Chapter 5.46 CABLE TELEVISION FRANCHISE ORDINANCE

The retransmission to all subscribers of all broadcast television channel signals authorized by the FCC and provided for herein;

The provision to all subscribers of non-broadcast open channel signals, originating from sources outside the Cable Communications System;

The cablecasting to all subscribers of programming on the Local Origination Channel, and all Public, Educational and Government Access Channels;

"Cable communications system" or "system,"

The transmission to all subscribers of all other cablecast open-channel signals.

"Broadcast signal"

means a television or radio signal that is transmitted over the air to a wide geographic audience and is received by a Cable Communications System off-the-air or by microwave or satellite link.

also referred to as "Cable Television System" or "CATV System," means a system of antennas, cables, amplifiers, towers, microwave links, cablecasting studios, and any other conductors, converters, equipment or facilities, designed and constructed for the primary purpose of distributing video programming to home subscribers, and the secondary purpose of producing, receiving, amplifying, storing, processing, or distributing audio, video, digital, or other forms of electronic or electrical signals.

"Cablecast facility"

means a facility used to originate cable programming and distribute programming to subscribers.

"Cablecast signal"

means a nonbroadcast signal that originates within the facilities of the Cable Communications System.

"Channel"

means a six Megahertz (Mhz) frequency band, which is capable of carrying either one standard video signal, a number of audio, digital or other non-video signals, or some combination of such signals.

"City" or "grantor"

means the City of Sunnyvale, as it is presently, and may be in the future, constituted.

"Closed-circuit" or "institutional service"

means such video, audio, data and other services provided to institutional users on an individual application, private channel basis. These may include, but not be limited to, two-way video, audio or digital signals among institutions, or from institutions to residential subscribers.

"Community access group"

means any nonprofit group or organization designated as eligible to utilize access channels and facilities.

"Connection charge" or "installation charge"

means any nonrecurring charge for connecting a subscriber to the cable television system, or to a particular service.

"Council"

means the City Council, the governing body of the City of Sunnyvale.

"Educational channel" or "educational access channel"

means any channel where educational institutions are the only designated programmers.

"FCC"

means the Federal Communications Commission and any legally appointed or elected successor.

"Franchise"

means the rights granted pursuant to this ordinance to construct and operate a Cable Communications System along the public ways within all or a specified area in the City. Any such authorizations, in whatever form granted, shall not mean and include any license or permit required for the privilege of transacting and carrying on a business within the City as required by other ordinances and laws of this City.

"Franchise agreement"

means a franchise grant ordinance accepted on the part of the Grantee, or a written agreement between the Grantor and Grantee, containing the specifications, franchise applications, and other related material.

"Franchise fee"

means the charges imposed as consideration for the granting of a franchise and the continuing use of the public streets and rights-of-way.

"Government channel" or "government access channel"

means any channel where local government agencies are the only designated programmers.

"Grantee"

means any person, corporation or other business entity receiving a franchise pursuant to this ordinance and its lawful successor, transferee or assignee.

"Grantor"

means the City of Sunnyvale as represented by the City Council or its delegate acting within the scope of its jurisdiction.

"Gross revenues"

means the annual gross revenues received by the Grantee from all sources of operations of the Cable Communications System within the franchise area, except that any sales, excise or other taxes collected for direct passthrough to local, state or federal government shall not be included.

"Initial service area"

means the area of the City which will receive service initially, as set forth in the franchise agreement.

"Institutional network" or "institutional loop"

means a closed circuit portion of the cable system designed to provide communication services between institutions, such as schools, banks, etc.

"Leased channel" or "leased access channel"

means any channel available for lease and programming by persons or entities other than the Grantee, including those portions of the other-access channels not in use by their designated programmers.

"Local origination channel"

means any channel where the Grantee is the only designated programmer, and provides local programs to subscribers.

"Non-broadcast signal"

means a signal that is transmitted by a Cable Communications System and that is not involved in an over-the-air broadcast transmission path.

"Open channel"

means any channel that can be received by all subscribers, without the necessity for special equipment.

"Pay-cable" or "pay-television"

means the delivery to subscribers, over the Cable Communications System, of television signals for a fee or charge to subscribers over and above the charge for Basic Subscriber Service, on a per program, per channel, or other subscription basis.

"Penetration"

means the ratio of cable system subscribers to the number of dwelling units passed by the cable television system.

"Person"

means an individual, partnership, association, organization, corporation or any lawful successor, transferee or assignee of said individual, partnership, association, organization or corporation.

"Private channel" or "closed-circuit channel"

means any channel which is available only to subscribers who are provided with special converter or terminal equipment to receive signals on that channel.

"Programmer"

means any person or entity who or which produces or otherwise provides program material or information for transmission by video, audio, digital, or other signals, either live or from recorded tapes or other storage media, to subscribers, by means of the Cable Communications System.

"Public access channel," "community access channel," or "community channel"

means any channel where any member of the general public or any non-commercial organization may be a programmer, without charge, on a nondiscriminatory basis.

"Resident"

means any person residing in the City as otherwise defined by applicable law.

"Section"

means any section, subsection, or provision of this franchise ordinance.

"Service area"

means the entire geographic area within the franchise territory.

"State"

means the State of California.

"Street"

shall include each of the following which have been dedicated to the public or hereafter dedicated to the public and maintained under public authority or by others and located within the City limits: streets, roadways, highways, avenues, lanes, alleys, sidewalks, easements, right-of-way and similar public ways and extensions and additions thereto, together with such other public property and areas that the City shall permit to be included within the definition of street from time to time.

"Subscriber"

means any person, firm, corporation, or other entity who or which elects to subscribe to, for any purpose, a service provided by the Grantee by means of or in connection with the cable communications system.

"Tapping"

means observing a communications signal exchange, where the observer is neither of the communicating parties, whether the exchange is observed by visual or electronic means, for any purpose whatsoever.

"Year"

means the remaining portion of 1982. Thereafter, "year" means a full calendar year.

(Ord. 2039-82 § 1)

§ 5.46.040 Grant of franchise.

Grant. In the event that Grantor shall grant to a Grantee a revocable franchise to construct, operate, maintain, and reconstruct a Cable Communications System within the City, said franchise shall constitute both a right and an obligation to provide the services of a Cable Communications System as required by the provisions of this ordinance and any franchise agreement. The franchise agreement or grant ordinance shall include those provisions of the Grantee's "Application for Franchise" that are finally negotiated and accepted by the Grantor and Grantee.

Any franchise granted under the terms and conditions contained herein, shall be consistent with Grantor's Charter and/or statutory requirements, which are incorporated by this reference as if fully set forth herein. In the event of conflict between the terms and conditions of the franchise and the terms and conditions under which the Grantor can grant a franchise, the Charter and/or statutory requirements shall, without exception, control.

Any franchise granted is hereby made subject to the general ordinance provisions now in effect or hereafter made effective. 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.

Franchise Territory. The Grantor may grant a franchise for all or any defined portion of the City. The service area shall be the entire territory defined in the franchise agreement. The initial service area shall be that portion of the franchise territory scheduled to receive initial service, as stated in the franchise agreement.

Use of Public Streets and Ways. For the purpose of operating and maintaining a Cable Communications 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 streets and ways within the City such wires, cables, conductors, ducts, conduits, vaults, manholes, amplifiers, appliances, pedestals, attachments, and other property and equipment as are necessary and appurtenant to the operation of the Cable Communications System. Prior to construction or alteration, however, the Grantee shall in each case file plans with the appropriate City agencies and utility companies, and receive written approval before proceeding.

Duration. The term of any franchise and all rights, privileges, obligations and restrictions pertaining thereto shall be 15 years from the effective date of the franchise unless terminated sooner as hereinafter provided. The effective date of the franchise shall be 30 days after adoption of the franchise grant ordinance by the Council. The Grantee must file by the effective date in the Office of the City Clerk a written acceptance of the franchise, or the franchise shall be null and void.

Transfer of Ownership or Control.

Transfer of Franchise. Any franchise granted hereunder shall be a privilege to be held for the benefit of the public. Said franchise cannot in any event be sold, transferred, leased, assigned or disposed of, including but not limited to, by forced or voluntary sale, merger, consolidation, receivership, or other means without the prior consent of the Grantor and then only under such conditions as the Grantor may establish. If any transfer of the franchise occurs without the prior consent of the Grantor, the franchise may, at Grantor's sole option, be terminated immediately.

Ownership or Control. The Grantee shall promptly notify the Grantor 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 10% 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 Grantor shall have consented thereto, which consent shall not be unreasonably withheld. For the purpose of determining whether it shall consent to such change, transfer, or acquisition of control, the Grantor may inquire into the qualifications of the prospective controlling party, and the Grantee shall assist the Grantor in any such inquiry.

