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HomeMy WebLinkAbout220 - Ordinances ORDINANCE NO. 220 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ADDING TITLE 7 TO THE RANCHO CUCAMONGA MUNICIPAL CODE TO PROVIDE FOR THE ESTABLISHMENT AND GRANTING OF FRANCHISES OR PRIVILEGES FOR THE CON- STRUCTION, MAINTENANCE AND OPERATION OF CABLE COMMUNI- CATION, OR CABLE TELEVISION SYSTEMS AND FURTHER PROVIDING FOR THE CONTINUING REGULATION AND ADMINISTRATION OF THESE FRANCHISES AND THE ACTIVITIES RELATIVE TO THEM SECTION 1: The Rancho Cueamonga Municipal Code is hereby amended by adding Title 7 thereto to read as follows: Title 7 Cable Television Systems and Franchises Chapters: 7.01 General Provisions 7.02 Grant of Franchise 7.03 Regulation of Franchise 7.04 General Financial and Insurance Provisions 7.05 Design and Construction Provisions 7.06 Service Provisions 7.07 Operation and Maintenance 7.08 Rights Reserved To The Grantor 7.09 Rights Reserve To The Grantee 7.10 Franchise Violations 7.11 Reports 7.12 Miscellaneous Provisions Chapter 7.01 GENERAL PROVISIONS Sections: 7.01.010 Intent 7.01.020 Short Title 7.01.030 Definitions 7.01.040 Notice of Public Hearings 7.01.010 Intent: The City of Rancho Cueamonga finds that the development of cable television and communications systems has the potential of having great benefit and impact upon the residents of Rancho Cueamonga. Because of the complex and rapidly changing technology 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 title and subsequent amendments to provide for and specify the means to attain the best possible public interest and public purpose in these matters and any franchise issued pursuant to this title shall be deemed to include this finding as an integral part thereof. 7.01.020 Short Title: This title shall be known and may be cited as the "City of Rancho Cucamonga Cable Television Franchise Ordinance." 7.01.030 Definitions: For the purpose of this title the following terms, phrases, words and their derivations shall have the meaning given herein. When not inconsistent with the context, words used in the present tense include the future, words in the plural number include the singular Ordinance No. 220 Page 2 number, and words in the singular number inciude the plural number. Words not defined shall be given their common and ordinary meaning. A. "Additional Subscriber Service" means any service not included in "Basic Subscriber Television Service," or "Basic Subscriber Radio Service" or "Institutional Service," including, but not limited to, pay-cable. B. "Agency Subscriber" means a subscriber who receives a service in a government or public agency, school, or non-profit corporation. C. "Basic Subscriber Radio Service" means the provision to all subscribers of such audio programs as the retransmission of broadcast FM 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. D. "Basic Subscriber Television Service" means the total of all of the following: ~. The transmission to all subscribers of all broadcast television channel signals authorized or permitted by the FCC and provided for in a franchise agreement. 2. The provision to all subscribers of non-broadcast open channel signals, originating from sources outside the Cable Communications System. 3. The cablecasting to all subscribers of Local Origination programming and Public, Educational and Government Access programming. 4. The transmission to all subscribers of all other cablecasting open-channel signals. Basic Subscriber Television Service may be offered to subscribers in one or more tiers or combination of programs. E. "Broadcast Signal" means a television or radio signal that is transmitted over the air to a wide geographic audience and is received by a Cable Communications System off-the-air or by microwave. F. "Cable Communications System" or "System," also referred to as "Cable Television System," "CATV System," or "Broadband Communications Network," means a system of antennas, cables, amplifiers, towers, microwave links, cablecasting studios, and other conductors, converters, equipment or facilities, designed and constructed for the primary purpose of distributing video programming to home subscribers, and the secondary purpose of producing, receiving, amplifying, storing, processing, or distributing audio, video, digital, or other forms of electronic or electrical signals. G. "Cablecast Signal" means a nonbroadcast signal that originates within the facilities of the Cable Communications System. H. "Cable-mile" means a linear mile of strand-bearing cable as measured on the street or easement from pole to pole or pedestal to pedestal. I. "Channel" means a six (6) Megahertz (MHz) frequency band, which is capable of carrying either one (1) standard television or video signal, a number of audio, digital or other non-video signals, or some combination of such signals. J. "Class IV Channel" means a signaling path provided by a Cable Communications System to transmit signals of any type from a subscriber terminal to another point in the cable television system. K. "Closed-Circuit" or "Institutional Service" means such video, audio, data and other services provided to i~stitutional users on an individual requirement, private channel basis. Th~ e may include, but not be limited to, two-way video, audio or digital signals among institutions, or from institutions to residential subscribers. Ordinance No. 220 Page 3 L. "Commence Construction" means that time and date when construction of the Cable Communications System is considered to have commenced, which shall be when the first connection is physically made to a utility pole, or undergrounding of cables is initiated, after preliminary engineering (strand mapping) and after all necessary permits and authorizations have been obtained. M. "Commence Operation" means that time and date when operation of the Cable Communications System is considered to have commenced which shall be when sufficient distribution facilities have been installed so as to permit the offering of full service to at least ten percent (10%) of the dwelling units located within the service area. N. "Commercial Subscriber" means a subscriber who receives a service in a place of business, where the service may be utilized in connection with a business, trade, or profession. O. "Converter" means an electronic device which converts signal carriers from one form to another. P. "Council" means the governing body of the City of Rancho Cucamonga. Q. "Educational Channel," or "Educational Access Channel" means any channel where educational institutions are the primary designated programmers. R. "FCC" means the Federal Communications Commission and any legally appointed or elected successor. S. "Franchise" means the nonexclusive rights granted pursuant to this title to construct and operate a Cable Communications System along the public way within all or a specified area in the City. Any such authorization, in whatever form granted, shall not mean and include any license or permit required for the privilege of transacting and carrying on a business within the City as required by other titles and laws of this City. T. "Franchise Asreement" means a franchise award title, or a contractual agreement, containing the specific provisions of the franchise granted, including referenced specifications, franchise applications, franchise requirements, titles and other related materials. U. "Franchise Fee" means the fee paid by the Grantee to the Grantor in consideration of the use of the public streets and rights-of-way. V. "Government Channel" or "Government Access Channel" means any channel where local government agencies are the primary designated programmers. W. "Grantee" means any "person" receiving a franchise pursuant to this title and under the granting franchise ordinance, and its lawful successor, transferee or assignee. X. "Grantor" or "City" means the City of Rancho Cucamonga as represented by the City Council or any delegate acting within the scope of its jurisdiction. Y. "Gross Annual Revenues" means the annual gross revenues received by the Grantee from all sources of operations of the Cable Communications System, except that any sales, excise or other taxes collected for direct pass-through to local, state or federal government shall not be included. Z. "Initial Service Area" means the area of the City which will receive service initially, as set forth in the franchise agreement. Ordinance No. 220 Page 4 AA. "Installation" means the connection of the system from feeder cable to subscribers' terminals, and the provision of service. BB. "Leased Channel" or "Leased Access Channel" means any channel or portion of a channel available for lease and programming by persons or entities other than the Grantee. CC. "Local Origination Channel" means any channel where the Grantee is the primary designated programmer, and provides video programs to subscribers. DD. "Monitoring" means observing a communication signal, or the absence of a signal, where the observer is neither the subscriber nor the programmer, whether the signal is observed by visual or electronic means, for any purpose whatsoever. Monitoring shall not include systemwide, non- individually addressed sweeps of the system for purposes of verifying system integrity, controlling return paths transmissions, or billing for pay-cable. EE. "Nonbroadcast Signal" means a signal that is transmitted by a Cable Communications System and that is not involved in an over-the-air broadcast transmission path. FF. "Open Channel" means any channel that can be received by all subscribers, without the necessity for special equipment. GG. "Pay-Cable" or "Pay-Television" means the delivery to subscribers, over the Cable Communications System, of television signals for a fee or charge to subscribers over and above the charge for Basic Subscriber Service, or a per program, per channel, or other subscription basis. HH. "Penetration" means the result expressed in the percentage obtained by dividing the total number of potential subscribers in the franchise area into the number of subscribers receiving service. II. "Person" means an individual, partnership, association, organization, corporation or any lawful successor, transferee or assignee of said individual, partnership, association, organization or corporation. JJ. "Private Channel" or "Closed-Circuit Channel" means any channel which is available only to subscribers who are provided with special converter or terminal equipment to receive signals on that channel. KK. "Prosrammer" means a person or entity who or which produces or otherwise provides program material or information for transmission by video, audio, digital, or other signals, either live or from recorded tapes or other storage media, to subscribers, by means of the Cable Communications System. LL. "Public Access Channel" or "Community Access Channel" means any channel where any member of the general public or any noncommercial organization may be a programmer, without charge, on a first-come, first- served, nondiscriminatory basis, in accordance with the terms of the franchise agreement. ~t. "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 commence 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. NN. "Reasonable Order" shall be written orders not excessive or extreme as to costs or time to comply, governed by sound thinking. Ordinance No. 220 Page 5 OO. "Resident" means any person residing in the City as otherwise defined by applicable law. PP. "Residential Suseriber" 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 profession. QQ. "Sale" shall include any sale, exchange, barter or offer for sale. RR. "School" means any nonprofit educational institution including primary and secondary schools, colleges and universities, both public and private. SS. "Section" means any section, subsection, or provision of this franchise ordinance. TT. "Service Area" means the entire geographic area within the City. UU. "State" means the State of California. W. "Street" shall include each of the following which have been dedicated to the public or hereafter dedicated to the public and maintained under public authority or by others and located within the City limits: streets, roadways, highways, avenues, lanes, alleys, sidewalks, easements, 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. WW. "Subscriber" means any persons, firm, corporation, or other entity who or which elects to subscribe to, for any purpose, a service provided by the Grantee by means of or in connection with the Cable Communications System. XX. "Substantially Completed" means that sufficient distribution facilities have been installed by the Grantee so as to permit the offering of full network service to at least ninety percent (90%) of the potential subscribers in the service area. YY. "Tapping" means observing a two-way communications signal exchange, where the observer is neither of the communicating parties, whether the exchange is observed by visual or electronic means, for any purpose whatsoever. 