Division 3 Franchise

If the grantor shall grant to the grantee a nonexclusive, revocable franchise to construct, operate and maintain a cable television system within the city, such franchise shall constitute both a right and an obligation to provide the services of a cable television system as regulated by the provisions of this article and the franchise agreement.

The franchise shall be granted under the terms and conditions contained herein, consistent with the city’s charter and/or other applicable statutory requirements. In the event of conflict between the terms and conditions of this article, the franchise agreement, or the terms and conditions on which the grantor can grant a franchise, the charter and/or statutory requirements shall control.

Any franchise granted by the city is hereby made subject to the general ordinance provisions now in effect or as may hereafter be enacted or amended, provided that any such ordinance as may be hereafter enacted or amended shall not abrogate any material provision of any franchise agreement entered into pursuant to the terms of this article or conditions of such franchise. Nothing in the franchise shall be deemed to waive the requirements of the various codes and ordinances of the city regarding permits, fees to be paid or manner of construction.

(1991 Code, sec. 7-77)

§ 4.04.073 Police powers.

In accepting the franchise, the grantee acknowledges that its rights hereunder are subject to the police power of the city to adopt and enforce general ordinances necessary to the safety and welfare of the public, and it agrees to comply with all applicable general laws and ordinances enacted by the city pursuant to such power.

Any conflict between the provisions of this article or the franchise and any other present or future lawful exercise of the city’s police powers shall be resolved in favor of the latter, except that any such exercise that is not a general application in the jurisdiction or applies exclusively to grantee of cable television systems which contains provisions inconsistent with this article shall prevail only if, upon such exercise, the city finds an emergency exists constituting a danger to health, safety, property or general welfare and such exercise is mandated by law.

(1991 Code, sec. 7-78)

§ 4.04.074 Service area.

The service area shall be the entire territory defined in the franchise agreement.

(1991 Code, sec. 7-79)

§ 4.04.075 Use of public ways.

For the purpose of constructing, operating and maintaining a cable television system in the city, the grantee may erect, install, construct, repair, replace, reconstruct and retain in, on, over, under, upon, across and along the public ways within the city such wires, cable, conductors, ducts, conduits, vaults, manholes, amplifiers, appliances, pedestals, attachments and other property and equipment as are necessary to the operation of the cable television system.

All installations shall be underground in those areas of the city where public utilities providing telephone and electric service are underground at the time of installation. In areas where either telephone or electronic utility facilities are above ground at the time of installation, grantee may install its system above ground. At such time as those utilities’ facilities are required to be placed underground by the city, the grantee shall likewise place its system underground with no additional cost to the city. Where not otherwise required to be placed underground by this article, the grantee’s system shall be located underground at the request of the adjacent property owner, provided that the excess cost over the aerial location shall be borne by the property owner making the request. All cable passing under the roadway shall be installed in conduit.

Prior to construction or relocation of any cable plant, the grantee shall in each case file plans with the appropriate city agencies, complete use agreements with the utility companies, obtain all construction permits and receive written approval of the city before proceeding. Such approval shall not be unreasonably withheld.

(1991 Code, sec. 7-80)

§ 4.04.076 Erection, use of poles.

No poles shall be erected by the grantee without prior approval of the city with regard to location, height, type and any other pertinent provisions of local building codes. However, no location of any pole of the grantee shall be a vested right and such poles shall be removed or modified by the grantee at the grantee’s expense whenever the city determines that the public convenience would be enhanced thereby. Grantee shall utilize existing poles and conduits, where possible. The city shall have the right, during the life of the franchise, to install and maintain free of charge upon the poles owned by the grantee, any wire and pole fixtures that do not unreasonably interfere with the cable television system operations of the grantee.

(1991 Code, sec. 7-81)

§ 4.04.077 Duration, acceptance.

