HomeMy WebLinkAbout2012 and 2015- Correspondence Related to the Transfer of the Cable Franchise Moss & Barnett
February 18, 2015
Ms. Debra A. Mangen
City Clerk
4801 West 50th Street
Edina, MN 55424
Re: Transfer of the Cable Franchise
Dear Ms. Mangen:
Enclosed please find a fully executed copy of Resolution No. 2015-164. We have retained a
photocopy for our files.
If you have any questions, please feel free to contact me.
Very truly yours,
Terri L. Hammer
Paralegal
P: (612) 877-5349 F: (612) 877-5999
Terri.Hammer(cblawmoss.com
Enclosure
2764597v1
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RESOLUTION NO. 2014-164
APPROVING THE TRANSFER OF THE CABLE FRANCHISE
AND CHANGE OF CONTROL OF THE GRANTEE
WHEREAS, Comcast of Arkansas/Florida/Louisiana/Minnesota/Mississippi/Tennessee,
Inc. ("Grantee"), currently holds a cable television franchise ("Franchise") granted by the City of
Edina, Minnesota ("City"); and
WHEREAS, Grantee owns, operates and maintains a cable television system in the City
("System") pursuant to the terms of the Franchise; and
WHEREAS, on February 12, 2014, Comcast Corporation ("Comcast") and Time Warner
Cable Inc. ("TWC") entered into an Agreement and Plan of Merger; and
WHEREAS, on April 25, 2014, Comcast and Charter Communications, Inc. ("Charter")
entered into the Comcast/Charter Transactions Agreement (the "Agreement"), pursuant to
which the Grantee, through a restructuring under Comcast's ownership, will become Comcast of
Minnesota, LLC ("New Grantee") and immediately thereafter will become a wholly-owned
subsidiary of Midwest Cable, Inc. ("Midwest Cable") (the "Transaction"); and
WHEREAS, on or about June 17, 2014 the City received from Grantee, FCC Form 394 -
Application for Franchise Authority Consent to Assignment or Transfer of Control of Cable
Television Franchise ("Application"); and
WHEREAS, Federal law and the terms of the Franchise require that the City take action
to consider the Application within one hundred twenty (120) days of the date of receipt, or on or
before October 15, 2014; and
WHEREAS, on or about August 22, 2014 Comcast and Midwest Cable agreed to extend
the Application review period for sixty (60) days until December 15, 2014 to allow the City time
to review the additional information concerning the qualifications of Midwest Cable provided to
the City on September 30, 2014; and
WHEREAS, on or about September 30, 2014 Comcast and Midwest Cable agreed to a
further extension of the Application review period for thirty (30) days until January 15, 2015 to
allow the City to review certain service agreements related to the Transaction as well as certain
SEC financial filings to be made available for review on October 31, 2014; and
WHEREAS, Section 2.7 of the Franchise requires the City's advance written consent
prior to the Grantee's transfer of the Franchise; and
WHEREAS, as a result of the proposed Transaction Grantee has requested consent
from the City to the proposed transfer of the Franchise; and
2630874v1 CITY OF EDINA
4801 West 50th Street-Edina,Minnesota 55424
www.EdinaMN.gov-952-927-8861 - Fax 952-826-0389
1
Resolution No. 2014-164
Page 2
WHEREAS, the City has reviewed the proposed Transaction, and based on information
provided by Grantee and Midwest Cable and on the information received by the City from the
Southwest Suburbs Cable Commission ("Commission"), the City has elected to approve the
proposed Transaction subject to certain conditions as set forth herein.
NOW, THEREFORE, the City of Edina, Minnesota hereby resolves as follows:
1. All of the above recitals are hereby incorporated by reference as if fully set forth
herein.
2. The Franchise is in full force and effect and Grantee is the lawful holder of the
Franchise.
3. New Grantee will be the lawful holder of the Franchise after completion of the
Transaction.
4. The City hereby consents and approves of the proposed Transaction subject to
the below conditions.
a. New Grantee agreeing to assume any and all liabilities, known and
unknown, under the Franchise.
b. Within twenty (20) days of the date of adoption of this Resolution, New
Grantee shall execute and file with the City the Acceptance and Agreement
attached hereto to verify New Grantee's compliance with the terms and
conditions of this Resolution; and
C. Within thirty (30) days following close of the Transaction, Midwest Cable
(also to be known as GreatLand Connections Inc.) shall execute and provide the
City with the Corporate Parent Guaranty attached hereto and incorporated by
reference.
d. New Grantee shall provide both SD and HD (simulcast) capacity for the
City's government access PEG channel - identical to what the Grantee currently
provides to the City of Edina, Minnesota under the Franchise.
e. New Grantee shall maintain and provide (as Grantee currently provides),
free of charge to the City, Commission and the Commission's member cities, the
existing PEG playback transmission connectivity and Comcast fiber and coax
cable in the following manner:
i. All fiber coming to and from the existing Comcast Head end
building - 10210 Crosstown Circle necessary for Commission PEG
transmissions.
ii. New Grantee shall provide, maintain and replace any existing
routers, switching equipment and related facilities at the headend that
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Resolution No. 2014-164
Page 3
may be required to maintain the same PEG access functionality as
Grantee currently provides and as otherwise required by the Franchise.
iii. The City, Commission and Commission's member cities shall
have the right to continue to use maintain the fiber& splice points at
10210 Crosstown Circle.
iv. In the event headend is relocated from 10210 Crosstown Circle,
all costs and expenses required to maintain the PEG playback
transmission connectivity and Comcast fiber and coax cable shall be
provided by New Grantee free of charge to the City, Commission and the
Commission's member cities.
V. New Grantee shall provide, maintain and replace the existing
termination equipment (Modulators) to facilitate the PEG programming
transmission to each of the Commission's member cities in following
amounts - Edina (6), Richfield (1), Hopkins (1), and Minnetonka (1).
f. New Grantee will participate in quarterly meetings with members of the
Commission or the Commission's designees for the first two (2) years following
the close of the Transaction to verify that subscriber issues and concerns are
being addressed by New Grantee or any other entity that may have interaction
with subscribers within the City. If issues are not being addressed, New Grantee
agrees to meet with Commission and City staff, as directed, to explain steps
being undertaken to address subscriber concerns and New Grantee will provide
regular and timely updates to the Commission to provide verification of corrective
actions being undertaken to address unresolved issues.
g. New Grantee will maintain an "escalated complaint program" to escalate
unresolved cable television complaints from subscribers. One or more
specifically identified employee(s) of New Grantee shall be available to
Commission or City staff via email for reporting issues. These specifically
identified employee(s) of New Grantee will have the ability to escalate service
issues to a senior officer of New Grantee or New Grantee's parent company
when necessary. New Grantee will follow-up with Commission or City staff by
email or by phone with a summary of the results of the complaint(s).
h. New Grantee's compliance with the requirements of paragraphs c, d, e, f,
and g of this Resolution shall be handled under the Franchise. New Grantee
shall be subject to available enforcement procedures and remedies as if these
obligations were set forth in the Franchise.
i. Comcast shall, within twenty (20) days of the date of adoption of this
Resolution, fully reimburse City for all of City's reasonable costs and expenses in
connection with the City's review of the proposed Transaction, including without
limitation, all costs incurred by the City for experts and attorneys retained by City
to assist in the review as well as notice and publication costs ("Reimbursement").
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Resolution No. 2014-164
Page 4
i. The Reimbursement shall not be deemed to be "Franchise Fees"
within the meaning of Section 622 of the Cable Act (47 U.S.C. §542), nor
shall the Reimbursement be deemed to be (i) "payments in kind" or any
involuntary payments chargeable against the Franchise Fees to be paid
to the City by New Grantee pursuant to the Franchise.
ii. The Reimbursement shall be considered a requirement or charge
incidental to the awarding or enforcing of the Franchise.
5. In the event the proposed Transaction contemplated by the foregoing resolution
is not completed, for any reason, the City's consent shall not be effective. If any of the
conditions set forth herein are not met, the City's consent to the proposed Transaction
shall be null and void and of no effect.
This Resolution shall take effect and continue and remain in eff ct from and after the
date of its passage, approval, and adoption.
Dated: December 16, 2014
6Attest:
Debra A. Mangen, City k James B. Hov and,
Mayor
STATE OF MINNESOTA)
COUNTY OF HENNEPIN) SS
CITY OF EDINA )
CERTIFICATE OF CITY CLERK
1, the undersigned duly appointed and acting City Clerk for the City of Edina do hereby certify that the
attached and foregoing Resolution was duly adopted by the Edina City Council at its Regular Meeting of
December 16, 2014, and as recorded in the Minutes of said Regular Meeting.
WITNESS my hand and seal of said City this ��-G l day of
of
City Cler
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2630874v1
Resolution No. 2014-164
Page 5
ACCEPTANCE AND AGREEMENT
Comcast of Minnesota, LLC hereby accept this Resolution No. -A 01q,
("Resolution") and agree to be bound by the terms and conditions of this Resolution and the
terms and conditions of the Franchise referenced within the Resolution.
Dated this day of rell� 2019
COMCAST OF MINNESOTA, LLC
`1
By: 4, . A
UU
Its: /1y(�
r
SWORN TO BEFORE ME this
-3 day of rda" , 2010?
N TARY PUBLIC
`i
.war„r JEAN W STRINGER
v. Notary Public
state of Minnesota
My commission Expires
January 31, 2020
5
2630874v1
b . .
CORPORATE PARENT GUARANTY
THIS AGREEMENT is made this day of 201_ (this
"Agreement"), by and among GreatLand Connections Inc. (f/k/a Midwest Cable, Inc.), a
Delaware corporation, (the "Guarantor") the City of Edina, Minnesota ("Franchising Authority"),
and , a ("Company"),
WITNESSETH
WHEREAS, on , 20 the Franchising Authority adopted
Ordinance No. granting a Cable Television Franchise which is now held by
(the "Franchise"), pursuant to which the Franchising Authority has
granted the rights to own, operate, and maintain a cable television system ("System"); and
WHEREAS, pursuant to the Comcast/Charter Transaction Agreement dated April 25,
2014 by and between Charter Communication, Inc., a Delaware corporation, and Comcast
Corporation, a Pennsylvania corporation, ("Agreement"), the Franchise will be transferred to the
Company and the Guarantor will acquire control of the Company as an indirect subsidiary of
Guarantor as a result of Comcast Corporation's contribution and spin off of certain cable
television systems pursuant to the Agreement ("Change in Control"); and
WHEREAS, Company and Comcast Corporation have requested the consent to the
Change of Control in accordance with the requirements of Section of the Franchise; and
WHEREAS, pursuant to Resolution No, dated
, 20_, Franchising Authority conditioned its consent to the Change of Control on the
issuance by Guarantor of a corporate parent guaranty guaranteeing certain obligations of
Company under the Franchise.
NOW, THEREFORE, in consideration of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, in
consideration of the approval of the Change of Control, Guarantor hereby unconditionally and
irrevocably agrees to provide all the financial resources necessary for the observance,
fulfillment and performance of the obligations of the Company under the Franchise and also to
be legally liable for performance of said obligations in case of default by or revocation or
termination for default of the Franchise.
This Agreement, unless terminated, substituted, or canceled, as provided herein, shall
remain in full force and effect for the duration of the term of the Franchise.
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Upon substitution of another Guarantor reasonably satisfactory to the Franchising
Authority, this Agreement may be terminated, substituted, or canceled upon thirty (30)days
prior written notice from Guarantor to the Franchising Authority and the Company. Such
termination shall not affect liability incurred or accrued under this Agreement prior to the
effective date of such termination or cancellation.
GREATLAND CONNECTIONS INC. (F/K/A
MIDWEST CABLE, INC.)
By: .
Its: vP
) ss.
The foregoing instrument was subscribed and sworn to before me this3�77-day of 6ra�cr
20S-, by �v/!nw 14. CA r/ /� the 176f1rH ru ji
of
a 41rQi•1> -C Donna M.Carlyle
Notary Public District of Columbia
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or
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2630874v1
AFFIDAVIT OF PUBLICATION City of Edina
STATE OF MINNESOTA )ss NOTICE OF UBOfficialIL.ICtHnEARING
COUNTY OF HENNEPIN ) The City Council for the City of
Edina,Minnesota will be conducting
a public hearing on December 16,
Charlene Vold being duly sworn on an oath, 2014 at 7:00 p.m.or as soon there-
states or affirms that they are the Authorized after as it may be heard at the City
Agent of the newspaper(s)known as: Hall in Edina,Minnesota.
The purpose of this public hear-
ing is to consider the application
SC Edina for the transfer of the cable system
from Comcast of Minnesota, Inc.,
the existing cable television franchi-
and has full knowledge of the facts stated see,to Midwest Cable,Inc.,a newly
below: formed entity that will hold the cable
(A)The newspaper has complied with all of system. The hearing will focus on
the requirements constituting qualifica- the application submitted and the
qualifications of Midwest Cable,Inc.
tion as a qualified newspaper as provided All interested persons should ap-
by Minn. Stat. §331A.02, §331A.07, and pear at the above date and time.
other applicable laws as amended. Dated this 2nd day of December,
(B)This Public Notice was p printed and pub- 2014.
CITY OF EDINA,MINNESOTA
lished in said newspaper(s) for I succes- By:Debra A.Mangan
sive issues; the first insertion being on Its:City Clerk
12/11/2014 and the last insertion being on
12/11/2014. 12n1n4,3sc1,PHN Comcast-
Midwest Cable,322389
Authorized Agent
Subscribed and sworn to or affirmed before
me on 12/11/2014.
M
Notary Public
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Rate Information:
(1)Lowest classified rate paid by commercial users
for comparable space:
$34.45 per column inch
Ad 1 D 322389
City of Edina, Minnesota
Ordinance Granting a Cable Television Franchise
to
Comcast of Arkansas/Florida /Louisiana/Minnesota/Mississippi/Tennessee, Inc.
July 17, 2012
2033319v1
■
TABLE OF CONTENTS
SECTION 1 DEFINITIONS....................................................................................................... 1
SECTION2 FRANCHISE ......................................................................................................... 5
SECTION 3 OPERATION IN STREETS AND RIGHTS-OF-WAY....................................... 8
SECTION 4 REMOVAL OR ABANDONMENT OF SYSTEM............................................ 12
SECTION 5 SYSTEM DESIGN AND CAPACITY ............................................................... 13
SECTION 6 PROGRAMMING AND SERVICES.................................................................. 16
SECTION 7 PUBLIC, EDUCATIONAL AND GOVERNMENTAL ACCESS .................... 18
SECTION 8 REGULATORY PROVISIONS.......................................................................... 24
SECTION9 BOND .................................................................................................................. 25
SECTION 10 SECURITY FUND............................................................................................. 26
SECTION 11 DEFAULT.......................................................................................................... 28
SECTION 12 FORECLOSURE AND RECEIVERSHIP......................................................... 30
SECTION 13 REPORTING REQUIREMENTS...................................................................... 31
SECTION 14 CUSTOMER SERVICE POLICIES.................................................................. 32
SECTION 15 SUBSCRIBER PRACTICES............................................................................. 38
SECTION 16 COMPENSATION AND FINANCIAL PROVISIONS.................................... 38
SECTION 17 MISCELLANEOUS PROVISIONS..................................................................42
EXHIBIT A FREE CABLE SERVICE TO PUBLIC BUILDINGS......................................A-1
EXHIBIT B EXISTING FIBER RETURN LINES ............................................................... B-1
EXHIBIT C FRANCHISE FEE PAYMENT WORKSHEET............................................... C-1
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ORDINANCE NO. 2012-14
AN ORDINANCE RENEWING THE GRANT OF A FRANCHISE TO COMCAST OF
ARKANSAS/FLORIDA/LOUISIANA/MINNESOTA/MISSISSIPPI /TENNESSEE,
INC. TO OPERATE AND MAINTAIN A CABLE SYSTEM IN THE CITY OF EDINA;
SETTING FORTH CONDITIONS ACCOMPANYING THE GRANT OF FRANCHISE;
PROVIDING FOR CITY REGULATION AND ADMINISTRATION OF THE CABLE
SYSTEM; AND TERMINATING ORDINANCE NO. 1996-5.
RECITALS
The City of Edina, Minnesota("City") pursuant to applicable federal and state law, is
authorized to grant one or more nonexclusive cable television franchises to construct, operate,
maintain and reconstruct cable television systems within the City limits.
Comcast of Arkansas /Florida/Louisiana/Minnesota/Mississippi/Tennessee, Inc., a
Delaware corporation ("Grantee") has operated a Cable System in the City, under a cable
television franchise granted pursuant to Ordinance No. 1996-5.
Negotiations between Grantee and the City have been completed and the franchise
renewal process followed in accordance with the guidelines established by the City Code,
Minnesota Statutes Chapter 238 and the Cable Act (47 U.S.C. 546).
The City reviewed the legal, technical and financial qualifications of Grantee and, after a
properly noticed public hearing, as determined that it is in the best interest of the City and its
residents to renew the cable television franchise with Grantee.
NOW, THEREFORE, THE CITY OF EDINA DOES ORDAIN that a franchise is
hereby granted to Comcast of Arkansas/Florida/Louisiana/Minnesota/Mississippi/
Tennessee, Inc., to operate and maintain a Cable System in the City upon the following terms
and conditions:
SECTION 1
DEFINITIONS
For the purpose of this Franchise, the following, terms, phrases, words, derivations and
their derivations shall have the meanings given herein. When not inconsistent with the context,
words used in the present tense include the future tense, words in the plural number include the
singular number and words in the singular number include the plural number. In the event the
meaning of any word or phrase not defined herein is uncertain, the definitions contained in
applicable local, State or Federal law shall apply.
"Access Channels" means any channel or portion of a channel utilized for public,
educational or governmental programming.
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"Affiliate" shall mean any Person controlling, controlled by or under common control of
Grantee.
"Applicable Laws" means any law, statute, charter, ordinance, rule, regulation, code,
license, certificate, franchise, permit, writ, ruling, award, executive order, directive, requirement,
injunction (whether temporary, preliminary or permanent),judgment, decree or other order
issued, executed, entered or deemed applicable by any governmental authority of competent
jurisdiction.
"Basic Cable Service"means any service tier which includes the lawful retransmission of
local television broadcast.
"Cable Act" means the Cable Communications Policy Act of 1984, 47 U.S.C. §§ 521 et
seq., as amended by the Cable Television Consumer Protection and Competition Act of 1992, as
further amended by the Telecommunications Act of 1996, as further amended from time to time.
"Cable Service" shall mean (a) the one-way transmission to Subscribers of(i) Video
Programming or (ii) Other Programming Service, and b) Subscriber interaction, if any, which is
required for the selection or use of such video programming or other programming service. For
the purposes of this definition, "video programming" is programming provided by, or generally
considered comparable to programming provided by a television broadcast station; and, "other
programming service" is information that a cable operator makes available to all Subscribers
generally.
"Cable System" or"System" shall have the meaning specified for"Cable System" in the
Cable Act. Unless otherwise specified, it shall in this document refer to the Cable System
constructed and operated in the City under this Franchise.
"Channel" means a portion of the electromagnetic frequency spectrum which is used in a
Cable System and which is capable of delivering a television channel as defined by the FCC by
regulation.
"City" shall mean the City of Edina, a municipal corporation in the State of Minnesota.
"City Code" means the Municipal Code of the City of Edina, Minnesota, as may be
amended from time to time.
"Commission"means the Southwest Suburban Cable Communications Commission
consisting of the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, Minnesota.
"Connection" means the attachment of the Drop to the television set of the Subscriber.
"Converter" means an electronic device, which converts signals to a frequency not
susceptible to interference within the television receiver of a Subscriber, and by an appropriate
Channel selector also permits a Subscriber to view all signals included in the Basic Cable
Service tier delivered at designated converter dial locations.
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"Council" shall mean the governing body of the City.
"Day" unless otherwise specified shall mean a calendar day.
"Drop" shall mean the cable that connects the Subscriber terminal to the nearest feeder
cable of the cable.
"Effective Date" shall mean August 1, 2012.
"Expanded Basic Service" means the next tier of service above the Basic Cable Service
tier excluding premium or pay-per-view services.
"FCC"means the Federal Communications Commission, or a designated representative.
"Franchise" shall mean the right granted by this Ordinance and conditioned as set forth
herein.
"Franchise Area" means the entire geographic area within the City as it is now
constituted or may in the future be constituted.
"Franchise Fee" shall mean the fee assessed by the City to Grantee, in consideration of
Grantee's right to operate the Cable System within the City's Streets and rights of way,
determined in amount as a percentage of Grantee's Gross Revenues and limited to the maximum
percentage allowed for such assessment by federal law. The term Franchise Fee does not include
the exceptions noted in 47 U.S.C. §542(g)(2)(A-E).
"GAAP" means generally accepted accounting principles as promulgated and defined by
the Financial Accounting Standards Board ("FASB"), Emerging Issues Task Force ("EITF")
and/or the U.S. Securities and Exchange Commission("SEC").
"Gross Revenues" means any and all compensation in whatever form, from any source,
directly or indirectly earned by Grantee or any Affiliate of Grantee or any other Person who
would constitute a cable operator of the Cable System under the Cable Act, derived from the
operation of the Cable System to provide Cable Service within the City. Gross Revenues include,
by way of illustration and not limitation, monthly fees charged Subscribers for Cable Services
including Basic Cable Service, any expanded tiers of Cable Service, optional premium or digital
services; pay-per-view services; Pay Services, installation, disconnection, reconnection and
change-in-service fees, Leased Access Channel fees, all Cable Service lease payments from the
Cable System to provide Cable Services in the City, late fees and administrative fees, payments
or other consideration received by Grantee from programmers for carriage of programming on
the Cable System and accounted for as revenue under GAAP; revenues from rentals or sales of
Converters or other Cable System equipment; advertising sales revenues booked in accordance
with Applicable Law and GAAP; revenues from program guides and electronic guides,
additional outlet fees, Franchise Fees required by this Franchise, revenue from Interactive
Services to the extent they are considered Cable Services under Applicable Law; revenue from
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the sale or carriage of other Cable Services, revenues from home shopping and other revenue-
sharing arrangements. Grantee agrees that Gross Revenues shall include all commissions paid to
the National Cable Communications and Comcast Spotlight or their successors associated with
sales of advertising on the Cable System within the City allocated according to this paragraph
using total Cable Service Subscribers reached by the advertising. Copyright fees or other license
fees paid by Grantee shall not be subtracted from Gross Revenues for purposes of calculating
Franchise Fees. Gross Revenues shall include revenue received by any entity other than Grantee
where necessary to prevent evasion or avoidance of the obligation under this Franchise to pay the
Franchise Fees.
Gross Revenues shall not include any taxes on services furnished by Grantee, which taxes
are imposed directly on a Subscriber or user by a city, county, state or other governmental unit,
and collected by Grantee for such entity. The Franchise Fee is not such a tax. Gross Revenues
shall not include amounts which cannot be collected by Grantee and are identified as bad debt;
provided that if amounts previously representing bad debt are collected, then those amounts shall
be included in Gross Revenues for the period in which they are collected. Gross Revenues shall
not include payments for PEG Access capital support. The City acknowledges and accepts that
Grantee shall maintain its books and records in accordance with GAAP.
"Interactive Services" are those services provided to Subscribers whereby the Subscriber
either (a) both receives information consisting of either television or other signal and transmits
signals generated by the Subscriber or equipment under his/her control for the purpose of
selecting what information shall be transmitted to the Subscriber or for any other purpose or (b)
transmits signals to any other location for any purpose.
"Minnesota Cable Communications Act" means the provisions of Minnesota law
governing the requirements for a cable television franchise as set forth in Minn. Stat. § 238, et.
seq., as amended.
"Normal Business Hours" means those hours during which most similar businesses in
City are open to serve customers. In all cases, "Normal Business Hours" must include some
evening hours, at least one (1) night per week and/or some weekend hours.
"Normal Operating Conditions" means those Service conditions which are within the
control of Grantee. Those conditions which are not within the control of Grantee include, but are
not limited to, natural disasters, civil disturbances, power outages, telephone network outages,
and severe or unusual weather conditions. Those conditions which are ordinarily within the
control of Grantee include, but are not limited to, special promotions, pay-per-view events, rate
increases, regular peak or seasonal demand periods, and maintenance or upgrade of the Cable
System.
"Pay Service" means programming (such as certain on-demand movie channels or pay-
per-view programs) offered individually to Subscribers on a per-channel, per-program or per-
event basis.
"PEG" means public, educational and governmental.
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"Person" means any natural person and all domestic and foreign corporations, closely-
held corporations, associations, syndicates,joint stock corporations, partnerships of every kind,
clubs, businesses, common law trusts, societies and/or any other legal entity.
"Street" shall mean the surface of and the space above and below any public Street, road,
highway, freeway, lane, path, public way, alley, court, sidewalk, boulevard, parkway, drive or
any easement or right-of-way now or hereafter held by City which shall, within its proper use
and meaning in the sole opinion of City, entitle Grantee to the use thereof for the purpose of
installing or transmitting over poles, wires, cables, conductors, ducts, conduits, vaults, man-
holes, amplifiers, appliances, attachments and other property as may be ordinarily necessary and
pertinent to a Cable System.
"Subscriber" means a Person who lawfully receives Cable Service.
"Wireline MVPD" means a multichannel video programming distributor that utilizes the
Streets to install cable or fiber and is engaged in the business of making available for purchase,
by Subscribers, multiple Channels of video programming in the City.
SECTION 2
FRANCHISE
2.1 Grant of Franchise. The City hereby authorizes Grantee to occupy or use the
City's Streets subject to: 1) the provisions of this non-exclusive Franchise to provide Cable
Service within the City; and 2) all applicable provisions of the City Code. Said Franchise shall
constitute both a right and an obligation to provide Cable Services as required by the provisions
of this Franchise. Nothing in this Franchise shall be construed to prohibit Grantee from: (1)
providing services other than Cable Services to the extent not prohibited by Applicable Law; or
(2) challenging any exercise of the City's legislative or regulatory authority in an appropriate
forum. The City hereby reserves all of its rights to regulate such other services to the extent not
prohibited by Applicable Law and no provision herein shall be construed to limit or give up any
right to regulate.
2.2 Reservation of Authority. The Grantee specifically agrees to comply with the
lawful provisions of the City Code and applicable regulations of the City. Subject to the police
power exception below, in the event of a conflict between A) the lawful provisions of the City
Code or applicable regulations of the City and B) this Franchise, the express provisions of this
Franchise shall govern. Subject to express federal and state preemption, the material terms and
conditions contained in this Franchise may not be unilaterally altered by the City through
subsequent amendments to the City Code, ordinances or any regulation of City, except in the
lawful exercise of City's police power. Grantee acknowledges that the City may modify its
regulatory policies by lawful exercise of the City's police powers throughout the term of this
Franchise. Grantee agrees to comply with such lawful modifications to the City Code; however,
Grantee reserves all rights it may have to challenge such modifications to the City Code whether
arising in contract or at law. The City reserves all of its rights and defenses to such challenges
whether arising in contract or at law. Nothing in this Franchise shall (A) abrogate the right of the
City to perform any public works or public improvements of any description, (B) be construed as
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a waiver of any codes or ordinances of general applicability promulgated by the City, or (C) be
construed as a waiver or release of the rights of the City in and to the Streets.
2.3 Franchise Term. The term of the Franchise shall be ten (10) years from the
Effective Date, unless extended by mutual written consent in accordance with Section 17.7 or
terminated sooner in accordance with this Franchise.
2.4 Franchise Area. This Franchise is granted for the Franchise Area defined herein.
Grantee shall extend its Cable System to provide Service to any residential unit in the City in
accordance with Section 6.6 herein. This Franchise governs any Cable Services provided by
Grantee to residential and commercial Subscribers to Grantee's Cable System.
2.5 Franchise Nonexclusive. The Franchise granted herein shall be nonexclusive.
The City specifically reserves the right to grant, at any time, such additional franchises for a
Cable System as it deems appropriate provided, however, such additional grants shall not operate
to materially modify, revoke, or terminate any rights previously granted to Grantee other than as
described in Section 17.18. The grant of any additional franchise shall not of itself be deemed to
constitute a modification, revocation, or termination of rights previously granted to Grantee.
Any additional cable franchise grants shall comply with Minn. Stat. Section 238.08 and any
other applicable federal level playing field requirements.
2.6 Periodic Public Review of Franchise. Within sixty (60) Days of the third and
sixth annual anniversary of the Effective Date of this Franchise, the City may conduct a public
review of the Franchise. The purpose of any such review shall be to ensure, with the benefit of
full opportunity for public comment, that the Grantee continues to effectively serve the public in
the light of new developments in cable law and regulation, cable technology, cable company
performance with the requirements of this Franchise, local regulatory environment, community
needs and interests, and other such factors. Both the City and Grantee agree to make a full and
good faith effort to participate in the review. So long as Grantee receives reasonable notice,
Grantee shall participate in the review process and shall fully cooperate. The review shall not
operate to modify or change any provision of this Franchise without mutual written consent in
accordance with Section 17.7 of this Franchise.
2.7 Transfer of Ownership.
(a) No sale, transfer, assignment or"fundamental corporate change", as
defined in Minn. Stat. § 238.083, of this Franchise shall take place until the parties to the
sale, transfer, or fundamental corporate change files a written request with City for its
approval, provided, however, that said approval shall not be required where Grantee
grants a security interest in its Franchise and assets to secure an indebtedness.
(b) City shall have thirty (30) Days from the time of the request to reply in
writing and indicate approval of the request or its determination that a public hearing is
necessary due to potential adverse affect on Grantee's Subscribers resulting from the sale
or transfer. Such approval or determination shall be expressed in writing within thirty
(30) Days of receipt of said request, or the request shall be deemed approved as a matter
of law.
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(c) If a public hearing is deemed necessary pursuant to (b) above, such
hearing shall be commenced within thirty (30) Days of such determination and notice of
any such hearing shall be given in accordance with local law or fourteen (14) Days prior
to the hearing by publishing notice thereof once in a newspaper of general circulation in
City. The notice shall contain the date, time and place of the hearing and shall briefly
state the substance of the action to be considered by City.
(d) Within thirty (30) Days after the closing of the public hearing, City shall
approve or deny in writing the sale or transfer request. City shall set forth in writing with
particularity its reason(s) for denying approval. City shall not unreasonably withhold its
approval.
(e) The parties to the sale or transfer of the Franchise only, without the
inclusion of the System in which substantial construction has commenced, shall establish
that the sale or transfer of only the Franchise will be in the public interest.
(f) Any sale or transfer of stock in Grantee so as to create a new controlling
interest in the System shall be subject to the requirements of this Section 2.7. The term
"controlling interest" as used herein is not limited to majority stock ownership, but
includes actual working control in whatever manner exercised.
(g) In no event shall a transfer or assignment of ownership or control be
approved without the transferee becoming a signatory to this Franchise and assuming all
rights and obligations thereunder, and assuming all other rights and obligations of the
transferor to the City.
(h) In the event of any proposed sale or assignment pursuant to paragraph(a)
of this section, City shall have the right of first refusal of any bona fide offer to purchase
the Cable System. Bona fide offer, as used in this section, means an offer received by the
Grantee which it intends to accept subject to City's rights under this section. This written
offer must be conveyed to City along with the Grantee's written acceptance of the offer
contingent upon the rights of City provided for in this section. City shall be deemed to
have waived its rights under this paragraph (h) in the following circumstances:
(i) If it does not indicate to Grantee in writing, within thirty (30) Days
of notice of a proposed sale or assignment, its intention to exercise its right of
purchase; or
- (ii) It approves the assignment or sale of the Franchise as provided
within this section.