7.01.040 Notice of Public Hearings. nenever a public hearing is required by a provision of this Title, notice o~ the time and place of said hearing, including a general explanation of the matter to be considered, shall be given at least ten (10) calendar days before the hearing by publication at least once in a newspaper of general circulation, published in the City or in an adjacent city, and circulated in the City, or if there is none, by posting in at least three public places in the City. Chapter 7.02 GRANT OF FRANCHISE Sections: 7.02.010 Grant 7.02.020 Franchise Required 7.02.030 Establishment of Franchise Requirements 7.02.040 Franchise Territory 7.02.050 Use of Public Streets and Ways 7.02.060 Duration 7.02.070 Franchise Nonexclusive Ordinance No. 220 Page 6 7.02.080 Franchise Applications 7.02.090 Grant Procedure 7.02 100 Transfer of Ownership or Control 7.02 110 Franchise Renewal 7.02 120 Police Powers 7.02 130 Franchise Fee 7,02 140 Forfeiture or Revocation 7.02 150 Procedures in the Event of Termination or Expiration 7.02 160 Receivership and Foreclosure 7.02 170 Franchise Processing Costs 7.02.010 Grant. In the event that Grantor shall grant to a Grantee a nonexclusive, revocable franchise to construct, operate, maintain, and reconstruct, a Cable Communications System within the franchise area, said franchise shall constitute both a right and an obligation to provide the services of a Cable Communications System as required by the provisions of this title and the franchise agreement. The franchise agreement 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 federal laws and regulations and state general laws and regulations. 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 made subject to the general title provisions now in effect or hereafter made effective. Nothing in the franchise shall be deemed to waive the requirements of the other codes and ordinances of the Grantor regarding permits, fees to be paid or manner of construction. 7.02.020 Franchise Required. No Cable Communications System shall be allowed to occupy or use the streets in the franchise territory or be allowed to operate without a franchise in accordance with the provisions of this title. 7.02.050 Establishment of Franchise Requirements. The Grantor may establish appropriate requirements for new franchises or franchise renewals, and may modify these requirements from time to time to reflect changing conditions and state of art in the cable television industry. Such require- ments shall not be retroactive to franchise then in effect. 7.02.040 Franchise Territory. The Grantor may grant a franchise for all or any defined portion of the City. The service area shall be the entire territory defined in the franchise agreement. The initial service area shall be that portion of the franchise territory scheduled to receive initial service, as stated in the franchise agreement. 7.02.050 Use of Public Streets and Ways. For the purpose of operating and maintaining a Cable Communications System in the franchise area, and subject to the provisions of Section 7.05.100 herein, the Grantee may erect, install, construct, repair, replace, reconstruct, and retain in, on, over, under, upon, across, and along the public streets and ways within the franchise territory such wires, cables, conductors, ducts, conduits, vaults, manholes, amplifiers, appliances, pedestals, attachments, and other property and equipment as are necessary and appurtenant to the operation of the Cable Communications System. Prior to construction or alteration, however, the Grantee shall in each case file plans with the appropriate Grantor agencies and local utility companies, and receive written approval before proceeding. Grantor shall in any event comply with all applicable City construction codes and procedures. Ordinance No. 220 Page 7 7.02.060 Duration. The term of any franchise and all rights, privileges, obligations and restrictions pertaining thereto shall be fifteen (15) years from the effective date of the franchise unless terminated sooner as hereinafter provided. The effective date of the franchise shall be the date of execution of the franchise agreement by the Grantor, subject to prior execution by the Grantee. 7.02.070 Franchise Nonexclusive. Any franchise granted shall be nonexclusive. The Grantor specifically reserves the right to grant, at any time, such additional franchies for a Cable Communications System as it deems appropriate. 7.02.080 Franchise Applications. Applicants for a franchise shall submit to the Grantor written applications utilizing the standardized format provided by the Grantor, at the time and place designated by the Grantor for accepting applications, and including the designated application fee. 7.02.090 Grant Procedure. All franchise applications when filed shall be available for public inspection at places designated by the Grantor. No later than ninety (90) days after filing, a public hearing shall be held on the application. A decision shall be made by the Grantor not later than ninety (90) days after such hearing based upon an evaluation of the application(s), the hearing, and other information that the Grantor may deem relevant. Grantor may grant on or more franchises, or may decline to grant any franchise, as it determines to be in the best public interest. 7.02.100 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 unreasonably withheld. B. Ownership or Control. The Grantee shall promptly 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 ten percent (10%) or more of the beneficial ownership interest of the Grantee. Every change, transfer, or acquisition of control of the Grantee shall make the franchise subject to cancellation unless and until the Grantor shall have consented thereto, which consent 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 injury. 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 proposed purchaser, transferee, or assignee (the "proposed transferee',), which in the case of a corporation, shall include all officers, directors, employees and all persons having a legal or equitable interest in five percent (5%) or more of its voting stock, or any of the proposed transferee's principals: a. Has ever been convicted or held liable for acts involving moral turpitude including, but not limited to any violation of federal, state or local law or regulations, or is presently under an indictment, investigation or complaint charging such acts; b. Has ever had a judgment in an action for fraud, deceit or misrepresentation entered against it, her, him, or them by any court of competent Jurisdiction; or Ordinance No. 220 Page 8 c. H~s pending any legal claim, lawsuit or administrative proceeding arising out of or involving a cable system. 2. To establish, to the satisfaction of the Grantor, the financial solvency of the proposed transferee by submitting all current financial data for the proposed transferee which the Grantee was required to submit in its franchise application, and such other data as the Grantor may request. Financial statements shall be audited, certified and qualified by an independent Certified Public Accountant. 3. To establish to the satisfaction of the Grantor that the financial and technical capability of the proposed transferee is such as shall enable it to maintain and operate the cable system for the remaining term of the franchise under the existing franchise terms. C. The Grantor agrees that any financial institution having a pledge of the franchise or its assets for the advancement of money for the construction and/or operation of the franchise shall have the right to notify the Grantor that it or its designee satisfactory to the Grantor will take control and operate the Cable Communications System, in the event of a Grantee default in its financial obligations. Further, said financial institution shall also submit a plan for such operation that will insure continued service and compliance with all franchise requirements during the term the financial institution exercises control over the system. The financial institution shall not exercise control over the system for a period exceeding one (1) year unless extended by the Grantor in its discretion and during said period of time it shall have the right to petition the Grantor to transfer the 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 shall not be unreasonably withheld. D. The consent or approval of the Grantor to any transfer of the Grantee shall not constitute a waiver or release of the rights of the Grantor in and to the streets, and any transfer shall by its terms, be expressly subordinate to the terms and conditions of any franchise. E. 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. F. In no event shall a transfer of ownership or control be approved without the successor in interest becoming a signatory to the franchise agreement. 7.02.110 Franchise Renewal. Nothing in any franchise agreement 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 nonrefundable application fee established by the Grantor in an amount not to exceed the reasonable cost of processing the application. The application shall set forth in detail the franchisee's legal, character, financial and other pertinent qualifications sufficient to make a determin- ation to renew or not to renew 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 hearing shall be held on the application. A decision shall be made by the Grantor not later than ninety (90) days after Ordinance No. 220 Page 9 such hearing based upon the application, the hearing, the Grantee's record of compliance 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 from submitting such an application. 5. In any renewal or public solicitation, the Grantor may require additional services, system upgrade or any other conditions it deems feasible and appropriate in the light of the state of art of the cable communications industry at that time. 7.02.120 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 comply with all applicable general laws and ordinances enacted by the Grantor pursuant to such power. Any conflict between the provisions of this title and any other present or future lawful exercise of the Grantor's police powers shall be resolved in favor of the latter, except that any such exercise that is not of general application in the Jurisdiction or applies exclusively to any Cable Communications System franchise which contains provisions inconsistent with the franchise shall prevail only if upon such exercise the Grantor finds any emergency exists constituting a danger to health, safety, property or general welfare or such exercise is mandated by law. 7.02.130 Franchise Fee. A. Annual Franchise Payment. A Grantee of a franchise hereunder shall pay to the Grantor an annual fee in an amount as designated in the franchise agreement, but in no event less than five percent (5%) of the annual gross revenues. Such payment shall be in addition to any other and commence as of the effective date of the franchise. The Grantor, if it so requests, shall be furnished a statement, audited and certified by a Certified Public Accountant, reflecting the total amounts of annual gross revenues and all payments, deductions and computations for the period covered by the payment. Grantor shall have the right to conduct an independent audit of Grantee's records, and if such audit indicates a franchise fee underpayment of two percent (2%) or more, the Grantee shall assume all reasonable costs of such an audit. B. Acceptance by Grantor. No acceptance of any payment by the Grantor shall be construed as a release or as an accord and satisfaction of any claim the Grantor may have for further or additional sums payable as a franchise fee under this title or for the performance of any other obligation or the Grantee. C. Failure to Make Required Payment. In the event that any franchise payment or recomputed amount is not made on or before the dates specified herein, Grantee shall pay as additional compensation: 1. An interest charge, computed from such due date, at an annual rate equal to the maximum interest rate which could lawfully be charged by a private lender in effect upon the due date. 