City Council approves 15-year WinFirst cable franchise after debate over financial stability

The Los Angeles City Council voted 12-2 on July 24 to approve a 15-year franchise ordinance authorizing WinFirst to provide cable service in the city.

Council members debated whether awarding a long-term franchise to WinFirst would actually increase competition or simply create a saleable asset that could be transferred to an incumbent operator. Councilmember Holden said he would vote no because he was not satisfied about WinFirst’s financial stability and worried the company would sell the franchise after receiving the award. Terry Sauer, the city’s Chief Administrative Officer, said staff conducted a file and financial review, concluded the matter was a policy decision for council, and therefore offered no recommendation for or against approval.

The ordinance approved by the council carries a 15-year term for the franchise and includes a performance-bond structure discussed in council questions: staff described a $29,000,000 performance bond tied to the build‑out, with an initial posting of $2,900,000 and incremental increases tied to construction milestones; the full bond amount would be available if the city called it for a default. Staff said the bond would be posted (not paid to the city) and would be callable if the contractor failed to perform. The council also confirmed that any subsequent sale or transfer of the franchise would require return to the council for approval.

Councilmembers who supported the ordinance framed the vote as a first step toward introducing competition in local cable service. Councilmember Padilla characterized the decision as a policy choice to begin bringing additional providers into the market; Councilmember Garcetti said he supported competition and did not view the decision as equivalent to past utility deregulation. Opponents warned that the company may not remain operational for the full build‑out and that transfers could occur later under hardship claims.

Staff told the council that WinFirst has begun construction in Sacramento but has not yet turned on customers there. Council members asked staff whether they had reports from Sacramento; staff said Sacramento had experienced typical construction issues and had not yet demonstrated customer performance. The CAO noted the firm's principals had experience operating larger systems in the past.

The roll call recorded the tally as 12 ayes and 2 noes; the transcript does not record a complete roll‑call listing of individual yes/no votes at the time of tabulation. The ordinance passed on second reading.

The council did not specify more detailed financing covenants, build‑out benchmarks in this vote, or an implementation timeline beyond the bond and transfer‑approval provisions discussed on the floor. Staff indicated the CAO and other departments had prepared financial and technical analyses and that further compliance and monitoring steps would be part of implementation and follow‑up work.