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Ord 129ORDINANCE NO. 129 AN ORDINANCE OF THE CITY OF POWAY, CALIFORNIA TO PROVIDE FOR THE ESTABLISP~IENT AND G~ANTING OF FRANCHISES OR PRIVIT.~Rq FOR THE CONSTRUCTION, ~ AND OPERATION OF CABLE ~ICATION, OR CABLE T~RVISION SYST~4S AND FURTHER PROVIDING FOR THE CONTINUING R~i43IATION AND ADMINISTRATION OF T~E FRANCHISES AND THE ACTMTIES ~ATIVE TO TH~4 S~CTION 1. INTE~f The City of Poway finds that the develoEa~ent of cable television and ~ munications systens has the potential of having great benefit and impact upon the people of Poway. Because of the ccmplex and rapidly changing tech- nology associated with cable television, the City further finds that the public convenience, safety and general welfare can best be served by establishing regulatory powers which should be vested in the City or such persons as the City shall designate. It is the intent of this ordinance and subsequent amendments to provide for and specify the me~ns to attain the best possible public interest and public purpose in these matters and any franchise agreement issued purs~ant to this ordinance shall be deemed to include this finding as an integral part thereof. S~CTION 2. SHORT TITLE This ordinance shall be known and may be cited as the "City of Poway Cable Television Franchise Ordinance." S~CTION 3. DEFINITIONS For the purpose of this ordinance the following terms, phrases, words and their derivations shall have the meaning given herein. When not incon- sistent with the context, words used in the present tense include the future, words in the plural number include the singular number, and words in the singular number include the plural number. The words "shall" is man- datory and '%~ay" is permissive. Words not defined shall be given their com- mon and ordinary meaning. 3.1 "Additional Subscriber Service" means any service not included in "Poway Required Basic Television Service," or "Basic Subscriber Radio Service" or "Institutional Service," including, but not limited to, pay-cable. 3.2 "Agency Subscriber" me~ns a subscriber who receives a service in a government or public agency, school, or nonprofit corporation. Ordinance No. 129 Page 2 3.3 3.4 3.5 3.6 3.7 3.8 "Basic Subscriber Radio Service" means the provision to all subscribers of such audio programs as the retransmission of broadcast Fbi radio signals, the retransmission of shortwave, weather, news, time and other similar audio information and the transmission of cablecast audio signals, all provided to subscribers at a monthly rate. "Poway Required Basic Television Service" m~ns the total of all of the following: (a) The transmission to all subscribers of all broadcast television channel signals authorized or permitted by the FCC and provided for in a franchise agr~ment. (b) The provision to all subscribers of nonbroadcast open channel signals, originating frc~u sources outside the Cable C~,L,onications Systeu. (c) The cablecasting to all subscribers of local origination progran~ning and public, education and government access progran~uing. (d) The transmission to all subscribers of all other cablecasting open-channel signals. Poway Required Basic Television Service may be offered to subscribers in one or more tiers or c~abination of programs. "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 C~,,aunications System off-the-air or by microwave. "Cable C~L,~ahnications Systems" or "System," also referred to as "Cable Television System," "CATV System," or "Broadband C~,,~nications Network," m~ns a system of antennas, cables, amplifiers, towers, microwave links, cablecasting studios, and other conductors, 'conver- ters, equiEm~ent or facilities, designed and constructed for the primary purpose of distributing video progran~ing to home subscribers, and the secondary purpose of producing, receiving, amplifying, storing, pro- cessing, or distributing audio, video, digital, or other forms of electronic or electrical signals. "Cablecast Signal" m~ans a nonbroadcast signal that originates within the facilities of the Cable Cu,,~onications System. "Cable-mile" means a lin~_r mile of strand-bearing cable as m~ured on the street or easement frem pole to pole or pedestal to pedestal. 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 Ordinance No. 129 Page 3 "Channel" means a six (6) Megahertz (~z) frequency band, which is capable of carrying either one (1) stand~rd television or video signal, a number of audio, digital or other nonvideo signals, or sc~e cc~- bination of such signals. "Class IV Channel" m~ns a signaling path provided by a Cable Cu~,,~unications System to transmit signals of any type from a subscriber terminal to another point in the cable television system. "Closed-Circuit" or "Institutional Service" m~ans such video, audio, data and other services provided to institutional users on an indivi- dual requirement, private channel basis. These may include, but not be limited to, two-way video, audio or digital signals among institutions, or frem institutions to residential subscribers. "Cu~,,ence Construction" means that time and date when construction of the Cable CuL,~nications System is considered to have c~L,~enced, which shall be when the first connection is physically made to a utility pole, or undergrounding of cables is initiated, construction does not include preliminary engineering (strand mapping) nor obtaining necessary permits and authorizations. "Cu~,~ence Operation" means that time and date when operation of the Cable C~,,~nications System is considered to have c~%m~=-nced which shall be when sufficient distribution facilities have ~n installed so as to permit the offering of full service to at lea~t ten percent (10%) of the dwelling units located within the service area. "Cu~,~rcial Subscriber" means a subscriber who receives a service in a place of business, where the service my be utilized in connection with a business, trade, or profession. "Converter" means an electronic device which converts signal carries frcm one form to another. "Council" means the governing body of the City of Poway. "Education Channel," or "Education Access Channel" means any channel where educational institutions are the primary designated programmers. "FCC" means the Federal C~,~,~nications Cu~,~'.~ssion and any legally appointed or elected successor. "Franchise" means the nonexclusive rights granted purs,,~nt to this ordinance to construct and operate a Cable Cu~,~unications Syst~ along the public way within all or a specified area in the City. Any such authorization, in whatever form granted, shall not me__~n 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. 3.20 3.21 3.22 3.23 3.24 3.25 3.26 3.27 3.28 3.29 3.30 Ordinance No. 129 Page 4 "Franchise Agreement" means a franchise award ordinance, or a contrac- tual agreement, containing the specific provisions of the franchise granted, including referenced specifications, franchise applications, franchise requir~nents, ordinances and other related materials. "Franchise Foe" m~ans the foe paid by the Grantoe to the Grantor in consideration of the use of the public streets and rights-of-way. "Government Channel" or "Government Access Channel" means any channel where local government agencies are the primary designated progr~.~,~rs. "Grantcc" means any "person" receiving a franchise pursuant to this ordinance and under the granting franchise ordinance, and its lawful successor, transferee or assignoe. "Grantor" or "City" means the'City of Poway as represented by the City Council or any delegate acting within the scope of its jurisdiction. "Gross Annual Revenues" memns the annual gross revenues received by the Grantoe frcm all sources of operations of the Cable C~nications System, except that any sales, excise or other taxes collected for direct pass-through 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. "Installation" means the connection of the system frcm the feeder cable to subscribers' terminals, and the provision of service. "Leased Channel" or "Leased Access Channel" means any channel or por- tion of a channel available for lease and progranm~ing by persons or entities other than the Grant~. "Local Origination Channel" means any channel where the Grantoe is the primary designated progranmer, and provides video programs to subscri- bers. "Monitoring" means observing a cu%¥nunication signal, or the absence of a signal, where the observer is neither the subscriber nor the progranmer, whether the signal is observed by visual or electronic means, for any purpose whatsoever. Monitoring shall not include syst~mm~ide, nonindividually addressed sweeps of the system for purposes of verifying system integrity, controlling return paths transmissions, billing for pay-cable, verifying ccm~pliance with FCC rules, or detecting unauthorized connections to the cable c~¥~unications syst~n. 3.31 3.32 3.33 3.34 3.35 3.36 3.37 3.38 3.39 3.40 Ordinance No. 129 Page 5 "Nonbroadcast Signal" means a signal that is transmitted by a Cable Com~nications System and tb~t is not involved in an over-the-air broadcast transmission path. "Open Channel" means any channel that can be received by all subscri- bers, without the necessity for special equi~-~nt. "Pay-Cable" or "Pay-Television" means the delivery to subscribers, over the Cable Cc~m~u%ications System, of television signals for a fee or charge to subscribers over and above the charge for Basic Subscriber Service, or a per program, per channel, or other subscription basis. "Penetration" m~ans the result expressed in the percentage obtained by dividing the to~al number of potential subscribers in the franchise area into the number of subscribers receiving service. "Person" m~ans an individual, partnership, association, corporation or any lawful successor, transferee or assignee of said individual, part- nership, association, organization or corporation. "Private Channel," or "Closed-Circuit Channel" means any channel which is available only to subscribers who are provided with special con- verter or termiDal equitm~nt to receive signals on that channel. "Progranmer" means a person or entity who or which produces or other- wise provides program material or information for transmission by video, audio, digital, or other signals, either live or frcm recorded tapes or other storage media, to subscribers, by means of the Cable Cc~manicat ions System. "Public Access Channel" or "C~,,~mity Access Channel" means any channel where any m~mber of the general public or any noncc~nercial organi- zation may be a prograx~ner, without charge, on a first-ccme, first- served, nondiscriminatory basis, in accordance with the terms of the franchise agrc~ent. "Reasonable Notice" shall be written notice addressed to the Grantee at its principal office or such other office as the Grantee has designated to the Grantor as the address to which notice should be transmitted to it, which notice shall be certified and postmarked not less than four (4) days prior to that day in which the party giving such notice shall cu~,,~_nce any action which requires the giving of notice. In computing said four (4) days, Saturdays, Sundays and holidays recognized by the Grantor shall be excluded. "Reasonable Order" shall be written orders not excessive or extr~ne as to costs or time to cu~ly, governed by sound thinking. Ordinance No. 129 Page 6 3.41 "Resident" m~ans any person residing in the City as otherwise defined by applicable law. 3.42 "Residential Subscriber" means a subscriber who receives a service in an individual dwelling unit, where the service is not to be utilized in connection with a business, trade, or pr6fession. 3.43 "Sale" shall include any sale, exchange, barter or offer for sale. 3.44 "School" means any nonprofit educational institution including primary and secondary schools, colleges and universities, both public and pri- vate. 3.45 "Section" means any section, subsection, or provision of this franchise ordinance. 3.46 "Service Area" m~ns the entire geographic area within the franchise territory. 3.47 "State" me~ns the State of California. 3.48 "Street" sb~ll include each of the following which have b~n 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, ease- ments, rights-of-way and similar public property and areas that the Grantor shall permit to be included within the definition of street from time to time. 3.49 "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 C~u'~nications System. 