The franchise and the rights, privileges and authority granted there under shall take effect and be in force from and after final passage of the ordinance granting such franchise as provided by law, and shall continue in full force and effect for a term of fifteen (15) years from the date of franchise award, provided that within forty-five (45) days immediately following the date of final passage and approval of such ordinance granting the franchise, the grantee shall file with the city its unconditional acceptance of the franchise in the form below and promise to comply with and abide by all its provisions, terms, and conditions.

The grantee, by the acceptance of the franchise, acknowledges that it has not been induced to enter into the franchise by any understanding, or promise, or other statement not expressed herein, whether oral or written, concerning any term or condition of the franchise regardless of whether such statement was made by or on behalf of the city.

The grantee further acknowledges by acceptance of the franchise that it has carefully read the terms and conditions of the ordinances and franchise agreement, is willing to and does accept all reasonable risks related to the possible interpretation of the provisions, terms and conditions herein.

§ 4.04.079 Timeliness in performing actions.

The grantee hereby agrees to indemnify and hold harmless the city, its officers, boards and commissions, agents, and employees from all damages, claims, awards or judgments against the city arising out of the construction, operation or maintenance of the cable television system.

(1991 Code, sec. 7-82)

§ 4.04.078 Nonexclusive rights.

The franchise discussed herein is nonexclusive. The grantor specifically reserves the right to grant at any time such additional franchises for a cable television system on the same or similar terms.

(1991 Code, sec. 7-83)

Whenever the ordinance or franchise agreement shall set forth any time for an act to be performed by or on behalf of the grantee, such time shall be deemed of the essence and any failure of the grantee to perform within the time allotted shall always be sufficient grounds for the city to invoke an appropriate penalty, including possible revocation of the franchise.

(1991 Code, sec. 7-84)

§ 4.04.080 Transfer of ownership or control.

Any franchise granted under this article cannot in any event be sold, transferred, leased, assigned or disposed of, including but not limited to, order of any court or agency, voluntary sale, merger, consolidation, receivership or other means without the prior consent of the city, and then only under such conditions as the city may establish. However, the grantee may transfer the franchise to a parent, affiliate or subsidiary and back again with the consent of the city. Such consent shall not be unreasonably withheld.

The grantee shall promptly notify the city of any actual or proposed change in, or transfer of, or acquisition by any other party of control of the grantee. The word “control” as used herein is not limited to major stockholders but includes actual working control in whatever manner exercised. A rebuttable presumption that a transfer of control has occurred shall arise upon the acquisition or accumulation by any person or group of persons of ten (10) percent of the voting shares of the grantee. Every change, transfer, or acquisition of control of the grantee shall make the franchise subject to cancellation unless and until the city shall have consented thereto, which consent will not be unreasonably withheld. For the purpose of determining whether it shall consent to such change, transfer, or acquisition of control the city may inquire into the qualifications of the prospective controlling party, and the grantee shall assist the city in any such inquiry.

The city agrees that any financial institution having a pledge of the franchise or its assets for the advancement of money for the construction and/or operation of the franchise shall have the right to notify the city that it or its designee satisfactory to the city will take control and operate the cable television system. Such financial institution shall also submit a plan for such operation that will ensure continued service and compliance with all franchise obligations during the term the financial institution exercises control over the system. The financial institution shall not exercise control over the system for a period exceeding one (1) year, unless extended by the council at its discretion and during such period of time, it shall have the right to petition or transfer franchise to another grantee. If the city finds that such transfer, after considering the legal, financial character, technical and other public interest qualities of the applicant are satisfactory, the city will transfer and assign the rights and obligations of such franchise as in the public interest. The consent of the city to such transfer shall not be unreasonably withheld.

The consent or approval of the city council to any transfer of the grant shall not constitute waiver or release of the rights of the city in and to the public ways, and any transfer shall, by its terms, be expressly subordinate to the terms and conditions of the ordinance and franchise agreement.

In the absence of extraordinary circumstances, the city will not approve any transfer or assignment of the franchise prior to completion of construction of the proposed system.

