Introduction
Why
should your city take action when faced with a change of control of your local
cable television franchise? Cable
operators and even some cities may argue that given that there may be no change
in the grantee serving your cable system a review of the qualifications and
thorough transfer process is unnecessary.
History has shown, however, that a change of control, even at the
highest levels of a corporate entity, often results in significant operational
changes at the local level. Further, the
impact on a company’s overall financial structure may be profound. One need only look to the Time Warner AOL
merger as an example of how even the best laid plans may not be achieved in a
volatile marketplace.
The
transfer process also provides an opportunity for local franchising authorities
(LFAs) to correct past performance issues under an existing franchise. To the extent an existing franchise violation
or ambiguous provision exists, the transfer process provides an opportunity to
obtain clarification and resolution. The
transfer proceeding can also be used to obtain appropriate financial assurances
including guarantees, security funds, or performance bonds based on the
financial qualifications of the proposed transferee. For those communities facing franchise
renewal, the transfer process may provide an opportunity to accelerate renewal
negotiations and arrive at final franchise documents to ensure that commitments
will be honored following the transfer.
This
paper will focus primarily on the transfer proceeding currently dominating
nearly one-third of all LFAs across the country. The AT&T Comcast merger affects thousands
of LFAs and is rapidly approaching the 120 day federal deadline. This paper will provide a cursory review of
the legal, technical and financial qualifications of the proposed AT&T
Comcast Corporation and will highlight applicable laws and issues to be
considered when reviewing the transaction.
Applicable
Law
Federal Law
The Cable Communications Policy Act of 1984, as
amended by the Cable Consumer Protection and Competition Act of 1992 and the
Telecommunications Act of 1996 (“Cable Act”), provides at Section 617 (47
U.S.C. § 537):
Sales
of Cable Systems
A
franchising authority shall, if the franchise requires franchising authority
approval of a sale or transfer, have 120 days to act upon any request for
approval of such sale or transfer that contains or is accompanied by such
information as is required in accordance with City regulations and by the franchising
authority. If the franchising authority
fails to render a final decision on the request within 120 days, such request
shall be deemed granted unless the requesting party and the franchising
authority agree to an extension of time.
The Cable Act also provides at Section 613(d) (47
U.S.C. § 533(d)) as follows:
(d) Regulation
of ownership by States or franchising authorities
Any State
or franchising authority may not prohibit the ownership or control of a cable
system by any person because of such person’s ownership or control of any other
media of mass communications or other media interests. Nothing in this section shall be construed to
prevent any State or franchising authority from prohibiting the ownership or
control of a cable system in a jurisdiction by any person (1) because of such
person’s ownership or control of any other cable system in such jurisdiction,
or (2) in circumstances in which the State or franchising authority determines
that the acquisition of such a cable system may eliminate or reduce competition
in the delivery of cable service in such jurisdiction.
Further, the Federal Communications Commission
(“FCC”) has promulgated regulations governing the sale of cable systems. Section 76.502 of the FCC’s regulations (47
C.F.R. § 76.502) provides:
47 C.F.R. § 76.502 Time Limits Applicable to Franchise
Authority Consideration of Transfer Applications
(a)
A franchise authority shall have 120 days from the
date of submission of a completed FCC Form 394, together with all exhibits, and
any additional information required by the terms of the franchise agreement or
applicable state or local law to act upon an application to sell, assign, or
otherwise transfer controlling ownership of a cable system.
(b)
A franchise authority that questions the accuracy of
the information provided under paragraph (a) must notify the cable operator
within 30 days of the filing of such information, or such information shall be
deemed accepted, unless the cable operator has failed to provide any additional
information reasonably requested by the franchise authority within 10 days of
such request.
(c)
If the franchise authority fails to act upon such
transfer request within 120 days, such request shall be deemed granted unless
the franchise authority and the requesting party otherwise agree to an
extension of time.
NOTE: LFAs
should also carefully review all applicable state law and the local franchise
to identify any additional requirements to be followed.
Description
of the AT&T/Comcast Transaction
AT&T
Corp. (“AT&T”), Comcast Corporation, (“Comcast”), and related subsidiaries
entered into an Agreement and Plan of Merger dated December 19, 2001, (“Merger
Agreement”) pursuant to which AT&T Comcast will become the new parent
corporation of Comcast and AT&T’s newly created cable television
subsidiary. AT&T will contribute its
cable television assets to a new subsidiary in a tax-free transaction prior to
the Merger. AT&T Comcast will also enter into a Support Agreement with
Sural LLC, an entity controlled by Mr. Brian L. Roberts which holds
approximately 86.7% of the voting power of Comcast, to provide various
management services. AT&T Comcast
has entered into an Exchange Agreement with Microsoft Corporation that will
provide for a conversion of $5 billion of indebtedness to 115 million shares of
AT&T Comcast common stock. AT&T
Comcast will be the largest cable operator with $19 billion in annual revenues
and in excess of 22 million subscribers.
Merger Agreement
Pursuant
to the Merger Agreement, AT&T Broadband Merger Sub will merge with and into
AT&T Broadband, with AT&T Broadband continuing as the surviving
corporation in the merger and, as a result of such merger, becoming a wholly
owned subsidiary of AT&T Comcast (the “AT&T Broadband Merger”). On the same effective date as the AT&T
Broadband Merger, Comcast Acquisition Corp. will merge with and into Comcast, with Comcast
continuing as the surviving corporation in the merger and, as a result of such
merger, becoming a wholly owned subsidiary of AT&T Comcast (the “Comcast
Merger”). The AT&T Broadband Merger
and the Comcast Merger are referred to herein collectively as the “Mergers”).
MERGERS
RESULTING STRUCTURE
The closing date for the Mergers will occur as soon
as practicable following the satisfaction or waiver of conditions to the
Mergers set forth in the Merger Agreement. The Mergers will be effective on the
same effective date, but after the completion of the separation and
distribution by AT&T of certain assets and the corresponding assumption of
certain liabilities of AT&T’s Broadband business operations by AT&T
Broadband, in a transaction described as an internal restructuring and
“spin-off” of the Broadband operations.
The consideration to be issued in the Mergers will
be shares of various classes of AT&T Comcast common stock. The rights of the classes of AT&T Comcast
common stock to be issued in the Mergers is dependent upon whether the holders
of Comcast Class A common stock and Class B common stock approve what is
referred to in the Merger Agreement as the “Preferred Structure”. If the Preferred Structure is not approved by
the holders of Comcast Class A common stock and Class B common stock, the
Mergers, if approved by the AT&T and Comcast shareholders, generally, will
be completed under what is described as the “Alternative Structure”.
