible and receive from the federal
government Supplemental Security Income benefits. Qualified NSLP participants shall
be permitted to enroll in the program throughout the school year. Charter will initially
offer the program: (1)to qualifying customers at a speed up to thirty (80) Mbps
download and four (4) Mbps upload; and (2) at a price not to exceed $14.99 a month,
including a modem. Charter shall provide notice to DCCA prior to instituting any
changes with respect to the speed or price of the service offering.
In addition, in order to qualify, participants cannot have subscribed to Internet
service from Charter, OTWC, or one of its parents, affiliates, or subsidiaries within the
last sixty (6 ) calendar days prior to enrollment and participants cannot have any
delinquent debts owed to Charter, OTWC, or its parents, affiliates, or subsidiaries.
RCCA finds Charter's commitment to offer a broadband service for low-income
consumers in the State to be a public benefit resulting from the Proposed Transaction.
Once launched in the State, the program will benefit eligible seniors, children, and
families in a positive manner and is consistent with the State's objectives of increasing
broadband adoption and use of the Internet. DCCA notes that in Hawaii approximately
fifty percent (50%) of school age students in public schools qualify to participate in the
National School Lunch Program. With enrollment figures estimated to be over 180,000
for the 2014 to 2015 school year, roughly 90,000 children and their families across the
State would be eligible to participate in Charter/OTWC's low-income broadband service
offering. Moreover, DCCA is unaware of any other statewide broadband program
offering in Hawaii with the similar potential reach as the service committed to by
Charter as part of the Proposed Transaction.
E. Expansion of Service to Unserved and Underserved Areas
Meeting the needs of the underserved and unserved communities in OTWC's
Cable Franchise areas in the State, especially on the neighbor islands, has been a
continuing concern for RCCA. In the transfer proceeding involving the cable franchises
of Oahu, Maui County (excluding Lahaina), Lahaina, West Hawaii (Kona), and East
Hawaii (Hilo) in 2000 due to the merger between Time Warner, Inc. and American
Online, Inc., DCCA stated the following:
There is a continuing public need for extending cable service
within TWE's neighbor island franchise areas. Although TWE
has made significant inroads with respect to extending cable
services to outlying, rural or remote communities within Maui
1
County and Hawaii County, the State remains concerned for
those without cable service . . .
Extension of cable service to all communities within
franchised areas remain a high priority of the State. TWE has
identified several communities that remain unserved, primarily
due to sparse population and distances away from existing
cable distribution facilities. Those communities include
Honokahau within Lahaina; Keanae, Wailua, Ulupalakua,
Makena, and Kahakuloa within Maui; Hawaiian Homes-
Kawaihae, Kohala by the Sea, Kohala Estates, Kohala Ranch,
Kohala Makai, Anekona, and Makapala within West Hawaii;
and Kamaee, Hakalau — Chen Chuck Road, Orchid Land
Estates, Hawaiian Acres, Hawaiian Orchid Island Estates,
Eden Roc Estates, Tiki Gardens, Ohia Estates, Royal
Hawaiian Estates, Leilani Estates, Cymbidium Acres, Orchid
Isle Estates, Aloha Estates, Hawaii Island Paradise Acres,
Pacific Paradise Development, Vacation Land, Kapoho
Beach, Kalapana Sea View Estates, Black Sands Beach,
Waawaa, Green Sands, Hawaii Ocean View Ranchos, Hawaii
Ocean View Estates, within East Hawaii.
D&O No. 261 at 10-11.
Ensuring that unserved communities be provided service remained a concern for
DCCA in its D&O that renewed the Oahu franchise in 2010. In that D&O, DCCA
continued its requirement for annual reports documenting OTWC's progress toward the
extension of cable service to such communities in D&O No. 261. The Oahu D&O
states, in relevant part, the following:
TWE currently has an extension policy of twenty-five homes
per mile. As a condition of this Franchise Order, TWE shall
either maintain through the duration of the renewal term its
extension policy or, if technically feasible, improve its
extension policy such that homes in less densely populated
areas can be served. TWE shall work with the Director's staff
and shall prepare an annual report regarding the feasibility of
extending Cable Service to all communities that remain
unserved. This report shall be submitted to the Director by
December 31st of each year.
D&O No. 346 at 41.
DCCA is aware that OTVVC has made some inroads in providing Cable Service
to the unserved areas since 2000, as identified above. Current records indicate that of
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the thirty-five (35) communities identified in 2000 as being unserved, OTWC service
may now be available, at least partially, in approximately eighteen (18) of the
communities including Honokahau, Ulupalau , and Makena on Maui; and Kohala by
the Sea, Kohala Estates, Tiki Gardens, and Ohia Estates on the island of Hawaii.
However, there are various other communities in the neighbor island Cable
Franchise areas that still remain without Cable Service. As noted above, in an effort to
address and highlight DCCA's concern regarding unserved communities, DCCA
required TWE (now OTWC) in D O Nos. 261 and 346 to work with the Director's staff
and prepare an annual report (due to the Director by December 31St of each year)
regarding the feasibility of extending service to all communities that remain unserved in
light of the cable operator's twenty-five (25) homes per mile extension policy.14 Since
this is a Cable Franchise requirement, Charter/OTWC is already obligated to comply
with this requirement; however, due to the importance of this issue, DCCA reiterates
that OTWC and/or Charter/OTWC, as applicable, shall be required to continue to submit
its annual reports to the Director regarding the unserved communities as provided in
D&O Nos. 261 and 346 ("Annual Report on Unserved Areas").