In seeking the Grantor's consent to any change in ownership or control, the Grantee shall have the responsibility:

To show to the satisfaction of the Grantor whether the proposed purchaser, transferee, or assignee (the "proposed transferee"), which in the case of a corporation, shall include all officers, directors, employees and all persons having a legal or equitable interest in 5% or more of its voting stock, or any of the proposed transferee's principals:

Has ever been convicted or held liable for acts involving moral turpitude (including, but not limited to any Federal or State agency, or violation of any tax or securities law), or is presently under an indictment, investigation or complaint charging such acts;

(ii)

Has ever had a judgment in an action for fraud, deceit or misrepresentation entered against it, her, him, or them by any court of competent jurisdiction; or

(iii)

Has pending any legal claim, lawsuit or administrative proceeding arising out of or involving a cable system.

To establish, to the satisfaction of the Grantor, the financial solvency of the proposed transferee by submitting all current financial data for the proposed transferee which the Grantee was required to submit in its franchise application, and such other data as the Grantor may request. Financial statements shall be audited, certified and qualified by an independent Certified Public Accountant.

To establish to the satisfaction of the Grantor that the financial standing of the proposed transferee is such as shall enable it to maintain and operate the cable system for the remaining term of the franchise.

The Grantor 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 Grantor that it or its designee satisfactory to the Grantor will take control and operate the cable television system. Further, said financial institution shall also submit a plan for such operation that will insure 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 year unless extended by the Grantor in its discretion and during said period of time it shall have the right to petition the Grantor to transfer franchise to another Grantee. If the Grantor finds that the legal, financial, character, technical and other public interest qualities of the applicant are satisfactory, the Grantor may transfer and assign the rights and obligations of such franchise as in the public interest. The consent of the Grantor to such transfer shall not be unreasonably withheld.

The consent or approval of the Grantor to any transfer of the Grantee shall not constitute a waiver or release of the rights of the Grantor in and to the streets, and any transfer shall by its terms, be expressly subordinate to the terms and conditions of this franchise.

In the absence of extraordinary circumstances, the Grantor shall not approve any transfer or assignment of the franchise prior to substantial 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.

Police Powers. In accepting this 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 franchise and any other present or future lawful exercise of the Grantor's police powers shall be resolved in favor of the latter, except that any such exercise that is not of general application in the jurisdiction or applies exclusively to Grantee or Cable Communications Systems which contains provisions inconsistent with this franchise shall prevail only if upon such exercise, the Grantor finds an emergency exists constituting a danger to health, safety, property or general welfare or such exercise is mandated by law.

Franchise Fee.

Annual Franchise Payment. A Grantee of a franchise hereunder shall pay to the Grantor an annual fee in an amount as designated in the franchise agreement, but in no event less than 5% of the annual gross revenues. Such payment shall be in addition to any other and commence as of the effective date of the franchise. In the event of a dispute, the Grantor, if it so requests shall be furnished a statement of said payment, audited and qualified by an independent Certified Public Accountant, reflecting the total amounts of annual gross revenues and the computations for the period covered by the payment.

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

Failure to Make Required Payment. In the event that any franchise 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 due date, at the annual rate equal to the prevailing commercial prime interest rate in effect upon the due date.

a sum of money equal to 5% of the amount due in order to defray those additional expenses and costs incurred by the Grantor by reason of delinquent payment.

Payments due the Grantor under this provision shall be computed quarterly, for the preceding quarter, as of March 31, June 30, September 30, and December 31. Each quarterly payment shall be due and payable no later than 30 days after the dates listed in the previous sentence. Each payment shall be accompanied by a brief report showing the basis for the computation and such other relevant facts as may be required by the Grantor.

Grantor reserves the right to include in any franchise agreement a requirement for Grantee to pay specified franchise fees in advance, either in the form of lump sum payments or minimum annual fees, to help defray Grantor's regulatory costs during the initial years of the franchise, before cable system revenues have stabilized.

Forfeiture or Revocation. The Grantor reserves the right to revoke any franchise granted hereunder and rescind all rights and privileges associated with the franchise in the following circumstances, each of which shall represent a default and breach under this ordinance and the franchise grant:

If the Grantee should default in the performance of any of its material obligations under this ordinance or under such documents, contracts and other terms and provisions entered into by and between the Grantor and the Grantee.

If the Grantee's quality of service, and response to subscriber complaints has, in the opinion of Grantor, demonstrated a continuing, willful pattern of inadequacy, which has not been corrected by Grantee after due notice by Grantor.

If the Grantee should fail to provide or maintain in full force and effect, the liability and indemnification coverages or the performance bond as required herein.

If any court of competent jurisdiction, the FCC or any state regulatory body by rules, decisions, or other action determines that any material provision of the franchise documents, including this ordinance, is invalid or unenforceable prior to the commencement of system construction.

If the Grantee should frequently violate any orders or rulings of any regulatory body having jurisdiction over the Grantee relative to this franchise unless such orders or rulings are being contested by the Grantee in a court of competent jurisdiction.

If the Grantee attempts to evade any of the provisions of this ordinance or the franchise agreement or practices any fraud or deceit upon the City.

The Grantee's construction schedule is delayed for more than 18 months later than the schedule contained in the franchise agreement.

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

Procedure Prior to Revocation.

The Grantor 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 30 days following such written demand, the Grantor may place its request for termination of the franchise upon a regular Council meeting agenda. The Grantor shall cause to be served upon such Grantee, at least 10 days prior to the date of such Council meeting, a written notice of this intention to request such termination, and the time and place of the meeting, notice of which shall be published by the City Clerk at least 10 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 may, by resolution, declare that the franchise of such Grantee shall be terminated and bond forfeited unless there be compliance by the Grantee within such period as the Council may fix.

Disposition of Facilities. In the event a franchise expires, is revoked, or otherwise terminated, the Grantor may order the removal of the system facilities from the City within a reasonable period of time as determined by the Grantor 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 and places in as good 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 Grantor shall inspect and approve the condition of the public ways and public places; and 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 paragraph and this ordinance.

Restoration by Grantor, Reimbursement of Costs. In the event of a failure by the Grantee to complete any work required by subsection (c) above or any other work required by Grantor's law or ordinance within the time as may be established and to the satisfaction of the Grantor, the Grantor may cause such work to be done and the Grantee shall reimburse the Grantor the cost thereof within 30 days after receipt of an itemized list of such costs or the Grantor may recover such costs through any security fund provided by Grantee.

Extended Operation and Continuity of Service. Upon either the expiration or revocation of a franchise, the Grantor may require the Grantee to continue to operate the system for an extended period of time not to exceed six months from the date of such expiration or revocation unless extended by Council resolution. The Grantee shall, as trustee for its successor in interest, continue to operate the Cable Communications System under the terms and conditions of this ordinance and the franchise and to provide the regular subscriber service and any and all of the services that may be provided at that time.

It shall be the right of all subscribers to continue to receive all available services insofar as their financial and other obligations to the Grantee are honored. The Grantee shall do everything in its power to ensure that all subscribers receive continuous, uninterrupted service regardless of the circumstances, including operation of the system during transitional periods following franchise expiration or termination.

Grantor's Right Not Affected. The termination and forfeiture of any franchise shall in no way affect any of the rights of the Grantor under the franchise or any provision of law.

Receivership and Foreclosure.

The franchise herein granted shall, at the option of the Grantor, cease and terminate 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, a reorganization, bankruptcy or other action or proceeding unless such receivership or trusteeship shall have been vacated prior to the expiration of said 120 days, or unless:

Such receivers or trustees shall have, within 120 days after their election or appointment, fully complied with all the terms and provisions of this ordinance and the franchise granted pursuant hereto, and the receivers or trustees within said 120 days shall have remedied all defaults under the franchise; and

Such receivers or trustees shall, within said 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.

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 Grantor 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 30 days after service of such notice, unless:

The Grantor shall have approved the transfer of this franchise, as and in the manner in this ordinance provided, and

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

Franchise Required. No Cable Communications System shall be allowed to occupy or use the streets of the City or be allowed to operate without a franchise in accordance with the provisions of this ordinance.

Franchise Processing Costs. Costs to be borne by Grantee shall include, but shall not be limited to, all costs of publications of notices prior to any public meeting provided for pursuant to a franchise, publication of relevant ordinances and franchise agreements and any cost not covered by franchise application fees, incurred by the Grantor in its study, preparation of proposal documents, evaluation of all applications, and processing of the franchise agreement, including but not limited to consultant and attorney fees and City staff time.

(Ord. 2039-82 § 1)

§ 5.46.050 Regulation of franchise.

Regulatory Authority. The Grantor shall exercise appropriate regulatory authority under the provisions of this ordinance and applicable law. Grantor may, at its sole option, participate in a joint regulatory agency, with delegated responsibility in the area of cable related communications.

Regulatory Responsibility. The Grantor may exercise or delegate the following regulatory responsibility:

Administering and enforcing the provisions of the Cable Communications System franchise.