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 reason of delinquent payment. D. Payment due the Grantor under this provision shall be computed quarterly, for the preceding quarter, as of March 31, June 30, September 30, and December 31. Each quarterly payment shall be due and payable no later than thirty (BO) days after the dates listed in the previous sentence. Each payment shall be accompanied by a brief report showing the basis for the computation and such other relevant facts as may be required by the Grantor. Ordinance No. 220 Page 10 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 much as they exceed the actual franchise payments due during any year. 7.02.140 Forfeiture or Revocation. A. Grounds for Revocation. The Grantor reserves the right to revoke any franchise granted hereunder and rescind all rights and privileges associated with the franchise in the following circumstances, each of which shall represent a default under this title and a material branch of the franchise: 1. If the Grantee should default in the performance of any of its material obligations under this title or under such documents, agreements and other terms and provisions entered into by and between the Grantor and the Grantee, subject to the provisions of Section 7.10.030. 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 bonds as required herein. 3. If any court of competent jurisdiction, or any federal or state regulatory body by rules, decisions or other action determines that any material provision of the franchise documents, including this title, is invalid or unenforceable prior to the commencement of system construction. 4. If the Grantee should willfully violate any orders or rulings of any regulatory body having Jurisdiction over the Grantee relative to the franchise. 5. If the Grantee ceases to provide services for any reason within the control of the Grantee over the Cable Communications System. 6. If the Grantee attempts to evade any of the provisions of this title 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 under the provisions of Section 7.10.030. 8. If the Grantee becomes insolvent, unable or unwilling to pay its debts, or upon the entry of an order for relief in favor of Grantee in a bankruptcy proceeding. B. Procedure Prior to Revocation. 1. The Grantor may make written demand that the Grantee do so comply with any such requirement, limitation, term, condition, rule or regulation or correct any action deemed cause for revocation. If the failure, refusal or neglect of the Grantee continues for a period of thirty (30) days following such written demand, the 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 least ten (10) days prior to the date of such meeting, a written notice of this intent to request such termination, and the time and place of the meeting, notice of which shall be published at least once, ten (10) days before such meeting in a newspaper of general circulation within the franchise area. 2. The Grantor shall hear any persons interested therein, and shall determine, based upon substantial evidence, whether the Grantee has committed a material breach of this title or the franchise agreement, and, if so, whether such breach was willful. 3. If the Grantor determines that the Grantee has committed a material breach, which was not willful, the Grantor shall direct the Grantee to take appropriate remedial action within such time and manner and upon such terms and conditions as are reasonable under the circumstances, or, if grantor finds that such breach is not curable, then Grantor may, by resolution, declare that the franchise of such Grantee shall be terminated. a. If the Grantor determines that the Grantee has committed a material breach, which was willful, then the Grantor may, by resolution, declare that the franchise of such Grantee shall be terminated and security Ordinance No. 220 Page 11 fund and bonds forfeited, or the Grantor may, at its option and if the material breach is capable of being cured by the Grantee, direct the Grantee to take appropriate remedial action within such time and manner and upon such terms and conditions as the Grantor shall determine are reasonable under the circumstances. 7.02.150 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 may order the removal of the system facilities from the franchise area within a reasonable period of time as determined by the Grantor or require the original Grantee to maintain and operate its network until a subsequent Grantee is selected and a subsequent or modified cable system becomes operational. B. Restoration of Property. In removing its plant, structures and equipment, the Grantee shall refill, at its own expense, any excavation that shall be made by it and shall leave all public ways and pisces in as good condition as that prevailing prior to the Grantee's removal of its equipment and appliances without affecting the electrical or telephone cable wires, or attachments. The liability, indemnity and insurance, and the security fund and bonds provided shall continue in full force and effect during the period of removal and until full compliance by the Grantee with the terms and conditions of this Section. C. Restoration by Grantor; Reimbursement of Costs. In the event of a failure by the Grantee to complete any work required by Subsection (A) and/or Subsection (B), or any other work required by Grantor by law or ordinance within the time as may be established and to the satisfaction of the Grantor, the Grantor may cause such work to be done and the Grantee shall reimburse the Grantor the cost thereof within thirty (30) days after receipt of an itemized list of such costs or the Grantor may 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 Communications System for a defined period of time not to exceed twenty- four (24) months from the date of such expiration or revocation. The Grantee shall, as trustee for its successor in interest, continue to operate the Cable Communications System under the terms and conditions of this title and the franchise agreement 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. 7.02.160 Receivership and Foreclosure. A. Any franchise herein granted shall, at the option of the Grantor, cease and terminate one hundred twenty (120) days after the appointment of a receiver or receivers or trustee or trustees to take over and conduct the business of the Grantee whether in a receivership, reorganization, bankruptcy or other action or proceeding unless such receivership or trusteeship shall have been vacated prior to the expiration of 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 and provisions of this title and the franchise granted pursuant hereto, and the receivers or trustees within said one hundred twenty (120) days shall have remedied all defaults under the franchise; and, Ordinance No. 220 Page 12 2. Such receivers or trustees shall, within said one hundred twenty (120) days, execute an agreement duly approved by the Court having Jurisdiction on the premises, whereby such receivers or trustees assume 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 involuntary sale of the plant, property and equipment of the Grantee, or any part thereof, the Grantor may serve notice of termination upon the Grantee and to the purchaser at such sale, in which event the franchise and all rights and privileges of the Grantee hereunder shall cease 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 title provided; and, 2. Such successful purchaser shall have covenanted and agreed with the Grantor to assume and be bound by all the terms and conditions of the franchise agreement. 7.02.170 Franchise Processing Costs. For either a new franchise award or a franchise renewal, costs to be borne by Grantee shall included, but shall not be limited to, all costs of publications of notices prior to any public meeting provided for pursuant to a franchise, development and publication of relevant ordinances and franchise agreement, fees, and any cost not covered by the applications fees, incurred by the Grantor in its study, preparation of proposal solicitation documents, evaluation of all applications, including, but not limited to consultant and attorney fees and Grantor staff time. These franchise processing costs are over and above the construction inspection and permit fees specified in Section 7.05.110 A 1. Chapter ?.03 REGULATION OF FRANCHISE Sections: 7.03.010 Regulatory Authority 7.03.020 Regulatory Responsibility 7.03.030 Public Usage of the System 7.03.040 Reservation by Grantor 7.03.050 Initial Rates 7.03.060 Rate Change Procedure 7.03.070 Annual Review of Performance 7.03.080 System and Services Review 7.03.080 Access Channel Management 7.0~.010 Regulatory Authority. The Grantor shall exercise appropriate regulatory authority under the provisions of this title and applicable law. If the franchise area served by the Cable Communications System also serves other contiguous or neighboring communities, Grantor may, at its sole option, participate in a joint regulatory agency, with delegated responsibility in the area of cable and related communications. 7.03.020 Regulatory Responsibility. The Grantor, acting alone or acting jointly with other Grantors, may exercise or delegate the following regulatory responsibility: A. Administering and enforcing the provisions of the Cable Communications System franchise(s). B. Coordination of the operation of government and educational channels. Ordinance No. 220 Page 13 C. Providing technical, programming 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 dedicated to public use and sharing of public facilities, if provided for in any franchise agreement. E. Planning expansion and growth of public benefit cable services. F. Analyzing the possibility of integrating cable communications with other local, state or national telecommunications networks. G. Formulating and recommending long-range telecommunications policy. 7.05.030 Public Usage of the System. If so specified in the franchise agreement, the Grantor may utilize a portion of the Cable Communications System capacity, and associated facilities and resources, to develop and provide cable services that will be in the public interest. In furtherance of this purpose, the Grantor may establish a commission, 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, may be delegated the following responsibilities: A. Receive and utilize or reallocate for utilization, channel capacity, facilities, funding and other support provided specifically for public usage of the Cable Communications System. 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 needs. 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. 7.03.040 Reservation by Grantor. The Grantor reserves the right, at its discretion, from time to time, to determine if the entity described in Section 7.03.030 is performing its purposes in a manner satisfactory to the Grantor, and if it is not, the Grantor may receive and reallocate all or a portion of the channel capacity, operations appropriation, and capital appropriation, including any facilities and equipment purchased previously with such appropriation, to another entity. A new entity shall be required to comply in all respects with the legal responsibilities described in Section 7.03.030. 7.03.050 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 agreement. B. Initial basic subscriber rates shall be effective for a minimum of two (2) years from the date cable service commences, or until Grantee has completed all construction proposed in its application whichever is longer. 