07-25-2012 Council Agenda - Laserfiche WebLink

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SETTLEMENT AGREEMENT SUMMARY • Resolves November 15, 2011, Notice of Violation concerning Comcast's failure to provide requested data, documents and certifications, and all franchise fee payment issues for calendar years 2009, 2010 and 2011, provided Comcast fully complies with the Settlement Agreement. The NSCC will withdraw the Notice of Violation, and associated resolutions, once the Settlement Agreement has been executed by all parties and the required payment is received. • Does NOT resolve other financial issues, such as Comcast's pass - through of franchise fees paid on non - subscriber revenues to subscribers, any franchise fee payment issues in 2012 or the propriety of Comcast's late fee. The NSCC will receive a lump sum payment of $41,568.00, which will not be offset against franchise fees or any grants paid to the NSCC, within 15 days of the effective date of the Settlement Agreement. • Comcast provides the NSCC and the member cities with assurances and documentation, including a certification from a Comcast financial officer, as to how advertising transactions are conducted and how advertising revenues, including commissions, rep fees, affiliate fees and rebates paid to affiliated entities, are booked and accounted for in gross revenues for franchise fee calculation purposes. • The current definition of gross revenues in the member cities' current franchises is clarified: (i) to include all advertising revenues received by Comcast and its affiliates from the operation of the cable system in the member cities, including commissions, rep fees and affiliate fees paid to Comcast Spotlight and NCC, and rebates returned to Comcast by NCC; (ii) to exclude advertising revenues and commissions that are received by unaffiliated persons or entities; and (iii) to incorporate a pro rata methodology for allocating revenues between the services in bundled service packages containing cable services. This will ensure that Comcast does not unfairly assign discounts to cable services in bundles so as to reduce its franchise fee payments to the member cities. • The definition of "gross revenues" to be included in any renewal franchises is finalized and agreed upon, and broadly incorporates revenues derived directly or indirectly by Comcast and its affiliates from the operation of the cable system to provide cable services in the member cities. As written, the definition ensures that the member cities receive franchise fees on "gross" advertising revenues and that revenues from bundled service packages are allocated to cable service using a specific pro rata methodology. If unresolved disputes over the classification of revenues arise, the parties will 32