3.50 "Substantially Cc~pleted" means that sufficient distribution facilities have been installed by the Grantee so as to permit the offering of full network service to at lea~t ninety percent (90%) of the potential subscribers in the service area. S~CTION 4. GRANT OF FRANCHISE 4.1 Grant. In the event that Grantor shall grant to the Grantee a nonexclusive, revocable franchise to construct, operate, maintain, and reconstruct, a Cable Cu¥~nications Systom within the franchise area, said franchise shall constitute both a right and an obligation to provide the services of a Cable Cu~,,~nications System as required by the provisions of this ordinance and the franchise agreement. The 4.2 4.3 4.4 4.5 Ordinance No. 129 Page 7 franchise agr~-~n~ent 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 general law 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 on which the Grantor can grant a franchise, the general law and/or statutory requirements, shall, without exception, control. Any franchise granted is hereby rode subject to the general ordinance provisions now in effect or hereafter made effective. Nothing in the franchise shall be dc~-~med to waive the requirements of the various codes and ordinances of the Grantor 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 agr~-~ment. Use of Public Streets and Ways. For the purpose of operating and main- taining a Cable C~L,L~nications System in the franchise area, and sub- ject to the provisions of Section 7.10 herein, the Grantee may erect, 'install, construct, repair, replace, reconstruct, and retain in, on, over, under, upon, across, and along the public strccts and ways within the franchise territory such wires, cables, conductors, ducts, con- duits, vaults, manholes, amplifiers, appliances, pedestals, attach- ments, and other property and equipment as are necessary and appurtenant to the operation of the Cable C~,'~,~unications System. Prior to construction or alteration, however, the Grantee shall in ~h case file plans with the appropriate Grantor agencies and local utility ccm- panies, and receive written approval before proceeding. Duration. The term of any franchise and all rights, privileges, obli- gations and restrictions pertaining thereto shall be fiftcc~n (15) y~rs frem the effective date of the franchise unless terminated sooner as hereinafter provided. The effective date of the franchise shall be the date of adoption of the resolution by the Grantor approving the franchise agrc~--~ent. Franchise Nonexclusive. Any franchise granted shall be nonexclusive. The Grantor specifically reserves the right to grant, at any time, such additional franchises for a Cable Cum~nications System as it appropriate. Ordinance No. 129 Page 8 4.6 Transfer of Ownership or Control. (a) 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. Such consent as required by the Grantor shall, however, not be unreaso- nably withheld. (b) Ownership or Control. The Grantee shall prcmptly notify the Grantor of any 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 transfer by any person or group of persons of thirty percent (30%) of the voting shares of the Grantee or thirty-three percent (33%) of the voting shares of Grantee's parent corporation, if any shall exist, during the period of the franchise agr~-~-~_n, t. 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 will 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: (1) To show to the satisfaction of the Grantor whether the pro- posed 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 five percent (5%) or more of its voting stock, or any of the proposed transferee's principals: Se Has ever ~cn convicted or held liable for acts involving moral turpitude including, but not limited to any violation of federal, state or local law or regula- tions, or is presently under an indictment, investiga- tion or c~laint charging such acts; (2) (3) Ordinance No. 129 Page 9 Has ever bad a judgment in an action for fraud, deceit or misrepresentation entered against it, her, him, or th~n by any court of c~-~etent jurisdiction; or 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 finan- cial solvency of the proposed transferee by submitting all current financial data for the proposed transferee which the Grantee was required to s,,k~li.'t in its franchise application, and such other data as the Grantor my request. Financial statements shall be audited, certified and qualified by an independent Certified Public ;%~coun~ant. To establish to the satisfaction of the Grantor that the financial and technical capability of the proposed transfercc is such as shall enable it to maintain and operate the cable system for the r~naining term of the franchise under the existing franchise terms. The Grantor agrees that any financial institution having a pledge of the franchise or its assets for the advan- cement 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 Cu~,~,onications System, in the event of a Grantee default in its finan- cial obligations. Further, said financial institution shall also sukxnit a plan for such operation that will ensure continued service and c~,~liance with all franchise requirements during the term the financial institution shall not exercise control over the system for a period excc~ing one (1) 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 such transfer after considering the legal, financial, character, technical and other public interest qualities of the applicant are satisfactory, the Grantor will transfer and assign the rights and obligations of such franchise as in the public interest. The consent of the Grantor to such transfer sba]l not be unreasonably withheld. (b) The consent or approval of the Grantor to any transfer of the Grantee shall not constitute a waiver or rele~_-~e of the rights of the Grantor in and to the streets, and any transfer sb~ll by its terms, be expressly subor- dinate to the terms and conditions of any franchise. · Ordinance No. 129 Page 10 4.7 (c) In the absence of extraordinary circumstances, the Grantor will not approve any transfer or assignment of the franchise prior to substantial completion of construction of the proposed system. (d) In no event shall a transfer of ownership of control be approved without the successor in interest beccming a signatory to the franchise agrc~.---~_nt and otherwise obli- gated thereto to the satisfaction of Grantor. Franchise Renewal. Nothing in any franchise agrc~--ment shall require renewal by the Grantor after the term of the franchise has expired, nor shall renewal be presumed as a matter of vested interest. (a) Term. The renewal term of any franchise shall not be greater than the initial term. (b) Renewal Procedure. (1) Not later than eighteen (18) nor earlier than twenty-four (24) months prior to the expiration of any franchise, a Grantee may submit an application for renewal of such franchise, on forms approved by the Grantor, with a nonrefun- dahle application fee eseahlished by the Grantor in an amount not to exceed the reasonable cost of processing the applica- tion. The application shall set forth in detail the franchi- see' s legal, character, financial and other pertinent qualifications sufficient to make a determination to renew or terminate such franchise. (2) The application when filed shall be available for public inspection at places designated by the Grantor. No later than ninety (90) days after filing, a public b~a~ring shall be held on the application. A decision shall be made by the Grantor not later than ninety (90) days after such h~aring based upon the application, the hearing the Grantee's record of c~pliance with the franchise requirements, its record of satisfactory service, and the terms and conditions proposed for the franchise renewal period. (3) Based on the above criteria, Grantor may decide to renew the / franchise under appropriate terms and conditions, or not to renew the franchise. (4) If Grantor's decision is not to renew the franchise, Grantor may initiate public solicitations for applications for a new franchise. The original Grantee shall not be precluded fr~ sutmaitting such an application. 4.8 Ordinance No. 129 Page 11 (5) In any renewal or public solicitation, the Grantor ray require additional services, systen upgrade or any other con- ditions it de~ms feasible and appropriate in the light of the accepted and proven state-of-the-art of the cable ccm- munications industry at that time. Police Powers. In accepting a franchise, the Grantee acknowledges that its rights hereunder are subject to the police power of the Grantor to adopt and enforce general ordinances necessary to the safety and welfare of the public; and it agrees to cc~ply with all applicable general laws and ordinances enacted by the Grantor purs~_~nt to such Any conflict between the provisions of this ordinance and any other present or future lawful exercise of the Grantor's police powers shall be resolved in favor of the latter, e~x:ept that any such exercise that is not of general application in the jurisdiction or applies e~lusi- vely to any Grantee or Cable Cu,,,~nications Systems which contains pro- visions inconsistent with this franchise shall prevail only if upon such exercise, the Grantor finds any ~nergency exists constituting a d_~_nger to health, safety, property or general welfare or such exercise is mandated by law. 4.9 Franchise Fee. (a) Annual Franchise Pa~anent. A Grantee of a franchise hereunder shall pay to the Grantor an annual fee in an amount as designated in the franchise agreement. The amount shall be the maximum amount allowed by the FCC or other applicable law and shall not exceed five (5) percent or be less than three (3) per cent. Such payment shall be in addition to any other palanents due the grantor and cc~nence as of the effective date of the franchise. In the event of a dispute, the Grantor, if it so requests shall be fur- nished a statement, by a Certified Public Account, reflecting the total amounts of annual gross revenues and all payments, deduc- tions and ccm~utations for the period covered by the payment. (b) Acceptance by Grantor. No acceptance of any payment by the Grantor sh~ll be construedas a release or as an accordandsetis- faction of any claim the Grantor my have for further or addi- tional sums payable as a franchise fee under this ordinance or for ' the performance of any other obligation of the Grantcc. (c) Failure to Make Required Pa~a~ent. In the event that any franchise payment or reccmputed amount is not made on or before the dates specified herein, Grantee shall pay as additional c~,-~ensation: (1) An interest charge, conputed frcm such due date, at the annual rate equal to the ccamercial prime interest rate in effect upon the due date. Ordinance No. 129 Page 12 (2) A sum of money equal to five percent (5%) of the amount due in order to defray those additional expenses and costs incurred by the Grantor by r~a-~on of delinquent payment. (d) An estimated quarterly payment shall be made for the first thrcc quarters of the calendar year based' upon the Grantee's operation, as of March 31, June 30, and September 30. W~ch of these payments shall be due and payable no later than thirty (30) days after the end of the c~arter. Each payment shall be accu~-~anied by a brief report showing the basis for the estimated payment and such other relevant facts as my be required by the Grantor. The payment for the quarter ending December 31 shall be due and payable no later then ninety (90) days after the end of the quarter. Said payment shall reflect the actual payment due the Grantor frcm the previous quarter plus an adjustment for any underpayment or overpayment made during the previous three quarters. Said payment shall be acccrapanied by a report showing the quarterly gross revenues, the total annual revenues, the basis of the ccmputation and such other relevant facts as may be required by the Grantor. (e) Following the issuance and acceptance of the franchise, the Grantee shall initiate franchise fee payments to the Grantor at the minimum rate specified in the franchise agreement. These initial payments shall be credited against payments due in later years of the franchise in as n~_~ch as they excc~ the actual franchise payments due during any y~r. 4.10'Forfeiture or Revocation. (a) Grounds for Revocation. The Grantor reserves the right to revoke any franchise granted hereunder and rescind all rights and privi- leges associated with the franchise in the following