ARTICLE 4.05 CABLE TELEVISION

No person, natural or corporate, or any other entity, shall own or operate a cable system in the city, except by franchise agreement between the city and the franchisee, which shall comply with all specifications of this article.

A breach by the franchisee of the franchise agreement, in addition to constituting a breach of contract, shall constitute a violation of this article. The cost of any litigation incurred by the city to enforce this article or the franchise granted pursuant hereto, or the franchise agreement, or in relation thereto, or in relation to the cancellation or termination of the franchise, shall be reimbursed to the city by the franchisee, if the city prevails in the litigation.

Should the franchisee prevail in the litigation, the costs therein incurred by the city shall be paid by the city.

§ 4.05.003 Term of franchise; revocation of franchise.

The costs shall including filing fees, costs of depositions, discovery and expert witness, all other expenses of suit, and a reasonable attorney’s fee.

(2002 Code, sec. 115.02)

No franchise granted hereunder, nor any renewal thereof, shall be for a term of more than a determined number of years. A renewal may be granted no more than two years prior to the expiration of any existing term.

In addition to all other rights and powers of the city by virtue of the franchise or this article, the city may terminate and cancel the franchise and all rights and privileges of the franchisee thereunder in the event that the franchisee either:

Substantially violates any material provision of the franchise or this article, or any rule, order or determination of the city council made pursuant thereto, where the violation shall remain uncured for a period of 30 days subsequent to receipt by the franchisee of written notice of the violation;

Evades any of the provisions of this article or the franchise agreement or practices any fraud or deceit upon the city;

Establishes a history of recurring violations cured only after taking advantage of the full 30-day notice (six occurrences shall be deemed a sufficient history);

Fails to utilize franchise for any period of 30 days;

Fails to comply with the rules or regulations of the FCC;

(F)

Fails to utilize practices to protect the safety of the general public;

(G)

Fails to maintain any security fund required by the city, as hereinafter provided; or

(H)

Fails to honor the hold-harmless and indemnity provisions of this article or the franchise agreement.

The termination and cancellation shall be made by resolution of the city council duly adopted after 45 days’ notice to the franchisee and shall in no way affect any of the city’s rights under this franchise or any provisions of law. Before the franchise may be terminated and canceled under this section, the franchisee shall be provided with an equal opportunity to be heard at a public hearing before the city council, upon 30 days’ written notice to the franchisee of the time and place of the public hearing. The notice shall affirmatively cite the reasons alleged to constitute cause for revocation. The notice of the public hearing shall be published in a local newspaper of general circulation at least ten days before the date of the hearing.

(2002 Code, sec. 115.03)

§ 4.05.004 Franchise applications.

An application in triplicate must be filed with the city for grant of a new franchise, renewal of a franchise under either the formal or informal procedures in accordance with section 626 of the Cable Act (47 USC 546), modification of a franchise agreement, or a transfer of a franchise. An applicant has the burden to demonstrate compliance with all requirements of this article and of federal law.

All applications accepted for filing must be made available by the city for public inspection. The city shall advertise the receipt of all accepted applications in accordance with standard procedure.

An application for the grant of a new franchise must contain, at minimum, the following information:

Name and address of the applicant, and identification of the ownership and control of the applicant, including the names and addresses of the ten largest holders of an ownership interest in the applicant, and all known persons with 5% or more ownership interest, the persons who control the applicant, all officers and directors of the applicant, and any other business affiliation and cable system ownership interest of each named person;

An indication of whether the applicant, or any person controlling the applicant, or any officer or major stockholder of the applicant, has been adjudged bankrupt, has had a cable franchise revoked or not renewed, or has been found guilty by any court or administrative agency of a violation of a security or antitrust law, or a felony, or any crime involving moral turpitude, and, if so, identification of any person or entity and a full explanation of the circumstances;

A demonstration of the applicant’s technical, legal and financial ability to construct and operate the proposed cable facility, including identification of key personnel;

A description of the applicant’s prior experience in cable or similar operations and identification of any other communities in which the applicant or its principals have, or had, a cable franchise or an interest therein, including the identification of any litigation involving any franchisees and their franchising authorities;

Identification of the area to be served by the franchise;

A detailed description of the physical facility proposed, including channel capacity, technical design, performance characteristics, headend and any access facilities to be provided;

(7)

A detailed description of the construction of the proposed system, including an estimate of aboveground and belowground mileage and its location, the proposed construction schedule, a description, where appropriate, of how services will be converted from existing facilities to new facilities, and information on the availability of space on poles and conduits, including, where appropriate, an estimate of the cost of rearrangement of facilities to accommodate the use;

(8)

A description of the services to be provided initially;

(9)

The proposed rate structure, including charges for each service tier, installation, converters, and other equipment or services;

(10)

An affidavit of the applicant or authorized officer certifying the truth and accuracy of the information in the application, and acknowledging the enforceability of application commitments, and certifying that the proposal meets all federal and state requirements; and

(11)

Any other information necessary to conform with the requirements of a request for proposals and information that the city may request of the applicant.