In no event shall a transfer of ownership or control be approved without successor in interest becoming a signatory to the franchise agreement.

(g)

The grantee shall inform the city in writing of a proposed sale of the system at such time as the proposed sale becomes public knowledge.

(h)

The council reserves the right to review the purchase price of any transfer or assignment of the cable television system. Any assignee must agree that any negotiated sale value which the council deems unreasonable based upon recent sales of comparable systems will not be considered in the rate base for any subsequent rate increase requests made by the assignee.

(1991 Code, sec. 7-85)

§ 4.04.081 Fees.

For the reason that the public ways of the county, state and city to be used by the grantee in the operation of the franchise area are valuable public properties acquired and maintained by the county, state and city at great expense to its taxpayers, and that the grant to the grantee to the public ways is a valuable property right which the grantee would be required to invest substantial capital in right-of-way costs and acquisitions, a grantee of a franchise hereunder shall pay to the city an annual fee in an amount as designated in the franchise agreement but in no event less than five (5) percent of the gross annual revenues. This annual franchise payment shall be in addition to any other fee and commence as of the effective date of the franchise. The city shall be furnished a statement by a certified public accountant, reflecting the total amounts of annual gross revenues and the above charges and computations for the period covered by the payment. In the event that it is determined that the federal or state government or any agency thereof lacks jurisdiction to impose the five-percent limitation of franchise fees, or that the limit is raised, then the franchise fee will be subject to renegotiation.

This payment shall be in addition to any other tax or payment owed to the government or other taxing jurisdiction by the grantee.

No acceptance of any payment by the city shall be construed as a release or as an accord and satisfaction of any claim the city may have for further or additional sums payable as a franchise fee under this article or for the performance of any other obligation of the grantee.

Failure to make required payment. In the event that any franchise fee payment or recomputed amount is not made on or before the dates specified herein, grantee shall pay, as additional compensation, an interest charge, computed from such date, at the annual rate equal to the commercial prime interest rate in effect upon the due date.

The franchise fee and any other cost or penalties assessed shall be payable quarterly, to the finance office, payable to the city. The grantee shall file a complete and accurate verified statement of all gross annual revenues within the city during the period for which such quarterly payment is made, and such payment shall be made to the city not later than forty-five (45) days after the expiration of the quarter (i.e., March thirty-first, June thirtieth, September thirtieth, and December thirty-first).

The city shall have the right to inspect the grantee’s income records and the right to audit and to recompute any amounts determined to be payable under this article; provided, however, that such audit shall take place within thirty-six (36) months following the close of each of the grantee’s fiscal years. Any additional amount due to the city as a result of the audit shall be paid within thirty (30) days following written notice to the grantee by the city which notice shall include a copy of the audit report. In such event, the grantee shall pay as additional compensation an interest charge computed from such due date, at the annual rate equal to the commercial prime interest rate in effect on the due date.

(1991 Code, sec. 7-86)

§ 4.04.082 Renegotiation.

If any court of competent jurisdiction, the Federal Communications Commission or any state regulatory body rules, decisions or other action determines, prior to the commencement of system construction, that any material provision of this article or any franchise granted pursuant thereto is invalid or unenforceable, then in such event, the city shall retain the right to negotiate any franchise entered into prior to any such rule, decision or other action.

(1991 Code, sec. 7-87)

§ 4.04.083 Franchise renewal.

Between the thirty-sixth and thirtieth month before the expiration of a franchise, the grantee may request the initiation of proceedings for the purpose of identifying the future cable-related community needs and interests and reviewing the performance of the grantee under the franchise during the then-current franchise term.

Upon completion of this procedure, the grantee shall submit a proposal for renewal. This proposal shall contain material as required by the city, including proposals for an upgrade of the cable television system. The city shall establish the date for the grantee’s proposal submission. Upon the receipt of the proposal, the city shall notify the public of the proposal. The city shall consider whether:

The grantee has substantially complied with the material terms of the existing franchise agreement and with applicable law;

The quality of the grantee’s service, including signal quality, response to consumer complaints and billing practices;

The grantee has the financial, legal and technical ability to provide the services, facilities and equipment as set forth in the grantee’s proposal; and

The grantee’s proposal is reasonable to meet the future cable-related community needs and interests, taking into account the cost of meeting such needs and interests.

