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HomeMy WebLinkAbout2000-12 WideOpenWest Minnesota LLC, Cable TV Franchise Agreement Ordinance OL City of Edina, Minnesota and WideOpenWest Minnesota, LLC Cable Television Franchise Agreement Ordinance No. 2000-12 Prepared by: Brian T. Grogan, Esq. MOSS & BARNETT A Professional Association 4800 Wells Fargo Center 90 South Seventh Street Minneapolis, MN 55402-4129 Telephone: (612) 347-0340 Facsimile: (612) 339-6686 With the assistance of. The Southwest Suburban Cable Commission 384349/1 TABLE OF CONTENTS SECTION 1. GRANT OF FRANCHISE.........................................................................1 SECTION 2. SHORT TITLE..........................................................................................1 SECTION 3. DEFINITIONS...........................................................................................1 SECTION 4. EFFECTIVE DATE AND TERM OF RENEWAL................................2 SECTION 5. WRITTEN NOTICE.................................................................................2 SECTION 6. DESIGN PROVISIONS............................................................................2 6.1 System Design.........................................................................................................2 6.2 Cable Nodes System Connect................................................................................2 6.3 Service to the Schools and Government Buildings.............................................3 6.4 Parental Control Lock...........................................................................................3 6.5 Standby Power.......................................................................................................3 6.6 Periodic Review Provisions...................................................................................3 6.7 Shared Use of Facilities .........................................................................................4 6.8 Verification of System Construction....................................................................5 6.9 Franchising Cost Reimbursement........................................................................5 SECTION 7. PUBLIC,EDUCATIONAL AND GOVERNMENTAL ACCESS PROGRAMMING ......................................................................................................................5 7.1 Access Channels.....................................................................................................5 7.2 Studio/Facilities......................................................................................................6 7.3 Funding for PEG Access.......................................................................................7 7.4 Regional Channel Six.............................................................................................7 7.5 Override of the Government Access Channel.....................................................7 SECTION 8. INSTITUTIONAL NETWORK...............................................................8 8.1. General....................................................................................................................8 8.2 Design......................................................................................................................8 8.3 Usage Fee. ...............................................................................................................9 8.4 Use of I-Net Capacity.............................................................................................9 8.5 Equipment Responsibility.....................................................................................9 8.6 I-Net Agreement...................................................................................................10 SECTION 9. PERIODIC CUSTOMER SURVEYS....................................................10 SECTION 10. LINE EXTENSION POLICY.................................................................11 SECTION 11. GENERAL FINANCIAL AND INSURANCE PROVISIONS............11 11.1 Payment to City....................................................................................................11 11.2 Bonds.....................................................................................................................11 11.3 Security Fund.......................................................................................................12 384349/1 i SECTION 12. PUBLIC COMMITMENT......................................................................15 SECTION 13. COMPETITION ADJUSTMENT..........................................................15 SECTION 14. ACCEPTANCE........................................................................................20 14.1 Other Franchises..................................................................................................20 14.2 Time of Acceptance; Incorporation of Offering; Exhibits...............................20 EXHIBITS Exhibit A—Franchise Fee Payment Worksheet.........................................................................A-1 Exhibit B—List of Public Schools and Buildings .......................................................................B-1 Exhibit C—WideOpen Minnesota, LLC Initial Programming....................................................0-1 384349/1 H FRANCHISE AGREEMENT ORDINANCE This Agreement, made and entered into this 19th day of December, 2000, by and between the City of Edina, Minnesota, a municipal corporation of the State of Minnesota, and WideOpenWest Minnesota, LLC. WITNESSETH WHEREAS, WideOpenWest Minnesota, LLC has requested that the City of Edina, Minnesota, grant it a cable television Franchise; and WHEREAS, the City is authorized to grant one or more nonexclusive revocable Franchises to operate, construct, maintain and reconstruct a Cable Television System within the City; and WHEREAS, the City reviewed the legal, technical and financial qualifications of WideOpenWest Minnesota, LLC and, after a properly noticed public hearing, has determined that it is in the best interest of the City and its residents to grant a Franchise to WideOpenWest Minnesota, LLC. NOW, THEREFORE, the City of Edina, Minnesota(hereinafter also known as the"City" or"Grantor")hereby grants to WideOpenWest Minnesota, LLC (hereinafter the"Grantee") a cable television Franchise in accordance with the provisions of Ordinance No. 2000-12 and this Agreement. SECTION 1. GRANT OF FRANCHISE WideOpenWest Minnesota, LLC is hereby granted a cable television Franchise. This Franchise shall be subject to the terms and conditions of this Franchise Agreement Ordinance and shall be subordinate to the Cable Television Franchise Ordinance and all applicable federal, state and local law. SECTION 2. SHORT TITLE This Agreement shall be known and cited as the"City of Edina, Minnesota Cable Television Franchise Agreement Ordinance." Within this document it shall also be referred to as "this Franchise"or"the Franchise." SECTION 3. DEFINITIONS The definitions contained in Ordinance Number 2000-12 of the City of Edina, Minnesota are incorporated herein by reference and adopted as fully as if set out verbatim. 