An application for modification of a franchise must include, at minimum, the following information:

The specific modification requested;

The justification for the requested modification, including the impact of the requested modification on subscribers and others, and the impact on the applicant if the modification is not approved;

A statement whether the modification is sought pursuant to section 625 of the Cable Act (47 USC 545) and, if so, a demonstration that the requested modification meets the legal standards of 47 USC 545; and

Any other information necessary for the city to a make a determination.

An application for approval of a renewal of a franchise must comply with the requirements of section 4.05.006.

(e)

An application for approval of a transfer of a franchise must comply with the requirements of section 4.05.007.

(f)

To be accepted for filing, an application must be accompanied by a filing fee in the following amount, as appropriate:

For a new franchise: $2,500.

For a renewal of a franchise: $5,000.

For a transfer of a franchise: $1,500.

§ 4.05.005 Interpretation of franchise agreement.

For modification of franchise: $1,500, pursuant to 47 USC 545.

(2002 Code, sec. 115.04)

The provisions of this article will apply to a franchise agreement as if fully set forth in the franchise agreement. The express terms of this article will prevail over conflicting or inconsistent provisions in a franchise agreement unless such agreement predated the effective date of this article (ordinance adopted October 5, 1993).

The provisions of a franchise agreement will be liberally construed in order to effectuate its purposes and objectives consistent with this article and the public interest.

A franchise agreement will be governed by and construed in accordance with the laws of the state.

(2002 Code, sec. 115.05)

§ 4.05.006 Renewal of franchise.

If a franchisee decides to initiate a formal franchise renewal process in accordance with section 626(a) through 626(g) of the Cable Act (47 USC 546(a) through 546(g)), it must notify the city within 30 to 36 months of the franchise expiration date. Upon the notification, or at the city’s own initiative, the city must commence the following process:

The city shall review and evaluate the future cable-related community needs and interests and the franchisee’s past performance. The review and evaluation process must include opportunity for public comment.

Immediately upon completion of the review and evaluation process, the city must provide a copy of its findings to the franchisee, which then may file a renewal application within 30 calendar days following the date of the notice. If the franchisee does not submit a renewal application by the specified date, it will be deemed not to be seeking renewal of its franchise. The contents of the application shall be in the form of an update of that declared for a new franchise.

Upon receipt of the renewal application, the city shall publish notice of its receipt and may schedule one or more public meetings or implement other procedures under which comments from the public on the application may be received.

In considering a renewal application, the city must consider whether:

The cable operator has substantially complied with the material terms of the existing franchise and with applicable law;

The quality of the cable operator’s service, including signal quality, response to customer complaints and billing practices (but without regard to the mix, quality or level of cable services or other services provided over the system) has been reasonable in light of community needs;

The cable operator has the financial, legal and technical ability to provide the services, facilities and equipment set forth in its proposal; and

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

The council shall hold at least one public hearing to consider the application. An advisory committee or a committee of the council may make recommendations to the council prior to its consideration, a copy of which shall be made available to the franchisee in advance of the council’s consideration. Following the public hearing on the renewal application, the council shall within 120 days either:

Pass a resolution that makes a preliminary assessment that the franchise should not be renewed; or

Pass a resolution that makes a preliminary assessment that the franchise should be renewed.

If a preliminary assessment is made that a franchise should not be renewed, at the request of the franchisee or on its own initiative, the city must commence an administrative proceeding in accordance with section 626(c) of the Cable Act (47 USC 546(c)).

The city shall commence an administrative proceeding, initiated by a hearing order which establishes the issues to be addressed in the hearing and the procedures to be followed and appoints a presiding officer for the hearing. Upon the completion of the hearing, the presiding officer shall issue a recommended decision. Parties to the hearing and the public shall have 30 calendar days to comment on the recommended decision after its issuance.

§ 4.05.007 Franchise conditions; service and technical requirements; reporting requirements; transfer of franchise.

Based on the recommended decision, the comments and arguments presented, and other evidence of record, the council, following a public hearing, shall make a final determination on whether to grant or to deny the renewal application. The council shall issue a written decision setting forth the reasons for its decision.