With respect to unserved areas, in its Application, Charter commits that within
four(4) years of the close of the Proposed Transaction it shall: (1) be investing at least
$2.5 billion nationwide in the build-out of its networks into commercial areas beyond
where Charter, TWC, and BHN currently operate55; and (2) build out one million line
extensions of its networks to homes in its franchise areas nationwide.56
Related to Charter's build out commitments, in Hawai"i, Charter/OTWC shall be
required to, within four( ) years after the close of the Proposed Transaction; (1) invest
at least TEN MILLION AND NO/100 DOLLARS ($10,000,000.00) to build out its network
beyond where OTWC currently operates; and (2) build out at least one thousand (1,000)
line extensions of its networks to homes in the Hawaii Cable Franchise areas. These
investment and build out requirements constitute real and tangible public benefits for the
State and its residents resulting from the ProposedTransaction. These requirements
also result in actual investment in the State's local economy, and represents Charter's
commitment to the State and Charter's Subscribers.
Moreover, within its Annual Report on Unserved Areas Charter/OTWC shall also
report to DCCA on its plans to build out its network in the Hawaii Cable Franchise
areas beyond where it currently operates, and with respect to line extensions,
consistent with the requirements for such build out of its infrastructure, as discussed
above. This report, at the request of the Director, may be presented to DCCA and be
subject to further requirements and refinements in the future.
54 See D&O No. 261 at 11, D&O No. 346 at 41.
ss See Public Interest Statement at 18.
56 See id
19
F, Statewide Technical Upgrade Plan
The pace of development and changes in the technology sector is increasing,
and DCCA recognizes that the definition of"state of the art" is changing at a faster pace
than ever before. Thus, technological investments must be made with an eye towards
ensuring compatibility with what has yet to be developed, and DCCA believes that
franchise agreements cannot be the basis upon which services to Subscribers do not
keep up with new and developing technologies. With these matters in mind, DCCA
requires OTWC, under the Oahu franchise agreement, to submit a technology upgrade
plan for every five (5) year period during the twenty (20) year Oahu franchise term.
Specifically, in D&O No. 346, DCCA required the following:
For every five-year period during the franchise term, TWE
shall submit a technology upgrade plan for its Oahu Cable
System to the DCCA. The first technology upgrade plan is
due on August 1, 2010, and thereafter, each successive five-
year plan shall be submitted no later than April 30th of the
preceding year (i.e., April 30, 2014; April 30, 2019; and April
30, 2024). The technology upgrade plan shall report on new
developments in cable technology and present an anticipated
timetable for the incorporation of new developments in the
Oahu Cable System. In addition, the plan shall describe the
effect and costs of new technological developments on
community needs and interests and also on PEG access, and
the effect and compatibility and costs of those technological
changes on consumer electronic equipment. TWE, to the
extent such information is reasonably available, shall also
describe how other cable companies have incorporated, or
are planning to incorporate, new technological developments
into their Cable Systems and the estimated timetable for doing
so. TWE shall also address in its plans, among other things,
the following: impacts to PEG Access and schools and
libraries, Franchise Required Channels, INET interconnection
or connection requirements, broadband internet speeds and
other matters related to its Cable System and the cable
franchise area. Nothing herein shall preclude TWE from filing
confidential, proprietary and/or competitively sensitive
information under sea[with the DCCA.
In the event that TWE's technology upgrade plan fails to
include any of the criteria established above, the Director may
require TWE to amend and/or update its technology upgrade
plan. If TWE fails or refuses to submit an amended andfor
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updated technology upgrade plan as requested by the 3
Director, TWE shall provide a statement explaining how such
non-compliance serves the public interest within fifteen
calendar days after receipt of the Director's request.
The Director may also request that TWE improve its
technology upgrade plan to incorporate new technologies in
Oahu more rapidly. If TWE fails or refuses to submit and/or
adhere to an improved technology upgrade plan as requested
by the Director, TWE shall provide a statement explaining why
its refusal or failure serves the public interest within fifteen
calendar days after receipt of the Director's request.
The Director shall review all statements provided by TWE
regarding how its refusal or failure serves the public interest
and, in the Director's sole discretion, approve or reject the
statements. The Director may also request additional
information supporting TWE's public interest statement. In
the event that the Director rejects TWE's public interest
statement, the Director may require TINE to submit a revised
statement or technology upgrade plan. The Director shall
have the option to reduce the duration of the cable franchise
renewal term, terminate the cable franchise, or take any other
appropriate action consistent with this Franchise Order and
applicable Law, in the event TWE's fails to either submit a
revised and/or improved technology upgrade plan consistent
with the direction of the Director or a statement that is
accepted by the Director explaining why its non-compliance
serves the public interest.
Furthermore, in the event that TWE fails to submit a
technology upgrade plan by the established deadline and/or
the Director determines that TWE has failed to implement a
previously submitted technology upgrade plan, TWE shall be
provided a reasonable time to cure any deficiencies or provide
a statement of how such non-compliance serves the public
interest.
Failure to remedy the deficiency or deficiencies with a
reasonable time, or failure to provide a statement that is
accepted by the Director explaining why TWE's non-
compliance serves the public interest, shall subject TWE, at
the option of the Director, to a reduction of the cable franchise
renewal term, termination the cable franchise, or any other
21
appropriate action taken by the Director and consistent with
this Franchise Order and applicable Law.
D&O No. 346 at 23-25.