In the event the city makes a preliminary decision to grant a renewal, the city and grantee shall negotiate amendments to the ordinance and the franchise agreement. Upon city approval of the provisions of the ordinance and franchise agreement, the city shall renew the franchise for a period of five (5) to fifteen (15) years.

In the event the city makes a preliminary decision to deny the grantee a renewal, the administrative procedure described in the Cable Act and amendments thereto shall be followed.

§ 4.04.084 Right of inspection of records.

In the event the grantee is denied a renewal, the city may purchase the system, effect a transfer and seek other applicants for the franchise in accordance with the Cable Act, as amended. The grant of this franchise in and of itself shall create no property right in the renewal of the franchise.

(1991 Code, sec. 7-88)

There shall be kept in the grantor’s office a separate record for the franchise. The grantee shall provide such information in such form as may be required by the grantor for such records.

(1991 Code, sec. 7-89)

§ 4.04.085 Performance evaluation.

The city and the grantee shall, at the request of the city, hold scheduled performance evaluation sessions in the fifth, tenth and twelfth years of the franchise term within thirty (30) days of the anniversary date of the city’s award of a franchise and at such other times as the city may request for special evaluation purposes.

All evaluation sessions shall be open to the public and announced in a newspaper of general circulation in accordance with legal notice, as provided herein. The grantee shall notify subscribers of all such evaluation sessions by announcement on the designated government channel or the local origination channel on the system between the hours of 11:00 a.m. and 9:00 p.m. for five (5) consecutive days preceding each session.

Topics which may be discussed at any scheduled session may include but not be limited to basic subscriber television service rate structures, franchise fees, penalties, free or discounted services, applications of new technologies, system performance, programs and services provided, subscriber complaints, judicial and Federal Communications Commission filings and line extensions.

§ 4.04.087 Right to purchase system by city.

During the review and evaluation by the city, the grantee shall fully cooperate with the city and shall provide such information and documents as the city may need to reasonably perform its review of matters subject to its jurisdiction.

(1991 Code, sec. 7-90)

§ 4.04.086 Rights reserved to grantee.

Should the grantee become dissatisfied with any material decision or ruling of the grantor pertaining to the cable television system, the grantee may pursue such other remedies as are available, including the bringing of action in any court of competent jurisdiction.

(1991 Code, sec. 7-91)

Right to purchase.

In the event the grantee forfeits and the city terminates the franchise pursuant to provisions of this article, or at the normal expiration of the franchise term, the city shall have the right to purchase the franchised cable television system. Purchase price shall be based upon the value of the system determined pursuant to this section.

Date of valuation.

The date of valuation shall be no earlier than the day following the date of expiration or termination and no later than the date the city makes a fair and reasonable offer for the system.

Transfer to city.

Upon exercise of this option, and the payment of the above sum by the city and its service of official notice of such action upon the grantee, the grantee shall immediately transfer to the city possession and title to all facilities and property, real and personal, of the cable television system, free from any and all liens and encumbrances not agreed to be assumed by the city in lieu of some portion of the purchase price set forth above; and the grantee shall execute such warranty, deeds or other instruments of conveyance to the city as shall be necessary for this purpose.

Intent to purchase.

Upon receipt of notice of the city’s intent to purchase the system at the fair market value as a going concern, less any value attributed to the franchise, the grantee shall have thirty (30) days within which to accept the city’s offer. In the event that the purchase price is not acceptable, the parties shall have one hundred twenty (120) days in which to negotiate an acceptable purchase price.

Appraisal.