2.8 Expiration. Upon expiration of the Franchise, the City shall have the right at its
own election and subject to Grantee's rights under Section 626 of the Cable Act to:
(a) extend the Franchise, though nothing in this provision shall be construed
to require such extension;
(b) renew the Franchise, in accordance with Applicable Laws;
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(c) invite additional franchise applications or proposals;
(d) terminate the Franchise subject to any rights Grantee has under Section
626 of the Cable Act; or
(e) take such other action as the City deems appropriate.
2.9 Right to Require Removal of Property. At the expiration of the term for which
the Franchise is granted provided no renewal is granted, or upon its forfeiture or revocation as
provided for herein, the City shall have the right to require Grantee to remove at Grantee's own
expense all or any part of the Cable System from all Streets and public ways within the Franchise
Area within a reasonable time. If Grantee fails to do so, the City may perform the work and
collect the cost thereof from Grantee.
2.10 Continuity of Service Mandatory. It shall be the right of all Subscribers to
receive all available services insofar as their financial and other obligations to Grantee are
honored. In the event that Grantee elects to overbuild, rebuild, modify, or sell the system, or the
City revokes or fails to renew the Franchise, Grantee shall make its best effort to ensure that all
Subscribers receive continuous uninterrupted service, regardless of the circumstances, during the
lifetime of the Franchise. In the event of expiration,purchase, lease-purchase, condemnation,
acquisition, taking over or holding of plant and equipment, sale, lease, or other transfer to any
other Person, including any other grantee of a cable communications franchise, the current
Grantee shall cooperate fully to operate the system in accordance with the terms and conditions
of this Franchise for a temporary period sufficient in length to maintain continuity of service to
all Subscribers.
SECTION 3
OPERATION IN STREETS AND RIGHTS-OF-WAY
3.1 Use of Streets.
(a) Grantee may, subject to the terms of this Franchise, erect, install,
construct, repair, replace, reconstruct and retain in, on, over, under, upon, across and
along the Streets within the City such lines, cables, conductors, ducts, conduits, vaults,
manholes, amplifiers, appliances, pedestals, attachments and other property and
equipment as are necessary and appurtenant to the operation of a Cable System within the
City. Without limiting the foregoing, Grantee expressly agrees that it will construct,
operate and maintain its Cable System in compliance with, and subject to, the
requirements of the City Code, including by way of example and not limitation, those
requirements governing the placement of Grantee's Cable System; and with other
applicable City Codes, and will obtain and maintain all permits and bonds required by the
City Code in addition to those required in this Franchise.
(b) All wires, conduits, cable and other property and facilities of Grantee shall
be so located, constructed, installed and maintained as not to endanger or unnecessarily
interfere with the usual and customary trade, traffic and travel upon, or other use of, the
Streets of City. Grantee shall keep and maintain all of its property in good condition,
order and repair so that the same shall not menace or endanger the life or property of any
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Person. Grantee shall keep accurate maps and records of all of its wires, conduits, cables
and other property and facilities located, constructed and maintained in the City.
(c) All wires, conduits, cables and other property and facilities of Grantee,
shall be constructed and installed in an orderly and workmanlike manner. All wires,
conduits and cables shall be installed, where possible, parallel with electric and telephone
lines. Multiple cable configurations shall be arranged in parallel and bundled with due
respect for engineering considerations.
3.2 Construction or Alteration. Grantee shall in all cases comply with the City
Code, City resolutions and City regulations regarding the acquisition of permits and/or such
other items as may be reasonably required in order to construct, alter or maintain the Cable
System. Grantee shall, upon request, provide information to the City regarding its progress in
completing or altering the Cable System.
3.3 Non-Interference. Grantee shall exert its best efforts to construct and maintain a
Cable System so as not to interfere with other use of Streets. Grantee shall, where possible in the
case of above ground lines, make use of existing poles and other facilities available to Grantee.
When residents receiving underground service or who will be receiving underground service will
be affected by proposed construction or alteration, Grantee shall provide such notice as set forth
in the permit or in City Code of the same to such affected residents.
3.4 Consistency with Designated Use. Notwithstanding the above grant to use
Streets, no Street shall be used by Grantee if the City, in its sole opinion, determines that such
use is inconsistent with the terms, conditions or provisions by which such Street was created or
dedicated, or presently used under Applicable Laws.
3.5 Undergrounding. Grantee shall place underground all of its transmission lines
which are located or are to be located above or within the Streets of the City in the following
cases:
(a) all other existing utilities are required to be placed underground by statute,
resolution, policy or other Applicable Law;
(b) Grantee is unable to get pole clearance;
(c) underground easements are obtained from developers of new residential
areas; or
(d) utilities are overhead but residents prefer underground (service provided at
- cost).
If an ordinance is passed which involves placing underground certain utilities including
Grantee's cable plant which is then located overhead, Grantee shall participate in such
underground project and shall remove poles, cables and overhead wires if requested to do so and
place facilities underground. Nothing herein shall mandate that City provide reimbursement to
Grantee for the costs of such relocation and removal. However, if the City makes available
funds for the cost of placing facilities underground, nothing herein shall preclude the Grantee
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from participating in such funding to the extent consistent with the City Code or Applicable
Laws.
Grantee shall use conduit or its functional equivalent to the greatest extent possible for
undergrounding, except for Drops from pedestals to Subscribers' homes and for cable on other
private property where the owner requests that conduit not be used. Cable and conduit shall be
utilized which meets the highest industry standards for electronic performance and resistance to
interference or damage from environmental factors. Grantee shall use, in conjunction with other
utility companies or providers, common trenches for underground construction wherever
available.
3.6 Maintenance and Restoration.
(a) Restoration. In case of disturbance of any Street, public way, paved area
or public improvement, Grantee shall, at its own cost and expense and in accordance with
the requirements of Applicable Law, restore such Street, public way, paved area or public
improvement to substantially the same condition as existed before the work involving
such disturbance took place. All requirements of this section pertaining to public property
shall also apply to the restoration of private easements and other private property.
Grantee shall perform all restoration work within a reasonable time and with due regard
to seasonal working conditions. If Grantee fails, neglects or refuses to make restorations
as required under this section, then the City may do such work or cause it to be done, and
the cost thereof to the City shall be paid by Grantee. If Grantee causes any damage to
private property in the process of restoring facilities, Grantee shall repair such damage.
(b) Maintenance. Grantee shall maintain all above ground improvements that
it places on City right-of-way pursuant to the City Code and any permit issued by the
City. In order to avoid interference with the City's ability to maintain the right-of-way,
Grantee shall provide such clearance as is required by the City Code and any permit
issued by the City. If Grantee fails to comply with this provision, and by its failure,
property is damaged, Grantee shall be responsible for all damages caused thereby.
(c) Disputes. In any dispute over the adequacy of restoration or maintenance
relative to this section, final determination shall be the prerogative of the City,
Department of Public Works and consistent with the City Code and any permit issued by
the City.
3.7 Work on Private Property. Grantee, with the consent of property owners, shall
have the authority, pursuant to the City Code, to trim trees upon and overhanging Streets, alleys,
sidewalks, and public ways so as to prevent the branches of such trees from coming in contact
with the wires and cables of Grantee, except that at the option of the City, such trimming may be
done by it or under its supervision and direction at the reasonable expense of Grantee.
3.8 Relocation.
(a) City Property. If, during the term of the Franchise, the City or any
government entity elects or requires a third party to alter, repair, realign, abandon,
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improve, vacate, reroute or change the grade of any Street, public way or other public
property; or to construct, maintain or repair any public improvement; or to replace, repair
install, maintain, or otherwise alter any cable, wire conduit, pipe, line, pole, wire-holding
structure, structure, or other facility, including a facility used for the provision of utility
or other services or transportation of drainage, sewage or other liquids, for any public
purpose, Grantee shall, upon request, except as otherwise hereinafter provided, at its sole
expense remove or relocate as necessary its poles, wires, cables, underground conduits,
vaults, pedestals, manholes and any other facilities which it has installed. Nothing herein
shall mandate that City provide reimbursement to Grantee for the costs of such relocation
and removal. However, if the City makes available funds for the cost of placing facilities
underground, nothing herein shall preclude the Grantee from participating in such
funding to the extent consistent with the City Code or Applicable Laws.
(b) Utilities and Other Franchisees. If, during the term of the Franchise,
another entity which holds a franchise or any utility requests Grantee to remove or
relocate such facilities to accommodate the construction, maintenance or repair of the
requesting party's facilities, or their more efficient use, or to "make ready" the requesting
party's facilities for use by others, or because Grantee is using a facility which the
requesting party has a right or duty to remove, Grantee shall do so. The companies
involved may decide among themselves who is to bear the cost of removal or relocation,
pursuant to City Code, and provided that the City shall not be liable for such costs.
(c) Notice to Remove or Relocate. Any Person requesting Grantee to remove
or relocate its facilities shall give Grantee no less than forty-five (45) Days' advance
written notice to Grantee advising Grantee of the date or dates removal or relocation is to
be undertaken; provided, that no advance written notice shall be required in emergencies
or in cases where public health and safety or property is endangered.
(d) Failure by Grantee to Remove or Relocate. If Grantee fails, neglects or
refuses to remove or relocate its facilities as directed by the City; or in emergencies or
where public health and safety or property is endangered, the City may do such work or
cause it to be done, and the cost thereof to the City shall be paid by Grantee. If Grantee
fails, neglects or refuses to remove or relocate its facilities as directed by another
franchisee or utility, that franchisee or utility may do such work or cause it to be done,
and if Grantee would have been liable for the cost of performing such work, the cost
thereof to the party performing the work or having the work performed shall be paid by
Grantee.
(e) Procedure for Removal of Cable. Grantee shall not remove any
underground cable or conduit which requires trenching or other opening of the Streets
along the extension of cable to be removed, except as hereinafter provided. Grantee may
remove any underground cable from the Streets which has been installed in such a
manner that it can be removed without trenching or other opening of the Streets along the
extension of cable to be removed. Subject to Applicable Law, Grantee shall remove, at
its sole cost and expense, any underground cable or conduit by trenching or opening of
the Streets along the extension thereof or otherwise which is ordered to be removed by
the City based upon a determination, in the sole discretion of the City, that removal is
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required in order to eliminate or prevent a hazardous condition. Underground cable and
conduit in the Streets which is not removed shall be deemed abandoned and title thereto
shall be vested in the City.
(f) Movement of Buildings. Grantee shall, upon request by any Person
holding a building moving permit, franchise or other approval issued by the City,
temporarily remove, raise or lower its wire to permit the movement of buildings. The
expense of such removal, raising or lowering shall be paid by the Person requesting same,
and Grantee shall be authorized to require such payment in advance. The City shall
require all building movers to provide not less than fifteen (15) Days' notice to the cable
company to arrange for such temporary wire changes.
SECTION 4
REMOVAL OR ABANDONMENT OF SYSTEM
4.1 Removal of Cable System. In the event that: (1) the use of the Cable System is
discontinued for any reason for a continuous period of twelve (12) months; or (2) the Cable
System has been installed in a Street without complying with the requirements of this Franchise,
Grantee, at its expense shall, at the demand of the City remove promptly from the Streets all of
the Cable System other than any which the City may permit to be abandoned in place. In the
event of any such removal Grantee shall promptly restore to a condition as nearly as possible to
its prior condition the Street or other public places in the City from which the System has been
removed.
4.2 Abandonment of Cable System. In the event of Grantee's abandonment of the
Cable System, City shall have the right to require Grantee to conform to the state right-of-way
rules, Minn. Rules, Chapter 7819. The Cable System to be abandoned in place shall be
abandoned in the manner prescribed by the City. Grantee may not abandon any portion of the
System without having first given three (3) months written notice to the City. Grantee may not
abandon any portion of the System without compensating the City for damages resulting from
the abandonment.
4.3 Removal after Abandonment or Termination. If Grantee has failed to
commence removal of System, or such part thereof as was designated by City, within thirty (30)
days after written notice of City's demand for removal consistent with Minn. Rules, Ch. 7819, is
given, or if Grantee has failed to complete such removal within twelve (12) months after written
notice of City's demand for removal is given, City shall have the right to apply funds secured by
the letter of credit and performance bond toward removal and/or declare all right, title, and
interest to the Cable System to be in City with all rights of ownership including, but not limited
to, the right to operate the Cable System or transfer the Cable System to another for operation by
it.
4.4 City Options for Failure to Remove Cable System. If Grantee has failed to
complete such removal within the time given after written notice of the City's demand for
removal is given, the City shall have the right to exercise one of the following options:
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(a) Declare all right, title and interest to the System to be in the City or its
designee with all rights of ownership including, but not limited to,the right to operate the
System or transfer the System to another for operation by it; or
(b) Declare the System abandoned and cause the System, or such part thereof
as the City shall designate, to be removed at no cost to the City. The cost of said removal
shall be recoverable from the security fund, indemnity and penalty section provided for in
this Franchise or from Grantee directly.
(c) Upon termination of service to any Subscriber, Grantee shall promptly
remove all its facilities and equipment from within the dwelling of a Subscriber who
owns such dwelling upon his or her written request, except as provided by Applicable
Law. Such Subscribers shall be responsible for any costs incurred by Grantee in
removing the facilities and equipment.
4.5 System Construction and Equipment Standards. The Cable System shall be
installed and maintained in accordance with standard good engineering practices and shall
conform, when applicable, with the National Electrical Safety Code, the National Electrical Code
and the FCC's Rules and Regulations.
4.6 System Maps and Layout. Grantee shall maintain complete and accurate system
maps, which shall include trunks, distribution lines, and nodes. Such maps shall include up-to-
date route maps showing the location of the Cable System adjacent to the Streets. Grantee shall
make all maps available for review by the appropriate City personnel.
SECTION 5
SYSTEM DESIGN AND CAPACITY
5.1 Availability of Signals and Equipment.
(a) Prior to the Effective Date of this Franchise, Grantee upgraded its Cable
System to a fiber to the fiber node Cable System architecture, with fiber optic
cable deployed from Grantee's headend to Grantee's fiber nodes, tying into
Grantee's coaxial Cable System already serving Subscribers. Active and passive
devices currently are passing a minimum of 750 MHz (with a minimum passband
of between 50 and 750 MHz) providing to Subscribers at least two hundred (200)
or more activated minimum downstream video Channels and minimum activated
upstream digital Channel capacity of 35 MHz accessible from any node and any
Subscriber in the Franchise Area. This upstream capacity requires no additional
installation of equipment for use except on users' premises.
(b) The entire System shall be technically capable of transmitting NTSC
analog, compressed digital and HDTV transmissions. The Grantee shall comply
with all FCC regulations regarding carriage of digital and HDTV transmissions.
(c) Grantee agrees to maintain the Cable System in a manner consistent with,
or in excess of the specifications in Section 5.1 (a) and (b) throughout the term of
the Franchise with sufficient capability and technical quality to enable the
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implementation and performance of all the requirements of this Franchise,
including the exhibits hereto, and in a manner which meets or exceeds FCC
technical quality standards at 47 C.F.R. § 76 Subpart K, regardless of the
particular format in which a signal is transmitted.
5.2 Free Cable Service to Public Buildings.
(a) Throughout the term of this Franchise Grantee shall provide, free of
charge, one (1) service Drop, three (3) Converters, if necessary and requested, and
Basic Cable Service and the next highest level of Service generally available to
all Subscribers (as of the Effective Date referred to as Expanded Basic Cable
Service) ("Complimentary Service"), to all of the sites listed on Exhibit A
attached hereto.
(b) If the Drop line to such building exceeds three hundred fifty (350) feet,
Grantee will accommodate the Drop up to three hundred fifty (350) feet if the
City or other agency provides the necessary attachment point for aerial service or
conduit pathway for underground service. If the necessary pathway is not
provided, the City or other agency agrees to pay the incremental cost of such
Drop in excess of two hundred (200) feet for an aerial service Drop, or in excess
of one hundred twenty-five (125) feet for an underground service Drop. For
purposes of this paragraph, "incremental cost" means Grantee's actual cost to
provide the Drop beyond the applicable distances, with no mark-up for profit.
The recipient of the service will secure any necessary right of entry.
(c) The City or the building occupant shall have the right to extend Cable
Service throughout the building to additional outlets without any fees imposed by
Grantee for the provision of Complimentary Service to such additional outlets. If
ancillary equipment, such as a Converter, is required to receive the signal at
additional outlets, Grantee will provide up to three (3) devices at no charge, and
will provide additional devices at Grantee's lowest residential rate charged within
the Twin Cities metropolitan area.
(d) Notwithstanding anything to the contrary set forth in this section, Grantee
shall not be required to provide Complimentary Service to such buildings unless it
is technically feasible. Outlets and maintenance of said Complimentary Service
shall be provided free of fees and charges.
5.3 Equal and Uniform Service. To the extent required by Applicable Law, Grantee
shall provide access to equal and uniform Cable Service throughout the City.
5.4 System Specifications.
(a) System Maintenance. In all its construction and service provision
activities, Grantee shall meet or exceed the construction, technical performance,
extension and service requirements set forth in this Franchise.
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(b) Emergency Alert Capability. At all times during the term of this
Franchise, Grantee shall provide and maintain an Emergency Alert System (EAS)
consistent with applicable federal law and regulations including 47 C.F.R., Part 11, and
any Minnesota State Emergency Alert System requirements. The City may identify
authorized emergency officials for activating the EAS consistent with the Minnesota
State Emergency Statewide Plan ("EAS Plan"). The City may also develop a local plan
containing methods of EAS message distribution, subject to Applicable Laws and the
EAS Plan. Nothing in this section is intended to expand Grantee's obligations beyond
that which is required by the EAS Plan and Applicable Law.
(c) Standby Power. Grantee shall provide standby power generating capacity
at the Cable System control center and at all hubs. Grantee shall maintain standby power
system supplies, rated at least at two (2) hours' duration, throughout the trunk and
distribution networks. In addition, Grantee shall have in place throughout the Franchise
term a plan, and all resources necessary for implementation of the plan, for dealing with
outages of more than two (2) hours.
(d) Technical Standards. The technical standards used in the operation of the
Cable System shall comply, at minimum, with the technical standards promulgated by the
FCC relating to Cable Systems pursuant to Title 47, Section 76, Subpart K of the Code of
Federal Regulations, as may be amended or modified from time to time, which
regulations are expressly incorporated herein by reference. The Cable System shall be
installed and maintained in accordance with standard good engineering practices and
shall conform with the National Electrical Safety Code and all other Applicable Laws
governing the construction of the Cable System.
5.5 Performance Testing. Grantee shall perform all system tests at the intervals
required by the FCC, and all other tests reasonably necessary to determine compliance with
technical standards required by this Franchise. These tests shall include, at a minimum:
(a) Initial proof of performance for any construction;
(b) Semi-annual compliance tests;
(c) Tests in response to Subscriber complaints;
(d) Tests requested by the City to demonstrate franchise compliance; and
(e) Written records of all system test results performed by or for Grantee shall
be maintained, and shall be available for City inspection upon request.
5.6 Special Testing.
(a) Throughout the term of this Franchise, City shall have the right to inspect
all construction or installation work performed pursuant to the provisions of the
Franchise. In addition, City may require special testing of a location or locations within
the System if there is a particular matter of controversy or unresolved complaints
regarding such construction or installation work or pertaining to such location(s).
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Demand for such special tests may be made on the basis of complaints received or other
evidence indicating an unresolved controversy or noncompliance. Such tests shall be
limited to the particular matter in controversy or unresolved complaints. City shall
endeavor to so arrange its request for such special testing so as to minimize hardship or
inconvenience to Grantee or to the Subscribers caused by such testing.
(b) Before ordering such tests, Grantee shall be afforded thirty (30) Days
following receipt of written notice to investigate and, if necessary, correct problems or
complaints upon which tests were ordered. City shall meet with Grantee prior to
requiring special tests to discuss the need for such and, if possible, visually inspect those
locations which are the focus of concern. If, after such meetings and inspections, City
wishes to commence special tests and the thirty (30) Days have elapsed without
correction of the matter in controversy or unresolved complaints, the tests shall be
conducted at Grantee's expense by Grantee's qualified engineer. The City shall have a
right to participate in such testing by having an engineer of City's choosing, and at City's
expense, observe and monitor said testing.
SECTION 6
PROGRAMMING AND SERVICES
6.1 Categories of Programming Service. Grantee shall provide video programming
services in at least the following broad categories:
Local Broadcast (subject to federal carriage requirements)
Public Broadcast
News and Information
Sports
General Entertainment
Arts/Performance/Humanities
Science/Technology
Children/Family/Seniors
Foreign Language/Ethnic Programming
Public, Educational and Governmental Access Programming (to the extent required by
the Franchise)
Movies
Leased Access
6.2 Changes in Programming Services. Grantee shall not delete or so limit as to
effectively delete any broad category of programming within its control without the City's
consent. Further, Grantee shall provide at least thirty (30) Days' prior written notice to
Subscribers and to the City of Grantee's request to effectively delete any broad category of
programming or any Channel within its control, including all proposed changes in bandwidth or
Channel allocation and any assignments including any new equipment requirements that may
occur as a result of these changes.
6.3 Parental Control Device. Upon request by any Subscriber, Grantee shall make
available for sale or lease a parental control or lockout device that will enable the Subscriber to
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block all access to any and all Channels without affecting those not blocked. Grantee shall
inform Subscribers of the availability of the lockout device at the time of original subscription
and annually thereafter.
6.4 FCC Reports. The results of any tests required to be filed by Grantee with the
FCC shall also be copied to City within ten (10) Days of the conduct of the date of the tests.
6.5 Annexation. Unless otherwise provided by Applicable Law, including the City
Code, upon the annexation of any additional land area by City, the annexed area shall thereafter
be subject to all the terms of this Franchise upon sixty (60) Days written notification to Grantee
of the annexation by City. Unless otherwise required by Applicable Laws, nothing herein shall
require the Grantee to expand its Cable System to serve, or to offer Cable Service to any area
annexed by the City if such area is then served by another Wireline MVPD franchised to provide
multichannel video programming.
6.6 Line Extension.
(a) Grantee shall construct and operate its Cable System so as to provide
Cable Service within the Franchise Area where there exists a density equivalent of seven
(7) dwelling units per one-quarter(1/4) mile of feeder cable as measured from the nearest
active plant of the Cable System if the extension is to be constructed using aerial plant,
and nine (9) dwelling units per one-quarter (1/4) mile of feeder cable as measured from
the nearest active plant if the extension is to be constructed using underground plant. The
City, for its part, shall endeavor to exercise reasonable efforts to require developers and
utility companies to provide the Grantee with at least fifteen (15) Days advance notice of
an available open trench for the placement of necessary cable.
(b) Where the density is less than that specified above, Grantee shall inform
Persons requesting Service of the possibility of paying for installation or a line extension
and shall offer to provide them with a free written estimate of the cost, which shall be
provided within fifteen (15) working days of such a request. Grantee may offer the
Persons requesting Service the opportunity to "prepay" some or all of the necessary line
extensions according to its regular business policies. Grantee shall at all times implement
such line extension policy in a nondiscriminatory manner throughout the City.
(c) Any residential unit located within one-hundred twenty-five (12 5) feet
from the nearest point of access on the Street from which the Cable System is designed to
serve the site shall be connected to the Cable System at no charge other than the standard
installation charge. Grantee shall, upon request by any potential Subscriber residing in
City beyond the one hundred twenty-five (125) foot limit, extend service to such
Subscriber provided that the Subscriber shall pay the net additional Drop costs, unless the
Grantee agrees to waive said costs. To the extent consistent with Applicable Laws,
Grantee agrees that it shall impose installation costs for non-standard installations in a
uniform and nondiscriminatory manner throughout the City.
6.7 Nonvoice Return Capability. Grantee is required to use cable and associated
electronics having the technical capacity for nonvoice return communications.
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SECTION 7
PUBLIC, EDUCATIONAL AND GOVERNMENTAL ACCESS
7.1 Number of PEG Access Channels. Grantee will maintain four (4) PEG Access
Channels for the first twelve (12) months of the Franchise term. Twelve (12) months after the
Effective Date of the Franchise, the City shall be entitled to only three (3) PEG Access Channels.
7.2 Analog, Digital and HD PEG Carriage Requirements. Grantee shall provide
the Access Channels on the most basic tier of service offered by Grantee in accordance with the
Cable Act, Section 611, and as further set forth in this Section 7. At such time as Grantee no
longer offers Basic Cable Service in an analog format, Grantee shall carry all PEG Access
Channels in a standard digital format in Grantee's Basic Cable Service package, unless the
parties agree to an earlier conversion date. Thereafter, and upon ninety (90) days' notice from
the City, Grantee shall make one (1) of the three (3) PEG Access Channels available in high
definition(HD) format, provided that Grantee receives a satisfactory HD signal from the
program originator.
(a) The City acknowledges that receipt of an HD format Access Channel may
require Subscribers to buy or lease special equipment, or pay additional HD charges
applicable to all HD services.
(b) All Access Channels may be delivered by City to Grantee in either analog
or standard digital format.
(c) Within twelve (12) months of the Effective Date, and with at least one
hundred twenty (120) Day written notice to Grantee, the City may provide PEG Access
Channels in only HD format to the demarcation point to provide the signal to Grantee,
and as such the City will no longer provide the PEG Access Channels in a standard
definition digital format. Grantee shall provide all necessary transmission equipment
from the demarcation point and throughout Grantee's distribution system, in order to
deliver the PEG Access Channels. Access Channel signals delivered in HD format to
Grantee shall not require Grantee to deliver such HD signals to Subscribers except as set
forth herein.
7.3 Existing PEG Studio and Playback. Within thirty (30) Days of the Effective
Date, Grantee shall have no further obligation to maintain Grantee's public access studio located
in Eden Prairie ("Studio"). Grantee shall maintain all public access and educational access
playback equipment and playback staff at the Studio for twelve (12) months from the Effective
Date ("Transition Period").
7.4 Existing PEG Equipment Transfer. Grantee will transfer all existing PEG
equipment, racks, lights, facilities, etc. currently in use at the Studio to the Commission. Timing
for the equipment transfer will occur within sixty(60) days following close of the Studio and the
equipment transfer for playback will occur shortly after the Transition Period is completed.
7.5 Control of PEG Channels. The control and administration of the Access
Channels shall rest with the City and the City may delegate, from time to time over the term of
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this Franchise, such control and administration to various entities as determined in City's sole
discretion.
7.6 Transmission of Access Channels. Access Channels may be used for
transmission of non-video signals in compliance with Applicable Laws. This may include
downstream transmission of data using a protocol such as TCP/IP or current industry standards.
Should Grantee develop the capability to provide bi-directional data transmission, spectrum
capacity shall be sufficient to allow Subscribers to transmit data to PEG facilities.
7.7 Access Channel Locations.
(a) Access Channels shall be carried on the Basic Cable Service tier to the
extent required by Applicable Law and as set forth in Section 7.2 herein. Nothing herein
precludes the Grantee from charging for equipment needed for Basic Cable Service.
Grantee shall make every reasonable effort to coordinate the cablecasting of PEG access
programming on the Cable System on the same Channel designations as such
programming is currently cablecast within the City. In no event shall any Access
Channel reallocations be made prior to ninety (90) Days written notice to the City by
Grantee, except for circumstances beyond Grantee's reasonable control. The Access
Channels will be located within reasonable proximity to other commercial video or
broadcast Channels, excluding pay-per-view programming offered by Grantee in the
City.
(b) Grantee agrees not to encrypt the Access Channels differently than other
commercial Channels available on the Cable System.
(c) In conjunction with any occurrence of any Access Channel(s) relocation,
Grantee shall provide a minimum of Nine Thousand Dollars ($9,000) of in-kind air time
per event on advertiser supported Channels (e.g. USA, TNT, TBS, Discovery Channel, or
other comparable Channels) for the purpose of airing City's, or its designees', pre-
produced thirty (30) second announcement explaining the change in location.
7.8 Navigation to Access Channels. Grantee agrees that if it utilizes a visual
interface under its control on its Cable System for all Channels, the Access Channels shall be
treated in a non-discriminatory fashion consistent with Applicable Laws so that Subscribers will
have ready access to Access Channels. This shall not be construed to require Grantee to pay any
third party fees that may result from this obligation.
7.9 Ownership of Access Channels. Grantee does not relinquish its ownership of or
ultimate right of control over a Channel by designating it for PEG use. A PEG access user—
whether an individual, educational or governmental user—acquires no property or other interest
by virtue of the use of a Channel position so designated. Grantee shall not exercise editorial
control over any public, educational, or governmental use of a Channel position, except Grantee
may refuse to transmit any public access program or portion of a public access program that
contains obscenity, indecency, or nudity in violation of Applicable Law.
7.10 Noncommercial Use of PEG. Permitted noncommercial uses of the Access
Channels shall include by way of example and not limitation: (1)the identification of financial
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supporters similar to what is provided on public broadcasting stations; or (2) the solicitation of
financial support for the provision of PEG programming by the City or third party users for
charitable, educational or governmental purposes; or(3)programming offered by accredited,
non-profit, educational institutions which may, for example, offer telecourses over a Access
Channel.
7.11 Dedicated Fiber Return Lines. Grantee will maintain all existing fiber paths in
place as of the Effective Date to facilitate PEG origination/return capacity in the City. Such fiber
returns paths are listed in Exhibit B attached hereto. Grantee shall not be responsible for fiber
"replacement" but will handle any damage and all maintenance on the existing fiber. Grantee
anticipates, but cannot guarantee, that that this will result in minimal fiber expenditures by the
City over the Franchise term.
7.12 Interconnection. To the extent technically feasible, Grantee will allow necessary
interconnection with any newly constructed City and school fiber for noncommercial
programming to be promoted and administered by the City as allowed under Applicable Laws
and at no additional cost to the City or schools. This may be accomplished through a patch panel
or other similar facility and each party will be responsible for the fiber on their respective sides
of the demarcation point. Grantee reserves its right to review on a case-by-case basis the
technical feasibility of the proposed interconnection. Based on this review Grantee may
condition the interconnection on the reasonable reimbursement of Grantee's incremental costs,
with no markup for profit, to recoup Grantee's construction costs only. In no event will Grantee
impose any type of recurring fee for said interconnection.
7.13 Ancillary Equipment. Any ancillary equipment operated by Grantee for the
benefit of PEG Access Channels on Grantee's fiber paths or Cable System, whether referred to
switchers, routers or other equipment, will be maintained by Grantee, at no cost to the City or
schools for the life of the Franchise. Grantee is responsible for any ancillary equipment on its
side of the demarcation point and the City or school is responsible for all other
production/playback equipment.
7.14 Future Fiber Return Lines for PEG. At such time that the City determines:
(a) that the City desires the capacity to allow Subscribers in the City to
receive PEG programming (video or character generated) which may originate from
schools, City facilities, other government facilities or other designated facilities (other
than those indicated in paragraph 10); or
(b) that the City desires to establish or change a location from which PEG
programming is originated; or
(c) that the City desires to upgrade the Connection to Grantee from an
existing signal point of origination,
the City will give Grantee written notice detailing the point of origination and the capability
sought by the City. Grantee agrees to submit a cost estimate to implement the City's plan within
a reasonable period of time but not later than September I" in the year proceeding the request for
any costs exceeding Twenty-five Thousand and No/100 Dollars ($25,000). The cost estimate
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will be on a time and materials basis with no additional markup. After an agreement to
reimburse Grantee for Grantee's out of pocket time and material costs, Grantee will implement
any necessary Cable System changes within a reasonable period of time. Nothing herein
prevents the City, or a private contractor retained by the City, from constructing said return fiber.