As noted above, the submittal of technology upgrade plans is a requirement of
the Oahu Cable Franchise and, as such, Charter/OTWC is required to adhere to and
comply with this requirement. In addition, the intent of RCCA is to include a similar
requirement in each of the franchise agreements that are entered into for the other
Hawaii Cable Franchises in the future. At this juncture, however, for consistency and
to ensure that any technological upgrades to service in OTWC's six (6) Cable Franchise
areas in the State are deployed reasonably and with a holistic understanding and views
of the needs and requirements of all of the communities that it serves, DCCA finds it
reasonable and appropriate to now extend the application of this requirement to all of
OTWC's Cable Franchise areas in the State.
Therefore, rather than providing a separate technology upgrade plan for each
Cable Franchise, Charter/OTVVC, following the closing of the Proposed Transaction,
shall submit a single statewide technology upgrade plan, as defined herein whenever
feasible. This requirement shall be negotiated and phased in as the neighbor island
Cable Franchises are renewed and technology upgrade plans for each Cable System
are prepared, and then eventually incorporated into a statewide plan. However, when
submitting a statewide technology upgrade plan, following the closing of the Proposed
Transaction, Charter/OTWC shall clearly indicate which Cable Franchise area(s) the
plan applies to and the applicable D&Os, note any exceptions, and fully comply with
every other aspects of the technology upgrade plan requirements as provided in the
Oahu franchise D&O, and to be provided in future D&Os for each of the other Cable
Franchises in the State.
G. Energy Efficient Two-Way Set-Top Boxes
Generally, Hawaii residents pay one of the highest rates for electricity in the
nation. Estimates have Hawaii residents paying an average of$0.33 per kilowatt hour
("kWh"), while the national average rate is approximately$0.10 per kWh.57 This
information is based on data from 2013. Recent reports from Hawaiian Electric
Company, Inc. (which serves the island of Oahu) and its subsidiary, Hawaii Electric
Light Company, Inc. (which serves the island of Hawai'i), indicate that while prices may
have decreased a little on Oahu, prices may have increased on Hawaii Island since
2013. For example, during the month of October 2015, residents on Oahu were paying
57 See htto_://www.eia. ov/electricity/state/which is a link to the U.S. Energy Information
Administration (EIA), a division oftheU.S. Department of Energy.
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over $0.30 per kWh58 while those living on Hawaii Island were paying over$0.41 per I
kWh.5-9
3
Given these statistics, DCCA believes that electric devices in Hawaii homes,
including cable set-top boxes, should be as energy efficient as possible. Charter has
agreed to make available Worldbox or other energy efficient two-way set-top boxes that
satisfy the U.S. Environmental Protection Agency's Energy Star 3.0 efficiency levels,
upon completion of the conversion to all-digital systems."
3
d
As a condition of approval of the Application, Charter/OTWC shall promote and
make Worldbox or another energy efficient set-top box available to its Subscribers
throughout the State. Customers shall have at least one option available to receive
such set-top boxes without incurring an additional cost, such as a delivery charge, to
obtain such equipment. Within three (3) years after the close of the Proposed
Transaction, at least ninety percent (90%) of newly deployed set-top boxes shall meet
the Energy Star 3.0 rating requirement, Additionally, DCCA encourages Charter/OTWC
to partner and work with local community organizations and stakeholders in the energy
field (e.g., Blue Planet Foundation and Hawaii Energy) to educate the public and
aggressively promote the use of energy efficient cable set-top boxes. Furthermore,
during this three (3) year period, Charter/OTWC should develop an economically
feasible program to change out older and less efficient boxes with energy efficient set-
top boxes with minimal (i,e., less than $1.00) or no cost to Subscribers, and no cost to
the State. "Cost' as described here is intended to refer to the charge associated with
delivery of the equipment to customers, not the price associated with lease or purchase
of the set-top box itself. If such a program is implemented, DCCA believes it would
benefit Charter/OTWC's Subscribers and the various communities in Hawaii that
Charter/OTWC serves.
H. All-Digital Network Transition
The transition from analog to all-digital service will benefit Hawaii consumers
through higher levels of television picture quality and increased video options. In
addition, such a transition should free up bandwidth in the cable operator's
infrastructure to allow for additional services including faster Internet speeds which
benefits the public and Charter/OTWC's Subscribers. Charter understands the
importance of providing all-digital service and upgrading network systems as it will bring
increased capabilities to the Hawai'i Cable Franchise areas.
�$ See http://www.hawaiianelectric.com/heco/ hidden Hidden/EnergyServices/Energy-Cost-
Adiustment-(ECAC) for Hawaiian-Electric?cpsextcurrehannel=9 and link to ECAC October 2095.
89 See htto://www.hawaiianelectric.com/heco/ hidden Hidden/EnergyServices/Enerq+ Cost.
Adjustment-(ECAC)-for-Hawaii-Electric-Lic�ht?cpsextcurrchannel=1 and lank to ECAC October 2015.
so see Charter's Testimony before DCCA in Support of the Application Submitted September 11,
2015, at 4.
23
In its Application, Charter commits to transitioning virtually all TWC Cable
Systems, including OWTC's Cable System, to all-digital networks within thirty (30)
months after the close of the Proposed Transaction.61 This will enable Charter/OTVVC
to reallocate network capacity for broadband use to increase speeds and to improve the
video product by adding significantly more high definition and on-demand options.
Based on and consistent with its commitment to transition to a virtually all-digital
network in Hawaii, Charter/OTWC shall provide DCCA with a plan regarding its
conversion to an all-digital network within six (6) months after the close of the Proposed
Transaction. The plan shall include timeframes, benchmarks, services, expectations of
the all-digital transition, and any other information reasonably requested by the Director.