(e)

The provisions of subsections (a) through (c) above notwithstanding, a franchisee may submit a proposal for renewal of a franchise in accordance with 47 USC 546(h). Before taking any action on the informal proposal, the city must hold one or more public hearings or implement other procedures under which comments on the proposal from the public may be received. Following public hearings or other procedures, the council shall determine whether the franchise should be renewed and the terms and conditions of any renewal. In making its determination, the council shall not consider any other pending applications for a franchise.

(f)

Once the council grants a renewal application, the city and the franchisee must agree on a franchise agreement, pursuant to the procedures specified in section 4.05.004, before the renewal becomes effective.

(g)

If renewal of a franchise is denied, the city may require the former franchisee to remove its facilities and equipment. If the former franchisee fails to do so within a reasonable period of time, the city may have the removal done at the former franchisee’s and/or surety’s expense.

(2002 Code, sec. 115.06)

All franchises granted pursuant to this article shall be subject to, and shall expressly indicate that they are subject to, the following provisions:

Any franchise granted hereunder shall be subject to the right of the city by resolution of its council to revoke the franchise for cause shown pursuant to section 4.05.003.

Any franchise granted hereunder shall be subject to all applicable provisions of city ordinances and any amendments thereto. Should the Federal Communications Commission (FCC) modify the provisions of its rules and regulations, the city shall then amend this article within a reasonable time after the effective date of the modification, to be in conformance with the modification.

The applicant awarded a franchise by city council resolution shall execute a franchise agreement upon the terms negotiated with the council and consistent with this article, state law and FCC rules and regulations.

No franchise shall be exclusive.

The franchise agreement shall contain further conditions or provisions as may be included in negotiations between the city and the franchisee, except that no conditions or provisions shall be such as to conflict with any provisions of this article or other law. In case of conflict or ambiguity between any terms or provisions of the franchise agreement and this article, the words of this article shall control.

The following minimum requirements for facilities and services apply to all franchises. The city may require that a franchisee exceed these minimum requirements.

A cable system franchised or refranchised after the effective date of this article (ordinance adopted October 5, 1993) must have a minimum capacity of 54 video channels available for immediate or potential use and have the capability for two-way communications.

A cable system may be required to provide one or more access channels for public, educational or governmental (PEG) access or reserve channels for future access use.

A cable system must provide leased access channels as required by federal law.

Service to public buildings may be required without charge as set forth in the franchise agreement.

A cable system must provide an emergency override capability to allow city officials to transmit information to viewers on all channels in the event of a public emergency.

(7)

The city may waive minimum requirements of this section where, in the judgment of the city, the waiver is justified in the public interest.

Any cable system constructed within the city must meet or exceed technical standards consistent with this article, the franchise agreement and the franchisee’s application. The system must meet all FCC technical standards and be capable of delivering all National Television Systems Committee color and monochrome standard signals and designed to provide superior picture quality and reliability. All television signals transmitted on a cable system must include any closed captioning information for the hearing impaired. Antennas, supporting structures and outside plant used in the system must be designed to comply with the recommendations of the Electronics Industries Association on tower structures and outside plant.

All construction, installation and maintenance must comply with the National Electrical Code, all state and local regulations and good and acceptable industry practices.

At the stages of any construction specified in the franchise agreement, the franchisee must perform, at its expense, proof-of-performance tests designed to demonstrate compliance with the requirements of this article, the franchise agreement and FCC requirements. The franchisee must provide the proof-of-performance test results promptly to the city.

The city may require periodic proof-of-performance tests to be performed at the expense of the franchisee. The franchisee must provide results promptly to the city.

The franchisee must advise the city when a proof-of-performance test is scheduled so that the city may have an observer present if it desires.

A franchisee must not design, install or operate its facilities in a manner that will interfere with the signals of any broadcast station, the electrical system located in any building, the cable system of another franchisee or individual or master antennas used for receiving television or other broadcast signals.

(e)

The franchisee shall, without charge for installation, maintenance or service, make single installations of its standard community antenna service facilities at the city hall, police station, fire station/emergency operation center, public library, elementary schools, junior high, high school and the office of the superintendent of the Post Independent School District.