384349/1 SECTION 4. EFFECTIVE DATE AND TERM OF RENEWAL This Franchise shall commence on the effective date described in Section 13 and shall expire on January 1, 2012. SECTION 5. WRITTEN NOTICE All notices,reports or demands required to be given in writing under this Franchise shall be deemed to be given when delivered personally to any officer of Grantee or City's Manager of this Franchise or 48 hours after it is deposited in the United States mail in a sealed envelope, with registered or certified mail postage prepaid thereon, addressed to the party to which notice is being given, as follows: If to City: City of Edina,Minnesota 4801 West 50th Street Edina,MN 55424 If to Grantee: WideOpenWest Minnesota, LLC Two Carlson Parkway, Suite 350 Plymouth, MN 55447 Such addresses may be changed by either party upon notice to the other party given as provided in this section. SECTION 6. DESIGN PROVISIONS 6.1 System Design Grantee shall construct a Hybrid Fiber Coax (HFC) system to a capacity of 860 MHz. Grantee's system will be designed to support a forward bandwidth of 50MHz - 860 MHz and a return bandwidth of 5MHz—40 MHZ. As designed, the system will have a capacity of at least 300 channels. The system shall serve an average of 150 homes per node. System construction shall be completed and in use within forty-eight (48)months from the Effective Date of this Franchise. 6.2 Cable Nodes System Connect Grantee will locate its "nodes"near schools where possible,without(in Grantee's opinion) compromising the engineering design of the System. The City will provide maps showing the location of the schools. 384349/1 2 6.3 Service to the Schools and Government Buildings A. Service to Public Schools and Public Buildings 1. The Grantee shall provide one outlet of Basic Service, the Cable Programming Service Tier and one Converter, if needed, to those facilities provided in Exhibit B. Service to public schools and municipally owned buildings constructed or occupied after the effective date of this Franchise shall be similarly provided subject to the building being located within 200 feet of the Grantee's then existing System. 2. If facility is over 200 feet from Grantee's then existing System, the school or municipality shall be responsible for all equipment, construction costs and additional wiring beyond the first 200 feet that are the Grantee's responsibility. 3. All internal wiring cost beyond the one outlet that Grantee agrees to provide shall be the responsibility of the school or municipality. 4. The financial responsibility for any additional Converters desired by the school or municipality shall be their responsibility. B. Service to Private Schools Grantee shall provide Installation to private schools within 200 feet of plant. A private school is defined as any private secondary school that receives funding pursuant to Title 1 of the Elementary and Secondary Education Act of 1965. Installation and Cable Service (Basic Service and Cable Programming Service Tier) shall be provided for free to such private schools through the year 2011. 6.4 Parental Control Lock Grantee shall provide, for sale or lease, to Subscribers, upon request, a parental control locking device. 6.5 Standby Power Grantee shall provide standby power throughout the System capable of providing at least three hours of emergency supply. 6.6 Periodic Review Provisions The City may request a State-of-the-Art review at any time between the sixth year anniversary and the twelfth year anniversary of the granting of this Franchise. In 384349/1 3 conducting a State-of-the-Art review, the City shall undertake the following process: A. The City and the Grantee shall undertake a review of the then existing Cable System. This review shall, at a minimum, take into account the following: 1. Characteristics of the existing System; 2. The State-of-the-Art; 3. Additional benefits provided to customers by the State-of-the-Art; 4. The market place demand for the State-of-the-Art; and 5. The financial feasibility of the State-of-the-Art taking into account associated rate increases, and the premature retirement of assets. B. The City shall hold at least two public hearings to enable the general public and Grantee to comment and to present evidence. C. For the purposes of this Section the term "State-of-the-Art" shall mean equipment or facilities that: 1. Are readily available with reasonable delivery schedules from two or more sources of supply; 2. Have the capability to perform the intended functions demonstrated within communities with similar characteristic (including,but not necessarily limited to,population, density, Subscriber penetration, etc.) under actual operating conditions for purposes other than tests or experimentation; and 3. Are technically and economically feasible to implement. The term "State-of-the-Art"shall not include equipment or facilities associated with or dedicated to the general public, educational or governmental access or telecommunication services. D. Notwithstanding anything to the contrary, the City may not undertake a State-of-the-Art review at any time the Grantee is deemed subject to effective competition pursuant to then applicable state or federal law. E. As a result of any review based on this Section, City and Grantee may enter into good faith negotiations to amend this Franchise as agreed upon. 6.7 Shared Use of Facilities The Grantee must make space available on its poles and towers, or upon timely request by the City, underground lines and conduit, for City wires, fixtures, or City utilities, whenever such use will not interfere with the use of those facilities by the Grantee or any other communication company. The City must pay for any added expense incurred by the Grantee because of such City use. 384349/1 4 6.8 Verification of System Construction The City may, in its sole discretion, retain a technical consultant to conduct an on- site review of Grantee's System to verify that construction has been completed in compliance with all requirements of this Franchise and Applicable Laws. All costs associated with a technical consultant for purposes described within this Section 6.8, up to a cap not to exceed$15,000, shall be borne by Grantee and shall not be deducted nor offset from any franchise fee payments which Grantee is required to remit to City under this Franchise. 