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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Time Warner ) ) Social Contract ) ) ORDER Adopted: March 16, 1998 Released: March 19, 1998 By the Deputy Chief, Cable Services Bureau: 1. Renaissance Media LLC ("Renaissance") has requested that the provisions of the Time Warner Social Contract (the "Social Contract") which the Commission entered into with Time Warner Cable ("Time Warner") continue to apply to 16 cable television systems Renaissance is acquiring from Time Warner. By this Order we grant the Renaissance request. 2. The Commission adopted the Social Contract with Time Warner on November 30, 1995. It is designed to provide rate stability, improved quality of service, and incentives for upgrades and system improvements. Under its terms, Time Warner is investing $4 billion to upgrade its domestic cable systems over the life of the Social Contract, has provided more than $4.7 million in refunds to its subscribers, has capped its regulated programming rate increases at $1 per year plus the recovery of external costs and the costs of inflation, has established "lifeline" basic service tiers priced below basic service tier rates in effect at the time of adoption of the Social Contract, and is providing free cable connections to public schools in its franchise areas. The Commission delegated to the Cable Services Bureau the authority to implement the Social Contract. 3. The 16 systems acquired by Renaissance from Time Warner serve 54 communities and 123,427 subscribers in Louisiana, Mississippi, and Tennessee. A list of the communities is attached as Exhibit 1. Renaissance has requested the continued application of the Social Contract to these 16 systems pursuant to Section III.F.6 of the Social Contract. Renaissance asks for no modification of the Social Contract. 4. By its the terms, the Social Contract may continue to apply to a cable system divested by Time Warner only if the acquiring operator agrees to be bound by the Social Contract. Section III.F.6 of the Social Contract provides: In the event of a sale of any system during the period of applicability of this Contract, the purchaser may elect, with the concurrence of the FCC, for the provisions of this Contract to continue to apply to such system. Such FCC concurrence shall be expeditiously decided and not be unreasonably withheld. In the event the purchaser elects not to have the provisions of this Contract apply to any such system, the CPST subscribers to such system shall be eligible for the refunds calculated pursuant to Section III.F.5 in the event the upgrade commitment described in Section III.F.1 has not been completed prior to the consummation of such sale. Renaissance seeks the concurrence of the Commission to continue application of the Social Contract to the 16 cable systems Renaissance is acquiring from Time Warner. 5. Renaissance and Time Warner have entered into an agreement pursuant to which Renaissance agrees to be bound to the Social Contract in its entirety with respect to the 16 systems it is acquiring from Time Warner (the "Agreement"). The Agreement is attached as Exhibit 2 and its terms are incorporated herein. The Agreement becomes effective upon the release by the Commission of this Order and the consummation of the Asset Purchase Agreement between Renaissance and Time Warner. 6. Pursuant to the agreement and the Social Contract, Renaissance will comply with provisions of the Social Contract that Time Warner has not fulfilled, including, but not limited to (a) upgrading those acquired systems with a capacity of at least 550 MHz as of the Social Contract Effective Date to 750 MHz; (b) upgrading all other acquired systems to 550 MHz; (c) upgrading 50 percent of the subscribers in the acquired systems to 750 MHz; (d) ensuring that at least 60 percent of new analog services in the acquired systems are added to the cable programming services tier ("CPST"); (e) adding at least 15 new channels on average (weighted by CPST subscribers) to the CPST of the acquired systems; (f) expending at least 60 percent of upgrade capital on benefits for basic service tier ("BST") and CPST subscribers; (g) submitting an annual progress report; and (h) assuming the obligation to pay all refunds and penalties imposed under the Social Contract for noncompliance with upgrade requirements not met by Renaissance or Time Warner. 7. The Social Contract imposes an investment requirement on Time Warner, pursuant to which Time Warner has agreed to invest $4 billion in capital costs associated with system upgrades. That financial commitment does not apply to Renaissance. Instead, Renaissance agrees to invest $25,100,000 million in capital costs in connection with the completion of the upgrade of the acquired systems. The $4 billion investment requirement imposed on Time Warner by the Social Contract is hereby reduced by an identical amount. 8. Accordingly, IT IS ORDERED that the request of Renaissance Media LLC for the assignment of the rights and the assumption of the obligations of the Social Contract with respect to the 16 cable systems being acquired by Renaissance Media LLC from Time Warner Cable IS GRANTED, provided that the Commission shall have the benefit of all agreements made between parties in the Agreement and the right to enforce any provision of the Social Contract against the party that has agreed to be responsible for such provisions in the Agreement. 9. This action is taken by the Deputy Chief, Cable Services Bureau, pursuant to authority granted by the Commission in Social Contract for Time Warner Cable and pursuant to authority delegated by Section 0.321 of the Commission's rules. 47 C.F.R.  0.321. FEDERAL COMMUNICATIONS COMMISSION John E. Logan Deputy Chief, Cable Services Bureau COMMUNIT IES SERVED BY SYSTEMS ACQUIRED BY RENAISSANCE FRANCHISE CUID NUMBER Mandeville, LA Madisonville, LA Covington, LA Slidell, LA St. Tammany Parish, LA Pearl River, LA Abita Springs, LA Lafourche, LA Thibodaux, LA Terrebone, LA LaFourche, LA (Ward Six) LaFourche, LA Assumption, LA (North) Assumption, LA (South) Napoleanville, LA St. James, LA Picayune, MS Pearl River County, MS Eunice, LA Evangaline Parish, LA (Ward Two) St. Landry, LA (Ward Six) Acadia, Parish, LA (Ward Seven) Chataignier, LA Opelousas, LA Leonville, LA Washington, LA St. Landry, LA Jennings, LA Jefferson Davis Parish, LA Acadia Parish, LA Church Point, LA St. Landry, LA Acadia Parish, LA (Ward Three) Pointe Coupee, LA New Roads, LA Morganza, LA LA0135 LA0408 LA0152 LA0102 LA0134 LA0396 LA0403 LA0224 LA0018 LA0218 LA0206 LA0052 LA0083 LA0192 LA0084 LA0274 MS0091 MS0176 LA0085 LA0318 LA0248 LA0247 LA0450 LA0053 LA0273 LA0227 LA0081 LA0060 LA0462 LA0452 LA0194 LA0391 LA0294 LA0175 LA0174 LA0235 COMMUNITIES SERVED (CONTINUED) FRANCHISE Jackson, TN Madison County, TN Selmer, TN McNairy County, TN Adamsville, TN Bethel Springs, TN Camden, TN Benton County, TN Alamo, TN Bells, TN Maury City, TN Crockett County, TN Newbern, TN Trimble, TN Obion, TN Troy, TN Dyer County, TN Obion County, TN CUID TN0031 TN0142 TN0053 TN0160 TN0126 TN0510 TN0014 TN0639 TN0131 TN0278 TN0279 TN0136 TN0121 TN0123 TN0120 TN0122 TN0670 TN0638