7.03.060 Rate Change Procedure. A. Within ninety (90) days of the filing of a petition for rate change for any rates subject to Grantor regulation, the Grantor shall hold an appropriate public hearing to consider the proposed rate change, at which hearing all persons desiring to be heard, includinE the Grantee, shall be heard on any matter, including but not limited to, the performance of its franchise, the Grantee's services, and the proposed new rates. Ordinance No. 220 Page 14 B. Upon notice of any public hearing as provided above, the Grantee shall notify its subscribers of the time, place and subject m~tter 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. C. Within ninety (90) days after said hearing, the Grantor shall render a written decision on the Grantee's petition, either accepting, rejecting, modifying or deferring the same and reciting the basis for its decision. The Grantor shall consider, but not be limited to the following factors in approving or disapproving the petition: 1. Grantee's substantial fulfillment of all material requirements of the franchise. 2. Quality of service, as indicated by the number and type of service complaints, Grantee's response to complaints, and the result of periodic system performance tests and the annual reviews specified in Section 7.03.070. 3. Prevailing rates for comparable services in other cabIe systems of similar size and complexity. 4. Rate of return on Grantee's equity, as compared to businesses of equivalent risk. For the purposes of this title, the rate of return on equity shall be defined as the net, after-tax profit divided by the equity portion of Grantee's investment in tangible assets. The investment shall be defined as the cumulative cost of tangible assets such as plant, property and equipment, less the cumulative depreciation charges, plus working capital, which shall be defined as equivalent to three (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 may be exempt from local rate regulation. Upon request of Grantor, Grantee shall promptly provide, from the Grantee, its parent company and any subsidiary company, all information as shall be reasonably necessary to determine system revenues and costs. 5. Performance of Grantee in introducing new services and expanding the cable system's capability, as compared to other systems of similar size and complexity, and as evaluated by the system and services review specified in Section 7.03.080. 6. Tax benefits received by Grantee, its partners or shareholders, as the result of their investment in the system. 7. 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. D. 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 thereafter be entitled to put its proposed new rates into effect. E. The Grantee's petition for a rate increase shall include, but not be limited to, the following financial reports, which shall reflect the operations of the system: 1. Balance Sheet 2. Income Statement 3. Statement of Sources and Applications of Funds 4. Detailed Supporting Schedules of Expenses, Income, Assets, Depreciation and other items as may be required. 5. Statement of Current and Projected Subscribers and Penetration. The Grantee's accounting records applicable to the system shall be available for inspection by the Grantor at all reasonable times. The Grantor shall have access to records of financial transactions for the purpose of Ordinance No. 220 Page 15 verifying burden rates or other indirect costs prorated to the operation. The documents listed above shall include sufficient detail and/or footnotes as may be necessary to provide the Grantor with the information needed to make accurate determinations as to the financial condition of the system. All financial statements shall be certified as accurate by a certified public accountant or an officer of Grantee. F. Schedule of Rates. The Grantee shall maintain and file with the Grantor, a complete schedule of subscriber rates including all fees and charges for services not subject to regulation or approval by the Grantor. G. Disconnections. There shall be no charge for disconnection from the system. However, if a subscriber has failed to pay properly due monthly fees or if a subscriber disconnects for seasonal periods, the Grantee may require, in addition to full payment of any delinquent fees, a reasonable fee for reconnection. H. No Consideration Beyond Schedule. The Grantee shall receive no consideration whatsover for or in connection with its provision of service to its subscribers other than as set forth in the Section or as filed with and/or approved by the Grantor. I. Submission of Rate Increase Requests. Grantee shall not submit a request for rate increase earlier than twelve (12) months after a prior request. 7.03.070 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 communications system. The reports required in Chapter 7 regarding subscriber complaints, the records of performance tests and the opinion survey report shall be utilized as the basis for review. In addition, any subscriber may submit complaints during the review meetings, either orally or in writing, and these shall be considered. A. Within thirty (30) days after the conclusion of the system performance review meetings, Grantor shall issue a report with respect to the adequacy of system performance and quality of service. If inadequacies are found, Grantor may direct Grantee to correct the inadequacies within a reasonable period of time. B. Failure of Grantee, after due notice, to correct the inadequacies shall be considered a material breach of the franchise, and Grantor may, at its sole discretion, exercise any remedy within the scope of this title considered appropriate. 7.05.080 System and Services Review. To provide for technological, economic, and regulatory changes in the state of the art of cable communications, to facilitate renewal procedures, to promote the maximum degree of flexibility in the cable system, and to achieve a continuing, advanced modern system, the foilowing system and services review procedures are hereby established: A. At Grantor's sole option, the Grantor and Grantee shall hold a System and Services Review Session on or about the third anniversary date of the franchise agreement. Subsequent System Review Sessions shall be scheduled by the Grantor each three (3) years thereafter. B. Sixty (60) days prior to the scheduled System and Services Review Session, Grantee shall submit a report to Grantor indicating the following: 1. All cable system services that are being provided on an operational basis, excluding tests and demonstrations, to cities in the United Ordinance No. 220 Page 16 States with populations above ten thousand (10,000), that are not provided to the Grantor. 2. A plan for provision of such services, or a Justification indicating why such services are not feasible for the franchise area. C. Topics for discussion and review at the System and Services Review Sessions shall include but shall not be limited to, services provided, rate structure, free or discounted services, application of new technologies, system performance, programming, subscriber complaints, user complaints, rights or 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 a report, including specifically a listing of any cable services not then being provided to the Grantor that are considered technically and economically feasible. Grantor may direct Grantee to provide such services within a reasonable time, under reasonable rates and conditions. Failure to provide such services without reasonable Justification may be considered a breach of the franchise, subject to remedies as provided in this title. 7.03.090 Access Channel Mans6ement. A. Intent. It is the intent of the Grantor to insure that access and community channels provided for in any franchise agreement, shall be managed in the best public interest, so that programming on such channels will be free of censorship, open to all residents, and available for all forms of public expression, community information and debate of public issues. Pursuant to these objectives, the Grantor may delegate the responsibility for access channel management to a nonprofit entity which may include, but not be limited to, any of the following: 1. A nonprofit public corporation. 2. An access management commission or committee, appointed by Grantor, and representing a broad spectrum of the community. 3. An established nonprofit entity with special cablecasting capability, such as a local or regional community college. B. Functions. The entity designated to manage the access channels shall have the following functions: 1. Responsibility for program production for management of the Public Access Channel and all other channels as may in the franchise agreement be designated for community-based programming. Community channels may include Government and Educational Access channels, as designated in the franchise agreement. 2. To assure that the Public Access and Community channels are made available to all residents of the franchise area on a nondiscriminatory, first-come, first-served basis. 3. To assure that no censorship or control over program content of the Public Access and Community channels exist, except as necessary to comply with FCC prohibition of material that is obscene, or contains commercial 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. 7. To make all purchases of materials and equipment that may be required. 8. To develop additional sources of funding, such as foundation or federal or state grants, to further community programming. 9. To perform such other functions relevant to the Public and Community channels as may be appropriate. Ordinance No. Page ? 7 10. Establishment of budgets on an annual basis, and utilization of funds and resources received from the Grantor or the public usage entity designated in Section 7.03.030 for the purpose of access programming. C. Access Rules. The access management entity shall complete a set of rules for the use of the Access and Community channels which shall be promptly forwarded to the Grantor. The rules shall be prepared in cooperation with the Grantee, and confirmed by agreement between the access management entity and the Grantee. The rules shall, at a minimum, provide for: 1. Access on a first-come, first-served, nondiscriminatory basis for all residents of the franchise area. 2. Prohibition of commercial or political use. 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 four (4) years. 5. Procedures by which individuals or groups who violate any rule may be prevented from further access to the channel. 6. Free use of such reasonable amounts of channel time, cableeasting facilities, and technical support as are provided for in the agreement between the access management entity and the Grantee. D. Access Management Entity Reports to Grantor. The access management entity shall provide a report to the Grantor, at least annually, indicating achievements in community-based programming and services, and also shall provide a special report each time Grantee requests an increase in rates, that are subject to Grantor regulation, indicating the level and quality of Grantee's support during the period elapsed since any previous rate increase was implemented. Chapter 7.04 GENERAL FINANCIAL AND INSURANCE PROVISIONS Sections: 7.04.010 Construction Bond 7.04.020 Performance Bond 7.04.030 Security Fund 7.04.040 Indemnification 7.04.050 Insurance 7.04.010 Construction Bond. A. Within thirty (30) days after the granting of a franchise and prior to the commencement of any construction work by the Grantee, the Grantee shall file with the Grantor a construction bond in the amount specified in the franchise agreement in favor of the Grantor and any other person who may claim damages as a result of the breach of any duty by the Grantee assured by such bond. B. Such bond as contemplated 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. C. In no event shall the amount of said bond be construed to limit the liability of the Grantee for damages. D. 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 Sections 7.04.020 and 7.04.030. 7.04.020 Performance Bond A. In addition to the construction bond set forth above, the Ordinance No. 220 Page 18 Grantee shall, at least thirty (30) days prior to the commencement of operation, file with the Grantor a performance bond in the amount specified in the franchise agreement in favor of the Grantor and any other person who may be entitled to damages as a result of any occurrence in the operation or termination of the Cable Communications System operated under the franchise agreement, and including the payments required to be made to the Grantor hereunder. B. Such bond as contemplated 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. C. In no event shall the amount of said bond be construed to limit the liability of the Grantee for damages. 