Coordination of the operation of facilities and channels dedicated for public use, as provided for in any franchise agreements.

Providing for technical, programming and operational support to public agency users, such as City departments, schools and health care institutions.

Establishing procedures and standards for institutional operations and services, use of dedicated channels, and sharing of public facilities.

Planning expansion and growth of cable services.

Analyzing the possibility of integrating cable communications with other City, State or regional telecommunications networks.

Formulating and recommending long-range telecommunications plans.

Public Usage of the System. If so specified in a franchise agreement, the Grantor may utilize a portion of the cable system capacity, and associated facilities and resources, to develop and provide cable services that will be in the public interest. In furtherance of this purpose, the Grantor may establish a public nonprofit corporation, to receive and allocate facilities, support funds and other considerations provided by the Grantee, and/or others. Such a public corporation, if established, may be delegated the following responsibilities:

Receive, and utilize or reallocate for utilization, channel capacity, facilities, funding and other support provided specifically for public usage of the cable system.

Review the status and progress of each service developed for public benefit.

Reallocate resources on a periodic basis to conform with changing priorities and public needs.

Report to the Grantor annually on the utilization of resources, the new public services developed and the benefits achieved for the City and its residents.

Reservation by Grantor. The Grantor reserves the right, at its discretion, from time to time, to determine if the Corporation described in subsection (c) above is performing its purposes in a manner satisfactory to the Grantor, and if it is not, the Grantor may receive and reallocate all or a portion of the channel capacity, operating appropriation, and capital appropriation, including any facilities and equipment purchased previously with such appropriations, to another entity. A new entity shall be required to comply in all respects with the legal responsibilities which the corporation has assumed under Section 5.46.050(c).

Annual Review of Performance. Within 90 days of the first anniversary of the effective date of each franchise, and each year thereafter throughout the term of the franchise, the Grantor and Grantee shall meet publicly to review the performance, quality of service and rates of the cable television system. The reports required in Section 5.46.070 regarding subscriber complaints, the records of performance tests and the opinion survey report shall be utilized as the basis for review. In addition, any subscriber may submit complaints during the review meetings, either orally or in writing, and these shall be considered.

Within 30 days after the conclusion of the system performance review meetings, Grantor shall issue findings with respect to the adequacy of system performance and quality of service. If inadequacies are found, Grantor may direct Grantee to correct the inadequacies within a reasonable period of time.

Failure of Grantee, after due notice, to correct the inadequacies shall be considered a material breach of the franchise, and Grantor may, at its sole discretion, levy any penalty within the scope of this ordinance considered appropriate.

System and Services Review. To provide for technological, economic, and regulatory changes in the state of the art of cable communications, to facilitate renewal procedures, to promote the maximum degree of flexibility in the cable system, and to achieve a continuing, advanced, modern system, the Grantor and the Grantee shall comply with the following system and services review provisions:

The Grantor and Grantee shall hold a System and Services Review Session on or about the third anniversary date of the franchise agreement. Subsequent System Review Sessions shall be scheduled by the Grantor each three years thereafter. All such review sessions shall be open to the public, and notice shall be given.

Sixty days prior to the scheduled System and Services Review Session, Grantee shall submit a report to Grantor indicating the following:

All cable system services that are being provided on an operational basis, excluding tests and demonstrations, to cities in the United States with populations above 50,000, that are not provided to the City.

A plan for provision of such services, or a justification indicating why such services are not feasible for the City.

Topics for discussion and review at the System and Services Review Sessions shall include but shall not be limited to, services provided, rate structure, free or discounted services, application of new technologies, system performance, programming, subscriber complaints, user complaints, rights of privacy, amendments to the franchise, undergrounding processes, developments in the law, and regulatory constraints.

Either the Grantor or the Grantee may select additional topics for discussion at any Review Session.

Not later than 60 days after the conclusion of each System and Services Review Session, Grantor shall issue findings, including specifically a listing of any cable services not then being provided to the City that are considered feasible. Grantor may direct Grantee to provide such services within a reasonable time, under reasonable rates and conditions. Failure to provide such directed services may be considered a breach of the franchise, subject to penalties as provided in this ordinance.

Rate Regulation. Grantor may regulate cable system rates and charges in accordance with this ordinance and applicable law. If any rate regulation authority currently preempted by State or Federal government laws or regulations should, in the future, no longer be preempted, Grantor shall have the right to assume regulatory authority to the extent then permitted.

Initial Rates.

The Grantee shall establish initial monthly rates and nonrecurring installation connection charges that shall be applied fairly and uniformly to all subscribers for its services, in accordance with the rates and charges contained in the franchise agreement.

Initial basic subscriber rates and charges shall be effective for a minimum of two years from the date cable service commences, or until Grantee has completed all construction proposed in its application for the first and second years, whichever is longer.

Rate Change Procedure.

Within 90 days of the filing of a petition for rate change, the Grantor shall hold an appropriate public hearing to consider the proposed rate change, at which hearing all persons desiring to be heard, including the Grantee, shall be heard on any matter, including but not limited to, the performance of this franchise, the Grantee's services, and the proposed new rates.

Upon notice of any public hearing, the Grantee shall notify its subscribers of the time, place, and subject matter of the public hearing by announcement on at least two channels of its system between the hours of 7:00 p.m. and 9:00 p.m., for at least five consecutive days prior to the hearing. In addition, notice of any public hearing shall be published in a newspaper of general circulation at least once.

Within 90 days after said hearing, the Grantor shall render a written decision on the Grantee's petition, either accepting, rejecting, modifying or deferring the same and reciting the basis of its decision. The Grantor shall consider, but not be limited to, the following factors in approving or disapproving the petition:

Grantee's substantial fulfillment of all material requirements of the franchise.

Quality of service, as indicated by the number and type of service complaints, Grantee's response to complaints, and the result of periodic system performance tests and the annual review specified in subsection (e) of this section.

Prevailing rates for comparable services in other cable systems of similar size and complexity.

Rate of return on Grantee's equity, as compared to businesses of equivalent risk. For the purposes of this ordinance, the rate of return on equity shall be defined as the net, after-tax profit divided by the equity portion of Grantee's investment in tangible assets. The investment shall be defined as the cumulative cost of tangible assets such as plant, property and equipment, less the cumulative depreciation charges, plus working capital, which shall be defined as equivalent to three months' total operating expenses.

The rate of return shall be calculated on a cumulative basis for all system revenues and costs including services such as pay-television that may be exempt from local rate regulation. Upon request of Grantor, Grantee shall promptly provide, from the Grantee, its parent company and any subsidiary company, all information as shall be reasonably necessary to determine system revenues and costs.

Performance of Grantee in introducing new services and expanding the cable system's capability, as compared to other systems of similar size and complexity, and as evaluated by the system and services review specified in Section 5.46.050(f).

(F)

The original cost of the system less depreciation determined on a straight line, actual life basis.

(G)

Tax benefits received by Grantee, its partners or shareholders, as the result of their investment in the system.

(H)

Cash flow derived from system services. The Grantor shall not consider any valuation based upon the franchise or the Grantee's good-will and these items of value shall neither be amortized as an expense nor shall a return be paid on them.

If the Grantor fails to render a written decision either accepting, rejecting, modifying, or deferring Grantee's petition within 180 days of the Grantee's petition pursuant to subsection (i)(2) of this section, the Grantee shall thereafter be entitled to put its proposed new rates into effect.

The Grantee's petition for a rate increase shall include, but not be limited to, the following financial reports, which sell reflect the operations of the system.

Balance Sheet

Income statement

Statement of Sources and Application of Funds

Detailed Supporting Schedules of Expenses, Income, Assets and other items as may be required.

Statement of Current and Projected Subscribers and Penetration.

The Grantee's accounting records applicable to the system shall be available for inspection by the Grantor at all reasonable times. The Grantor shall have access to records of financial transactions for the purpose of verifying burden rates or other indirect costs prorated to the operation. The documents listed above shall include sufficient detail and/or footnotes as may be necessary to provide the Grantor with the information needed to make accurate determinations as to the financial condition of the system. All financial statements shall be audited by, and carry an unqualified opinion from, an independent Certified Public Accountant and shall be certified as accurate by an officer of Grantee.

Schedule of Rates. Grantee shall maintain and file with the Grantor, a complete schedule of subscriber rates and non-recurring charges and deposits, including all fees and charges for services not subject to approval by the Grantor.

Disconnections. There shall be no charge for disconnection from the system. However, if a subscriber has failed to pay properly due monthly fees or if a subscriber disconnects for seasonal periods, the Grantee may require, in addition to full payment of any delinquent fees, a reasonable fee for reconnection.

(8)

No Consideration Beyond Schedule. The Grantee shall receive no consideration whatsoever for or in connection with its provision of service to its subscribers other than as set forth in this Section or as filed with and/or approved by the Grantor.