Under either the Preferred Structure or Alternative
Structure, the Comcast Class B shareholders, who own approximately 86.6% of the
Comcast’s voting power, will own 33-1/3% of AT&T Comcast voting power upon
completion of the AT&T Comcast transaction.
A description of the securities to be exchanged in the Preferred
Structure and Alternative Structure follows:
Preferred Structure
If the Preferred Structure is approved by the
applicable holders of Comcast Class A common stock and Class B common stock,
the AT&T Broadband shareholders and the holders of Comcast Class A common
stock will receive shares of AT&T Comcast Class A common stock based on
applicable exchange ratios set forth in the Merger Agreement; the holders of
Comcast Class B common stock will receive shares of AT&T Comcast Class B
common stock; and the holders of Comcast Class A special common stock will
receive shares of AT&T Comcast Class A special common stock.
Alternative Structure
In the event the Mergers are consummated under
circumstances where the Alternative Structure is implemented, the holders of
Comcast Class B common stock will receive AT&T Comcast Class B common
stock; the holders of AT&T Broadband common stock will receive shares of
AT&T Comcast Class C common stock; the holders of Comcast Class A common
stock will receive shares of AT&T Comcast Class A common stock; and the
holders of Comcast Class A special common stock will receive shares of AT&T
Comcast Class A special common stock.
The applicable exchange ratios for the shares of common stock are set
forth in the Merger Agreement and will be determined based on the number of
outstanding shares of common stock as of the closing date of the Mergers. If the Mergers were consummated as of April
10, 2002, and without giving effect to the issuance of any additional shares of
common stock that may be required to be issued under the Merger Agreement, the
tables below describe the relative economic and voting interest of the AT&T
Broadband and Comcast shareholders upon the consummation of the Mergers under
the Preferred Structure and Alternative Structure, including the effect of the
Microsoft Quips transfer.
TABLE OF ECONOMIC INTEREST
PERCENTAGES
SHAREHOLDERS
OF AT&T BROADBAND AND COMCAST CORPORATION
(giving
effect to the Mergers using assumptions set forth in the AT&T Comcast S-4A)
Based on
AT&T Comcast S-4 Amendment No. 1 filed with Securities and Exchange
Commission on April 10, 2002 (see pages I-1 and I-2)
|
CATEGORY
OF SHAREHOLDERS |
ESTIMATED
EQUITY OWNERSHIP PERCENTAGE POST
MERGER1 |
|
|
With
Microsoft |
Without
Microsoft |
|
|
|
||
|
AT&T
Broadband Shareholders |
54.80% |
57.70% |
|
Comcast
– Class A Shareholders |
1.00% |
1.00% |
|
Comcast
– Class B Shareholders |
0.40% |
0.40% |
|
Comcast
– Class A Special Shareholders |
38.60%[1] |
40.60% |
|
Microsoft |
5.30% |
0% |
|
TOTALS |
99.30%[2] |
99.70%[3] |
TABLE OF VOTING POWER
SHAREHOLDERS
OF AT&T BROADBAND AND COMCAST CORPORATION
(giving
effect to the Mergers using assumptions set forth in the AT&T Comcast S-4A)
|
SHAREHOLDERS |
ESTIMATED
VOTING POWER POST
MERGER[4] |
|||
|
Preferred Structure |
Alternate Structure |
|||
|
With
Microsoft |
Without
Microsoft |
With
Microsoft |
Without
Microsoft |
|
|
|
||||
|
AT&T
Broadband Shareholders[5] |
60.60% |
65.55% |
56.60% |
61.55% |
|
Comcast
– Class A Shareholders |
1.10% |
1.10% |
5.14% |
5.14% |
|
Comcast
– Class B Shareholders |
33.33% |
33.33% |
33.33% |
33.33% |
|
Comcast
– Class A Special Shareholders |
0.00% |
0.00% |
0.00% |
0.00% |
|
Microsoft |
4.95% |
|
4.95% |
0.00% |
|
TOTALS |
99.98%[6] |
99.98%17 |
100.0217% |
100.0217% |
As a result of the capital structure of AT&T
Comcast under either the Preferred Structure or the Alternative Structure, the
former Comcast shareholders will have significant control over AT&T
Comcast.
Separation and Distribution Agreement
Pursuant to the Separation and Distribution
Agreement, AT&T will assign and transfer to AT&T Broadband all of
AT&T’s and its subsidiaries right, title and interest in all of the assets
of the AT&T’s Broadband business which are not then held by AT&T
Broadband or an AT&T Broadband subsidiary, subject to the obligation on the
part of AT&T Broadband to assume all of the liabilities of AT&T’s
Broadband business that are not already liabilities of AT&T Broadband or an
AT&T Broadband subsidiary. The
foregoing process of the assignment of AT&T Broadband assets and the
assumption liabilities is referred to as the “separation”. Following the separation, AT&T will
“spin-off” AT&T Broadband by distributing to the shareholders of record of
AT&T common stock, one share of AT&T Broadband common stock for each
share of AT&T common stock held. The
record date for the AT&T Broadband spin-off will be the close of business
on the date of completion of the Mergers, subject to the right of AT&T and
Comcast to modify that date by mutual agreement.
The separation and spin-off are each scheduled to
occur on the closing date of the Mergers, with the separation occurring before
the spin-off and the spin-off prior to the Mergers. The shares of AT&T Broadband common stock
issued in the spin-off will be retained by the distribution agent pending
delivery of certificates of various classes of AT&T Comcast common stock
described above under the description of the Merger Agreement.
Repayment of Indebtedness
AT&T
Broadband has agreed to repay at the completion of the Mergers any debt that it
or any of its subsidiaries owes to AT&T or any of AT&T’s subsidiaries
and AT&T has agreed to repay at the completion of the Mergers any debt that
it or any of its subsidiaries owes to AT&T Broadband or any of AT&T
Broadband’s subsidiaries. Comcast has
made arrangements for sufficient financing to accomplish the obligation of
AT&T Broadband to complete the foregoing.
The amount of the indebtedness
owed by AT&T Broadband and its subsidiaries to AT&T and its
subsidiaries is expected to exceed $3.96 billion.