7.04.030 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 maintain on deposit through the term of this franchise, the sum specified in the franchise agreement, as security for the faithful performance by it of all the provisions of the franchise, and compliance with all orders, permits and directions of any agency of the Grantor having Jurisdiction over its acts or defaults under this title, and the payment by the Grantee of any claims, liens and taxes due to the Grantor which arise by reason of the construction, operation or maintenance of the system. The security fund may be assessed by the Grantor for purposes including, but not limited to, the following: 1. Failure of Grantee to pay Grantor sums 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 damages assessed against Grantee due to default or violation of franchise requirements. B. At Grantor's sole option, some portion of the security fund may be provided in the acceptable form of an irrevocable letter of credit, in lieu of a cash deposit. C. Within thirty (30) days after notice to it that any amount has been withdrawn by the Grantor from 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 originai amount. D. If the Grantee fails, after ten (10) days notice to pay to the Grantor any franchise fee or taxes due and unpaid; or, fails to pay to the Grantor within such ten (10) days, any damages, costs or expenses which the Grantor shall be compelled to pay by reasons 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 comply with any provision of the franchise which the Grantor reasonably determines can be remedied by an expenditure of the security fund, the Grantor may immediately withdraw the amount thereof, with interest and any penalties, from the security fund. Upon such withdrawal, the Grantor shall notify the Grantee of the amount and date thereof. E. The security fund deposited pursuant to this Section shall become 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 7.02.140. 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. Ordinance No. 220 Page 19 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 title or authorized by law, and no action, proceeding or exercise of a right with respect to such security fund shall affect any other right the Grantor may have. 7.04.040 Indemnification A. The Grantee shall by acceptance of any franchise granted indemnify, defend and hold harmless the Grantor, its officers, boards, commissions, agents, and employees from any and all claims, suits, judgments for damages or other relief, costs and attorneys' fees in any way arising out of or through or alleged to arise out of or through: 1. The act of the Grantor in granting the franchise; and 2. The acts or omissions of Grantee, its servants, employees, or agents including, but not limited to, any failure or refusal by Grantee, its servants, employees or agents to comply with any obligation or duty imposed on Grantee by this title or the franchise agreement. 3. The exercise of any right or privilege granted or permitted by this title or the franchise agreement. Such indemnification shall include, but not be limited to, all claims arising in tort, contracts, infringement of copyright, violations of statutes, ordinances or regulations or otherwise. 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 may participate in the defense of such claims at its expense. 7.04.050 Insurance A. The Grantee shall maintain throughout the term of the franchise insurance in amounts at least as follows: 1. Worker's Compensation Insurance. In such coverage as may be required by the worker's compensation insurance and safety laws of the state of California and amendments thereto. 2. Comprehensive General Liability. Comprehensive general liability insurance, including, but not limited to, coverage for bodily injury and property damage shall be maintained at the sum(s) specified in the franchise agreement. 3. Comprehensive Automobile Liability. Comprehensive automobile liability including, but not limited to, non- ownership and hired ear coverage as well as owned vehicles with coverage for bodily injury and property damage shall be maintained at the sum(s) specified in the franchise agreement. B. The Grantee shall furnish the Grantor with copies of such insurance policies and certificates of insurance. C. Such insurance policies provided for herein shall name the Grantor, its officers, boards, commissions, agents, and employees as additional insureds and shall contain the following endorsement: "It is hereby understood and agreed that this insurance policy may not be cancelled by the surety or the intention no to renew be stated by the surety until thirty (30) days after receipt by the City by registered mail of written notice of such intention to cancel or not renew." D. The minimum amounts set forth in the franchise agreement 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. E. All insurance carriers providing coverage under Section 7.04.050 A shall be duly licensed to operate in the state of California, and shall be subject to approval of Grantor. Ordinance No. 220 Page 20 Chapter 7.05 DESIGN AND CONSTRUCTION PROVISIONS Sections: 7.05.010 System Design 7.05.020 Geographical Coverage 7.05.030 Cablecasting Facilities 7.05.040 System Construction Schedule 7.05.050 Remedies for Delay in Construction 7.05.060 Provision of Service 7.05.070 Undergrounding of Cable 7.05.080 New Development Undergrounding 7.05.090 Underground at Multiple-Dwelling Units 7.05.100 Street Occupancy 7.05.110 Construction and Technical Standards 7.05.120 Areawide Interconneetion 7.05.010 System Design. The Cable Communications System shall be constructed in accordance with the design requirements contained in the franchise agreement. 7.05.020 Geographical Coverage. The Grantee shall design and construct the Cable System in such a manner as to have the eventual capability to pass by every single-family dwelling unit, multiple-family dwelling unit, school and public agency within the area of the franchise. Service shall be provided to subscribers in accordance with the schedules and line extension policies specified in the franchise agreement. Cable system construction and provision of service shall be non-discriminatory, and Grantee shall not delay or defer service to any section of the franchise area on the grounds of economic preference. 7.05.030 Cablecastin~ Facilities. The Grantee shall provide cableeasting facilities in accordance with the requirements of the franchise agreement. 7.05.040 System Construction Schedule A. The Grantee shall comply with the requirements of the system construction schedule contained in the franchise agreement. B. The Grantee shall provide a detailed construction plan indicating progress schedule, area construction maps, test plan, and projected dates for offering service. In addition, the Grantee shall update this information on a monthly basis, showing specifically whether schedules are being met and the reasons for any delay. 7.05.050 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 construntion: 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 monetary damages up to the maximum per day and per incident limits specified in the franchise agreement, levied against the security fund for delays exceeding 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 exceeding eighteen (18) months. Ordinance No. 220 Page 21 Any remedies applied shall be in accordance with the procedures contained in Chapter 10 herein. 7.05.060 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 from the date of request. 7.05.070 Under~roundin~ 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- sharing basis, with other utilities, when such other utilities may convert from aerial to underground construction. 7.05.080 New Development Undergrounding. In cases of new construction or property development where utilities are to be placed underground, upon request by the Grantee, the developer or property owner shall give Grantee reasonable 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. Costs of trenching and easements required to bring service to the development 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 property owner, then should the trenches be closed after the five (5) day period, the cost of new trenching is to be borne by Grantee. 7.05.090 Under~round at Multiple-Dwellin~ Units. In oases of multiple dwelling units serviced by aerial utilities, Grantee shall make every effort to minimize the number of individual aerial drop cables between the pole and the dwelling unit. The burden of proof shall be upon the Grantee to demonstrate why undergrounding of drop cables is technically or economically unfeasible. 7.05.100 Street Occupancy A. Grantee shall utilize existing poles, conduits, and other facilities whenever possible, and shall not construct or install any new, different, or additional poles, conduits, r other facilities whether on public property or on privately-owned property until the written approval of the Grantor is obtained. However, no location of any pole or wire holding structure of the Grantee shall be a vested interest and such poles or structures shall be removed or modified by the Grantee at its own expense whenever the Grantor determines that the public convenience would be enhanced thereby. B. Grantee shall notify the Grantor at least ten (10) days prior to the intention of the Grantee to commence any construction in any streets. The Grantor shall cooperate with the Grantee in granting any permits required, providing such grant and subsequent construction by the Grantee shall not unduly interfere with the use of such streets and that proposed construction shall be done in accordance with the pertinent provisions of the titles of the Grantor. C. All transmission lines, equipment and structures shall be so installed and located as to cause minimum interference with the rights and reasonable convenience of property owners and at all times, shall be kept and maintained in a safe, adequate and substantial condition, and in good order and repair. The Grantee shall, at all times, employ ordinary care and shall install and maintain in use commonly accepted methods and devices for preventing failures and accidents which are likely to cause damage, injuries, or nuisances to the public. Suitable barricades, flags, lights, flares or Ordinance No. 220 Page 22 other devices shall be used at such times and places as are reasonably required for the safety of all members of the public. Any poles or other fixtures placed in any public way by the Grantee shall be placed in such a manner as not to interfere with the usual travel on such public way. D. Grantee shall, at its own expense, and in a manner approved by the Grantor, restore to Grantor standards and specifications any damage or disturbance caused to the public way as a result of its operations or construction on its behalf. E. Whenever, in case of fire or other disaster, it becomes necessary in the Judgment of the Grantor to remove any of the Grantee's facilities, no charge shall be made by the Grantee against the Grantor for restoration and repair. F. Grantee shall have the authority to trim trees on public property at its own expense as may be necessary to protect its wire and facilities, subject to the supervision and direction of the Grantor. Trimming of trees on private property shall require written consent of the property owner. G. 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 same is required by reason of traffic conditions, public safety, street vacation, freeway or street grade separation or realignment, installation of sewers, drains, waterpipes, power line, signal line, transportation facilities, tracks, or any other types of structure or improvements by governmental agencies whether acting in a governmental or a proprietary capacity, or any other structure or public improvement, including but not limited to movement of buildings, redevelopment, or any general program under which the Grantor shall undertake to cause any such properties 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. H. Upon failure of Grantee to commence, pursue or complete any work required by law or by the provisions of this title to be done in any street, within the time prescribed and to the satisfaction of the Grantor, the Grantor may, at its option, cause such work to be done and the Grantee shall pay to the Grantor the cost thereof in the itemized amounts reported by the Grantor to Grantee within thirty (30) days after receipt of such itemized report. I. The Grantee shall make no paving cuts or curb cuts unless absolutely necessary, and only after written permission has been given by the Grantor. J. Grantor reserves the right to require conduit for underground cabling. 