Township of Horsham, PA Cable Television

CABLE SERVICE or CABLE SERVICES

Editor's Note: This ordinance also superseded former Ch. 86, Cable Television, adopted 9-23-2019 by Ord. No. 2019-06.

§ 86-1 Definitions.

Except as otherwise provided herein, the definitions and word usages set forth in the Communications Act (as hereinafter defined) are incorporated herein and shall apply in this agreement. In addition, the following definitions shall apply:

ACCESS CHANNEL

A video channel that franchisee shall make available to the Township without charge for educational or governmental use for the transmission of video programming as directed by Township.

AFFILIATE

Any person who, directly or indirectly, owns or controls, is owned or controlled by, or is under common ownership or control with, the franchisee.

BASIC SERVICE

Any service tier that includes the retransmission of local television broadcast signals as well as the EG channel(s) required by this franchise.

Shall be defined herein as it is defined under Section 602 of the Communications Act, 47 U.S.C. § 522(6), as may be amended, which currently states: "the one-way transmission to subscribers of video programming or other programming service, and subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service."

CABLE SYSTEM or SYSTEM

Shall be defined herein as it is defined under Section 602 of the Communications Act, 47 U.S.C. § 522(7), as may be amended, which currently states "a facility, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide cable service which includes video programming and which is provided to multiple subscribers within a community, but such term does not include (A) a facility that serves only to retransmit the television signals of 1 or more television broadcast stations; (B) a facility that serves subscribers without using any public right-of-way; (C) a facility of a common carrier which is subject, in whole or in part, to the provisions of [Title II of this Act], except that such facility shall be considered a cable system (other than for purposes of section 621(c) to the extent such facility is used in the transmission of video programming directly to subscribers, unless the extent of such use is solely to provide interactive on-demand services; (D) an open video system that complies with section 653 of this title; or (E) any facilities of any electric utility used solely for operating its electric utility system." The cable system shall be limited to the optical spectrum wavelength(s), bandwidth, or future technological capacity that is used for the transmission of cable services directly to subscribers within the Township and shall not include the tangible network facilities of a common carrier subject in whole or in part to Title II of the Communications Act or of an information services provider.

CHANNEL

Shall be defined herein as it is defined under Section 602 of the Communications Act, 47 U.S.C. § 522(4), as may be amended, which currently states "a portion of the electromagnetic frequency spectrum which is used in a cable system and which is capable of delivering a television channel (as television channel is defined by the FCC by regulation)."

COMMUNICATIONS ACT

The Communications Act of 1934, as amended.

COMPLAINT

Any written communication, including electronic mail, by a subscriber expressing dissatisfaction with any aspect of franchisee's cable system or cable operations.

CONTROL

The ability to exercise de facto or de jure control over day-to-day policies and operations or the management of the franchisee's affairs.

CUSTOMER SERVICE STANDARDS

The standards for customer service as set forth in Exhibit B.[1]

EDUCATIONAL ACCESS CHANNEL

An access channel available for the use of the local schools in the Township.

Educational or governmental.

FCC

The United States Federal Communications Commission, or successor governmental entity thereto.

FIBER TO THE PREMISE TELECOMMUNICATIONS NETWORK ("FTTP NETWORK")

The franchisee's network that transmits noncable services pursuant to the authority granted under the laws of the Commonwealth of Pennsylvania and under Title II of the Communications Act, which noncable services are not subject to Title VI of the Communications Act, and provides cable services from the operation of a cable system.

FORCE MAJEURE

An event or events reasonably beyond the ability of the franchisee to anticipate and control. This includes, but is not limited to, the following: severe or unusual weather conditions, labor strikes, slowdowns, stoppages, and lockouts, war or act of war (whether an actual declaration of war is made or not), insurrection, riots, act of public enemy, including terrorist attacks, orders of the government of the United States or the Commonwealth of Pennsylvania, actions or inactions of any government instrumentality or public utility other than franchisee (including condemnation to the extent not foreseeable), accidents for which the franchisee is not responsible, fire, flood, or other acts of God, or work delays caused by waiting for utility providers to service or monitor utility poles to which the franchisee's FTTP network is attached, and unavailability of materials and/or qualified labor to perform the work necessary to the extent that such unavailability of materials and/or qualified labor was reasonably beyond the ability of the franchisee to foresee or control.

FRANCHISEE

Verizon Pennsylvania LLC, and its lawful and permitted successors, assigns, and transferees.

GOVERNMENT ACCESS CHANNEL

An access channel available for the use of the Township for governmental purposes.

GROSS REVENUE

All revenue, as determined in accordance with generally accepted accounting principles, which is derived by the franchisee or its affiliates, from the operation of the cable system to provide cable service in the Township, including, but not limited to:

Basic service fees;

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

Fees charged to subscribers for premium cable services;

Fees for video-on-demand and pay-per-view;

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

(6)

Revenue from the provision of any other cable services;

(7)

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

(8)

Fees for changing any level of cable service programming;

(9)

Fees for service calls;

(10)

Early termination fees (solely to the extent such early termination fee can be proportionately attributable to cable service);

(11)

Fees for leasing of channels;

(12)

Rental of any and all subscriber equipment, including digital video recorders, converters and remote control devices;

(13)

Advertising revenues (on a pro rata basis) as set forth herein;

(14)

Revenue from the sale or rental of subscriber lists;

(15)

Revenues or commissions received from the carriage of home shopping channels (on a pro rata basis as set forth herein) subject to Subsection C(5) below;

(16)

Fees for music services that are cable services over the cable system;

(17)

Fees for DVR;

(18)

Regional sports programming fees;

(19)

Late payment fees;

(20)

NSF check charges;

(21)

Franchise fees for the provision of cable services over the cable system in the Township; and

(22)

Foregone revenue that the franchisee chooses not to receive in exchange for trades, barters, services, or other items of value consistent with Subsection C(8) below.

For the avoidance of doubt, advertising revenues shall include the amount of the franchisee's gross advertising revenue calculated in accordance with generally accepted accounting principles (i.e., without deducting commissions paid to independent third parties). Advertising and home shopping revenue, as described in Subsections A(13) and A(15) above, is based upon the ratio of the number of subscribers as of the last day of the period for which gross revenue is being calculated to the number of the franchisee's subscribers within all areas covered by the particular revenue source as of the last day of such period. By way of illustrative example, the franchisee sells two ads: Ad "A" is broadcast nationwide; Ad "B" is broadcast only within Pennsylvania. The franchisee has 100 subscribers in the Township, 500 subscribers in Pennsylvania, and 1,000 subscribers nationwide. Gross revenue as to the Township from Ad "A" is 10% of the franchisee's revenue therefrom. Gross revenue as to the Township from Ad "B" is 20% of the franchisee's revenue.

Gross revenue shall not include:

Revenues received by any affiliate or other person in exchange for supplying goods or services used by the franchisee to provide cable service over the cable system;

Bad debts written off by the franchisee in the normal course of its business; provided, however, that bad debt recoveries shall be included in gross revenue during the period collected;

Refunds, rebates, or discounts made to subscribers or other third parties;

Any revenues classified, in whole or in part, as noncable services revenue under federal or state law including, without limitation, revenue received from telecommunications services; revenue received from information services, including, without limitation, internet access service, electronic mail service, internet-derived electronic bulletin board service, or similar online computer services; charges made to the public for commercial or cable television that is used for two-way communication that are classified as noncable services; and any other revenues classified as noncable services in accordance with applicable laws or regulations;

NORMAL OPERATING CONDITIONS

Any revenue of the franchisee or any other person that is received directly from the sale of merchandise through any cable service distributed over the cable system, notwithstanding that portion of such revenue which represents or can be attributed to a subscriber fee or a payment for the use of the cable system for the sale of such merchandise, which portion shall be included in gross revenue;

(6)

The sale of cable services on the cable system for resale in which the purchaser is required to collect cable franchise fees from purchaser's customer;

(7)

Any tax of general applicability imposed upon the franchisee or upon subscribers by a local, state, federal, or any other governmental entity and required to be collected by the franchisee and remitted to the taxing entity (including, but not limited to, sales/use tax, gross receipts tax, excise tax, utility users tax, public service tax, communication taxes, and noncable franchise fees);

(8)

Any forgone revenue that the franchisee chooses not to receive in exchange for its provision of free or reduced cost cable or other communications services to any person, including, without limitation, employees of the franchisee and public institutions or other institutions designated in the franchise; provided, however, that such forgone revenue that the franchisee chooses not to receive in exchange for trades, barters, services, or other items of value shall be included in gross revenue;

(9)

Sales of capital assets or sales of surplus equipment that are not deemed to be a cable service;

(10)

Program launch fees;

(11)

Directory or internet advertising revenue including, but not limited to, yellow page, white page, banner advertisement, and electronic publishing; and

(12)

Any fees or charges collected from subscribers or other third parties for any EG grant.

INFORMATION SERVICES

Shall be defined herein as it is defined under Section 3 of the Communications Act, 47 U.S.C. § 153(24), as may be amended in the future, which states "the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing, but does not include any use of any such capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service."

INTERNET ACCESS

Dial-up or broadband access service that enables subscribers to access the internet.

NONCABLE SERVICES

Any service that is not a cable service as defined herein, including, but not limited to, information services and telecommunications services.

Those service conditions that are within the control of the franchisee. Those conditions that are not within the control of the franchisee include, but are not limited to, natural disasters, civil disturbances, power outages, telephone network outages, and severe or unusual weather conditions. Those conditions that are ordinarily within the control of the franchisee include, but are not limited to, special promotions, pay-per-view events, rate increases, regular peak or seasonal demand periods, and maintenance or rebuild of the cable system. See 47 CFR 76.309(c)(4)(ii).

PERSON

An individual, partnership, association, joint stock company, trust, corporation, or governmental entity.

PUBLIC RIGHTS-OF-WAY

The surface and the area across, in, over, along, upon, and below the surface of the public streets, roads, bridges, sidewalks, lanes, courts, ways, alleys, and boulevards, including public utility easements and public lands and waterways used as public rights-of-way, as the same now or may thereafter exist, which are under the jurisdiction or control of the Township. Public rights-of-way do not include the airwaves above a right-of-way with regard to cellular or other nonwire communications or broadcast services.

SERVICE AREA

All portions of the Township where cable service is being offered.

SERVICE INTERRUPTION

The loss of picture or sound on one or more cable channels.

SUBSCRIBER

A person who lawfully receives cable service over the cable system with the franchisee's express permission.

TELECOMMUNICATION SERVICES

Shall be defined herein as it is defined under Section 3 of the Communications Act, 47 U.S.C. § 153(53), as may be amended in the future, which states "the offering of telecommunications for a fee directly to the public, or such classes of users as to be effectively available directly to the public, regardless of the facilities used."

TELECOMMUNICATIONS FACILITIES

Franchisee's existing telecommunications services and information services facilities and its FTTP network facilities.

TITLE II

Title II of the Communications Act, Common Carriers, as amended, which governs the provision of telecommunications services.

TITLE VI

Title VI of the Communications Act, cable Communications, as amended, which governs the provision of cable services by franchisee.

TOWNSHIP

The incorporated area (entire existing territorial limits) of the Township and such additional areas as may be included in the corporate (territorial) limits of the Township during the term of this franchise.

TRANSFER OF THE FRANCHISE

Any transaction in which:

The right, title, control or other interest in the franchisee is transferred, directly or indirectly, from one person or group of persons to another person or group of persons, so that control of the franchisee is transferred; or

At least 30% of the equitable ownership of the franchisee is transferred or assigned; or

VIDEO SERVICE PROVIDER or VSP

The rights held by the franchisee pursuant to this agreement are transferred or assigned to another person or group of persons.