7.15 Access Channel Carriage.
(a) Any and all costs associated with any modification of the Access Channels
or signals after the Access Channels/signals leave the City's designated playback
facilities, or any designated playback center authorized by the City shall be borne entirely
by Grantee. Grantee shall not cause any programming to override PEG programming on
any Access Channel, except by oral or written permission from the City, with the
exception of emergency alert signals.
(b) The City may request and Grantee shall provide an additional Access
Channel when the cumulative time on all the existing Access Channels combined meets
the following standard: whenever one of the Access Channels in use during eighty
percent (80%) of the weekdays, Monday through Friday, for eighty percent (80%) of the
time during a consecutive three (3) hour period for six (6) weeks running, and there is a
demand for use of an additional Channel for the same purpose, the Grantee has six (6)
months in which to provide a new, Access Channel for the same purpose; provided that,
the provision of the additional Channel or Channels does not require the Cable System to
install Converters.
(c) The VHF spectrum shall be used for one (1) of the public, educational, or
governmental specially designated Access Channels.
(d) The City or its designee shall be responsible for developing,
implementing, interpreting and enforcing rules for PEG Access Channel use.
(e) The Grantee shall monitor the Access Channels for technical quality to
ensure that they meet FCC technical standards including those applicable to the carriage
of Access Channels, provided however, that the Grantee is not responsible for the
production quality of PEG programming productions. The City, or its designee, shall be
responsible for the production and quality of all PEG access programming. Grantee shall
carry all components of the standard definition of Access Channel including, but not
limited to, closed captioning, stereo audio and other elements associated with the
programming.
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7.16 Access Channel Support.
(a) Within thirty (30) days of the Effective Date of this Franchise Grantee
shall remit to the Commission a one-time Two Hundred Thousand and No/100 Dollar
($200,000) grant in support of PEG capital purposes ("PEG Grant"). Comcast retains all
legal authority it may possess to recover the PEG Grant from Subscribers in any manner
permitted by Applicable Law.
(b) Upon the Effective Date of this Franchise, Grantee shall also collect and
remit to the City Sixty cents (60¢)per Subscriber per month in support of PEG capital
("PEG Fee").
(c) During the twelve (12) months following the Effective Date, Grantee shall
retain Thirteen cents (13¢) of the Sixty cent (60¢) PEG Fee to reimburse Grantee for the
costs associated with maintaining staff, equipment and space at the Studio to handle the
public and educational playback obligations for the Transition Period. This will result in
the City receiving a Forty-seven cent (47¢) PEG Fee for the first twelve (12) months of
the Franchise. Thereafter the PEG Fee will revert to the Sixty cent(60¢) level for the
remainder of the ten (10) year Franchise term— subject to the one-time inflation
adjustment set forth in Section 7.16 (d) below.
(d) At the fifth (5`h) anniversary of the Effective Date of this Franchise, the
City, at its discretion, may require Grantee to increase the PEG Fee to Sixty-five cents
(65¢) per Subscriber per month for the remaining term of the Franchise. The PEG Fee
shall be used by City in its sole discretion to fund PEG access capital expenditures.
(e) Neither the PEG Grant nor the PEG Fee are intended to represent part of
the Franchise Fee and are intended to fall within one (1) or more of the exceptions in 47
U.S.C. § 542. The PEG Grant and PEG Fee may be categorized, itemized, and passed
through to Subscribers as permissible, in accordance with 47 U.S.C. §542 or other
Applicable Laws. Grantee shall pay the PEG Fee to the City quarterly at the same time
as the payment of Franchise Fees under Section 16.1 of the Franchise. Grantee agrees
that it will not offset or reduce its payment of past, present or future Franchise Fees
required as a result of its obligation to remit the PEG Funds or the PEG Fee.
(f) Any PEG Access capital support amounts owing pursuant to this
Franchise which remain unpaid more than twenty-five (25) Days after the date the
payment is due shall be delinquent and shall thereafter accrue interest at twelve percent
(12%)per annum or the prime lending rate published by the Wall Street Journal on the
Day the payment was due plus two percent(2%), whichever is greater.
7.17 PEG Technical Quality.
(a) Grantee shall not be required to carry a PEG Access Channel in a higher
quality format than that of the Channel Signal delivered to Grantee, but Grantee shall not
implement a change in the method of delivery of Access Channels that results in a
material degradation of signal quality or impairment of viewer reception of Access
Channels, provided that this requirement shall not prohibit Grantee from implementing
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new technologies also utilized for commercial Channels carried on its Cable System.
Grantee shall meet FCC signal quality standards when offering Access Channels on its
Cable System and shall continue to comply with closed captioning pass-through
requirements. There shall be no significant deterioration in an Access Channels signal
from the point of origination upstream to the point of reception downstream on the Cable
System.
(b) Within twenty-four (24) hours of a written request from City to the
Grantee identifying a technical problem with a Access Channel and requesting assistance,
Grantee will provide technical assistance or diagnostic services to determine whether or
not a problem with a PEG signal is the result of matters for which Grantee is responsible
and if so, Grantee will take prompt corrective action. If the problem persists and there is
a dispute about the cause, then the parties shall meet with engineering representation
from Grantee and the City in order to determine the course of action to remedy the
problem.
7.18 Access Channel Promotion. Grantee shall allow the City to place bill stuffers in
Grantee's Subscriber statements at a cost to the City not to exceed Grantee's out of pocket cost,
no less frequently than twice per year, or at such time as a Access Channel is moved or relocated,
upon the written request of the City and at such times that the placement of such materials would
not materially and adversely affect Grantee's cost for the production and mailing of such
statements. The City agrees to pay Grantee in advance for the actual cost of such bill stuffers.
7.19 Change in Technology. In the event Grantee makes any change in the Cable
System and related equipment and facilities or in its signal delivery technology, which requires
the City to obtain new equipment in order to be compatible with such change for purposes of
transport and delivery of the Access Channels, Grantee shall, at its own expense and free of
charge to City or its designated entities, purchase such equipment as may be necessary to
facilitate the cablecasting of the Access Channels in accordance with the requirements of the
Franchise.
7.20 Relocation of Grantee's Headend. In the event Grantee relocates its headend,
Grantee will be responsible for replacing or restoring the existing dedicated fiber connections at
Grantee's cost so that all the functions and capacity remain available, operate reliably and satisfy
all applicable technical standards and related obligations of the Franchise free of charge to the
City or its designated entities.
7.21 Regional Channel Six. Grantee shall make available Regional Channel Six as
long as it is required to do so by the State of Minnesota.
7.22 Government Access Channel Functionality. 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; and
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(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 the
Grantee at any time when not carrying live or taped government access programming.
7.23 Compliance with Minnesota Statutes Chapter 238. In addition to the
requirements contained in this Section 7 of this Franchise, Grantee and City shall comply with
the PEG requirements mandated by Minn. Stat. 238.084.
SECTION 8
REGULATORY PROVISIONS.
8.1 Intent. The City shall have the right to administer and regulate activities under
the Franchise up to the full extent permitted by Applicable Law.
8.2 Delegation of Authority to Regulate. The City reserves the right to delegate its
regulatory authority wholly or in part to agents of the City, including, but not limited to, an
agency which may be formed to regulate several franchises in the region in a manner consistent
with Applicable Laws. This may include but shall not be limited to the Commission or other
entity as City may determine in its sole discretion. Any existing delegation in place at the time
of the grant of this Franchise shall remain intact unless expressly modified by City.
8.3 Areas of Administrative Authority. In addition to any other regulatory
authority granted to the City by law or franchise, the City shall have administrative authority in
the following areas:
(a) Administering and enforcing the provisions of this Franchise, including
the adoption of administrative rules and regulations to carry out this responsibility.
(b) Coordinating the operation of Access Channels.
(c) Formulating and recommending long-range cable communications policy
for the Franchise Area.
(d) Disbursing and utilizing Franchise revenues paid to the City.
(e) Administering the regulation of rates, to the extent permitted by
Applicable Law.
(f) All other regulatory authority permitted under Applicable Law.
The City or its designee shall have continuing regulatory jurisdiction and supervision over the
System and the Grantee's operations under the Franchise to the extent allowed by Applicable
Law.
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8.4 Regulation of Rates and Charges.
(a) Right to Regulate. The City reserves the right to regulate rates or charges
for any Cable Service within the limits of Applicable Law, to enforce rate regulations
prescribed by the FCC, and to establish procedures for said regulation or enforcement.
(b) Notice of Change in Rates and Charges. Throughout the term of this
Franchise, Grantee shall give the City and all Subscribers within the City at least thirty
(30) Days' notice of any intended modifications or additions to Subscriber rates or
charges. Nothing in this Subsection shall be construed to prohibit the reduction or
waiving of rates or charges in conjunction with promotional campaigns for the purpose of
attracting Subscribers or users.
(c) Rate Discrimination Prohibited. Within any category of Subscribers,
Grantee shall not discriminate among Subscribers with regard to rates and charges made
for any service based on considerations of race, color, creed, sex, marital or economic
status, national origin, sexual preference, or (except as allowed by Applicable Law)
neighborhood of residence, except as otherwise provided herein; and for purposes of
setting rates and charges, no categorization of Subscribers shall be made by Grantee on
the basis of those considerations. Nevertheless, Grantee shall be permitted to establish (1)
discounted rates and charges for providing Cable Service to low-income, handicapped, or
low-income elderly Subscribers, (2) promotional rates, and (3) bulk rate and package
discount pricing.
SECTION 9
BOND.
9.1 Performance Bond. Upon the Effective Date of this Franchise and at all times
thereafter Grantee shall maintain with City a bond in the sum of One Hundred Thousand Dollars
($100,000.00) 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 (2%) in excess of
the then prime rate), up to the full amount of the bond, and which bond shall further guarantee
payment by 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 Cable
System.
9.2 Rights. 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.
9.3 Reduction of Bond Amount. City may, in its sole discretion, reduce the amount
of the bond.
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SECTION 10
SECURITY FUND
10.1 Security Fund. If there is an uncured breach by Grantee of a material provision
of this Franchise or a pattern of repeated violations of any provision(s) of this Franchise, then
Grantee shall, upon written request, establish and provide to the City, as security for the faithful
performance by Grantee of all of the provisions of this Franchise, a letter of credit from a
financial institution satisfactory to the City in the amount of Twenty Thousand and No/100
Dollars ($20,000.00). In no event shall Grantee fail to post a Twenty Thousand and No/100
Dollar ($20,000.00) letter of credit within thirty (30) days receipt of a notice of franchise
violation pursuant to this Section 10.1. Failure to post said letter of credit shall constitute a
separate material violation of this Franchise, unless the breach is cured within such thirty (30)
Day period or longer period allowed under the Franchise. The letter of credit shall serve as a
common security fund for the faithful performance by Grantee 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 Cable 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 in those circumstances
where Grantee disputes the allegation that it is not in compliance, and maintained for the
duration of the dispute. 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 Two Thousand Dollars ($2,000) in
that action.
10.2 Withdrawal of Funds. 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.
10.3 Restoration of Funds. Within ten (10) Days after notice to it that any amount
has been withdrawn by the City from the security fund pursuant to 10.4 of this section, Grantee
shall deposit a sum of money sufficient to restore such security fund to the required amount.
10.4 Liquidated Damages. 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 Franchise,
City in its sole discretion may charge to and collect from the security fund the following
liquidated damages:
(a) For failure to provide data, documents, reports or information or to
cooperate with City during an application process or System review, the liquidated
damage shall be One Hundred Dollars ($100.00) per Day for each Day, or part thereof,
such failure occurs or continues.
(b) 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 10.4,
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the liquidated damage shall be One Hundred Fifty Dollars ($150.00) per Day for each
Day, or part thereof, such failure occurs or continues.
(c) For failure to test, analyze and report on the performance of the System
following a request by City, the liquidated damage shall be Two Hundred Fifty Dollars
($250.00) per Day for each Day, or part thereof, such failure occurs or continues.
(d) Forty-five Days following notice from City of a failure of Grantee to
comply with construction, operation or maintenance standards, the liquidated damage
shall be Two Hundred Dollars ($200.00) per Day for each Day, or part thereof, such
failure occurs or continues.
(e) For failure to provide the services Grantee has proposed, including but not
limited to the implementation and the utilization of the Access Channels the liquidated
damage shall be One Hundred Fifty ($150.00) per Day for each Day, or part thereof, such
failure occurs or continues.
10.5 Each Violation a Separate Violation. Each violation of any provision of this
Franchise shall be considered a separate violation for which separate liquidated damages can be
imposed.
10.6 Maximum 120 Days. Any liquidated damages for any given violation shall be
imposed upon Grantee for a maximum of one hundred twenty (120) Days. If after that amount
of time Grantee has not cured or commenced to cure the alleged breach to the satisfaction of the
City, the City may pursue all other remedies.
10.7 Withdrawal of Funds to Pay Taxes. 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 16 of this Franchise.
10.8 Procedure for Draw on Security Fund. Whenever the City finds that Grantee
has allegedly violated one (1) 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 thirty
(30) Days subsequent to receipt of the notice in which to correct the violation before the City
may require Grantee to make payment of damages, and further to enforce payment of damages
through the security fund. Grantee may, within ten (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.
(a) City shall hear Grantee's dispute at the next regularly scheduled or
specially scheduled Council meeting. Grantee shall have the right to speak and introduce
evidence. The City shall determine if Grantee has committed a violation and shall make
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written findings of fact relative to its determination. If a violation is found, Grantee may
petition for reconsideration.
(b) If after hearing the dispute, the claim is upheld by the City, then Grantee
shall have thirty (30) Days within which to remedy the violation before the City may
require payment of all liquidated damages due it.
10.9 Time for Correction of Violation. The time for Grantee to correct any alleged
violation may be extended by the City if the necessary action to collect the alleged violation is of
such a nature or character as to require more than thirty (30) Days within which to perform
- provided Grantee commences corrective action within fifteen(15) Days and thereafter uses
reasonable diligence, as determined by the City, to correct the violation.
10.10 Grantee's Right to Pay Prior to Security Fund Draw. Grantee shall have the
opportunity to make prompt payment of any assessed liquidated damages and if Grantee fails to
promptly remit payment to the City, the City may resort to a draw from the security fund in
accordance with the terms of this Section 10 of the Franchise.
10.11 Failure to so Replenish Security Fund. 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.
10.12 Collection of Funds Not Exclusive Remedy. The collection by City of any
damages or monies 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. Notwithstanding this section,
however, should the City elect to impose liquidated damages, that remedy shall remain the City's
exclusive remedy for the one hundred twenty (120) Day period set forth in Section 10.6.
SECTION 11
DEFAULT
11.1 Basis for Default. City shall give written notice of default to Grantee if City, in
its sole discretion, determines that Grantee has:
(a) Violated any material provision of this Franchise or the acceptance hereto
or any rule, order, regulation or determination of the City, state or federal government,
not in conflict with this Franchise;
(b) Attempted to evade any provision of this Franchise or the acceptance
hereof,
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(c) Practiced any fraud or deceit upon City or Subscribers;
(d) Made a material misrepresentation of fact in the application for or
negotiation of this Franchise; or
(e) Incurred a twelve (12) month or more delay in the construction schedule.
11.2 Default Procedure. If Grantee fails to cure such default within thirty (30) Days
after the giving of such notice (or if such default is of such a character as to require more than
thirty (30) Days within which to cure the same, and Grantee fails to commence to cure the same
within said thirty (30) Day period and thereafter fails to use reasonable diligence, in City's sole
opinion, to cure such default as soon as possible), then, and in any event, such default shall be a
substantial breach and City may elect to terminate the Franchise. The City may place the issue of
revocation and termination of this Franchise before the governing body of City at a regular
meeting. If City decides there is cause or reason to terminate, the following procedure shall be
followed:
(a) City shall provide Grantee with a written notice of the reason or cause for
proposed termination and shall allow Grantee a minimum of thirty (30) Days subsequent
to receipt of the notice in which to correct the default.
(b) Grantee shall be provided with an opportunity to be heard at a public
hearing prior to any decision to terminate this Franchise.
(c) If, after notice is given and an opportunity to cure, at Grantee's option, a
public hearing is held, and the City determines there was a violation, breach, failure,
refusal or neglect, the City may declare by resolution the Franchise revoked and of no
further force and effect unless there is compliance within such period as the City may fix,
such period may not be less than thirty (30) Days provided no opportunity for compliance
need be granted for fraud or misrepresentation.
11.3 Mediation. If the Grantee and City are unable to resolve a dispute through
informal negotiations during the period of thirty (30) Days following the submission of the claim
giving rise to the dispute by one (1) party to the other, then unless that claim has been waived as
provided in the Franchise, such claim may be subject to mediation if jointly agreed upon by both
parties. Unless the Grantee and City mutually agree otherwise, such mediation shall be in
accordance with the rules of the American Arbitration Association currently in effect at the time
of the mediation. A party seeking mediation shall file a request for mediation with the other
party to the Franchise and with the American Arbitration Association. The request may be made
simultaneously with the filing of a complaint, but, in such event, mediation shall proceed in
advance of legal proceedings only if the other party agrees to participate in mediation. Mutually
agreed upon Mediation shall stay other enforcement remedies of the parties for a period of ninety
(90) days from the date of filing, unless stayed for a longer period by agreement of the Grantee
and City. The Grantee and City shall each pay one-half of the mediator's fee and any filing fees.
The mediation shall be held in the City unless another location is mutually agreed upon.
Agreements reached in mediation shall be enforceable as a settlement agreement in any court
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having jurisdiction thereof. Nothing herein shall serve to modify or on any way delay the
franchise enforcement process set forth in Section 10 of this Franchise.
11.4 Failure to Enforce. Grantee shall not be relieved of any of its obligations to
comply promptly with any provision of the Franchise by reason of any failure of the City to
enforce prompt compliance, and City's failure to enforce shall not constitute a waiver of rights or
acquiescence in Grantee's conduct.
11.5 Compliance with the Laws.
_ (a) If any federal or state law or regulation shall require or permit City or
Grantee to perform any service or act or shall prohibit City or Grantee from performing
any service or act which may be in conflict with the terms of this Franchise, then as soon
as possible following knowledge thereof, either party shall notify the other of the point in
conflict believed to exist between such law or regulation. Grantee and City shall conform
to state laws and rules regarding cable communications not later than one (1) year after
they become effective, unless otherwise stated, and shall conform to federal laws and
regulations regarding cable as they become effective.
(b) If any term, condition or provision of this Franchise or the application
thereof to any Person or circumstance shall, to any extent, be held to be invalid or
unenforceable, the remainder hereof and the application of such term, condition or
provision to Persons or circumstances other than those as to whom it shall be held invalid
or unenforceable shall not be affected thereby, and this Franchise and all the terms,
provisions and conditions hereof shall, in all other respects, continue to be effective and
complied with provided the loss of the invalid or unenforceable clause does not
substantially alter the agreement between the parties. In the event such law, rule or
regulation is subsequently repealed, rescinded, amended or otherwise changed so that the
provision which had been held invalid or modified is no longer in conflict with the law,
rules and regulations then in effect, said provision shall thereupon return to full force and
effect and shall thereafter be binding on Grantee and City.
SECTION 12
FORECLOSURE AND RECEIVERSHIP
12.1 Foreclosure. Upon the foreclosure or other judicial sale of the Cable System,
Grantee shall notify the City of such fact and such notification shall be treated as a notification
that a change in control of Grantee has taken place, and the provisions of this Franchise
governing the consent to transfer or change in ownership shall apply without regard to how such
transfer or change in ownership occurred.
12.2 Receivership. The City shall have the right to cancel this Franchise subject to any
applicable provisions of state law, including the Bankruptcy Act, one hundred twenty (120) Days
after the appointment of a receiver or trustee to take over and conduct the business of Grantee,
whether in 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:
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(a) Within one hundred twenty (120) Days after his election or appointment,
such receiver or trustee shall have fully complied with all the provisions of this Franchise
and remedied all defaults thereunder; and,
(b) Such receiver or trustee, within said one hundred twenty (120) Days, shall
have executed an agreement, duly approved by the Court having jurisdiction in the
premises, whereby such receiver or trustee assumes and agrees to be bound by each and
every provision of this Franchise.
SECTION 13
REPORTING REQUIREMENTS
13.1 Quarterly Reports. Within forty-five (45) calendar days after the end of each
calendar quarter, Grantee shall submit to the City along with its Franchise Fee payment a report
showing the basis for computation of such fees prepared by an officer of Grantee showing the
basis for the computation of the Franchise Fees paid during that period in a form and substance
substantially equivalent to Exhibit C attached hereto. This report shall separately indicate
revenues received by Grantee within the City including, but not limited to such items as listed in
the definition of"Gross Revenues" at Section 1 of this Franchise.
13.2 Monitoring and Compliance Reports. Upon request, but no more than once a
year, Grantee shall provide a written report of any and all FCC technical performance tests for
the residential network required in FCC Rules and Regulations as now or hereinafter constituted.
In addition, Grantee shall provide City with copies of reports of the semi-annual test and
compliance procedures established by this Franchise no later than thirty (30) Days after the
completion of each series of tests.
13.3 Reports. Upon request of the City and in no event later than thirty (30) Days from
the date of receipt of such request, Grantee shall, free of charge, prepare and furnish to the City,
at the times and in the form prescribed, such additional reports with respect to its operation,
affairs, transactions, or property, as may be reasonably necessary to ensure compliance with the
terms of this Franchise. Grantee and City may in good faith agree upon taking into consideration
Grantee's need for the continuing confidentiality as prescribed herein. Neither City nor Grantee
shall unreasonably demand or withhold information requested pursuant with the terms of this
Franchise.
13.4 Communications with Regulatory Agencies.
(a) Upon written request, Grantee shall submit to City copies of any pleading,
applications, notifications, communications and documents of any kind, submitted
by Grantee or its Affiliates to any federal, State or local courts, regulatory
agencies and other government bodies if such documents directly relate to the
operations of Grantee `s Cable System within the Franchise Area. Grantee shall
submit such documents to City no later than thirty (30) Days after receipt of
City's request. Grantee shall not claim confidential, privileged or proprietary
rights to such documents unless under federal, State, or local law such documents
have been determined to be confidential by a court of competent jurisdiction, or a
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federal or State agency. With respect to all other reports, documents and
notifications provided to any federal, State or local regulatory agency as a routine
matter in the due course of operating Grantee `s Cable System within the
Franchise Area, Grantee shall make such documents available to City upon City's
written request.
(b) In addition, Grantee and its Affiliates shall within ten (10) Days of any
communication to or from any judicial or regulatory agency regarding any alleged
or actual violation of this Franchise, City regulation or other requirement relating
to the System, use its best efforts to provide the City a copy of the
communication, whether specifically requested by the City to do so or not.
SECTION 14
CUSTOMER SERVICE POLICIES
14.1 Response to Customers and Cooperation with City. Grantee shall promptly
respond to all requests for service, repair, installation and information from Subscribers. Grantee
acknowledges the City's interest in the prompt resolution of all cable complaints and shall work
in close cooperation with the City to resolve complaints.
14.2 Definition of"Complaint." For the purposes of Section 14, with the exception
of Subsection 14.5, a"complaint" shall mean any communication to Grantee or to the City by a
Subscriber or a Person who has requested Cable Service; a Person expressing dissatisfaction with
any service, performance, or lack thereof, by Grantee under the obligations of this Franchise.
14.3 Customer Service Agreement and Written Information. Grantee shall provide
to Subscribers a comprehensive service agreement and information in writing for use in
establishing Subscriber service. Written information shall, at a minimum, contain the following
information:
(a) Services to be provided and rates for such services.
(b) Billing procedures.
(c) Service termination procedure.
(d) Change in service notifications.
(e) Liability specifications.
(f) Converter/Subscriber terminal equipment policy.
(g) Breach of Franchise specification.
(h) How complaints are handled including Grantee's procedure for
investigation and resolution of Subscriber complaints.
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(i) The name, address, and phone number of the Person identified by the City
as responsible for handling cable questions and complaints for the City. This information
shall be prominently displayed and Grantee shall submit the information to the City for
review and approval as to its content and placement on Subscriber billing statements. A
copy of the written information shall be provided to each Subscriber at the time of initial
Connection and any subsequent reconnection.
14.4 Reporting Complaints.
(a) The requirements of this Section 14.4 shall be subject to federal law
regarding Subscriber privacy. Grantee shall maintain all Subscriber data available
for City inspection. Subscriber data shall include the date, name, address,
telephone number of Subscriber complaints as well as the subject of the
complaint, date and type of action taken to resolve the complaint, any additional
action taken by Grantee or the Subscriber. The data shall be maintained in a way
that allows for simplified access of the data by the City.
(b) Subject to federal law and upon reasonable request by the City, Grantee
shall, within a reasonable amount of time, provide City with such Subscriber data
for its review.
14.5 Customer Service Standards. The City hereby adopts the customer service
standards set forth in Part 76, §76.309 of the FCC's rules and regulations, as amended. Grantee
shall, upon request, which request shall include the reason for the request (such as complaints
received or other reasonable evidence of concern), provide City with information which shall
describe in detail Grantee's compliance with each and every term and provision of this Section
14.5. Grantee shall comply in all respects with the customer service requirements established by
the FCC and those set forth herein. To the extent that this Franchise imposes requirements
greater than those established by the FCC, Grantee reserves whatever rights it may have to
recover the costs associated with compliance in any manner consistent with Applicable Law.
14.6 Local Office. Grantee shall maintain a convenient local customer service and bill
payment location for matters such as receiving Subscriber payments, handling billing questions,
equipment replacement and customer service information. Grantee shall comply with the
standards and requirements for customer service set forth below during the term of this
Franchise.
14.7 Cable System office hours and telephone availability.
(a) Grantee will maintain a local, toll-free or collect call telephone access line
which will be available to its Subscribers twenty-four (24) hours a Day, seven (7) Days a
week.
(i) Trained Grantee representatives will be available to respond to
customer telephone inquiries during Normal Business Hours.
(ii) After Normal Business Hours, the access line may be answered by
a service or an automated response system, including an answering machine.
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Inquiries received after Normal Business Hours must be responded to by a trained
Grantee representative on the next business Day.
(b) Under Normal Operating Conditions, telephone answer time by a
customer representative, including wait time, shall not exceed thirty (30) seconds when
the connection is made. If the call needs to be transferred, transfer time shall not exceed
thirty (30) seconds. These standards shall be met no less than ninety percent (90%) of the
time under Normal Operating Conditions, measured on a quarterly basis.
(c) Grantee shall not be required to acquire equipment or perform surveys to
measure compliance with the telephone answering standards above unless an historical
record of complaints indicates a clear failure to comply.
(d) Under Normal Operating Conditions, the customer will receive a busy
signal less than three percent (3%) of the time.
(e) Customer service center and bill payment locations will be open at least
during Normal Business Hours and will be conveniently located.
14.8 Installations, Outages and Service Calls. Under Normal Operating Conditions,
each of the following standards will be met no less than ninety-five percent (95%) of the time
measured on a quarterly basis:
(a) Standard Installations will be performed within seven (7) business days
after an order has been placed. "Standard" Installations are those that are located up to
one hundred twenty-five (125) feet from the existing distribution system as more
specifically set forth in Section 6.6(c).
(b) Excluding conditions beyond the control of Grantee, Grantee will begin
working on "Service Interruptions"promptly and in no event later than twenty-four (24)
hours after the interruption becomes known. Grantee must begin actions to correct other
Service problems the next business Day after notification of the Service problem.
(c) The "appointment window" alternatives for Installations, Service calls,
and other Installation activities will be either a specific time or, at maximum, a four (4)
hour time block during Normal Business Hours. (Grantee may schedule Service calls and
other Installation activities outside of Normal Business Hours for the express
convenience of the customer.)
(d) Grantee may not cancel an appointment with a customer after the close of
business on the business Day prior to the scheduled appointment.
(e) If Grantee's representative is running late for an appointment with a
customer and will not be able to keep the appointment as scheduled, the customer will be
contacted. The appointment will be rescheduled, as necessary, at a time which is
convenient for the customer.
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14.9 Communications between Grantee and Subscribers.
(a) Refunds. Refund checks will be issued promptly, but no later than either:
(i) The customer's next billing cycle following resolution of the
request or thirty (30) Days, whichever is earlier, or
(ii) The return of the equipment supplied by Grantee if Cable Service
is terminated.
(b) Credits. Credits for Cable Service will be issued no later than the
customer's next billing cycle following the determination that a credit is warranted.
14.10 Billing:
(a) Consistent with 47 C.F.R. § 76.1619, bills will be clear, concise and
understandable. Bills must be fully itemized, with itemizations including, but not limited
to, Basic Cable Service and premium Cable Service charges and equipment charges.
Bills will also clearly delineate all activity during the billing period, including optional
charges, rebates and credits.
(b) In case of a billing dispute, Grantee must respond to a written complaint
from a Subscriber within thirty (30) Days.
14.11 Subscriber Information. Grantee will provide written information on each of
the following areas at the time of Installation of Service, at least annually to all Subscribers, and
at any time upon request:
(a) Products and Services offered;
(b) Prices and options for programming services and conditions of
subscription to programming and other services;
(c) Installation and Service maintenance policies;
(d) Instructions on how to use the Cable Service;
(e) Channel positions of programming carried on the System; and
(f) Billing and complaint procedures, including the address and telephone
number of the City's cable office.
Subscribers shall be advised of the procedures for resolution of complaints about the
quality of the television signal delivered by Grantee, including the address of the responsible
officer of the City. Subscribers will be notified of any changes in rates, programming services or
Channel positions as soon as possible in writing. Notice must be given to Subscribers a
minimum of thirty (30) Days in advance of such changes if the change is within the control of
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Grantee. In addition, Grantee shall notify Subscribers thirty (30) Days in advance of any
significant changes in the information required by this Section 14.11.
14.12 Notice or Rate Programming Change. In addition to the requirement of this
Section 14.12 regarding advance notification to Subscribers of any changes in rates,
programming services or Channel positions, Grantee shall give thirty (30) Days written notice to
both Subscribers and the City before implementing any rate or Service change. Such notice shall
state the precise amount of any rate change and briefly explain in readily understandable fashion
the cause of the rate change (e.g., inflation, change in external costs or the addition/deletion of
Channels). When the change involves the addition or deletion of Channels, each Channel added
or deleted must be separately identified. For purposes of the carriage of digital broadcast signals,
Grantee need only identify for Subscribers, the television signal added and not whether that
signal may be multiplexed during certain dayparts.
14.13 Subscriber Contracts. Grantee shall, upon written request, provide the City with
any standard form residential Subscriber contract utilized by Grantee. If no such written contract
exists, Grantee shall file with the City a document completely and concisely stating the length
and terms of the Subscriber contract offered to customers. The length and terms of any standard
form Subscriber contract(s) shall be available for public inspection during Normal Business
Hours. A list of Grantee's current Subscriber rates and charges for Cable Service shall be
maintained on file with City and shall be available for public inspection.
14.14 Refund Policy. If a Subscriber's Cable Service is interrupted or discontinued,
without cause, for twenty-four (24) or more consecutive hours, Grantee shall, upon request by
the Subscriber, credit such Subscriber pro rata for such interruption. For this purpose, every
month will be assumed to have thirty (30) Days.