(9)

Submission of Rate Increase Requests. Grantee shall not submit request for rate increases earlier than 12 months after a prior request.

Access Channel Management.

Intent. It is the intent of the Grantor to ensure that access and community channels provided for in any franchise agreement, shall be managed in the best public interest, so that programming on such channels will be free of censorship, open to all residents, and available for all forms of public expression, community information and debate of public issues. Pursuant to these objectives, the Grantor may delegate the responsibility for access channel management to a nonprofit entity, termed the Access Channel Manager, which may include, but not be limited to, any of the following:

A nonprofit public corporation

An access management commission or committee, appointed by Grantor, and representing a broad spectrum of the community

An established nonprofit entity with special cablecasting capability, such as a local or regional community college.

Functions. The Access Channel Manager shall have the following functions:

Responsibility for program production for and management of the Public Access Channel and all other channels as may in the franchise agreement be designated for community-based programming. Community channels may include Government and Educational Access channels as well as Public Access channels.

Establishment of budgets on an annual basis, and utilization of funds and resources received from the Grantor or the public usage corporation designated in Section 5.46.050(c), for the purpose of access programming.

To assure that no censorship or control over program content of the Public Access and Community channel(s) exists, except as necessary to comply with FCC prohibition of material that is obscene, or contains commercial advertising, or conducts a lottery, and to assure that Public Access and Community channels are made available to all residents of the City on a non-discriminatory, first-come, first-served basis.

To devise, establish, and administer all rules, regulations, and procedures pertaining to the use and scheduling of the Public Access and Community channels.

To prepare, in conjunction with the Grantee, such regular or special reports as may be required or desirable.

(F)

To hire and supervise staff.

(G)

To make all purchases of materials and equipment that may be required.

(H)

To develop additional sources of funding, such as foundation or Federal or State grants, to further community programming.

(I)

To perform such other functions relevant to the Public and Community channel(s) as may be appropriate.

§ 5.46.060 General financial and insurance provisions.

Access Channel Manager Reports to Grantor. The Access Channel Manager shall provide a report to the Grantor, at least annually, indicating achievements in community-based programming and services.

(Ord. 2039-82 § 1)

Construction and Performance Bond.

Within 30 days after the granting of any franchise and prior to the commencement of any construction work by the Grantee, the Grantee shall file with the Grantor a construction and performance bond in the amount specified in the franchise agreement, in favor of the Grantor and any other person who may claim damages as a result of the breach of any duty by the Grantee assured by such bond.

Such bond as contemplated herein shall be in the form approved by the City Attorney and shall among other matters cover the cost of removal of any properties installed by the Grantee in the event said Grantee shall default in the performance of its construction obligation.

In no event shall the amount of said bond be construed to limit the liability of the Grantee for damages.

Compliance Bond.

In addition to the performance bond set forth above, the Grantee shall, at least 30 days prior to the commencement of operation, file with the Grantor a compliance bond in the amount specified in the franchise agreement, in favor of the Grantor and any other person who may be entitled to damages as a result of any occurrence in the operation or termination of the Cable Communications System operated under this franchise, and including the payments required to be made to the Grantor hereunder.

In no event shall the amount of said bond be construed to limit the liability of the Grantee for damages.

Security Fund.

Within 30 days after the effective date of the franchise, the Grantee shall deposit into a bank account, established by the Grantor, and maintain on deposit through the term of this franchise, the sum specified in the franchise agreement, as security for the faithful performance bait of all the provisions of this franchise, and compliance with all orders, permits and directions of any agency of the Grantor having jurisdiction over its acts or defaults under the franchise, and the payment by the Grantee of any claims, liens and taxes due the Grantor which arise by reason of the construction, operation or maintenance of the system. The security fund may be assessed by the Grantor for purposes including, but not limited to, the following:

Failure of Grantee to pay Grantor sums due under the terms of the franchise

Reimbursement of costs borne by the Grantor to correct franchise violations not corrected by Grantee, after due notice

Monetary penalties assessed against Grantee due to default or violation of franchise requirements.

Within 30 days after notice to it that any amount has been withdrawn by the Grantor from the security fund pursuant to subdivision (c)(1), the Grantee shall deposit a sum of money sufficient to restore such security fund to the original amount.

If the Grantee fails, after 10 days' notice to pay to the Grantor any franchise fee or taxes due and unpaid; or, fails to pay to the Grantor within such 10 days, any damages, costs or expenses which the Grantor shall be compelled to pay by reason of any act or default of the company in connection with this franchise; or fails, after 30 days' notice of such failure by the Grantor to comply with any provision of the franchise which the Grantor reasonably determines can be remedied by an expenditure of the security, the Grantor may immediately withdraw the amount thereof, with interest and any penalties, from the security fund. Upon such withdrawal, the Grantor shall notify the Grantee of the amount and date thereof.

The security fund deposited pursuant to this section shall become the property of the Grantor in the event that the franchise is canceled by reason of the default of the Grantee or revoked for cause in accordance with the procedures of Section 5.46.040(j) above. The Grantee, however, shall be entitled the return of such security fund, or portion thereof, as remains on deposit at the expiration of the term of the franchise, or upon termination of the franchise at an earlier date, provided that there is then no outstanding default on the part of the Grantee.

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

Indemnification.

The Grantee shall by acceptance of the franchise granted herein indemnify, defend and hold harmless the Grantor, its officers, boards, commissions, agents, and employees from any and all claims, suits, judgments for damages in any way arising out of or through or alleged to arise out of or through (1) the act of the Grantor in granting a franchise and (2) the acts or omissions of Grantee, its servants, employees, or agents. Both such indemnifications shall cover such claims arising in tort, contracts, violations of statutes, ordinances or regulations or otherwise.

In the event any such claims shall arise, the Grantor shall tender the defense thereof to the Grantee; provided, however, that the Grantor in its sole discretion may participate in the defense of such claims at its expense.

Insurance.

The Grantee shall maintain throughout the term of the franchise insurance in amounts at least as follows:

Worker's Compensation Insurance: in such coverage as may be required by the worker's compensation insurance and safety laws of the State of California and amendments thereto.

Grantee's Liability: in the amount specified in the franchise agreement.

Comprehensive General Liability: bodily injury and property damage in the amount specified in the franchise agreement.

Comprehensive Automobile Liability: including non-ownership and hired car coverage as well as owned vehicles with minimum limits bodily injury and property damage as specified in the franchise agreement.

The Grantee shall furnish the Grantor with copies of such insurance policies and certificates of insurance.

Such insurance policies provided for herein shall name the Grantor, its officers, boards, commissions, agents, and employees as additional insureds and shall contain the following endorsement:

"It is hereby understood and agreed that this insurance policy may not be canceled by the surety or the intention not to renew be started by the surety until 30 days after receipt by the Grantor by registered mail of written notice of such intention to cancel or not renew."

The minimum amounts set forth for such insurance shall not be construed to limit the liability of the Grantee to the Grantor under the franchise issued to the amounts of such insurance.

(Ord. 2039-82 § 1)

§ 5.46.070 Reports.

Annual Reports. Within 60 days after the close of Grantee's fiscal year, for the franchise, the Grantee shall submit a written annual report, in a form approved by the Grantor, including, but not limited to, the following information:

A summary of the previous year's (or, in the case of the initial reporting year, the initial year's) activities in development of the cable system, including, but not limited to, services begun or discontinued during the reporting year, and user participation;

A financial statement, audited by and carrying an unqualified opinion from, an independent Certified Public Accountant, including a statement of income, revenues, operating expenses, value of plant, annual capital expenditures, depreciation with an attached depreciation schedule, interest paid, taxes paid, balance sheets, and a statement of sources and application of funds, covering all years since the beginning of the franchise;

A current statement of costs of construction by component categories;

A projected income statement, balance sheet, statement of sources and applications of funds, and statement of projected construction for the next two years;

A reconciliation between previously projected construction and/or financial estimates, as the case may be, and actual results;

A list of Grantee's officers, members of its board of directors, and other principals of Grantee;

A list of stockholders or other equity investors holding 5% or more of the voting interest in the Grantee and its parent, subsidiary and affiliated corporations and other entities, if any;

(8)

To the extent that money, other than profits, is paid to a parent, subsidiary, or other person affiliated with the Grantee, the amounts of such payments and the basis for computation of such amounts (e.g., the basis for computing any management fees or share of "home office" overhead).

Plant Survey Report. Simultaneously with the annual report required by Section 5.46.070(a), Grantee shall submit to the Grantor an annual plant survey report which shall be a complete survey of the Grantee's plant and a full report thereon. Said report shall include, but not be limited to, a description and "as-built" maps of the portions of the franchise area that have been cabled and have all services available, and an appropriate engineering evaluation including suitable electronic measurements conducted in conformity with such requirements, including supervision, as the Grantor may prescribe. Said report shall be in sufficient detail to enable the Grantor to ascertain that the service requirements and technical standards of the FCC and/or the franchise are achieved and maintained. At Grantor's request, but no more often than once per three years, the Grantee and the Grantor shall agree upon the appointment of a qualified independent engineer to evaluate the technical performance of the cable system. The cost of such evaluation shall be borne by the Grantee.