6.9 Franchising Cost Reimbursement. Upon acceptance of this Franchise, Grantee shall provide City full reimbursement for all reasonable and necessary franchising costs not already covered by Grantee's application fee. Grantee's reimbursement of franchising costs shall not be deducted or offset from any franchise fees which Grantee is required to remit pursuant to this Franchise. SECTION 7. PUBLIC, EDUCATIONAL AND GOVERNMENTAL ACCESS PROGRAMMING 7.1 Access Channels A. Grantee shall provide four public, educational and government (PEG) Access Channels (the "Access Channels"). One channel shall be dedicated to public access, one channel shall be dedicated to governmental access, and two channels shall be dedicated to educational access. B. Grantee shall provide to each of its Subscribers who receive all or any part of the total services offered on the System,reception of each public, educational and governmental Access Channel. C. Grantee shall provide at least one specially designated access channel available for lease on a first come,nondiscriminatory basis by commercial and noncommercial users. This Section is not applicable to Subscribers receiving only alarm system services or only data transmission services for computer operated functions. The VHF spectrum shall be used for at least one of the specially designated noncommercial public Access Channels required. D. Whenever any of the Access Channels are in use during 80 percent of the weekdays (Monday-Friday), for 80 percent of the time during any consecutive three hour period for six weeks running, and there is demand for use of an additional channel for the same purpose, Grantee shall then 384349/1 5 have six months in which to provide a new specially designated access channel for the same purpose at no additional cost to Subscribers. E. Grantee must establish rules and regulations for the public, educational and leased Access Channels. The rules and regulations established by the Grantee are subject to approval by the City. F. Subscribers receiving programs on one or more special service channels without also receiving the regular Subscriber services may receive only one specially designated composite Access Channel composed of the programming on Access Channels. Subscribers receiving only alarm system services or only data transmission services for computer operated functions shall not be included in this requirement. 7.2 Studio/Facilities A. Prior to the provision of Cable Service within the City, Grantee will provide one large facility containing one studio with square footage of not less than 1440 square feet for use by the cities of Eden Prairie, Edina, Hopkins, Minnetonka and Richfield ("Member Cities") at a location within the Member Cities mutually agreeable to Grantee and the Member Cities for public, educational and governmental access production. The studio will have the capacity for audience participation. The facility will include two separate editing suites, storage space and the entire studio facility will be wheelchair accessible. The facility shall be open during the hours of Monday through Friday 10:00 a.m. to 6:00 p.m. and regular weekend hours and some regular week night hours. B. Grantee shall make readily available for public use at least minimal equipment necessary for the production of programming and playback of prerecorded programs for the specially designated noncommercial public Access Channel. The Grantee shall also make readily available upon need being shown, the minimum equipment necessary to make it possible to record programs at remote locations with battery operated portable equipment. C. No charges shall be made for channel time or playback of prerecorded programming on the specially designated noncommercial public Access Channel. Grantee can include any costs associated with production and playback for the noncommercial public Access Channel in the total sum allocated for public, educational and governmental access programming as stated in Section 7.3. Additionally, at the City's request, Grantee will work with the City to institute a nominal membership fee for users of the PEG access facility. 384349/1 6 D. Need within the meaning of this section shall be determined in the sole discretion of City or by Subscriber petition. Said petition must contain the signatures of at least 10 percent of the Subscribers of System,but in no case more than 500 nor fewer than 100 signatures. 7.3 Funding for PEG Access Prior to the provision of Cable Service within the City, Grantee shall provide no less than $200,128 annually for PEG access operating expenses collectively for the cities of Edina, Eden Prairie, Hopkins, Minnetonka, and Richfield. After the first year of the Franchise, Grantee shall provide sufficient financial and in-kind support to maintain a substantially equivalent level of services, facilities and equipment in the remaining years of the Franchise Agreement Ordinance comparable to the services, facilities and equipment provided in the first year of the Franchise. These expenses will be itemized on customers' bills. This amount will provide the following services: (a) labor costs; (b) educational consultant; (c) facilities and utilities; (d) access expenses; (e) educational expenses; (f) equipment maintenance; (g)technical support; and(h)replay expenses. This funding shall not be deducted from the Franchise Fee within the meaning of this Agreement. Grantee shall not calculate a Franchise Fee upon funds itemized on the customers' bills for public, educational or governmental access production and programming. 7.4 Regional Channel Six Under Minnesota Cable Communications Act, standard VHF Channel six has been designated for usage as the regional channel. Also known as Metro Cable Network, this independent, noncommercial,nonprofit channel shall be made available without charge. This provision shall remain in effect as long as a regional channel is required by the State of Minnesota. 