(f)

All of the franchisee’s plant and equipment, including but not limited to the antenna site, headend and distribution system, towers, house connections, structures, poles, wire, cable, coaxial cable, fixtures and appurtenances, shall be installed, located, erected, constructed, reconstructed, replaced, removed, repaired, maintained and operated in accordance with good engineering practices, performed by qualified pole line construction crews and so as not to endanger or interfere with the safety of any persons or property, or to interfere with improvements the municipality may deem proper to make, or to interfere in any manner with the rights of any property owner or to unnecessarily hinder or obstruct pedestrian or vehicular traffic on municipal properties. Further, all plant and equipment and all construction shall meet all relevant specifications of the Federal Communications Commission, National Electrical Safety Code and other applicable federal, state and local regulations.

Any opening or obstruction in or disturbances of the streets, public ways or other municipal properties made by the franchisee in the exercise of its rights under a franchise agreement shall be done in compliance with the city code, which regulates work in the public ways of the city, except that the bond requirements therein may be waived in cognizance of the bond requirements of this article. Any disturbance shall be replaced or repaired in accordance with the city standards then currently in effect and shall be subject to approval by proper authority of the city. Further, the city may require the franchisee to install the cable system underground in the city where other public utilities have been or will be installed underground.

The franchisee shall, at its expense, protect, support, temporarily disconnect, or relocate in the same street or other public place or municipal property any property of the franchisee when required by the city council or its designee by reason of public safety, street vacation, freeway and street construction, change or establishment of street grade, installation of sewers, drains, water pipes, power lines, signal lines and tracts, or any other type of structures or improvements by public agencies.

The franchisee shall, on the request of any private party holding an appropriate permit issued by the city, temporarily raise or lower its lines to permit the moving of any building or other structure, and the actual expense paid in advance of the same shall be paid by the party requesting the same.

Upon failure of the franchisee to commence, pursue or complete any work required by law or by the provisions of this franchise to be done in any street or other public place or municipal property, within the time prescribed by the applicable work permit and to the satisfaction of the proper authority of the city, the city council may, at its option, cause the work to be done, and the franchisee shall pay to the city the cost thereof in the itemized amounts reported by the city council to the franchisee within 30 days after receipt of the itemized report.

(g)

Any damage caused to the property of building owners or users or any other person by the franchisee’s negligence or intentional conduct shall be repaired fully by the franchisee.

(h)

Upon termination of service to any subscriber, the franchisee shall promptly remove all its facilities and equipment from the premises of the subscriber upon his or her request.

The franchise granted by this article cannot in any event be sold, transferred, leased, assigned or disposed of as a whole or in part, or otherwise, without prior consent of the city expressed by resolution, and then only under such conditions as may be prescribed in the consenting resolution. No consent shall unreasonably be withheld. No consent shall be required for any mortgage or hypothecation, as a whole or in part, to secure an indebtedness. There shall be no restrictions upon the transfer of the franchise to a controlled subsidiary or to a parent corporation.

The consent or approval of the city to any assignment or transfer by the franchisee shall not constitute a waiver or release of the rights of the city in and to the streets.

A mortgage or pledge of the cable system equipment or any part thereof or a leasing by the franchisee from another person of the cable system equipment or part thereof for financing purposes or otherwise shall be made only subject and subordinate to the rights of the city under this article or applicable law.

An application to transfer a franchise must meet the requirements of section 4.05.004 and provide complete information on the proposed transaction, including details on the legal, character, financial, technical and other pertinent qualifications of the transferee, and on the potential impact of the transfer on subscriber rates. At minimum, the information required in section 4.05.004 must be provided by the proposed transferee.

Final action on an application for transfer of a franchise must be taken by the council. In making a determination on an application, the council will consider the legal, financial, technical and character qualifications of the transferee to operate the system and whether operation by the transferee would adversely affect the cable services to subscribers or otherwise be contrary to the public interest.

(j)

The franchisee shall not oppose intervention by the city in any suit or proceeding where an adverse judgment might affect the rights of the city.

(k)

The franchisee shall not, in its rates or charges, or in making available services or facilities of its system, or in its rules or regulations, or in any other aspect, make or grant preferences or advantages to any subscriber or potential user of the system except as permitted by FCC rules, and shall not subject any persons to any prejudice or disadvantage.

(l)

This provision shall not be deemed to prohibit promotional campaigns to stimulate subscriptions to the system or other legitimate uses thereof, nor shall it be deemed to prohibit the establishment of a graduated scale of charges and classified rate schedules to which any customer coming within such classification shall be entitled.