7.05.110 Construction and Technical Standards. A. Construction Standards. 1. City Codes and Permits. Grantee shall comply with all applicable City construction codes and permit procedures. Grantor shall be entitled to charge reasonable permit and inpsection fees to recover the special nonrecurring inspection costs imposed by the construction of the cable system. 2. Compliance with Safety Codes. Ail construction practices shall be in accordance with all applicable sections of federal and state Occupational Safety and Health Acts and any amendments thereto as well as all state and local codes where applicable. 3. Compliance with Electrical Codes. Ail installation of electronic equipment shall be of a permanent nature, durable and installed in accordance with the provisions of the Basic BOCA Electrical Code as amended, and all applicable state and local codes. Ordinance No. 220 Page 23 4. 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. 5. Compliance with Aviation Requirements. Antennas supporting structures (towers) shall be painted, lighted, erected and maintained in accordance with all applicable rules and regulations of the Federal Aviation Administration and all other applicable state or local codes and regulations. 6. Construction Standards and Requirements. All of the Grantee's plant and equipment, including but not limited to the antenna site, head-end and distribution system towers, house connections, structures, poles, wire, cable coaxial cable, fixtures and appurtenances shall be installed, located, erected, constructed, reconstructed, replaced, removed, repaired, maintained and operated in accordance with good engineering practices, performed by experienced maintenance and construction personnel so as not to endanger or interfere with improvements the Grantor may deem proper to make, or to interfere in any manner with the rights of any property owner, or to hinder or obstruct pedestrian or vehicular traffic. 7. Safety~ Nuisance~ Requirements. The Grantee shall at all times employ ordinary care and shall install and maintain in use commonly accepted methods and devices preventing failures and accidents which are likely to cause damage, injury or nuisance to the public. B. Technical Standards. The Cable Communications System shall meet all technical and performance standards contained in the franchise agreement. C. Test and Compliance Procedure. The Grantee shall submit, within sixty (60) days after the effective date of the franchise agreement, a detailed test plan describing the methods and schedules for testing the Cable Communications System on an ongoing basis to determine compliance with the provisions of the franchise agreement. The tests for Basic Subscriber Television Services shall be performed at intervals no greater than every twelve (12) months, on a minimum of twenty (20) subscriber television receivers, 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 shall be witnessed by representatives of the Grantor, and written test reports shall be submitted to the Grantor. If more than ten percent (10%) of the locations tested fail to meet the performance standards, the Grantee shall be required to indicate what corrective measures have been taken, and the entire test shall be repeated for at least twenty (20) different locations. A second failure of more than ten percent (10%) may 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 commencement of service to subscribers the Grantor may require additional tests, full or partial repeat tests, different test procedures, or tests involving a specific subscribers terminal. Requests for such additional tests will be made on the basis of complaints received or other evidence indicating an unresolved controversy or significant noncompliance, and such tests shall be limited to the particular matter in controversy. The Grantor shall endeavor to so arrange its requests for such special tests so as to minimize hardship or inconvenience to Grantee or to the subscriber. 7.05.120 Areawide Interconnection. A. Interconnection Required. The Grantee shall interconnect public usage channels of the Cable Communications System with any or all other cable systems in adjacent areas, upon the directive of the Grantor. Interconnection of systems shall permit interactive transmission and reception of program material, and may be done by direct cable connection, microwave link, satellite, or other appropriate method. B. Interconnection Procedure. Upon receiving the directive of the Grantor to interconnect, the Grantee shall immediately initiate negotiations with the other affected system or systems. The cost shall be borne by both Ordinance No. 220 Page 24 Grantees, in the proportion of number of channels received to total number of channels transmitted and received, under the assumption that benefits accrue primarily through receipt of additional channels. In the case of regional or state-wide interconnection, the same principle shall apply. C. Relief. The Grantee may be granted reasonable extensions of time to interconnect or the Grantor may rescind its order to interconnect upon petition by the Grantee to the Grantor. The Grantor may grant said request if it finds that the Grantee has negotiated in good faith and has failed to obtain an approval from the system or systems 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 interconnection corporation, regional interconnection authority or city, county, state or federal regulatory agency which may be hereafter established for the purpose of regulating, financing, or otherwise providing for the interconnection of cable systems beyond the boundaries of the franchise territory. E. Initial Technical Requirements to Assure Future Interconnection Capability. 1. Every Grantee receiving a franchise to operate a Cable Communications System within the franchise territory shall use the same frequency allocations for commonly provided television signals so far as is technically and economically feasible. 2. Grantee shall provide local origination and access equipment that is compatible throughout the area so that videocassettes or videotapes can be shared by various systems. Chapter 7.06 SERVICE PROVISIONS Sections: 7.06.010 Services to be Provided 7.06.020 Basic Subscriber Television Service (BSTS) 7.06.030 Basic Subscriber Radio Service (BSRS) 7.06.040 Institutional Service (IS) 7.06.050 Additional Subscriber Services 7.06.060 Local Origination Channel(s) 7.06.070 Government Access Channel(s) 7.06.080 Educational Access Channel(s) 7.06.090 Public Access Channel(s) 7.06.100 Public Access(s) (Closed-Circuit) 7.06.110 Leased Access Channel 7.06.120 Leased Use of Access Channels 7.06.130 Universal Connection 7.06.010 Services to be Provided. The Grantee shall provide, as a minimum, the services listed in the franchise agreement. Services shall not be reduced without prior approval of Grantor. 7.06.020 Basic Subscriber Television Service (BSTS). The "Basic Subscriber Television Service" shall include the FCC required services, the distant television broadcast signals, the imported non-broadcast signals, and the provision of all other cablecast open-channel signals. This service shall be provided to all subscribers at the established BSTS monthly subscription rates. Ordinance No. 220 Page 25 7.06.050 Basic Subscriber Radio Service (BSRS). The "Basic Subscriber Radio Service" shall include the provision of all audio services designated in the franchise agreement, including retransmission of local broadcast FM radio signals, and cablecast FM signals. This service shall be provided to ail subscribers at the established BSRS monthly subscription rates. 7.06.040 Institutional Service (IS). If specified in the franchise agreement, 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 non-video signals. 7.06.050 Additional Subscriber Services. "Additional Subscriber Services," not included in the BSTS and BSRS services specified above, may be provided, either within the basic subscription rates, or on a premium basis, subject to applicable law. 7.06.060 Local Origination Channel(s). The Grantee shall operate the cablecasting studios on a high-quality, professional basis for the purpose of providing cablecast programming responsive to local needs and interests. The primary emphasis for the Local Origination Channel(s) shall be on providing community-focused programming that is unavailable to viewers on broadcast television channels. 7.06.070 Government Access Channel(s). The Grantee shall provide the number of channels specified in the franchise agreement, including all necessary interface equipment and cabling to permit operation, for the use of the Grantor at no charge to the Grantor. The Grantee shall provide facilities and technical support to aid in the utilization of these channels, as specified in the franchise agreement. 7.06.080 Educational Access Channel(s). The Grantee shall provide the number of channels specified in the franchise agreement including all necessary interface equipment and cabling to permit operation, for the use of the local educational institutions at no charge. The Grantee shall provide facilities and technical support to aid in the utilization of these channels, as specified in the franchise agreement. 7.06.090 Public Access Channel(s). The Grantee shall provide the number of channels specified in the franchise agreement including all necessary interface equipment and cabling to permit operation, to be available to the public at no charge. The Public Access Channel(s) may be managed and operated by the access management entity, as described in Chapter 7.03. The Grantee shall make available for programmers of the public access channel the facilities and support specified in the franchise agreement. 7.06.100 Public Access(s) (Closed-Circuit). If the Cable Communications System includes a closed-circuit institutional network, the Grantee shall make a portion of the network capacity, as specified in the franchise agreement, available for local government, educational and public use at no charge. The Public Access two-way channels shall be managed and operated by the access management entity. 7.06.110 Leased Access Channel. Grantee shall make available for lease, on a nondiscriminatory basis, the number of channels specified in the franchise agreement. All leased channel service revenues shall be included in gross revenues subject to the franchise fee. 7.06.120 Leased Use of Access Channels. If Grantor determines that a new service would be in the public interest and receives a bona fide offer from a third party to provide such a service, Grantee shall be offered the first right of refusal to provide the service on the same terms. If Grantee declines to provide the service, Grantor may utilize appropriate access channel capacity to accommodate that service. Ordinance No. 220 Page 26 7.06.150 Universal Connection. The Grantor may require that all dwelling units within the franchise area shall be connected physically to the cable system by the Grantee by means of drop cables terminating at each dwelling unit, whether or not the dwelling unit'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 shall be entitled to recover the incremental cost of providing a universal connection. Chapter 7.07 OPERATION AND MAINTENANCE Sections: 7.07.010 Open Books and Records 7.07.020 Records Required 7.07.030 Maintenance and Complaints 7.07.040 Rights of Individuals 7.07.050 Continuity of Service Mandatory 7.07.060 Grantee Rules and Regulations 7.07.070 Tenant Rights 7.09.010 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 business hours, all books, records, maps, plans, financial statements, service complaint 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 travel and maintenance expense necessarily incurred in making such examination shall be paid by Grantee. 