In the event the city and grantee are unable to agree upon the value of the cable television system within the time limits set forth above, either party may require by written notice to the other that the value of the cable television system be appraised in the following manner:

The city and the grantee shall each within fifteen (15) days after such written notice select an appraiser who shall be a disinterested person with reasonable knowledge and experience relative to the valuation of cable television systems. The two (2) appraisers thus selected shall immediately thereafter select a third appraiser who shall likewise be a disinterested person having reasonable knowledge and experience relative to the valuation of cable television systems.

Within thirty (30) days after appointment of all appraisers and upon ten (10) days’ written notice to the parties, the panel of appraisers shall commence discussions on the issue of valuation and shall receive all relevant information from the parties.

The discussion shall be recorded and may be transcribed at the request of either party. All proceedings, debates and deliberations shall be open to the public and at such times and places as contained in the notice or as thereafter publicly stated in the order to adjourn, except that if two (2) appraisers agree, debate and deliberations may be held in closed session.

The value of the system as determined by the appraisers shall be as follows:

(A)

If a renewal of a franchise held by the grantee is denied and the city acquires ownership of the system or effects a transfer of ownership of the system to another person, any such acquisition or transfer shall be at a fair market value, determined on the basis of the cable system valued as a going concern, but with no value allocated to the franchise itself.

(B)

If a franchise held by a grantee is revoked for cause and the city acquires the ownership of the cable system or effects a transfer of ownership of the system to another person, any such acquisition or transfer shall be at the equitable price.

(5)

Within thirty (30) days after the close of the discussions, the appraisers shall prepare findings and decision agreed upon by a majority of the panel which shall be filed with the city and served by mail upon the grantee. Unless the parties extend by mutual agreement the time which the appraisers have to make a decision, the proceedings shall become null and void and shall be started anew.

(6)

The decision of the appraisers regarding the value of the system shall be final.

(7)

Either party may seek judicial relief in the following circumstances:

(A)

A party fails to select an appraiser.

(B)

The appraisers fail to select a third appraiser.

(C)

One (1) or more appraisers is unqualified.

(D)

Designated time limits have been exceeded.

(E)

The panel has not proceeded expeditiously.

(F)

The decision was procured by corruption, fraud or undue means.

(G)

There was evident partiality on the part of one (1) or more of the appraisers.

(H)

The appraisers exceeded their authority hereunder.

(I)

Based upon the record, the panel abused its discretion.

§ 4.04.088 Receivership and foreclosure.

Purchase agreement.

Upon receipt of the decision of the appraisers, the city shall have thirty (30) days in which to sign a purchase agreement acceptable to the grantee. The purchase price shall be the value of the system as determined by the appraisers.

(1991 Code, sec. 7-92)

Termination by insolvency.

The franchise discussed herein shall, at the option of the city council, cease and terminate one hundred twenty (120) days after the appointment of a receiver or receivers or trustee or trustees to take over and conduct the business of the grantee whether in a receivership, reorganization, bankruptcy or other action or proceeding unless such receivership or trusteeship shall have been vacated prior to the expiration of such one hundred twenty (120) days, or unless:

Such receivers or trustees shall have, within one hundred twenty (120) days after their election or appointment, fully complied with all the terms and provisions of this article and the franchise granted pursuant thereto, and the receivers or trustees within such one hundred twenty (120) days shall have remedied all defaults under the franchise; and

Such receivers, or trustees shall, within such one hundred twenty (120) days, execute an agreement duly approved by the court having jurisdiction in the premises, whereby such receivers or trustees assume and agree to be bound by each and every term, provision and limitation of the franchise herein granted.

Termination by judicial action.

In the case of a foreclosure or other judicial sale of the plant, property and equipment of the grantee or any part thereof, including or excluding this franchise, the council may serve notice of termination upon the grantee and the successful bidder at such sale, in which event the franchise herein granted and all rights and privileges of the grantee hereunder shall cease and terminate thirty (30) days after service of such notice, unless:

The council shall have approved the transfer of this franchise, in the manner this article provides; and

Such successful bidder shall have covenanted and agreed with the city to assume and be bound by all the terms and conditions of this franchise.