circt~nstan- ces, each of which shall represent a default and breach under this ordinance and the franchise grant: (1) If the Grantee should default in the performance of any of its obligations under this ordinance or under such documents, agrc~--n~_nts and other terms and provisions entered into by and between the Grantor and the Grantee. (2) If the Grantee should fail to provide or maintain in full force and effect, the liability and indemnification coverages or the security fund or bondsas required herein. (3) If any court of ccl~petent jurisdiction, or any federal or state regulatory body by rules, decisions or other action determines that any provision of the franchise documents, including this ordinance, is invalid or unenforceable prior to the ccmnencement of system construction. Ordinance No. 129 Page 13 (4) If the Grantee should willfully 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 before an appropriate regula- tory body or agency or in a court of cc~petent jurisdiction. (5) If the Grantee ceases to provide services for any reason wi thin the control of the Grantee over the Cable CuL,L~nications Syste~. The Grantee shall not be declared at fault or be subject to any sanction under any provision of this ordinance in any case in which performance of any such provision is prevented for reasons beyond the Grantee's control. A fault shall not be deemed to be beyond the Grantee's control if committed by a corporation or other business entity in which the Grantee holds a controlling interest, whether held directly or indirectly. (6) If the Grantee attaints to evade any of the provisions of this ordinance or the franchise agreement or practices any fraud or deceit upon the Grantor. (7) If the Grantee's construction schedule is delayed for more than eighteen (18) months later than the schedule contained in the franchise agreement and Grantor finds that the delay was not excusable. (8) If the Grantee becc~es insolvent, up_able or unwilling to pay its debts, or is adjudged bankrupt. (b) Procedure Prior to Revocation. (1) The Grantor my make written d~mand that the Grantee do so cc~ly with any such requirement, limitation, term condition, rule or regulation or correct any action de~ed cause for revocation. If the failure, refusal or neglect of the Grantee continues for a period of thirty (30) days following such written demand, the Grantor may place its request for termination of the franchise upon a regular Council meeting agenda. The Grantor shall cause notice to be served upon such Grantee, at l~a~t ten (10) days prior to the date of such m~_ting, a written notice of this intent to request such termination, and the time and place of the meeting, notice of which shall be published at least once, ten (10) days before such ~m~cting in a newspaper of general circulation within the franchise area. 0rdinanee No. 129 Page 14 (2) The Grantor 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. (3) If such failure, refusal or nC~31ect by the Grantee was with just cause, the Grantor shall direct the Grantee to cc~ply within such time and manner and upon such terms and con- ditions as are r~a.~onable. (4) If the Grantor shall determine such failure, refusal or neglect by the Grantee was without just cause, then the Grantor may, by resolution, declare that the franchise of such Grantee sb~ll be terminated and security fund end bonds forfeited unless there be a cuL~liance by the Grantee within such period as the Grantor my fix. (5) The decision of Grantor shall be in writing; the reasons stated therefore set forth with findings supported by evi- dence within the record of proccc~ings. 4.11 Procedures in the Event of Termination or Expiration. (a) Disposition of Facilities. In the event a franchise expires, is. revoked, or otherwise terminated, the Grantor my order the remo- val of the system facilities frcm the franchise area reasonable period of time as determined by the Grantor or may allow the underground system facilities to be abandoned in place or require the original Grantee to maintain and operate its network until a subsequent Grantee is selected and a subsequent or modified cable syste~ beccmes operational. (b) Restoration of Property. In r~uoving its plant, structures and equi~nent, the Grantee sba31 refill, at its own expense, any exca- vation that sba]l be made by it and shall leave all public ways and places in as good condition as that prevailing prior to the Grantee' s r~noval of its equi[m~nt 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, and the security fund and bonds provided therein shall continue in full force and effect during the period of r~noval and until full compliance by the Grantee with the terms and conditions of this Section. Ordinance No. 129 Page 15 (c) Restoration b~; Grantor, Reimbursement of Costs. In the event of a failure by the Grantee to complete any work required by Subsection (a) above and/or Subsection (b) above, or any other work required by Grantor by law or ordinance within the time as my be established and to the satisfaction of the Grantor, the Grantor my cause such work to be done and the Grantee sb~ll reim- burse the Grantor the cost thereof within thirty (30) days after receipt of an itemized list of such costs or the Grantor my recover such costs through the security fund or bonds provided by Grantee. The Grantor shall be permitted to seek legal and equitable relief to enforce the provisions of this Section. (d) Extended Operation. Upon either the expiration or revocation of a franchise, the Grantor may require the Grantee to continue to operate the Cable C~L,,,unications System for a defined period of time not to exccc~d twenty-four (24) months frcm the date of such expiration or revocation. The Grantcc shall, as trustee for its successor in interest, continue to operate the Cable Cu,,,~nications System under the terms and conditions of this ordi- nance and the franchise agr~ent and to provide the regular subscriber service and any and all of the services that may be provided at that time. The Grantor shall be permitted to seek legal and equitable relief to enforce the provisions of this Section. (e) 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. 4.12 Receivership and Foreclosure. (a) Any franchise herein granted shall, at the option of the Grantor, cease and terminate one hundred twenty (120) days after their appointment of a receiver or receivers or trustee or trustees to take over and conduct the business of the Grantee whether in a receivership, reorganization, bankruptcy or other action or pro- cc~ing unless such receivership or trusteeship shall have been vacated prior to the expiration of said one hundred twenty (120) days, or unless: (1) Such receivers or trustees shall have, within one hundred twenty (120) days after their election or appointment, fully complied with all the terms end provisions of this ordinance and the franchise granted pursuant hereto, and the receivers or trustees within said one hundred twenty (120) days shall have r~medied all defaults under the franchise; and, Ordinance No. 129 Page 16 4.13 4.14' (2) Such receivers or trustees shall, within said one hundred twenty (120) days, execute an agrc~.---~nt duly approved by the Court having jurisdiction in the premises, whereby such receivers or trustees ass~ne and agree to be bound by each and every term, provision and limitation of the franchise agreement. (b) In the case of a foreclosure or other judical sale of the plant, property and equil~aent of the Grantee, or any part thereof, the Grantor may serve notice of termination upon the Grantee and the successful bidder at such sale, in which event the franchise and all rights and privileges of the Grantee hereunder shall c~.~e and terminate thirty (30) days after service of such notice, unless: (1) The Grantor shall have approved the transfer of the franchise, as and in the manner in this ordinance provided; and, (2) Such successful bidder shall have covenanted and agreed with the Grantor to assume and be bound by all the terms and con- ditions of the franchise agre~nent. Franchise Required. No Cable C~,,,unications System shall be allowed to occupy or use the streets in the franchise territory or be allowed to operate without a franchise in accorOance with the provisions of this ordinance. Establishment of Franchise Requirements. The Grantor my establish appropriate requirements for new franchises or franchise renewals, and may modify these requir~aents from time to time to reflect changing conditions and state-of-the-art in the cable television industry. Such requirements shall not be retroactive to franchises then in effect. SBCTION 5. Pd~%~ATION OF FRANCHISE 5.1 Regulatory Authority. The Grantor shall exercise appropriate regula- tory authority under the provisions of this ordinance and applicable law. If the franchise ares served by the Cable C~',,~%unications System also serves other contiguous or neighboring ccmmunities, Grantor may, at its sole option, participate in a joint regulatory agency, with delegated responsibility in the area of cable and related ~ munications. 5.2 Regulatory Responsibility. The Grantor, acting alone or acting jointly with other Grantors, may exercise or delegate the following regulatory responsibility: 5.3 Ordinance No. 129 Page 17 (a) Administering and enforcing the provisions of the Cable Cut~L~mications System franchise(s). (b) Coordination of the operation of government and educational chan- nels. (c) Providing technical, progranxning and operational support to public agency users, such as government departments, schools and health care institutions. (d) Establishing procedures and standards for use of channels dedi- cated to public use and sharing of public facilities, if provided for in any franchise agrc~nent. (e) Planning expansion and growth of public benefit cable services. (f) Analyzing the possibility of integrating cable cc~nunications with other local, state or national telec~f~f~nications networks. (g) Formulating and rec~,,t~_nding long-range telec(~,,~nication policy. Public Usage of the Syst~n. If so specified in the franchise agrc~--~ent, the Grantor may utilize a portion of the Cable Cu~nications Syst6~n capacity, and associated facilities and resour-. ces, to develop and provide cable services that will be in the public interest. In furtherance of this purpose, the Grantor my establish a cc~mission, public corporation, or other entity to receive and allocate facilities, support funds and other considerations provided by the Grantee, and/or others. Such an entity, if established, my be dele- gated the following responsbilities: (a) Receive and utilize or reallocate for utilization, channel capa- city, facilities, funding and other support provided specifically for public usage of the Cable C~Lu~nications Systen. (b) Review the status and progress of each service developed for public benefit. (c) Reallocate resources on a periodic basis to conform with changing priorities and public (d) 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. 5.4 Ordinance No. 129 Page 18 Reservation byGrantor. The Grantor reserves the right, at its discre- tion, frcm time to time, to determine if the entity described in section 5.3 above is performing its purposes in a manner satisfactory to the Grantor, and if it is not, the Grantor my receive and allocate all or a portion of the channel capacity, operations, and capital appropriation, including any facilities~and equipment purchased pre- viously with such appropriation, to another entity. A new entity shall be required to c~ly in all respects with the legal responsibilities described in Section 5.3. 5.5 Initial Rates. (a) The Grantee shall establish initial rates that must be applied fairly and uniformly to all subscribers in the franchise area for its services in accordance with the rates contained in the franchise agr~-~n~_nt. Ail rates shall be the maximum allowable rate to be charged to the subscriber. (b) Initial basic subscriber rates shall be effective for a minimumof t~ (2) years frcm the date cable service cu¥,~nces, or until Grantee bas completed all construction proposed in its application whichever is longer. 