(m)

The franchisee shall provide safe, adequate and prompt service of its facilities, and shall provide prompt and efficient investigation of all complaints. Subscribers may telephone the franchisee’s office during regular business hours without incurring added message or toll charges to report complaints regarding cable television operations to the franchisee. Should a subscriber have an unresolved complaint regarding cable television operations, the subscriber shall be entitled to file his or her complaint with the municipal executive who has primary responsibility for the continuing administration of the franchise and the procedures for resolving complaints, and thereafter to meet jointly with the representative of the franchisee within 30 days to fully discuss and resolve the matters.

The franchisee shall notify each subscriber, at the time of initial subscription to the service of the franchisee, of the procedures for reporting and resolving such complaints.

(n)

A franchisee must maintain in the city a business office open during normal business hours with a listed local telephone number and employ a sufficient number of telephone lines to allow reasonable access by subscribers and members of the public. When the business office is closed, an answering machine or service capable of receiving service complaints and inquiries must be employed. In lieu of a business office within the city, the franchisee may substitute a listed toll-free (800) telephone number that connects with a business office that meets the above requirements.

A franchisee must have available at all times personnel, equipment and procedures capable of locating and correcting major system malfunctions. Major system malfunctions must be corrected without delay. Corrective action for all other malfunctions must be initiated not later than the next business day after the subscriber service call is received, and must be completed as promptly as possible.

A franchisee must provide each subscriber, at the time cable service is installed, written instructions for placing a service call, filing a complaint or requesting an adjustment. Each subscriber must also be provided with a schedule of the subscriber’s rates and charges, a copy of the service contract, delinquent subscriber disconnect and reconnect procedures, and a description of any other of the franchisee’s policies in connection with its subscribers.

A franchisee must maintain a complete record of service complaints received and action taken. These records must be open to the city for inspection during normal business hours. The records must be retained for not less than two years.

(o)

The franchisee or applicant for franchise shall diligently apply for all necessary permits and authorizations required in the conduct of its business, and shall diligently pursue the acquisition thereof, including necessary pole attachment contracts, and necessary authorizations from the Federal Aviation Administration to construct receiving antenna towers as may be required, and any necessary authorizations or waivers from the Federal Communications Commission, and when any permit, authorization, contract or waiver is obtained, a copy thereof shall be available in franchisee’s office. After the franchisee has diligently pursued the acquisition of necessary pole attachment contracts or other necessary easements, and where the necessary contracts have not been entered or easements been obtained after a reasonable period of time, the franchisee may submit the matter to the city council to determine whether the city shall acquire the necessary rights and easements by condemnation. If necessary, all costs thereof are to be borne by the franchisee.

(p)

The franchisee shall provide the following reports and data:

Quarterly reports, to be furnished within 45 days after the end of a calendar or fiscal quarter, consisting of gross revenues and the basis for calculation of the franchise fee;

Annually by May 1:

Copies of financial statements of income, assets and liabilities, certified by the franchisee’s independent auditor;

Summary of subscriber complaints;

Summary of operations certified by a franchisee officer; number of subscribers by class; connects and disconnects; miles of truck and distribution; and homes passed;

Future plans; rate changes; service changes; and possible introduction of new features, services or new technology;

Description of investments and property installed by class and cost;

(F)

Copy of engineer’s certified report and summary of results and corrections of annual proof-of-performance test;

(G)

Quarterly leakage monitoring reports, to include:

All categories of leaks found;

Leaks repaired; and

Backlog of unrepaired leaks.

(H)

Copies of all other technical tests conducted on the system during the year.

The city may require:

Ownership report, showing partners or major stockholders or parents holding 5% or more of stock ownership;

Copy of annual audit report to stockholder or parent;

Current map of system;

Summaries of telephone and service performance; and

Copies of petitions, applications and communications with the FCC, Securities and Exchange Commission or other federal or state regulatory agencies having jurisdiction over matters affecting the system or franchise.

(q)

The system shall be engineered to provide an audio alert system to allow authorized officials to automatically override the audio signal on all channels and transmit and report emergency information. In the event of any use by the city, the city will hold harmless and indemnify the franchisee from any damages or penalties resulting from the use of this service.

(r)

The franchisee shall at all times employ ordinary care and shall install and maintain in use commonly accepted methods and devices preventing failures and accidents which are likely to cause damage, injury or nuisance to the public.

(s)

The field of cable communications is a relatively new and rapidly changing field which shall no doubt see many regulatory, technical, financial, marketing and legal changes during the term of the franchise period. Therefore, in order to provide for a maximum degree of flexibility in the franchise, and help to achieve a continued advanced and modern system for the city, the franchisee shall provide the following renegotiation provisions. Special renegotiation sessions may be held at any time during the term of the franchise, provided that both the city and the franchisee shall mutually agree on the time, the place and the topics to be negotiated. All renegotiation sessions shall be open to the public and announced in a newspaper of general circulation at least five days before each session.