7.5 Override of the Government Access Channel Grantee agrees to provide the capability such that the City, from its City Hall, can switch its government Access Channel in the following ways: A. Insert live Council meetings from City Hall; B. Replay government access programming from City Hall; C. Transmit character generated programming; D. Schedule for Grantee to replay City-provided tapes in pre-arranged time slot on the government Access Channel; and E. Switch to C-SPAN 2 or other comparable programming provided by 384349/1 7 Grantee at any time when not carrying live or taped government access programming. SECTION 8. INSTITUTIONAL NETWORK 8.1. General. A. Grantee shall provide Grantor an Institutional Network("I-Net") in accordance with the terms and conditions of this Section 8 and an agreement ("I-Net Agreement") entered into between Grantor and Grantee. B. Grantee shall build and maintain an I-Net consisting of one pair(two (2) dark fibers) of single-mode fiber optic cable. The I-Net will be of a Star or point-to-point configuration serving the I-Net user sites listed in Exhibit B of the Franchise. The I-Net user sites (as designated in Exhibit B), and any new public facilities constructed during the term of the Franchise Agreement,will be connected to the Grantee's hub site and an umbilical fiber cable which will be connected to the central hub site serving the Franchise Area. The I-Net fibers will be part of the Grantee's subscriber network maintained at the same level as the Grantee's active subscriber network. C. The I-Net will be connected, in the I-Net user sites, at a pre-determined demarcation point chosen by the Grantor, with a rack or equivalent device installed to mount to Grantee's fiber optics connectors and patch panel. Fiber will be run to each designated building in conduit with locator tape as part of the standard installation. D. Grantee will provide professional engineering and consulting for the design and use of the I-Net. 8.2 Design. Within no more than three (3)months after the effective date of the Franchise Agreement, Grantee and its network consultants will provide a Design of the I- Net capacity requested by Grantor. The Design shall include the following: (i) a walkout of the I-Net user sites to which I-Net capacity will be provided; (ii) a detailed network design; (iii) a breakdown of all material, equipment, labor and Facilities required to provide I-Net capacity and (iv) any material, equipment, labor and Facilities required to provide inter-City Connections as set forth in Section 8.7 hereof. Upon receipt of the Design, Grantor shall have one (1) month to enter into an I-Net Agreement. 8.3 Usage Fee. Throughout the term of the Franchise, commencing upon activation of the I-Net capacity, neither the City nor any I-Net user site shall pay Grantee a Usage Fee. 384349/1 8 Any costs associated with usage of the I-Net capacity,maintenance of outside plant and maintenance,replacement and diagnosis of electronic equipment necessary to provide I-Net capacity shall be borne by Grantee. 8.4 Use of I-Net Capacity. A. Grantor Use. Grantor may use the I-Net capacity set forth in the I-Net Agreement for those services which Grantee may legally provide under federal, State and local law. Grantee's provision of telecommunication services will be according to prevailing law. Grantor shall only use the I- Net capacity for noncommercial, governmental communication uses in accordance with this Franchise and the I-Net Agreement. B. Grantee Use. Grantee shall own all equipment and Facilities, outside the demarcation point used to provide the I-Net capacity to Grantor. Grantee shall have the right to use any bandwidth or I-Net capacity not specifically guaranteed to Grantor under the I-Net Agreement. The I-Net Agreement shall provide that in the event Grantee shall cease operation of the cable system during the term of the Franchise Agreement for any reason, without a transfer of the Franchise Agreement being approved by Grantor, the ownership of all equipment and Facilities comprising the I-Net (specifically including any I-Net equipment designated as owned by Grantee pursuant to this Franchise) shall transfer to the Grantor. 8.5 Equipment Responsibility. A. Grantor and Grantee will mutually determine a physical demarcation point. The fiber, coaxial cable, equipment and electronics outside the demarcation point will be owned and maintained by Grantee and will not be the responsibility of Grantor. This demarcation point will normally be located inside Grantor's public buildings, similar to the telephone company. Grantor will guarantee that Grantee will have unrestricted access to the demarcation point within such municipal buildings to provide adequate maintenance and technical support. B. All equipment related to the provision of I-Net capacity will be identified in writing with applicable technical descriptions and ownership designation. Grantor's equipment inside the demarcation point shall be purchased by Grantee,but selected in conjunction with Grantor. The Grantor shall make reimbursement for the purchase of the equipment inside the demarcation point to the Grantee. Ongoing maintenance of all equipment inside the physical demarcation point that interfaces with Grantee's equipment will be the responsibility of the Grantor. 8.6 I-Net Agreement. A. The I-Net Agreement between Grantor and Grantee shall be coterminous with the term of the Franchise Agreement, as set forth in Section 4 hereof. 384349/1 9 B. If at any time Grantor desires additional capacity or services, the I-Net Agreement will be amended. Payment of costs for any additional equipment necessary to increase capacity in the future shall be the responsibility of Grantor. C. At the termination of the Franchise Agreement, Grantor shall maintain the right to continued use of the I-Net under mutually negotiated terms. 8.7 Grantee shall provide at no charge, upon request and at the time necessary for use, modulators and associated fiber optic signal transmission and reception equipment for single channel return purposes for each public and private accredited educational institution, each city hall, as approved by the City. SECTION 9. PERIODIC CUSTOMER SURVEYS 9.1 The Grantee shall, upon request of the City and at times mutually agreed upon by the parties,but no more frequently than once every three years, conduct a random survey of a representative sample of Subscribers. Each questionnaire shall be prepared and conducted in good faith so as to provide reasonably reliable measure of customer satisfaction with: (1) audio and signal quality; (2)response to customer complaints; (3)billing practices; (4)programming; and (5) Installation practices; 9.2 The survey shall be conducted in conformity with standard research procedures, including the use of telephone survey conducted by an independent person in the business of regularly conducting such surveys. The survey shall consist of a sample size of 300 customers or such other sample size as to yield a margin of error of plus or minus six percent or less of the total customer base. 9.3 The Grantee shall report the results of the survey and any steps the Grantee may be taking in response to the survey within 60 days of the completion of the survey. 