Disposition of Time Warner Entertainment Interest. AT&T Broadband has agreed to pay to
AT&T 50% of the proceeds or value in excess of a threshold amount (net of
tax effect) with respect to its interest in Time Warner Entertainment. The threshold amount is a base amount of
$10.2 billion, increased by 7% simple interest on the balance until paid. If the Time Warner Entertainment interest has
not been fully disposed of within 54 months of the Mergers, then the value of
the interest will be determined by appraisal, and AT&T Broadband will pay 50%
of the value in excess of the threshold amount on a tax adjusted basis.
Material
conditions to the Separation and Distribution.
The following conditions, among others constitute conditions precedent
to the separation and distribution:
1.
Receipt of required regulatory approvals;
2.
Satisfaction of conditions necessary to
enable the spin-off to qualify as a tax-free distribution to affected parties
and shareholders;
3.
Approval by the AT&T Shareholders; and
4.
Satisfaction of the conditions to the
Mergers.
Support Agreement
Sural LLC, which is controlled by Brian L.
Roberts, president of Comcast, and holder of approximately 86.7% of the
combined voting power of Comcast common stock, has entered into a support
agreement with, among other parties, AT&T, pursuant to which Surral LLC has
agreed to vote its shares of Comcast common stock in favor of the AT&T
Comcast transaction. Surral LLC’s vote
in favor of the AT&T Comcast transaction will be sufficient to approve the
AT&T Comcast transaction without the vote of any other Comcast shareholder;
however, the form of the transaction as being consummated under the Preferred
Structure or Alternative Structure requires the approval of the holders of
Comcast Class A common stock in addition to Surral LLC, which holds all of the
Comcast Class B common stock.
Pursuant to the Support Agreement, Surral LLC has
agreed as follows:
1.
Prior to the
completion of the Mergers it will not transfer ownership of Comcast shares
except to certain permitted transferees who agree to be bound by the
restrictions of the Support Agreement;
2.
After
completion of the Mergers, until the tenth (10th) anniversary of the
effective date of the Mergers, Surral LLC will not transfer ownership of any of
its shares of AT&T Comcast Class B common stock except to certain permitted
transferees who agree to be bound by the transfer restrictions except for
transactions that either permit AT&T Comcast other shareholders to dispose
of their of AT&T Comcast stock on an equivalent basis and for the highest
amount of consideration on a per share basis as Surral LLC receives for any of
its shares of AT&T Comcast common stock in a transaction which is approved
by the disinterested holders of AT&T Comcast’s voting stock.
3.
Brian L.
Roberts has also agreed to a similar restriction in the preceding paragraph
with respect to his equity interest in Surral LLC, subject to similar
exceptions.
4.
A general
prohibition exists which prevents AT&T Comcast and its subsidiaries from
entering into any material transaction with Brian L. Roberts, any
associate or permitted transferee of Roberts unless the transaction is approved
by AT&T Comcast plus the its disinterested directors.
5.
Compensation
arrangements between Roberts and AT&T Comcast including any of its
subsidiaries require the approval of the disinterested directors of the
compensation committee of AT&T Comcast.
6.
Until the 2004
annual meeting Surral LLC will vote its shares of AT&T Comcast Class B
common stock against any proposed amendment to the governance arrangements set
forth in the AT&T Comcast charter.
(See discussion in Legal Qualification section regarding “atypical
governance structure”.)
7.
In the event of
Brian L. Roberts death or incapacity prior to the fifth anniversary of the
Mergers, unless Ralph J. Roberts has sole voting power with respect to the
election of directors with respect to all outstanding shares of AT&T
Comcast Class B common stock, then Surral LLC will vote such shares in the same
proportion as the holders of other voting common stock of AT&T Comcast
vote, which restriction applies until the fifth anniversary of the consummation
of the Mergers.
8.
The Support
Agreement terminates one day following the tenth anniversary of the
consummation of the Mergers or upon termination of the Merger Agreement.
Exchange Agreement
As part of the transactions contemplated by the
Mergers, AT&T, Comcast, AT&T Comcast Corporation and Microsoft
Corporation, a Washington corporation, have entered into an Exchange Agreement,
which provides for the terms of the conversion of $5 billion of AT&T debt
currently in the form of 5% Convertible Quarter Income Preferred Securities
(“QUIPS”) into 115 million shares of AT&T Comcast Common Stock. The purpose and effect of the Exchange
Agreement, if consummated, will be to substantially reduce the outstanding debt
held by AT&T Comcast Corporation after the Mergers.
Microsoft Corporation currently holds the QUIPS, a
security issued by the AT&T Finance
Trust I, a Delaware business trust. The
QUIPS are convertible into 5 billion aggregate face amount of 5% junior
convertible subordinated debentures due 2029 of AT&T, which debentures are
in turn convertible into AT&T common stock.
In connection with the AT&T Broadband spin-off, Microsoft has
agreed, subject to the satisfaction of certain terms and conditions, to
exchange the QUIPS for a number of shares of AT&T Broadband common stock
that will be converted in the AT&T Broadband Merger into 115 million shares
of AT&T Comcast Class A common stock under the Preferred Structure or
AT&T Comcast Class C common stock under the Alternative Structure;
provided, however, so that Microsoft and its affiliates will not hold more than
4.95% of AT&T Comcast’s voting power as a result of the Mergers, Microsoft
has agreed to accept shares of non-voting AT&T Comcast Class A special
common stock in lieu of shares of voting common stock (Class A or Class C,
depending on the structure of the Merger) to the extent of the surplus voting
shares.
As part of the QUIPS exchange transaction, AT&T
Comcast agreed that, if at any time prior to the fifth anniversary of the QUIPS
exchange transaction (assuming the transaction is consummated) AT&T Comcast
offers a high speed internet access agreement to any third party, then AT&T
Comcast will also be obligated to offer an agreement on non-discriminatory
terms with respect to the same cable systems for Microsoft’s Internet service
provider, The Microsoft Network.
Legal Qualifications
Standard of Review
The legal qualifications standard relates primarily
to an analysis of whether AT&T Comcast, AT&T Broadband, AT&T
Broadband Merger Sub, Comcast and Comcast Merger Sub are (i) authorized to
proceed with the transactions contemplated by the Merger Agreement and, to the
extent parties thereto, the Separation and Distribution Agreement; and (ii)
with respect to AT&T Comcast and AT&T Broadband, are authorized to
control the cable television system (the “System”). The general standard of review is that the
consent shall not be unreasonably withheld.
Good Standing Status
With respect to the foregoing-described entities the
following conclusions can be drawn:
1.