(t)

The franchisee shall indemnify and hold harmless the city at all times during the term of the franchise granted hereby and specifically agrees that it will pay all damages and penalties which the city may be legally required to pay as a result of granting the franchise. Damages and penalties shall include neglect, damage arising out of copyright infringements and other damages arising out of the installation, operation or maintenance of the cable system authorized herein, whether or not any act or omission complained of is authorized, allowed or prohibited by the franchise. In the case suit shall be filed against the city, either independently or jointly with the franchisee, to recover for any claim or damages, the franchisee, upon notice to it by the city, shall defend the city against the action and, in the event of a final judgment being obtained against the city, either independently or jointly with the franchisee, or solely by reason of the acts of the franchisee, the franchisee will pay the judgment and all costs and hold the city harmless therefrom.

Prior to the franchise becoming effective, the city may require a franchisee to post a cash security deposit as specified in the franchise agreement to be used as a security and to ensure the faithful performance of all provisions of law and the franchise agreement and compliance with all orders, permits and directions of the city, and the payment by the franchisee of any claims, liens or taxes due to the city which arise by reason of the construction, operation or maintenance of the system.

The city shall place any security deposit in an interest-bearing account. The interest will accrue to the benefit of the franchisee but may not be withdrawn; all interest will be added to and become part of the original security fund during the term of the franchise.

If a franchisee fails to pay the city any fees or taxes due, liquidated damages, or damages, costs or expenses incurred by the city by reason of any act or default of the franchisee, or if the franchisee fails to comply with any provision of the franchise agreement that the city reasonably determines can be remedied by an expenditure of the security fund, the city may, after ten calendar days’ notice to the franchisee, withdraw that amount with any interest from the security fund. Upon the withdrawal, the city shall notify the franchisee of the amount and date of the withdrawal.

Within 30 calendar days after notice to it that an amount has been withdrawn by the city from the security fund, the franchisee must deposit a sum of money sufficient to restore the security fund to the original amount. If the franchisee fails to restore the security fund to the original amount within 30 calendar days, the entire security fund remaining may be forfeited and/or the failure may be considered a material breach of this article and may be used as grounds for revocation of the franchise.

The security fund will become the property of the city in the event the franchise is revoked. The franchisee is entitled to the return of the security fund that remains following termination of the franchise, less any outstanding default or unpaid amounts owed to the city by the franchisee.

(F)

The rights reserved to the city with respect to the security fund are in addition to all other rights of the city whether reserved by this article or authorized by other law, and no action, proceeding or exercise of a right with respect to the security fund will affect any other right the city may have.

The franchisee shall be required to maintain insurance in forms and in companies as shall be approved by the city, the approval not to be unreasonably withheld, to protect the city and the franchisee from and against any and all claims, injury and damage to persons or property, both real and personal, caused by the construction, erection, operation or maintenance of any aspect of the system. The amount of insurance shall be not less than the following:

General liability insurance:

Bodily injury per person: $500,000.

Bodily injury per occurrence: $1,000,000.

Property damage per occurrence: $250,000.

(iv)

Property damage, aggregate: $500,000.

Automobile insurance:

Bodily injury per person: $500,000.

Bodily injury per occurrence: $1,000,000.

Property damage per occurrence: $500,000.

Workers’ compensation insurance shall also be provided as required by the laws of the state, as amended.

All insurance coverage shall provide a 30-day notice to the city secretary in the event of material alteration or cancellation of any coverage afforded in the policies prior to the date the material alteration or cancellation shall become effective.

Copies of all policies required hereunder shall be furnished to and filed with the city secretary, prior to the commencement of operations or the expiration of prior policies, as the case may be.

Neither the provisions of this section, nor any credit accepted by the city pursuant hereto, nor any liquidated damages recovered by the city hereunder, shall be construed to excuse unfaithful performance of the franchise or limit the liability of the franchisee under this article or the franchise for damages, either to the full amount of the fund, or otherwise.

(2002 Code, sec. 115.07)

§ 4.05.008 Regulation of rates.

To the extent permitted by law, the city shall regulate rates of basic cable service. This article is passed following certification by the FCC of the city as the regulator of the rates. Consequently, the initial rate action of the city shall be to require that the operator comply with the following:

The operator shall, within __________ days, submit to the city a completed FCC form 393 computing permissible benchmark rates, unless the operator elects to have rates set on a “cost of service” basis, in which event it shall submit data on which it will rely to establish the costs.