9.4 Notwithstanding anything to the contrary, the Grantee shall be under no obligation to conduct a survey at any time the Grantee is deemed subject to effective competition under then applicable state or federal law. SECTION 10. LINE EXTENSION POLICY 10.1 The Grantee shall, within 12 months of receiving a request, extend the System to any residences within the City served by City water and sewer facilities. 10.2 The City recognizes that in some instances the Grantee needs the permission of private property owners to extend service to others who may be interested in service and agrees that should the Grantee be unable to obtain these needed permissions under terms reasonable to the Grantee and the property owners from 384349/1 10 whom permission is required that the Grantee shall be under no obligation to extend service. SECTION 11. GENERAL FINANCIAL AND INSURANCE PROVISIONS 11.1 Payment to City A. Grantee shall pay to the City a Franchise Fee in an amount equal to five percent (5%) of its annual Gross Revenues. B. The foregoing payment shall be compensation for use of Streets. C. Payments due the City under this provision shall be computed at the end of each calendar quarter. Payments shall be due and payable for each quarter not later than 60 days from the last day of the quarter. Each payment shall be accompanied by a brief report showing the basis for the computation. At the end of each calendar year, Grantee shall complete a Franchise Fee Payment Worksheet attached hereto as Exhibit A. Grantee shall file a completed Franchise Fee Payment Worksheet no later than 60 days after the last day of the calendar year. D. No acceptance of any payment shall be construed as an accord that the amount paid is in fact the correct amount, nor shall such acceptance of payment be construed as a release of any claim the City may have for further or additional sums payable under the provisions of this Franchise. All amounts paid shall be subject to audit and recomputation by the City. E. In the event any payment is not made on the due date, interest on the amount due shall accrue from such date at the annual rate of 12%. 11.2 Bonds A. Prior to the commencement of System construction, and at all times thereafter until Grantee has completed the construction of the System in Section 6.1 of this Franchise, Grantee shall maintain with City a bond in the sum of$300,000.00 in such form and with such sureties as shall be acceptable to City, conditioned upon the faithful performance by Grantee of this Franchise and the acceptance hereof given by City and upon the further condition that in the event Grantee shall fail to comply with any law, ordinance or regulation, there shall be recoverable jointly and severally from the principal and surety of the bond, any damages or losses suffered by City as a result, including the full amount of any compensation, indemnification or cost of removal of any property of Grantee, including a reasonable allowance for attorneys' fees and costs (with interest at two percent in excess of the then prime rate), up to the full amount of the bond, and which bond shall further guarantee payment by 384349/1 11 Grantee of all claims and liens against City or any, public property, and taxes due to City, which arise by reason of the construction, operation, maintenance or use of the System. Upon completion of the System as described in Section 6.1 of this Franchise,the City may reduce the bond to the sum of$100,000. B. The rights reserved by City with respect to the bond are in addition to all other rights the City may have under this Franchise or any other law. C. City may, in its sole discretion, reduce the amount of the bond. 11.3 Security Fund A. In the event the Grantee is given notice of a noncompliance pursuant to Section 34 of the Ordinance, the Grantee shall within ten(10) days thereof deposit into a bank account, established by the City, and maintain on deposit the sum of Twenty Thousand and 00/100 Dollars ($20,000.00) or deliver to the City a letter of credit in the same amount as a common Security Fund for the faithful performance by it of all the provisions of this Franchise and compliance with all orders, permits and directions of the City and the payment by Grantee of any claim, liens, costs, expenses and taxes due the City which arise by reason of the construction, operation or maintenance of the System. Interest on this deposit shall be paid to Grantee by the bank on an annual basis. The security may be terminated by the Grantee upon the Resolution of the alleged noncompliance. The obligation to establish the security fund required by this paragraph is unconditional. The fund must be established whenever Grantee is given the notice required, even if Grantee disputes the allegation that it is not in compliance. If Grantee fails to establish the security fund as required, the City may take whatever action is appropriate to require the establishment of that fund and may recover its costs, reasonable attorneys' fees, and an additional penalty of$2000 in that action. B. Provision shall be made to permit the City to withdraw funds from the Security Fund. Grantee shall not use the Security Fund for other purposes and shall not assign,pledge or otherwise use this Security Fund as security for any purpose. C. Within ten (10) days after notice to it that any amount has been withdrawn by the City from the Security Fund pursuant to (A) of this section, Grantee shall deposit a sum of money sufficient to restore such Security Fund to the required amount. D. In addition to recovery of any monies owed by Grantee to City or damages to City as a result of any acts or omissions by Grantee pursuant to the 384349/1 12 Franchise, in particular Section 11(G) herein, City in its sole discretion may charge to and collect from the Security Fund the following penalties: 1. For failure to complete System construction in accordance with Section 6.1 hereof, unless City approves the delay, the penalty shall be $200.00 per day for each day, or part thereof, such failure occurs or continues. 2. For failure to provide data, documents, reports or information or to cooperate with City during an Application process or System review, the penalty shall be $50.00 per day for each day, or part thereof, such failure occurs or continues. 3. For failure to comply with any of the provisions of this Franchise for which a penalty is not otherwise specifically provided pursuant to this Paragraph C, the penalty shall be $50.00 per day for each day, or part thereof, such failure occurs or continues. 4. For failure to test, analyze and report on the performance of the System following a request by City, the penalty shall be $50.00 per day for each day, or part thereof, such failure occurs or continues. 