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6 <br /> 1 <br /> REPORT <br /> CVI/TWC TRANSFER REVIEW <br /> Cablevision Industries, Inc. - Orange County, NC-0256 <br /> BACKGROUND: <br /> Commensurate with the Cable Act of 1992, the Federal Communications Commission <br /> promulgated a transfer of ownership procedure to allow franchise authorities to review the <br /> legal, technical and financial qualifications of the new owner/transferee; and determine <br /> whether or not the transferee is qualified to assume the duties and responsibilities of operating <br /> a cable-telecommunication system. <br /> The FCC-394 form is completed by the operator and given to the franchise authority. The <br /> purpose the form is to disclose the business matters associated with the transfer. It requires the <br /> cable operator to: 1) furnish a copy of the document providing for the transfer of control from <br /> Alert Cable TV of North Carolina to Time Warner Incorporated, 2) address whether the <br /> transferee is legally qualified to transact business in North Carolina, 3) address the character <br /> qualifications of the transferee, 4) address the transferee's financial qualifications, and 5) <br /> discuss the transferee's technical qualifications. <br /> METHODOLOGY: <br /> CVI's submission to Orange County was evaluated by the consultants to determine whether <br /> the operator provided information about the transferee consistent with the procedures <br /> prescribed by the Federal Communication Commission. Documents provided by CVI about <br /> Time Warner were read carefully. Information furnished by CVI was evaluated against <br /> similar information known by the consultants: information which had been gathered over time <br /> by the consultants about the transferee's [Time Warner] character, legal, technical, financial - <br /> business practices. <br /> The consultants met with CVI representatives and attorneys with the Federal Trade <br /> Commission [FTC] to discuss issues and concerns related to the merger. Also, they spoke <br /> with attorneys from the Federal Trade Commission who have the responsibility to assess the <br /> impact upon the local competitive environment by the merger. The acquisition of CVI by <br /> TWI must be approved by the FTC. Therefore, any action by the local franchise authority <br /> regarding the proposed transfer may be rendered moot should the FTC not approve the <br /> proposed transaction. <br />