7.07.020 Records Required. A. In any event the Grantee shall at all times maintain: 1. A record of all complaints received and interruptions of degradation of service experienced for the preceding three (3) years. 2. A full and complete set of plans, records and "as-built" maps showing the exact location of all Cable Communications System equipment installed or in use in the franchise territory, exclusive of subscriber service drops. 7.07.030 Maintenance and Complaints. A. The Grantee shall maintain an office in the service area which shall be open during all usual business hours, have a publicly listed toll- free telephone, and be so operated to receive subscriber complaints and requests for repairs or adjustments on a twenty-four (24) hour a day basis. A written log shall be maintained listing all complaints and their disposition as required by Section 7.07.020 A 1. B. The Grantee shall render efficient service, make repairs promptly, and interrupt service only for good cause and for the shortest time possible. Such interruptions, insofar as possible, shall be preceded by notice and shall occur during period of minimum use of the system. A written log shall be maintained for all service interruptions as required by Section 7.07.020 A 1. C. 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 service. Ordinance No. 220 Page 27 D. The Grantee shall furnish each subscriber at the time service is installed, written instructions that clearly set forth procedures, furnish information concerning the procedures for making inquiries or complaints, including the name, address and local telephone number of the employee or employees or agent to whom such inquiries or complaints are to be addressed, and furnish information concerning the Grantor office responsible for administration of the franchise with the address and telephone number of the office. 7.07.040 Rights of Individuals A. Grantee shall not deny service, deny access, or otherwise discriminate against subscribers, channel users, or general citizens on the basis of race, color, religion, national origin, age or sex. Grantee shall comply at all times with all other applicable federal, state and local laws and regulations, and all executive and administrative orders relating to non- discrimination which are hereby incorporated and made part of this title by reference. B. Grantee shall strictly adhere to the equal employment opportunity requirements of federal, state and local law and regulations in effect on the date of the franchise grant, and as amended from time to time. C. No signals of a Class IV cable communications channel shall be transmitted from a subscriber terminal for purposes of monitoring individual viewing patterns or practices without the express written permission of the subscriber. The request for such permission shall be contained in a separate document with a prominent statement that the subscriber is authorizing the permission in full knowledge of its provision. Such written permission shall be for a limited period of time not to exceed one (1) year, which shall be renewsble 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 shall be entitled to conduct systemwide or individually addressed "sweeps" for the purpose of verifying system integrity, controlling return-path transmission, or billing for pay services. D. The Grantee, or any of its agents or employees, shall not, without the specific written authorization of the subscriber involved, sell, or otherwise make available to any person: 1. Lists of the names and addresses of such subscribers, or 2. Any list which identifies the viewing habits of individual subscribers. E. 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, equipment, channels studios and other services to all citizens, businesses, public agencies and other entities having a legitimate use for the system, and no one shall be arbitrarily excluded from its use. Allocation of use of said facilities shall be made according to the rules or decisions of the Grantee, the Grantor in its lawful exercise of regulatory authority, and any state or federal regulatory agencies affecting the same. 7.07.050 Contlnuit~ of Service Mandator~ 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 subscribers receive continuous, uninterrupted service regardless of the circumstances. Ordinance No. 220 Page 28 In the event of a change of franchisee, 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 services 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 obligation for the Grantee, then during such period as the Grantor fulfills such obligation, the Grantor shall be entitled to collect all revenues from the system, and the Grantee shall reimburse the Grantor for all reasonable costs or damages in excess of the revenues collected by the Grantor that are the result of the Grantee's failure to perform. 7.07.060 Grantee Rules and Regulations. The Grantee shall have the authority to promulgate such rules, regulations, terms and conditions governing the conduct of its business as shall be reasonably necessary to enable the Grantee to exercise its rights and perform its obligations under the franchise, and to assure an uninterrupted service to each and all of its customers. Provided, however, that such rules, regulations, terms and conditions shall not be in conflict with the provisions hereof or applicable state and federal laws, rules and regulations. Such rules, regulations, terms and conditions shall be submitted to the Grantor for its review and Grantor approval is required prior to their becoming effective. 7.07.070 Tenant Rights. Grantee shall be required to provide service to tenants in individual units of a multiple housing facility with all services offered to other dwelling units within the 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 premises; C. To reasonable conditions promulgated by Grantee to protect Grantee's equipment and to encourage widespread use of the system; and D. To not discriminate in rental charges, or otherwise, between tenants who receive cable service and those who do not. Chapter 7.08 RIGHTS RESERVED TO THE GRANTOR Sections: 7.08.010 Right to Purchase the System 7.08.020 Right of Inspection of Records 7.08.030 Right of Inspection of Construction 7.08.040 Right of Intervention 7.08.050 Right to Require Removal of Property 7.08.010 Right to Purchase the System. The Grantor may in any lawful manner and upon the payment of a fair valuation lawfully ascertain, purchase, condemn, acquire, take over and hold the property and plant of the Grantee in whole or in part. If such purchase or taking over be upon revocation of the franchise or at the expiration of the term of the franchise such valuation shall not include any sum for the value of the franchise or grant under which such plant and property is being operated. Ordinance No. 220 Page 29 7.08.020 Right of Inspection of Records. There shall be kept in the Grantor's office a separate record for the franchise, which record shall show the items hereafter set forth. The Grantee shall provide such information in such form as may be required by the Grantor for said records. A. The true and entire cost of construction equipment, of maintenance and of the administration and operation thereof; the amount of stock issued, if any; the amount of cash paid in, the number of and par value of shares, the amount and character of indebtedness, if any; the rate of taxes, the dividends declared; the character and amount of all fixed charges; the allowance, if any, for interest, for wear and tear or depreciation; all amounts and sources of income. B. Any amount collected annually from the Grantor treasury and the character and extent of the service rendered therefor to the Grantor. C. The amount collected annually from other users of service and the character and extent of the service rendered therefor to them. The books and records kept by the Grantor shall be open to public examination at any time during the business hours of the Grantor's office. The information, in addition to any further data which may be required by the Grantor, shall be furnished by the Grantee to the Grantor upon request, and at the Grantee's own cost and expense. 7.08.0~0 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. 7.08.040 Right of Intervention. The Grantor shall have the right of intervention in any suit or proceeding to which the Grantee is party, and the Grantee shall not oppose such intervention by the Grantor. 7.08.050 Right to Require Removal of Property. At the expiration of the term for which the franchise is granted, or upon its revocation or expiration, as provided for herein, the Grantor shall have the right to require the Grantee to remove, at its own expense, all portions of the Cable Communications System from all streets and public ways within the franchise area. Chapter 7.09 RIGHTS RESERVED TO THE GRANTEE Sections: 7.09.010 Right of Grantee 7.09.010 Right of Grantee. In the event of any dispute between Grantee and Grantor over this title or the franchise agreement, or with respect to any rights or obligations arising therefrom, Grantee shall first pursue and exhause all available administrative remedies. Thereafter Grantee may pursue any appropriate legal action which such action may be brought only in a Superior or Municipal Court of California situated in the County of San Bernardino. Chapter 7.10 FRANCHISE VIOLATIONS Sections: 7.10.010 Remedies for Franchise Violations 7.10.020 Procedure for Remedying Franchise Violations 7.10.030 Force Majeure; Grantee's Inability to Perform Ordinance No. 220 Page 30 7.10.010 Remedies for Franchise Violations. If the Grantee fails to perform any obligation under the franchise, or fails to do so in a timely manner, the Grantor may at its option, and in its sole discretion; A. Assess against the Grantee monetary damages up to the limits established in the franchise agreement for material franchise violations, said assessment to be levied against the security fund, hereinabove provided, and collected by Grantor immediately upon said assessment. The amount of such assessment shall be deemed, without proof, to represent liquidation of damages actually sustained by Grantor by reason of Grantee's failure to perform. Such assessment shall not constitute a waiver by the Grantor of any other right or remedy it may have under the franchise or under applicable law, including without limitation, its right to recover from Grantee such additional damages, losses, costs and expenses, including actual attorney fees, as may have been suffered or incurred by Grantor by reasons of or arising out of such breach of the franchise. This provision for assessment of damages is intended by the parties to be separate and apart from Grantor's right to enforce the provisions of the construction and performance bonds provided for in Chapter 4, and is intended to provide compensation to Grantor for actual damages. B. For violations considered by Grantor to have materially degraded the quality of service, order and direct Grantee to issue rebates or reduce its rates and/or charges to subscribers, in an amount solely determined by Grantor to provide monetary relief substantially equal to the reduced quality of service resulting from Grantee's failure to perform. C. Require Grantee to cure all defaults and breaches of its obligations hereunder before Grantee is entitled to increase any rate or charge to subscribers hereunder. D. Terminate the franchise, for any of the causes stated in Chapter 2. E. No remedy shall be imposed by Grantor against Grantee for any violation of the franchise without Grantee being afforded due process of law, as provided for in Section 7.10.020. Grantor may, in its sole Judgment and discretion, impose any or all of the above enumerated measures against Grantee, which shall be in addition to any and all other legal or equitable remedies it has under the franchise or under any applicable law. 7.10.020 Procedure for Remedying Franchise Violations. In the event that the Grantor determines that the Grantee has violated any provision of the franchise, any rule or regulation promulgated pursuant hereto or any applicable federal, state, or local law, the Grantor may make a written demand on the Grantee that it remedy such violation. If the violation, breach, failure, refusal, or neglect is not remedied to the satisfaction of the Grantor within 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 heard upon thirty (30) days written notice to the Grantee of the time and the place of the hearing provided and the allegations of franchise violations. B. If, after notice is given and, at the Grantee's option, a full public proceeding is held, the Grantor determines that such violation, breach, failure, refusal, or neglect by the Grantee was excusable as provided in Section 7.10.030, the Grantor shall direct the Grantee to correct or remedy the same within such additional time, in such manner and upon such terms and conditions as the Grantor may direct. C. If, after notice is given and, at the Grantee's option, a full Ordinance No. 220 Page 31 public proceeding is held, the Grantor determines that such violation, breach, failure, refusal or neglect was inexcusable, then the Grantor may impose a remedy in accordance with Section 7.10.010. 