5.6 Rate Change Procedure. (a) The Grantee may establish its own rates and charges for services rendered to subscribers under this franchise. (b) The Grantor may recapture its rate-making authority at any time if the Grantor, at its discretion, determines that the Grantee is failing to m~ct FCC Technical Standards, is not properly providing service for its subscribers, or, in the judgement of the Grantor, the Grantee is not cc~plying with its franchise c~,,~Jtment. (c) When the Grantee elects to increase its rates it shall notify, in writing, the Grantor, a minimum of ninety (90) calendar days before the increase is scheduled to take effect. The Grantor my challenge this increase within thirty (30) calendar days. If the Grantor challenges an increase pursuant to this subsection, the increase shall not becc~ effective until a b~?ing is held and the increase is approved by the City Council. (d) Within sixty (60) days following the notification to the Grantee that the Grantor wishes to challenge the rate increase, the Grantor shall hold a public bearing to consider the proposed rate change, at which h~aring all persons desiring to be heard, including the Grantee, shall be b~rd on any rotter including, but not limited to, the performance of its franchise, the Grantee's service, and the proposed new rates. (e) (f) Ordinance No. 129 Page 19 Upon notice of any public bM_ring as provided above, the Grantee shall notify its subscribers of the time, place, and subject matter of the public hearing by announcement on at least two (2) channels of its system between the hours of 7:00 P.M. and 9:00 P.M., for at least five (5) consecutive days prior to the hearing or by such suitable m~ns and messages as my be approved by the Grantor. Within ninety (90) days after said h~ring, the Grantor shall render a written decision on the Grantee's petition, either accepting, rejecting, modifying or deferring the same and reciting the basis for its decision. The Grantor shall consider, but not be limited to the following factors in approving or disapproving the petition: (1) Grantee's fulfillment of all requirements of the franchise. (2) Quality of service, as indicated by the number and type of service complaints, Grantee's response to ccmplaints, and the result of periodic syst~an performance tests and the annual reviews specified in Section 5.7. (3) Prevailing rates for comparable services in other cable systems of similar size and c~plexity. (4) Bate of return on Grantee's equity, as c~ared 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 protion of Grantee's invest- ment in tangible assets. The inveStment shall be defined as the cumulative cost of tangible assets such as plant, pro- perty and equipment, less the cumulative depreciation charges, plus working capital, which shall be defined as equivalent to three (3) 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-cable that my be ex~,~at frcm local rate regulation. Upon request of Grantor, Grantee shall prcmptly provide, frcm the Grantee, its parent cc~pany and any subsidiary come,any, all information as shall be reasonably necessary to determine system revenues and costs. (5) Performance of Grantee in introducing new services and expanding the cable system's capability, as c~npared to other systems of similar size and ccx~lexity, and as eva- luated by the system and services review specified in Section 5.8 (g) Ordinance No. 129 Page 20 (h) (i) (6) (7) Tax benefits received by Grantee, its partners or sbmre- holders, as the result of their investment in the system. Cash flow derived from system services. The Grantor shall not consider any valuation based upon the franchise or the Grantee's goodwill 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 one hundred eighty (180) days of the Grantee's petition pursuant to this Section, the Grantee shall ther~fter be entitled to put its proposed new rates into effect. The Grantee's request for a rate increase shall at the request of the Grantor, include, but not be limited to, the following finan- cial reports, which shall reflect the operations of the system: (1) Balance sheet. (2) Inccme sheet. (3) Statement of sources and applications of funds. (4) Detailed supporting schedules of expenses, incc~e, assets, depreciation and other items as may be required. (5) Statement of current and projected subscribers and penetra- tion. The Grantee's accounting records applicable to the system shall be available for inspection by the Grantor at all reasoDahle 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 sbmll include sufficient detail and/or footnotes as maybenecessarytoprovide the Grantor with the information needed to make accurate determinations as to the financial condition of the system. All financial stat~nents shall be certified as accurate by a certified public accoun- tant or officer of Grantee. Schedule of Rates. The Grantee shall maintain and file with the Grantor, a c~lete schedule of subscriber rates including all fccs and charges for services not subject to regulation or appro- val bythe Grantor. Ordinance No. 129 Page 21 5.7 (j) 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 s~a.~onal periods, the Grantee may require, in addition to full payment of any delinquent fees, a reasonable fee for reconnection. (k) 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. (1) S,,k~uission of Rate Increase Requests. Grantee sb~311 not s,,h~it a request for rate increases ~rlier than twelve (12) months after a prior request. (m) Rate Increase Notice. The Grantee shall give notice to subscri- bers at least thirty (30) days in advance of the implementation of a rate increase, and no part of the increase shall be applicable to any bills for service which have already bc~n sent to subscri- bers. Annual Review of Performance. At Grantor's sole option, within ninety (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 cu,,~,unications system. The reports required in Section 9 regarding subscriber cc~01aints, the records of performance tests and the opinion survey report shall be utilized as the basis for review. In addition, any subscriber my sut~it cu~olaints during the review w~tings, either orally or in writing, and these shall be considered. (a) Within thirty (30) days after the conclusion of the system perfor- mance review m~ctings, Grantor shall issue findings with respect to the adequacy of system performance and quality of ser- vice. If inadequacies are found, Grantor may direct Grantee to correct the inadequacies within a reasonable period of time. (b) Failure of Grantee, after due notice, to correct the inadequacies shall be considered a material breach of the franchise, and Grantor my, at its sole discretion, exercise any remedy within the scope of this ordinance or state law considered appropriate. Ordinance No. 129 Page 22 5.8 System and Services Review. To provide for technological, econcmic, and regulatory cbzRnges in the proven and accepted state-of-the-art of cable c~,~nicationsw to facilitate renewal proceduresw to prc~ote the maximum degree of flexibility in the cable system, and to achieve a continuing, advanced modern system, the Grantor and the Grantee shall cc~ply with the following system and services review provisions and the franchise agreement: (a) At Grantor's sole option, the Grantor and Grantee shall hold a system and services review sessions; however, Grantor shall not require such sessions more frequently than every three (3) years. (b) Sixty (60) days prior to the scheduled system and services review session, Grantee shall sutmzit a report to Grantor indicating the following: (1) All cable systsm services referred to above that are known to be in large metropolitmn areas. (2) A plan for provision of such services, or justification indi- cating why such services are not feasible for the franchise (c) Topics for discussion and review at the system and services review sessions shall include but shall not be limited to, services pro- vided, rate structure, free or discounted services, application of new technologies, system performance, progra~ning, subscriber ccmplaints, user c~laints, rights of privacy, amendments to the franchise, undergrounding processes, developments in the law, and regulatory constraints. (d) Either the Grantor or the Grantee may select additional topics for discussion at any review session. (e) Not later than sixty (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 Grantor that are considered technically and econcmtically feasible. Grantor may direct Grantee to provide such services within a reasonable time, under reasonable rates and con- ditions. Failure to provide such direct services may be con- sidered a breach of the franchise, subject to remedies as provided in this ordinance. 0rdinanceNo. 129 Page 23 5.9 ~cess Channel Management. (a) Intent. It is the intent of the Grantor to ensure that access and c~,,nunity channels provided for in any franchise agrc~----aent,, 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, cci~m~nity infor- mation and debate of public issues. Pursnant to these objectives, the Grantor may delegate the responsibility for non-regionally oriented public access channel manag~m~_nt to a nonprofit entity which may include, but not be limited to, any of the following: (1) A nonprofit public corporation. (2) An access management cc~mission or cc~anittee, appointed by Grantor, and representing a broad spectrum of the c~L.,~nity. (3) An established nonprofit entity with special cablecasting capability, such as a local or regional C~L,LLunity college. (b) Functions. The entity designated to manage the access channels shall have the following functions: (1) Responsibility for program production for and management of the public access channel and all other channels as my in the franchise agrc~---nlent be designated for c~L,~.~nity-based prograra~ing. Cc~ammity channels may include government and educational access channels', as designated in the franchise agrc~.---~ent. (2) To assure that the public access and cu,,,,unity cb~nnnels are made available to all residents of the franchise area on a nondiscriminatory, first-come, first-served basis. (3) To assure tb~t no censorship or control over program content of the public access and C(~L,~Lunity channels exist, except as necessary to cu~ly with FCC prohibition of material that is obscene, or contains cc~mercial advertising, or conducts a lottery. (4) TO devise, establish, and administer all rules, regulations, and procedures pertaining to the use and scheduling of the public access and community channels. (5) To prepare, in conjunction with the Grantee, such regular or special reports as may be required or desirable. (6) To hire and supervise staff. (c) (d) Ordinance No. 129 Page 24 (7) TO make all purchases of mterials and equipment that my be required. (8) To develop additional sources of funding, such as foundation or federal or state grants, to further c~,,,unity programming. (9) To perform such other functions relevant to the public and c(~,,~nity channels as may be appropriate. (10) Establishment of budgets on an annual basis, and utilization of funds and resources received frcm the Grantor or the public usage entity designated in Section 5.3, for the pur- pose of access progranming. Access Rules. The access management entity shall c~lete a set of rules for the use of'the access and cam~nity channels which shall be prc~ptly forwarded to the Grantor. The rules shall be prepared in cooperation with the Grantee, and confirmed by a contractual agreement between the access management entity and the Grantee. The rules shall, at a minimum, provide for: (1) Access on a first-cc~e, first-served, nondiscriminatory basis for all residents of the franchise area. (2) Prohibition of advertising for c~m~rcial or political pur- poses, as defined by the FCC. (3) Prohibition of any presentation of lottery information, Or obscene or indecent material. (4) Public inspection of the log of producers, which shall be retained by the Grantee for a period of two (2) y~ars. (5) Procedures by which individuals or groups who violate any rule mybeprevented frcmfurtheraccess tothe channel. (6) Free use of such r~a~onable amounts of channel time, cable- casting facilities, and technical support as are provided for in the agrc~aent between the access management entity and the Grantee. Access Management Entity Re~orts to Grantor. The access manage- ment entity shall provide a report to the Grantor, at l~t annually, indicating achievements in c~m~unity-based prograaming and services, and also shall provide a special report each time Grantee requests an increase in rates, indicating the level ana quality o~ Grantee's support outing tne pez~oa elapsea slnce any previous rate ~ncrease was nmp±emen~e~. S~CTION 6. Ordinance No. 129 Page 25 GI~AL FINANCIAL AND INSURANCE PROVISIONS 6.1 Construction Bond (a) (b) (c) (d) Within thirty (30) days after the granting of a franchise and prior to the cc~mencement of any construction work by the Grantee, the Grantee shall file with the Grantor a construction bond in the amount specified in the franchise agrc~--~ent 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 cont~,~lated herein shall be in the form approved by the Grantor 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 franchise obligation. In no event shall the amount of said bond be construed to limit the liability of the Grantee for aamages. Grantor, at its sole option, may waive this requirement, or permit consolidation of the construction bond with the performance bond and security fund specified, respectively in Section 6.2 and 6.3. 