AT&T
Broadband Corp. is a Delaware corporation, formed on December 14, 2001, and,
based on a verbal confirmation with the Delaware Secretary of State on April
30, 2002, is active but was not in good standing due to its failure to
pay an unspecified amount of franchise taxes to the Delaware Secretary of
State.[7]
2.
AT&T
Comcast Corporation is a Pennsylvania corporation formed on December 7, 2001
and, based on a verbal confirmation with the Pennsylvania Secretary of State on
April 30, 2002, is in good standing;
3.
AT&T
Broadband Merger Sub, is a Delaware corporation formed on December 7, 2001,
and, based on a verbal confirmation with the Delaware Secretary of State on
April 30, 2002, is in good standing;
4.
Comcast Corporation,
a Pennsylvania corporation, was formed on March 5, 1969, and based on a verbal
confirmation with the Pennsylvania Secretary of State on April 30, 2002, is in
good standing; and
5.
Comcast Merger
Sub, a Pennsylvania corporation, was formed on December 4, 2001, and based on a
verbal confirmation with the Pennsylvania Secretary of State on April 30, 2002,
is in good standing.
Legal
Challenges
In response to what is described by
AT&T Comcast as an “Atypical governance structure for a large publicly held
corporation,” certain AT&T shareholders have expressed their concerns to
the Securities and Exchange Commission regarding what is described by these
shareholders as a “controversial proposal” under which AT&T will spin-off
AT&T’s Broadband operations and subsequently merger with Comcast
Corporation to form a new Pennsylvania corporation, AT&T Comcast[8]. The Letters of Opposition raise concerns
regarding the nature and effect of the “atypical” governance structure and also
challenge the bundling of the separation and merger transaction with the
approval of significant corporate governance changes as constituting a
potential violation of the Securities and Exchange Commission’s 1992 Amendment
to Section 14(a) of the Securities Exchange Act of 1934, which has the effect
of eliminating the ability of companies to group related matters into a single
proposal, requiring that the form of the proxy provide for a separate vote on
each matter presented. The position
taken in the Letters of Opposition is that the various material corporate
governance matters, most of which will appear in AT&T Comcast’s Articles of
Incorporation, require a separate vote on each matter presented.[9] The “atypical” governance provisions
referenced in the Letters of Opposition, include the following:
1.
The Board of
Directors of AT&T Comcast will not expire until the 2005 annual meeting of
shareholders and that no annual meeting will be held until 2005[10];
2.
AT&T
Comcast shareholders will not have the right to call special meetings of
shareholders or act by written consent;
3.
AT&T
Comcast will adopt a shareholder rights plan upon consummation of the Mergers
that will prevent any holder of AT&T Comcast stock from acquiring more than
10% of the voting power without the approval of the AT&T Comcast board[11];
4.
AT&T
Comcast Chairman and CEO can only be removed from their positions prior to
April 2010 with the approval of 75% of the entire AT&T Comcast board;
5.
The AT&T
Comcast charter is not subject to amendment except upon the approval of 75% of
the entire AT&T Comcast board until the earlier of the date on which Brian
L. Roberts is no longer serving as Chairman of the Board or CEO or April 2010;
and
6.
The creation of
dual class stock whereby the Roberts Family, as holders of AT&T Comcast
Class B common stock will hold a non-dilutable 33-1/3% combined voting power of
AT&T Comcast stock despite holding less than 1.5% of the economic interest
in AT&T Comcast.
Moreover, the Letters of Opposition further indicate
that the governance changes could adversely affect AT&T Comcast, including
making it virtually impossible for:
1.
Shareholders to
hold AT&T Comcast Board members, either individually or as a group,
accountable to this Shareholder’s interests and concerns (which are not
necessarily analogous to the interests and concerns of LFAs in all instances);
and
2.
The Board to
replace executive management of AT&T Comcast for up to eight years (which
could have an effect on the operation of the System due to policy decisions
established at the executive management level of the Transferee).
AT&T and Comcast also advised their respective
shareholders to carefully consider a variety of risk factors in deciding
whether to vote for approval and adoption of the Merger Agreement and the
transactions contemplated by the Merger Agreement. Selected risk factors relate to the atypical
governance structure outlined above and include the following:
1.
Voting power of
AT&T Comcast’s principal shareholder may discourage third party
acquisitions of AT&T Comcast at a premium.
After completion of the AT&T Comcast transaction, Brian L. Roberts
will have significant control over the operations of AT&T Comcast through
his control of Sural LLC, which as a result of its ownership of all outstanding
shares of AT&T Comcast Class B common stock will hold a non-dilutable
33-1/3% of the combined voting power of AT&T Comcast stock will also have
separate approval rights over certain material transactions involving AT&T
Comcast, which include right to approve any merger of AT&T Comcast with
another company or any other transaction that requires AT&T Comcast
shareholder approval under applicable law or any other transaction that would
result in any person or group owning shares representing in excess of 10% of
the combined voting power of the resulting or surviving entity or any issuance
of securities requiring AT&T Comcast shareholder approval over applicable
rules and regulations of any stock exchange or quotation system;
2.
Any issuance of
AT&T Comcast Class B common stock or which are convertible into Class B
common stock; and
3.
Charter
amendments and other actions that limit the rights of holders of AT&T
Comcast Class B common stock to transfer, vote or otherwise exercise rights
with respect to AT&T Comcast Capital stock.
Atypical governance arrangements may make it more
difficult for shareholders to act. Since
AT&T Comcast shareholders will not have the right to call special meetings
of shareholders or act by written consent and AT&T Comcast directors will
be able to be removed only for cause, AT&T Comcast shareholders will not be
able to replace the initial AT&T Comcast board members prior to the first
annual meeting to be set in the charter of AT&T Comcast (currently April
2004). Even after the expiration of the
initial term of the board of directors, it will be difficult for an AT&T
Comcast shareholder, other than Sural LLC or a successor entity controlled by
Brian L. Roberts, to elect a slate of directors of its own choosing to the
AT&T Comcast board due to the fact that Brian L. Roberts, through his control
of Sural LLC or a successor entity, will hold all of the AT&T Comcast Class
B common stock with the aggregate nondilutable voting interest of 33 1/3%.
In addition to the governance arrangements relating
to the AT&T Comcast board, Comcast and AT&T have agreed to a number of
governance arrangements which make it difficult to replace the senior
management of AT&T Comcast which are summarized above.