In addition, the plan shall at a minimum state that Charter/OTWC shall: (i) provide
customers and stakeholders (including the various PEG access organizations and any
other entities that can potentially be impacted by the transition) in Hawaii with thirty (30)
calendar days' advance notice and information prior to transition or partial transition; (ii)
upon request, provide up to two (2) digital transport adapters ("IDTAs") or"basic boxes"
free of charge for a period of up to two (2) years, depending upon the level of service;
(iii) make available the requested DTAs or basic boxes to Subscribers through its
customer service centers for pick-up or for delivery by mail service (including pre-paid
return service) at no charge to the Subscriber which will greatly assist customers in
remote areas; and (iv) include a marketing campaign so that Subscribers are informed
of the transition, or at least have consistent reminders included in their monthly billing
statement.
Related to its commitment to transition OTWC's systems to all digital, within six
(6) months after the close of the Proposed Transaction, Charter/OTWC's
representatives shall meet and discuss with DCCA and the various PEG access
organizations options for transitioning PEG Channels throughout OTWC's Cable
Franchise areas to standard definition digital and high definition formats, as applicable.
The plan regarding this issue will need to be reasonable to all parties, and may involve
various factors and considerations. In addition, these discussions may be initiated
and/or continued in the various Cable Franchise renewal proceedings that are currently
on-going and may in fact be fully resolved in the Cable Franchise renewal proceedings.
I. Feasibilily For Real-Time Testimony From Remote Areas
DCCA recognizes that in a democratic society public participation and
involvement in government decision making is essential. During the course of the
public hearings and stakeholder meetings that DCCA held regarding the Application, a
number of individuals commented on the need for better access to participate in
government hearings, both at the State and County levels. Hawai'i's unique landscape
was cited as posing significant obstacles to public access and participation to
61 See State Transfer Application at 37.
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government decision making; particularly, air travel and long distance driving
requirements often prevent interested parties from taking an active role in government.
For the purpose of creating better access to government hearings and increasing
participation in the democratic process, following the close of the Proposed Transaction,
Charter/OTVVC shall study the feasibility of providing a means to readily accommodate
real-time video testimony by the public at State legislative and County hearings held on
Oahu, and at various County council meetings on the neighbor islands. The study shall
review the technical and infrastructure upgrades needed to provide interested
individuals situated on the neighbor islands with the ability and opportunity to give real-
time, live testimony at State legislative hearings on Oahu, or allow residents in remote
locations the ability to testify via video at County meetings without having to leave their
immediate communities. The study shall provide options, parameters, and detailed
plan(s) (with benchmarks and timeframes) needed to accomplish the objectives set forth
herein, and shall examine how currently available public resources can be utilized to
achieve the objectives set forth above. Charter/OTVVC shall submit this study to DCCA
within twelve (12) months after the close of the Proposed Transaction and agrees to
work with DCCA to meet the objectives of the plan.
J. Notice of Any Call Center Closures
The closure of a call center can negatively impact Subscribers, employees, and
the wider general community where the call center is located. At this time, DCCA is
aware that OTWC has a call center with approximately two hundred (200) employees
located at OTWC's main office on Oahu in Mililani, and smaller call centers at Ward
Avenue in Honolulu, on Oahu, and two (2) separate call centers in Hilo and Kona on
the island of Hawaii, each with less than fifty (50) employees.
Under the federal Worker Adjustment and Retraining Notification ("WARN") Act,
Charter is required to provide sixty (50) calendar days' advance notice regarding the
closure of any call center impacting fifty (50) or more employees. In general', the WARN
Act offers protection to workers, their families, and communities by requiring employers
to provide sixty (50) calendar days' notice in advance of covered plant closings and
covered mass layoffs. Under this law, notice must be provided to either the affected
workers or their representatives (e.g., a labor union), to the State dislocated worker unit,
and to the appropriate unit of local government.
While the WARN Act requirements would apply to OT VC's Mililani call center on
O'ahu, the law may not apply to OTWC's smaller call centers, such as those located in
Hilo and Kona on the island of Hawaii. The communities of Hilo and }Sona are smaller
and less economically diverse than Oahu, and closure of Charter/OT1lVC's call centers
in those communities would not only directly impact Charter/OT VC's employees, but
would have a significant economic and customer service impact to their communities.
25
Consequently, O and/or Charter/OTWC shall be required in the upcoming
Cable Franchise renewals (including the renewal of the East HawaH and West Hawai'i
franchises) to apply the notification requirements under the WARN Act to all call center
closures and relocations in the State regardless of the size of the call center or the
number of employees affected.
K. Customer Service Assurances
Given that the Proposed Transaction involves the transfer of control of OTWC's
Cable Systems, although indirectly, DCCA is concerned about how the transition may
impact customer service and OTWC's and/or Charter/OTWC's response to and ability to
address customer service needs, complaints, and requirements. Applicants assured
DCCA that the Proposed Transaction will not adversely impact customers and the
services they are provided. Nonetheless, to alleviate DCCA's concerns, Charter
commits that Charter/OTWC's Customer Satisfaction Survey, conducted annually, shall
produce results consistent with results obtained in prior survey years. In the event,
however, that there is a ten percent (10%) or more decline in a specific measurement of
the survey, after close of the Proposed Transaction, Charter/OTWC shall submit a
written explanation to DCCA as to the reasons for the decline within thirty (30) calendar
days of the submittal of the survey. In addition, Charter/OTWC shall provide a detailed
plan (including timeframes and specific actions) to remedy and correct any decline in
the customer service measurement.