7.10.O50 Force Majeurei Grantee's Inability to Perform. In the event Grantee's performance of any of the terms, conditions, obligations, or requirements of the franchise is prevented or impaired due to any cause beyond its reasonable control or not reasonably foreseeable, such inability to perform shall be deemed to be excused and no penalties or sanctions shall be imposed as a result thereof, provided Grantee has notified Grantor in writing within thirty (30) days of its discovery of the occurence of such an event. Such causes beyond Grantee's reasonable control or not reasonably foreseeable shall include, but shall not be limited to, Acts of God and civil emergencies. Chapter 7.11 REPORTS Sections: 7.11.010 Annual Reports 7.11.020 Plant Survey Report 7.11.030 Copies of Federal and State Reports 7.11.040 Public Reports 7.11.050 Complaint File and Reports 7.11.060 Privacy Report 7.11.070 Miscellaneous Reports 7.11.080 Inspection of Facilities 7.11.090 Business Office and Files 7.11.100 Public Inspection 7.11.110 Failure to Report 7.11.120 False Statements 7.11.130 Cost of Reports 7.11.010 Annual Reports. At Grantor's sole option, within sixty (60) days after the close of Grantee's fiscal year, the Grantee shall submit a written annual report, in a form approved by the Grantor, including, but not limited to, the following information: A. A summary of the previous year's (or, in the case of the initial report year, the initial year's) activities in development of the cable system, including, but not limited to, services begun or discontinued during the reporting year, and the number of subscribers for each class of service; B. A financial statement, audited by, an independent Certified Public Accountant, or certified by an officer of the Grantee, including a statement of income, revenues, operating expenses, value of plant, annual capital expenditures, depreciation with an attached depreciation schedule, interest paid, taxes paid, balance sheets, and a statement of sources and application of funds. C. A current statement of costs of construction by component categories; D. A projected income statement and statement of projected construction for the next two (2) years; E. A list of Grantee's officers, members of its board of directors, and other principals of Grantee; F. A list of stockholders or other equity investors holding five percent (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 Ordinance No. 220 Page 32 parent, subsidiary, or other person affiliated with the Grantee, the amounts of such payments and the basis for computation of such amounts (e.g., the basis for computing any management fees or share of "home office" overhead). 7.13.020 Plant Survey Report. At Grantor's sole option, Grantee shall submit to the Grantor an annual plant survey report which shall be a complete survey of the Grantee's plant and a full report thereon. Said report shall include, but not be limited to, a description and "as-built" maps of the portions of the franchise area that have been cabled and have all services available, an appropriate engineering evaluation including suitable electronic measurements conducted in conformity with such requirements, including supervision, as the Grantor may prescribe. Said report shall be in sufficient detail to enable the Grantor to ascertain that the service requirements and technical standards of the FCC and/or the franchise are achieved and maintained. If Grantor has reason to believe that portions or all of the system do not meet either the FCC technical standards, or those incorporated into the franchise agreement, 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 independent 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. 7.11.030 Copies of Federal and State Reports. The Grantee shall submit to the Grantor copies of all pleadings, applications, reports, communications and documents of any kind, submitted by the Grantee to, as well as copies of all decisions, correspondence and actions by, any federal, state and local courts, regulatory agencies and other government bodies relating to its cable television operations within the franchise area. Grantee shall submit such documents to the Grantor simultaneously with their submission to such courts, agencies and bodies; and within five (5) days after their receipt from such courts, agencies and bodies. The Grantee hereby waives any right to claim confidential, privileged or proprietary rights to such documents unless such confidential rights are determined to be confidential by law or by the practices of federal or state agencies. Such confidential data exempt from public disclosure shall be retained in confidence by the Grantor and its authorized agents and shall not be made available for public inspection. 7.11.040 Public Reports. A copy of each of Grantee's annual and other periodic public reports and those of its parent, subsidiary and affiliated corporations and other entities, as the Grantor requests and is reasonably appropriate, shall be submitted to the Grantor within five (5) days of its issuance. 7.11.050 Complaint File and Reports. An accurate and comprehensive file shall be kept by the Grantee of any and all complaints regarding the cable system. A procedure shall be established by the Grantee by the time of installation of the cable system to remedy complaints quickly and reasonably to the satisfaction of the Grantor. Complete records of Grantee's actions in response to all complaints shll be kept. These files and records shall remain open to the public during normal business hours: A. A summary of complaints, identifying the number and nature of complaints and their disposition, in a form approved by the Grantor, shall be completed for each month and submitted to the Grantor by the tenth day of succeeding month. B. The results of an annual opinion survey report which identifies satisfaction of dissatisfaction among subscribers with cable communications 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. 7.11.060 Privacy Report. At Grantor's option, Grantee shall Ordinance No. 220 Page 33 submit to the Grantor an annual report indicating the degree of compliance with the privacy provisions of Chapter 7 of this title, and all steps taken to assure that the privacy rights of individuals have been protected. 7.11.070 Miscellaneous Reports. Grantee shall submit to the Grantor such other information or reports in such forms and at such times as the Grantor may reasonably request or require. 7.11.080 Inspeetlon 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 emergency, upon demand without prior notice, to allow Grantor to verify the accuracy of any submitted report. 7.11.090 Business Office and Files. At the Grantee's local office, as required by Section 7.07.030 herein, Grantee shall keep complete and accurate books and records. The Grantor shall have the right to inspect at any time during normal business hours ali books, records, maps, plans, income tax returns, financial statements, service complaint logs, performance test results and other like materials of the Grantee which relate to the operation of the Cable System. Access to the aforementioned records shall not be denied by the Grantee on the basis that said records contain confidential, privileged, or proprietary information. 7.11.100 Public Inspection. All reports subject to public disclosure, shall be available for public inspection at a designated Grantor office during normal business hours. 7.11.110 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 the franchise, and shall subject the Grantee to all remedies, legal or equitable, which are available to the Grantor under the franchise or otherwise. 7.11.120 False Statements. Any materially false or misleading statement or representation made knowingly by the Grantee in any report required under the franchise shall be deemed a material breach of the franchise and shall subject the Grantee to all remedies, legal or equitable, which are available to the Grantor under the franchise or otherwise. 7.11.130 Cost of Reports. All reports and records required under this or any other Section shall be furnished at the sole expense of the Grantee. Chapter 7.12 MISCELLANEOUS PROVISIONS Sections: 7.12.010 Compliance with State and Federal Laws 7.12.020 Separability Non-Material Provisions 7.12.030 Separability-Material Provisions 7.12.040 Notices 7.12.050 Captions 7.12.060 No Recourse Against the Grantor 7.12.070 Nonenforcement by the Grantor 7.12.010 Compliance with State and Federal Laws. Notwithstanding any other provisions of the franchise to the contrary, the Grantee shall at all times comply with all laws and regulations of the state and federal government or any admministrative 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 services, or shall prohibit the Grantee to perform any service, or shall prohibit the Grantee Ordinance No. 220 Page 34 from 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. 7.12.020 Separability Non-Material Provisions. If any provision of this title or any related agreements is held by any court or by any federal, state, or local agency of competent 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 title, and such holding shall not affect the validity and enforceability of all other provisions hereof. In the event that such law, rule or regulation is subsequently repealed, rescinded, amended or otherwise changed, so that the provision hereof or thereof which 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 compliance with said provision. 7.12.050 Separability-Material Provisions. If any material section of this title, as determined by the Grantor, is held to be invalid or preempted by federal, state or county regulations or laws, the Grantor shall negotiate with Grantee appropriate modifications to the franchise to provide reasonable relief to the Grantor from such invalidity or premption, including the payment of damages. If the parties are unable to reach agreement on such modifications, then the dispute shall be submitted 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. 7.12.040 Notices. Grantee shall maintain within the service area throughout the term of the franchise, an address for service of notices by mail. 7.12.050 Captions. The captions to sections throughout this title are intended solely to facilitate reading and reference. Such captions shall not affect the meaning or interpretation of this title. 7.12.060 No Recourse A~ainst the Grantor. The Grantee shall have no recourse whatsoever against the Grantor or its officials, boards, commissions, agents, or employees for any loss, costs, expense, or damage arising out of any provision or requirement of the franchise or because of the enforcement of the franchise. 7.12.070 Nonenforcement by the Grantor. The Grantee shall not be relieved of its obligation to comply with any of the provisions of this title by reason of any failure of the Grantor to enforce prompt compliance. SECTION 2: The Mayor shall sign this Ordinance and the City Clerk shall attest to the same, and the City Clerk shall notice of the adoption of this Ordinance by publishing a display advertisement prepared in accordance with Government Code 36933 (c) (2) within fifteen (15) days after the adoption of this Ordinance at least once in The Daily Report, a newspaper of general circulation, published in the City of Ontario, and circulated in the City of Rancho Cucamonga. PASSED, APPROVED, and ADOPTED this 21st day of March, 1984. AYES: Dahl, Buquet, Mikels, Frost Ordinance No. 220 Page 35 NOES: None ABSENT: Schlosser /~ D. Mtkels, Mayor ATTEST: