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MEMORANDUM <br /> August 9, 1996 • <br /> Page 10 <br /> All of these issues are addressed later in this report. <br /> The cable systems will continue to be operated by the existing subsidiaries, and the <br /> franchise holders will not change. <br /> A chart showing current ownership/control structure of the entities is attached hereto as <br /> Exhibit 3. A post-merger chart is attached hereto as Exhibit 4. <br /> 4. LEGAL QUALIFICATIONS. <br /> The legal qualifications standard relates primarily to an analysis of whether US West or <br /> its subsidiary is duly organized and authorized to own the cable systems. It should be noted that <br /> current federal law has shifted dramatically regarding the ownership of cable systems. US West <br /> maynotpurchaseand <br /> own these cable systems (except Hudson/North Hudson) because the cable <br /> systems are located in US West telephone service territory. <br /> US West has filed a Petition for Special Relief requesting an 18 month temporary waiver <br /> to own the Minnesota systems. The comment period runs through August 20, 1996, and this <br /> office is responding on behalf of the Authorities. It will be argued that the Telecommunications <br /> Act of 1996 requires approval by the the Authority of any Request for Waiver on behalf of US <br /> West. <br /> Counsel for US West proposed that any consent to FCC 394 could be considered a consent <br /> to the ownership waiver. That argument is specifically rejected by this analysis and any resolution <br /> adopted to consent to this transfer should specifically state that it is not a consent to a waiver. <br /> S <br />