L Rate Transparency and Uniformity'
As part of the Proposed Transaction, DCCA visited all six (6) OTWC Cable
Franchise areas in Hawai'i and held nine (9) public hearings and a CAC meeting to
gather testimony. A recurring issue brought up during the public hearings and public
comment period were calls for full disclosure and better rate transparency regarding
billing statements. Consistent with the testimony received, DCCA has a history of
fielding customer complaints from Subscribers regarding billing issues and OTWC's
billing practices.
With these concerns in mind, upon closing of the Proposed Transaction,
Charter/OTVVC shall, to the extent required by law provide full disclosure and rate
transparency through itemization and explanation of all charges for customers so that
customers are not surprised with the inclusion of any add-on charges and fees,
including but not limited to taxes, broadcast fees, PEG access fees, and capital funding
amounts. In addition, Charter/OTWC shall be held to all federal and state requirements
regarding pricing and billing practices.
According to Applicants, the Proposed Transaction does not in and of itself
require an increase in OTWC's current existing rate structure and Applicants expect that
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rates shall continue to be basad on market and operating factors.62 During negotiations,
RCCA was again reminded that aside from rates for basic service in areas without
effective competition, LFAs (including DCCA) do not have jurisdiction or regulatory
purview over rates for Cable Service. Nonetheless, at this juncture, with respect to
general overall rates for its services, other than basic rates, Charter commits, and
DCCA shall require, that for a minimum of thirty (30) months after the close of the
Proposed Transaction, Charter and/or Charter/OTWC, as applicable, shall ensure that
cable and broadband service rates for Hawaii customers and Subscribers shall be
generally consistent with and/or in alignment with rates for services that are charged in
Charter's other franchise areas on the mainland U.S. for comparable services. This
obligation is connected to Charter's commitment to transition OTWC's Cable System to
all-digital within thirty (30) months after the close of the Proposed Transaction, as
discussed above. Upon transition to an all-digital network, Charter intends to market its
services in Hawaii consistent with its current packaging and pricing strategies, including
its base sixty (00) Mbps broadband service, which it has no current plans to apply
differently throughout its national foot print.
M. One Thousand New WiFi Public Access Points
Public WiFi access points ("hotspots") can provide free, untethered Internet
service in today's world of mobile connectivity. Public hotspots benefit individuals in
multiple ways by, among other things, providing seamless access to Internet services
that do not impact the monthly data quotas for their mobile devices and providing
access where they may not have access to their mobile provider's service. In addition,
such access points are especially important to provide Internet access and the
socioeconomic benefits that flow from that access to residents who lack any access in
their homes because they live in an unserved area or because of economic or other
barriers. For these individuals who often live in rural areas, public WiFi may provide
essential Internet connectivity allowing them to access public services as well as
educational, health, and other online services. Public WiFi is also important to
businesses in Hawaii by allowing them to market their business products and services,
and to support the State's primary economic driver of tourism by providing connectivity
services expected by these travelers and generally available in most of the desirable
travel destinations around the world. Thus, increasing the availability of public WiFi
access points will provide a public benefit for the State as a whole.
In the Application, Charter commits to increasing competition in the mobile
market place by deploying over three hundred thousand (300,000) out-of-home "public"
WiFi access points nationwide within four(4) years after the close of the Proposed
Transaction.63 Although RCCA does not have jurisdiction over WiFi and does not
regulate WiFi services in any way, in the interest of offering public benefits for the State,
Charter commits to, and DCCA shall require that Charter shall deploy at least one
62 See Response to First Set of IRs at 9(Response to IR 7),
E3 See State Transfer Application at 8. See also Public Interest Statement at 18.
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thousand (1,000) new public WiFi access points throughout Charter/OTWC's Cable
Franchise areas in the State, within four(4) years after the close of the Proposed
Transaction ("Required WiFi Access Points").
Additionally, Charter commits to, and DCCA shall require that at least ten percent
(10%) of the Required WiFi Access Points (or one hundred (100) hotspots) be deployed
in public parks, or at civic or other community centers, and other public open areas and
gathering places, including areas near and around public buildings and public schools
("Designated WiF1 Access Points"), as specified and directed by DCCA, in
consultation with Charter/OTVVC. For the Designated WiFi Access Points, DCCA shall
assist Charter/OTVVC in identifying and gaining access to needed facilities and
infrastructure to deploy the Designated WiFi Access Points. Additionally, this
commitment is subject to: (1) Charter[OTWC having network connectivity at the
location without additional build out and extension of its system; and (2)
Charter/OTWC's general terms and conditions and service use policies.
N. Performance Bond and Other Financial Assurances
To ensure compliance with a number of conditions set forth in this D&O, OTVVC
and/or Charter/OTWC shall purchase (or enter into, as applicable) a ONE MILLION
AND NO/100 DOLLAR ($1,000,000-00) performance bond, within a minimum four (4)
year term ("Performance Bond"), The Performance Bond shall cover and secure the
performance of certain Charter/OTVVC obligations as required under this D&O and
protect the public if this Proposed Transaction leads to a bankruptcy filing with four (4)
years after the close, The Performance Bond, in a form acceptable to DCCA, shall be
payable to DCCA for the benefit of the State (or directly to Charter/OTVVC's customers,
at the direction of DCCA) upon the determination by the Director, after notice and an
opportunity to cure, that: (1) Charter/OTWC has failed to invest the required TEN
MILLION AND NO/I 00 DOLLARS ($10,000,000.00) to build out its network or provide
the one thousand (1,000) line extensions within four(4) years after the close of the
Proposed Transaction, as required in this D&O; (2) Charter/OTWC has failed to provide
the one thousand (1,000) Required WiFi Access Points required in this D&O-, or (3) the
Proposed Transaction leads Charter/OTWC to file for any form of bankruptcy protection
within four(4) years after the close of the Proposed Transaction. The Performance
Bond described herein shall be obtained and provided to DCCA within nine (9) months
after the close of the Proposed Transaction.