The effect of the above-referenced atypical
governance arrangement on the overall business operations of AT&T Comcast
is uncertain, however, it is appropriate for LFAs to consider the adverse
impact of the governance structure affecting AT&T Comcast on its ability to
fulfill, or cause the applicable subsidiary operating entity to fulfill its
respective legal obligations under the Franchise.
Updated S-4
On May 14, 2002, AT&T Comcast Corporation filed
a revised S-4 registration statement to the Securities and Exchange Commission
which addressed several of the issues raised by certain AT&T
shareholders. In particular, the proposed
merger to be put to shareholders has been unbundled with one vote on the change
of control and a separate vote on the governance issues.
Technical Qualifications
The technical qualifications standard relates to
AT&T Comcast’s technical expertise and experience in operating and
maintaining cable television systems. In
such a review, the general standard is once again that the consent shall not be unreasonably withheld.
Independently,
AT&T and Comcast are before the proposed merger “Top 5” cable television
multiple system operators. Presuming the
merger is completed, the combined AT&T Comcast will be the largest U.S.
cable operator.
While
it is virtually impossible to suggest that the merged entity will lack the
technical qualifications to be a cable franchisee, there are legitimate issues
that should be addressed in connection with any transfer approval.
Specifically,
the entity controlling the local franchisee will not be AT&T or Comcast,
but rather an entirely new entity which will control the assets of the present
AT&T systems and the present Comcast systems. Comcast has stated that its
present technical management team, supplemented by some of the existing
AT&T technical managers, will provide the technical oversight of the new
entity. If there is an exodus of
technical management in or supervising the franchise area, the LFA should be
concerned as Comcast may not presently have cable systems in or near the LFA
(and, presumably, no local technical management team to step in to the recently
vacated shoes). The LFA may wish to seek
assurances from AT&T Comcast that at the time of the transfer of control,
if approved, it will have a full and competent technical staff that will insure
uninterrupted technical operations without reduction in present service levels.
Financial
Qualifications
Scope of Review
Moss
& Barnett reviewed selected financial information provided by AT&T
Broadband, a division of AT&T Corp., a New York corporation (“AT&T”),
in conjunction with AT&T’s request for consent to the change in ownership
of the cable television systems (the “Systems”).
The
selected financial information, which was provided or obtained and to which our
review has been limited, consists solely of the following financial information
(hereinafter referred to collectively as the “Financial Statements”):
1.
Combined
unaudited pro forma condensed balance sheet of AT&T Comcast Corporation as
of December 31, 2001 and September 30, 2001, and the related combined unaudited
pro forma statements of operations for the years ending December 31, 2001 and
2000, together with the footnotes and additional information, as published in
AT&T Comcast Corporation’s Form S-4 and Form S-4 Amendment No. 1, and filed
with the Securities and Exchange Commission on February 11, 2002 and April 10,
2002, respectively;
2.
Consolidated
balance sheet of AT&T and subsidiaries as of December 31, 2001, 2000 and
1999, and a related consolidated statements of operations, changes in
shareholders’ equity and cash flows for the years ended December 31, 2001,
2000, and 1999, together with the footnotes and additional information, as the
same were published in AT&T Corp.’s Form 10-K for the year ending December
31, 2001, and filed with the Securities and Exchange Commission on April 1,
2002;
3.
Consolidated balance
sheet of Comcast Corporation and subsidiaries (“Comcast”) as of December 31,
2001 and 2000, and the related consolidated statements of operations, changes
in shareholders’ equity and cash flows for the years ended December 31, 2001
and 2000, together with the footnotes and additional information, as the same
were published in Comcast’s Form 10-K for the year ending December 31, 2001,
and filed with the Securities and Exchange Commission on March 29, 2002;
4.
Financial
information provided in the AT&T Comcast Corporation Investor Presentation
dated December 20, 2001;
5.
Financial
information included as part of a presentation entitled “AT&T Broadband and
Comcast Merger Financial Issues” dated March 18, 2002 presented by Mr. Sumanta
Ray of the Communications Workers of America; and
6.
Financial
information provided from AT&T with Form 394 and in response to Moss &
Barnett’s questionnaire provided April 1, 2002.
AT&T, in response to Moss & Barnett’s
transfer questionnaire dated April 1, 2002, failed to provide us with requested
information regarding certain financial forecasts, financial projections,
potential cost savings, and synergies.
On April 15, 2002, we again requested such information as was used as a
basis by Credit Suisse First Boston Corporation and Goldman Sachs & Co., in
their opinions to the AT&T Board of Directors dated December 19, 2001. AT&T provided us, in response to our
second request, with a declaration to the Federal Communications Commission
dated February 27, 2002 of Mr. Robert Pick, Senior Vice President of Corporate
Development at Comcast. As such, our
review of the financial information with respect to AT&T Comcast
Corporation does not include any analysis with respect to the projected
financial information, except as provided in Mr. Pick’s declaration or as
otherwise noted within this report.
Our procedure was limited to providing a summary of
our analysis of the Financial Statements and additional financial information
to facilitate our client’s assessment of the financial capabilities of AT&T
Comcast Corporation to become the successor operator of the Systems serving the
Cities currently operated by AT&T.
Overview
of AT&T Corp.
1.
Summary of
AT&T. AT&T Corp., a New York Corporation, was
incorporated in 1885. AT&T provides
voice, data and video communication services to consumers worldwide, including
international, regional and local communication services, cable television and
Internet services.
AT&T Broadband is a separating operating unit of
AT&T, and is one of the largest broadband communications companies by
customer in the United States as of December 31, 2001. AT&T Broadband provides cable television,
high-speed cable Internet services and broadband telephone services. As of December 31, 2001, AT&T Broadband
served approximately 13.6 million basic subscribers and passed in excess of 24
million homes. AT&T’s geographical
market includes the cities of Chicago, San Francisco, and Boston. Almost 80% of AT&T Broadband’s markets
are located in larger metropolitan areas.
A substantial portion of the assets of AT&T
Broadband were acquired by AT&T through the acquisitions of the assets of
Tele-Communications, Inc. on March 9, 1999, and MediaOne Group, Inc. on June
15, 2000. AT&T Broadband also holds
investments in Time Warner Entertainment Company L.P., Insight Midwest, L.P.,
and Texas Cable Partners, L.P.
2.