However, notwithstanding Subsection A(1), (2), and (3), a transfer of the franchise shall not include transfer of an ownership or other interest in the franchisee to the parent of the franchisee or to another affiliate of the franchisee; transfer of an interest in the franchise or the rights held by the franchisee under the franchise to the parent of the franchisee or to another affiliate of the franchisee; any action that is the result of a merger of the parent of the franchisee; or any action that is the result of a merger of another affiliate of the franchisee.

VIDEO PROGRAMMING

Shall be defined herein as it is defined under Section 602 of the Communications Act, 47 U.S.C. § 522(20), which currently states "programming provided by, or generally considered comparable to programming provided by, a television broadcast station."

Any entity using wired facilities occupying a substantial portion of the public rights-of-way as the primary means of delivery to provide video programming services to multiple subscribers within the territorial boundaries of the Township, for purchase, barter, or free of charge, regardless of the transmission method, facilities or technologies used. A VSP shall include, but is not limited to, any entity that provides cable services, video programming services or internet-protocol-based services within the territorial boundaries of the Township.

Editor's Note: Said exhibit is included as an attachment to this chapter.

§ 86-2 Grant of authority; limits and reservations.

Grant of authority. Subject to the terms and conditions of this agreement and applicable laws and regulations, the Township hereby grants to the franchisee the right to own, construct, operate, and maintain a cable system to provide cable services along the public rights-of-way within the Township. No privilege or power of eminent domain is bestowed or waived by this grant. Furthermore, consistent with Subsection B below, the Township's grant of authority to provide cable services pursuant to this franchise does not include the authority to provide any noncable services.

Township's regulatory authority. The parties recognize that the franchisee's FTTP network has been constructed and is operated and maintained as an upgrade to and/or extension of its existing telecommunications Facilities for the provision of noncable services. The jurisdiction of the Township over the franchisee's telecommunications Facilities is governed by federal and state law, and the Township will not assert jurisdiction over the franchisee's FTTP network in contravention of those laws. Therefore, as provided in Section 621 of the Communications Act, 47 U.S.C. § 541, the Township's regulatory authority under Title VI of the Communications Act is not applicable to the construction, installation, maintenance, or operation of the franchisee's FTTP network to the extent the FTTP network is constructed, installed, maintained, or operated for the purpose of upgrading and/or extending Verizon's existing telecommunications Facilities for the provision of noncable services. This agreement shall not be construed to limit whatever existing regulatory authority the Township may have under federal and state law with respect to the FTTP network facilities.

Term. This franchise shall become effective on March 10, 2023 (the "effective date"). The term of this franchise shall be five years from the effective date until March 9, 2028, unless the franchise is earlier terminated by franchisee pursuant to the terms of § 86-2D or E of this agreement or revoked by the Township pursuant to § 86-12D of this agreement.

Termination generally. If, at any time during the renewal term, franchisee experiences a net decline of 6% or greater of its subscribers in the franchise area in any prior twelve-month period (for purposes of clarification, any such twelve-month evaluation period shall not commence prior to the effective date), franchisee shall thereafter have the right to terminate the franchise upon 12 months' written notice to the Township.

Modification/termination based on VSP requirements/competitive equity:

If there is a change in federal, state, or local law that reduces any material financial and/or operational obligation that the Township has required from or imposed upon a VSP, or if the Township enters into any franchise, agreement, license, or grant of authorization to a VSP to provide video programming services to residential subscribers in the Township and the agreement, license or grant of authorization, taken as a whole upon consideration of all of its material obligations, is less burdensome than those imposed by this franchise, franchisee and the Township shall, within 60 days of the Township's receipt of franchisee's written notice, commence negotiations to modify this franchise to create reasonable competitive equity between franchisee and such other VSPs.

Franchisee's notice pursuant to Subsection E(1) shall specify the change in law and the resulting change in obligations. Franchisee shall respond to reasonable information requests from the Township, as may be necessary to review the change in obligations resulting from the cited law.

Grant not exclusive. The franchise and the rights granted herein to use and occupy the public rights-of-way to provide cable services shall not be exclusive, and the Township reserves the right to grant other franchises for similar uses or for other uses of the public rights-of-way, or any portions thereof, to any person, or to make any such use itself, at any time during the term of this franchise. Any such rights that are granted shall not materially interfere with existing facilities of the cable system or the franchisee's FTTP network.

Franchise Subject to Federal, State, and Local law. Notwithstanding any provision to the contrary herein, this franchise is subject to and shall be governed by all applicable provisions of federal, state, and local laws and regulations.

No waiver:

The failure of the Township on one or more occasions to exercise a right or to require compliance or performance under this franchise, the Communications Act, or any other applicable state or federal law shall not be deemed to constitute a waiver of such right or a waiver of compliance or performance by the Township, nor to excuse the franchisee from complying or performing, unless such right or such compliance or performance has been specifically waived in writing.

The failure of the franchisee on one or more occasions to exercise a right under this franchise or applicable law, or to require performance under this franchise, shall not be deemed to constitute a waiver of such right or of performance of this agreement, nor shall it excuse the Township from performance, unless such right or performance has been specifically waived in writing.

Construction of agreement:

The provisions of this franchise shall be liberally construed to effectuate their objectives.

Nothing herein shall be construed to limit the scope or applicability of Section 625 Communications Act, 47 U.S.C. § 545.

Should any change to federal or state law have the lawful effect of materially altering the terms and conditions of this agreement making it commercially impracticable for franchisee to continue the provision of cable services in the Township, then the parties shall modify this franchise to the mutual satisfaction of both parties to ameliorate the negative effects on the franchisee and the Township of the material alteration. Any modification to this franchise shall be in writing and signed by both parties. If the parties cannot reach agreement on the above-referenced modification to the franchise, then upon either party's initiative, the parties agree to submit the matter to binding arbitration in accordance with the commercial arbitration rules of the American Arbitration Association.

Police powers. Nothing in this franchise shall be construed to prohibit the reasonable, necessary, and lawful exercise of the police powers of the Township. The Township shall not subject the franchisee to any ordinances or regulations that are that are in conflict with this franchise.

Compliance with federal and state privacy laws. Franchisee shall comply with the privacy provisions of Section 631 of the Communications Act, 47 U.S.C. § 551, and all other applicable federal and state privacy laws and regulations. The parties agree that, during the term hereof, franchisee shall not be subject to any local laws or ordinances which, directly or indirectly, conflict with or exceed the scope of such applicable federal and/or state privacy laws.

Permits. Nothing herein shall be construed to limit the Township's lawful authority to require permits and applicable fees for certain activities in the public rights-of-way; provided, however, that the franchisee shall not be required to obtain permits for cable service drops for individual subscribers.

§ 86-3 Provision of cable service.

Service area:

Service area. Subject to the issuance of all necessary permits by the Township, the franchisee shall offer cable service to all residential households in the service area and may make cable service available to businesses in the service area, except:

For periods of Force Majeure;

For periods of unreasonable delay caused by the Township;

(c)

For periods of delay resulting from the franchisee's inability to obtain authority to access rights-of-way in the service area;

(d)

In areas where developments, buildings or other residential dwelling units are subject to claimed exclusive arrangements with other providers;

(e)

In areas, developments, buildings or other residential dwelling units where the franchisee cannot gain access under reasonable terms and conditions after good faith negotiation, as reasonably determined by the franchisee;

(f)

In areas, developments, buildings or other residential dwelling units where the franchisee is unable to provide cable service for technical reasons or which require nonstandard facilities which are not available on a commercially reasonable basis, including, but not limited to, circumstances where the franchisee cannot access the areas, developments, buildings or other residential dwelling units by using the franchisee's existing network pathways and which would thus require the construction of new trunk, feeder, or distribution lines;

(g)

In areas where the occupied residential household density does not meet the density requirements set forth in Subsection A(2); and

(h)

In areas, developments, buildings or other residential dwelling units that are not habitable or have not been constructed as of the effective date.

Density requirement. Subject to Subsection A(1) above, the franchisee shall make cable services available to residential dwelling units in all areas of the Township where the minimum density is 30 occupied residential dwelling units per mile as measured in strand footage from the nearest technically feasible point on the active FTTP network trunk or feeder line.

Availability of cable service. Franchisee shall make cable service available to all residential dwelling units and may make cable service available to businesses within the service area in conformance with Subsection A, the franchisee shall not discriminate between or among any individuals in the availability of cable service. In the areas in which the franchisee shall provide cable service, the franchisee shall be required to connect, at the franchisee's expense, other than a standard installation charge, all residential dwelling units that are within 200 feet of trunk or feeder lines not otherwise already served by the franchisee's FTTP network. The franchisee shall be allowed to recover, from a subscriber that requests such connection, no more than the actual costs incurred in excess of 200 feet for residential dwelling unit connections that exceed 200 feet and actual costs incurred to connect any nonresidential dwelling unit subscriber.

Cable service to public buildings. If there is final determination or ruling of any agency or court having jurisdiction, after exhaustion of all appeals related thereto, that the provision of free or discounted cable service to public buildings pursuant to a cable franchise should no longer be included in the calculation of franchise fees subject to the 5% statutory cap under the Communications Act, then, subject to Subsection A if requested by the Township pursuant to written notice to franchisee, Verizon shall provide, without charge, one service outlet activated for basic service to the following:

Each current municipal building, fire station, and public library as may be designated by the Township in Exhibit A[1]; provided, however, that if it is necessary to extend franchisee's trunk or feeder lines more than 200 feet solely to provide service to any such public building, the Township shall have the option either of paying franchisee's direct costs for such extension in excess of 200 feet, or of releasing franchisee from the obligation to provide service to such public building. Furthermore, franchisee shall be permitted to recover, from any public building owner entitled to free service, the direct cost of installing, when requested to do so, more than one outlet, or concealed inside wiring, or a service outlet requiring more than 200 feet of drop cable; provided, however, that franchisee shall not charge for the provision of basic service to the additional service outlets once installed.

Editor's Note: Said exhibit is included as an attachment to this chapter.

Each public K-12 school, and each nonpublic K-12 school that a) receives funding pursuant to Title I of the Elementary and Secondary Education Act of 1965, 20 U.S.C. § 6301 et seq. and b) is considered a nonpublic, nonlicensed school under the Pennsylvania Private Academic Schools Act, 24 P.S. §§ 6702 through 6721, located in the Township, as may be designated by the Township in Exhibit A; provided, however, that franchisee shall not be obligated to provide any service outlets activated for basic service to home schools; also provided, however, that if it is necessary to extend franchisee's trunk or feeder lines more than 200 feet solely to provide service to any such school building, the Township shall have the option either of paying franchisee's direct costs for such extension in excess of 200 feet, or of releasing franchisee from the obligation to provide service to such school building. Furthermore, franchisee shall be permitted to recover, from any school building owner entitled to free service, the direct cost of installing, when requested to do so, more than one outlet, or concealed inside wiring, or a service outlet requiring more than 200 feet of drop cable; provided, however, that franchisee shall not charge for the provision of basic service to the additional service outlets once installed.

§ 86-4 System facilities.

Technical requirement. The cable system shall meet or exceed any and all applicable technical performance standards of the FCC, the National Electrical Safety Code, the National Electric Code and any other applicable federal laws and the laws of the Commonwealth of Pennsylvania, to the extent not in conflict with federal law and regulations.

System characteristics. The franchisee's cable system shall meet or exceed the following requirements:

The cable system shall be operated with operated with an initial digital carrier passband between 57 MHz and 861 MHz.

The cable system shall be operated as an active two-way system that allocates sufficient portion of said bandwidth to deliver reliable two-way cable services.

The cable system must conform to all applicable FCC technical performance standards, as amended from time to time, and any other future applicable technical performance standards, and shall comply with all technical standards of the following:

National Electrical Code (NEC);

National Electrical Safety Code (NESC).

Interconnection. The franchisee shall operate its cable system so that it may be interconnected with other cable systems in the Township. Interconnection of systems may be made by direct cable connection, microwave link, satellite, or other appropriate methods.

No interference. The cable system shall be operated in such a manner as to comply with all applicable FCC requirements regarding i) consumer electronic equipment and ii) interference with the reception of off-the-air signals of licensed FCC operators.

Standby power. The system shall incorporate equipment capable of providing standby powering of the system.

Emergency alert system. The franchisee shall comply with the applicable requirements of the FCC with respect to the operation of an Emergency Alert System ("EAS") requirements of the FCC and applicable state and local EAS plans in order that emergency messages may be distributed over the cable system.

§ 86-5 EG services.

EG set aside; interconnection:

In order to ensure universal availability of educational and government access programming, franchisee shall reserve on the basic service tier capacity for the use of one dedicated educational access channel and one dedicated government access channel (collectively, "EG channels") for exclusive use by the Township or its designee. The Township will comply with all laws and regulations related to use of the EG channels. The parties agree that franchisee shall retain the right to utilize all such reserved EG channel capacity, in its sole discretion, during the term of this franchise until such time as the Township begins using the EG channel pursuant to Subsection A(2) for educational and/or governmental purposes and/or if the Township ceases to use the access channel(s) during the term of this agreement.

The Township reserves the right to obtain from the franchisee, upon 120 days' written notice, one EG channel for exclusive use by the Township. Such notification shall constitute authorization to the franchisee to transmit such programming within and without the Township. The franchisee shall assign the EG channel number to the extent such channel number assignments do not interfere with the franchisee's existing or planned channel number lineup and contractual obligations, provided it is understood that the franchisee specifically reserves the right to make such assignments in its sole discretion. The EG channel shall be used for community programming related to educational and/or governmental activities. The Township shall have complete control over the content, scheduling, and administration of the EG channel and may delegate such functions, or a portion of such functions, to an appropriate designee. The franchisee shall not exercise any editorial control over EG channel programming. If an EG channel provided under this chapter is not being utilized by the Township, the franchisee may utilize such EG channel, in its sole discretion, after receiving written approval by the Township until such time as the Township elects to utilize the EG channel for its intended purpose. In the event that the Township decides to exercise its right to use EG capacity, the Township shall provide the franchisee with 90 days' prior written notice of such request.

The Township shall comply with the law regarding the noncommercial use of EG channels.

The Township and/or its designee shall be solely responsible for operating its switching equipment and the picture and audio quality of all EG channel programming up to the demarcation points and for ensuring all EG channel programming is inserted on the appropriate upstream EG channel. All EG channel programming shall be transmitted to the franchisee in baseband or SD-SDI format with either mono or stereo audio signals, and with signals received by franchisee in stereo cablecast by franchisee in stereo. Notwithstanding the foregoing, the franchisee shall not be obligated to provide the Township or its designee with either cablecast equipment and facilities or the personnel responsible for maintaining and operating equipment and facilities on the Township's side of the demarcation point and used to generate or administer any EG channel access signals, except as necessary to implement the franchisee's responsibilities specified herein. The Township and the franchisee shall work together in good faith to resolve any connection issues. If the Township issues a franchise to, or renews a franchise with, a competing VSP, the competing VSP may not connect its system to franchisee's system for the purposes of obtaining EG channel programming from the EG channels transmitted on franchisee's system without franchisee's prior written consent.

Franchisee may, in its sole discretion, use reasonable efforts to interconnect its cable system with the existing cable operator(s). If interconnection is pursued, franchisee may, in its sole discretion, use reasonable efforts to interconnect its cable system with the existing cable operator(s). If interconnection is pursued, for purposes of providing EG channels, no earlier than 12 months after written notice by the Township to activate an EG channel, the Township may require the franchisee to provide a video link, without charge to the Township, to a location within the Township where EG access programming is originated for the purpose of cablecasting EG programming; provided, however, that the franchisee shall not be obligated to provide the Township with either cablecast equipment and facilities or personnel responsible for maintaining and operating such equipment and facilities or generating any such EG programming.

Indemnity for EG. The Township shall require all local producers and users of any of the EG facilities or channels to agree in writing to authorize the franchisee to transmit programming consistent with this agreement and to defend and hold harmless the franchisee and the Township from and against any and all liability or other injury, including the reasonable cost of defending claims or litigation, arising from or in connection with claims regarding an EG programming facility, not including the actual FTTP network, or channel or EG channel programming, including claims for failure to comply with applicable federal laws, rules, regulations or other requirements of local, state, or federal authorities; for claims of libel, slander, invasion of privacy, or the infringement of common law or statutory copyright; for unauthorized use of any trademark, trade name, or service mark; for breach of contractual or other obligations owing to third parties by the producer or user; and for any other injury or damage in law or equity. The Township shall establish rules and regulations for use of EG facilities, consistent with, and as required by, Section 611 of the Communications Act, 47 U.S.C. § 531. Notwithstanding the foregoing, the Township shall not indemnify the franchisee for any damages, liability, or claims resulting from acts of willful misconduct or negligence of the franchisee, its officers, employees, or agents.

Recovery of costs. The franchisee shall be allowed to recover any costs arising from the provision of EG services as set forth in 47 U.S.C. § 622, and to include such costs as a separately billed line item on each subscriber's bill. Without limiting the foregoing, if allowed under state and federal laws, franchisee may externalize, line-item, or otherwise pass-through interconnection costs to subscribers.

§ 86-6 Franchise fees.

Payment to the Township. The franchisee shall pay to the Township a franchise fee of 5% of annual gross revenue. In accordance with Title VI of the Communications Act, the twelve-month period applicable under the franchise for the computation of the franchise fee shall be a calendar year. Such payments shall be made no later than 45 days following the end of each calendar quarter. Specifically, payments shall be due and payable on or before May 15 (for the first quarter), August 15 (for the second quarter), November 15 (for the third quarter), and February 15 (for the fourth quarter). In the event that any franchise fee payment is not made on or before the applicable dates, then interest shall be added at the rate of 6% of the amount of franchise fee revenue due to the Township. No acceptance of any payment shall be construed as an accord that the amount paid is the correct amount. The franchisee shall be allowed to submit or correct any payments that were incorrectly omitted, and shall credit any payments that were incorrectly submitted, in connection with the quarterly franchise fee remittances within 90 days following the close of the calendar year for which such payments were applicable. If the Township issues or renews any cable franchise(s) after the effective date that provide(s) for a lower percentage of a franchise fee, then the percentage of the franchisee's franchise fee payments shall be immediately thereafter reduced to match such lower percentage over that same time period.

Supporting information. Each franchise fee payment shall be accompanied by a brief report that provides line items for revenue sources and the amount of revenue received from each source and is verified by a financial manager of the franchisee showing the basis for the computation.

Limitation on franchise fee actions. The parties agree that the period of limitation for recovery of any franchise fee payable hereunder shall be 48 months from the date on which the applicable payment by the franchisee is due.

Audits:

The Township may audit or conduct a franchise fee review of the franchisee's books and records pertaining directly to the franchisee's payment of franchise fees in the Township no more than once every three years during the term. Any audit shall be initiated through written notice to the franchisee by the Township, and the Township or any auditor employed by the Township shall submit its complete request for records within 60 days of the Township's notice; provided, however, that the parties shall work cooperatively on an ongoing basis during the audit review in the event the Township or its designated auditor identifies reasonable follow-up records requests to the extent necessary to complete the audit. Subject to the confidentiality provisions of § 86-8A, and execution of a nondisclosure agreement with the Township or an auditor employed by the Township, all records reasonably necessary for any such audit shall be made available by the franchisee to the Township, in accordance with § 86-8A hereof, at a designated office of the franchisee or such other location in the eastern region of the Commonwealth of Pennsylvania mutually agreed upon by the parties.

The franchisee shall provide the records reasonably necessary for the audit and requested by the Township in a timely manner. Any such audit conducted by the Township or auditor employed by the Township shall be completed in a timely manner. If upon completion of the audit, the Township does not make a claim for additional payments, then the Township shall provide the franchisee with written documentation of closure of the audit. The Township's claim for additional franchise fee payments or its written notice of the audit closure shall be provided to the franchisee within 60 days from the date on which the audit is completed by the Township or its auditor in accordance Subsection D(1), above, or by such other date as is mutually agreed to by the parties.

Each party shall bear its own costs of an audit; provided, however, that if the results of any audit indicate that the franchisee underpaid the franchise fees by 5% or more, then the franchisee shall pay the reasonable, documented, out-of-pocket costs of the audit up to $3,000.

If the results of an audit indicate an underpayment of franchise fees, the parties agree that such underpayment shall be remitted to the Township within 45 days; provided, however, that the franchisee shall be required to remit underpayments to the Township together with interest at 6% of the amount correctly due from the date such underpayment would have been due.

Any entity employed by the Township that performs the audit or franchise fee review shall be a professional firm with recognized expertise in auditing franchise fees and shall not be permitted to be compensated on a success-based formula, e.g., payment based on an underpayment of fees, if any.

Bundled services. If cable services are provided to subscribers in conjunction with noncable services, then the calculation of gross revenues shall be adjusted, if needed, to include only the value of the cable services billed to subscribers, as reflected on the books and records of the franchisee in accordance with FCC rules, regulations, standards, or orders. Franchisee agrees that it will not intentionally or unlawfully allocate such revenue for the purpose of evading payments under this franchise. The parties agree that tariffed telecommunications services that cannot be discounted by state or federal law or regulation are to be excluded from the bundled discount allocation basis.

§ 86-7 Customer service.

Customer service requirements are set forth in Exhibit B.[1] Such requirements may be amended by written consent of the parties.

Editor's Note: Said exhibit is included as an attachment to this chapter.

§ 86-8 Reports and records.

Open books and records. Upon 30 days' written notice to the franchisee, the Township shall have the right to inspect the franchisee's books and records pertaining to this agreement or the franchisee's provision of cable service in the Township at any time during franchisee's regular business hours as are reasonably necessary to ensure compliance with the terms of this franchise. Such notice shall specifically reference the section or subsection of the franchise that is under review, so that the franchisee may organize the necessary books and records for appropriate access by the Township. The books and records to be made available for inspection by the Township shall be made available for inspection at a designated office of the franchisee or such other location in the eastern region of the Commonwealth of Pennsylvania mutually agreed upon by the parties. The franchisee shall not be required to maintain any books and records for franchise compliance purposes longer than 48 months. Notwithstanding anything to the contrary set forth herein, the franchisee shall not be required to disclose information that it reasonably deems to be proprietary or confidential in nature, nor disclose any of its or an affiliate's books and records not relating to this agreement or to the provision of cable service in the Township. If the franchisee claims any information to be proprietary or confidential, it shall identify the information and provide an explanation as to the reason it is claimed to be confidential or proprietary. The Township shall treat any information disclosed by the franchisee as confidential so long as it is permitted to do so under applicable law, and shall only disclose it to employees, representatives, and agents thereof that have a need to know, or in order to enforce the provisions hereof. The franchisee shall not be required to provide subscriber information in violation of Section 631 of the Communications Act, 47 U.S.C. § 551.

Records required. The franchisee shall at all times maintain the following, which may be inspected pursuant to Subsection A above:

Records of all complaints for a period of 48 months after receipt by the franchisee. Complaints recorded will not be limited to complaints requiring an employee service call;

Records of significant outages (as defined in the customer service standards attached as Exhibit B[1]) for a period of 48 months after occurrence, indicating date, duration, area, and the number of subscribers affected, type of outage, and cause;

Editor's Note: Said exhibit is included as an attachment to this chapter.

Records of service calls for repair and maintenance for a period of 48 months after resolution by the franchisee, indicating the date and time service was required, the date of acknowledgment and date and time service was scheduled (if it was scheduled), and the date and time service was provided, and (if different) the date and time the problem was resolved; and

Records of installation/reconnection and requests for service extension for a period of 48 months after the request was fulfilled by the franchisee, indicating the date of request, date of acknowledgment, and the date and time service was extended.

§ 86-9 Insurance and indemnification.

Insurance:

The franchisee shall maintain in full force and effect, at its own cost and expense, during the franchise term, the following insurance coverage:

Commercial general liability insurance in the amount of $3,000,000 per occurrence for property damage and bodily injury. Such insurance shall cover the construction, operation, and maintenance of the cable system, and the conduct of the franchisee's cable service business in the Township.

Automobile liability insurance in the amount of $1,000,000 combined single limit each accident for bodily injury and property damage coverage.

(c)

Workers' compensation insurance meeting all legal requirements of the Commonwealth of Pennsylvania and Employers' liability insurance in the following amounts: A) bodily injury by accident: $100,000; and B) bodily injury by disease: $100,000 employee limit; $500,000 disease policy limit.

The Township shall be included as an additional insured as its interest may appear under this franchise on commercial general liability and automobile liability insurance policies.

Upon receipt of notice of cancellation from its insurer, the franchisee shall provide the Township with 30 days' prior written notice of such cancellation.

Each of the required insurance policies shall be with insurers qualified to do business in the Commonwealth of Pennsylvania, with an A-VII or better rating for financial condition and financial performance by Best's Key Rating Guide, Property/Casualty Edition.

Upon written request, the franchisee shall deliver to the Township Certificates of Insurance showing evidence of the required coverage.

Indemnification:

The franchisee agrees to indemnify, save and hold harmless, and defend the Township, its elected and appointed officials, officers, agents, boards, and employees, from and against any and all claims for injury, loss, liability, cost or expense arising in whole or in part from, incident to, or connected with any act or omission of the franchisee, its officers, agents, or employees, including the acts or omissions of any contractor or subcontractor of the franchisee, arising out of the construction, operation, upgrade, or maintenance of its cable system. The obligation to indemnify, save, hold harmless and defend the Township shall include the obligation to pay judgments, injuries, liabilities, damages, penalties, expert fees, court costs and franchisee's own attorney's fees. The Township shall give the franchisee timely written notice of the Township's request for indemnification within a) 30 days of receipt of a claim or action pursuant to this subsection or b) 10 days following service of legal process on the Township or its designated agent of any action related to this subsection. The Township agrees that it will take all necessary action to avoid a default judgment. Notwithstanding the foregoing, the franchisee shall not indemnify the Township for any damages, liability, or claims resulting from, and Township shall be responsible for, Township's own acts of willful misconduct, the Township's breach of obligation under the franchise, or negligence of the Township, or its elected and appointed officials, officers, agents, boards, and employees.

With respect to the franchisee's indemnity obligations set forth in Subsection B(1), the franchisee shall provide the defense of any claims brought against the Township by selecting counsel of the franchisee's choice to defend the claim, subject to the consent of the Township, which shall not unreasonably be withheld. Nothing herein shall be deemed to prevent the Township from cooperating with the franchisee and participating in the defense of any litigation by its own counsel at its own cost and expense; provided, however, that after consultation with the Township, the franchisee shall have the right to defend, settle, or compromise any claim or action arising hereunder, and the franchisee shall have the authority to decide the appropriateness and the amount of any such settlement. In the event that the terms of any such proposed settlement include the release of the Township, and the Township does not consent to the terms of any such settlement or compromise, the franchisee shall not settle the claim or action, but its obligation to indemnify the Township shall in no event exceed the amount of such settlement.

§ 86-10 Transfer of franchise.

Transfer; Subject to Section 617 of the Communications Act, 47 U.S.C. § 537, and applicable federal regulations, no transfer of the franchise shall occur without the prior consent of the Township, provided that such consent shall not be unreasonably conditioned or withheld. No such consent shall be required, however, for a transfer in trust, by mortgage, by other hypothecation, by assignment of any rights, title, or interest of the franchisee in the franchise or cable system in order to secure indebtedness, or for transactions otherwise excluded under § 86-1 above.[1]

Editor's Note: This refers to the definition of "transfer of the franchise" in said section.

§ 86-11 Renewal of franchise.

The Township and the franchisee agree that any proceedings undertaken by the Township that relate to the renewal of this franchise shall be governed by and comply with the provisions of Section 626 of the Communications Act, 47 U.S.C. § 546.

§ 86-12 Enforcement and termination of franchise.

Notice of noncompliance: If at any time the Township believes that the franchisee has not complied with the terms of the franchise, the Township shall informally discuss the matter with the franchisee. If these discussions do not lead to resolution of the problem in a reasonable time, the Township shall then notify the franchisee in writing of the exact nature of the alleged noncompliance (for purposes of this chapter, the "noncompliance notice"). If the Township does not notify the franchisee of any alleged noncompliance, it shall not operate as a waiver of any rights of the Township hereunder or pursuant to applicable law.

Franchisee's right to cure or respond. The franchisee shall have 30 days from receipt of the noncompliance notice to: i) respond to the Township in writing, if franchisee contests (in whole or in part) the assertion of noncompliance; ii) cure such noncompliance; or iii) in the event that, by its nature, such noncompliance cannot be cured within such thirty-day period, initiate reasonable steps to remedy such noncompliance, diligently pursue such remedy to completion, and notify the Township of the steps being taken and the date by which they are projected to be completed. Upon cure of any noncompliance, the Township shall provide written confirmation that such cure has been effected.