5. For failure by Grantee to provide additional services as negotiated between City and Grantee at a periodic review session within 45 days after a request by City the penalty shall be $200.00 per day for each day, or part thereof, such failure occurs or continues. 6. Forty-five days following notice from City of a failure of Grantee to comply with construction, operation or maintenance standards, the penalty shall be $200.00 per day for each day, or part thereof, such failure occurs or continues. 7. For failure to provide the services Grantee has proposed, including, but not limited to,the implementation and the utilization of the Access Channels and the making available for use of the equipment and other facilities to City, the penalty shall be $100.00 per day for each day, or part thereof, such failure occurs or continues. 8. Each violation of any provision of this Franchise shall be considered a separate violation for which a separate penalty can be imposed. E. Exclusive of the contractual penalties set out above in this section, a violation of any provision of this Franchise is a misdemeanor. 384349/1 13 F. If Grantee fails to pay to the City any taxes due and unpaid; or fails to repay to the City, any damages, costs or expenses which the City shall be compelled to pay by reason of any act or default of the Grantee in connection with this Franchise; or fails, after thirty(30) days' notice of such failure by the City to comply with any provision of the Franchise which the City reasonably determines can be remedied by an expenditure of the security, the City may then withdraw such funds from the Security Fund. Payments are not Franchise Fees as defined in Section 29 of the Ordinance. G. Whenever the City finds that Grantee has allegedly violated one or more terms, conditions or provisions of this Franchise, a written notice shall be given to Grantee. The written notice shall describe in reasonable detail the alleged violation so as to afford Grantee an opportunity to remedy the violation. Grantee shall have 30 days subsequent to receipt of the notice in which to correct the violation before the City may require Grantee to make payment of penalties, and further to enforce payment of penalties through the Security Fund. Grantee may,within 10 days of receipt of notice,notify the City that there is a dispute as to whether a violation or failure has, in fact, occurred. Such notice by Grantee shall specify with particularity the matters disputed by Grantee and shall stay the running of the above-described time. 1. City shall hear Grantee's dispute at the next regularly scheduled or specially scheduled Council meeting. Grantee shall have the right to subpoena and cross-examine witnesses. The City shall determine if Grantee has committed a violation and shall make written findings of fact relative to its determination. If a violation is found, Grantee may petition for reconsideration. 2. If, after hearing the dispute, the claim is upheld by the City,then Grantee shall have 30 days within which to remedy the violation before the City may require payment of all penalties due it. 3. The time for Grantee to correct any alleged violation may be extended by the City if the necessary action to correct the alleged violation is of such a nature or character as to require more than 30 days within which to perform,provided Grantee commences corrective action within 15 days and thereafter uses reasonable diligence, as determined by the City, to correct the violation. H. If City draws upon the Security Fund delivered pursuant hereto, in whole or in part, Grantee shall replace the same within three days and shall deliver to City a like replacement Security Fund for the full amount stated in Paragraph A of this section as a substitution of the previous Security Fund. 384349/1 14 I. If any Security Fund is not so replaced, City may draw on said Security Fund for the whole amount thereof and hold the proceeds, without interest, and use the proceeds to pay costs incurred by City in performing and paying for any or all of the obligations, duties and responsibilities of Grantee under this Franchise that are not performed or paid for by Grantee pursuant hereto, including attorneys' fees incurred by the City in so performing and paying. The failure to so replace any Security Fund may also, at the option of City, be deemed a default by Grantee under this Franchise. The drawing on the Security Fund by City, and use of the money so obtained for payment or performance of the obligations, duties and responsibilities of Grantee which are in default, shall not be a waiver or release of such default. J. The collection by City of any damages, monies or penalties from the Security Fund shall not affect any other right or remedy available to City, nor shall any act, or failure to act, by City pursuant to the Security Fund, be deemed a waiver of any right of City pursuant to this Franchise or otherwise. SECTION 12. PUBLIC COMMITMENT Grantee shall provide free service connections, free on-line (i.e. high-speed cable modem services) services and any required modem to all institutions identified in Exhibit B. SECTION 13. COMPETITION ADJUSTMENT 13.1 In consideration of Grantee's substantial investment to build its System for the Cities of Eden Prairie, Edina, Minnetonka, Hopkins and Richfield, Minnesota, the City agrees to include the following provisions. 13.2 Any additional or subsequent cable Franchise granted to cable or non-cable companies who may compete with Grantee within the Franchise area will be granted only on substantially similar terms and conditions as this Franchise and shall not contain less burdensome nor more favorable terms than those imposed on Grantee by this Franchise. 13.3 The City and Grantee agree that all Franchise provisions that Grantee is subject to are effective against the Grantee only if such requirements are applied as well to any and all wired competitors of the Grantee within the Franchise area. For purposes of this subsection, a wired competitor is any video provider using Streets and offering at least 12 channels of video programming at least one of which is a broadcast signal, which uses wires, coaxial cables, optical fiber or other similar technology and places or attaches such wires, cables or fibers on Streets or public utility facilities. This definition of wired competitor does not include a Satellite 384349/1 15 Master Antenna Television system located wholly on private property within a building. 