If no election is made for “cost of service” rating, then rates shall be determined in accordance with benchmark rules.

Upon receipt of the required submissions from the operator, the city shall schedule at least one public hearing at a time convenient to the general public. At that hearing, the public may present oral or written comments on the proposed rates.

To facilitate the comment, the city, upon receipt of the submission, will publish one time, in a newspaper of general circulation, a notice of availability of form 393 for review, including a statement of its location and hours of availability.

Within not less than 30 days from the date of receipt of the submission, the city shall by order either:

Extend the time for decision an additional days;

Object to the proposed rates, citing the basis for objection; or

Accept such.

In the absence of formal action, such proposed rates shall be deemed acceptable.

The rates shall be established pursuant to ordinance.

In the event the operator elects for rates to be set on a “cost of service” basis, the rate of return on investments shall be set after a public hearing, comments from the operator and review of financial data deemed by the council to reflect present economic conditions and utility experience.

(7)

In the event benchmark computation is later elected, the city may require resubmission of form 393 and reestablishment of rates with no requirement of refund.

The company may petition the council for a change in rates subject to regulation by filing a proposed rate schedule with the city secretary. The following procedure shall be followed:

The franchisee may no more than annually petition the council for a change in rates by filing a revised rate schedule including the justification(s) for proposed new schedule in accordance with form 393 or election of “cost of service” rating. The city shall schedule a public hearing as provided for herein.

Within ten days of notification by the council of the place and time established for a hearing on the petition, the company shall notify its subscribers of the same by announcement on one channel of its system, between the hours of 7:00 p.m. and 9:00 p.m., for five consecutive days, and shall give the subscribers additional written notice in their next billing.

Following all proper notice, but in no event later than 60 days from the date of petition, the city shall hold a public hearing to consider the proposed new rates, at which hearing all parties desiring to be heard, including the franchisee, shall be heard on any matter relating to the performance of this franchise, the franchisee’s service and the proposed new rates. Both oral and written testimony shall be accepted.

Within 75 days after the hearing, the city shall render a written decision on the franchisee’s petition, either accepting, rejecting or modifying the same and reciting the basis of its decision.

The criteria for the city decision in such matters shall be the establishment of rates which are fair to both the company and its subscribers and shall be generally defined as necessary to all affected return on investment, taking into account appropriate costs, including but not necessarily limited to capital costs, basic programming costs, customer service, labor and ancillary cost attributed to obtaining and transmitting signals carried on the basic tier, increases in the costs, and the cost of franchise-imposed requirements not directly related to the provision of cable service, as well as a reasonable profit.

In order for the city to determine whether proposed rate changes comport with the criteria herein, the franchisee’s petition for a rate increase shall include the following financial reports, which shall reflect the operations of the local system for the latest 12-month period: a balance sheet; income statement; cash flow statement; statement of sources and applications of funds; detailed supporting schedule of expenses, income, assets and other items as may be required; and statement of current and projected subscribers and penetration.

The accounting records applicable to the system shall be available for inspection by the city at all reasonable times. The city shall have access to records of financial transactions for the purpose of verifying overhead charges or other indirect cost allocated to the operation. The documents listed above shall include sufficient detail and/or footnotes as may be necessary to provide the city with the information needed to make accurate determinations as to the financial condition of the system. All financial statements shall be certified as accurate by an officer of the franchisee.

Notwithstanding the right to inspection by the public, the city agrees to protect the nature of documents agreed to be confidential in nature. The standard of confidentiality and disclosure shall be the Right to Privacy Act and legal decisions construing it.

(2002 Code, sec. 115.08)

§ 4.05.009 Franchise fee.

Amount.

During the term of any franchise granted pursuant to this article, the franchisee shall pay to the city, for the use of its streets, public places and other facilities, as well as the maintenance, improvements and supervision thereof, a quarterly franchise fee in an amount equal to a maximum of 5% of the annual gross revenues received by it from operations conducted within the city.

Method of computation.

Payments due the city under the terms of this article shall be computed quarterly as of September 30, December 31, March 31 and June 30 for the preceding quarter and shall be paid on or before the thirtieth calendar day from each the computation date at the office of the city administrator [city manager] during his or her regular business hours. The city shall be furnished a statement with each payment, certified as correct by the franchisee, reflecting the total amount of gross revenues, and the above charges, deductions, and computations, for the three-month payment period covered by the payment.

Right of recomputation.