6.2 Performance Bond (a) In addition to the construction bond set forth above, the Grantee shall, at least thirty (30) days prior to the cu,,~encement of operation, file with the Grantor a performance bond in the amount specified in the franchise agrc~.---nent in favor of the Grantor and any other person who may be entitled to ~amages as a result of any occurrence in the operation or termination of the Cable Cu~,'manications System operated under the franchise agre~m~_nt, and including the payments required to be made to the Grantor hereunder. (b) Such bond as contemplated herein shall be in the form and with a come, any approved by the Grantor 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 franchise obligation. (c) In no event shall the amount of said bond be construed to the liability of the Grantee for damages. Ordinance No. 129 Page 26 6.3 Security Fund (a) Within thirty (30) days after the effective date of the franchise, the Grantee shall deposit into a bank account, established by the Grantor and mintain on deposit through the term of this franchise, the sum specified in the franchise agr~-~lent, as security for the faithful performance by it of all the provisions of the franchise, and cc~pliance with all orders, permits and directions of any agency of the Grantor having jurisdiction over its act or defaults under this ordinance, and the payment by the Grantee of any claims, liens and ~axes due the Grantor which arise by reason of the construction, operation or maintenance of the syst~. The security fund my be assessed by the Grantor for purposes including, but not limited to, the following: (1) Failure of Grantee to pay Grantor s~ns due under the terms of the franchise. (2) Reimbursement of costs borne by the Grantor to correct franchise violations not corrected by Grantee, after due notice. (3) Monetary remedies or penalties assessed against Grantee due to default or violation of franchise requirements. (b) At Grantor's sole option, scmeportion of the security fund maybe provided in the acceptable fom of an irrevocable letter of cre- dit, in lieu of a cash deposit. (c) Within thirty (30) days after notice to it that any amount has bc~n withdrawn by the Grantor frc~ the security fund pursuant to Subsection (a) of this Section, the Grantee shall deposit a sum of money sufficient to restore such security fund to the original amount. (d) If the Grantee fails, after ten (10) days notice to pay to the Grantor any franchise fee or ma_xes due and unpaid; or, fails to pay to the Grantor within such ten (10) days, any damages, costs or expenses which the Grantor shall be c~pelled to pay by re_~?on of any act or default of the Grantee in connection with the franchise; or fails, after thirty (30) days notice of such failure by the Grantor to cc~ply with any provision of the franchise which the Grantor r~a~onably determines can be remedied by an expen- diture of the security fund, the Grantor may in~ediately withdraw the amount thereof, with interest and any penalties, frcm the security fund. Upon such withdrawal, the Grantor shall notify the Grantee of the amount and date thereof. Ordinance No. 129 Page 27 (e) The security fund deposited pursuant to this Section shall beccme the property of the Grantor in the event that the franchise is revoked for cause by reason of the default of the Grantee in accordance with the procedures of Section 4.10 above. The Grantee, however, shall be entitled to the return of such security fund, or portion thereof, as remains on deposit no later than ninety (90) days after the expiration of the term of the franchise, provided that there is then no outstanding default on the part of the Grantee. (f) 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 ordinance or authorized by law, and no action, proccc~ing or exercise of a right with respect to such security fund shall affect any other right the Grantor may have. 6.4 Indemnification 6.5 (a) The Grantee shall by acceptance of the franchise granted herein agrees to indemmify, defend and hold harmless the Grantor, its officers, boards, c~ssions, agents, and ~loyees frcmany 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 this franchise; and (2) The acts or c~uissions of Grantee, its servants, ~loyees, or agents, except for acts of negligence of the Grantor. Both such ind~unifications sb~ll cover such claims arising in tort, contracts, violations of statutes, ordinances or regulations or other- wise. (b) 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 my participate in the defense of such claims at its expense. Insurance (a) The Grantcc shall maintain throughout the tern of the franchise insurance in amounts at le_mmt as follows: (1) Worker's Cu~oensation Insurance. In such coverage as may be required by the worker's cuupensation insurance and safety laws of the State of California and amendments thereto. Ordinance No. 129 Page 28 (b) (c) (d) (2) Comprehensive General Liability. Cc~prehensive autcmo bile liability including, but not limited to, nonownership and hired car coverage as well as owned vehicles wi th coverage for bodily injury and property damage shall be min- tained at the sum(s) specified in the franchise agr~-~a~nt. The Grantee shall furnish the Grantor with certificates of insurance. Such insurance certificates provided for herein shall name the Grantor, its officers, boards, cc~nissions, agents, and ~oloyees as additional insureds and shall contain the following endor- sement: "It is hereby understood and agrc~ that this insurance policy may not be cancelled by the surety or the intention not to renew be stated by the surety until thirty (30) days after receipt by the City by registered mail written notice of such intention to cancel or not renew." The minimum amounts set forth in the franchise agr~-~a~ent for such insurance shall not be construed to limit the liability of the Grantee to the Grantor under the franchise issued hereunder to the amounts of such insurance. SECTION 7. DESIGN AND CONSTRUCTION pROVISIONS 7.1 System Design. The Cable Cu~,LLunications Syst~n shall be construed in accordance with the design requirements contained in the franchise agreement. 7.2 Geographical Coveraqe. The Grantee shall design and construct the cable syst~n in such a manner as to have the eventual capability to pass by every single-family dwelling unit, multiple-family dwelling until, school and public agency within the area of the franchise. Service shall be provided to subscribers in accordance with the schedu- les and line extension policies specified in the franchise agrc---~ent. Cable system construction and provision of service shall be non- discriminatory, and Grantee shall not delay or defer service to any section of the franchise area on the grounds of econc~ic preference. 7.3 Cahlecastinq Facilities. The Grantee shall provide cablecasting faci- lities in accordance with the requirenents of the franchise agrc~.---~nt. 7.4 System Construction Schedule (a) The Grantee shall cu,~ly with the requirenents of the system construction schedule contained in the franchise agrc~.---~nt. 7.5 7.6 7.7 7.8 Ordinance No. 129 Page 29 (b) The Grantee shall provide a detailed construction plan indicating progress schedule, area construction maps, test plan, and pro- jected 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. Remedies for Delay in Construction. The Grantor may at its sole option, apply any or all of the following remedies in connection with delays in system construction: (a) Reduction in the duration of the franchise on a month-for-month basis for each month of delay exceeding six (6) months. (b) Forfeiture of construction bonds and/or assessment of menefary damages up to the maximum limit specified in the franchise agreement, levied against the security fund for delays excc~ing one (1) year. (c) Termination of the franchise within one (1) year after award of the franchise if the Grantee has failed to initiate system construction. (d) Termination of the franchise for other delays excc~ing eighteen ( 18 ) months. Any remedies applied shall be in accordmnce with the procedures con- tained in Section 12 herein. 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 within thirty (30) days frcm the date of request. Undergroundin9 of Cable. The undergrounding of cable 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 and relocated in concert, and on a cost-sbmring basis, with other utilities, when such other utilities my convert frem aerial to underground construction. New Development Underqroundinq. In cases of new construction or pro- perty development where utilities are to be placed underground, upon request by the Grantee, the developer or property owner shall give Grantee r~.~omable notice 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. 7.9 Ordinance No. 129 Page 30 Cost of trenching and ~s~ments required to bring service to the deve- lopment shall be borne by the developer or property owner; except that if Grantee fails to install its conduit, pedestals and/or vaults, and laterals within five (5) working days of the date the trenches are available, as designated in the notice given by the developer or pro- perty owner, then should the trenches be closed after the five (5) day period, the cost of new trenching is to be borne by Grantee. Underground at M~ltiple-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 econo- mically unf~_~ible. 7.10 Street Occupancy (a) (b) (c) Grantee shall utilize existing poles, conduits and other facili- ties 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 a permit or 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 lea-~t ten (10) days prior to the intention of the Grantee to cu,¥L~nce any construction in any streets except in case of a bonafide ~mergency. The Grantor shall cooperate with the Grantee in granting any permits required, pro- viding such grant and subsequent construction by the Grantee shall not unduly interfere with the use of such right-of-way and that proposed construction shall be done in accordance with the per- tinent provisions of the ordinances of the Grantor. 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 subseantial condition, and in good order and repair. The Grantee shall, at all times, employ ordinary care and shall install and maintain in use cc~only accepted methods and devices for pre- venting failures and accidents which are likely to cause damage, injuries, or nuisances to the public. Suitehle barricades, flags, (d) (e) (f) (g) (h) (i) Ordinance No. 129 Page 31 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 right-of-way by the Grantee shall be placed in such a manner as not to interfere with the usual travel on such public right-of- way. Grantee shall, at its own expense, and in a manner approved by the Grantor, restore to Grantor standards and specifications any ~amage or disturbance caused to the public right-of-way as a result of its operations or construction on its behalf. Whenever, in case of fire or other disaster, it becc~es necessary in the judgment of the Grantor to remove any of the Grantee's facilities, no cb~arge sba]l be made by the Grantee against the Grantor for restoration and repair. 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. Tr~.,.