Borough of Jim Thorpe, PA Franchise Fees, Cable System

Any corporation, partnership or other business entity that owns or controls, is owned or controlled by, or is under common ownership or control with a cable operator.

BASIC SERVICE

That service tier which shall include at least the retransmission of local broadcast television signals for which a cable operator has obtained retransmission consent and/or must carry agreements and any educational and governmental ("EG") access channel.

BROADCAST

Over-the-air transmission by a television or radio station.

CABLE OPERATOR

Any corporation, person, partnership or entity which provides or operates a cable system.

CABLE SERVICE

The one-way transmission to subscribers of video programming or other programming service and subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service.

CABLE SYSTEM

A facility, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide cable service which includes video programming and which is provided to multiple subscribers within the municipality, but such term does not include:

(1)

A facility that serves only to retransmit the television signals of one or more television broadcast stations;

(2)

A facility that serves subscribers without using any public right-of-way;

(3)

A facility of a common carrier which is subject, in whole or in part, to the provisions of Title II of the Cable Act, except that such facility shall be considered a cable system (other than for purposes of § 621 of the Cable Act) to the extent that facility is used in the transmission of video programming directly to subscribers unless the extent of that use is solely to provide interactive on-demand services;

(4)

An open video system that complies with § 653 of the Cable Act; or

(5)

Any facilities of any electric utility used solely for operating its electric utility systems.

DROP

The coaxial or fiber optic or other cable that connects a home or building to the cable system.

FCC

The Federal Communications Commission.

GROSS REVENUES

(1)

All revenue received directly or indirectly by a cable operator from any source whatsoever arising from, attributable to, or in any way derived from the operation of cable operator's cable system located within the municipality to provide cable services. Gross revenues shall include, but are not limited to, the following:

(a)

Basic service fees;

(b)

Fees charged to subscribers for any service tier other than basic service;

(c)

Fees charged for premium services;

(d)

Fees charged to subscribers for any optional, per-channel or per-program services;

(e)

Revenue from the provision of any other cable services;

(f)

Charges for installation, additional outlets, relocation, disconnection, reconnection and change-in-service fees for video or audio programming;

(g)

Fees for downgrading any level of cable service programming;

(h)

Fees for "trouble calls";

(i)

Fees for leasing of channels;

(j)

Charges based on the sale or lease of any portion of the cable system or fiber capacity;

(k)

Rental or sales of any and all equipment, including converters and remote-control devices;

(l)

Any and all advertising revenues;

(m)

Revenues or commissions from home shopping channels;

(n)

Internet access or cable modem service fees (provided such service is deemed to be a cable service by the FCC or a court of competent jurisdiction);

(o)

Revenue from interactive television services;

(p)

Bank-at-home services and other revenue-sharing arrangements provided through the cable system;

(q)

Fees for any and all music services;

(r)

Fees for video-on-demand;

(s)

Sales of program guides;

(t)

Late payment fees;

(u)

NSF check charges; and

(v)

Franchise fees.

(2)

Gross revenues shall not include bad debts or any taxes on services furnished by the cable operator and imposed directly upon any subscriber or user by the municipality, state, federal or other governmental unit.

MUNICIPALITY

Borough of Jim Thorpe.

NORMAL OPERATING CONDITIONS

Business conditions within the cable operator's service department which are within the control of the cable operator. Those conditions that are not within the control of the cable operator include, but are not limited to, natural disasters, civil disturbances, power outages, telephone network outages and severe or unusual weather conditions.

OUTLET

An interior receptacle that connects a television set to the cable system.

PROGRAMMING

Any video, audio, text or data coded signal carried over the cable system.

SUBSCRIBER

A person or entity who contracts with cable operator for, and lawfully receives, the video signals and cable services distributed by the cable system.

Nothing herein shall be interpreted to enlarge the municipality's right to collect franchise fees beyond the authority granted to the municipality by the Cable Act; and, the municipality acknowledges that revenues from advertising revenue and home shopping channels are received based on zip codes that do not conform to municipality boundaries. For the purpose of calculating franchise fees, these revenues will be prorated among franchise authorities based upon the number of subscribers within each.

§ 245-3 Compensation for municipality.

Franchise fee. Every cable operator shall pay to the municipality an amount equal to 4% of the gross revenues derived from the operation of its cable system in the municipality. The term "gross revenues" is defined in § 245-2, Definitions. The cable operator shall not deduct or otherwise credit against the franchise fee any tax, fee or assessment of general applicability. The municipality may amend the franchise fee upon 60 days' written notice to the cable operator provided that the franchise fee may not exceed 5%. In the event that federal law is amended to authorize a franchise fee higher than 5%, the municipality may, at its discretion, direct the cable operator to pay a higher franchise fee. The cable operator may pass franchise fees through to subscribers pursuant to applicable law and regulations.