Management
and Operations. AT&T Broadband is an integrated operating
unit of AT&T and has relied on AT&T for its management direction and
operations. AT&T Broadband’s
financial statements reviewed in this report are based upon management’s
accounting assumption and allocations, which may not accurately reflect the
balance sheet and statement of operations of AT&T Broadband as a stand
alone company.
3.
Acquisition
and Divestures. AT&T Broadband has increased its cable
capacity through a number of acquisitions in 1999, 2000 and 2001. The chart below shows the significant
acquisitions including the purchase prices, the basic number of subscribers and
cost per basic subscriber.
|
Predecessor Owner |
Acquisition Month |
Purchase Price |
Basic Subscribers |
Approx. Per Subscriber Cost |
|
Tele-Communications,
Inc. |
March
1999 |
$52.0
billion |
10.7
million |
$4,837 |
|
MediaOne
Group, Inc. |
June
2000 |
$45.0
billion |
5
million |
$9,028
a |
|
Cablevision
Systems Corporation |
January
2001 |
$1.075
billion |
228,000
(net) |
$4,715 |
a. Includes a 25% interest in
Time Warner Entertainment Company, LP.
AT&T Broadband has also completed in a number of
divestures and joint venture activities.
The chart below shows the significant divestures including the sales
prices, the basic number of subscribers and the approximate cost per basic
subscriber.
|
Buyer |
Month of Sale |
Sales Price |
Basic Subscribers |
Approx. Per Subscriber Cost |
|
Comcast
Corporation |
April
2001 |
$1,423
million |
590,000 |
$2,412 |
|
MediaOne
Communications Corp. |
June
2001 |
$295
million |
94,000 |
$3,138 |
|
Charter
Communications, Inc. |
June
2001 |
$1,719
million |
554,000
(net) |
$3,103 |
|
Comcast
Corporation |
June
2001 |
$510
million |
115,000 |
$4,434 |
|
MediaCom
Communications Corp. |
July
2001 |
$1,724
million |
710,000 |
$2,428 |
|
Adelphia
Communications Corp. |
December
2001 |
$318
million |
128,000 |
$2,484 |
4.
Financing. The cable
television business is inherently capital intensive and requires substantial
cash infusion for construction, maintenance, improvements and expansion of
cable, plant, and distribution equipment as well as to fund acquisitions. AT&T Broadband has relied extensively on
cash infusions from AT&T to fund its operations and growth. At the current time, AT&T Broadband is
managed by AT&T on a centralized basis, but for purposes of AT&T
Broadband’s pro forma financial statements reviewed in this report, the terms,
conditions and interest rates of the AT&T Broadband debt are equal to an
independent third party lender’s terms, conditions and interest rates. The failure of AT&T Broadband to receive
the substantial amounts of capital previously supplied by AT&T would have a
debilitating effect on AT&T Broadband.
The contemplated merger transaction would be the largest transaction in
the cable television systems operating business. At the current time, AT&T Broadband has
in excess of $22.3 billion of debt. Of
this total amount of AT&T Broadband debt, $5 billion would be reduced to
capital in the Microsoft Exchange Agreement discussed in this report.
AT&T Broadband, as part of its debt management
activities, has liquidated some of its operations (see Acquisition and
Divestures above) and is in the process of trying to liquidate its Time Warner
Entertainment Company, L.P. holdings.
Overview of Comcast Corporation
1.
Summary of
Comcast Corporation. Comcast Corporation, a Pennsylvania
corporation, was organized in 1969 and is in the business of development,
management and operation of broadband communication networks in the United
States. Comcast, the third largest cable
operator in the United States, provides services to approximately 8.5 million
subscribers in the United States as of December 31, 2001.
Comcast also provides, through its subsidiary, QVC,
Inc. and its subsidiaries, an electronic retail outlet for customers through
its television programming.
Additionally, Comcast provides programming content, including E!
Entertainment Television Inc., the Golf Channel and other Comcast networks.
Comcast currently employs approximately 38,000
individuals, with one-half of the individuals working within the cable
communications area.
2.
Management
and Operations. Mr. Brian L. Roberts is the President of
Comcast and controls the corporation.
Mr. Roberts, through a related entity, Sural, LLC, owns approximately
87% of the voting power of Comcast. As
part of the merger transaction, Mr. Roberts will vote for and endorse the
merger transaction as well as be given atypical governance rights with respect
to AT&T Comcast Corporation.
3.
Acquisitions. Comcast
acquisitions have provided growth in its cable operations unit. In 2001, Comcast exchanged approximately
440,000 subscribers with Adelphia Communications Corporation and had the
following acquisitions: (Number of basic subscribers and purchase price varies
slightly from amounts shown on AT&T Acquisitions and Divestures above)
|
Predecessor Owner |
2001 Acquisition
Month |
Purchase Price |
Basic Subscribers |
Approx. Per
Subscriber Cost |
|
AT&T |
April |
$1.423 billion |
585,000 |
$2,432 |
|
AT&T |
April |
$518.7 million |
112,000 |
$4,631 |
4.
Financing. As is the
case for AT&T Broadband, capital is vital for the constant maintenance,
system upgrades and operations of its cable system. As a stand-alone entity, Comcast’s management
believes that it can meet its liquidity and capital requirements through cash flow
from operations, existing cash and credit facilities. Historically, Comcast has maintained high
profit margins, which has resulted in positive working capital.[12] The Comcast positive working capital as of
December 31, 2001, if maintained, could bridge the short-term cash needs of
AT&T Comcast Corporation until its operations provide positive cash flow.
Findings
1.
Analysis of
AT&T Comcast Corporation’s Financial Statements. Neither
federal law nor FCC regulations provide franchising authorities with any
guidance concerning the evaluation of the financial qualifications of a
transfer applicant for a cable franchise.[13] In certain circumstances, it is appropriate
to consider the performance of an applicant based on the applicant’s historical
performance in relation to the recognized industry standards. Given the fact that AT&T through AT&T
Broadband and Comcast and its subsidiaries have a history of cable system
operations, such combined statistical information and analysis is relevant with
respect to the transaction contemplated by the Merger Agreement. We have based our analysis in part on
industry standards, which are generally recognized in making such a
determination. These industry standards
are more precisely described below.
Based on the selected financial information, which
we reviewed, the following is a summary of various financial factors as
compared to applicable industry standards for operations for the 12-month
periods ending December 31, 2001 and 2000 and balance sheet dates of December
31 and September 30, 2001. AT&T
Comcast Corporation management recognizes that the financial information in
these pro forma statements may differ substantially from the financial results
if AT&T Broadband and Comcast were actually one corporation throughout the
pro forma period.
|
AT&T CORP. AND COMCAST CORP. COMBINED FINANCIAL DATA |
|||
|
DESCRIPTION |
INDUSTRY STANDARD |
2001 |
2000 |
|
1.