14.15 Late Fees. Grantee shall comply with all applicable state and federal laws with
respect to any assessment, charge, cost, fee or sum, however characterized, that Grantee imposes
upon a Subscriber for late payment of a bill. The City reserves the right to enforce Grantee's
compliance with all Applicable Laws to the maximum extent legally permissible.
14.16 Disputes. All Subscribers and members of the general public may direct
complaints, regarding Grantee's Service or performance to the chief administrative officer of the
City or the chief administrative officer's designee, which may be a board or Commission of the
City.
14.17 Customer Bills. Customer bills shall be designed in such a way as to present the
information contained therein clearly and comprehensibly to Customers, and in a way that(A) is
not misleading and (B) does not omit material information. Notwithstanding anything to the
contrary in Section 14.10, above, Grantee may, in its sole discretion, consolidate costs on
Customer bills as may otherwise be permitted by Section 622(c) of the Cable Act (47 U.S.C.
§542(c)).
14.18 Failure to Resolve Complaints. Grantee shall resolve a complaint within thirty
(30) Days in a manner deemed reasonable by the City under the terms of the Franchise.
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14.19 Maintain a Complaint Phone Line. Grantee shall maintain a local or toll-free
telephone Subscriber complaint line, available to its Subscribers twenty-four (24) hours per Day,
seven (7) Days a week.
14.20 Notification of Complaint Procedure. Grantee shall have printed clearly and
prominently on each Subscriber bill and in the customer service agreement provided for in
Section 14.3, the twenty-four (24) hour Grantee phone number for Subscriber complaints.
Additionally, Grantee shall provide information to customers concerning the procedures to
follow when they are unsatisfied with measures taken by Grantee to remedy their complaint.
This information will include the phone number of the City office or Person designated to handle
complaints. Additionally, Grantee shall state that complaints should be made to Grantee prior to
contacting the City.
14.21 Subscriber Privacy.
(a) To the extent required by Minn. Stat. §238.084 Subd. 1(s) Grantee shall
comply with the following: No signals including signals of a Class IV Channel may 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 permission must be contained in a separate document with a prominent
statement that the Subscriber is authorizing the permission in full knowledge of its
provisions. Such written permission shall be for a limited period of time not to exceed
one (1) year which may be renewed at the option of the Subscriber. No penalty shall be
invoked for a Subscriber's failure to provide or renew such permission. The permission
shall be revocable at any time by the Subscriber without penalty of any kind whatsoever.
(b) No information or data obtained by monitoring transmission of a signal
from a Subscriber terminal, including but not limited to lists of the names and addresses
of Subscribers or any lists that identify the viewing habits of Subscribers shall be sold or
otherwise made available to any party other than to Grantee or its agents for Grantee's
business use, and also to the Subscriber subject of that information, unless Grantee has
received specific written permission from the Subscriber to make such data available.
The request for permission must be contained in a separate document with a prominent
statement that the Subscriber is authorizing the permission in full knowledge of its
provisions. Such written permission shall be for a limited period of time not to exceed
one (1) year which may be renewed at the option of the Subscriber. No penalty shall be
invoked for a Subscriber's failure to provide or renew such permission. The permission
shall be revocable at any time by the Subscriber without penalty of any kind whatsoever.
(c) Written permission from the Subscriber shall not be required for the
conducting of system wide or individually addressed electronic sweeps for the purpose of
verifying System integrity or monitoring for the purpose of billing. Confidentiality of
such information shall be subject to the provision set forth in subparagraph (b) of this
section.
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14.22 Grantee Identification. Grantee shall provide all customer service technicians
and all other Grantee employees entering private property with appropriate picture identification
so that Grantee employees may be easily identified by the property owners and Subscribers.
SECTION 15
SUBSCRIBER PRACTICES
15.1 Subscriber Rates. There shall be no charge for disconnection of any installation
or outlet. If any Subscriber fails to pay a properly due monthly Subscriber fee, or any other
properly due fee or charge, Grantee may disconnect the Subscriber's service outlet, provided,
however, that such disconnection shall not be effected until after the later of: (i) forty-five (45)
Days after the original due date of said delinquent fee or charge; or(ii) ten (10) Days after
delivery to Subscriber of written notice of the intent to disconnect. If a Subscriber pays before
expiration of the later of(i) or (ii), Grantee shall not disconnect. After disconnection, upon
payment in full of the delinquent fee or charge and the payment of a reconnection charge,
Grantee shall promptly reinstate the Subscriber's Cable Service.
15.2 Refunds to Subscribers shall be made or determined in the following
manner:
(a) If Grantee fails, upon request by a Subscriber, to provide any service then
being offered, Grantee shall promptly refund all deposits or advance charges paid for the
service in question by said Subscriber. This provision does not alter Grantee's
responsibility to Subscribers under any separate contractual agreement or relieve Grantee
of any other liability.
(b) If any Subscriber terminates any monthly service because of failure of
Grantee to render the service in accordance with this Franchise, Grantee shall refund to
such Subscriber the proportionate share of the charges paid by the Subscriber for the
services not received. This provision does not relieve Grantee of liability established in
other provisions of this Franchise.
(c) If any Subscriber terminates any monthly service prior to the end of a
prepaid period, a proportionate amount of any prepaid Subscriber service fee, using the
number of days as a basis, shall be refunded to the Subscriber by Grantee.
SECTION 16
COMPENSATION AND FINANCIAL PROVISIONS.
16.1 Franchise Fees. During the term of the Franchise, Grantee shall pay to the City a
Franchise Fee of five percent (5%) of Gross Revenues. If any such law, regulation or valid rule
alters the five percent (5%) Franchise Fee ceiling enacted by the Cable Act, then the City shall
have the authority to (but shall not be required to) increase the Franchise Fee accordingly,
provided such increase is for purposes not inconsistent with Applicable Law. In the event
Grantee bundles or combines Cable Services (which are subject to the Franchise Fee) with non-
Cable Services (which are not subject to the Franchise Fee) so that Subscribers pay a single fee
for more than one (1) class of service resulting in a discount on Cable Services, Grantee agrees
that for the purpose of calculation of the Franchise Fee, it shall allocate to Cable Service revenue
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no less than a pro rata share of the revenue received for the bundled or combined services. The
pro rata share shall be computed on the basis of the published charge for each service in the
bundled or combined classes of services when purchased separately.
(a) Franchise Fees shall be paid quarterly not later than forty-five (45) Days
following the end of a given quarter. In accordance with Section 16 of this Franchise,
Grantee shall file with the City a Franchise Fee payment worksheet, attached as Exhibit
C, signed by an authorized representative of Grantee, which identifies Gross Revenues
earned by Grantee during the period for which payment is made. 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
which the City may have for further or additional sums payable under the provisions of
this section.
(b) Neither current nor previously paid Franchise Fees shall be subtracted
from the Gross Revenue amount upon which Franchise Fees are calculated and due for
any period, unless otherwise required by Applicable Law.
(c) Any Franchise Fees owing pursuant to this Franchise which remain unpaid
more than forty-five (45) Days after the dates specified herein shall be delinquent and
shall thereafter accrue interest at twelve percent (12%) per annum or two percent (2%)
above prime lending rate as quoted by the Wall Street Journal, whichever is greater.
16.2 Auditing and Financial Records. Throughout the term of this Franchise, the
Grantee agrees that the City, upon reasonable prior written notice of twenty (20) Days to the
Grantee, may review such of the Grantee's books and records regarding the operation of the
Cable System and the provision of Cable Service in the Franchise Area which are reasonably
necessary to monitor and enforce Grantee's compliance with the provisions of this Franchise.
Grantee shall provide such requested information as soon as possible and in no event more than
thirty (30) Days unless Grantee explains that it is not feasible to meet this timeline and provides
a written explanation for the delay and an estimated reasonable date for when such information
will be provided. All such documents pertaining to financial matters that may be the subject of
an inspection by the City shall be retained by the Grantee for a minimum period of seven (7)
years,pursuant to Minnesota Statutes Section 541.05. The Grantee shall not deny the City
access to any of the Grantee's records on the basis that the Grantee's records are under the
control of any parent corporation, Affiliated entity or a third party. The City may request in
writing copies of any such records or books that are reasonably necessary, and the Grantee shall
provide such copies within thirty (30) Days of the receipt of such request. One (1) copy of all
reports and records required under this or any other section shall be furnished to the City at the
sole expense of the Grantee. If the requested books and records are too voluminous, or for
security reasons cannot be copied or removed, then the Grantee may request, in writing within
ten (10) Days of receipt of such request, that the City inspect them at the Grantee's local offices
or at one of Grantee's offices more convenient to City or its duly authorized agent. If any books
or records of the Grantee are not kept in such office and not made available in copies to the City
upon written request as set forth above, and if the City determines that an examination of such
records is necessary for the enforcement of this Franchise, then all reasonable travel expenses
incurred in making such examination shall be paid by the Grantee.
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16.3 Review of Record Keeping Methodology. Grantee agrees to meet with
representative of the City upon request to review its methodology of record-keeping, financial
reporting, computing Franchise Fee obligations, and other procedures the understanding of
which the City deems necessary for understanding the meaning of reports and records.
16.4 Audit of Records. The City or its authorized agent may at any time and at the
City's own expense conduct an independent audit of the revenues of Grantee in order to verify
the accuracy of Franchise Fees paid to the City. Grantee and each parent company of Grantee
shall cooperate fully in the conduct of such audit. In the event it is determined through such audit
that Grantee has underpaid Franchise Fees in an amount of five percent (5%) or more than was
due the City, then Grantee shall reimburse the City for the entire cost of the audit within thirty
(30) days of the completion and acceptance of the audit by the City.
16.5 Records to be reviewed. The City agrees to request access to only those books
and records, in exercising its rights under this section, which it deems reasonably necessary for
the enforcement and administration of the Franchise.
16.6 Indemnification by Grantee. Grantee shall, at its sole expense, fully indemnify,
defend and hold harmless the City, and in their capacity as such, the officers and employees
thereof, from and against any and all claims, suits, actions, liability and judgments for damage or
otherwise except those arising wholly from negligence on the part of the City or its employees;
for actual or alleged injury to persons or property, including loss of use of property due to an
occurrence, whether or not such property is physically damaged or destroyed, in any way arising
out of or through or alleged to arise out of or through the acts or omissions of Grantee or its
officers, agents, employees, or contractors or to which Grantee's or its officers, agents,
employees or contractors acts or omissions in any way contribute, and whether or not such acts
or omissions were authorized or contemplated by this Franchise or Applicable Law; arising out
of. or alleged to arise out of any claim for damages for Grantee's invasion of the right of privacy,
defamation of any Person, firm or corporation, or the violation of infringement of any copyright,
trademark, trade name, service mark or patent, or of any other right of any Person, firm or
corporation; arising out of or alleged to arise out of Grantee's failure to comply with the
provisions of any Applicable Law. Nothing herein shall be deemed to prevent the City, its
officers, or its employees from participating in the defense of any litigation by their own counsel
at such parties' expense. Such participation shall not under any circumstances relieve Grantee
from its duty of defense against liability or of paying any judgment entered against the City, its
officers, or its employees.
16.7 Grantee Insurance. Upon the Effective Date, Grantee shall, at its sole expense
take out and maintain during the term of this Franchise public liability insurance with a company
licensed to do business in the state of Minnesota with a rating by A.M. Best & Co. of not less
than "A-"that shall protect the Grantee, City and its officials, officers, directors, employees and
agents from claims which may arise from operations under this Franchise, whether such
operations be by the Grantee, its officials, officers, directors, employees and agents or any
subcontractors of Grantee. This liability insurance shall include, but shall not be limited to,
protection against claims arising from bodily and personal injury and damage to property,
resulting from Grantee's vehicles, products and operations. The amount of insurance for single
40
2033319v1
limit coverage applying to bodily and personal injury and property damage shall not be less than
Three Million Dollars ($3,000,000). The liability policy shall include:
(a) The policy shall provide coverage on an "occurrence" basis.
(b) The policy shall cover personal injury as well as bodily injury.
(c) The policy shall cover blanket contractual liability subject to the standard
universal exclusions of contractual liability included in the carrier's standard
endorsement as to bodily injuries, personal injuries and property damage.
(d) Broad form property damage liability shall be afforded.
(e) City shall be named as an additional insured on the policy.
(f) An endorsement shall be provided which states that the coverage is
primary insurance with respect to claims arising from Grantee's operations under this
Franchise and that no other insurance maintained by the Grantor will be called upon to
contribute to a loss under this coverage.
(g) Standard form of cross-liability shall be afforded.
(h) An endorsement stating that the policy shall not be canceled without thirty
(30) Days notice of such cancellation given to City
(i) City reserves the right to adjust the insurance limit coverage requirements
of this Franchise no more than once every three (3) years. Any such adjustment by City
will be no greater than the increase in the State of Minnesota Consumer Price Index (all
consumers) for such three (3) year period.
0) Upon the Effective Date, Grantee shall submit to City a certificate
documenting the required insurance, as well as any necessary properly executed
endorsements. The certificate and documents evidencing insurance shall be in a form
acceptable to City and shall provide satisfactory evidence that Grantee has complied with
all insurance requirements. Renewal certificates shall be provided to City prior to the
expiration date of any of the required policies. City will not be obligated, however, to
review such endorsements or certificates or other evidence of insurance, or to advise
Grantee of any deficiencies in such documents and receipt thereof shall not relieve
Grantee from, nor be deemed a waiver of, City's right to enforce the terms of Grantee's
obligations hereunder. City reserves the right to examine any policy provided for under
this paragraph or to require further documentation reasonably necessary to form an
opinion regarding the adequacy of Grantee's insurance coverage.
41
2033319v1
SECTION 17
MISCELLANEOUS PROVISIONS.
17.1 Posting and Publication. Grantee shall assume the cost of posting and
publication of this Franchise as such posting and publication is required by law and such is
payable upon Grantee's filing of acceptance of this Franchise.
17.2 Guarantee of Performance. Grantee agrees that it enters into this Franchise
voluntarily in order to secure and in consideration of the grant from the City of a ten(10) year
Franchise. Performance pursuant to the terms and conditions of this Franchise is guaranteed by
Grantee.
17.3 Entire Agreement. This Franchise contains the entire agreement between the
parties, supersedes all prior agreements or proposals except as specifically set forth herein, and
cannot be changed orally but only by an instrument in writing executed by the parties. This
Franchise is made pursuant to Minnesota Statutes Chapter 238 and the City Code and is intended
to comply with all requirements set forth therein.
17.4 Consent. Wherever the consent or approval of either Grantee or the City is
specifically required in this agreement, such consent or approval shall not be unreasonably
withheld.
17.5 Prior Franchise Terminated. The cable television franchise as originally granted
by Ordinance No. 1996-5 is hereby terminated.
17.6 Franchise Acceptance. No later than forty-five (45) Days following City
Council approval of this Franchise, Grantee shall execute and return to the City three (3) original
franchise agreements. The executed agreements shall be returned to the City accompanied by
performance bonds, security funds, and evidence of insurance, all as provided in this Franchise.
In the event Grantee fails to accept this Franchise, or fails to provide the required documents, this
Franchise shall be null and void. The Grantee agrees that despite the fact that its written
acceptance may occur after the Effective Date, the obligations of this Franchise shall become
effective on August 1, 2012.
17.7 Amendment of Franchise. Grantee and City may agree, from time to time, to
amend this Franchise. Such written amendments may be made subsequent to a review session
pursuant to Section 2.6 or at any other time if City and Grantee agree that such an amendment
will be in the public interest or if such an amendment is required due to changes in federal, state
or local laws; provided, however, nothing herein shall restrict City's exercise of its police
powers.
17.8 Notice. Any notification that requires a response or action from a party to this
Franchise, within a specific time-frame or would trigger a timeline that would affect one or both
parties' rights under this Franchise, shall be made in writing and shall be sufficiently given and
served upon the other party by hand delivery, first class mail, registered or certified, return
receipt requested, postage prepaid, or by reputable overnight courier service and addressed as
follows:
42
2033319v1
To the City: City Manager, City of Edina
4801 West 50th Street
Edina, MN 55424
To the Grantee: Comcast Regional Vice President of Operations
10 River Park Place
St. Paul, MN 55107
Recognizing the widespread usage and acceptance of electronic forms of communication,
emails and faxes will be acceptable as formal notification related to the conduct of general
business amongst the parties to this contract, including but not limited to programming and price
adjustment communications. Such communication should be addressed and directed to the
Person of record as specified above.
17.9 Force Majeure. In the event that either party is prevented or delayed in the
performance of any of its obligations, under this Franchise by reason of acts of God, floods, fire,
hurricanes, tornadoes, earthquakes, or other unavoidable casualties, insurrection, war, riot,
vandalism, strikes, delays in receiving permits where it is not the fault of Grantee, public
easements, sabotage, acts or omissions of the other party, or any other similar event beyond the
reasonable control of that party, it shall have a reasonable time under the circumstances to
perform such obligation under this Franchise, or to procure a substitute for such obligation to the
reasonable satisfaction of the other party.
17.10 Work of Contractors and Subcontractors. Work by contractors and
subcontractors is subject to the same restrictions, limitations and conditions as if the work were
performed by Grantee. Grantee shall be responsible for all work performed by its contractors
and subcontractors, and others performing work on its behalf as if the work were performed by it
and shall ensure that all such work is performed in compliance with this Franchise, the City Code
and other Applicable Law, and shall be jointly and severally liable for all damages and correcting
all damage caused by them. It is Grantee's responsibility to ensure that contractors,
subcontractors or other Persons performing work on Grantee's behalf are familiar with the
requirements of this Franchise, the City Code and other Applicable Laws governing the work
performed by them.
17.11 Abandonment of System. Grantee may not abandon the System or any portion
thereof without having first given three (3) months written notice to City and conforming to the
City Code, as well as the state right-of-way rules, Minn. Rules, Chapter 7819. To the extent
required by Minn. Stat. §238.084 Subd. 1 (w), Grantee shall compensate City for damages
resulting from the abandonment.
17.12 Removal After Abandonment. In the event of Grantee's abandonment of the
System, City shall have the right to require Grantee to conform to the City Code, as well as the
state right-of-way rules, Minn. Rules, Chapter 7819. If Grantee has failed to commence removal
of System, or such part thereof as was designated by City, within thirty (30) Days after written
notice of City's demand for removal consistent with City Code and Minn. Rules, Ch. 7819, is
given, or if Grantee has failed to complete such removal within twelve (12) months after written
notice of City's demand for removal is given City shall have the right to apply funds secured by
43
2033319vl
the performance bond toward removal and/or declare all right, title, and interest to the System to
be in City with all rights of ownership including, but not limited to, the right to operate the
System or transfer the System to another for operation by it.
17.13 Governing Law. This Franchise shall be deemed to be executed in the State of
Minnesota, and shall be governed in all respects, including validity, interpretation and effect, and
construed in accordance with, the laws of the State of Minnesota, as applicable to contracts
entered into and performed entirely within the State.
17.14 Nonenforcement by City. Grantee shall not be relieved of its obligation to
comply with any of the provisions of this Franchise by reason of any failure of the City or to
enforce prompt compliance.
17.15 Captions. The paragraph captions and headings in this Franchise are for
convenience and reference purposes only and shall not affect in any way the meaning of
interpretation of this Franchise.
17.16 Calculation of Time. Where the performance or doing of any act, duty, matter,
payment or thing is required hereunder and the period of time or duration for the performance is
prescribed and fixed herein, the time shall be computed so as to exclude the first and include the
last Day of the prescribed or fixed period or duration of time. When the last Day of the period
falls on Saturday, Sunday or a legal holiday, that Day shall be omitted from the computation and
the next business Day shall be the last Day of the period.
17.17 Survival of Terms. Upon the termination or forfeiture of the Franchise, Grantee
shall no longer have the right to occupy the Streets for the purpose of providing Cable Service.
However, Grantee's obligations to the City (other than the obligation to provide service to
Subscribers) shall survive according to their terms.
17.18 Competitive Equity If any other Wireline MVPD enters into any agreement with
the City to provide multi channel video programming or its equivalent to residents in the City,
the City, upon written request of the Grantee, shall permit the Grantee to construct and/or operate
its Cable System and provide multi channel video programming or its equivalent to Subscribers
in the City under the same agreement as applicable to the new MVPD. Within one hundred
twenty (120) Days after the Grantee submits a written request to the City, the Grantee and the
City shall enter into an agreement or other appropriate authorization (if necessary) containing the
same terms and conditions as are applicable to the new Wireline MV
Passed and adopted this 17th day of July 2012.
ATTE T CITY OF E NESOTA
By:
Its: City Clerk9�0,44-4 -0111
Its: Mayor
44
2033319v1
ACCEPTED: This Franchise is accepted, and we agree to be bound by its terms and conditions.
COMCAST OF ARKANSAS /FLORIDA /
LOUISIANA/MINNESOTA /
MISSISSIPPI /TENNESSEE, INC.
Date: By: /
Its: Timothy T.Nestler
W Finance and Accounting
S ORN TOIBEFORE ME this
day of , 2012
Ll�
NOTAR PUBLIC
REGINA M CUNNINGHAM
NOTARY PUBLIC
STATE OF COLORADO
My Commission Expires 5/20/2016
45
2033319v1
Exhibit A
Free Cable Service to Public Buildings
1. SCHOOL,ST PETER 5421 FRANCE AVE S
2. JUNIOR HIGH,SOUTHVIEW 4725 S VIEW LN
3. CITY HALL,EDINA 4801 W 50TH ST
4. COMM CENTER,EDINA 5701 NORMANDALE RD
5. ELEMENTARY,CONCORD 5900 CONCORD AVE
6. EDINBOROUG PARK,* 7700 YORK AVE S
7. ELEM,CREEK VALLEY 6401 GLEASON RD
8. MIDDLE SCHOOL,VALLEY V 6750 VALLEY VIEW RD
9. HIGH SCHOOL,EDINA 6754 VALLEY VIEW RD
10. ELEMENTARY,CORNELIA 7000 CORNELIA DR
11. LIBRARY,SOUTHDALE 7001 YORK AVE S
12. ELEMENTARY,HIGHLAND 5505 DONCASTER WAY
13. ELEMENTARY,COUNTRYSIDE 5701 BENTON AVE
14. GOLF COURSE,BRAEMAR 6364 JOHN HARRIS DR STE 2
15. STATION,EDINA FIRE 7335 YORK AVE S
16. ICE ARENA,BREMER 7501 IKOLA WAY
17. MAINT SHED,BRAEMAR 7401 BRAEMAR BLVD
18. LIBRARY, EDINA 5280 GRANDVIEW SQ
19. FIRE STATION,EDINA 6250 TRACY AVE
20. PUBLIC WORKS,EDINA 7450 METRO BLVD
21. ELEMENTARY,NORMANDALE 5701 NORMANDALE RD
22. SENIOR CENTER,EDINA 5280 GRANDVIEW SQ
23. GOLF COURSE,FRED RICHARDS 7640 PARKLAWN AVE
A-1
2033319v1
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A R
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lip-
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Exhibit C
Franchise Fee Payment Worksheet
TRADE SECRET— CONFIDENTIAL
Month/Year Month/Year Month/Year Total
A la Carte Video Services
Audio Services
Basic Cable Service
Installation Charge
Bulk Revenue
Expanded Basic Cable
Service
Pay Service
Pay-per-view
Guide Revenue
Franchise Fee Revenue
Advertising Revenue
Home Shopping Revenue
Digital Services
Inside Wiring
Other Revenue
Equipment Rental
Processing Fees
PEG Fee
FCC Fees
Bad Debt
Late Fees
REVENUE
Fee Calculated
Fee Factor: 5%
C-1
2033319v1
Moss & Barnett
A Professional Association
June 8, 2012
Mr. Scott Neal
City Manager
City of Edina
4801 West 50th Street
Edina, MN 55424-1330
Re: Extension Resolution - Southwest Suburban Cable Commission
Dear Scott:
Enclosed please find the originally executed Extension Resolution for the City of Edina which we received
from Comcast today.
Very truly yours,
/3 "'
Brian T. Grogan
Attorney At Law
P: (612) 877-5340
GroganB@moss-barnett.com
BTG/tl h
Enclosure
4800 WELLS FARGO CENTER 90 South Seventh Street Minneapolis, MN 55402-4129
P:612-877-5000 F:612-877-5999 W:moss-barnett.com
RESOLUTION NO. 2012-63
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EDINA,MINNESOTA GRANTING COMCAST OF ARKANSAS/
FLORIDA/LOUISIANA/MINNESOTA/MISSISSIPPI/TENNESSEE,INC.
A FRANCHISE EXTENSION TO JULY 31,2012
WHEREAS,effective January 1, 1997,the City of Edina, Minnesota("City')granted a Cable Television
Franchise greement("Franchise")to Time Warner Cable,Inc.;and
WHEREAS, the Franchise is currently held by Comcast of Arkansas/ Florida / Louisiana /
Minnesota/Mississippi/Tennessee, Inc. ("Comcast"); and
WHEREAS, the City adopted Resolution No. 2011-117 on November 15, 2011 extending
the term of the Franchise, as amended by the Resolution; and
WHEREAS, Comcast executed said Resolution No. 2011-117 and agreed to continue
complying with the Franchise, as amended by the Resolution; and
WHEREAS,the City and Comcast, pursuant to 47 U.S.C.§546(h),are currently conducting informal
franchise renewal negotiations in an attempt to reach a mutually acceptable terms for franchise renewal;and
WHEREAS,the City and Comcast are interested in continuing informal renewal negotiations and desire to
extend the current Franchise term from April 17,2012 to July 31,2012;and
WHEREAS,both the City and Comcast desire to expressly reserve all of their respective
rights under state and federal law; and
WHEREAS,the City and Comcast continue to be governed by the formal renewal process pursuant to 47
U.S.C. §546(a-g)and nothing contained herein shall in anyway diminish either party's rights under the formal
renewal process.
NOW,THEREFORE,the City Council of the City of Edina,Minnesota hereby resolves as follows:
1. The Franchise is hereby amended by extending the term of the Franchise from April 17,2012
through and including July 31,2012.
2. Except as specifically modified hereby,the Franchise shall remain in full force and effect.
3. The City and Comcast hereby agree that neither waives any rights either may have under the
Franchise or applicable law.
a •�
4. This Resolution shall become effective upon the occurrence of both of the following conditions:
(1)The Resolution being passed and adopted by the City Council of the City of Edina;and(2)Comcast's
acceptance of this Resolution.
Adopted by the City Council of Edina, Minnesota,this 17`h day of April,L1,I1
CITY OF E A
Its: ci L(Ur—
ATTEST:
City Clerk
ACCEPTANCE
Comcast of Arkansas/Florida/Louisiana/Minnesota/Mississippi/Tennessee, Inc.hereby
acknowledges the City of Edina, Minnesota Resolution No._and hereby accepts the terms,provisions and
recitals of the Resolution and agrees to be bound by the Franchise to the extent consistent with applicable laws.
DATED: a-4 COMCAST OF ARKANSAS/FLORIDA/
LOU ISIANA/MINNESOTA/
MISSISSIPPI/TENNESSEE,INC.
By:
Its: ��e I/i c e �°re l '�Le s1t
Sworn to before me this
day of 0
Q&K�j I
Nota Public
c► e� JEAN W STRINGER
�'. Notary Public
glieS State of Minnesota
My Commission Expires
January 31, 2015
Moss & Barnett
A Professional Association
January 13, 2012
Mr. Scott Neal
City Manager
4801 West 50th Street
Edina, MN 55424
Re: Extension Resolution - Southwest Suburban Cable Commission
Dear Scott:
Enclosed please find the originally executed Extension Resolution for the City of Edina which we
received from Comcast on January 12, 2012.
Very truly yours,
rte`'
Brian T. Grogan
Attorney At Law
P: (612) 877-5340
GroganB@moss-barnett.com
BTG/tl h
Enclosure
1924644v1
4800 WELLS FARGO CENTER j 90 South Seventh Street Minneapolis. MN 55402-4129
P,612-877-5000 F,612-877-5999 Wmoss-barnett com
RESOLUTION NO. 2011-117
ZEA THE CITY COUNCIL OF THE CITY OF EDINA, MINNESOTA
W9��j�, GRANTING COMCAST OF ARKANSAS/FLORIDA/
o� a LOUISIANA/ MINNESOTA/MISSISSIPPI/TENNESSEE, INC.
�y A FRANCHISE EXTENSION TO APRIL 16, 2012
•fN��ie�e��9•
City of Edina
WHEREAS, effective January 1, 1997,the City of Edina, Minnesota ("City") granted a Cable Television
Franchise Agreement ("Franchise")to Time Warner Cable, Inc.; and
WHEREAS, the Franchise is currently held by Comcast Arkansas / Florida / Louisiana / Minnesota /
Mississippi/Tennessee, Inc. ("Comcast"); and
WHEREAS, pursuant to Section 47 U.S.C. §546(a) Comcast provided notification to the City of Comcast's
intent to seek renewal of the Franchise; and
WHEREAS, pursuant to Section 47 U.S.C. §546(a)the City properly commenced franchise renewal
proceedings; and
WHEREAS,the City and Comcast, pursuant to 47 U.S.C. §546(h), are currently conducting informal
franchise renewal negotiations in an attempt to reach a mutually acceptable terms for franchise
renewal; and
WHEREAS,the City and Comcast are interested in continuing informal renewal negotiations and desire
to extend the current Franchise term from January 2, 2012 to April 16, 2012; and
WHEREAS, both the City and Comcast desire to expressly reserve all of their respective
rights under state and federal law; and
WHEREAS,the City and Comcast continue to be governed by the formal renewal process pursuant to 47
U.S.C. §546(a-g) and nothing contained herein shall in anyway diminish either party's rights under the
formal renewal process.
NOW,THEREFORE, the City Council of the City of Edina, Minnesota hereby resolves as follows:
1. The Franchise is hereby amended by extending the term of the Franchise from January
2, 2012 through and including April 16, 2012.
2. Except as specifically modified hereby,the Franchise shall remain in full force and effect.
City Hall 952-927-8861
4801 WEST 50TH STREET FAX 952-826-0390
EDINA,MINNESOTA,55424-1394 www.CityofEdina.com TTY 952-826-0379
Resolution No. 2011-117
Page Two
3. The City and Comcast hereby agree that neither waives any rights either may have
under the Franchise or applicable law.
4. This Resolution shall become effective upon the occurrence of both of the following
conditions: (1)The Resolution being passed and adopted by the City Council of the City of Edina;
and (2) Comcast's acceptance of this Resolution.
Adopted by the City Council of Edina, Minnesota,this 15th day of Novemb r, 11.
t
Attest: -
Debra A. Mang n,City 6erk James B. Hovland, Mayor
STATE OF MINNESOTA)
COUNTY OF HENNEPIN) SS
CITY OF EDINA )
CERTIFICATE OF CITY CLERK
I,the undersigned duly appointed and acting City Clerk for the City of Edina do hereby certify that the attached and
foregoing Resolution was duly adopted by the Edina City Council at its Regular Meeting of November 15,2011, and
as recorded in the Minutes of said Regular Meeting.
WITNESS my hand and seal of said City this day of
City Clerk
ACCEPTANCE
Comcast of Arkansas/ Florida/Louisiana/Minnesota/Mississippi/Tennessee, Inc. hereby
Ill
acknowledges the City of Edina, Minnesota Resolution No.ON and hereby accepts the terms,
provisions and recitals of the Resolution and agrees to be bound by the Franchise to the extent
consistent with applicable laws.