Liquidated damages. After the time period set forth in § 86-12A and B above, in the event that the Township finds that an alleged noncompliance continues to exist and that the franchisee has not corrected the same in a satisfactory manner or has not diligently commenced correction of such violation, the franchisee agrees that the Township may recover liquidated damages from the franchisee in the amounts set forth below following the notice and opportunity to cure provisions set forth in § 86-12A and B above; provided, however, that if the franchisee disputes the assessment of any liquidated damages hereunder, the franchisee may request and the Township agrees to schedule a public hearing with regard to such dispute. Following the notice and opportunity to cure periods in § 86-12A and B above, the Township shall provide the franchisee with written notice that it intends to elect the liquidated damage remedies set forth herein. If the Township elects to recover liquidated damages for any item set forth in this Subsection C (including customer service violations), the Township agrees that such recovery shall be its exclusive remedy for the time period in which liquidated damages are assessed; provided, however, once the Township has ceased to assess its liquidated damages remedy as set forth in Subsection C(2) it may pursue other available remedies.

Pursuant to Subsection B, the following monetary damages shall apply.

For failure to provide cable service as set forth in § 86-3A through C: $150/day for each day the violation continues;

For failure to maintain the FCC technical standards as set forth in § 86-4: $150/day for each day the violation continues;

(c)

For failure to provide EG services to the community specified in § 86-5A: $150/day for each day the violation continues;

(d)

For failure to comply with franchise fee audit requirements as set forth in § 86-6D: $150/day for each day the violation continues;

(e)

For failure to provide the Township with any reports or records required by the agreement within the time period required: $150/day for each day the violation continues;

(f)

For failure to meet customer service requirements with regard to Sections 2, 3, and 4 of the Customer service Standards set forth in Exhibit B: $450 for each quarter in which such standards were not met;

(g)

For failure to carry the insurance specified in § 86-9A(1): $150/day for each day the violation continues; and

(h)

For a transfer specified in § 86-10 without required approval: $150/day for each day the violation continues.

The amount of all liquidated damages per annum shall not exceed $15,000 in the aggregate. All similar violations or failures from the same factual events affecting multiple subscribers shall be assessed as a single violation, and a violation or a failure may only be assessed under any one of the above-referenced categories. Violations or failures shall not be deemed to have occurred or commenced until they are not cured as provided in § 86-12.

Except as otherwise provided herein, any liquidated damages assessed pursuant to this section shall not be a limitation upon any other provisions of this franchise and applicable law, including revocation.

Additional enforcement measures. Subject to applicable federal, state and local law, in the event the Township determines that the franchisee is in default of any provision of this franchise, the Township may:

Commence an action at law for monetary damages or seek other equitable relief; or

In the case of a substantial noncompliance with a material provision of this franchise, seek to revoke the franchise in accordance with Subsection E below.

Revocation. Should the Township seek to revoke this agreement, and the Township chooses not to impose liquidated damages or ceases to impose liquidated damages, the Township shall give written notice to the franchisee of such intent. The notice shall set forth the specific nature of the noncompliance. The franchisee shall have 60 days from receipt of such notice to object in writing and to state its reasons for such objection. In the event the Township has not received a satisfactory response from the franchisee, it may then seek termination of this agreement at a public hearing. The Township shall cause to be served upon the franchisee, at least 30 days prior to such public hearing, a written notice specifying the time and place of such hearing.

At any designated public hearing at which the Township has informed the franchisee that revocation is a possible consequence in accordance with the written notice requirements, the franchisee shall be provided a fair opportunity for full participation, including the rights to be represented by legal counsel, to introduce relevant evidence, and to require the production of evidence. A complete verbatim record and transcript shall be made of such hearing at the franchisee's sole cost and expense.

Following the public hearing, the franchisee shall be provided up to 30 days to submit its proposed findings and conclusions to the Township in writing, and thereafter the Township shall provide a written determination to the franchisee setting forth: i) whether an event of default has occurred under this agreement; ii) whether such event of default is excusable; and iii) whether such event of default has been cured by the franchisee. The Township shall also determine whether it will revoke the franchise based on the information presented or, in the discretion of the Township, grant additional time to the franchisee to effect any cure. If the Township determines that it will revoke the franchise, the Township shall promptly provide the franchisee with a written determination setting forth the Township's reasoning for such revocation. The franchisee may appeal such written determination of the Township to an appropriate court of competent jurisdiction, which will have the power to review the determination of the Township consistent with applicable law. Franchisee shall be entitled to such relief as the court finds appropriate. Such appeal must be taken within the time frame permitted by law.

§ 86-13 Miscellaneous provisions.

Actions of parties. In any action by the Township or the franchisee that is mandated or permitted under the terms hereof, such party shall act in a reasonable, expeditious, and timely manner.

Binding acceptance. This agreement shall bind and benefit the parties hereto and their respective receivers, trustees, successors, and assigns.

Force majeure. The franchisee shall not be held in default under, or in noncompliance with, the provisions of the franchise, nor suffer any enforcement or penalty relating to noncompliance or default, where such noncompliance or alleged defaults occurred or were caused by a force majeure.

Good faith error. The parties hereby agree that it is not the Township's intention to subject the franchisee to penalties, fines, forfeitures, or revocation of the franchise for violations of the agreement where the violation was a good faith error that resulted in no or minimal negative impact on subscribers.

Delivery of payments. The franchisee may use electronic funds transfer to make any payments to the Township required under this agreement.

Notices. Unless otherwise expressly stated herein, notices required under the franchise shall be mailed first class, postage prepaid, to the addressees below. Each party may change its designee by providing written notice to the other party.

Notices to the franchisee shall be mailed to:

	President Verizon Pennsylvania LLC 900 Race Street, 6th Floor Philadelphia, PA 19107
With a copy to:
	Verizon Legal Department 140 West Street, 6th Floor New York NY 10007 Attention: Monica Azare, Vice President and Deputy General Counsel