Copies of Federal and State Reports. The Grantee shall submit to the Grantor copies of all pleadings, applications, reports, communications and documents of any kind, submitted by the Grantee to, as well as copies of all decisions. correspondence and actions by, any Federal, State and local courts, regulatory agencies and other government bodies relating to its cable television operations within the franchise area. Grantee shall submit such documents to the Grantor simultaneously with their submission to such courts, agencies and bodies; and within five days after their receipt from such courts, agencies and bodies. The Grantee hereby waives any right to claim confidential, privileged or proprietary rights to such documents. However, information otherwise confidential by law and so designated by the Grantee, which is submitted to the Grantor shall be retained in confidence by the Grantor and its authorized agents and shall not be made available for public inspection.

Public Reports. A copy of each of Grantee's annual and other periodic public reports and those of its parent, subsidiary and affiliated corporations and other entities, as the Grantor requests and is reasonably appropriate, shall be submitted to the Grantor within five days of its issuance.

Complaint File and Reports. An accurate and comprehensive file shall be kept by the Grantee of any and all complaints regarding the cable system. A procedure shall be established by the Grantee by the time of installation of the cable system to remedy complaints quickly and reasonably to the satisfaction of the Grantor. Complete records of Grantee's actions in response to all complaints shall be kept. These files and records shall remain open to the public during normal business hours.

A summary of complaints, identifying the number and nature of complaints and their disposition, in a form approved by the Grantor, shall be completed for each month and submitted to the Grantor by the tenth (10th) day of the succeeding month.

An annual opinion survey report which identifies satisfaction or dissatisfaction among subscribers with cable communications services offered by the Grantee shall be submitted to the Grantor no later than two months after the end of Grantee's fiscal year. The surveys required to make said report shall be conducted in conformity with such requirements, including supervision, as the Grantor may prescribe.

Privacy Report. Grantee shall submit to the Grantor an annual report indicating the degree of compliance with the privacy provisions of Section 5.46.090 of this ordinance, and all steps taken to assure that the privacy rights of individuals have been protected.

Miscellaneous Reports. Grantee shall submit to the Grantor such other information or reports in such forms and at such times as the Grantor may request or require.

Income Tax Returns. The Grantee shall submit to the Grantor copies of all income tax returns and reports which are filed with the local State or Federal governments pertaining to its cable system in the franchise area within five days of the date on which such reports are filed.

Inspection of Facilities. The Grantee shall allow the Grantor to make inspections of any of the Grantee's facilities and equipment at any time upon one day's prior notice, or, in case of emergency, upon demand without prior notice, to allow Grantee to verify the accuracy of any submitted report.

Business Office and Files. The Grantee shall maintain an office within the franchise area and shall keep complete and accurate books and records. The Grantor shall have the right to inspect at any time during normal business hours all books, records, maps, plans, income tax returns, financial statements, service complaint logs, performance test results and other like materials of the Grantee which relate to the operation of the cable system. Access to the aforementioned records shall not be denied by the Grantee on the basis that said records contain confidential, privileged, or proprietary information.

Public Inspection. All reports required under this section, except as otherwise herein provided, shall be available for public inspection in the city clerk's office during normal business hours.

(l)

Failure to Report. The refusal, failure, or neglect of the Grantee to file any of the reports required under this section, or as the Grantor may direct, shall be deemed a material breach of the franchise, and shall subject the Grantee to all penalties and remedies, legal or equitable, which are available to the Grantor under the franchise or otherwise.

(m)

False Statements. Any materially false or misleading statement or representation made knowingly by the Grantee in any report required under the franchise shall be deemed a material breach of the franchise and shall subject the Grantee to all penalties and remedies, legal or equitable, which are available to the Grantor under the franchise or otherwise.

(n)

Cost of Reports. All reports and records required under this or any other section shall be furnished at the sole expense of the Grantee.

(Ord. 2039-82 § 1)

§ 5.46.080 Franchise violations.

Remedies for Franchise Violations. By acceptance of a franchise under this Chapter, a Grantee agrees that failure to comply with the provisions of this ordinance, or with a franchise grant ordinance, or any written franchise agreement, will result in damage to the City, and that it will be impracticable to determine the actual amount of such damage. Therefore if the Grantee fails to perform any obligation under the franchise, or fails to do so in a timely manner, the Grantor may at its option, and in its sole discretion;

Assess against the Grantee penalties of up to $5,000 per day for construction delays, and up to $1,000 per day for all other violations, which the Grantee hereby agrees to pay, said assessment to be levied against the security fund, hereinabove provided, and collected by Grantor immediately upon said assessment. Grantor and Grantee agree that the amount of such assessment shall be deemed, without proof, to represent liquidation of damages sustained Grantor by reason of Grantee's failure to perform. Such assessment shall not constitute a waiver by the Grantor of any other right or remedy it may have under the franchise or under applicable law, including without limitation, its right to recover from Grantee such additional damages, losses, costs and expenses, including actual attorney fees, as may have been suffered or incurred by Grantor by reason of or arising out of such breach of the franchise. This provision for assessment of damages is intended by the parties to be separate and apart from Grantor's right to enforce the provisions of the Construction and Performance or Compliance bonds provided for in Section 5.46.060.

For violations considered by Grantor to have materially degraded the quality of service, order and direct Grantee to issue rebates or reduce its rates and/or charges to subscribers, in an amount solely determined by Grantor to provide monetary relief substantially equal to the reduced quality of service resulting from Grantee's failure to perform.

Require Grantee to cure all defaults and breaches of its obligations hereunder before Grantee is entitled to increase any rate or charge to subscribers hereunder.

Terminate the franchise, for any of the causes stated in Section 5.46.040.

No penalty shall be imposed by Grantor against Grantee for any violation of this franchise without Grantee being afforded due process of law, as provided for in Section 5.46.080(b).

Grantor may, in its sole judgment and discretion, impose any or all of the above enumerated measures against Grantee, which shall be in addition to any and all other legal or equitable remedies it has under this franchise or under any applicable law.

Procedure for Remedying Franchise Violations. In the event that the Grantor determines that the Grantee has violated any provision of the franchise, any rule or regulation promulgated pursuant hereto or any applicable Federal, State, or local law, the Grantor may make a written demand on the Grantee that it remedy such violation. If the violation, breach, failure, refusal, or neglect is not remedied to the satisfaction of the Grantor within 30 days following such demand, the Grantor shall determine whether or not such violation, breach, failure, refusal, or neglect by the Grantee was excusable or inexcusable, in accordance with the following procedure:

A public hearing shall be held and the Grantee shall be provided with an opportunity to be heard upon 30 days' written notice to the Grantee of the time and the place of the hearing provided and the allegation of franchise violations.

If, after notice is given and, at the Grantee's option, a full public proceeding is held, the Grantor determines that such violation, breach, failure, refusal, or neglect by the Grantee was excusable as provided in Section 5.46.080(c), the Grantor shall direct the Grantee to correct or remedy the same within such additional time, in such manner and upon such terms and conditions as the Grantor may direct.

If, after notice is given and, at the Grantee's option, a full public proceeding is held, the Grantor determines that such violation, breach, failure, refusal or neglect was inexcusable, then the Grantor may assess a penalty or remedy in accordance with Section 5.46.080(a).

If, after notice is given and, at the Grantee's option, a full public proceeding is held, the Grantor declares the franchise or any renewal thereof breached, the parties may pursue their remedies pursuant to the franchise or any other remedy, legal or equitable.

Force Majeure; Grantee's Inability to Perform. In the event Grantee's performance of any of the terms, conditions, obligations, or requirements of the franchise is prevented or impaired due to any cause beyond its reasonable control or not reasonably foreseeable, such inability to perform shall be deemed to be excused and no penalties or sanctions shall be imposed as a result thereof, provided Grantee has notified Grantor in writing within 30 days of its discovery of the occurrence of such an event. Such causes beyond Grantee's reasonable control or not reasonably foreseeable shall include, but shall not be limited to, Acts of God and civil emergencies.

(Ord. 2039-82 § 1)

§ 5.46.090 Operation and maintenance.

Open Books and Records. The Grantee shall maintain an office within the franchise territory, and manage all of its operations in accordance with a policy of totally open books and records. The Grantor shall have the right to inspect at any time during normal business hours, all books, records, maps, plans, income tax returns, financial statements, service complaint logs, performance test results and other like materials of the Grantee which relate to the operation of the franchise. Access to the aforementioned records shall not be denied by the Grantee on the basis that said records contain "proprietary" information.

Records Required. The Grantee shall at all times maintain within the franchise area, and retain throughout the term of the franchise:

A record of all complaints received and interruptions or degradation of service experienced for the preceding three years.

A full and complete set of plans, records and "as-built" maps showing the exact location of all Cable Communication System equipment installed or in use in the City, exclusive of subscriber service drops.

Filing. When not otherwise prescribed herein, all matters required to be filed with the City shall be filed with the City Clerk.

Other Records. The City may impose reasonable requests for additional information, records and documents from time to time.

Inspection of Property and Records. At all reasonable times, Grantee shall permit examination by any duly authorized representative of the Grantor, all franchise property, together with any appurtenant property of Grantee situated within or without the City. Grantee shall also permit any duly authorized representative of the Grantor to examine and transcribe any and all maps and other records kept or maintained by Grantee or under its control concerning the operations, affairs, transactions or property of Grantee. If any of such maps or records are not kept in the City, or upon reasonable request made available in the City, and if the Grand shall determine that an examination of such maps or records is necessary or appropriate to the performance of any of their duties, then all travel and maintenance expense necessarily incurred in making such examination shall be paid by Grantee.

Maintenance and Complaints.

The Grantee shall maintain an office in the franchise territory which shall be open during all usual business hours, have a publicly listed toll-free telephone, and be so operated to receive subscriber complaints and requests for repairs or adjustments on a 24-hour basis. A written log shall be maintained listing all complaints and their disposition, including the time taken to respond to the complaint and to repair the problem.

The Grantee shall render efficient service, make repairs promptly, and interrupt service only for good cause and for the shortest time possible. Such interruptions, insofar as possible, shall be preceded by notice and shall occur during period of minimum use of the system. A written log shall be maintained for all service interruptions.

The Grantee shall maintain a repair force of technicians capable of responding to subscriber complaints or requests for service within 24 hours after receipt of the complaint or request. No charge shall be made to the subscriber for this service.

The Grantee shall furnish each subscriber at the time service is installed, written instructions that clearly set forth procedures, furnish information concerning the procedures for making inquiries or complaints, including the name, address and local telephone number of the employee or employees or agent to whom such inquiries or complaints are to be addressed, and furnish information concerning the City office responsible for administration of the franchise with the address and telephone number of the office.

Rights of Individuals.

Grantee shall not deny service, deny access, or otherwise discriminate against subscribers, channel users, or general citizens on the basis of race, color, religion, national origin, age or sex. Grantee shall comply at all times with all other applicable Federal, State and local laws and regulations, and all executive and administrative orders relating to nondiscrimination which are hereby incorporated and made part of this ordinance by reference.

Grantee shall strictly adhere to the equal employment opportunity requirements of the FCC, state and local regulations, and as amended from time to time.

Neither the Grantee, nor any person, agency, or entity shall, without the subscriber's consent, tap, or arrange for the tapping, of any cable, line, signal input device, or subscriber outlet or receiver for any purpose except routine maintenance of the system, polling with audience participation, or audience viewing surveys to support advertising research regarding viewers where individual viewer behavior cannot be identified.

In the conduct of providing its services or pursuit of any collateral commercial enterprise resulting therefrom, Grantee shall take any and all necessary action to prevent an invasion of a subscriber's or general citizen's right to privacy or other personal rights as such rights are delimited and defined by applicable law. Grantee shall not without lawful court order or other applicable valid legal authority utilize the system's interactive two-way equipment or capability for unauthorized personal surveillance of any subscriber or general citizen.

No cable line, wire, amplifier, converter, or other piece of equipment owned by Grantee shall be installed by Grantee without first securing the written permission of the owner of any property involved; provided, however, that where the property owner has granted an easement or a servitude to another and the servitude by its terms contemplates uses such as Grantee's intended use, Grantee shall not be required to secure the written permission of the owner for the installation of cable television equipment or facilities unless Grantee elects to do so. If permission is later revoked, whether by the original or a subsequent owner, the Grantee shall remove forthwith any of its equipment which is visible and movable and promptly restore the property to its original condition.

The Grantee shall not sell or otherwise make available lists of the names and addresses of subscribers, or any list which identifies, by name, subscriber viewing habits, or personalized data pertaining to a subscriber's use of any of Grantee's services without the express consent of the subscriber to which the personalized data pertains. For purposes of this section, "personalized data" shall mean the name and/or addresses of an individual subscriber directly associated with data obtained on his or her use of specific services provided by or through the Grantee. Nothing herein shall be construed to prevent, as a normal incident of commercial enterprise, the sale or availability of "non-personalized" or "aggregated data" which is not personalized as defined herein.

Tenant Rights. Grantee shall be required to provide service to tenants in individual units of a multiple housing facility with all services offered to other dwelling units within the City, so long as the owner of the facility consents in writing, if requested by Grantee, to the following:

To Grantee's providing of the service to units of the facility;

To reasonable conditions and times for installation, maintenance, and inspection of the system on the facility premises;

To reasonable conditions promulgated by Grantee to protect Grantee's equipment and to encourage widespread use of the system; and

To not discriminate in rental charges, or otherwise, between tenants who receive cable service and those who do not.

§ 5.46.100 Design and construction provisions.

Grantee Rules and Regulations. The Grantee shall have the authority to promulgate such rules, regulations, terms and conditions governing the conduct of its business as shall be reasonably necessary to enable the Grantee to exercise its rights and perform its obligations under this franchise, and to assure an uninterrupted service to each and all of its customers. Provided, however, that such rules, regulations, terms and conditions shall not be in conflict with the provisions hereof or applicable State and Federal laws, rules and regulations. Such rules, regulations, terms and conditions shall be submitted to the Grantor for its review and Grantor approval is required prior to their becoming effective.

(Ord. 2039-82 § 1)

System Design. The Cable Communications System shall be constructed in accordance with the design requirements contained in the franchise agreement.

Geographical Coverage. The Grantee shall design and construct the System in such a manner as to have the capability to pass by every single-family dwelling unit, multiple-family dwelling unit, agency, and business establishment within the area of the franchise. Service shall be provided to subscribers in accordance with the schedules and line extension policies specified in the franchise agreement. Cable system construction and provision of service shall be non-discriminatory, and shall not delay or defer service to any section of the franchise area on the grounds of economic preference.

Cablecasting Facilities. The Grantee shall provide cablecasting facilities in accordance with the requirements of the franchise agreement.

System Construction Schedule.

The Grantee shall comply with the requirements of the system construction schedule contained in the franchise agreement.

Service need not be provided where power and telephone utilities are not available.

The Grantee shall provide a detailed construction plan indicating progress schedule, area construction maps, test plan, and projected dates for offering service. In addition, the Grantee shall update this information on a monthly basis, showing specifically whether schedules are being met and the reasons for any delay.

Failure to begin construction within one year after award of the franchise will be grounds for franchise revocation, at the option of the Grantor.

Penalties for Delay in Construction. The Grantor may at its sole option, apply any of the following in connection with delays in system construction:

Reduction in the duration of the franchise on a month-for-month basis for each month of delay exceeding six months.

Forfeiture of construction and performance bonds and/or assessment of a penalty not to exceed $5,000 per day, levied against the security fund for delays exceeding one year.

Termination of the franchise for delays exceeding 18 months. Any penalties applied shall be in accordance with the procedures contained in Section 5.46.080.

Provision of Service. After service has been established by activating trunk cables for any area, the Grantee shall provide service to any requesting subscriber within that area 30 days from the date of request.

Undergrounding of Cable. The undergrounding of cables is encouraged. In any event, cables shall be installed underground at Grantee's cost where existing utilities are already underground. Previously installed aerial cable shall be undergrounded in concert, and on a cost-sharing basis, with other utilities, when such other utilities may convert from aerial to underground construction. All undergrounding plans shall be subject to prior Grantor approval, and the issuance of permits, at designated permit fees.

New Development Undergrounding. In cases of new construction or property development where utilities are to be placed underground, the developer or property owner shall give Grantee reasonable notice of such construction or development, and of the particular date on which open trenching will be available for Grantee's installation of conduit, pedestals and/or vaults, and laterals to be provided at Grantee's expense. Grantee shall also provide specifications as needed for trenching.

Undergrounding at Multiple-Dwelling Units. In cases of multiple-dwelling units serviced by aerial utilities, Grantee shall make every effort to minimize the number of individual aerial drop cables, giving preference to undergrounding of multiple drop cables between the pole and the dwelling unit. The burden of proof shall be upon the Grantee to demonstrate why undergrounding of drop cables is technically or economically unfeasible.

Street Occupancy.

Grantee shall utilize existing poles, conduits and other facilities whenever possible, and shall not construct or install any new, different, or additional poles, conduits, or other facilities whether on public property or on privately-owned property until the written approval of the Grantor is obtained. However, no location of any pole or wire holding structure of the Grantee shall be a vested interest and such poles or structures shall be removed or modified by the Grantee at its own expense whenever the Grantor determines that the public convenience would be enhanced thereby.

Grantee shall notify the Grantor at least 10 days prior to the intention of the Grantee to commence any construction in any streets. The Grantor shall cooperate with the Grantee in granting any permits required, providing such grant and subsequent construction by the Grantee shall not unduly interfere with the use of such streets and that proposed construction shall be done in accordance with the pertinent provisions of the ordinances of the City.

All transmission lines, equipment and structures shall be so installed and located as to cause minimum interference with the rights and reasonable convenience of property owners and at all times, shall be kept and maintained in a safe, adequate and substantial condition, and in good order and repair. The Grantee shall, at all times, employ ordinary care and shall install and maintain in use commonly accepted methods and devices for preventing failures and accidents which are likely to cause damage, injuries, or nuisances to the public. Suitable barricades, flags, lights, flares or other devices shall be used at such times and places as are reasonably required for the safety of all members of the public. Any poles or other fixtures placed in any public way by the Grantee shall be placed in such a manner as not to interfere with the usual travel on such public way.

Grantee shall, at its own expense, and in a manner approved by the Grantor, restore to Grantor standards and specifications any damage or disturbance caused to the public way as a result of its operations or construction on its behalf.

Whenever, in case of fire or other disaster, it becomes necessary in the judgment of the Grantor to remove any of the Grantee's facilities, no charge shall be made by the Grantee against the Grantor for restoration and repair, unless such acts amount to gross negligence by the Grantor.

Grantee shall have the authority to trim trees on public property at its own expense as may be necessary to protect its wires and facilities, subject to the supervision and direction of the Grantor. Trimming of trees on private property shall require written consent of the property owner.

The Grantee at his expense shall protect, support, temporarily disconnect, relocate, or remove any property of Grantee when, in the opinion of the Grantor the same is required by reason of traffic conditions, public safety, street vacation, freeway or street construction, change or establishment of street grade, installation of sewers, drains, waterpipes, power line, signal line, transportation facilities, tracks, or any other types of structure or improvements by governmental agencies whether acting in a governmental or a proprietary capacity, or any other structure or public improvement, including but not limited to movement of buildings, urban renewal and redevelopment, and any general program under which the Grantor shall undertake to cause all such properties to be located beneath the surface of the ground. The Grantee shall in all cases have the privilege, subject to the corresponding obligations, to abandon any property of Grantee in place. Nothing hereunder shall be deemed a taking of the property of Grantee and Grantee shall be entitled to no surcharge by reason of anything hereunder.

(8)

Upon failure of Grantee to commence, pursue or complete any work required by law or by the provisions of this ordinance to be done in any street, within the time prescribed and to the satisfaction of the Grantor, the Grantor may, at its option, cause such work to be done and the Grantee shall pay to the Grantor the cost thereof in the itemized amounts reported by the Grantor to Grantee within 30 days after receipt of such itemized report.

(9)

The Grantee shall make no paving cuts or curb cuts unless absolutely necessary, but only after written permission has been given by the Grantor.

(10)

The Grantee shall install in conduit all cable passing under any major roadway.

Construction and Technical Standards.

Construction Standard.

Compliance with Safety Codes. All construction practices shall be in accordance with all applicable sections of the Occupational Safety and Health Act of 1970 and any amendments thereto as well as all State and local codes where applicable.

Compliance with Electrical Codes. All installation of electronic equipment shall be of a permanent nature, durable and installed in accordance with the provisions of the Basic BOCA Electrical Code as amended.

Antennas and Towers. Antenna supporting structures (towers) shall be designed for the proper loading as specified in Electronics Industry Association's R.S. - 222A Specifications.

Compliance with Aviation Requirements. Antenna supporting structures (tower) shall be painted, lighted, erected and maintained in accordance with all applicable rules and regulations of the Federal Aviation Administration and all other applicable state or local codes and regulations.

Construction Standards and Requirements. All of the Grantee's plant and equipment, including but not limited to the antenna site, head-end 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 experienced maintenance and construction personnel so as not to endanger or 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.

(F)

Safety, Nuisance Requirements. The Grantee 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.

Technical Standards. The Cable Communications System shall meet all technical and performance standards contained in the franchise agreement.

Test and Compliance Procedure. The Grantee shall submit, within 60 days after the effective date of the franchise agreement, a detailed test plan describing the methods and schedules for testing the Cable Communications System on an ongoing basis to determine compliance with the provisions of FCC technical standards and the franchise agreement. The tests for Basic Subscriber Television Services shall be performed periodically, at intervals no greater than annually, on a minimum of 20 subscriber television receivers, located throughout the service area. At least 8 of these locations shall be at the far end of the distribution trunk cables. The tests shall be witnessed by representatives of the Grantor, and written test reports shall be submitted to the Grantor. If more than 10% of the locations tested fail to meet the performance standards, the Grantee shall be required to indicate what corrective measures have been taken, and the entire test shall be repeated for at least 20 different locations. A second failure of more than 10% may result, at the Grantor's option, in penalties, including but not limited to an order to reduce subscriber rates due to degraded service in accordance with the provisions of Section 5.46.080.

Special Tests. At any time after commencement of service to subscribers the Grantor may require additional tests, full or partial repeat tests, different test procedures, or tests involving a specific subscriber's terminal. Requests for additional tests will be made on the basis of complaints received or other evidence indicating an unresolved controversy or significant noncompliance, and such tests will be limited to the particular matter in controversy. The Grantee shall endeavor to so arrange its requests for such special tests so as to minimize hardship or inconvenience to Grantee or to the subscriber.

(l)

Areawide Interconnection.

Interconnection Required. The Grantee shall interconnect origination and access channels of the Cable Communications System with any or all other cable systems in adjacent areas, upon the directive of the Grantor. Interconnection of systems shall permit interactive transmission and reception of program material, and may be done by direct cable connection, microwave link, satellite, or other appropriate method.

Interconnection Procedure. Upon receiving the directive of the Grantor to interconnect, the Grantee shall immediately initiate negotiations with the other affected system or systems. The cost shall be borne by both Grantees, in the proportion of number of channels received to total number of channels transmitted and received, under the assumption that benefits accrue primarily through receipt of additional channels.

In the case of regional or state-wide interconnection, the same principle shall apply.

Cooperation Required. The Grantee shall cooperate with any interconnection corporation, regional interconnection authority or city, county, state and federal regulatory agency which may be hereafter established for the purpose of regulating, financing, or otherwise providing for the interconnection of cable systems beyond the boundaries of the City.

Initial Technical Requirements to Assure Future Interconnection Capability.

All Cable Communications Systems receiving franchises to operate within the City shall use the same frequency allocations for designated television signals.

All Cable Communications Systems are required to use signal processors at the headend for each television signal.

Grantee(s) shall provide local origination equipment that is compatible through the area so that video-cassettes or video tapes can be shared by various systems.

(Ord. 2039-82 § 1)

§ 5.46.110 Service provisions.

Services to be Provided. The Grantee shall provide, as a minimum, the services listed in the franchise agreement. Services shall not be reduced or changed without prior approval of Grantor.

Basic Subscriber Television Service (BSTS). The "Basic Subscriber Television Service" shall include the FCC-required services, the distant television broadcast signals, the imported non-broadcast signals, and the provision of all other cablecast open-channel signals. This service shall be provided to all subscribers at the established BSTS monthly subscription rates. BSTS may be provided in various service tiers or configurations subject to Grantor approval.

Basic Subscriber Radio Service (BSRS). The "Basic Subscriber Radio Service" shall include the provision of all audio services designated in the franchise agreement, including broadcast FM and AM radio, and cablecast FM signals. This service shall be provided to all subscribers at the established BSRS monthly subscription rates.

Institutional Service (IS). The "Institutional Service" if provided by the franchise agreement: shall include the provision of transmission and/or reception services to institutional users, on a lease channel basis at established IS rates. Services may include the distribution of video or non-video signals.

Additional Subscriber Services. "Additional Subscriber Services," not included in the BSTS and BSRS services specified above, including but not limited to two-way and interactive residential services, may be provided as specified in the franchise agreement.

Local Origination Channel. The Grantee shall operate and/or fund all cablecasting studios as specified in the franchise agreement on a high-quality, professional basis for the purpose of providing cable cast programming responsive to local needs and interests. The emphasis for the Local Origination Channel, if provided by the franchise agreement, shall be on providing programming that is unavailable to viewers on broadcast television channels and other national program services.

Government Access Channel. The Grantee shall provide the number of channels specified in the franchise agreement, including all necessary interface equipment and cabling to permit operation, for the use of the Grantor at no charge to the Grantor. The Grantee shall make every effort to provide advice and technical expertise to aid in the utilization of these channels.