~.ing of trees on private property shall require written consent of the property owner. The Grantee at its expense shall protect, support, temporarily disconnect, relocate, or remove any property of Grantee when, in the opinion of the Grantor the' san~ is required by reason of traf- fic conditions, public safety, street vacation, freeway or 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, or any other structure or public improvement, including but not limited to movement of buildings, redevelotmnent, or any general program under which the Grantor shall undertake to cause any such proper- ties to be located beneath the surface of the ground. 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. Upon failure of Grantee to c~'Lk%~nce, 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 my, at its option, cause such work to be done and the Grantee sb~] 1 pay to the Grantor the cost thereof in the itemized amounts reported by the Grantor to Grantee within thirty (30) days after receipt of such itemized report. The Grantee shall make no paving cuts or curb cuts unless absolu- tely necessary, and only after written permission has b~n given by the Grantor. 0rdinanceNo. 129 Page 32 (j) Grantor reserves the right to require conduit for underground cabling as determined bythe superintendent of streets. 7.11 Construction and Technical Standards (a) Construction Standards. (1) C~t~liance 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 appli- cable. (2) C~%~liance with Electrical Codes. All installation of electronic equipment shall be of a permanent nature, durable and installed in accordance with the provisions of the National Electrical Cede as amended, and all applicable state and local codes. (3) Antennas and Towers. Antenna supporting structures (towers) shall be designed for the proper loading as specified in Electronics Industry Association's R.S.-222-A specifications. (4) Ccmpliance with Aviation Requirements. Antennas supporting structures (tower) shall be painted, lighted, erected and maintained in accordance with all applicable rules and regu- lations of the Federal Aviation Administration and all other applicable state or local codes and regulations. (5) Construction Standards and Requirements. All of the Grantee's plant and equipment, including but not limited to the antenna site, head-end and distribution syst~n 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 main- tenance and construction personnel so as not to endanger or interfere with improvements the Grantor may deem proper to make, or to interfere in any manner with the r~a~onable rights of any property owner, or to unnecessarily hinder or obstruct pedestrian or vehicular traffic. (6) Safety, Nuisance, Requir~nents. The Grantcc shall at all time~ employ ordinary care and shall install and maintain in use cc~am~nly accepted methods and devices preventing failures and accidents which are likely to cause damage, injury or nuisance to the public. Ordinance No. 129 Page 33 (b) Technical Standards. The Cable C~,,~Lonications System shall ~wcct all technical and performance standards contained in the franchise agr~--~_nt. (c) Test and Ccmpliance Procedure. The Grantee shall sukmit, within sixty (60) days after the effective date of the franchise agrc~---ment, a detailed test plan describing the methods and schedu- les for testing the Cable Cc~unications System on an ongoing basis to determine cca~liance with the provisions of the franchise agr~n~-nt. The tests for basic subscriber television services shall be performed at intervals no greater than every six (6) months, on a minimum of twenty (20) subscriber line service con- nections, located throughout the service area. At least eight (8) of these locations shall be at the far end of the distribution trunk cables. The tests may be witnessed by representatives of the Grantor, and written' test reports shall be suk~itted to the Grantor. If more than ten percent (10%) of the locations tested fail to ~t the performance standards, the Grantee shall be required to indicate what corrective measures have been taken, and the entire test my be repeated for at least twenty (20) different locations at the discretion of the Grantor. A second failure of more than ten percent (10%) my result, at the Grantor's option, in remedies, including but not limited to an order to reduce subscriber rates due to degraded service. (d) Special Tests. At any time after cc~Lmencement of service to subscribers the Grantor may reqUire additional tests, full or par- tial repeat tests, different test procedures, or tests involving a specific subscriber's terminal. Requests for such additional tests will be made on the basis of ccr~laints received or other evidence indicating an unresolved controversy or significant non- ccm~pliance, and such tests shall be limited to the particular matter in controversy. The Grantor sh~]l endeavor to so arrange its requests for such special tests so as to minimize hardship or inconvenience to Grantee or to the subscriber. 7.12 Areawide Interconnection. (a) Interconnection Required. The Grantee shall interconnect public usage channels of the Cable C~L~nications 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. Ordinance No. 129 Page 34 (b) Interconnection Procedure. Upon receiving the directive of the Grantor to interconnect, the Grantee sba!l inmediately initiate negotiations with the other affected systsm 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 prin- ciple shall apply. (c) Relief. The Grantee may be granted r~.~onable extensions of time to interconnect or the Grantor may rescind its order to intercon- nect upon petition by the Grantee to the Grantor. The Grantor my grant said request if it finds that the Grantee ba.~ negotiated in good faith and has failed' to obtain an approval frc~n the system or syst~ns of the proposed interconnection, or that the cost of the interconnection would cause an unreasonable or unacceptable increase in subscriber rates. (d) Cooperation Required. The Grantee shall cooperate with any inter- connection corporation, regional interconnection authority or city, county, state, and federal regulatory agency which my be hereafter established for the purpose of regulating, financing, or otherwise providing for the interconnection of cable systems beyond the boundaries of the franchise territory. (e) Initial Technical Requirements to Assure Future Interconnection' Capability. (1) All Cable C~m~nications Systems receiving franchises to operate within the franchise territory shall use the same frequency allocations for commonly provided television signals so far as is technically and econcmically feasible. (2) Grantee shall provide local origination and access equi[muent that is cu~atible throughout the area so that videocassettes or videotapes can be shared by various syst~ns. S~CTION 8. SERVICE PROVISIONS 8.1 Services to be Provided. The Grantee shall provide, as a minimum, the services listed in the franchise agre~p~nt. Services shall not be reduced without prior approval of Grantor. 8.2 8.3 8.4 8.5 8.6 8.7 8.8 Ordinance No. 129 Page 35 Poway Required Basic Television Service (PRBTS). The "Poway Required Basic Television Service" shall include the FCC required services, the distant television broadcast signals, the imported nonbroadcast signals, and the provision of all other cablecast open-channel signals. This service shall be provided to all s~ubscribers at the established PRBTS monthly subscription rates. Basic Subscriber Radio Service (BSRS). The "Basic Subscriber Radio Service" shall include the provision of all audio services designated in the franchise agrc~-~aent, including broadcast FM radio, and cablecast FM signals. This service shall be provided to all subscribers at the established BSRS monthly subscription rates. Institutional Service (IS). If specified in the franchise agr~-~a~nt, the "Institutional Service" shall include the provision of transmission and/or reception services to institutional users, on a leased channel basis at established IS rates. Services may include the distribution of video or nonvideo signals. Additional Subscriber Services. "Additional Subscriber Services," not included in the PRBTS and BSRS services specified above, may be pro- vided, either within the basic subscription rates, or on a pr~ini~m~ basis, subject to applicable FCC regulations. Local Origination Channel(s). The Grantee shall operate the cable- casting studios on a high-c~a]ity, professional basis for the purpose of providing cablecast progra~ning response to local needs and interests. The emphasis for the Local Origination Channel(s) shall be on providing progra~ning that is unavailable to viewers on broadcast television channels. Government A~cess Channel(s). The Grantee shall provide the number of channels specified in the franchise agreement, including all necessary interface equi~aent 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 utiliza- tion of these channels. Education Access Channel(s). The Grantee shall provide the number of channels specified in the franchise agre~nent 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. Ordinance No. 129 Page 36 8.9 Public Access Channel(s). The Grantee shall provide the number of channels specified in the franchise agr~-~J~_n, t including all necessary interface equitanent 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 managem~ent entity, as described in Section 5. The Grantee shall make available for progranwaers of the public access channel the facilities and support listed in the franchise agrc~--aent. 8.10 Public Access(s) (Closed-Circuit). If the Cable Culu~nications System includes a closed-circuit institutional network, the Grantee shall make at least three (3) two-way channels available for local government programs, educational programs, and public service programs use at no charge. The Public Access two-way channels shall be managed and operated by the access management entity. 8.11 Leased A~cess Channel. Grantee shall make available on a non- discriminatory basis, the number of channels specified in the franchise agrc~,---~nt. All leased channel service revenues sba1 1 be included in gross revenues subject to the franchise fee. 8.12 Universal Connection. The Grantor may require that all dwelling units. within the franchise area, where it is econcmically f~_?ible, to be connected physically to the cable system by the Grantee by m~ans of .drop cables terminating at each d~elling unit, whether or not the d~lling unit's 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 sb~ll be entitled to recover the incremental cost of providing a universal connection. S~CTION 9. OPERATION AND MA1/FfENANCE 9.1 Open Books and Records. The Grantee shall 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 busi- ness hours, all books, records, maps, plans, financial statements, ser- vice ccmplaint logs, performance test results and other like materials of the Grantee which relate to the operation of the franchise and are maintained at the office within the franchise territory. If any of such books or records are not kept in the local office, or upon reasonable request made available to the Grantor, and if the Grantor shall determine that an examination of such. records is necessary or appropriate to the performance of any of Grantor's duties, then all r~a-~onable travel and maintenance expense necessarily incurred in making such examination shall be paid by Grantee. Ordinance No. 129 Page 37 9.2 Records Required. (a) In any event the Grantee shall at all times maintain: (1) A record of all cu,~laints received and interruptions or degradation of service experienced for the preceding three (3) y~rs. (2) A full and c~-EJlete set of plans, records and "as-builts" maps showing the exact location of all Cable C~,,Lunications System equiE~_nt installed or in use in the franchise terri- tory, exclusive of subscriber service drops. 9.3 Maintenance and Complaints (a) (b) (c) 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 c<~plaints and requests for repairs or adjustments on a twenty-four (24) hour a day basis. A written log shall be main- tained listing all ccmplaints and their disposition. The Grantee shall render efficient service, make repairs prc~tly, 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 twenty-four (24) hours after receipt of the complaint or request. No charge shall be made to the subscriber for this ser- vice. (d) The Grantee shal 1 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 ~EJloyee or ~Y~loyees or agent to whom such inquiries or complaints are to be addressed, and furnish infor- mation concerning the Grantor's office responsible for administra- tion of the franchise with the address and telephone number of the office. 