DATED: [ COMCAST OF ARKANSAS/FLORIDA/
LOUISIANA/MINNESOTA/
MISSISSIPPI/TENNESSEE,INC.
By: L
Its: `� V
Sworn to before me this
dayof/Du CQytti-��✓ fid/
JEAN W STRINGER
s Notary Public
State of Minnesota
'No ary Public My Commission Expires
+( • ...• January 31, 2015
�9Z A,�1r
o e tA
V)
.3y
•'At RPOFA1FO
City of Edina
November 21, 2011
Ms. Terri Hammer
Moss and Barnett
4800 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402
RE: Resolution No. 2011-17 Cable Television Franchise Extension
Dear Terri:
I am enclosing two signed copies of the above referenced resolution for the City of
Edina. Please return the final executed copy to my attention. If you require anything
further, please do not hesitate to contact me at your convenience. Thank you for
your assistance with this matter.
Sincerely,
Debra A. Mangen
City Clerk
Enclosure: 1
City Hall 952-927-8861
4801 WEST 50TH STREET FAX 952-826-0390
EDINA,MINNESOTA,55424-1394 www.CityofEdina.com TTY 952-826-0379
RESOLUTION NO. 2011-117
1r1A THE CITY COUNCIL OF THE CITY OF EDINA, MINNESOTA
GRANTING COMCAST OF ARKANSAS/ FLORIDA/
oe m LOUISIANA/MINNESOTA/MISSISSIPPI/TENNESSEE, INC.
�y A FRANCHISE EXTENSION TO APRIL 16, 2012
• N�bRPON'�49•
eee
City of Edina
WHEREAS,effective January 1, 1997,the City of Edina, Minnesota ("City")granted a Cable Television
Franchise Agreement ("Franchise")to Time Warner Cable, Inc.; and
WHEREAS, the Franchise is currently held by Comcast Arkansas / Florida / Louisiana / Minnesota /
Mississippi/Tennessee, Inc. ("Comcast"); and
WHEREAS, pursuant to Section 47 U.S.C. §546(a) Comcast provided notification to the City of Comcast's
intent to seek renewal of the Franchise; and
WHEREAS, pursuant to Section 47 U.S.C. § 546(a)the City properly commenced franchise renewal
proceedings; and
WHEREAS,the City and Comcast, pursuant to 47 U.S.C. §546(h), are currently conducting informal
franchise renewal negotiations in an attempt to reach a mutually acceptable terms for franchise
renewal; and
WHEREAS,the City and Comcast are interested in continuing informal renewal negotiations and desire
to extend the current Franchise term from January 2, 2012 to April 16, 2012; and
WHEREAS, both the City and Comcast desire to expressly reserve all of their respective
rights under state and federal law; and
WHEREAS,the City and Comcast continue to be governed by the formal renewal process pursuant to 47
U.S.C. §546(a-g) and nothing contained herein shall in anyway diminish either party's rights under the
formal renewal process.
NOW,THEREFORE,the City Council of the City of Edina, Minnesota hereby resolves as follows:
1. The Franchise is hereby amended by extending the term of the Franchise from January
2, 2012 through and including April 16, 2012.
2. Except as specifically modified hereby, the Franchise shall remain in full force and effect.
City Hall 952-927-8861
4801 WEST 50TH STREET FAX 952-826-0390
EDINA,MINNESOTA,55424-1394 www.CityofEdina.com TTY 952-826-0379
Resolution No. 2011-117
Page Two
3. The City and Comcast hereby agree that neither waives any rights either may have
under the Franchise or applicable law.
4. This Resolution shall become effective upon the occurrence of both of the following
conditions: (1)The Resolution being passed and adopted by the City Council of the City of Edina;
and (2) Comcast's acceptance of this Resolution.
Adopted by the City Council of Edina, Minnesota,this 15th day of Novemb r, 2 11.
Attest: &, " /� -
Debra A. Mang n,City dierk James B. Hovland, Mayor
STATE OF MINNESOTA)
COUNTY OF HENNEPIN) SS
CITY OF EDINA )
CERTIFICATE OF CITY CLERK
I,the undersigned duly appointed and acting City Clerk for the City of Edina do hereby certify that the attached and
foregoing Resolution was duly adopted by the Edina City Council at its Regular Meeting of November 15, 2011, and
as recorded in the Minutes of said Regular Meeting.
WITNESS my hand and seal of said City this day of
City Clerk
ACCEPTANCE
Comcast of Arkansas/ Florida/Louisiana/Minnesota/Mississippi/Tennessee, Inc. hereby
acknowledges the City of Edina, Minnesota Resolution No. and hereby accepts the terms,
provisions and recitals of the Resolution and agrees to be bound by the Franchise to the extent
consistent with applicable laws.
DATED: COMCAST OF ARKANSAS/FLORIDA/
LOUISIANA/MINNESOTA/
MISSISSIPPI/TENNESSEE,INC.
By:
Its:
Sworn to before me this
day of
Notary Public
City of Edina
(Oeaoial Publication)
CITY OF EDINA
4801 WEST 50TH STREET
FARIM
EDINA,NN 56424.
WINNESOTA
NOTICE is that the Edina City
Council will hold
a on Monday, June
SUN 17,1996 at 7:00 p.m.' Chambers,City Hall,
PUBLICATIONS 4601 West 50th neeota.The pure of {
S1srCurmt am-PON &..S kr the hearing is to the current cable tele-
vision franchise,
AFFIDAVIT OF PUBLICATION h6&on
r ngt such an public rim
ilA.the foregoing ed such an opportu-
eity.All others i teen connnegts with
the City M the hearing by letter
STATE OF MINNESOTA) to the City Man 3 1 West 50th Street,
Edina Minnesota,
BY ORDER OF THF,' CITY COUNCIL.
ss. Debra Mangan
I City Clerk
COUNTY OF HENNEPIN) Dated: May 16;1996
(Mjky 29.1996)dl\cablety
Denis L. M i n d a k
being duly sworn on an oath says that he/she is
the publisher or authorized agent and employee of the publisher of the newspaper known as
Sun-Current , and has full knowledge of the facts
which are stated below.
(A) The newspaper has complied with all of the requirements constituting qualification as a
qualified newspaper, as provided by Minnesota Statue 331A.02, 331A.07, and other applicable
laws, as amended.
(B)The printed Notice of Public Hearin-d
which is attached was cut from the columns of said newspaper, and was printed and published
once each week, for one successive weeks; it was first published
on Wednesday the 2 9 day of M a Y , 19 96, and was thereafter
printed and published on every to and including
, the day of 19----;and printed below is a copy of
the lower case alphabet from A to Z, both inclusive, which is hereby acknowledged as being the
size and kind of type used in the composition and publication of the notice:
abcdefghijklmnopgrstuvwxyz fe
BY:
TITLE: Publisher
Acknowledged before me on this
22 day of J u l Y _' 1996
,
No ry Public
h1 HED'LO-
L --,A
-�+ " kis Yv� r r r'•iL'l Al","tpJc�7A
{ P.
IM" rx,ire;;Jari.3?,Xcv
RATE INFORMATION
(1) Lowest classified rate paid by commercial users $ 2.1512er line
for comparable space
(2) Maximum rate allowed by law for the above matter $ 5.95 per line
(3) Rate actually charged for the above matter $ 1.09 per line
Cable Television
Regulatory Ordinance
Prepared by:
Adrian E. Herbst, Esq.
Theresa M. Harris, Esq.
Fredrikson&Byron, P.A.
1100 International Centre
900 Second Avenue South
Minneapolis, MN 55402
Telephone: (612) J47-7000
Fax: (612) 347-7077
With the assistance of:
The Southwest Suburban
Cable Commission
TABLE OF CONTENTS
STATEMENT OF INTENT AND PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Sec. 1. Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Sec. 2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Sec. 3. Authority to Grant Franchises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Sec. 4. Application for Franchise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Sec. 5. Acceptance and Duration of Franchise . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Sec. 6. Franchise Territory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Sec. 7. Franchise Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Sec. 8. Construction of System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Sec. 9. Work Performed by Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Sec. 10. Conditions on Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Sec. 11. Use of Grantee's Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Sec. 12. Failure to Complete Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Sec. 13. Technical Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Sec. 14. Interconnection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Sec. 15. Removal or Abandonment of A System . . . . . . . . . . . . . . . . . . . . . . . . . 13
Sec. 16. Customer Service Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Sec. 17. Programming Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Sec. 18. Subscriber Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Sec. 19. Local Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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Sec. 20. Subscriber Charges . . . . . . . . . . . . . . . . . . 16
Sec. 21. Rate Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Sec. 22. Rights of Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Sec. 23. Public, Educational and Governmental Access . . . . . . . . . . . . . . . . . . . . . 18
Sec. 24. Grantee Records and Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Sec. 25. Transfer of Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Sec. 26. Right to Purchase. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Sec. 27. Mediation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Sec. 28. Special Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Sec. 29. Franchise Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Sec. 30. Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Sec. 31. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Sec. 32. Security Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Sec. 33. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Sec. 34. Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Sec. 35. Continuity of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Sec. 36. Foreclosure and Receivership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Sec. 37. Compliance with Laws, Rules and Regulations . . . . . . . . . . . . . . . . . . . . 28
Sec. 38. Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Sec. 39. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Sec. 40. Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Sec. 41. Certification and Publication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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EXHIBITS
Exhibit A - Federal Communications Commission
Customer Service Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Exhibit B - Annual Performance Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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ORDINANCE NO.
AN ORDINANCE TO REGULATE THE GRANTING OF FRANCHISES TO
OPERATE AND MAINTAIN A CABLE SYSTEM IN THE CITY; SETTING
FORTH CONDITIONS ACCOMPANYING THE GRANT OF FRANCHISE;
PROVIDING FOR REGULATION AND USE OF THE SYSTEM; AND
PRESCRIBING PENALTIES FOR THE VIOLATION OF ITS PROVISION.
The City Council of , Minnesota ordains:
STATEMENT OF INTENT AND PURPOSE
The City of , pursuant to applicable federal and state
law, is authorized to grant one or more nonexclusive cable television franchises to construct,
operate, maintain and reconstruct Cable Television Systems within the City limits.
The City Council finds that the development of Cable Television Systems has the
potential of having great benefit and impact upon the residents of . Because of
the complex and rapidly changing technology associated with cable television, the City
Council further finds that the public convenience, safety and general welfare can best be
served by establishing regulatory powers which should be vested in the City or such Persons
as the City shall designate. It is the intent of this Ordinance and subsequent amendments to
establish minimum requirements regarding the granting of cable television franchises
consistent with Minnesota and federal law recognizing that these laws and the requirements
of local government are continuously changing, and to provide for and specify the means to
attain the best possible cable television service to the public. Any franchises issued pursuant
to this Ordinance shall be deemed to include this intent as an integral part thereof.
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Sec. 1. Title.
This Ordinance shall be entitled, "Cable Regulatory Ordinance."
Sec. 2. Definitions.
For the purpose of this Ordinance, the following, terms, phrases, words, derivations
and their derivations shall have the meanings given herein. When not inconsistent with the
context, words used in the present tense include the future tense, words in the plural number
include the singular number and words in the singular number include the plural number.
A. "Access Channels" shall mean those Channels which, by the terms of this
Ordinance or the Franchise Agreement, are required to be kept available by the Minnesota
Cable Communications Act for partial or total dedication to public access, educational
access, or local government access.
B. "Affiliate" shall mean any person controlling, controlled by or under common
control of a Grantee of a franchise issued pursuant to this Ordinance.
C. "Applicant" means any person that applies for a Franchise under this
Ordinance.
D. "Application" or "Proposal" are synonymous for the purposes of this
Ordinance. An Application or Proposal means the process by which the Applicant submits a
request and indicates a desire to be granted a franchise for all, or a part, of the City. An
Application or Proposal includes all written documentation, including official city council
minutes concerning the construction, detailed description of services to be provided, the area
to be served within the City, the portion of Street to be used, rendering of services and the
manner thereof, rates and charges, maintenance, or any other matter pertaining to the
proposed Cable Communications System.
E. "Basic Cable Service" means any service tier which includes the
retransmission of local television broadcast signals. This definition shall be deemed to
change pursuant to any changes in applicable federal law and shall be interpreted in a manner
consistent with the rules of the Federal Communications Commission.
F. "Cable Communications System," "Cable Television System," "Cable
System," "CATV" or "System", shall mean a System of coaxial cables or other electrical
conductors and equipment used or to be used to originate or receive television or radio
signals directly or indirectly off the air and to transmit them via cable or fiber optics to
Subscribers for a fixed or variable fee, including the origination, receipt, transmission, and
distribution of voices, sound signals, pictures, visual images, digital signals, telemetry, or
any other type of closed circuit transmission by means of electrical impulses, whether or not
directed to originating signals or receiving signals off the air.
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G. "Cable Service" shall mean (a) the one-way transmission to subscribers of (i)
Video Programming or (ii) Other Programming Service, and (b) subscriber interaction, if
any, which is required for the selection or use of such video programming or other
programming service. For the purposes of this definition, "video programming" is
programming provided by, or generally considered comparable to programming provided by
a television broadcast station; and, "other programming service" is information that a cable
operator makes available to all subscribers generally.
H. "City" shall mean the City of , a municipal
corporation in the State of Minnesota.
I. "Connection" means the attachment of the drop to the first radio or television
set of the subscriber.
J. "Converter" means an electronic device, which converts signals to a frequency
not susceptible to interference within the television receiver of a subscriber, and by an
appropriate channel selector also permits a subscriber to view all signals included in the basic
service delivered at designated converter dial locations.
K. "Council" shall mean the governing body of the City.
L. "Drop" shall mean the cable that connects the subscriber terminal to the
nearest feeder cable of the cable.
M. "FCC" means the Federal Communications Commission, or a designated
representative.
N. "Franchise" means the non-exclusive right and authority granted to an
Applicant by a Franchise Agreement Ordinance to construct, maintain and operate any part
of a Cable Communications System described in the Application, through use of the public
Streets, public utility easements or other public rights-of-way or public places in the City.
The Franchise shall describe in detail all requirements applicable to the Franchise including
all applicable requirements of federal, state and local laws.
O. "Franchise Agreement Ordinance" or "Franchise Agreement" means the
ordinance adopted by City granting a Franchise to an Applicant.
P. "Grantee" shall mean any Person to whom a Franchise is granted pursuant to
this Ordinance and any lawful successor or assignee of the original Grantee.
Q. "Gross Revenues" shall mean all revenues received directly or indirectly by
the Grantee, arising from or in connection with the provision of Cable Service in the City
and consistent with local, state and federal law, including, but not limited to, Subscriber
revenues (including Pay TV), advertising income, home shopping programs, rentals of
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equipment, antenna or signal space, and any and all other Gross Revenues received by the
Grantee from the provision of Cable Service in the area under the jurisdiction of the City.
Grantee is not required to include revenues recorded as received but which are "bad debt,"
but it must include any recoveries of bad debt. This definition of gross revenues also does
not include any sales, excise or other taxes collected by Grantee on behalf of federal, state,
county, city or other governmental unit. Funds collected by Grantee to support public,
educational and governmental access programming are also excluded from the definition of
Gross Revenues.
R. "Minnesota Cable Communications Act" means the provisions of Minnesota
law governing the requirements for a cable television franchise as set forth in Minn. Stat.
§ 238, et. seq., as amended.
S. "Ordinance" means this Ordinance concerning the granting of Franchises in
and by the City for Cable Communications Systems.
T. "Person" means any natural person and all domestic and foreign corporations,
closely-held corporations, associations, syndicates, joint stock corporations, partnerships of
every kind, clubs, businesses, common law trusts, societies and/or any other legal entity.
U. "Street" shall mean the surface of and the space above and below any public
Street, road, highway, freeway, lane, path, public way, alley, court, sidewalk, boulevard,
parkway, drive or any easement or right-of-way now or hereafter held by City which shall,
within its proper use and meaning in the sole opinion of City, entitle Grantee to the use
thereof for the purpose of installing or transmitting over poles, wires, cables, conductors,
ducts, conduits, vaults, man-holes, amplifiers, appliances, attachments and other property as
may be ordinarily necessary and pertinent to a System.
V. "Subscriber" shall mean any person or entity receiving service provided by a
Grantee pursuant to the authority of a Franchise.
W. In the event the meaning of any word or phrase not defined herein is
uncertain, the definitions contained in applicable State or Federal law shall apply.
Sec. 3. Authority to Grant Franchises.
A. The Council is empowered and authorized to issue, in accordance with the
City Charter, non-exclusive Franchises to install, construct, operate and maintain Cable
Communications Systems in the City's Streets, as well as to regulate these activities.
B. The Council has determined that the granting of Franchises for Cable
Communications Systems in the City will promote the public interest, enhance the health &
welfare and safety of the public and stimulate commerce by assuring that: (1) Cable
Communications Systems are responsive to the needs and interests of the City and its
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residents; (2) Cable Communications Systems provide, and are encouraged to provide the
widest diversity of information and service to the public; and (3) there is an orderly process
for the granting or renewal of Franchises, and oversight of the services provided pursuant to
Franchises.
C. No person shall construct, operate, maintain, or continue to operate or
maintain a Cable Communications System which occupies any part of the City's Streets,
without the authority of a Franchise granted by the City pursuant to this Ordinance.
D. No provision of this Ordinance shall be deemed or construed to require the
granting of a Franchise by the City.
E. Any Franchise granted must comply with the Minnesota Cable
Communications Act standards.
F. Grantee's rights are subject to the police power of City to adopt and enforce
ordinances necessary to the health, safety and welfare of the public of general applicability.
G. Both the City and the Grantee expressly reserve any and all rights that either
may have under applicable state and federal law including but not necessarily limited to, the
Cable Communications Policy Act of 1984, as amended, and the rules and regulations of the
FCC. Neither adoption of this Franchise by the City nor acceptance by the Grantee shall be
construed as a waiver, modification, termination or discharge of any right that either the city
or the Grantee may now or hereafter have.
H. Except as may be based upon public health, safety and welfare requirements of
general applicability or where required by federal or state law or rules, no modification or
amendment to the Regulatory Ordinance or the franchise agreement ordinance shall be
effective unless in writing and signed by both the City and Grantee.
Sec. 4. Application for franchise.
A. Each Applicant for a Franchise, including the renewal of a Franchise
consistent with state and federal law, requesting permission to construct, operate or maintain
any Cable Communications System in the City shall file an Application with the City in a
form and containing such information as is requested by the City. The contents of such
Application may vary, according to the nature of the proposed Cable Communications
Systems. However, an Initial Application shall contain, at a minimum, the following
information.
(1) The name, address and telephone number of the Applicant. If the
Applicant is a partnership, the home and business address of each partner shall also
be set forth. If the Applicant is a corporation, the Application shall state the names
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and addresses of its directors, main officers, major stockholders and associates and
the names and addresses of parent or subsidiary companies.
(2) A statement setting forth in its entirety any and all agreements and
understandings, whether formal or informal, written, oral or implied, existing or
proposed to exist between the Applicant and any Person who proposes to have an
ownership interest with respect to the proposed Franchise or to the proposed Cable
Communications System. If a Franchise is granted to a Person acting as a
representative of another Person and such information is not disclosed in the original
Application, the Franchise shall be deemed void and of no force and effect.
(3) Financial statements, as determined by the Council, prepared by a
certified public accountant, or person otherwise satisfactory to the Council, showing
Applicant's financial status and financial ability to complete the construction and
installation of the proposed Cable Communications System and/or continue the
operation of the existing Cable Communications System.
(4) A statement describing the Cable Communications System and
specifying the type and capacity of the Cable Communications System proposed to be
construed, installed, maintained or operated by the Applicant and the proposed or
existing location of the Cable Communications System.
(5) A description of all previous experience of the Applicant in providing
Cable Communications System service and in related or similar fields.
(6) Any other details, statements, information or references pertinent to the
subject matter of such Application which shall be required or requested by the
Council, or by any provision of any other ordinance of the City.
The City reserves the right to modify the Application in a renewal process to
accommodate information regarding the Applicant that is already in the possession of the
City. Any renewal of a Franchise shall comply with applicable federal, state or local law.
B. Prior to the issuance of a Franchise, the City shall hold a public hearing,
following reasonable notice to the public, at which Applicant and its Application shall be
examined and the public and all interested parties afforded a reasonable opportunity to be
heard. The City reserves the right to seek reimbursement of its costs to the extent permitted
by applicable state and federal law. The preceding statement does not constitute an
agreement by any Applicant to reimburse the City for the cost of the Application process.
C. In making any determination hereunder as to any Application, the City shall
consider the impact on the Streets with the addition of the proposed Cable Communications
System, the needs of the City and the legal, technical and financial qualifications of the
Applicant. For initial franchises, the City shall give due consideration to the quality of the
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service proposed; experience, character, background and the financial responsibility of any
Applicant and its management and owners; willingness and ability to abide by policy
conditions; Franchise limitations and requirements; and any other considerations deemed
pertinent to the Council for safeguarding the interest of the City and the public. For a
renewal of a Franchise, the City shall also consider the factors identified in the Cable
Communications Policy Act of 1984, as amended.
D. The City may require the Applicant for an initial franchise to reimburse the
City for its reasonable costs to review the Application including costs for technical assistance
to aid the City in understanding the nature and effect of the Application.
Sec. 5. Acceptance and Duration of Franchise.
A. Any Franchise granted pursuant to this Ordinance shall be in the form of a
Franchise Agreement Ordinance between the City and the Grantee which shall comply with
all specifications of this Ordinance.
B. Any Franchise granted pursuant to this Ordinance shall become effective in
accordance with the terms and conditions approved by the Council, provided that a Grantee
has filed with the City Clerk a written instrument addressed to the Council accepting the
Franchise, within the time specified by the City Council, and agreeing to comply with all
provisions of this Ordinance and the Franchise.
C. The term of a Franchise shall be stated in the Franchise Agreement Ordinance,
but shall in no event exceed 15 years.
Sec. 6. Franchise Territory.
Any Franchise shall be valid within all territorial limits of the City, and within any
area added to City during the term of a Franchise, unless otherwise specified in the
Franchise Agreement Ordinance.
Sec. 7. Franchise Administration.
A. Administrator. The City Manager or the City Manager's designee shall be
responsible for the continuing administration of a Franchise. The administrator may be
changed by City from time to time by written notice given to a Grantee.
B. Advisory body. The City may appoint an advisory body to monitor the
performance of a Grantee in executing the provisions of a Franchise. The advisory body
shall perform all functions required of it by the City and applicable laws, ordinances, rules
and regulations.
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C. Delegation of Authority by the City
(1) The City reserves the right to delegate and redelegate from time to time
any of its rights or obligations under a Franchise to any body or
organization.
(2) Any delegation by City shall be effective upon written notice by City to
a Grantee of such delegation.
(3) Upon receipt of notice by a Grantee of City's delegation, a Grantee
shall be bound by all terms and conditions of the delegation not in
conflict with a Franchise.
(4) Any such delegation, revocation or redelegation, no matter how often
made, shall not be_deemed an amendment to a Franchise or require any
consent of a Grantee.
D. Nonenforcement by City. A Grantee shall not be relieved of its obligation to
comply with any of the provisions of a Franchise by reason of any failure of
the City or to enforce prompt compliance.
E. Administration of Franchise.
(1) The City shall have continuing regulatory jurisdiction and supervision
over the System and a Grantee's operation under a Franchise. The
City may issue such reasonable rules and regulations concerning the
construction, operation and maintenance of a System as are consistent
with the provisions of a Franchise.
(2) A Grantee shall construct, operate and maintain a System subject to the
supervision of all the authorities of the City who have jurisdiction in
such matters and in strict compliance with all laws, ordinances,
departmental rules and regulations affecting the System.
(3) A System and all parts thereof shall be subject to the right of periodic
inspection by the City where reasonably necessary to the enforcement
of a Franchise and provided that such inspection shall not interfere with
the operation of a System and such inspections take place during
normal business hours.
F. Emergency Use. In the case of any emergency or disaster, a Grantee shall,
upon request of the City or emergency management personnel, make available
to the City its emergency alert system and related facilities for use during an
emergency or disaster period in accordance with Section 47 C.F.R. § 11.
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G. Controlling Law. A Franchise shall be construed and enforced in accordance
with the substantive laws of the State of Minnesota except to the extent the
Supremacy Clause of the United States Constitution requires application of
federal law.
H. Captions. The paragraph captions and headings in a Franchise are for
convenience and reference purposes only and shall not affect in any way the
meaning of interpretation of a Franchise.
I. Calculation of Time. Where the performance or doing of any act, duty,
matter, payment or thing is required hereunder and the period of time or
duration for the performance is prescribed and fixed herein, the time shall be
computed so as to exclude the first and include the last day of the prescribed
or fixed period or duration of time. When the last day of the period falls on
Saturday, Sunday or a legal holiday, that day shall be omitted from the
computation and the next business day shall be the last day of the period.
Sec. 8. Construction of System.
A. A Grantee shall, at least 60 days prior to any construction regarding the
System in the City, provide notice to representatives of the City of the following: (1) The
nature of the work to be undertaken; (2) the estimated schedule for said work; (3) steps to be
taken to minimize disruption to public; and (4) steps to be taken to notify the residents and
others of said work.
B. A Grantee shall not open or disturb the surface of any Streets without fust
obtaining a permit from City for which permit City may impose a reasonable fee to be paid
by a Grantee. The lines, conduits, cables and other property placed in the Streets shall be
located in such part of the Street as shall be reasonably determined by the City. In so
determining the location in such part of the Street, the parties shall take into account the
health, safety and welfare considerations together with the technical parameters of the System
design. A Grantee shall, upon completion of any work requiring the opening of any Streets,
restore the same, including the pavement and its grounds to as good a condition as formerly
and in a manner and quality approved by City, and shall exercise reasonable care to maintain
the same thereafter in good condition. Such work shall be performed with diligence and due
care, and if Grantee shall fail to perform the work promptly, to remove all dirt and rubbish
and to put the Street back into the condition required hereby, City shall have the right to give
written notice to Grantee regarding the condition of the Street. Grantee shall have 30 days
from the receipt of written notice from the City to put the Street into the condition required
hereby or reach an agreement with the City. Such work shall be performed with diligence
and due care, and if Grantee shall fail to perform the work promptly, to remove all dirt and
rubbish and to put the Street back into the condition required hereby, the City shall have the
right following 30 days written notice to a Grantee to put the Street back into good condition
at the expense of the Grantee. A Grantee, upon demand, shall pay to the City the cost of
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such work done or performed including its administrative and overhead plus an additional ten
percent as liquidated damages.
C. All wires, conduits, cable and other property and facilities of a Grantee shall
be so located, constructed, installed and maintained as not to endanger or unnecessarily
interfere with the usual and customary trade, traffic and travel upon, or other use of, the
Streets of City. A Grantee shall keep and maintain all of its property in good condition,
order and repair so that the same shall not menace or endanger the life or property of any
person. A Grantee shall keep accurate maps and records of all of its wires, conduits, cables
and other property and facilities located, constructed and maintained in the City.
D. All wires, conduits, cables and other property and facilities of a Grantee, shall
be constructed and installed in an orderly and workmanlike manner. All wires, conduits and
cables shall be installed, where possible, parallel with electric and telephone lines. Multiple
cable configurations shall be arranged in parallel and bundled with due respect for
engineering considerations.
E. A Grantee shall at all times comply with all applicable laws, ordinances, rules,
regulations and codes, federal, state and local. In any event, the installation, operation or
maintenance of System shall not endanger or interfere with the safety of persons or property
in the City.
F. Whenever City shall undertake any public improvement which affects a
Grantee's equipment or facilities, City shall, with due regard to reasonable working
conditions and with reasonable notice, direct a Grantee to remove its wires, conduits, cables
and other property located in Streets. A Grantee shall relocate or protect its wires, conduits,
cables and other property at its own expense. If the City uses its own funds to reimburse
any non-municipally owned utility for relocating its property at the City's request, and if the
City does not receive something of approximately equal value, to which it was not otherwise
entitled, in exchange for such reimbursement, the City will reimburse Grantee in a
substantially similar manner. Notwithstanding anything to the contrary, this requirement
shall not apply where an electric utility has been compensated for relocating its plant
underground through franchise fees collected from the electrical utility and such fees are
dedicated in whole or in part to the undergrounding of electric facilities.
G. To the extent a Grantee plans to construct or rebuild its System, it shall
comply with the following minimum requirements:
(1) A Grantee shall construct underground in any area where both electrical
and telephone has been installed underground.
(2) A Grantee shall change from aerial to underground, at its own expense,
in any area where both electrical and telephone are hereafter changed
from aerial to underground. If the City uses its own funds to
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reimburse any non-municipally owned utility for relocating its property
at the City's request, and if the City does not receive something of
approximately equal value, to which it was not otherwise entitled, in
exchange for such reimbursement, the City will reimburse Grantee in a
substantially similar manner. Notwithstanding anything to the contrary,
this requirement shall not apply where an electric utility has been
compensated for relocating its plant underground through franchise fees
collected from the electrical utility and such fees are dedicated in whole
or in part to the undergrounding of electric facilities.
(3) A Grantee shall change from aerial to underground, when both
electrical and telephone are similarly required, without cost to City,
whenever requested by City, which request can be made for a certain
area or areas or for the entire System. If the City uses its own funds to
reimburse any non-municipally owned utility for relocating its property
at the City's request, and if the City does not receive something of
approximately equal value, to which it was not otherwise entitled, in
exchange for such reimbursement, the City will reimburse Grantee in a
substantially similar manner. Notwithstanding anything to the contrary,
this requirement shall not apply where an electric utility has been
compensated for relocating its plant underground through franchise fees
collected from the electrical utility and such fees are dedicated in whole
or in part to the undergrounding of electric facilities.
(4) To enable a Grantee reasonable opportunity to change its wiring from
aerial to underground, and also to allow it to pre-wire all new
subdivisions or new development areas, City shall arrange for the
Grantee to receive timely notice of a new Franchise granted for Cable
Services, but in no event shall City have any liability for failure to
arrange for notice of the following:
(a) Any changes of which City has knowledge of, or which City
may order, regarding a change from aerial to underground of
any line (telephone or electrical) within its boundaries.
(b) Any underground trenching that may be pending.
(c) New subdivisions and development. All of such subdividers or
developers shall be notified of a Franchise and a System.
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Sec. 9. Work Performed by Others.
A. A Grantee shall give notice to City specifying the names and addresses of any
entity, other than a Grantee, which performs construction services pursuant to a Franchise,
provided, however, that all provisions of a Franchise remain the responsibility of a Grantee.
B. All provisions of a Franchise shall apply to any subcontractor or others
performing any work or services pursuant to the provisions of a Franchise.
Sec. 10. Conditions on Use.
A. A Grantee shall not place poles or other fixtures where the same will interfere
with any gas, electric or telephone fixture, water hydrant or main.
B. A Grantee, at the request of any person holding a building moving permit and
with not less than five business days advance notice, shall temporarily remove, raise or lower
its wires, conduits and cables. The expense of such temporary removal, raising or lowering
of wires, conduits and cables shall be paid by person requesting the same, and Grantee shall
have the authority to require such payment in advance of any required work taking place.
C. A Grantee shall have the authority, to the extent the City has authority to grant
the same, to trim trees upon or overhanging any Street so as to prevent the branches of such
trees from coming in contact with the wires, conduits and cables of a Grantee. All trimming
shall be done under the supervision and direction of City and at the expense of a Grantee.