If the Performance Bond is not utilized within four (4) years from the date of its
issuance, Charter and/or Charter/OTWC shall have the right to terminate the
Performance Bond unless, at least sixty (60) days prior to the end of the four (4) year
period, the Director provides written notice to Charter and/or Charter/OTWC that
Charter and/or Charter/OTVVC is required to renew or extend the Performance Bond for
an additional one (1) year period. The decision to require Charter and/or
Charter/OTWC to renew or extend the Performance Bond shall be at the sole discretion
of the Director.
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Moreover, to protect Hawaii customers, in the event that Charter transfers
control of its Hawaii Cable Systems as a result of a bankruptcy protection filing or other
form of financial insolvency, Charter and or Charter/OT VC, as applicable, shall take all
commercially reasonable efforts to avoid any service interruptions and to ensure that
the transition is seamless to its Subscribers. Belated to this, Charter/OTWC shall also
provide RCCA, upon request, with information regarding Charter's debt service and
events of default of the various loan agreements entered into pursuant to the Proposed
Transaction on an annual basis, for a period of four (4) years. The first report shall be
submitted on December 31st of the year that the Proposed Transaction closed, and
each subsequent report shall be submitted to RCCA upon the request of the Director. I
}. Outstanding Franchise Issue and Belated Matters
During this proceeding, RCCA was made aware that an outstanding Cable
Franchise issue would not be completed or resolved prior to the issuance of this D&O r
due to the federal time limits placed on LFAs regarding the review and approval of the
transfer of Cable Systems. Specifically, the review period dict not afford sufficient time
for resolution of the customer service concerns related to Hana, Maui ("Hana Customer
Service"). While DCCA would prefer to have this matter resolved prior to issuance of
this D&O, based on the nature of the issue, discussions on the matter, and the
representations made by Charter in this proceeding, DCCA is confident that this issue
can and will be addressed after the issuance of this D&O.
As noted above, DCCA and OT VC are in good faith discussions to resolve the
Hana Customer Service concerns in a reasonable, fair, and appropriate manner.
Applicants have agreed that OTWC shall continue to be responsible for any and all past
outstanding franchise issues, acts, and omissions. DCCA may require OTWC and/or
Charter/OTWC to provide written reports each month, or more frequently as requested
by DCCA, and to meet with DCCA staff as requested, to discuss OTWC's and/or
Charter/OTWC's work to resolve the Hana customer service concerns until they are
resolvedto the satisfaction of the Director.
Although Charter/OTWC, as the cable operator, is bound by the Franchise D&Os
and must also comply with all applicable State laws and rules regarding the provision of
Cable Service, DCCA also reminds Charter of its certification to the State that it would
comply with all Franchise D&Os and all applicable State laws and rules, and that it shall
use its best efforts to cure any outstanding Cable Franchise issues.64
DCCA notes that approval of the Proposed Transaction goes not and shall not
constitute a waiver or release of any of DCCA's rights under any of the Franchise D&Os
64 Specifically, Charter has certified that it would"use its best efforts to comply with the terms of the
franchise and applicable state laws or local ordinances and related regulations, and to effect changes,as
promptly as practicable, in the operation system, if any changes are necessary to cure any violations
thereof or defaults thereunder presently in effect or ongoing." Form 394 at 5, Section V, Part ll.
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or applicable laws and rules, D&Os, Orders, Letter Orders, and other directives that
have been issued by the Director to address specific needs and requirements by
amending certain obligations consistent with the provisions of the Franchise D&Os and
State law. DCCA, Charter and OTWC do not waive any and reserve all of their rights
with respect to OTVVC's and Charter's compliance with the terms, conditions, and
requirements in the Franchise D&Os, and all applicable laws and rules, D&Os, Orders,
Letter Orders, and other directives that have been issued by the Director to address
specific needs and requirements by amending certain obligations consistent with the
provisions of the Franchise D&Os and State law.
The Director's approval of the Proposed Transaction shall not in any way be
deemed to be a representation by DCCA that OTWC is in compliance with all of its
obligations and responsibilities under the Franchise D&Os and all applicable laws and
rules, D&Os, Orders, Letter Orders, and other directives that have been issued by the
Director to address specific needs and requirements by amending certain obligations
consistent with the provisions of the Franchise D&Os and State law,
After the close of the Proposed Transaction, O and Charter/OTWC shall
continue to be responsible for any and all past Cable Franchise issues, acts, and
omissions, known and unknown, of OTWC under the Franchise D&Os and all applicable
laws and rules, D&Os, Orders, Letter Orders, and other directives that have been
issued by the Director to address specific needs and requirements by amending certain
obligations consistent with the provisions of the Franchise D&Os and State law.
