1	The Devil’s in the Details – The Oshkosh Refranchising Experience 2002 WAPC Spring Conference Wisconsin Dells, WI April 5-6, 2002 Warren Kraft, Esq., Oshkosh City Attorney Brian T. Grogan, Esq., Moss & Barnett
2	Oshkosh - Process City retains M&B – 4/98 City sends TW RFI – 5/98 City hires survey firm – 6/98 City conducts internal PEG review - 7/98 “Informal” Needs Assessment Report prepared-8/98 Franchise Documents prepared - 11/98 Regulatory Ordinance Franchise Agreement
3	Oshkosh - Process City sends “Informal” Needs Assessment to TW for Response – 1/99 Initial Informal Negotiations with TW – 3/99 Local GM and Gov. Affairs Director involved Several face-to-face meetings Numerous conference calls Informal Negotiations Breakdown – 6/99
4	Oshkosh - Process Unresolved Major Issues Include: System upgrade Term PEG Channels PEG financial support Reporting requirements Other regulatory provisions
5	Oshkosh - Formal Informal negotiations reconvene – 5/00 Add’l TW representatives included in negotiations –6/00-7/00 Corporate legal counsel Informal negotiations again breakdown City issues “formal” needs assessment – 8/00 TW submits “formal” proposal – 9/00 City issues preliminary denial of TW proposal – 12/00 City extends existing franchise term – 12/00
6	Oshkosh - Formal TW and City attempt to determine procedure for Administrative Hearing – 1/01-2/01 City retains Wisconsin counsel (Boardman Firm) – 3/01 Discovery for Administrative Hearing – 4/01-7/01 Depositions of city personnel Thousands of pages of documents produced Exchange of expert reports Settlement/Informal negotiations occur simultaneously – 4/01-8/01 Agreement reached – 9/01
7	Oshkosh - Agreement Key Franchise Terms 15 year term 750 MHz System 3 PEG Channels (option for 4^th) $.35 - $.40 p/subscriber p/month to support PEG capital expenditures Clarification of “PEG capital” 5% franchise fee of “gross revenues”
8	Oshkosh - Agreement “Gross Revenues” means all cash, or other consideration derived from the operation of the Cable System to provide Cable Services in the City by (A) the Franchisee; (B) any Cable Operator of the Cable System; or (C) only to the extent necessary to prevent evasion, their affiliates, subsidiaries, parent and any Person in which the Franchisee has a financial interest, that are not Cable Operators but that are performing the normal functions and responsibilities of a Cable Operator in the City. This definition is intended to be read to reach as broadly as possible to encompass all revenues, subject to only to the limitations imposed by federal or state law.
9	Oshkosh - Agreement Therefore, “Gross Revenues” would include, by way of example but not limitation, the following: Standard Subscriber service monthly fees; Optional service monthly fees; Installation and reconnection fees; Leased channel fees; Converter rentals; Advertising revenues; and All recoveries of bad debts previously written off and revenues from the sale or assignment of bad debts.
10	Oshkosh - Agreement Institutional Network 12 channels 35 locations Separate Regulatory Ordinance Bond of $150,000 to $500,000 Security Fund of $50,000 Penalties for noncompliance Change of control provisions Aggressive customer service standards FCC customer service obligations
11	Key Issues in Dealing with Elected Officials Thorough Briefing of Renewal Processes Benefits and drawbacks of each procedure Potential renewal issues and results Anticipated costs (consultants, etc.) Political stakeholders (UWO, schools, etc.) Reliance on administrative team Need for confidentiality to negotiate Steer clear of media wars and expect the worst
12	Key Issues in Dealing with Elected Officials Periodic Updates During Process Keep focused on goals and objectives Reminders of potential conflicts Keep political rhetoric to minimum Work hard to stay in control
13	Key Issues in Dealing with Elected Officials When THE Fight Comes Hold their hands Gently remind them of their commitments Keep their focus on the ultimate prize Know what issues to “fall on your sword” for Prepare for the political capitulation
14	Why Do Renewals Go Formal Impact on surrounding communities precedent Personality conflicts Unreasonable positions by city by operator Outside Consultants/Attorneys
15	Lessons Learned Needs Assessment is key Must be supported by data/experts Operator will out spend city on Needs Assessment Administrative Hearing “process” unclear Operator may create a war of attrition Stay focused on achieving goals Avoid polarizing the parties
16	"Thank You!" Thank You!