EBITDA/revenue(1)* (Cash flow percentage) |
39.09%
to 54.83% |
24.1% |
22.9% |
|
2.
Operating Income Percentage* (Operating Income/Revenue) |
+11% |
(15.6%) |
(37.3%) |
|
3.
Debt/Equity Ratio* (long-term
debt/total equity) |
2.20:1 |
.51:1 |
.49:1(2) |
|
4.
Current Ratio* (current assets/current liabilities) |
1.0:1 |
.58:1 |
.39:1(2) |
|
5.
EBITDA (in Billions) |
N/A |
4.7 |
4.1 |
(1)
Range based on a Domestic Suburban/Rural Wireline
Cable Comparisons prepared by CIBC Oppenheimer.
Data has not been independently
verified by the reviewer.
(2)
Ratio determined as of
September 30, 2001.
* Data based on Financial
Information in 2001 S-4 and 2001 S-4A.
2.
Specific
Financial Statement Data and Analysis.
a.
Assets. According
to the combined AT&T Comcast Corporation financial information, AT&T
Comcast Corporation had (i) current assets of $6,256 and $4,882 million; (ii)
working capital of a negative $4,551 million and a negative $7,756 million; and
(iii) total assets of $140,775 million and $141,201 million as of December 31,
2001 and September 30, 2001, respectively.
Working capital, which is the excess of current assets over current
liabilities, is a short-term analytical tool used to assess the ability of a
particular entity to meet its current financial obligations in the ordinary
course of business. The negative working
capital balance of $4,551 million as of December 31, 2001, suggests that
AT&T Comcast Corporation may experience a short-term deficiency in available
working capital resources that will be needed to pay transaction costs and debt
service in the next year. This will need
to be overcome by AT&T Comcast Corporation drawing on other capital
resources including additional borrowings, liquidation of current investments
regarding Time Warner Entertainment Company, LP investment) and operating cash
flows. AT&T Comcast Corporation
current ratio (current assets divided by current liabilities) as of December
31, 2001, of .58:1 is below recognized industry standards of 1.0:1, but this
rate has improved over the September 30, 2001 ratio of 39:1.
b.
Liabilities. According
to the combined AT&T Comcast Corporation financial information, AT&T
Comcast Corporation had (i) current liabilities of $10,807 million and $12,638
million; (ii) long-term debt net of current maturities of $31,528 million and
$30,574 million; and (iii) equity of $61,742 million and $62,098 million as of
December 31, 2001 and September 30, 2001, respectively. As of December 31, 2001, AT&T Comcast
Corporation’s debt to equity ratio, which is a measure of the amount of debt in
relation to total equity, was approximately .51:1. Generally, a low debt to
equity ratio is considered favorable.
AT&T Comcast Corporation’s debt to equity ratio is more favorable
than the industry standard. This is
largely the result of AT&T’s previous stock equity acquisitions. The Tele-Communications, Inc. stock
acquisition in 1999 has contributed significantly to AT&T Comcast
Corporation’s favorable debt to equity ratio.
c.
Income and
Expense. According to the combined AT&T Comcast
Corporation financial information, the combined entity would have: (i) revenue
of $19,697 million and $17,924 million; (ii) operating expenses of $22,767
million and $24,604 million; and (iii) net loss of $3,070 million and $6,680
million for the years ending December 31, 2001 and 2000, respectively. AT&T Comcast Corporation, based on
December 31, 2001 proforma data, would have had an operating cash flow
percentage for the 12 months ending December 31, 2001 of 24.1%, which is lower
than the industry average of 40% to 55%. Cash flow and the cash flow percentage
provide a measure of the ability of a business entity to generate cash. AT&T Comcast Corporation believes that as
a result of the merger of the two entities and cost savings and synergies, the
cash flow percentage should improve greatly as a result of improved margins.
3.
AT&T and
Comcast Management Discussion and Analysis of Financial Results. Both
AT&T Broadband and Comcast may recognize potential benefits and cost
savings related to the merger of the AT&T Broadband operations and
Comcast. As noted previously, we
requested additional information verifying these projected revenue increases
and cost savings, and AT&T provided us with a declaration from Mr. Pick, a
Comcast Senior Vice President of Corporate Development, regarding the potential
cost savings and benefits. The following
information is a summary of some of the pertinent projected financial benefits
and costs management believes will result from the merger transaction.
a.
Revenue. The
creation of a larger subscriber base through the combination of AT&T
Broadband and Comcast will allow for the deployment of a greater range of
services and products, which should have a positive impact on revenues.
As a
result of the merger transaction, AT&T and AT&T Comcast Corporation may
compete in the same market, including the cable and digital subscriber line
(“DSL), which may result in a decrease in potential revenue for AT&T
Comcast Corporation from the amounts shown in their pro forma financial
statements. No estimated revenue loss
was provided by management with respect to this potential item.
b.
Expenses. The
AT&T Comcast Corporation management believes the merger of the AT&T
Broadband and Comcast will result in a substantial reduction in overall
operating costs. Mr. Pick, in his
statement to the Federal Communications Commission suggested numerous areas
where cost savings would result in a reduction in the AT&T Comcast
Corporation’s overall costs. These
projected cost savings and efficiencies in the programming, general operating,
advertising, new products and telephony areas will result in cost savings of
approximately $1,250 to $1,950 million a year.
The net present value of these projected savings in $13,500
million. These projected savings and
synergies do not include additional transaction costs of the merger and issues
with respect to AT&T Broadband’s utilization of AT&T’s centralized
management services, which have not been fully described in management’s
discussion.
c.
Gross
Margins. Management believes that the combination of
the two operations will increase AT&T Broadband’s operating margins, to a
level that Comcast currently enjoys, which is approximately 42% through three
quarters of 2001. AT&T Broadband’s
gross margin through three quarters of 2001 was approximately 23%. The potential increase in AT&T
Broadband’s gross margin could result in up to $1.6 billion of annual
additional earnings from the AT&T Broadband’s operations.
d.
Capital
Expenditures. In 2001, AT&T and Comcast anticipate
spending approximately $4.3 billion and $1.3 billion, respectively, on capital
expenditures. Management, according to
its registration statement, states that it has not determined the actual amount
of capital expenditures for the period after the merger, but expects that the
capital expenditures will be substantial.