P. Other Areas of Discussion
Applicants made numerous representations in this transfer proceeding regarding
the proposed public benefits of the Proposed Transaction, including Charter's
investment in infrastructure, broadband options, and accelerated deployment of
innovative and advanced technologies and services, many of which are enumerated
above in Section IV.C. of this D&O. During the course of this proceeding, DCCA made
various attempts to solicit additional information and clarifications regarding the
purported public benefits, especially for the neighbor island Cable Franchises. For
instance, DCCA requested that Charter elaborate on its intentions and plans with
respect to its low-income broadband service program, expansion of PEG access
services and obligations, rates and services impacting Subscribers, transition to all-
digital, and deployment of broadband services and advance technologies, among other
issues.
In general, while Charter did provide some details and a number of
commitments, it often asserted that the requested information was not within DCCA's
scope of review related to the Application. Nonetheless, Charter made assurances (and
DCCA relies on these representations in issuing this D&O) that it would cause
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Charter/OTWC to satisfy and adhere to all Cable Franchise requirements, and that
there were no current plans to change any rates and services.61
During negotiations, RCCA further attempted to obtain Charters commitments
regarding the issues mentioned above. However, RCCA was hindered during the
negotiations given that; (1) the FCC prohibits LFAs from regulating rates and
conditioning Cable System transfers on them$s; and (2) broadband and broadband-
related issues (including, but not limited to, broadband deployment, how broadband is
provided including upload and download speeds, broadband prices, and Net Neutrality),
are beyond DCCA's statutory jurisdiction, given that broadband is not a regulated
service, unless agreed to by the cable operator.
Nevertheless, at this juncture, RCCA finds that the conditions and requirements
listed below are also necessary, reasonable, and appropriate under the circumstances
to ensure that the Proposed Transaction is in the public interest.
1. "Favored Nation Clause„
To the extent that Charter and/or Charter/OTWC or any local cable television
service provider controlled directly or indirectly by Charter provides an improved or
"better" broadband service program for low-income consumers in any franchise area in
the United States (including any state or individual franchise area specific program for
low-income consumers), beyond what Charter/OTWC is required to and/or intends to
provide in the Hawaii Cable Franchise areas as a result of the Proposed Transaction,
Charter/OTWC shall make a substantially comparable offering available to all customers
and Subscribers served by Charter/OTVVC in its Hawaii Cable Franchises within ninety
(90) calendar days of the service first being offered in the other franchise area.
In addition, after close of the Proposed Transaction, Charter/OTWC commits to
being actively engaged in working with RCCA and other stakeholders, including those
living in unserved and underserved areas, on important issues related to and regarding
deployment of its infrastructure to unserved and underserved areas in the State. In the
event that the line extension policy of any local cable television service provider
controlled directly or indirectly by Charter is amended pursuant to or in connection with
the Proposed Transaction, so that Charter provides a more favorable homes per mile
density standard for extension of its cable system, then Charter shall provide a written
report on all such amendments and the conditions and requirements associated with
ss See Generally, State Transfer Application, Responses to First Set of IRs,and Responses to
Second Set of IRs.
88 See Implementation of Sections 11 and 13 of the Cable Television and Competition Act of 1992,
Report and Order,8 FCC Rod 6828¶39, n. 38(1993) (In exercising their transfer jurisdiction, franchising
authorities may not seek to circumvent federal regulatory authority, including federal rate regulations in
particular.).
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such amendments to DCCA, and discuss with DCCA whether and how such
amendments could be implemented in the State.
2. Post-Transaction Progress Report and Briefing
Under State law, the Director has the power and jurisdiction to supervise and
regulate every cable operator in the State and is empowered to do all things which are
necessary or convenient in the exercise of the Director's power and jurisdiction.67
Accordingly, within six (6) months after the date of the close of the Proposed
Transaction, Charter/OTWC shall provide a written report to DCCA and orally brief the
Director on the impacts of the completed transaction. At a minimum, the written report
and briefing shall address the following:
a. How the transfer of control of the Cable Systems from TWC to
Charter is progressing;
b. How the transaction has impacted the operations and organization
of the Cable Systems in the State;
C. Any future plans regarding services and operation of the Cable
Systems in the State; and
d. Charter/OTWC's progress towards fulfilling and satisfying all the
purported public benefits related to the Proposed Transaction as
represented by Charter in this transfer proceeding, including those
enumerated in Section N.C. of this D&O and its progress for
compliance with the other terms and conditions of this D&O.
During the briefing, Charter/OTWC shall be prepared to respond to any questions
posed by the Director and DCCA staff, and provide any follow-up discussions and
documentation after the briefing, as warranted and appropriate.
V. CONCLUSION
Based on the foregoing, the Director finds that Charter is legally, financially, and
technically qualified to acquire control of OTWC and to provide the services required for
each of OTV\/C's Hawaii Cable Franchises and that the Proposed Transaction is in the
public interest with the terms, conditions, and requirements described above, and
should therefore be approved. Accordingly, DCCA hereby approves the Proposed
Transaction based on the information provided in the Application, and the supporting
and supplemental filings by Applicants. Specifically, DCCA approves the transfer from
TVVC to Charter of control of OTWC's Cable Franchises for the island of Oahu, island
of Kaua'i, East Hawaii (Hilo), West Hawaii (Kona), County of Maui (excluding
67 See FIRS section 440G-12(a),
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Lahaina), and Lahaina, subject to the terms, conditions, and requirements specified in
this D&O.