No acceptance of any payment 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 franchisee fee under this article or for the performance of any other obligation hereunder.

Failure to make required payment.

Failure to pay any fees required by this section after 30 days’ notice from the city of the failure shall result in automatic suspension of the franchise granted, and reinstatement thereof may be had only upon resolution by the city council and payment of the delinquent fee or fees plus any interest or penalties as may be required by the resolution. The suspension of the franchise for failure to pay any fees required may terminate the franchisee’s right to operate the system during the suspension period. The council shall have the power to appoint a new operator during the suspension period and the council shall farther have the power to appoint the delinquent franchisee as operator for a negotiated fee.

(2002 Code, sec. 115.09)

§ 4.05.010 Enforcement remedies.

The city has the right to apply any one or a combination of the following remedies in the event a franchisee violates any provision of the law or its franchise agreement:

Impose liquidated damages in the amount, whether per day, per incident or other measure of violation, as provided in the franchise agreement. Payment of liquidated damages by the franchisee will not relieve the franchisee of its obligation to meet the franchise requirements;

Reduce the duration of the franchise on a basis as the city determines is reasonable pursuant to the process specified in section 4.05.003; and

Revoke the franchise as provided for in section 4.05.003.

In determining which remedy or remedies are appropriate, the city must take into consideration the nature of the violation, the person or persons bearing the impact of the violation, the nature of the remedy required in order to prevent further violations, and such other matters as the city determines are appropriate.

In addition to or instead of any other remedy, the city may seek legal or equitable relief from any court of competent jurisdiction.

The franchisee shall not be relieved of its obligation to comply promptly with any of the provisions of the franchise by any failure of the city to enforce prompt compliance.

(2002 Code, sec. 115.10)

§ 4.05.011 Performance evaluation.

The city may periodically evaluate the performance of a franchisee during the franchise term, including an evaluation of the picture quality and reliability of service rendered. A franchisee shall cooperate fully with these evaluations and supply the city with all relevant information requested and perform, if requested, any tests reasonably necessary to the evaluation of the system’s technical performance. If the city desires to implement a survey of subscribers in connection with its evaluation of service, a franchisee shall distribute the city’s questionnaire to its subscribers. Any meetings between the city and the franchisee for the purposes of evaluation shall be publicized in advance and open to the public.

If evaluation indicates the need for modification to the franchise agreement, the city shall attempt to negotiate the necessary changes. The city shall issue a report to the council of the results of the performance evaluation and any recommended changes to the franchise agreement as negotiated with the franchisee.

The council may hold a public hearing on any performance evaluation reports. Any franchise agreement modifications must be approved by the council before they become effective.

§ 4.05.012 PEG and emergency access facilities.

If a performance evaluation results in a report that the performance of a franchisee is in material violation of its obligations under this article or the franchise agreement and the franchisee has failed to undertake adequate corrective measures, the city may initiate enforcement remedies pursuant hereto.

(2002 Code, sec. 115.11)

If requested by the city, applications for a franchise or franchise renewal shall include proposals for the provision of access channels sufficient to meet community needs during the term of the franchise as determined by the city, and shall specify what, if any, it is willing to make for equipment and facilities that shall be used for local program production by cable access users.

Any access channel operations must conform to the following minimum requirements:

Access channels shall be carried on the franchisee’s lowest-priced service offering.

The franchise shall have no control over the content of any programming carried on access channels.

§ 4.05.013 Extension of service; continuity of service.

The city may require a franchisee, or select a nonprofit corporation or other entity, to manage the access program and to establish reasonable rules for the use of access channels consistent with the requirements of this article, the franchise agreement and the intended purpose of the channels. The rules shall be subject to review and approval by the city.

(2002 Code, sec. 115.12)

In order that existing subscribers shall not be unfairly burdened, the existing rate schedule described in section 4.05.004 shall not apply where 150 feet of line or more of line or cable is required or where undergrounding of cable is required to reach the proposed subscriber; in such cases special rates (including a capital contribution) may be negotiated with the proposed subscriber. Absent a nonrefundable capital contribution, the franchisee shall not be required to extend service to an area [unless] at least 30 homes per strand mile request service.

The franchisee shall be required to provide continuous service to all subscribers in return for payment of the established fee.

If the franchisee overbuilds, modifies or sells the system, or the city revokes or fails to renew this franchise, the franchisee is required as part of this franchise agreement to continue to operate the system until an orderly change of operation is effectuated. In the event the franchisee fails to operate the system for five consecutive days without prior approval of the city council, the city or its agent shall operate the system until the time that a new operator is selected.