D. Nothing contained in a Franchise shall relieve any Person from liability arising
out of the failure to exercise reasonable care to avoid injuring a Grantee's facilities while
performing any work connected with grading, regrading or changing the line of any Street or
public place or with the construction or reconstruction of any sewer or water system.
Sec. 11. Use of Grantee's Facilities.
A Grantee is authorized to use Streets to construct, operate and maintain a Cable
Television System and to provide Cable Services in the City. All uses by Grantee or others
authorized by Grantee shall be subject to applicable permits, licenses, certificates or
franchises as may be required by the City, state or federal law or rules.
Sec. 12. Failure to Complete Work.
Upon the failure, refusal or neglect of a Grantee to cause any work or other act
required by law, this Ordinance or a Franchise to be properly completed or performed, after
notice to a Grantee the City may cause work or other activity to be completed or performed,
in whole or in part, to the satisfaction of the City. Upon so doing, the City shall submit to a
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Grantee an itemized statement of the cost thereof. A Grantee shall, within 30 days after
receipt of the statement, pay to the City the entire amount thereof.
Sec. 13. Technical Standards.
A. A Cable System shall be designed, constructed and operated so as to meet
those technical standards promulgated by the Federal Communications Commission relating
to Cable Television Systems contained in part 76 of the Federal Communications
Commission's rules and regulations relating to Cable Television Systems and found in Code
of Federal Regulations, Title 47, Sections 76.601 to 76.630. The City shall be able to
enforce these standards to the extent allowable under local, state or federal law. Any tests
required by the Federal Communications Commission pursuant to these rules must be filed
with the City upon request.
B. A Grantee shall perform additional tests if requested by City. The tests may
be done at such times as is determined by City, with notice to a Grantee. All expenses for
all such tests shall be paid by City, unless otherwise agreed upon.
Sec. 14. Interconnection.
A. A System shall be designed to be interconnected with other adjacent Systems.
At a minimum, a System shall be capable of interconnecting the access channel programming
to other adjacent systems. Grantee shall not be required to provide more access channels as
a result of interconnecting with another system than the number of channels required by the
franchise agreement ordinance.
B. The City may request a Grantee to negotiate interconnecting the Subscriber
Network with other adjacent Systems in the general area. A Grantee shall use its good faith
to negotiate such interconnection and shall keep the City informed of the progress of any
negotiations.
Sec. 15. Removal or Abandonment of A System.
A. In the event that: (1) the use of any System is discontinued for any reason for
a continuous period of 12 months; or (2) any System has been installed in a Street without
complying with the requirements off this Ordinance and a Franchise, a Grantee, at its
expense shall, at the demand of the City remove promptly from the Streets all of a System
other than any which the City may permit to be abandoned in place. In the event of any
such removal Grantee shall promptly restore to a condition as nearly as possible to its prior
condition the Street or other public places in the City from which a System has been
removed.
B. A System to be abandoned in place shall be abandoned in the manner
prescribed by the City. A Grantee may not abandon any portion of a System without having
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first given three months written notice to the City. A Grantee may not abandon any portion
of a System without compensating the City for damages resulting from the abandonment.
C. At the termination or expiration of the term for which a Franchise is granted
and following a denial of renewal, or upon its revocation, as provided for, the City shall
have the right to require a Grantee to remove within two years, at a Grantee's expense, all or
any portion of a System from all Streets within the City. In so removing a System, a
Grantee shall refill and compact at its own expense, any excavation that shall be made and
shall leave all Streets and private property in as good a condition as that prevailing prior to a
Grantee's removal of a System, and without affecting, altering or disturbing in any way
electric, telephone or utility, cables wires or attachments. The City, or its delegation, shall
have the right to inspect and approve the condition of such Streets after removal. The
security fund, insurance, indemnity and penalty provision of a Franchise shall remain in full
force and effect during the entire term of removal. The indemnity and insurance provisions
of this Ordinance in Sections 31 and 33 shall survive any termination or revocation.
D. If a Grantee has failed to complete such removal within the time given after
written notice of the City's demand for removal is given, the City shall have the right to
exercise one of the following options:
(1) Declare all right, title and interest to a System to be in the City or its
designee with all rights of ownership including, but not limited to, the
right to operate a System or transfer a System to another for operation
by it; or
(2) Declare a System abandoned and cause a System, or such part thereof
as the City shall designate, to be removed at no cost to the City. The
cost of said removal shall be recoverable from the security fund,
indemnity and penalty section provided for in the Franchise, or from a
Grantee directly.
E. Upon termination of service to any Subscriber, a Grantee shall promptly
remove all its facilities and equipment from a dwelling of a Subscriber who owns such
dwelling upon his or her written request, except as provided by applicable state and federal
law. Such Subscribers shall be responsible for any costs incurred by a Grantee in removing
the facilities and equipment.
Sec. 16. Customer Service Standards.
A. At all times, a Grantee shall meet the requirements of the Federal
Communications Commission regulations on Consumer Service Obligations. A Grantee shall
comply with the Customer Service Obligations of the Federal Communications Commission
as such standards may from time to time be amended. A copy of the Consumer Service
Obligations is attached hereto as Exhibit A.
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B. A Grantee shall begin actions to correct service or maintenance problems no
later than 24 hours after it is notified of a System outage for 95% of Subscribers. A Grantee
shall bear the costs of making any repairs, adjustments, or installations, unless the Subscriber
caused the damage necessitating the repairs or maintenance. A Grantee may charge for
service.
C. Subscriber Complaints to the City.
(1) Subscribers shall direct all complaints regarding service to a Grantee.
(2) If such complaints are not rectified within seven days from the date the
complaint is made, the Subscriber may file a complaint with the City.
(3) The City shall maintain a record of all complaints it receives.
(4) If, at any time after receipt of a complaint, the City believes that the
complaint may constitute a violation of a Franchise, or local, state or
federal law, the City may notify a Grantee regarding the complaint.
(5) If the City and a Grantee cannot resolve the complaint within seven
days after the date that the Subscriber files a complaint with the City,
the City may issue a written notice specifying the nature of the
complaint and ordering a Grantee to appear at the next regularly
scheduled meeting or other appropriate public forum, as determined by
City.
(6) If the City and Grantee fail to rectify the complaint, the City may begin
default procedures as specified in Section 34.
Sec. 17. Programming Provisions.
A Grantee shall identify its initial services in an Exhibit attached to a franchise
agreement ordinance.
Sec. 18. Subscriber Practices.
A. There shall be no charge for disconnection of any installation or outlet. If any
subscriber fails to pay a properly due monthly subscriber fee, or any other properly due fee
or charge, a Grantee may disconnect the subscriber's service outlet, provided, however, that
such disconnection shall not be effected until after the later of: (i) 45 days after the original
due date of said delinquent fee or charge; or (ii) ten days after delivery to subscriber of
written notice of the intent to disconnect. If a subscriber pays before expiration of the later
of (i) or (ii), a Grantee shall not disconnect. After disconnection, upon payment in full of
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the delinquent fee or charge and the payment of a reconnection charge, a Grantee shall
promptly reinstate the subscriber's cable service.
B. Refunds to subscribers shall be made or determined in the following manner:
(1) If a Grantee fails, upon request by a subscriber, to provide any service
then being offered, a Grantee shall promptly refund all deposits or
advance charges paid for the service in question by said subscriber.
This provision does not alter a Grantee's responsibility to subscribers
under any separate contractual agreement or relieve a Grantee of any
other liability.
(2) If any subscriber terminates any monthly service because of failure of a
Grantee to render the service in accordance with a Franchise, a Grantee
shall refund to such subscriber the proportionate share of the charges
paid by the subscriber for the services not received. This provision
does not relieve a Grantee of liability established in other provisions of
a Franchise.
C. If any subscriber terminates any monthly service prior to the end of a prepaid
period, a proportionate amount of any prepaid subscriber service fee, using the number of
days as a basis, shall be refunded to the subscriber by a Grantee.
D. Continued failure by a Grantee to provide services required by a Franchise
may, in the discretion of City, be cause for imposition of a penalty or termination of a
Franchise.
Sec. 19. Local Office.
Each Franchise shall require that a Grantee maintain a local business office, as
described in a Franchise, or agent, which subscribers may access by telephone 24 hours a
day, seven days a week, without incurring long distance toll charges, so that complaints,
questions or requests regarding the service provided pursuant to a Franchise may be promptly
reported to a Grantee.
Sec. 20. Subscriber Charges.
Current subscriber charges, the length and terms of residential subscriber contracts,
and the procedure by which subscriber charges are established shall be available during
normal business hours for public inspection.
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Sec. 21. Rate Regulation.
The City reserves the right to regulate rates for services offered over the Cable
System, to the extent not expressly preempted by federal and state law. A Grantee shall be
subject to the rate regulation provisions provided for herein, and those of the FCC at 47
C.F.R., Part 76.900, Subpart N.
Sec. 22. Rights of Individuals.
A. Discriminatory Practices Prohibited. In the performance of a Franchise, a
Grantee shall not discriminate against any person on the ground of or because of race, creed,
color, national origin or ancestry, sex, religion, sexual preference, or political opinion or
affiliation or age. A Grantee shall comply at all times with all other applicable federal, state
and City laws, and all executive and administrative orders relating to non-discrimination.
B. Subscriber Privacy.
(1) No signals, including signals of a Class IV Channel, shall be
transmitted from a subscriber terminal except as required to provide a
service authorized by a Franchise and the Subscriber. A Grantee and
any other Person shall neither initiate nor use any procedure or device
for procuring or storing information or data from a subscriber's
terminals or terminal by any means, without the prior authorization of
the affected Subscriber which shall not have been obtained from the
Subscriber as a condition of service. The request for such authorization
shall be contained in a separate document and identify the purpose for
which the data or information is being gathered or stored. After the
first year of the authorization's initial signing, a Grantee shall, for each
year said authorization is in effect without revocation, mail a notice to
each authorizing Subscriber informing him or her of the right to revoke
said authorization. The authorization shall be revocable at any time by
the Subscriber without penalty of any kind whatsoever. A separate
authorization shall be required for'each type or classification of data or
information sought from a Subscriber terminal.
(2) A Grantee shall not, without the written authorization of the affected
Subscriber, provide to anyone data identifying or designating any
Subscriber other than where that third-party is performing a service or
task in furtherance of the Grantee's business including, but not
necessarily limited to, billing or telemarketing functions. Any data
authorized shall be made available upon request by and without charge
to the authorizing subscriber in understandable fashion, including
specification of the purpose for which the information is being gathered
and to whom and for what fee the information is to be sold.
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C. A Grantee shall not tap or monitor, arrange for the tapping or monitoring, or
permit any other person to tap or monitor, any cable, line, signal input device,
or Subscriber outlet or receiver for any purpose whatsoever, without the prior
written authorization of the affected Subscriber as required by paragraph B of
this section.
D. Nothing herein contained shall prohibit a Grantee from verifying System
operation and the transmission of signals to an affected subscriber or from
monitoring for the purpose of billing.
Sec. 23. Public, Educational and Governmental Access.
Each Franchise shall include a requirement for public, educational and governmental
access programming and facilities consistent with state and federal law.
Sec. 24. Grantee Records and Books.
A. Throughout the term of a Franchise, a Grantee shall maintain books and
records in accordance with normal and accepted bookkeeping and accounting practices for
the Cable Communications industry, and allow for inspection of them at reasonable times at
its designated office where necessary to enforcement of a Franchise. The books and records
to be maintained by a Grantee shall include the following:
(1) A record of all requests for service;
(2) A record of all subscriber or other complaints, and the action taken;
(3) A file of all subscriber contracts;
(4) Grantee policies, procedures and company rules; and
(5) Financial records.
B. A Grantee shall file with City, at the time of its annual payment of a Franchise
Fee, as described in a Franchise, the following:
(1) A copy of the most recent performance review for a Grantee utilizing
the Annual Performance Review Form attached hereto as Exhibit B.
(2) A statement certified by an officer of Grantee showing, in such detail
as acceptable to City, the gross revenues of a Grantee for the preceding
fiscal year.
(3) Current list of names and addresses of each officer and director and
other management personnel, and if a corporation, each shareholder
having stock ownership of three percent or more, and if a partnership,
all general partners, and if a general partner is a corporation, the
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foregoing information shall be given as to the corporate general
partner.
(4) If requested by City, a copy of each document filed with all federal,
state and local agencies during the preceding fiscal year not previously
filed with City.
(5) A statement of its current billing practices.
(6) A current copy of its rules governing use of equipment and facilities
and public, educational and government access and leased access
programming.
( ) A current copy of its subscriber service contract.
(8) A copy of any subscriber surveys conducted during the last calendar
year.
C. City, its agents and representatives shall have authority where necessary to
enforcement of a Franchise to arrange for and conduct an inspection or audit of the books
and records of a Grantee. A Grantee shall first be given five days notice of the inspection or
audit request, the description of and purpose for the inspection or audit, and description, to
the best of City's ability, of the books, records and documents it wants to review.
Sec. 25. Transfer of Ownership.
A. A Franchise shall not be assigned or transferred, either in whole or in part, or
leased, sublet or mortgaged in any manner, nor shall title thereto, either legal
or equitable or any right, interest or property therein, pass to or vest in any
person other than an Affiliate of Grantee without the prior written consent of
City, which consent shall not be unreasonably withheld. Further, Grantee
shall not sell or transfer any stock or ownership interest so as to create a new
controlling interest except with the consent of City, which consent shall not be
unreasonably withheld.
B. Any sale or transfer of Franchise, including a sale or transfer by means of a
fundamental corporate change, requires the written approval of City. The
parties to the sale or transfer of Franchise shall make a written request to City
for its consent. City shall reply in writing within 30 days of actual receipt of
the request and shall indicate its approval of the request or its determination
that a public hearing is necessary. City shall conduct a public hearing on the
request within 30 days of such determination if it determines that a sale or
transfer of Franchise may adversely affect the Grantee's subscribers.
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C. Unless otherwise already provided for by local law, notice of any such hearing
shall be given 14 days prior to the hearing by publishing notice thereof once in
a newspaper of general circulation in the City. The notice shall contain the
date, time and place of the hearing and shall briefly state the substance of the
action to be considered by City. Within 30 days after the public hearing, City
shall approve or deny in writing the sale or transfer request.
D. In a sale or transfer of only a Franchise, without the inclusion of the System in
which at least substantial initial construction has commenced, a Grantee shall
be required to establish to the sole satisfaction of City that the sale or transfer
of a Franchise is in the public interest.
E. For purposes of this section, fundamental corporate change means the sale or
transfer of a controlling interest in the stock of a corporation or the sale or
transfer of all or a majority of a corporation's assets, merger (including a
parent and its subsidiary corporation), consolidation or creation of a subsidiary
corporation. For the purposes of this Section, fundamental partnership change
means the sale or transfer of all or a majority of a partnership's assets, change
of a general partner in a limited partnership, change from a limited to a
general partnership, incorporation of a partnership, or change in the control of
a partnership.
F. The word "control", as used herein, shall apply to the sale or transfer of all or
a majority of Grantee's assets or shares of stock, merger (including any parent
and its subsidiary corporation), consolidation, creation of a subsidiary
corporation of the parent company, or sale or transfer of stock in Grantee so
as to create a new controlling interest. The term "controlling interest" as used
herein is not limited to majority stock ownership, but includes actual working
control in whatever manner exercised, including the creation or transfer of
decision-making authority to a new or different board of directors. Every
change, transfer or acquisition of control of a Grantee shall make the
Franchise subject to cancellation unless and until City shall have consented in
writing thereto, which consent shall not be unreasonably withheld. For the
purpose of determining whether it shall consent to such change, transfer or
acquisition of control, City may inquire into the qualifications of the
prospective controlling party. The City reserves the right to seek
reimbursement of its costs for conducting an inquiry to the extent permitted by
applicable state and federal law. The preceding statement does not constitute
an agreement by any party to reimburse the City.
G. In no event shall a transfer or assignment of ownership or control be approved
without transferee becoming a signatory to a Franchise.
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H. Any transferee of a Franchise shall be subordinate to any right, title or interest
of City.
I. For information on the right of the City to purchase the cable system during a
transfer of ownership, see Section 26.
J. Notwithstanding anything to the contrary, no such consent or approval shall be
required for a transfer or assignment to any Person controlling, controlled by
or under the same common control as the Grantee.
Sec. 26. Right to Purchase.
A. Transfer of Ownership.
If at any time a Grantee receives a bona fide purchase offer for an asset sale of
a System which a Grantee is willing to accept, a complete copy of such offer
shall promptly be given to City and City shall have the right to purchase a
System according to the terms of that offer. City shall exercise such right by
submitting to a Grantee, within 60 days after City's actual receipt of the bona
fide offer, notice that City desires to purchase a System pursuant to said offer.
If City does not exercise such right a System may be sold, but only on terms
substantially similar to those terms submitted to City. If any substantive
changes are made in the purchase offer given to City, such purchase offer, as
so changed, shall again be given to City and City shall have 60 days from
actual receipt by City of the offer, as changed, within which to exercise its
right to purchase a System pursuant to the offer, as changed, all as above
provided. If City does not exercise its right to purchase a System pursuant to
any offer given to City pursuant to this paragraph, and a System is not sold to
the buyer and on the terms set out in the offer given to City, then the right of
City to purchase a System shall continue, and all subsequent purchase offers
shall be given to City pursuant to this paragraph. Also, the City's right to
purchase pursuant to this paragraph shall survive every sale to a buyer and
shall continue and be binding upon every buyer of the System.
B. Upon Forfeiture, Revocation or Expiration
(1) Upon forfeiture, revocation or termination of a Franchise, or at the
normal expiration and denial of any renewal of a Franchise term, City
shall have the right to purchase the System. Such right shall be
exercised upon written notice to Grantee given within 120 days after
the occurrence of any such event.
(2) In the event City elects to exercise its right to purchase the System as
provided in this Paragraph B, the following shall then apply:
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(a) If a Franchise expires and the renewal of the Franchise is denied
and the City acquires ownership of the Cable System or effects
a transfer of ownership of the System to another Person, any
such acquisition or transfer shall be at fair market value,
determined on the basis of the Cable System valued as a going
concern but with no value allocated to the Franchise itself, or
(b) If a Franchise held by a Grantee is revoked for cause and the
City acquires ownership of the Cable System or effects a
transfer of ownership of the System to another Person, any such
acquisition or transfer shall be at an equitable price.
(c) A Grantee expressly waives its rights, if any, to relocation costs
that might otherwise be provided by law.
(d) The date of valuation shall be no earlier than the day following
the date of revocation, forfeiture, expiration or termination of a
Franchise and no later than the date City makes a written offer
for a System.
Sec. 27. Mediation.
It either a Grantee or City asserts that the other is in default in the performance of
any obligation of a Franchise or in the event of a dispute relating to a right to purchase or
terms and conditions of it as described in Section 26 of this Ordinance, the complaining party
shall notify the other of the default or claim and the desired remedy. The notification shall
be written. Representatives of City and a Grantee must promptly meet and attempt in good
faith to negotiate a resolution. If the dispute is not resolved within 30 days of the written
notice, the City and a Grantee may jointly select a mediator to facilitate further discussion.
The City and a Grantee will equally share the fees and expenses of this mediator. If a
mediator is not used, or if the City and a Grantee are unable to resolve the matter within 30
days after first meeting with the selected mediator, either may commence an action in any
"court of competent jurisdiction in Minnesota to interpret and enforce a Franchise or for such
other relief as may be permitted by law or equity, or either Grantee or City may take any
other action permitted by law.
Sec. 28. Special Provisions.
A. As permitted by state and federal law, and specified in a Franchise Agreement
Ordinance, each Franchise may require a Grantee to provide facilities and services to public
schools and community colleges within the City, and to fire and police stations and other
buildings owned and controlled by the City used for public non-residential purposes.
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B. System Maps and Layout - A Grantee shall have, at all times, up-to-date route
maps showing the location of the Cable Communications System adjacent to the Streets. A
Grantee shall make all maps available for review by the appropriate City personnel.
C. System Construction and Equipment Standards - The Cable Communications
System shall be installed and maintained in accordance with standard good engineering
practices and shall conform, when applicable, with the National Electrical Safety Code and
the FCC's Rules and Regulations.
Sec. 29. Franchise Fee.
A. As permitted by state and federal law, a Grantee may be required to pay to the
City a Franchise Fee as set forth in a Franchise, in compensation for the use of the City's
Streets pursuant to a Franchise.
B. If a Franchise requires payment of a Franchise Fee, each such Franchise shall
authorize the City to audit a Grantee's financial records and accountings relating to a
Franchise Fee. A Grantee shall make available at its local business office, upon reasonable
request, such data as needed to conduct such audit in accordance with generally accepted
accounting principles.
C. The City and its representatives shall have the right to inspect a Grantee's
financial records during normal business hours to determine whether a Grantee has properly
paid all sums due to the City pursuant to the terms of a Franchise.
D. Any neglect, omission or refusal of a Grantee to cooperate with the City in
reviewing its financial information for the purpose of auditing payment of a Franchise Fee,
or to pay a Grantee fee in full, at the time and in the manner provided in the Franchise,
which neglect, omission or refusal shall continue for more than 30 days following written
notice thereof to a Grantee from the City, shall be grounds for default of a Franchise as
provided for in Section 34 hereof.
Sec. 30. Liability.
A. A Grantee shall pay all damages and penalties which the City may legally be
required to pay as a result of granting a Grantee's Franchise.
B. A Grantee shall pay all expenses incurred by the City in defending itself with
regard to all damages and penalties mentioned above. The expenses shall include all costs,
such as attorney's fees.
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Sec. 31. Indemnification.
A. Grantee shall indemnify, defend, and hold harmless the City for all damages
and penalties, at all times during the term of this Franchise, as a result of the procedures for
granting this Franchise, the granting of this Franchise, or Grantee's conduct or performance
under this Franchise. These damages and penalties shall include, but shall not be limited to,
damages arising out of Personal injury, property damage, copyright infringement,
defamation, antitrust, errors and omission, theft, fire, and all other damages arising out of
Grantee's exercise of this Franchise, whether or not any act or omission complained of is
authorized, allowed or prohibited by this Franchise.
B. In order for the City to assert its rights to be indemnified, defended, or held
harmless, the City must:
(1) Notify Grantee of any claim or legal proceeding which gives rise to
such right;
(2) Afford Grantee the opportunity to participate in and fully control any
compromise, settlement or other resolution or disposition of such claim or proceeding,
unless, however, the City, in its sole discretion, determines that its interests cannot be
represented in good faith by Grantee; and
(3) Fully cooperate with the reasonable requests of Grantee in its
participation in, and control, compromise, settlement or resolution or other disposition of
such claim or proceeding subject to paragraph (2) above.
(4) Act reasonably under all circumstances so as to protect the indemnitor
against liability and refrain from compromising any of indemnitor's rights.
C. In the event the City, in its sole discretion, determines that its interests cannot
be represented in good faith by Grantee, Grantee shall pay, upon receipt of written demand
from City, all reasonable expenses incurred by the City in defending itself with regard to all
damages and penalties mentioned in paragraph A above. These expenses shall include, but
not be limited to, all out-of-pocket expenses, such as attorney's fees and costs and the
reasonable value of services (as determined by City, rendered by City or any employees,
agents or representatives of City; provided, however, the attorney fees shall not exceed (on
an hourly basis) those customarily charged for similar work in the Twin Cities Metropolitan
area of Minnesota. City reserves the right to cooperate with a Grantee and participate in the
defense of any litigation either through intervention or otherwise.
Sec. 32. Security Funds.
A. The City may require a Grantee to file with the City Clerk, concurrently with
its acceptance of a Franchise and at a Grantee's sole expense, a corporate surety bond,
589627
Franchise ordinance
December 3,1996-Page 24
construction bond or letter of credit. Such bond or letter of credit shall be in an amount
specified in the Franchise Agreement Ordinance, issued by a responsible company licensed to
do business in Minnesota and conditioned upon the faithful performance of the Grantee to
meet its obligations under this Ordinance and the Franchise Agreement Ordinance. The bond
or letter of credit may be reduced at the sole discretion of the franchising authority.
B. The provisions of this Section shall not be construed to excuse unfaithful
performance by a Grantee or limit the liability of a Franchise under this Ordinance or a
Franchise for damages.
Sec. 33. Insurance.
A. A Grantee shall maintain liability insurance covering its obligations of
indemnification provided for in or as a result of the exercise of a Franchise covering both the
City and a Grantee (and shall maintain said insurance during the entire term of a Franchise)
in the minimum amount of-
(1) $500,000 for property damage to any one person;
(2) $2,000,000 for property damage in any one act or occurrence;
(3) $1,000,000 for personal injury to any one person; and
(4) $2,000,000 for personal injury in any one act or occurrence.
B. During the term of this Franchise, the Grantee shall maintain insurance, as
required by paragraph (A) above, issued by a carrier or carriers with an A.M. Best rating of
"A-" or better. The Grantee shall maintain on file with the City certificates of insurance
together with written evidence of payment of required premiums throughout the term of this
Franchise. The above minimum amounts may be changed from time to time by Grantee as
requested by the City; provided, however, the Grantee shall not be required to provide
insurance in excess of what is customarily provided by other cable television operators in the
Twin Cities Metropolitan area.
C. A Grantee shall immediately give notice to City of any threatened or pending
litigation likely to affect this insurance.
D. Neither the provisions of this section nor any damages recovered by City shall
be construed to, or shall, excuse unfaithful performance by a Grantee or limit the liability of
a Grantee.
E. No recovery by City of any sum by reason of the Letter of Credit or Bond
required in a Franchise shall be any limitation upon the liability of a Grantee to City under
the terms of this section, except that the sum so received by City from such Letter of Credit
or Bond shall be deducted from a recovery under this section, if for the same act or
occurrence.
599627
Franchise Ordinance
Domnber 3,1996-Page 25
F. All insurance policies maintained pursuant to a Franchise shall contain the
following endorsement:
It is hereby understood and agreed that this insurance policy may not be
cancelled nor the intention not to renew be stated until 30 days after receipt by
the City, by registered mail, of written notice of such intention to cancel or
not to renew.
G. A Grantee shall provide worker's compensation insurance as required by state
law.
H. All such insurance coverage shall provide a 30 day notice to the City Manager
in the event of material alteration or cancellation of any coverage afforded in said policies
prior to the date said material alteration or cancellation shall become effective.
Sec. 34. Default.
A. City shall give written notice of default to a Grantee if City, in its sole
discretion, determines that a Grantee has:
(1) Violated any provision of a Franchise or the acceptance hereof, or any
rule, order, regulation or determination of the City, state or federal
government, not in conflict with a Franchise;
(2) Attempted to evade any provision of a Franchise or the acceptance
hereof;
(3) Practiced any fraud or deceit upon City or subscribers;
(4) Made a material misrepresentation of fact in the application for or
negotiation of a Franchise; or
(5) Incurred a 12 month or more delay in the construction schedule.
B. If a Grantee fails to cure such default within 30 days after the giving of such
notice (or if such default is of such a character as to require more than 30 days within which
to cure the same, and a Grantee fails to commence to cure the same within said 30 day
period and thereafter fails to use reasonable diligence, in City's sole opinion, to cure such
default as soon as possible), then, and in any event, such default shall be a substantial breach
and City may elect to terminate the Franchise. The City may place the issue of revocation
and termination of a Franchise before the governing body of City at a regular meeting. If
City decides there is cause or reason to terminate, the following procedure shall be followed:
598627
Frmchise Ordinance
December 3,1996-Page 26
(1) City shall provide a Grantee with a written notice of the reason or
cause for proposed termination and shall allow a Grantee a minimum of
30 days subsequent to receipt of the notice in which to correct the
default.
(2) A Grantee shall be provided with an opportunity to be heard at a public
hearing prior to any decision to terminate a Franchise.
(3) If, after notice is given and an opportunity to cure, at a Grantee's
option, a public hearing is held, and the City determines there was a
violation, breach, failure, refusal or neglect, the City may declare by
resolution the franchise revoked and of no further force and effect
unless there is compliance within such period as the City may fix, such
period may not be less than 30 days provided no opportunity for
compliance need be granted for fraud or misrepresentation.
Sec. 35. Continuity of Service.
A. It shall be the right of all Subscribers to continue receiving services insofar as
their financial and other obligations to a Grantee are honored. In the event that a Grantee
elects to rebuild, modify or sell the System, or the City gives notice of intent to terminate or
fails to renew a Franchise, a Grantee shall act so as to insure that all Subscribers receive
reliable service.
B. In the event of a change of a Grantee, or in the event a new operator acquires
a System, a Grantee shall cooperate with the City's new Grantee or operator in maintaining
continuity of service to all Subscribers. During such period, a Grantee shall be entitled to
the revenues for any period during which it operates a System and shall be entitled to
reasonable cost for its services when it no longer operates the System.
C. In the event a Grantee fails to operate the System for three consecutive days
without approval of the City or without just cause, the City may, at its option, operate the
System or designate an operator until such time as a Grantee restores service under
conditions acceptable to the City or a permanent operator is selected. This section shall not
apply if the cable operator is unable to operate the system due to Force Majeure as defined in
Section 38. If the City is required to fulfill this obligation for a Grantee, a Grantee shall
reimburse the City for all reasonable cost or damages in excess of revenue from the System
received by the City that are a result of a Grantee's failure to perform.
D. A Grantee shall not allow its cable or other operations to interfere with the
television reception of Persons not served by a Grantee, nor shall a System interfere with,
obstruct or hinder in any manner, the operation of the various utilities serving the residents
of the City, as the facilities of such utilities exist at the time of construction or extension of a
Grantee's System.
599627
Franchise Ordinance
December 3,1996-Page 27
Sec. 36. Foreclosure and Receivership.
A. Foreclosure. Upon the foreclosure or other judicial sale of a System, a
Grantee shall notify the City of such fact and such notification shall be treated
as a notification that a change in control of a Grantee has taken place, and the
provisions of a Franchise governing the consent to transfer or change in
ownership shall apply without regard to how such transfer or change in
ownership occurred.
B. Receivership. The City shall have the right to cancel a Franchise subject to
any applicable provisions of state law, including the Bankruptcy Act, 120 days
after the appointment of a receiver or trustee to take over and conduct the
business of a Grantee, whether in receivership, reorganization, bankruptcy or
other action or proceeding, unless such receivership or trusteeship shall have
been vacated prior to the expiration of said 120 days, or unless:
(1) Within 120 days after his election or appointment, such receiver or
trustee shall have fully complied with all the provisions of a Franchise
and remedied all defaults thereunder; and,
(2) Such receiver or trustee, within said 120 days, shall have executed an
agreement, duly approved by the Court having jurisdiction in the
premises, whereby such receiver or trustee assumes and agrees to be
bound by each and every provision of a Franchise.
Sec. 37. Compliance with Laws, Rules and Regulations.
Any of the provisions or terms of this Ordinance may be amended by the City in
order to be made consistent with any new or amended local, state or federal law, rule, or
regulation of governmental authorities with jurisdiction to regulate Cable Communications
Systems. The City and a Grantee shall conform to federal and state laws and regulations as
soon as they become effective. Where amendment to laws, rules or other regulatory
standards requires modification of any Franchise granted pursuant to this Ordinance, the
modifications necessary to effect compliance with such laws, rules or regulations shall be
made within one year of the effective date of such change, or at the time of renewal of a
Franchise, whichever occurs first.
Sec. 38. Force Majeure.
A. In the event a Grantee's performance of any of the terms, conditions or
obligations required by this Ordinance or a Franchise granted hereunder is prevented by a
cause or event not within a Grantee's control, such inability to perform shall be deemed
excused and no penalties or sanctions shall be imposed as a result thereof.
588627
Franchiw Ordinance
December 3,1996-Page 29
B. For the purpose of this section, causes or events not within the control of a
Grantee shall include but not be limited to acts of God, strikes, sabotage, riots or civil
disturbances, restraints imposed by order of a governmental agency or court, failure or loss
of utilities, explosions, acts of public enemies and natural disasters such as floods,
earthquakes, storms, landslides, and fires.
Sec. 39. Severability.
A. This Ordinance shall be construed in a manner consistent with all applicable
federal and Minnesota laws.
B. If any section, subsection, sentence, clause, phrase or portion of this
Ordinance or any Franchise granted hereunder is for any reason held illegal, invalid or
unconstitutional by the decision of any court of competent jurisdiction, such portion shall be
deemed a separate, distinct and independent provision, and such holding shall not affect the
validity of the remaining portion's hereof or thereof.
Sec. 40. Effective Date.
This Cable Regulatory Ordinance shall become effective on January 1, 1997 and
simultaneously Ordinance No. , also known as the Cable Communications Ordinance,
and Ordinance No. , also know as the Local Programming Restructuring Ordinance,
shall be repealed, provided that the current Grantee under the Cable Communications
Ordinance has executed a Franchise Agreement Ordinance in compliance with this Ordinance
before December 25, 1996. If the current Grantee under the Cable Communications
Ordinance has not executed a Franchise Agreement Ordinance pursuant to this Ordinance by
, this Cable Regulatory Ordinance becomes null and void, and the
existing Cable Communications Ordinance remains in force.
Sec. 41. Certification and Publication.
The City Clerk shall certify to the passage of this Ordinance and shall cause the same
to be printed in accordance with the requirements of the City and state law.
PASSED, ADOPTED AND APPROVED by the Mayor and Council of the City of
Minnesota, this day of , 1996.
Mayor
ATTEST:
City Clerk
589627
Franchise ordinance
December 3,1996-Page 29
EXHIBIT A
FEDERAL COMMUNICATIONS COMIVIISSION
CUSTOMER SERVICE OBLIGATIONS
589627
Franchise ordinance
December 3,1996-Page 30
EXHIBIT B
ANNUAL PERFORMANCE REVIEW
Check Where
Applicable
1. RATES AND CHARGES
No change
Changed
Notices sent to City and subscriber
Changes in rates and costs identified by attachment
Change "reasonable" and consistent with the standards
prescribed by the FCC
Other (describe in attachment)
2. PROGRAMS AND SERVICES
No change in programs and services
New programs and services added
Identify new programs and services
Other (describe in attachment)
3. CUSTOMER SERVICE
Customer service requirements complied with
Periodic subscriber satisfaction survey performed
Results of subscriber satisfaction survey with comment
on meeting needs identified (attached)
589627
Franchise ordinance
December 3,1996-Page 31
4. FILINGS WITH FCC
Summary of all filings with FCC described in attachment
5. PERFORMANCE TEST IN FRANCHISE COMPLETED
Summary of performance test results (attached)
6. FRANCHISE FEE PAYMENTS MADE WITH REVENUE SOURCES
IDENTIFIED (SUPYIMARY ATTACHED)
7. COMPLETION OF CONSTRUCTION
Upgrade/rebuild (summary attached)
New technologies incorporated into system
Channel capacity increased
Service extended to new areas
Other
8. NEW SERVICES
No Changes
Services other than programming made available in the subscriber
network (summary attached)
9. TERMS AND CONDITIONS IN THE FRANCHISE
HAVE BEEN COMPLIED WITH
Summary attached of outlining incomplete matters requiring
action by Company
Company participated in planning studied and Cable Advisory
Committee activities (summary attached)
588627
Franchise Ordinance
December 3,1996-Page 32
All insurance, bonds and deposits are updated and filed with City
Duplication of materials already filed with the City is not required with this filing.
Dated this day of , 19_ by
Officer of Cable Company
City of Verification:
The above Annual Performance Review has been filed by
as required. The Office of Administrative Services for the City of has reviewed
the information and finds that the filing is complete /is not complete
The following matters are deemed incomplete and require further information and/of
compliance by
THE CITY OF
By:
Dated this day of , 19_.
589627
Franchise Ordinance
December 3,1996-Page 33
k
Cable Television
Franchise Agreement Ordinance
Prepared by:
Adrian E. Herbst, Esq.
Theresa M. Harris, Esq.
Fredrikson&Byron, P.A.
1100 International Centre
900 Second Avenue South
Minneapolis,MN 55402
Telephone: (612)347-7000
Fax: (612)347-7077
With the assistance of:
The Southwest Suburban
Cable Commission
TABLE OF CONTENTS
Page
SECTION 1. RENEWAL OF GRANT OF FRANCHISE . . . . . . . . . . . . . . . . . . . 2
SECTION 2. SHORT TITLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 3. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 4. EFFECTIVE DATE AND TERM OF RENEWAL . . . . . . . . . . . . . . 2
SECTION 5. WRITTEN NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 6. DESIGN PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
6.1 System Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
6.2 Cable Nodes System Connect . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
6.3 Service to the Schools and Government Buildings . . . . . . . . . . . . . . . . 3
6.4 Parental Control Lock . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . 4
6.5 Standby Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6.6 Periodic Review Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6.7 Shared Use of Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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 . . . . . . . . . . . . . . . . . . 8
SECTION 8. PERIODIC CUSTOMER SURVEYS . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 9. LINE EXTENSION POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 10. GENERAL- FINANCIAL AND INSURANCE PROVISIONS . . . . . . . 9
10.1 Payment to City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
10.2 Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
10.3 Security Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 11. SOCIAL CONTRACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 12. COMPETITION ADJUSTMENT . . . . . . . . . . . . . . . . . . . . . . . . . 14
589638
Franchise Agreement Ordinance
December 3,1996-Page i
SECTION 13. ACCEPTANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
13.1 Other Franchises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
13.2 Time of Acceptance: Incorporation of
Offering: Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
EXHIBITS
Exhibit A - Franchise Fee Payment Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Exhibit B - Time Warner Social Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Exhibit C - Paragon Cable Initial Programming . . . . . . . . . . . . . . . . . . . . . . . . . 22
588638
Franchise Agreement Ordinance
December 3,1996-Page ii
FRANCHISE AGREEMENT ORDINANCE
This Agreement, madp and entered into this ��;tynicip�c_
of 19_, by
and between the City of , a oration of the State
of Minnesota, and KBL Cable Systems of the Southwest Inc., a wholly-owned subsidiary of
Time Warner Inc.
WITNESSETH
WHEREAS, KBL Cable Systems of the Southwest Inc. has operate" Cable System in
the City of . .-E, - ,pursuant to Ordinance No. , also known as the
Cable Communications Ordinance, which expires on December 31, 1999; and
WHEREAS, KBL Cable Systems of the Southwest Inc. has requested an early renewal
of its Franchise because KBL Cable Systems of the Southwest Inc. intends to rebuild its System
to a modern state of the art design as described herein and at substantial cost; and
WHEREAS, KBL Cable Systems of the Southwest Inc. and the City of
2AL.A Lek , based on City's understanding the rebuilt System will provide
considerable new service capabilities and economic benefit opportunities to its institutions,
residents and businesses, have agreed to enter into an early renewal of the Franchise; and
WHEREAS, the City of Qom , will repeal Ordinance No.
IIaU , also known as the Cable Communications Ordinance, including amendments and
agreements relating to it beginning with the effective date of this Agreement Ordinance, and
enact Ordinance No. I 6 , also known as the Cable Regulatory Ordinance, through which the
City is authorized to grant and renew 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 KBL
Cable Systems of the Southwest Inc. and after a properly noticed public hearing, has determined
that it is in the best interest of the City and its residents to renew its Franchise with KBL Cable
Systems of the Southwest Inc.
NOW, THEREFORE, the City of ?AKJ*"G— (hereinafter also
known as the "City" or "Grantor") hereby grants to KBL Cable Systems of the Southwest Inc.
(hereinafter the "Grantee") renewal of its cable television Franchise in accordance with the
provisions of Ordinance No. and this Agreement.
58963E
Panchim Agreement ORIb m"
December 3,1996-Page 1
SECTION 1. RENEWAL OF GRANT OF FRANCHISE
The cable television Franchise granted through Ordinance Number /1 -6 on the -)9 day
of , 19 $ b and now held by Grantee is renewed. Ordinance Number a 0
that granted the original franchise is repealed and replaced by the Cable Regulatory Ordinance,
Ordinance Number -q( -4 and this Franchise Agreement Ordinance 'his Franchise shall be
subject to the terms and conditions of this Franchise Agreement Ordinance and shall be
subordinate to the Cable Regulatory Ordinance and all applicable federal, state and local law.
SECTION 2. SHORT TITLE
This Agreement shall be known and cited as the "City of <<J ,
, Cable
Television Franchise Agreement Ordinance." Within this document it shall also be referred to
as "this Franchise" or "the Franchise."
SECTION 3. DEFIMTIONS
The definitions contained in Ordinance Number of the City of
e + are incorporated herein by reference and adopted as fully as if
set out verbatim.
SECTION 4. EFFECTIVE DATE AND TERM OF RENEWAL
This Franchise shall commence on the effective date described in Section 13 and shall expire 15
years thereafter.
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:
If to Grantee: KBL Cable Systems of the Southwest Inc. d/b/a Paragon Cable Company
801 Plymouth Avenue N.
Minneapolis, MN 55411
Such addresses may be changed by either party upon notice to the other party given as provided
in this section.
589638
Franchise Agreement Ordinance
December 3,1996-Page 2
SECTION 6. DESIGN PROVISIONS.
6.1 System Design.
Grantee agrees to upgrade its System to a capacity of 750 MHz which is the
equivalent of 112 6 MHz analog video channels. However, Grantee will initially
use the 54 MHz-550 MHz section of the System to deliver analog signals and
reserve the 550 MHz to 750 MHz section for future applications. Stated in terms
of 6 MHz analog channels the 54 MHz to 550 MHz of the System has capacity
for 79 channels. The upgraded System shall have the technical capacity for non-
voice return communications which means the provision of appropriate system
design techniques with the installation of cable and amplifiers suitable for the
subsequent insertion of necessary non-voice communications electronic modules.
Such upgrade shall be completed and in use by December 31, 1999.
6.2 Cable Nodes System Connect.
Grantee will locate its "nodes" near schools where possible, without in Grantee's
opinion, comprising the engineering design of the System. The City will provide
maps showing the location of the schools.
6.3 Service to the Schools and Government Buildings.
A. Service to Pubic Schools and Public Buildings
1. The Grantee shall continue to provide one outlet of Basic Service,
the Cable Programming Service Tier and one Converter, if needed,
to those facilities presently served. 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.
589638
Franchise Agreement Ordinance
December 3,1996-Page 3
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 shall be provided
for free to such private schools through the year 2000.
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 continue to provide standby power throughout the System now and
as rebuilt 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 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:
589639
Franchise Agreement Onkunce
December 3,1996-Page 4
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.
SECTION 7. PUBLIC EDUCATIONAL AND GOVERNMENTAL ACCESS
PROGRANMNG.
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
588638
Franchise Agreement Ordinance
December 3,1996-Page 5
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
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. Subject to a transition plan that shall be filed with the City before the City
executes this Agreement and that shall be updated annually until the
transition is complete, Grantee will provide one large facility containing
one studio with the current square footage of 1440 square feet in the Eden
Prairie studio for public, educational and governmental access production
which will be located in Eden Prairie. 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 meet the current hours of Monday through
Friday 10:00 a.m. to 6:00 p.m. and by appointment on evenings and
weekends. The facility shall also add 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
588638
Franchise Agreement Ordinance
December 3,1996-Page 6
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.
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.
In the first year after the effective date of this Franchise, 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, non-commercial, non-profit 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.
588638
Franchise Agreement Ordinance
December 3,1996-Page 7
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
Grantee at any time when not carrying live or taped government access
programming.
SECTION 8. PERIODIC CUSTOMER SURVEYS
8.1 The Grantee shall upon request of the City and at times mutually agreed upon by
the parties, but no more frequent 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;
8.2 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.
8.3 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.
8.4 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.
588638
Franchise Agreement Ordinance
December 3,1996-Page 8
SECTION 9. LINE EXTENSION POLICY.
9.1 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.
9.2 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
whom permission is required that the Grantee shall be under no obligation to
extend service.
SECTION 10. GENERAL FINANCIAL AND INSURANCE PROVISIONS.
10.1 Payment to CitX.
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%.
10.2 Bonds.
A. At the commencement of this Franchise, and at all times thereafter until
Grantee has completed the System Upgrade 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
589638
Franchise Agreement Ordinmce
December 3,1996-Fage 9
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 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 Upgrade 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.
10.3 Security Fund.
A. In the event the Grantee is given notice of a non-compliance 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 non-compliance. 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
588638
Franchise Agreement Ordinance
December 3,1996-Page 10
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 Franchise, 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
Grantee's upgrade plan, 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
598639
Franchise Agreement Ordmmce
December 3,1996-Page 11
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.
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 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.
588638
Franchise Agreemed.Ordinance
December 3.1996-Page 12
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.
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 11. SOCIAL CONTRACT.
The Social Contract between Grantee and the Federal Communications Commission is attached
hereto as Exhibit B. It is expressly understood by the City and the Grantee that the Social
Contract is made a part hereof for informational purposes only. Inclusion of the Social Contract
by reference is not intended to nor shall it create any right of the City to enforce any provisions
of the Social Contract directly or indirectly under the terms of this Franchise. The parties
expressly acknowledge and understand that the Social Contract and the obligations contained
therein are enforceable exclusively by the FCC as more fully set forth in the Social Contract.
588638
Franchise Agreement Ordinance
December 3,1996-Page 13
SECTION 12. COMPETITION ADJUSTMENT.
12.1 In consideration of Grantee's substantial investment estimated at $20 million
dollars to rebuild its System at an early date for the Cities of Eden Prairie, Edina,
Minnetonka, Hopkins and Richfield, MN, the City agrees to include the following
provisions.
12.2 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.
12.3 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 Master Antenna Television system located wholly on private
property within a building.
12.4 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
588638
Franchise Agreement Ordinance
December 3,1996-Page 14
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:
(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.
588638
Franchise Agreement Ordinance
December 3,1996-Page 15
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.
(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
598638
Franchise Agreement Ordinance
December 3,1996-Page 16
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, Hopkin,
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.
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.
12.5 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.
599639
Franchise Agreement Ordinance
December 3,1996-Page 17
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.
12.6 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 parry,
the parties may agree to enter mediation.
SECTION 13. ACCEPTANCE.
13.1 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.
13.2 Time of Acceptance: Incorporation of
Offering; Exhibits.
A. Grantee shall accept this Franchise in form and substance acceptable to
City by December 25, 1996. Such acceptance by Grantee shall be deemed
the grant of this Franchise for all purposes.
B. Upon acceptance of this Franchise, Ordinance No.1L, also known as the
Cable Communications Ordinance, and Ordinance No. _, also known
as the Local Programming Restructuring Ordinance, shall be repealed and
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 deliver to
City 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.
588638
Franchise Agreement Ordinance
December 3,1996-Page 18
D. At the time of acceptance, 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
January 1, 1997.
IN WITNESS WHEREOF, Grantor and Grantee have executed this Franchise Agreement
the date and year first above written.
CITY OF ,Minnesota
By
Date:
Mayor
ATTEST:
City Clerk
(SEAL)
KBL CABLE SYSTEMS OF THE SOUTHWEST
INC., A WHOLLY-OWNED SUBSIDIARY OF
TIME WARNER INC.
By
(Corporate Seal) Date:
588638
Franchise Agreement Ordinance
December 3,1996-Page 19
STATE OF )
COUNTY OF )
The foregoing instrument was acknowledged before me on 199_, by
the of the City of ,
on behalf of the City.
Notary Public
STATE OF )
COUNTY OF )
The foregoing instrument was acknowledged before me on , 199_, by
the of KBL Cable Systems of the Southwest
Inc., a wholly-owned subsidiary of Time Warner Inc., on behalf of the company.
Notary Public
588638
Franchise Agreement Ordinance
December 3,1996-Page 20
EXHIBIT A
FRANCHISE FEE PAYMENT WORKSHEET
588638
Franchise Agreement Ordinance
December 3,1996-Page 21
EXHIBIT B
TIME WARNER SOCIAL CONTRACT
588638
Franchise Agreement Ordinance
December 3,1996-Page 22
EXHIBIT C
PARAGON CABLE INITIAL PROGRANEVE NG
598638
Franchise Agreement Ordinance
December 3,1996-Page 23
l
i
SOUTHWEST SUBURBAN CABLE COMMISSION
1994 - 1995 Annual Report
j
i •; E
Commission Members
Patricia Pidcock, Chair, Eden Prairie
Glenn Smith, Vice Chair, Edina
Carl Jullie, Secretary/Treasurer, Eden Prairie
Ken Rosland, Edina
Chuck Kritzler and Jim Genellie, Hopkins
Karen Anderson and Dave Childs, Minnetonka
Don Priebe and Steve Devich, Richfield
Staff
Adrian Herbst, Attorney/Administrator
Mary Kay Robertson, Legal Assistant/Assistant Administrator
SWSCC Annual Report
438440 -- November 3, 1995
INDEX
Page
MISSION STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
STRUCTURE OF THE COMMISSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
STATISTICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
RESOLUTIONS REGARDING H.R. 3636 AND MODIFICATION OF
MINNESOTA CHAPTER 328 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
JOINT MEETING WITH MEMBER CITIES' CITY COUNCIL . . . . . . . . . . . . . . . 6
USWEST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
STANLEY HUBBARD BROADCASTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
LEAGUE OF MINNESOTA CITIES PRESENTATION . . . . . . . . . . . . . . . . . . . . 7
EASEMENT AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
TECHNICAL REVIEW COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
LEGISLATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
RETREAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
REORGANIZATION OF OPERATING COMMITTEE UNDER THE JOINT AND
COOPERATIVE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
TRANSFER OF OWNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
FRANCHISE RENEWAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SOCIAL CONTRACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
WAIVER OF 1994 AND 1995 ANNUAL REPORT, BUSINESS PLAN AND
CUSTOMER SURVEY OF PARAGON CABLE . . . . . . . . . . . . . . . . . . . . 12
RATE REGULATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SWSCC Annual Report
438440 -- November 3, 1995 j
ACCESS RULES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
WORK WITH SCHOOL DISTRICTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
REGIONAL CHANNEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
REGULATORY CLIMATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
BUDGET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SWSCC Annual Report
438440 -- November 3, 1995 11
MISSION STATEMENT
"The mission of the Southwest Suburban Cable Commission (SWSCC) is to
provide an accessible forum to assure high quality cable communications
services from the franchisee to all residents."
SWSCC Annual Report
438440 --November 3, 1995 1
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SWSCC Annual Report
438440 --November 3, 1995 2
1
SUMMARY
This year's annual report includes highlights for the activities of the years 1994 and
1995 and the work plan of the Southwest Suburban Cable Commission for the year 1996. It
is intended that this report be brief and readable.
We trust that this report will provide you with a brief understanding of the nature and
work of the Commission.
The following are highlights from the years 1994-1995.
SWSCC Annual Report
438440 -- November 3, 1995 3
STRUCTURE OF THE COMMISSION
The Southwest Suburban Cable Commission is a joint powers commission created by
an agreement of the cities of Eden Prairie, Edina, Hopkins, Minnetonka and Richfield
(member cities). The joint powers agreement was created for the specific purpose of
administering and enforcing the cable television franchise as granted by each of the member
cities. This was accomplished in accordance with the general joint powers law in Minnesota
and the Minnesota Cable Act.
The Commission is made of up of one elected and one staff representative from each
city. It is currently comprised of the following directors:
Patricia Pidcock and Carl Jullie, Eden Prairie
Glenn Smith and Kenneth Rosland, Edina
Chuck Kritzler and Jim Genellie, Hopkins
Karen Anderson and Dave Childs, Minnetonka
Don Priebe and Steve Devich, Richfield
Patricia Pidcock, council member of the City of Eden Prairie has been the chairperson
for the Commission since 1993. Glenn Smith, council member from the City of Edina, is
the vice-chairperson of the Commission. Carl Jullie, city manager for the City of Eden
Prairie, is secretary/treasurer for the Commission and chair of the Operating Committee.
The Commission is staffed by Adrian Herbst, Theresa Harris, Anthony Mendoza and
Mary Kay Robertson of the Fredrikson & Byron law firm. They perform any legal, as well
as administrative services that are needed by the Commission. Additionally, Cummings,
Keegan & Company has been hired for accounting services.
MEETINGS
The Commission meets on a quarterly basis. The meetings are generally held on the
first Wednesday evening of the month. The meetings are held in January, April, July, and
October. Starting in 1996, the meetings will be held on the fourth Thursday of the month on
a quarterly basis so that it will not conflict with the Municipal Legislative Committee
meetings.
SWSCC Annual Report
438440 -- November 3, 1995 4
STATISTICS
The following is a brief summary of some of Paragon Cable's statistics. You can see
that Paragon's subscriber base continues to increase. The following is a comparison of
December 1994 and September 1995.
Statistics 1994 Actual September 1995
Marketable Homes For Sale 84,767 85,877
Total Basic Subscriber 52,256 53,699
Penetration 65.00% 62.53%
Total Pay Units 33,764 32,126
RESOLUTIONS REGARDING H.R. 3636 AND
MODIFICATION OF MINNESOTA CHAPTER 328
At the January 27, 1994 commission meeting, the Commission adopted a resolution
regarding H.R. 3636 relating to telecommunications and a national infrastructure. The goal
of the national infrastructure is to create a national information highway unimpeded by
unnecessary regulation. H.R. 3636 will permit telephone companies to operate as cable
television operators and essentially eliminates the current cross-ownership restrictions that
preclude telephone companies from serving as cable operators in their own telephone service
areas. It was thought at that time that H.R. 3636 was the first step that would lead to the
development of a national information superhighway.
Cable television operators and telephone companies are converging to become one and
the same, with each seeking to provide the others' services. A national policy, however,
cannot serve to guide the development of telecommunications and cable services to meet the
local needs which has been the promise of cable television. The resolution passed by the
Commission was intended to insure that local regulation is respected and not diminished.
The same rules should apply to telephone companies and cable operators.
The resolution was forwarded to the Minnesota Association of Community
Telecommunications Administrators, League of Minnesota Cities, Metropolitan Council,
Congress, and local representatives.
SWSCC Annual Report
438440--November 3, 1995 5
JOINT MEETING WITH MEMBER CITIES' CITY COUNCILS
On May 4, 1994, the Commission held a joint meeting to update city council
members from each of the Southwest communities on the changes in the law and
technologies that have affected cable television businesses. Ron James, Vice President of the
Midwest Region of US West, spoke on how the telephone will be used at home and at work
in the future, and about the delivery of video-dial-tone services. US West had recently
announced that it would be providing services in the Southwest area and Mr. James
addressed this topic.
US WEST
Commission staff met with US West on various occasions in 1994 regarding
Minnesota law, what it says, what kind of issues the staff saw, and issues surrounding US
West's video dial tone service. Because video dial tone service will be a competitor to
Paragon Cable in the southwest area, the Commission feels it's important that video dial tone
service is regulated in the same manner that cable service is regulated and that telephone
companies provide universal access to video dial tone service.
US West is testing video dial tone in Omaha, Nebraska. The test offers residents 77
channels of programming. US West discussed its motion for a declaratory judgment before
the FCC regarding the method for allocating the channels. It also discussed the two recent
court victories on the video dial tone issue. US West shared with the Commission staff other
priority items, including franchise fees, public access and US West's response to consumers.
There was also discussion about the fairness issue regarding taxes and franchise fees.
US West wants to make sure that their share of taxes and fees is not more than the cable
company's share. They stated that in some states like Minnesota, taxes or fees that are paid
equal the taxes or fees paid by the cable company, plus franchise fees. In other states, US
West will either pay taxes that are less or much higher.
STANLEY HUBBARD BROADCASTING
On August 17, 1994, Steven Blum, an executive at Stanley Hubbard Broadcasting,
gave a presentation regarding Direct Broadcast Satellite System. The Commission felt that
after the presentation by US West, the Commission should also hear from a different
competitor. Mr. Blum talked about how DBS operates, its impact on television and where
they fit in the information superhighway.
In summary, DBS consists of a receiving dish, a remote control and converter box.
Two satellites service the system. The system will eventually deliver 150 to 175 channels.
A dish, remote control and converter box will cost approximately $600 to $700. The cost to
have it professionally installed is $150 to $200. The programming can be purchased in pre-
set packages or ala-carte.
SWSCC Annual Report
438440 --November 3, 1995 6
Because the system is digital rather than analog, there is a tremendous amount of
information you can receive in your home. They provide a program guide that is interactive
to search for the programming you would like to view. The programming guide also
provides ratings. The remote control allows you to block transmission of certain channels in
your home.
DBS does not provide local or access channels. The satellite dish does not necessarily
have to be located outside the home. The system is designed for 99.9% reliability nation-
wide, which equals to approximately eight hours of outage each year.
LEAGUE OF MINNESOTA CITIES PRESENTATION
Jim Miller, the executive director of the League of Minnesota Cities, gave a
presentation to the Operating Committee at its meeting in August, 1994. At that time, the
Technical Committee of the Southwest Suburban Cable Commission was looking into
connecting the Commission to the information superhighway developed in the metropolitan
area. Some of the projects contemplated include interactive capabilities and a teleconference
facility at a member's city hall that would be interactive with the convention center and the
League of Minnesota Cities. The Technical Committee decided not to pursue the facility for
several reasons. The facility would have been extremely costly. Bill Leto, a member of the
Educational Consortium, suggested that the Technical Committee focus on accessing the fiber
optical network already available rather than building a duplicate fiber optic network.
Mr. Miller indicated that the League of Minnesota Cities is developing a strategic
plan to determine how best to assist its membership. At that time, focus groups and surveys
had been contemplated. Mr. Miller saw three separate issues before the membership of the
League:
1. League members are frustrated by technological changes and the meaning of
those changes to the communities;
2. The League members want the League to provide more services to assist in
dealing with the new technology; and
3. In rural and small communities, the League members have requested more
accessible services and expertise to assist them.
Mr. Miller believes that cable commissions may have outlived their usefulness and
that communities may be better served by a consortium which focuses specifically on
telecommunications issues and their role in the economic development of communities.
Many outstate communities have experimented with videoconferencing with mixed
success. Cost remains the largest issue. The second barrier is that no one at the state level
is monitoring the technology and the technological changes. Major decisions are being made
SWSCC Annual Report
438440 -- November 3, 1995 7
regarding who gets access to the information superhighway and who does not. These
decisions affect the economies in small towns.
The League is considering providing more services on a subscription or consulting
basis. The League is considering defining core services which members will receive by
paying their yearly dues. Many areas may want additional services, and the League may
require those communities to pay an additional fee. A couple of nation-wide League of
Cities organizations are ready to provide these programs for a set fee. Funding will remain
the major obstacle to offering extensive services in the Minnesota area.
Mr. Miller expressed concern that cities are overlooking the issue of technological
advancements and the impact on cities while those advancements could cause the most
profound changes the cities have ever seen. He believes that the information technology
advancements are extremely important to the viability of cities in the future and the question
is do the cities want to be more involved in the process, and if so, how will the involvement
take place.
EASEMENT AGREEMENTS
Paragon Cable made a presentation before the operating committee of the Commission
in August, 1994 regarding easement agreements and wiring agreements to improve
communications between the sales representatives and the apartment managers. As part of
the easement program, Paragon has identified one Paragon employee that each apartment
manager can contact with questions or concerns regarding cable services. By establishing an
ongoing rapport between the apartment managers and Paragon employees assigned to the
apartment complexes, Paragon hopes to alleviate many problems and negative feelings which
have occurred in the past. Paragon has re-wired many of the apartments to improve
services. By assigning specific representatives to each building, Paragon believes that
communications will improve between the apartment managers, residents and Paragon.
Under the easement agreement, Paragon has permission to be on the premises of
apartment buildings and complexes. The agreement also notifies new buyers of apartment
buildings that the cable system installed in their buildings belong to Paragon rather than the
property owner. The easement agreement does not allow Paragon to install cable in the
apartment complexes. It needs permission of the apartment owner for the installation of new
cable. An easement agreement does not exist forever. It only exists as long as Paragon
holds the easement agreement. The purpose of the easement program is to protect Paragon
Cable's wiring from incoming competitors.
Problems were arising with various complexes within the southwest area. If a
building owner did not sign the easement agreement by a certain date, Paragon indicated that
the service would be cut off to the current subscribers and no new installations would be
made. The cities felt that this was a violation of the franchise ordinance. The Commission
met with Paragon Cable regarding this matter and feels that the easement agreement currently
in place should alleviate future problems.
SWSCC Annual Report
438440-- November 3, 1995 8
TECHNICAL REVIEW COMMITTEE
In 1992, the Commission budgeted funds for a Technical Review Committee to be
formed in the year 1993 to become educated and focus upon future recommendations to the
Commission in preparation for the upcoming franchise renewal. In 1994, the Technical
Review Committee met to pursue a fiber optic link between the member cities. It decided
not to pursue this project because of the high cost, lack of corresponding benefit and
potential lack of need due to the amount of fiber optic cable already in the ground.
In August 1994, the Technical Review Committee met with the League of Minnesota
Cities to discuss the possibility of the League interconnecting the municipalities to provide
interactive services. This is discussed more fully under the League of Minnesota Cities'
presentation to this Annual Report.
The Technical Review Committee then decided to develop a master regulatory
ordinance that would regulate the placement of fiber optics on public property.
In October 1994, the Commission put the work of the Technical Review Committee
on hold after the staff began working with the League of Minnesota Cities and other cable
commissions in drafting legislation and an ordinance which was substantially similar to the
one proposed by the Technical Review Committee.
LEGISLATION
In the fall of 1994, staff began working with the League of Minnesota Cities on
developing legislation. The Commission members thought it was unfair that the phone
companies would be able to provide video services without a franchise and thought there
should be a level playing field. A resolution was drafted by the Southwest Commission and
was introduced at the Minnesota Association of Community and Telecommunications
Administrators (MACTA) Conference in January 1995. Mr. Herbst, counsel for the
SWSCC, stated to the members of MACTA that it is important for municipalities throughout
the State to take an active role in telecommunications legislation.
After the conference, a MACTA legislative committee was formed. Staff worked
with the legislative committee to draft an ordinance to control the fiber optic lines and
services that would be using the rights-of-way.
The Fredrikson & Byron firm along with Bernick & Lifson began researching the
federal and state law to decide whether the federal government should have the right to
dictate the use of the rights-of-way, eliminate franchise fee requirements and control the
rights-of-way. The firms reviewed laws in the state regarding telephone and other
telecommunications issues. After the research was completed, the firms developed
legislation.
SWSCC Annual Report
438440 --November 3, 1995 9
Minnesota's system for cable communications or video program services is unique
because the legislature declared that there is a public benefit to be derived and it is essential
that municipalities identify the needs, protect the public interest and insure that community
services are preserved. The legislature wanted to make sure that there is a level playing field
so that the phone company that provides video dial tone is subject to similar requirements
and payment of similar fees as cable operators.
The League provided some leadership in assisting with the legislation. They
developed and voted on priority policies that were adopted and embodied into the proposed
legislation.