(1991 Code, sec. 7-93)

§ 4.04.089 Forfeiture or revocation.

Grounds for revocation.

The city reserves the right to revoke any franchise and rescind all rights and privileges associated with the franchise in the following circumstances, each of which shall represent a default and breach under the ordinance and the franchise agreement:

If the grantee shall default in the performance of any of the material obligations under this article or the franchise agreement.

If the grantee shall fail to provide or maintain in full force and effect the liability and indemnification coverage or the performance bond as required herein.

If the grantee attempts to evade any of the provisions of this article or the franchise agreement or practices any fraud or deceit upon the city or subscribers.

The grantee’s construction schedule is delayed later than the schedule contained in the franchise agreement or beyond any extended date set by the city.

(5)

The grantee becomes insolvent, unable or unwilling to pay its debts or is adjudged bankrupt.

(6)

Failure to restore service after ninety-six (96) consecutive hours of interrupted service, except when approval of such interruption is obtained from the city.

(7)

Material misrepresentation of fact in the application for or negotiation of the franchise.

(8)

If the grantee ceases to provide cable service for any reason within the control of the grantee.

Effect of circumstances beyond control of grantee.

The grantee shall not be declared at fault or be subject to any sanction under any provision of this article in any case, in which performance of any such provision is prevented by just cause. A fault shall not be deemed to be beyond the grantee’s control if committed by a corporation or other business entity in which the grantee holds a controlling interest, whether held directly or indirectly. Pending litigation against the grantee shall not excuse the grantee from the performance of its obligations under this article and under the franchise agreement except to the extent that such performance may be impaired by an outstanding order of a court of competent jurisdiction. Failure of the grantee to perform such obligations because of pending litigation may result in forfeiture or revocation pursuant to the provisions of this section.

Procedure prior to revocation.

The following procedures shall be observed prior to the revocation of any franchise granted under this article:

The city shall make written demand that the grantee do so comply with any such requirement, limitation, term, condition, rule or regulation or correct any action deemed cause for revocation. If the failure, refusal or neglect of the grantee continues for a period of thirty (30) days following such written demand, the city shall place its request for termination of the franchise upon a regular council meeting agenda. The city shall cause to be served upon such grantee, at least ten (10) days prior to the date of such council meeting, a written notice of this intent to request such termination, and the time and place of the meeting, notice of which shall be published by the city clerk at least once, seven (7) days before such meeting in a newspaper of general circulation within the city.

The council shall hear any persons interested therein, and shall determine in its discretion, whether or not any failure, refusal or neglect by the grantee was with just cause.

If such failure, refusal or neglect by the grantee was with just cause, the council shall direct the grantee to comply within such time and manner and upon such terms and conditions as are reasonable.

If the council shall determine such failure, refusal, or neglect by the grantee was without just cause, then the council shall, by resolution, declare that the franchise of the grantee shall be terminated and bond forfeited unless there be compliance by the grantee within ninety (90) days.

Disposition of facilities.

In the event a franchise expires, is revoked or otherwise terminated, the city may in its sole discretion, do one (1) of the following:

Purchase the system under the procedures set forth in this article, subject to the Cable Act.

Order the removal of the system facilities required by public necessity from city within a reasonable period of time as determined by the city or require the original grantee to maintain and operate its system until a subsequent grantee is selected.

Restoration of property.

In removing its plant, structures and equipment, the grantee shall refill, at its own expense, any excavation that shall be made by it and shall leave all public ways in as good a condition as that prevailing prior to the grantee’s removal of its equipment and appliances without affecting the electrical or telephone cable wires or attachments. The city shall inspect and approve the conditions of the public ways, cables, wires, attachments and poles after removal. The liability, indemnity and insurance as provided herein and the performance bond provided therein shall continue in full force and effect during the period of removal and until full compliance by the grantee with the terms and conditions of this subsection and this article.