13.4 Any Franchise provision or other regulation enforced by the City upon Grantee which is not also imposed upon Grantee(s)wired competitors within the Franchise area of the City, shall be void as to Grantee, subject to the following requirements: A. The existence of a wired competitor in the Franchise area of the City shall not relieve Grantee of an obligation to provide an annual minimum Franchise Fee of two percent of.Gross Revenues. If the wired competitor obtains a cable Franchise which requires it to pay a Franchise Fee or substantially similar fee of an equivalent amount to the City, the State of Minnesota or any other governmental entity which is less than five percent of Gross Revenues, the City shall reduce Grantee's Franchise Fee to the same level,but in no event less than two percent of Gross Revenues. If the wired competitor does not obtain a cable Franchise,but it is required to pay a Franchise Fee or substantially similar fee to the City, State of Minnesota or any other governmental entity, then Grantee shall pay the same fee,but in no event less than two percent of Gross Revenues. If the wired competitor is not required to pay a Franchise Fee or similar fee to the City or the State of Minnesota, then the two percent minimum Franchise Fee shall apply to Grantee for all homes and customers who are passed by the wired competitor's system. If at any time a wired competitor with a cable Franchise pays a Franchise Fee of more than two percent, or if a wired competitor without a Franchise Fee pays a Franchise Fee or similar fee of more than two percent, Grantee shall pay the same Franchise Fee. In no event shall Grantee be required to pay more than a five percent Franchise Fee. If the wired competitor discontinues providing multichannel video services,the Grantee's Franchise Fee shall immediately return to its original level. B. The existence of a wired competitor shall not relieve Grantee of an obligation to provide at least one channel for public, educational and governmental access programming. If the wired competitor obtains a cable Franchise which requires it to provide less than four public, educational and governmental Access Channels, the City shall, upon the effective date of the subsequent Franchise, reduce Grantee's requirement to the same number of channels,but in no event shall Grantee provide less than one public, educational and governmental access channel. If the wired competitor does not obtain a cable Franchise,but it is required to provide less than four public, educational and governmental Access Channels, or if the wired competitor is not required to provide any public, educational or governmental Access Channels, then the City shall reduce the number of Access Channels required of Grantee as follows: 384349/1 16 (i) If the wired competitor passes less than 25% of the homes and customers in the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, Grantee shall provide at least four public, educational and governmental Access Channels. (ii) If the wired competitor passes 25%or more but less than 50%of the homes and customers in the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, Grantee shall provide at least three public, educational and governmental Access Channels. (iii) If the wired competitor passes 50%or more of the homes and customers in the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, Grantee shall provide at least one public, educational and governmental Access Channel. If at any time, a wired competitor provides channels for public, educational and governmental access which exceed the channels provided by Grantee, Grantee shall provide the same number of channels as the wired competitor. In no event shall Grantee be required to provide more public, educational or governmental Access Channels than it has agreed to in this Franchise Agreement Ordinance. If the wired competitor discontinues providing multichannel video services, the Grantee's requirement for the provision of public, educational and governmental Access Channels shall immediately return to its original level. C. If a wired competitor obtains a cable Franchise which requires it to provide less funding for equipment or facilities for public, educational and governmental access or less facilities and equipment than Grantee, the City shall reduce the Grantee's requirement for funding for public, educational and governmental access and facilities and equipment to the level of the wired competitor. If the wired competitor does not obtain a cable Franchise, including open video providers in accordance with the Telecommunications Act of 1996 and FCC rules,but it is required to provide less funding for public, educational and governmental access or less equipment or facilities than Grantee, or if the wired competitor is not required to provide any funding for public, educational or governmental access or equipment or facilities, then the City shall reduce the Grantee's required funding as follows: (i) If the wired competitor passes less than 25% of the homes and customers in the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, Grantee shall continue to provide the same level of funding for public, educational and governmental access facilities and equipment as indicated in this Ordinance. 384349/1 17 (ii) If the wired competitor passes 25% or more but less than 50% of the homes and customers in the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, the City shall reduce the funding, and equipment and facilities requirements of the Grantee by 30%. (iii) If the wired competitor passes 50% or more of the homes and customers in the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, the City shall eliminate the funding, and equipment and facilities requirements for public, educational and governmental access funding. It is not the intent of this section to reduce Grantee's funds, equipment and facilities requirements regarding public, educational and governmental access programming to an amount less than the amount provided by its wired competitors. If at any time a wired competitor provides funds, equipment or facilities for public, educational and governmental access that exceed the funds, equipment or facilities provided by Grantee under this paragraph, Grantee shall provide the same amount of funds, equipment and facilities. In no event shall Grantee be required to provide more funds, equipment or facilities than it has agreed to provide in Section 7 of this Franchise Agreement Ordinance. If the wired competitor discontinues providing multichannel video services, the Grantee's requirement for the provision of funding and, equipment and facilities for public, educational and governmental access and, facilities and equipment shall immediately return to its original level. D. For all other Franchise provisions imposed upon Grantee in this Ordinance, if a wired competitor obtains a cable Franchise which does not require it to meet the same Franchise provision, the City shall not require Grantee to meet that Franchise provision. If the wired competitor does not obtain a cable Franchise and it is not required to meet the same Franchise provision, then the City shall relieve the Grantee from that Franchise provision as follows: (i) If the wired competitor passes less than 50% of the homes and customers in the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, Grantee shall continue to comply with the Franchise provision. (ii) If the wired competitor passes 50%or more of the homes and customers in the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, the City shall not require Grantee to meet the Franchise provision. 384349/1 18 If at any time a wired competitor provides a requirement contained originally in this cable Franchise, Grantee shall comply with that same requirement. If the wired competitor discontinues providing multichannel video services, the Grantee shall be required to meet the Franchise provision. 13.5 If Grantee is aware of a Franchise provision imposed by the City upon Grantee which is not also imposed by the City or the State of Minnesota upon a wired competitor, it shall identify the wired competitor, including the basis for stating that the entity is a"wired competitor" as defined above; it shall identify the Franchise provision in question; and it shall provide this information to the City. Within 90 days, the City shall: (1)pass a resolution declaring that Grantee is subject to this section for that requirement; (2) declare why the entity in question is not a wired competitor; or(3) state that the"wired competitor"is subject to a requirement that substantially duplicates the Franchise provision. During the above process, the Grantee shall escrow any funds at issue in the above process that the Franchise requires be remitted during the time period of the above process and Grantee shall continue to meet any and all requirements in question. If the City declares such requirement void as to Grantee, the City is not liable for Grantee's past compliance with the requirement, including any past fees remitted to the City. 13.6 If the City and Grantee are unable to agree upon the operation of this section of the Ordinance within 90 days after one party provides notice to the other party, the parties may agree to enter mediation. SECTION 14. ACCEPTANCE 14.1 Other Franchises A. The System intended for City,may be part of a joint system that serves the cities of Eden Prairie, Edina, Hopkins, Minnetonka and Richfield, Minnesota. B. Grantee will, in good faith, apply for and accept, if offered to it, a Franchise (similar Franchise) from each of the other cities on all the same terms and conditions herein provided, except provisions omitted as inapplicable. 14.2 Time of Acceptance; Incorporation of Offering; Exhibits A. Grantee shall accept this Franchise in form and substance acceptable to City by Such acceptance by Grantee shall be deemed the grant of this Franchise for all purposes. 384349/1 19 B. Upon acceptance of this Franchise, Grantee shall be bound by all the terms and conditions contained in Ordinance No. , also known as the Cable Television Regulatory Ordinance, and herein. With its acceptance, Grantee also shall obtain an opinion from its legal counsel, acceptable to City, stating that this Franchise has been duly accepted by Grantee, that this Franchise is enforceable against Grantee in accordance with its terms, and which opinion shall otherwise be in form and substance acceptable to City. C. With its acceptance, Grantee also shall deliver to City true and correct copies of documents creating Grantee and evidencing the power and authority referred to in the opinion of Grantee's counsel, certified as of a then current date by public office holders to the extent possible and otherwise by an officer of Grantee. D. Ninety(90) days prior to the commencement of the operation of the System, Grantee shall provide a copy of its initial services which shall be attached hereto as Exhibit C. E. The effective date of this Franchise Agreement Ordinance shall be IN WITNESS WHEREOF, Grantor and Grantee have executed this Franchise Agreement the date and year first above written. ATTEST: CITY OF EDINA, MINNESOTA By City Clerk Its: (SEAL) WIDEOPENWEST MINNESOTA, LLC By Its: (Corporate Seal) 384349/1 20 STATE OF MINNESOTA ) ) ss: COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me on by_ the of the City of Edina, Minnesota, on behalf of the City. Notary Public STATE OF ) ss: COUNTY OF ) The foregoing instrument was acknowledged before me on by , the of WideOpenWest Minnesota, LLC, on behalf of the company. Notary Public 384349/1 21 EXHIBIT A FRANCHISE FEE PAYMENT WORKSHEET Percentages Based on Revenue&Bad Total Revenue Debt Quarter Quarter Quarter Quarter Payment Basic 0 Eden Prairie 0% $0 $0 $0 $0 $0 Additional Outlets 0 Edina 0% 0 0 0 0 0 Equipment Rent 0 Hopkins 0% 0 0 0 0 0 Pay TV 0 Minnetonka 0% 0 0 0 0 0 Pay Per Event 0 Richfield 0% 0 0 0 0 0 Transaction Fee 0 Advertising 0 TOTAL 0% $0 $0 $0 $0 $0 Shopping Service 0 Other 0 TOTAL REVENUE 0 LESS: Local Access 0 LESS: Bad Debt 0 CHARGEABLE REVENUE 0 X FRANCHISE FEE% 0 TOTAL FRANCHISE FEES TO BE PAID $0 384349/1 A-1 EXHIBIT B LIST OF PUBLIC SCHOOLS AND BUILDINGS PUBLIC SCHOOLS Concord Elementary 5900 Concord Avenue Cornelia Elementary 7000 Cornelia Drive Countryside Elementary 5701 Benton Avenue Creek Valley Elementary 6401 Gleason Road Highlands Elementary 5505 Doncaster Way Normandale Elementary 5701 Normandale Road South View Middle School 4725 South View Lane Valley View Middle School 6750 Valley View Road Edina High School 6754 Valley View Road Edina Community Center 5701 Normandale Road PUBLIC BUILDINGS City Hall 4801 W. 50th Street Public Works 5146 Eden Avenue Fire Station#1 6250 Tracy Avenue Fire Station#2 7335 York Avenue Southdale Liquor Store 6755 York Avenue 50th Street Liquor Store 3943 W. 50th Street Vernon Avenue Liquor Store 5013 Vernon Avenue Aquatic Center 4300 W. 66th Street Arneson Acres 4711 W. 70th Street Art Center 4701 W. 64th Street Braemar Arena 7501 lkola Way Braemar Golf Course 6364 John Harris Drive Braemar Golf Dome 7420 Braemar Blvd. Fred Richards Golf Course 7640 Parklawn Avenue Centennial Lakes 7499 France Avenue South Edinborough Park 7700 York Avenue South Edina Community Library 4701 W. 50th Street Southdale Library 7001 York Avenue Weber Park Shelter 4115 Grimes Avenue Todd Park Shelter 4429 VanderVork Avenue Walnut Ridge Park 5801 Londonderry Road Cornelia School Park 7142 Cornelia Drive Tupa Historic Park 4918 Eden Avenue 384349/1 B-1 EXHIBIT C WIDEOPENWEST MINNESOTA,LLC INITIAL PROGRAMMING To be provided ninety(90) days prior to System activation 384349/1 C-1