The legislation drafted on behalf of the cities did not pass but the legislature did
require the Department of Public Service to review public, educational and governmental
access, franchise fees, universal service and public rights-of-way. MACTA and the League
of Minnesota Cities are actively pursuing ways to protect the franchise fees and the public's
rights-of-way.
RETREAT
On August 17, 1994, the Commission approved holding a planning retreat to reassess
the Commission's missions and goals in light of the change in regulatory framework. A
retreat was held on January 20, 1995 to discuss the work of the Commission, organizational
matters, funding issues, to address potential projects for the future and the Commission's
relationship with both the staff and cable company.
An Officers Committee has been formed for the purpose of approving
communications between the commission members, commission staff and to help
prioritization of issues. Because the Commission knew that it would be handling two priority
projects, a transfer of ownership and franchise renewal during 1995, the Commission
recommended that at least one or two committees meet regularly with the staff on these
issues to participate in negotiations. The Commission members agreed that it will look at
different functions for the operating committee. During 1995 and 1996, the Commission
would like the operating committee to assist in negotiating a new contract with Paragon
Cable. Because of this, the Joint Powers Agreement was amended by each of the individual
member cities. Other items discussed include the agenda format, meeting dates, committees,
budgetary considerations, minutes, and complaint handling procedures.
REORGANIZATION OF OPERATING COMMITTEE UNDER
THE JOINT AND COOPERATIVE AGREEMENT
The Commission, at its January 20, 1995 retreat decided to reorganize the
responsibilities of the operating committee. The Commission has streamlined some of its
procedures to alter the functions outlined with respect to the operating committee and the
SWSCC Annual Report
438440 --November 3, 1995 10
Joint and Cooperative Agreement. An amendment was made to each of the member cities'
Joint and Cooperative Agreement. This will give the Commission flexibility to deal with its
own operations and governance.
TRANSFER OF OWNERSHIP
On February 21, 1995, the Southwest Suburban Cable Commission received notice
from Paragon Cable that KBLCOM Incorporated, which is a wholly-owned subsidiary of
Houston Industries, would become a wholly-owned subsidiary of Time-Warner, Inc. Under
the Federal Communications Commission's rules, the Commission had the right to review the
legal, technical and financial qualifications of the new owner. At the May 17, 1995 Special
Commission Meeting, the Commission approved the transfer of ownership between Houston
Industries and Time-Warner, Inc. The member cities received approval from each city
council during June, 1995.
FRANCHISE RENEWAL
In the Winter of 1995, the cable operator approached Commission staff to see if the
Commission would be interested in an early renewal if Paragon Cable upgrades the cable
system. After the transfer of ownership process was completed in June, 1995, the
Commission decided at its July, 1995 meeting that it would proceed with an early renewal.
The Franchise Agreement with Paragon Cable does not expire until December 31, 1999.
Under the renewal requirements of the Cable Act, the process would not ordinarily be
initiated until approximately December 31, 1996.
The Commission is in Phase I of the franchise renewal process. Five different
research groups have been formed as part of the information gathering process. These
include city access, customer service, educational access, public access and technology. The
research groups began meeting in August, 1995, and hope to conclude their information
gathering process by November, 1995. A report will then be given to the Commission for it
to decide whether to proceed with Phase II, which is the negotiation process.
SOCIAL CONTRACT
On August 3, 1995, the Federal Communications Commission (FCC) released the
proposed terms of the social contract between Time Warner Cable and the FCC. Any
system owned by Time Warner Cable as of that date would be covered by this contract. The
FCC requested comments by September 5, 1995. If Time Warner Cable and the FCC reach
an agreement and the FCC adopts the contract, as written, it will automatically cover the
systems owned by Time Warner Cable.
There are six major components to the proposed social contract which will affect the
southwest area. They are as follows: basic service tier rate reduction; equipment and
SWSCC Annual Report
438440 -- November 3, 1995 11
installation rates; cable programming services tier; creation of migrated products tiers;
subscriber refunds; and upgrades. The Southwest Cable Commission approved the sending
of favorable comments to the FCC regarding Time Warner Cable's social contract. As of
this date, an agreement has not been reached between Time Warner Cable and the FCC.
WAIVER OF 1994 AND 1995 ANNUAL REPORT BUSINESS PLAN
AND CUSTOMER SURVEY OF PARAGON CABLE
Paragon Cable asked the Commission members to waive the requirement under the
Performance Agreement of providing a customer survey, annual report and business plan for
the years 1994 and 1995. They asked for the waiver during the year 1994 because of the
implementation of the new rate regulation forms. During 1995, Paragon stated that the bulk
of the information was given during the transfer of ownership as well as updates given
during the Operating Committee on commission meetings. Paragon felt that it satisfied its
requirement for the customer survey through the programming preferences survey which was
recently completed and presented to the operating committee at its meeting in May, 1995.
Paragon also believed that the information would be provided during the franchise renewal
which was initiated in August, 1995. Because of this, the Commission approved the waiver
of the requirements for the years 1994 and 1995.
RATE REGULATION
Under the Cable Consumer Protection and Competition Act of 1992 and the rules
adopted by the Federal Communications Commission, the Commission has undertaken
appropriate procedural steps to regulate basic cable service tier and related equipment in the
Southwest Suburban Cable Commission area.
On May 4, 1994, counsel recommended that the Commission approve Paragon
Cable's rate of $14.90 for its basic service tier. The rate of $14.90 was approved by the
Commission.
On August 12, 1994 Paragon Cable submitted a new FCC Form 1200 and supporting
documents. At the October 19, 1994 meeting, counsel asked that the Commission ask for an
accounting order because counsel needed clarification on rates pertaining to installation. The
order adopts the benchmark rate and also gives notice to the cable operator that it may
charge the rates for installation and if there is a clarification or ruling from the FCC,
Paragon may be subject to provide refunds to the subscribers at that point in time.
On April 12, 1995, counsel sent to the Cable Commission Members a copy of its
review of the FCC Form 1210 filed by Paragon Cable which was received in February,
1995. Paragon Cable increased its basic service tier rate to $15.69. Counsel stated that
there was no need to take action on the rate increase because it complied with FCC rules:
SWSCC Annual Report
438440 -- November 3, 1995 12
ACCESS RULES
The Commission makes an annual review of access rules pertaining to public,
educational and governmental access channels. The review is to examine issues and
questions relating to the rules and to further explore any amendments which may be needed.
The last changes made to the Access Rules were in January, 1993. These amendments
include an amendment to limit the access channel usage for access users because of the
increased use of the access facilities and equipment and demand for channel time; revise a
procedure allowing the political candidates to use the equipment, facilities and channel time
on the cable system the same as any other access user; and incorporation of new language
regarding the 1992 Cable Act relating to restrictive programming to receive a certification
from the access user that their programming does not contain any material that would
otherwise be prohibited. Paragon Cable sent out several announcements and press releases to
the local newspapers to make all interested parties aware of the changes in the Access Rules.
WORK WITH SCHOOL DISTRICTS
Two channels are devoted to programming educational access in the southwest area.
The Commission continues to assist with improving the quality and quantity of the programs
on these channels. In 1991, the Commissioner developed a policy that permits the school
districts to utilize the government access channels at key times when needed additional
channel capacity is required for specialized school program purposes.
Bill Leto, the Chair of the ECCC, gave presentations to the Commission in the years
1994 and 1995 regarding the ECCC's relationship with the Southwest area and Paragon.
cable. In 1994, Mr. Leto, commented that his organization has an excellent relationship with
Paragon and has thoroughly enjoyed working with them. He thanked the Commission for the
use of Channel 34. In particular, he stated that three high school students had won awards in
Japanese language competitions as part of using cable in the classroom. In 1995, Mr. Leto
reported that the school districts are increasing their production capabilities. He stated that
the Eden Prairie district is currently developing a new production facility. He pointed out
that the access capacity and the collaboration are the key issues for the future.
REGIONAL CHANNEL 6
Regional Channel 6 is a channel devoted to local programming which airs on all cable
systems in the Twin Cities metro area. The Southwest Cable Commission has been a regular
sponsor of Regional Channel 6. Regional Channel 6 offers the Southwest cities an
opportunity to communicate to residents within the southwest area as well as the metropolitan
area. The Commission regularly attends meetings hosted by the Metro Cable Network for its
programmers and it also participated in a survey to gather input from municipal officials to
develop its programming plans. Currently, MCN is in the process of building a studio for its
programmers. The studio was completed in October, 1995.
SWSCC Annual Report
438440 -- November 3, 1995 13
REGULATORY CLIMATE
On the federal level, the Senate's Telecommunications Bill (S.652) was passed in July
1995 and the House Telecommunications Bill (H.R. 1555) passed in August that would
reform the telecommunications industry. Both bills preserve the rights of local franchising
authorities to control and manage their public rights-of-way. The new telecommunications
bill will not override a city's authority to require telecommunications providers to obtain a
franchise in order to use public rights-of-way. Further, it assures that franchising authorities
will receive reasonable compensation from telecommunication providers for the use of public
rights-of-way. Both bills remove barriers to competition in the areas of video programming,
telephone, cable television and other telecommunication services.
The bills differ on the subject of rate regulation. S. 652 would abolish rate regulation
over expanded tier programming. Cable operators would be subject to price caps if their
expanded tier rates exceed a national average. Under H.R. 1555, basic tier regulation would
survive, but only for large operators who systems are not subject to competition from a
competitor that has captured approximately 15% of a subscriber base in the franchise area.
All expanded tier regulation would be eliminated under H.R. 1555. Recently, a committee
was formed to draft a final bill for passage.
On a local level, the Department of Public Service ("DPS") has been asked by the
legislature to conduct a study by February, 1996 in the State of Minnesota. These issues
include franchise fees, public access usage, universal service and public rights-of-way. As
part of its study, the DPS is conducting a survey of municipalities, cable operators, telephone
companies and other utility companies on various issues. The information will assist the
legislature in determining how the telephone companies and other service providers will be
regulated.
BUDGET
Attached is a copy of the 1996 budget with the comparison of the 1995 budget, which
was approved by the Commission at its November, 1995 meeting.
SWSCC Annual Report
438440 -- November 3, 1995 14
BUDGET
1. Legal and Administrative Services 1995 1996
Legal Retainer 22,880.00 22,880.00
Administration Retainer 40,000.00 40,000.00
Miscellaneous 9,570.00 9,570.00
$ 72,450.00 $ 72,450.00
2. Accounting Fees $ 4,000.00 $ 3,600.00
3. Meeting Costs $ 1,300.00 $ 1,300.00
4. Seminar Expenses
- MACTA Conference 300.00 600.00
- NATOA Conference 2,500.00 2.500.00
$ 2,800.00 $ 3,100.00
5. Insurance
- League of Minnesota Cities
Insurance Trust $ 2,500.00 $ 3,600.00
Bonds $ 200.00 -- 0.--]
6. Memberships
A. Regional Channel 6
- Membership Dues 3,300.00 6,000.00
- Assessment 6,000.00 3,300.00
$ 9,300.00 $ 9,300.00
B. MACTA
- Membership Dues $ 200.00 $ 250.00
f 1995 Right-of-Way
Legislative Effort $ 5,000.00 -- 0.--]
7. 1996 MACTA Legislative Effort $ 9,600.00
(192,000 population x $.05)
8. Contingency
- Implementation of Rate
Regulation $ 10.000.00 $ 10,000.00
BALANCE $ 107.750.00 $ 113.200.00
SWSCC Annual Report
438440 -- November 3, 1995
1996 BUDGET CONTRIBUTIONS
1995 Budget $ 113,200.00
5 Cities' Contribution
of$2,500 each - 12.500.00
Amount to be divided
proportionally $ 100,700.00
Penetration % by Yearly Contribution Quarterly
Member Cities ($2,500 + % of$100,700) Contribution
Edina 24.36% x $100,700 = $24,530.52 + $2,500 = $27,030.52 $6,757.63
Eden Prairie 23.98% x $100,700 = $24,147.86 + $2,500 = $26,647.86 $6,661.97
Minnetonka 25.58% x$100,700 = $25,759.06 + $2,500 = $28,259.06 $7,064.76
Richfield 17.13% x$100,700 = $17,249.91 + $2,500 = $19,749.91 $4,937.48
Hopkins 8.95% x $100,700 = $9,012.65 + $2,500 = $11,512.65 $2,878.16
TOTAL: $113,200.00 $28.300.00
FRANCHISE FEE DISTRIBUTION
Projected 1995 Franchise Payment to Retained by
Fee Payments Southwest City
Edina $ 205,284.00 $ 27,030.52 $ 178,253.48
Eden Prairie $ 202,128.00 $ 26,647.86 $ 175,480.14
Minnetonka $ 215,608.00 $ 28,259.06 $ 187,348.94
Richfield $ 144,364.00 $ 19,749.91 $ 124,614.09
Hopkins $ 75.416.00 $ 11,512.65 $ 63.903.35
TOTAL: $ 842.800.00 $113.200.00 $729,600.00
NOTE: Please note that the penetration percentages are net revenue percentages year to date as of June, 1995.
The final percentages will be determined at the end of the year when the total revenues are calculate.
SWSCC Annual Report
438440—November 3, 1995
1r ' ?
Cities should must begin 36 months (three years) prior TV operator must have an opportunity to
to the termination date of the present correct past violations if the city intends
begin review of franchise agreement. to deny renewal for poor performance or
The formal renewal process grants poor service.
TVfranchises cities an opportunity to fully evaluate the The formal process begins 36 months
present and future needs of cable TV before the expiration date of the current
customers and to determine whether the franchise agreement. At this time,there
GARLA HEYL present cable TV operator has complied is a six-month notification"window"at
with the terms and conditions of the which time either the city or the operator
franchise agreement. This process also may request the formal process.
allows cities to evaluate proposals from If the operator requests the formal
ities have watched with the present operator,and also allows review process and the city denies the
interest the recent negotiation of various improvements to formal process,then the city would not
congressional amendments to incorporate into a new or amended be able to deny renewal of the present
the cable TV act. While this franchise agreement. franchise agreement. The city would
act does allow greater In aformal renewal proceeding,thecity then put itself in the informal review
regulation of local cable TV must always keep in mind that it can process which is merely negotiating with
service,most cities will not be able to take only deny renewal for four reasons. the current cable operator. However,
any further actions concerning their under this scenario, (operator chooses
franchised cable TV operator for two formal,city grants informal) because the
reasons.First the current agreement city cannot deny renewal of the agree-
between the operator and the city ment due to the procedure which it has
probably took effect at a time when cities "The formal process must chosen to take,the city loses leverage in
did not have the power to regulate cable its negotiating position.
TV operators;and second,the agreement beg `36 months three years) If the cable TV operator does not
""_
probably doesn't include a provision for request formal review proceedings within
future regulation. this notification period,the city could still
But,it is not too early for cities to start prior to the termination date request this process although it probably
planning and considering options would not want to. If the cable operator
regarding cable TV service for their of the present franchise has not requested formal review,then the
citizens,even if they are in the middle of informal process would apply and the city
their franchises. In fact,the city must agreement." could deny renewal for other reasons
take action three years before the than specified under the formal review
expiration of the current franchise process.
agreement if it intends to deny renewal Under the informal process(with the
of the agreement,or at least would like to The operator has not substantially scenario of both city and operator
keep open the option of non-renewal. If complied with the material terms of choosing informal),the city may either
the city has any inkling of denying the the existing franchise agreement and grant or deny any proposal for renewal
renewal of the present cable operator, applicable law; after affording the public adequate notice
even five years before the expiration date The quality of the operator's service, and an opportunity for comment.Either
would be a good time to start document- including signal quality,response to the city or the operator can initiate the
ing valid reasons for non-renewal of the consumercomplaints,andbilling proposal.
present franchise agreement. practices has not been reasonable in However,if the city were to deny
light of community needs; renewal under this process and for
Informal review process The operator does not have the reasons other than those permitted in the
versus formal review financial,legal,and technical ability to formal review process,the city may still
provide the services,facilities,and have potential challenges from the
process equipment as set forth in the current operator upon denial of a new
Renewal requirements for cable TV operator's proposal;and franchise agreement. Some of these
operatorsare partofSection 626ofthe The operator's proposal is not reason- claims may consist of due process and
cable act(47 USC 546).There are two able to meet the future cable-related equal protection violations,violation of
procedures which a citymayfollowwhen community needs and interests taking their first amendment rights,inadequacy
renewinga franchise:aformal renewal into account the cost of meeting such of the city's evidence in making the
process and an informal renewal process. needs and interests. denial,antitrust claims,breach of the
These two processes may occur simulta- The city musthave evidence to support present contract,and violation of state
neously. However,the formal process anyofthefourdenial reasons.The cable and federal law.
provide for the passengers'safety after the court said the officer had not placed Analysis and decision:
they asked the driver to accompany them the passengers in a position of danger by The appellate court upheld the trial
into the police station.The due process leaving them in the car.To the contrary, court's decision.A city's discretionary
>
clause of the Constitution imposes a duty the driver placed the passengers in a/ decisions have immunity from liability while
on state actors,such as police officers,to dangerous position when he left the car operational types of decisions do not have
protect or�care for citizens in limited keys in the car knowing that the ssen- immunity from liability.If the city had
situations. gets were drunk. proved that the challenged decisions were
One example of a siftr ion where the (Gregory v.Rogers,Ark.,61 U. .L.W. discretionary,such as policy-making or
state has a duty to care for individuals is 2177(October 6,1992)). planning decisions,then the city might
when citizens are in a custodial setting have been immune from liability.
where they have limited ability to care for- City must es lisp that The court noted that in this case,the
themselves.There are other exceptionsd city did not prove that the decisions in
@visions we e
but the court held that none of these dii.kretiona to get question were policy decisions.The city
exceptions applied to this case. failed to show evidence of the decision
The court said the police did not have �mmuy making process.The city gave no
any reason to know that the passengers Facts: indication that it held meetings on these
were drunk.The driver was not drunk The plainti was a truck and issues and gave no evidence about what
and he did not indicate that the passen- injured whil walking ho from school. factors city officials considered in
gers were drunk.He simply stated that The plain * sued the city an e school decisions about the sidewalk and the
they had been drinking.There were no district f negligence in failing t ' stall speed zone.
other signs that the passengers were a sidew k or in failing to install a scho The court also noted that there was no
drunk.Thus,the court held that a speed one on the road where the ~evidence that a sidewalk was even consid-
reasonable judge or jury could not have acci ent occurred.The city asserted that ered,until after the accident.Further,the
found that the police knew or should it s immune from liability under city gave noevidencethat it considered a
have known that the passengers were mnesota law and asked for summary school speed zone in the area of the
drunk. Judgment.The trial court denied accident. (Marhula v. City of Maple Grove,
Additionally,even iftheofficerhad summaryjudgment and the city appealed Finance and Commerce,Court of Appeals
known that the passengers were drunk, the decision. Opinions,August 14,1992).
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these inadequacies so that the operator What the agreement cannot in the event of an outage.
has a chance to correct them. If the city include Another way to entice better perfor-
ignores the violations,the city may waive The city cannot require certain mance by the cable operator may be to
eriodic
ance reviews,
the
renewal.
If the city denies renewal of the cable Provisions when renewing franchises.However,the cable operator may propose technical provide
chn al performance testing,l liquidated
operator,the operator has 120 days from these requirements which could become damages for failure to perform,forfei-
the receipt of the notice of the non- part of the franchise and then would be tures,letters of credit,and performance
renewal to appeal this decision to a state subject to enforcement. These include bonds when there is lack of compliance
or federal court. A court may grant the with the agreement.
operator relief from the denial of renewal Providing more leased access capacity
the than required in the cable act or having Municipal system
if the city's decision isnot based f r
the operator provide broad categories
four criteria or supported by evidence. A r Some cities may also consider the
court may also deny relief if the city has Phe operator''s rogramminthat will be offered under proposapossibility of buying out the present cable
failed to comply with the procedural Many cities in Minnesota may regulate operator or building their own cable
requirements for renewal. basic rates because the cable operator is system. Many communities have had
" dissatisfaction with their private cable"
not subject to effective competition"Renewal provisions J P
under FCC rules. However,before any operator due to high rates,poor picture
If the city agrees to renew with the city regulates rates,it must be certified by quality,or just a bad attitude of the
current operator,a renewed franchise the FCC through a cumbersome process. operator. Some cities believe that a
must include certain requirements. The municipally run cable operation will
renewal must include access to the Even more cumbersome is the time and
publicbetter serve
rights-of-ay and easements that have energy a city needs to expend to support There will beh stabiliz tion of rates,a
been dedicated for compatible uses. The greater control of the whole cable system,
operator must assure the safety,appear- an improvement of the quality of service,
ance,and convenience of use of the and perhaps a source of revenue for the
rights-of--way. The operator and the city.
subscriber must assume the cost of the The city may require a Cities should carefully consider the
use of the rights-of-way. The operator financial risks of municipal ownership of
may not deny access to cable service franchise fee of up to five a cable TV operation. Additionally,there
because of the income of the residents of would probably have to be voter referen-
the local area,and must offer subscribers dum for the bonds. There would be
a device to block out channels. The percent of the gross revenues initial high capital costs for buying out
franchise renewal must include require- the present system or for building a new
ments of state law. (Minnesota Statutes of the cable operator. The one. There would also be a problem of
238.084.) inexperience in running a cable system.
However,the prospects of a municipally
What the agreement can include city can also require fees and operated cable system certainly could be
The city may include proposals for a leverage during the negotiating process
upgrading the system. The city may taxes in addltlon to a for renewal of the current cable operator.
require channel capacity for PEG use, The city may want to keep the option of
rules and procedures for the use of PEG franchise fee. having a municipally operated system
channels,and channel capacity on an later on and provide for that in the
institutional network for educational and renewal of the franchise. This could
government use. The city may also include reimbursement for purchasing
require facilities and equipment related the present operator system.
to the establishment or operation of the rate regulation.Even if a city may not
cable system. The city may require a want to regulate the rates,it should Things to do today
franchise fee of up to five percent of the preserve this right in the agreement. The The city should begin to determine
gross revenues of the cable operator. The city may also provide for rate refunds if what the community will need in the
city can also require fees and taxes the city finds the operator is charging an future for cable-related services. The city
generally applied to other utilities or unreasonable rate. should evaluate the past and present
businesses in addition to a franchise fee. Along with reserving the right to performance of the incumbent cable
The city can also require that the regulate rates at a later date,the city operator. This will ensure that the city
operator pay capital cost of PEG access should also expressly provide that it can will have the evidence to document that
facilities;and also the operator. The costs regulate to the greatest extent possible by the present operator is not capable of
of bonds,security funds,letters of credit law at anytime throughout the agree- performing under the current franchise
and any other costs incidental to the ment. The city should maintain its police agreement and,therefore,should not be
award or the enforcement of the fran- power to regulate the operator instead of renewed. The city may want to review its
chise. The city may also require regula- just relying on enforceable promises in a franchise-related documents and begin
tion of the installation and rental of franchise agreement. The city should some internal planning to produce any
equipment for the hearing impaired. also provide enforcement mechanisms surveys it may want to take periodically
The city may prohibit the showing of for the agreement,such as providing during the current franchise
obscene material. consumer rebates for the inconvenience agreement.
The informal process could continue at look at public,educational,and govern- requirements for proposals from the
the same time that the formal process is mental (PEG) access and other internal operator and set deadlines for any
occurring.While the city is holding network use of the cable system.The city submission by the operator.
hearings and meeting the time-frames may want to study whether the cable Keeping in mind this time frame,the
under a formal review process,it could operator could meet the technical needs city should promptly review the cable
still meet and negotiate under the of further operation of the city's system. operator's proposal and identify any
informal process.City denials of various issues that may require negotiations. The
proposals or counter proposals during Request for proposals city should have reasonable expectations I .
the informal process,would have no After the needs assessment and and ensure that any proposed changes
effect on the concurrent formal process. performance review,the city may prepare are cost effective for customers.
Many operators are triggering formal a request for proposal (RFP) for response Furthermore,the city should require
procedures 30 to 36 months prior to by the existing cable operator. This flexibility in the agreement to accommo-
expiration of the franchise and are also proposal may address the needs and date any changes which may occur in
asking cities to negotiate informally. A interests the city identified in its surveys. service or in law. The city should reserve
city must be careful to fully comply with The city cannot require specific the right to regulate to the fullest extent
procedural requirements of the formal programming or categories of program- possible,by law,as it exists at any time
process even if it appears that the ming,but may instead state preferences throughout the franchise agreement.
informal negotiations are going well. If or interests. A city can also require that The agreement should provide that when
the city does not meet the time frames of the operator provide certain capital costs service capabilities increase,these
the formal process,it could forfeit the for support of PEG access facilities. The changes can be incorporated into the
right to deny renewal and lose any service.
negotiating leverage in the informal These services may include entertain-
process. ment services;programming of local
channels;satellite services;importation of
Formal process «If the city does not meet the distant signals;interactive services
procedures including meter reading,fire detection,
time frames of the formal and home security;tying the system to an
Needs assessment and adjoining community's to receive
performance reviewit could forfeit the programs;and institutional networks or a
process,
When the city agrees to the formal subscriber network such as two-way
review process,it must meet certaininteractive programs which schools use.
requirements to preserve its rights for right to deny renewal and lose
Denial of renewal
non-renewal. Prior to 30 months before
the expiration of the franchise agree- any negotlatLUg leverage In the As mentioned previously,under the
ment,the city must hold public proceed formal review process,there are only four
ings to identify future cable-related kformal process." reasons why a city can deny renewal of
community needs and interests,and to the franchise agreement to the existing
review the past performance of the cable operator. If the city decides to deny
operator. renewal to the current cable operator,it
The city may review the cable proposal may also set forth requirements must hold an administrative hearing.
operator's performance by hiring an for a system upgrade,and should include The operator must receive adequate
independent engineer or technical a statement of the priorities and criteria notice of the hearing and a fair opportu-
consultant to review the technical aspects which the city believes to be important. nity to participate. The operator must
of the franchise and to make a determi- The city should determine the legal, have the right to introduce evidence and
nation of compliance.The city may also financial,and technical qualifications of to question witnesses at the hearing.
perform a survey or other means of the cable operator when requesting this Additionally,the city must maintain a
identifying community satisfaction with proposal. The city can also request that written transcript of the hearing.
the current operator. the operator include all its objections to The denial of a proposal for review
The city should also review any the proposed franchise along with any must be in writing and state the basis for
complaint logs that it has maintained and alternative language the operator denial. If denial is because the operator
request to review complaint logs of the proposes. has not substantially complied with
cable operator. The city has a right to After completing the studies,the city material terms of the existing franchise
request information regarding the must hold a public hearing on the past agreement and applicable law(first
existing cable system from the cable performance of the operator and the factor),or because the operator's service
operator during the assessment review future needs of the community. It is has not been reasonable in light of the
process. important to remember that within four community needs (second factor),the
The city may also want to do a fran- months after the completion of the needs city must give the operator notice and an
chise compliance audit to see if it has assessment and performance review,the opportunity to correct such defects.It is
been getting its required franchise fee city must determine whether to renew the very important that the city document
based on the gross profits if the current agreement or to preliminarily deny the well in advance of the time of the renewal
franchise agreement allows the fee. In franchise agreement. In order to meet process the violations which it believes
deciding future needs,the city should this time line,the city must establish have occurred and notify the operator of
SOUTHWEST SUBURBAN CABLE COMMISSION
CO FREDRIKSON & 13YRON
1 100 International Centre
900 Second Avenue South IJ2
Minneapolis, MN 55402-3394
(612)347-7000
Direct Dial No.
(612) 347-7131
E-Mail:tharris®fredlaw.com
October 29, 1996
[VIA EXPRESS MAILI
Carl Jullie, City Manager Kenneth Rosland, City Manager
City of Eden Prairie City of Edina
8080 Mitchell Road 4801 West 50th Street
Eden Prairie, MN 55344-4485 Edina, MN 55424
David Childs, City Manager Jim Genellie, Assistant City Manager
City of Minnetonka City of Hopkins
14600 Minnetonka Boulevard 1010 South First Street
Minnetonka, MN 55345 Hopkins, MN 55343
Steve Devich, Assistant City Manager
City of Richfield
6700 Portland Avenue
Richfield, MN 55423
Re: Franchise Agreement Ordinance
Dear City Managers:
Enclosed please find revised page 12 of the Franchise Agreement Ordinance. The previous page
12 contained a typographical error. Please place this new page 12 within your Franchise
Agreement Ordinance. This page should not effect the status of any of the other
pages. Thank you for your assistance with this matter.
Very truly urs,
Theres yoarris "—
«�xc .� f
TMH:wp:593327
cc: Kim Roden (w/encl.)
Cities of Eden Prairie, Edina, Ilopkins, Minnetonka & Richfield
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.
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
588638
Franchise Agreement Ordinance
October 16,1996-Page 12
SOUTHWEST SUBURBAN CABLE COMMISSION
CO FRI:DRIKSON & 13YRON
1 100 International Centre
900 second Avenue South
Minneapolis, MN 55402-3394
(612)347-7000
Direct Dial No.
(612) 347-7131
tharrisafredlaw.com
December 6, 1996
Kenneth Rosland
City of Edina
4801 West 50th Street
Edina, MN 55424
Re: Modifications to the Franchise Documents
Dear Ken:
The City of Minnetonka and Paragon Cable agreed upon additional modifications to the Cable
Television Regulatory Ordinance and the Cable Television Franchise Agreement Ordinance.
Paragon has offered those same changes to all the Cities. The City of Eden Prairie has adopted
franchise documents containing the changes.
I have enclosed a description of the modifications. Additionally, I have provided a new set of
draft documents that contain the modifications and a computer disk containing the same. Please
let me know if I can assist you in modifying the documents that your City adopted.
Very truly yours
Theresarris
TMH: :606694
Enc.
Cities of Eden Prairie, Edina, Hopkins, Minnetonka& Richfield
MNTKA LEGAL DEPT TEL :939-8248 Dec 03 96 9 :52 No .003 P .01
CITY OF MINNETONKA
CITY ATTORNEYS OFFICE
DESYL L. PETERSON
CITY ATTORNEY
14600 MINNETONKA BLVD. - MINNETONKA, MN - 55345
612/939-8262 - FAX 612/939-8248
FACSIMILE TRANSMITTAL
DATE: DECEMBER 3, 1996
TO: THERESA HARRIS
FAX NO: 347-7077
TOTAL NUMBER OF PAGES INCLUDING THIS PAGE: 2
REMARKS:
Attached are three changes to the cable television ordinances which we have
negotiated with Paragon Cable. Would you please arrange to have all three
changes made to Minnetonka's version of the ordinances, in addition to the
requirements for the effective date. If you have questions about this, please let me
know.
ATKA LEGAL DEPT TEL :939-8248 Dec 03 96 9 :53 No -003 P .02
1 . Regulatory Ordinance, §8(F): Substitute for the last sentence:
If the City uses its own funds to reimburse a non-municipally owned utility
for relocating its property at the City's request, and if the City does not
receive something of approximately equal value, to which it was not
otherwise entitled, in exchange for such reimbursement, the City will
reimburse Grantee in a substantially similar manner. Notwithstanding
anything to the contrary, this requirement shall not apply where an electric
utility has been compensated for relocating its plant underground through
franchise fees collected from the electrical utility and such fees are dedicated
in whole or in part to the undergrounding of electric facilities.
2. Franchise Ordinance §6.7: Add the following language:
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.
3. Franchise Ordinance §10.3. Add the following language to paragraph (A):
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.