9.4 Rights of Individnals (a) Grantee shall not deny service, deny access, or otherwise discri- minate against subscribers, channel users, or general citizens on the basis of race, color, religion, national origin, age or sex. (b) (c) Ordinance No. 129 Page 38 (d) (e) Grantee shall ccmply 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 frcm time to time. No signals of a Class IV cable ccxm%~nications channel shall be transmitted frc~ a subscriber terminal for purposes of monitoring individual viewing patterns or practices without the express writ- ten permission of the subscriber. The request for such permission shall be contained in a separate document with a prcminent state- ment that the subscriber document is authorizing the permission in full knowledge of its provisions. Such written permission shall be for a limited period of time not to exceed one (1) year, which shall be renewable at the option of the subscriber. No penalty shall be invoked for a subscriber's failure to provide or renew such an authorization. The authorization shall be revokable at any time by the subscriber without penalty of any kind whatsoever. Such authorization is required for each type or classification of Class IV cable television activity planned; provided however, that the Grantee sb~%ll be entitled to conduct syste~ide or indivi- dually addressed "sweeps" for the purpose of verifying system integrity, controlling return-path transmission, ensuring technical standards compliance, securing the cable system, verifying basic service custcmers or billing for pay services. The Grantee, or any of its agents or ~,~loyees, shall not, without the specific written authorization of the subscriber involved, sell, or otherwise make available to any party: (1) Lists of names and addresses of such subscribers, or (2) Any list which identifies the viewing habits of individual subscribers. Fairness of Accessibility. The entire system of the Grantee shall be operated in a manner consistent with the principle of fairness and equal accessibility of its facilities, equi~w~_nt, channels, studios and other services to all citizens, businesses, public agencies and other entities having a legitimate use for the net- work, and no one shall be arbitrarily excluded frem its use. Allocation of use of said facilities shall be made according to the rules or decisions of the Grantee and any regulatory agencies affecting the same. 9.5 Continuity of Service Mandatory 9.6 Ordinance No. 129 Page 39 9.7 (a) It shall be the right of all subscribers to continue receiving service insofar as their financial and other obligations to the Grantee are honored. In the event that the Grantee elects to overbuild, rebuild, modify, or sell the system, or the Grantor gives notice of intent to terminate or fails to renew this franchise, the Grantee shall act so as to ensure that all subscri- bers receive continuous, uninterrupted service regardless of the circ~stances. In the event of a change of franchiscc, or in the event a new operator acquires the system, the Grantee shall cooperate with the Grantor, new franchisee or operator in maintaining continuity of service to all subscribers. During such period, Grantee shall be entitled to the revenues for any period during which it operates the system, and shall be entitled to reasonable costs for its ser- vices when it no longer operates the system. (b) In the event Grantee fails to operate the system for seven (7) consecutive days without prior approval of the Grantor or without just cause, the Grantor may, at its option, operate the system or designate an operator until such time as Grantee restores service under conditions acceptable to the Grantor or a permanent operator is selected. If the Grantor is required to fulfill this obliga- tion for the Grantee, the Grantee shall reimburse the Grantor for all reasonable costs or damages in excess of revenues frcm the system received by the Grantor that are the result of the Grantee's failure to perform. Grantee Rules and Requlations. The Grantee shall have the authority to prcmulgate 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 custouers. 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. Tenant Rights. Grantee shall be required to provide service to tenants in individual units of a rmlltiple housing facility with all services offered to other dwelling units within the franchise area, so long as the owner of the facility consents in writing, if requested by Grantee, to the following: (a) To Grantee's providing of the service to units of the facility; (b) To reasonable conditions and times for installation, maintenance, and inspection of the system on the facility pr~uises; (c) (d) SECTION 10. 10.1 10.2 Ordinance No. 129 Page 40 To reasonable conditions promulgated by Grantee to protect Grantee's equipment and to encourage widespread use of the syst~n; and To not discriminate in rental charges, or otherwise, between tenants who receive cable service and those who do not. Rights to Purchase the Syst~u. The Grantor my 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 only include the current fair mrket value of physical assets of cable television system, and not include any s~u for the value of the franchise, the present or future subscri- bers, or the grant under which such plant and property is being operated. Right of Inspection of Records. The Grantee shall provide such infor- mation which shall show the following in such fora as may be required by the Grantor. ' (a) The true and entire cost of construction equipment, of mintenance 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 Waxes, the dividends declared; the character and amount of all fixed charges; the allowance, if any, for interest, for wear and t~r or depreciation; all amounts and sources of inccme. (b) The amount collected annually frcm the Grantor tr~mury and the character and extent of the service rendered therefor to the Grantor. (c) The amount collected annually frem other users of service and the - character and extent of the service rendered therefor to them. (d) The Grantor shall have the right to inspect all books, records, maps, plans, inccme tax returns, financial statements, and other like mterials of the Grantee during normm] business hours. The Grantor may inspect all such records required in this section at the offices of the Grantee and the Grantee shall make the herebe- fore mentioned records available to the Grantor. If the Grantor needs copies of such information in order to ccmplete its examina- tion of the Grantee's operation, the Grantee may make available Ordinance No. 129 Page 41 10.3 10.4 10.5 such copies of the books and reports that the Grantor is requesting in order to c~lete the Grantor's examination of the Grantee's operation. I~nediately upon c~letion of such review, the Grantor shall return all such materials to the Grantee. 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 interven- tion in any suit or proceeding to which the Grant~ is party, and to which the outcone might materially affect cable service in the City of Poway, and the Grantee shall not oppose such intervention by the Grantor. Right to Require R~noval of Property. At the expiration of the term for which the franchise is granted, or upon its revocation or expira- tion, as provided for herein, the Grantor shall have the right to require the Grantee to r~move, at its own expense, all portions of the Cable C~,,,mlnications System frem all streets and public ways within the franchise area. S~CTION 11. 11.1 Right of Grantee. In any material dispute, the Grantee may pursue such other remedies as are available, including the bringing of action in any court of conpetent jurisdiction. S~CTION 12. FRANCHISE VIOLATIONS 12.1 Remedies for Franchise Violations. If the Grantee fails to performany obligation under the franchise, or fails to do so in a timely manner, the Grantor may at its option, and in its sole discretion; (a) Assess against the Grantee mone~mry dmmages up to the limits established in the franchise agrc~---ment for material franchise violations, which the Grantee hereby agrees to pay, said assessment to be levied against the security fund, hereinabove provided, and collected by Grantor inmediately upon said assessment. 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 frem Grantee such damages, losses, costs and expenses, including actual attorney fees, as may have been suf- fered or incurred by Grantor by r~mmon of or arising out of such breach of the franchise. This provision for assessment of damages 12.2 Ordinance No. 129 Page 42 is intended bytheparties to be separate and apart frcm Grantor's right to enforce the provisions of the construction end perfor- mance bonds provided for in Section 6, and is intended to provide cca~ensation to Grantor for actual damages. (b) For violations considered by Grantor to have 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 mone~ry relief substantially equal to the reduced quality of service resulting from Grantee's failure to perform. (c) Require Grantee to cure all defaults and breaches of its obliga- tions hereunder before Grantee is entitled to increase any rate or charge to subscribers hereunder. (d) Terminate or shorten the franchise period, for any of the causes stated in Section 4, above or otherwise contained within this ordinance or the franchise agre~uent. (e) No remedy 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 12.2 below. Grantor may, in its sole judgment and discretion, impose any of all of the above enumeratedmeasures against Grantee, which shall be in addition to anyandall other legal or equitable remedies it has under this franchise or under any applicable law. Procedures for Remedyin~ Franchise Violations. In the event that the Grantor determines that the Grantee has violated any provision of the franchise, any rule or regulation promulgated purs,~nt hereto or any applicable federal, state, or local law, the Grantor maymake a written d~and on the Grantee that it remedy such violation. If the violation, breach, failure, refusal, or neglect is not r~e~ied to the satisfac- tion of the Grantor within thirty (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) A public hearing shall be held and the Grantee shall be provided with an opportunity to be beard upon thirty (30) days written notice to the Grantee of the time and the place of the bearing provided and the allegations of franchise violations. (b) If, after notice is given and, at the Grantcc's option, a full public proceeding is held, the Grantor determines that such viola- tion, breach, failure, refusal, or neglect by the Grantee was excusable as provided in Section 12.3 below, the Grantor shall Ordinance No. 129 Page 43 12.3 12.4 direct the Grantee to correct or remedy the same within such addi- tional time, in such manner and upon such terms and conditions as the Grantor may direct. (c) If, after notice is given and, at the Grantee's option, a full public proceeding is held, the Grantor determines that such viola- tion, breach, failure, refusal or neglect was inexcusable, then the Grantor may assess a penalty or remedy in accordance with Section 12.1 above. Force Majeure: Grantee's Inability to Perform. In the event Grantee's performance of any of the terms, conditions, obligations, or require- ments of the franchise is prevented or impaired due to any cause beyond its reasonable control or not reasonably foresee~_hle, 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 thirty (30) days of its discovery of the occurrence of such an event. Such causes beyond Grantee's reasoDahle control or not reasonably foreseeable sb~ll include, but shall not be limited to, Acts of God and civil emergencies. Findings and Conclusions. Any conclusion by Grantor, pursn~nt to this section shall bemade in writing and supported bywritten findings sup- ported byevidencewithin the record of said proc~ings. SECTION 13. 