Educational Access Channel. The Grantee shall provide the number of channels specified in the franchise agreement including all necessary interface equipment and cabling to permit operation, for the use of the local educational institutions at no charge. The Grantee shall make every effort to provide advice and technical expertise to aid in the utilization of these channels.

Public Access Channel. The Grantee shall provide the number of channels specified in the franchise agreement including all necessary interface equipment and cabling to permit operation, to be available to the public at no charge. The Public Access channel(s) shall be managed and operated by the Access Channel Manager, as described in Section 5.46.050. The Grantee shall make available for programmers of the public access channel the facilities and support listed in the franchise agreement.

Public Access Channel (Closed-Circuit). If the Cable Communications System includes a closed-circuit institutional network, the Grantee shall make at least three two-way channels available for local government, educational and public use at no charge. The Public Access two-way channel shall be managed and operated by the Access Channel Manager.

§ 5.46.120 Rights reserved to the grantor.

Leased Access Channel. Grantee shall make available for lease, on a nondiscriminatory basis, the number of channels specified in the franchise agreement. Grantee shall not use its franchise position to deny leased access to others who may wish to offer a nonentertainment service competitive to a service provided by Grantee. All leased channel service revenues at the subscriber level shall be included in gross revenues subject to the franchise fee. Such revenues shall include monthly or per-use fees charged to users of services by lessees, but shall not include direct revenues generated by the sale of specific products offered by these services.

(l)

Universal Connection. The Grantor may require that all dwelling units within the City shall be connected physically to the cable system by the Grantee by means of drop cables terminating at each dwelling unit, whether or not the dwelling unit occupants desire to subscribe to cable service. The cost and charges shall be determined by the Grantor at the time such connection is required. Grantee shall be entitled to recover the incremental cost of providing a universal connection.

(Ord. 2039-82 § 1)

Right to Purchase the System. The Grantor may in any lawful manner and upon the payment of a fair valuation lawfully ascertain, purchase, condemn, acquire, take over and hold the property and plant of the Grantee in whole or in part. If such purchase or taking over be upon revocation of the franchise or at the expiration of the term of the franchise, such valuation shall not include any sum for the value of the franchise or grant under which such plant and property is being operated.

Right of Inspection of Records. There shall be kept in the Grantor's office a separate record for the franchise, which record shall show the things hereafter set forth. The Grantee shall provide such information in such form as may be required by the Grantor for said records.

The true and entire cost of construction of equipment, of maintenance and of the administration and operation thereof; the amount of stock issued, if any; the amount of cash paid in, the number of par value of shares, the amount and character of indebtedness, if any; the rate of taxes, the dividends declared; the character and amount of all fixed charges; the allowance, if any, for interest, for wear and tear or depreciation; all amounts and sources of income.

The amount, if any, collected annually from the City treasury for any use of the cable system for which a charge was levied, and the character and extent of the service rendered therefor to the City.

The amount collected annually from other users of service and the character and extent of the service rendered therefor to them.

The books of records kept by the Grantor shall be open to public examination at any time during the business hours of the Grantor's office. The information, in addition to any further data which may be required by the Grantor, shall be furnished by the Grantee to the Grantor upon request, and at the Grantee's own cost and expense.

The Grantor shall have the right to inspect all books, records, maps, plans, income tax returns, financial statements, and other like material of the Grantee at any time during normal business hours.

Right of Inspection of Construction. The Grantor shall have the right to inspect all construction or installation work performed subject to the provisions of the franchise and to make such tests as it shall find necessary to ensure compliance with the terms of this franchise and other pertinent provisions of law.

Right of Intervention. The Grantor shall have the right of intervention in any suit or proceeding to which the Grantee is party, and the Grantee shall not oppose such intervention by the Grantor.

§ 5.46.130 Rights reserved to the grantee.

Right to Require Removal of Property. At the expiration of the term for which the franchise is granted, or upon its revocation or expiration, as provided for herein, the Grantor shall have the right to require the Grantee to remove, at its own expense, all portions of the Cable Communications System from all streets and public ways within the City.

(Ord. 2039-82 § 1)

Right of Grantee. Should the Grantee become dissatisfied with any material decision or ruling of the Grantor pertaining to cable communications matters, the Grantee may pursue such other remedies as are available, including the bringing of action in any court of competent jurisdiction.

(Ord. 2039-82 § 1)

§ 5.46.140 Miscellaneous provisions.

Compliance with State and Federal Laws. Notwithstanding any other provisions of this franchise to the contrary, the Grantee shall at all times comply with all laws and regulations of the state and federal government or any administrative agencies thereof. Provided, however, if any such State or Federal law or regulation shall require the Grantee to perform any service, or shall permit the Grantee to perform any service, or shall prohibit the Grantee from performing any service, in conflict with the terms of this ordinance or of any law or regulation of the Grantor, then as soon as possible following knowledge thereof, the Grantee shall notify the Grantor of the point of conflict believed to exist between such regulation or law and the laws or regulations of the Grantor or this ordinance, and the Grantee shall be excused from performance hereunder, provided that it acts in good faith reliance thereon, pending resolution of such conflict.

Separability—Non-Material Provisions. If any provision of this ordinance or any related agreements is held by any court or by any Federal, State, or County agency of competent jurisdiction to be invalid as conflicting with any Federal, State, or County law, rule or regulation now or hereafter in effect, or is held by such court or agency to be modified in any way in order to conform to the requirements of any such law, rule or regulation, and if said provision is considered non-material by the Grantor, said provision shall be considered a separate, distinct and independent part of this ordinance, and such holding shall not affect the validity and enforceability of all other provisions hereof. In the event that such law, rule or regulation is subsequently repealed, rescinded, amended or otherwise changed, so that the provision hereof or thereof which had been held invalid or modified is no longer in conflict with the law, rules and regulations then in effect, said provision shall thereupon return to full force and effect and shall thereafter be binding on the Parties hereto, provided that the Grantor shall give the Grantee 30 days' written notice of such change before requiring compliance with said provision.

Separability—Material Provisions. If any material section of this ordinance, as determined by the Grantor, is held to be invalid or preempted by Federal or State regulations or laws, the Grantor shall negotiate with Grantee appropriate modifications to the franchise to provide reasonable relief from such invalidity or preemption, including the payment of liquidated damages. If the parties are unable to reach agreement on such modifications, then the dispute will be submitted to a mutually agreeable arbitrator, in accordance with state law, who will determine what modifications and/or liquidated damages are appropriate. The arbitrator's decision shall be binding on the parties, provided, that no decision of the arbitrator shall require the Grantor or Grantee to be in violation of any Federal or State law or regulation.

Notices. All notices from Grantee to the Grantor pursuant to this franchise shall be to the City Clerk. Grantee shall maintain with the Grantor, throughout the term of the franchise, an address for service of notices by mail. Grantee shall also maintain within the franchise territory, a local office and telephone number for the conduct of matters related to this franchise during normal business hours.

Public Notice. Minimum public notice of any public meeting relating to the franchise shall be by publication at least once in a newspaper of general circulation in the area at least 10 days prior to the meeting, posting at City Hall, by announcement on at least two channels of the Grantee's Cable Communications System between the hours of 7:00 p.m. and 9:00 p.m., for five consecutive days prior to the meeting.

Captions. The captions to sections throughout this proposal are intended solely to facilitate reading and reference to the sections and provisions of this proposal. Such captions shall not affect the meaning or interpretation of this proposal.

No Recourse Against the Grantor. The Grantee shall have no recourse whatsoever against the Grantor or its officials, boards, commissions, agents, or employees for any loss, costs, expense, or damage arising out of any provision or requirement of the franchise or because of the enforcement of the franchise.

Nonenforcement by the Grantor. The Grantee shall not be relieved of its obligation to comply with any of the provisions of this permit by reason of any failure of the Grantor to enforce prompt compliance.

Theft of Services and Tampering.

No person, whether or not a subscriber to the cable system may intentionally or knowingly damage or cause to be damaged any wire, cable, conduit, equipment or apparatus of Grantee, or commit any act with intent to cause such damage, or to tap, tamper with or otherwise connect any wire or device to a wire, cable, conduit, equipment and apparatus, or appurtenances of Grantee with the intent to obtain a signal or impulse from the cable system without authorization from or compensation to the Grantee, or to obtain cable television or other communications service with intent to cheat or defraud Grantee of any lawful charge to which it is entitled.

Any person convicted of violating any provision of this section is subject to a fine of not more than five hundred dollars for each offense. Each day's violation of this section shall be considered a separate offense.

(Ord. 2039-82 § 1)

§ 5.46.150 Franchise applications.

Franchise Application and Selection. The criteria which shall be used in selecting a Grantee shall be those set forth in Section 53066 of the California Government Code, together with specific standards for meeting those criteria which are promulgated by the Grantor. Applicants for a franchise shall submit to the Grantor written applications utilizing the standardized format provided by the Grantor, at the time and place designated by the Grantor for accepting applications, and including the designated application fee.