Quarterly payments. Franchise fee payments to the municipality under this provision shall be computed at the end of each calendar quarter and shall be due and payable within 60 days after the end of each calendar quarter. Specifically, payments shall be due and payable on or before May 31 (for the first quarter), August 31 (for the second quarter), November 30 (for the third quarter), and the last day of February (for the fourth quarter) of each year. In the event that any franchise fee payment is not made on or before the applicable dates, then interest shall be added at the then-current prime rate of the largest commercial bank in Carbon County plus three percentage points. The interest rate shall be applied as described from the date such franchise fee payment was originally due. No acceptance of any payment shall be construed as an accord that the amount paid is in fact the correct amount, nor shall acceptance of any payment be construed as a release of any claim the municipality may have for additional sums payable under this chapter.

Quarterly reports. Each franchise fee payment shall be accompanied by a written report containing an accurate statement of the cable operator's gross revenues received for cable services for the quarter in connection with the operation of the cable operator's cable system and a brief report showing the basis for computation of fees. The report shall contain a line item for every source of revenue received and the amount of revenue received from each source. The report shall be verified by a financial representative of the cable operator.

Audits. On an annual basis, upon 30 days' prior written notice, the municipality shall have the right to conduct an independent audit of the cable operator's records reasonably related to the sources, amounts and computation of gross revenues in accordance with generally accepted accounting principles. Any reproduction of such records for purposes of inspection shall be performed at the cable operator's expense. If the audit shows that franchise fees have been underpaid, then the cable operator shall pay the underpaid amount plus interest in the amount of the then-current prime rate of the largest bank in Carbon County plus three percentage points. If franchise fees have been underpaid by 5% or more, then the cable operator shall also pay the total cost of the audit.

§ 245-4 Reporting requirements.

Quarterly franchise fee report. In accordance with § 245-3C of this chapter, cable operator shall accompany each quarterly franchise fee payment with a written report containing an accurate statement of the cable operator's gross revenues received for the quarter in connection with the operation of the cable operator's cable system and a brief report showing the basis for computation of fees. The report shall contain a line item for every source of revenue received and the amount of revenue received from each source. The report shall be verified by a financial representative of the cable operator.

Government reports. The cable operator shall provide to the municipality, upon written request, copies of any reports, documents, and pleadings which the cable operator has submitted to any federal, state or local regulatory agencies, courts or other governmental bodies if such documents relate directly to the cable operator's cable system within the municipality. The cable operator shall provide copies of such documents no later than 30 days after such written request.

§ 245-5 Franchise violations and damages.

Violations.

(1)

If the municipality has reason to believe that the cable operator violated any provision of this chapter, it shall notify the cable operator in writing of the nature of such violation and the section of this chapter that it believes has been violated. If the municipality does not notify the cable operator of any violation of this chapter, it shall not operate as a waiver of any rights of the municipality hereunder or pursuant to applicable law.

(2)

The cable operator shall have 30 days to cure such violation after written notice is received by taking appropriate steps to comply with the terms of this chapter. If the nature of the violation is such that, in the municipality's reasonable judgment, it cannot be fully cured within 30 days due to circumstances outside of the cable operator's control, the period of time in which the cable operator must cure the violation may be extended by the municipality in writing for such additional time necessary to complete the cure, provided that the cable operator shall have promptly commenced to cure and is diligently pursuing its efforts to cure in the reasonable judgment of the municipality.

(3)

Should the cable operator dispute that a violation has in fact occurred, then the cable operator must notify the municipality in writing of such dispute within 10 days of receipt of the notice of violation by the municipality. Such notice by the cable operator shall state with particularity the matters disputed by the cable operator and shall stay the running of the above-referenced time period. If the cable operator disputes the violation as described above, then the municipality shall conduct an administrative review of the dispute. If, after the administrative review is concluded, the municipality determines that a violation has in fact occurred, then the cable operator shall have 30 days from the municipality's final determination to cure the violation.

§ 245-6 Violations and penalties.

Any person, partnership or corporation who or which has violated the provisions of this chapter shall, upon being found liable therefore in a civil proceeding, will pay a judgment of not less than $100 nor more than $300 plus all court costs including reasonable attorney fees incurred by the municipality as a result thereof.

In addition to all other remedies provided herein, the municipality may institute and maintain appropriate actions by law or in equity to restrain, correct or abate violations, to recover damages and to prevent illegal operations in violation of this chapter.