13.1 Annual Re~orts. At Grantor's sole option, within ninety (90) days after the close of Grantee's fiscal y~ar, the Grantee shall s,,frait a written annual report, in a form approved by the Grantor, including, but not limited to, the following information: (a) A s~,,~ry of the previous year's (or, in the case of the initial report year, the initial y~ar's) activities in develo~ment of the cable system, including, but not limited to, services begun or discontinued during the reporting year, and the number of subscri- bers for each class of service; (b) A financial statement, or a Securities Exchange Cu~,,Hssion 10K report audited by, an independent certified public accountant, or certified by an officer of the Grantee, including a statement of inccme, revenues, operating expenses, value of plant, annual capi- tal expenditures, depreciation with an attached depreciation sche- dule, interest paid, ~axes paid, balance sheets, and a stat~]~e~nt of sources and application of funds; (c) A current statement of costs of construction by cc~ponent cate- gories; 13.2 13.3 Ordinance No. 129 Page 44 (d) A projected income statement and statement of projected construc- tion for the next two (2) years; (e) A list of Grantee's officers, members of its board of directors, and other principals of Grantcc; (f) A list of stockholders or other equity investors holding five per- cent (5%) or more of the voting interest in the Grantee and its parent, subsidiary and affiliated corporations and other entities, if any; (g) 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 cu,~utation of such amounts (e.g., the basis for ccmputing any manag~flent fees or share of "hc~e office" overhead). (h) The aforementioned reports and information shall be made available to the Grantor at the offices of the Grantee as requested by the Grantor. Such information shall be available for review by the grantor during normal business hours. However, if additional information and research may be nc~ed, the grantor my request and the Grantee shall provide copies of any of the aforementioned information for use in its review of the Grantee's c~pliance with its franchise and shall return it to the Grantee at the earliest possible m~ent after the review-has ~n ccmpleted. Plant Survey Re~ort. At Grantor's sole option, Grantee shall suhnit to the Grantor an annual plant survey report which shall be a ccmplete 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 franchisee area that have been cabled and have all services available, 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 e, able the Grantor to ascertain that the service requirements and technical s~an~rds of the FCC and/or the franchise are achieved and mintained. At Grantor's request, but no more often than once per three (3) years, the Grantee and the Grantor shall agree upon the appointment of a qualified inde- pendent engineer to evaluate and verify the technical performance of the cable system. The cost of such evaluation shall be borne equally by the Grantee and the Grantor. Copies of Federal and State Reports. The Grantee shall suhnit to the Grantor copies of all initial pleadings, applications, reports, sub- mitted by the Grantee to any federal, state and regulatory agencies and other government bodies materially relating to its cable television 13.4 13.5 13.6 13.7 13.8 Ordinance No. 129 Page 45 operations within the franchise area. Grantee shall su~uit such docu- ments to the Grantor simultaneously with their submission to such courts, agencies and bodies. Public Reports. A copy of each of Grantee's annual and other periodic public reports and those of its parent, subsidiary and affiliated cor- porations and other entities, as the Grantor requests and is reasonably appropriate, shall be submitted to the Grantor within five (5) days of its iss~ance. Cc~plaint File and Reports. An accurate and cc~prehensive file shall be kept by the Grantee of any and all cu~olaints regarding the cable system. A procedure shall be established by the Grantee by the time of installation of the cable system to remedy cc~plaints quickly and reasonably to the satisfaction of the Grantor. C~,~lete records of Grantee's actions in response to all complaints shall be kept. These files and records shall r~main open to the public during normal busi- ness hours: (a) A st,,,,~y of cc~plaints, identifying the number and nature of c~,~laints and their disposition, in a form approved by the Grantor, shall be cu,~leted for each month and sutx~itted to the Grantor by the tenth day of the succeeding month. (b) The results of an annual opinion survey report which identifies satisfaction of dissatisfaction among subscribers with cable ~ munications services offered by the Grantee shall be submitted to the Grantor no later than two (2) months after the end of Grantee's fiscal year. The surveys required to make said report shall be in a format approved by the Grantor and may be in a form that can be transmitted to subscribers with one (1) or more bills for service. The Grantee my utilize focus groups, telephone, personal surveys, or other valid randem surveys to achieve the intent of this section, if so approved by the Grantor. Miscellaneous Reports. Grantee shall su _P~it to the Grantor such other information or reports in such forms and at such times as the Grantor may reasonably request or require. Inccme Tax Returns. If not incorporated with parent c~any returns, the Grantee sb~]l submit to the Grantor copies of all inccme ~ returns and reports which are filed with the local, state or federal governments pertaining to its cable system in the franchise area within five (5) 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 reasonable notice, or, in case of ~ergency, upon d~mand without prior notice, to allow Grantee to verify the accuracy of any s,,P~i. ' tted report. Ordinance No. 129 Page 46 13.9 Business Office and Files. The Grantee shall maintain an office within the franchise area. The Grantee 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 cucplaint logs, performance test results and other like materials of the Grantee which relate to the operation of the cable syst~. ~cess to the aforementioned records shall not be denied by the Grantee on the basis that said records contain confidential, privileged, or proprietary information. 13.10 Public Inspection. All reports subject to public disclosure, shall be available for public inspection at a designated Grantor office during normal business hours. 13.11 Failure to Report. The refusal, failure, or neglect of the Grantee to file any of the reports required, or such other reports as the Grantor reasonably may request, shall be deemed a material breach of franchise, and shall subject the Grantee to all reme- dies, legal or equitable, which are available to the Grantor under the franchise or otherwise. 13.12 False Statements. Any materially false or misleading statement or representation made knowingly by the Grantee in any report required under the franchise, shall subject the Grantee to all remedies, legal or equitable, which are available to the Grantor under the franchise or otherwise. 13.13'Cost of Reports All reports and records required under this or any other section shall be furnished at the sole expense of the Grantee. S~CTION 14. MISC~LrANq~US PROVISIONS 14.1 Cu~liance with State and Federal Laws. Notwithstanding any other pro- visions of the franchise to the contrary, the Grantee shall at all times cc~ply 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 frc~ performing any service, in conflict with the terms of the franchise or 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 the franchise. 14.2 14.3 14.4 14.5 Ordinance No. 129 Page 47 Separability Nonmaterial Provisions. If any provision of this ordi- nance or any related agreements is held by any court or by any federal, state, or local agency of cu~etent jurisdiction to be invalid as conflicting with any federal, state, or local 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 enforc~bility 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 provi- sion hereof or thereof which has 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 thirty (30) days written notice of such change before requiring ccmpliance with said provision. Separability-Material Provisions. If any material section of this ordinance, as determined by the Grantor, is held to be invalid or prc~--mpted by federal, state or county regulations or laws, the Grantor shall negotiate with Grantee appropriate modifications to the franchise to provide reasonable relief frc~a such invalidity or prc~aption, including the payment of liquidated damages. If the parties are unable to reach agreement on such modifications, then the dispute shall be suP~litted to a mutually agreeable arbitrator, in accordance with state law, who shall 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. If an arbitrator cannot be agrc~ upon, then each party sb~ll select an arbitrator of his choice and each selected arbitrator shall agrcc upon a third. Said panel of three arbitrators shall render a majority decision herein. Notices. Grantee shall maintain within the franchise area or the County of San Diego throughout the term of the franchise, an address for service of notices by mail. Grantee shall also maintain within the franchise area, a local office telephone number or toll free number for the conduct of matters related to this franchise during normal business hours. Captions. The captions to sections throughout this ordinance are intended solely to facilitate reading and reference. Such captions shall not affect the m~aning or interpretation of this ordinance. Ordinance No. 129 Page 48 14.6 14.7 14.8 No Recourse A~ainst the Grantor. The Grantee shall have no recourse whatsoever against the Grantor or its officials, boards, cu,,,,~ssions, agents, or e~ployees for any loss, costs, expense, or damage arising out of any provision or r.e~uir~nent of the franchise or because of the enforcement of the franchise except any acts of negligence. Nonenforcement b~; the Grantor. The Grantee shall not be relieved of its obligation to ccmply with any of the provisions of this ordinance by reason of any failure of the Grantor to enforce prompt ccmpliance. Acknowledgments. Except as expressly provided in this franchise, the Grantee herein shall have no recourse whatsoever against the Grantor for any loss, cost, or expense, for damage arising out of the provi- sions or requirenents of this franchise or because of the enforcement thereof by the Grantor, nor for the failure of the Grantor to have the authority to grant all or any part of this franchise excepting any acts of negligence. The Grantee expressly acknowledges that upon accepting this franchise, it does so voluntarily and in reliance upon its own investigation and understanding of the power and authority of the Grantor to grant this franchise. The Grantee by acceptance of this franchise acknowledges that it has not ~n induced to enter into this franchise by any understanding or prcmise, or other statement, whether verbal or written, by or on behalf of the Grantor or by any other third person concerning any term or condition of this franchise not expressed herein. The Grantee acknowledges that it was not coerced or unlawfully induced into accepting this franchise and that any offers which it made for services or benefits under this franchise were made as a matter of its own volition without any coercion from the Grantor or any agent thereof. The Grantee further acknowledges by acceptance of this franchise that it has carefully read the terms and conditions hereof and is willing to and does accept all the risks of the m~aning of such terms and conditions and agrees that, in the event of any ambi- guity therein or in the event of any other dispute over the meaning thereof, the same shall be construed strictly against the Grantee and in favor of the Grantor. S~CTION 15. FRANCHISE APPLICATIONS 15.1 Franchise Applications. Applicants for a franchise shall sukmit 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. Ordinance No. 129 Page 49 S~CTION 16. Sections 21.1601-21.1668 of the Ordinances are hereby rescinded. San Diego County Code of Regulatory S~CTION 17. This ordinance shall take effect and be in force thirty (30) days after the date of its passage; and the City Clerk of the City of Poway is hereby authorized to use s%a,,,ery publication procedures pursuant to Government Code Section 36933 utilizing the Poway News-Chieftain, a newspaper of general circulation published in the City of Poway. Introduced and first read at a regular meeting of the City Council of the City of Poway held the 29th day Of May, 1984, and thereafter P~SED AND ADOPTED at a regular m~eting of said City Council held the 12 day of June , 1984, by the following roll call vote: AYES: COUNC~: EMERY, KRUSE, ORAVEC, SHEPARDSON, TARZY NOES: COUNCII~I~MBERS: NONE ABSENT: COUNCI~RRS: NONE AT~EST: Marjorie ~. Wahlsten, City Clerk