Vl. ORDER
NOW, THEREFORE, the request to transfer control of OTWC's six (6) Hawaii
Cable Franchises from TWC to Charter, as described in the Application, is hereby
APPROVED, subject to the following:
A. Following the close of the Proposed Transaction, Charter shall adhere and
comply, or shall cause OTWC and/or Charter/OTWC to comply, with all
terms, requirements, conditions and obligations set forth in the Franchise
D&Os, and any other D&Os, Orders, Letter Orders, and other directives
that have been issued periodically to address specific needs and
requirements consistent with the provisions of the Franchise D&Os and
federal and State laws.
/Moreover, in connection with its Cable Franchise obligations, OTWC (and
its predecessor-in-interest, TWE) entered into various stipulations and
agreements with the State and other educational and governmental
agencies related to and impacting its services in the Cable Franchise
areas. Charter/OTWC shall fully comply with the various stipulations and
agreements OTWC (or TWE, as applicable) had entered into related to its
franchise obligations that are in effect as of the date the Proposed
Transaction is completed.
B. The approval of the Proposed Transaction by the Director does not and
shall not amend nor alter the Franchise D&Os, or any D&Os, Orders,
Letter Orders, and ether directives that have been issued periodically to
address specific needs and requirements consistent with the provisions of
the Franchise D&Os and federal and State laws in any way, except as
expressly provided otherwise in this D&O. The Franchise D&Os, and any
D&Os, Orders, Letter Orders, and other directives that have been issued
periodically to address specific needs and requirements consistent with
the provisions of the Franchise D&Os and federal and State laws shall
continue to remain in full force and effect, and enforceable in accordance
with their terms and conditions and applicable law.
C. OTWC (and, later Charter/OTWC) shall fully adhere to and comply with all
of the D&Os, Orders, Letter Orders, and any other directives as provided
by OTWC's Hawaii Cable Franchises issued by DCCA during the interim
period between the issuance of this D&O and the close of the Proposed
Transaction.
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D. TWC, Charter, OTWC, and Charter/OTWC, as applicable, shall adhere to
and comply with all of the terms, conditions, and requirements provided in
this D&O, including but not limited to Section IV. of this D&O.
E. The closing of the Merger Agreements is completed without any materially
adverse changes to the Merger Agreements that were provided to DCCA
and last reviewed by DCCA in connection with the Proposed Transaction.
Applicants and/or OTWC shall promptly notify the Director in writing of the
closing of the Merger Agreements and also upon the completion of the
Proposed Transaction, provide the exact dates when the Merger
Agreements closed and the Proposed Transaction is completed (as
applicable) and whether any material changes to the Merger Agreements
were made prior to or shortly after the close of the Proposed Transaction.
1 Notification shall be provided to DCCA within seven (7) calendar
days after the closing of the Merger Agreements and seven (7)
calendar days after completion of the Proposed Transaction.
2, In the event there are any materially adverse changes to the
Merger Agreements or to the structure or operation of OTVVC's
cable systems in the State as a result thereof, the Director reserves
the right to review such changes and take any and all necessary
and appropriate actions to protect the public interest, including but
not limited to modifying or rescinding this D&O.
F. The approval of the Merger Agreements (and/or Proposed Transaction) by
the FCC, the United States Department of Justice ("DOX), and other
applicable federal agencies shall be required, and Charter, TWC, and
OTWC (and/or Charter/OTWC) shall comply with any conditions,
obligations, and requirements imposed by the FCC, DOJ, or any other
federal agency in connection with the Merger Agreements or Proposed
Transaction, as applicable. In addition, the Merger Agreements and
Proposed Transaction shall be in compliance with all State laws, rules,
and requirements, including any and all State anti-trust statutes and
requirements.
G. Except as otherwise specifically provided in this D&O, the terms,
conditions, requirements, and obligations of OTVVC's Cable Franchises in
the State (i.e., the Franchise D&Os, and D&Os, Orders, Letter Orders, and
other directives that have been issued periodically to address specific
needs and requirements consistent with the provisions of the Franchise
D&Os and State law) and franchise-related agreements and stipulations
shall continue to be in full force and effect.
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H. Notwithstanding any provision to the contrary in this D&U, if the Merger
Agreements fail to close or the Proposed Transaction is not completed, for
whatever reason, within twelve (12) months from the date of this D&Q, this
D&O shall be automatically rescinded and shall be deemed null and void,
and all prior D&tis issued to OTWC and its predecessor-in-interest, TWE,
shall continue to remain in full force and effect. In such an event, OTWC
shall immediately provide prompt written notification to the Director, and
the Director shall have the right to take any and all actions and to issue
such Orders as the Director deems necessary or appropriate to serve and
protect the public interest within the subject Cable Franchise areas in
accordance with applicable federal and State laws and rules.
Dated: Honolulu, Hawai°i, December 17 2015
P-2�1�- ck�
CATHERINE AWA D I C L6N
Director of Commerce and Consumer Affairs
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CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing DECISION AND ORDER NO. 366
was served upon the following parties at the address shown below by mail, postage
prepaid, on this 17th _day of December $ 2015.
CARLITO P. CALIBOSO, ESQ.
JODI S. YAMAMOTO, ESQ.
YAMAMOTO CALIBOSO
1099 Alakea Street, Suite 2100
Honolulu, Hawaii 96813
Counsel for CHARTER COMMUNICATIONS, INC.
BRIAN A. FANG, ESQ.
WATANABE I LLP
First Hawaiian Center, 23rd Floor
999 Bishop Street
Honolulu, Hawaii 96813
Counsel for TIME WARNER CABLE INC.
*n Suekawa
S c
cretary
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