Notwithstanding
the above paragraph, management believes the transaction will result in an
overall reduction in capital expenditures through economies of scale of
$200-$300 million annually. In 2000 and
2001, Comcast invested less in capital expenditures than AT&T Broadband.[14] A continued decrease in the amount of capital
expenditures may result in a reduction in the quality of products and services
provided by AT&T Comcast Corporation.
Additionally,
capital expenditures for both AT&T Broadband and Comcast have outpaced net
cash provided by operations in the amount of $3.5 billion and $952 million for
AT&T Broadband and Comcast in 2001, respectively. Management believes this trend may continue
in the years to come after the merger transaction. As such, this substantial use of cash could
potentially have an adverse effect on AT&T Comcast Corporation’s continued
operations.
e.
Dividends. As part of
the merger transaction, AT&T Comcast Corporation does not intend to pay
dividends in order to preserve cash for operations.
f.
Long Term
Contracts/Investments. Both AT&T Broadband and Comcast are
subject to exclusive long-term contracts for video programming, audio
programming, electronic program guides, billing and other services. These contracts may limit the economies of
scale and cost savings projected to be realized as a result of the merger. Some of these long-term contracts are with
Starz Encore Group, TV Guide and CSG Systems, Inc. for programming, interactive
programming guides and billing. Due to
the proprietary nature of the agreements, the terms of these agreements are not
disclosed, which may have a direct impact on the potential cost savings from
this merger transaction.
AT&T
Broadband’s substantial investments, including a noncontrolling 25% ownership
interest in Time Warner Entertainment Company L.P., will limit AT&T Comcast
Corporation’s ability to manage these investments and pass through its
synergies and cost savings. In addition,
AT&T’s controlling ownership in At Home Corporation, which filed bankruptcy
in September of 2001, may subject AT&T Comcast Corporation to suit from the
other shareholders or creditors of At Home Corporation. The financial impacts of this suit are not
evaluated within the report.
g.
Labor. The merger
transaction may result in a substantial reduction in the workforce of AT&T
Broadband and Comcast. The loss of
current employees working with or providing services on the Cities’ Systems may
result in a decline in the current level of system and customer service. The cost of this workforce reduction has not
been provided in management’s reports.
Less than 10% of AT&T Broadband employees are represented by unions affiliated
with the AFL-CIO.
h.
Financing. Management
realizes that AT&T Comcast Corporation will have significant debt
obligations in excess of $30 billion as of the date of the merger. Management has secured approximately $12.85
billion of financing, which will be used to replace obligations to AT&T ($9
- $10 billion), redeem certain AT&T shareholders ($1 - $2 billion) and to
provide cash for operating funds and capital expenditures ($1 - $2 billion).
Comcast
has obtained commitments for $12.85 billion from various lenders as of May 13,
2002. Management realizes that the
failure to secure these additional funds will have a direct impact on the
AT&T Comcast Corporation’s ability to fund its operation in the short-term,
and may require the sale of a portion of its assets. In addition, the cost of obtaining the
financing may be materially higher than the cost incurred by AT&T Broadband
on its debt previously held by AT&T.
Comcast has cash, cash equivalents and short term investments of $3.0
billion and available lines of credit from its subsidiaries of $3.5 billion as
of December 31, 2001. Thus, based on the
financial information supplied by the management of AT&T Broadband and
Comcast, AT&T Comcast Corporation should have sufficient liquid assets for
short-term operations and capital expenditures, and sufficient assets available
to collateralize or sell to obtain additional financing through the initial
period after the merger.
Conclusion
As
this paper demonstrates, the AT&T Comcast merger is an extraordinarily
complex transaction which will no doubt have a significant impact on the
overall direction and local operations of the operating subsidiaries. LFAs should carefully consider the legal,
technical, financial, character and other qualifications of their operating
subsidiary, as controlled by AT&T Comcast Corporation, in proceeding
through the transfer process.
The
transfer process presents LFAs an opportunity to clarify outstanding franchise
violations or ambiguous franchise provisions and may provide the parties an
opportunity to resolve longstanding disputes.
Moreover, the transfer process provides LFAs with an opportunity to
ensure that appropriate safeguards are in place with respect to the financial
qualifications of the operating subsidiary.
Imposing conditions upon approval such as a guaranty, performance bond
or security fund may be appropriate based on the financial review.
While
the AT&T Comcast merger is dominating the time of many LFAs around the
country, the next wave of transfers may be on the horizon. Financial difficulty in the cable and
telecommunications industry coupled with issues regarding accounting practices
has caused many large multiple system operators (MSOs) to experience a
significant decline in their stock value.
Adelphia is one company which has recently seen its stock value fall
dramatically and has had a significant change in its upper management. Published reports indicate that Adelphia may
be moving toward a sale of certain select properties around the country,
several of which will be highly sought after by the top five (5) MSOs. With these issues in mind, the time to begin
preparing for a transfer proceeding is not when the FCC Form 394 arrives but
rather before the form is ever received by the LFA. Given that federal law imposes a 120 day
deadline to complete a transfer review, it may be prudent for LFAs to be
prepared in advance for issues which are likely to arise when a transfer
request arrives at City Hall.
For additional information regarding the transfer
process and the laws and regulations governing such a proceeding please visit
our web site at: www.municipalcommunicationslaw.com.
~~ END OF PAPER ~~
Brian T. Grogan is a shareholder with the Minneapolis
law firm of Moss & Barnett practicing in the areas of telecommunications
and cable television law. Brian
represents entities throughout the country on franchise renewals, transfers of
ownership, competitive franchising, telecommunications planning, right-of-way
management, first amendment issues, tower siting, leasing and zoning,
litigation and other related communication matters. He is a frequent presenter at state and
national conferences regarding communications law and he is a member of the
American Bar Association (Forum Committee on Communications Law), National
Association of Telecommunications Officers and Advisors, International
Municipal Lawyers Association (Contracts, Franchises and Technology Section),
and is past chair of the Communications Law Section of the Minnesota State Bar
Association.
Brian T.
Grogan, Esq.
Moss &
Barnett, A Professional Association
4800 Wells
Fargo Center, 90 South Seventh Street
Minneapolis,
MN 55402-4129
Phone: 612-347-0340
Facsimile: 612-339-6686
E-mail: groganb@moss-barnett.com
Web Site: www.municipalcommunicationslaw.com