1996-790.~~~
C
Cable Television
Franchise Agreement Ordinance
CITY of
Hopkins
,MINNESOTA
Prepared by:
Adrian E. Herbst, Esq.
Theresa M. Harris, Esq.
Fmdrilsson & 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. DEFII~TITTONS ..................................... 2
SECTION 4. EFFECTIVE DATE AND TERM OF RENEWAL .............. 2
SECTION 5. WRITTEN NOTICE ................................. 2
SECTION 6. DESIGN PROVISIONS ............................... 3
6.1 stem Design ..................................... 3
6.2 Cable Nodes System Connect ............................ 3
6.3 Service to the Schools and Government Building ................ 3
6.4 Parental Control Lock ................................ 4
6.5 Standby Power ..................................... 4
6.6 Periodic Review Provisions ............................. 4
SECTION 7. PUBLIC, EDUCATIONAL AND GO AL ACCESS
PROG~G ................................... 5
7.1 Access Channels .................................... 5
7.2 Studio/Facilities .................................... 6
7.3 Funding for PEG Access ............................... 7
7.4 Regional Channel Six ................................. 7
7.5 Override of the Government Access Channel .................. 7
SECTION 8. PERIODIC CUSTOMER SURVEYS ....................... 8
SECTION 9. LINE EXTENSION POLICY ............................ 8
SECTION 10. GENERAL FINANCIAL AND INSURANCE PROVISIONS ....... 9
10.1 Payment to Cit,~ .................................... 9
10.2 Bonds .......................................... 9
10.3 Security Fund .................................... 10
SECTION 11. SOCIAL CON'T'RACT ............................... 13
SECTION 12. COMPETITION ADJUSTMENT ......................... 13
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Fnmc6iae Agreement Ordinance
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` SECTION 13. ACCEPTANCE .... • ............................... 17
13.1 Other Franchises 17
13.2 Time of Acceptance: Incorporation of
Offering: Exhibits . .................................. 18
'r~1~~11:
Exhibit A -Franchise Fee Payment Worksheet .......................... 20
Exhibit B -Time Warner Social Contract ............................. 21
Exhibit C -Paragon Cable Initial Programming ......................... 22
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Franchise Asnxmrnt Ordinance
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FRANCHISE AGREEMENT ORDINANCE
This Agreement, made and entered into this day of , 19_, by
and between the City of Hopkins , a municipal corporation of the State
of Minnesota, and KBL Cable Systems of the Southwest Inc., awholly-owned subsidiary of
Time Warner Inc.
WITNESSETH
WHEREAS, KBL Cable Systems of the Southwest Inc. has operated a Cable System in
the City of Hopkins ,pursuant to Ordinance No. ~ also known as the
Cable Communications Ordinance, which expires on December 31, 1999; and
oVHEREAS, 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
Hopkins ,based on City's understanding the rebui]t 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 Hopkins ,will repeal Ordinance No. 81-486
91-701 ,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. 96-79~ 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 Hopkins (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 No96-792 and this Agreement.
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Franchise Agreement Ordinance
October 16, 1996 -Page 1
SECTION 1. RENEWAL OF GRANT OF FRANCHISE
The cable television Franchise granted through Ordinance Number8l-486 on the 1st day
of January 19 81 and now held by Grantee is renewed. Ordinance Number8l-486 & 91-701
that granted the original franchise is repealed and replaced by the Cable Television Franchise
Ordinance, Ordinance Number 96-792 and this Franchise Agreement Ordinance. This
Franchise shall be subject to the terms and conditions of this Franchise Agreement Ordinance
and shall be subordinate to the Cable Television Franchise Ordinance and all applicable federal,
state and local law.
SECTION 2. SHORT TITLE
This Agreement shall be known and cited as the "City of How i ns Cable
Television Franchise Agreement Ordinance. " Within this document it shall also be referred to
as "this Franchise" or "the Franchise. "
SECTION 3. DEFINITIONS
The definitions contained in Ordinance Number 96-792 of the City of
Hopkins 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 Utited 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:
City Manager
If to City: 1010 First St. S.
Hopkins, MN 55343
If to Grantee:
Such addresses may be changed by either party upon notice to the other pasty given as provided
in this section.
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Franebioe Agrcemeut Ordmmce
October 16, 1996 - Page 2
SECTION 6 DESIGN PROVISIONS.
6.1 Svstem 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 Svstem 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 ~~
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 fmancial responsibility for any additional Converters desired
by the school or muticipality shall be their responsibility.
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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 aState-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 aState-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:
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.
1. Characteristics of the existing System;
r.
B.
C.
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.
The City shall hold at least two public hearings to enable the general
public and Grantee to comment and to present evidence.
For the purposes of this Section the term "State-of--the-Art" shall mean
equipment or facilities that:
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October 16, 1996 - Fage 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
govennmental 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 C~~antee 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.
SECTION 7 PUBLIC EDUCATIONAL AND GOVERNMENTAL ACCESS
PROG~G.
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7.1 Access Channels.
A. Grantee shall provide four public, educational and government (PEG)
Access Channels (the "Access Channels"~. One channel shall be dedicated
to public access, one channel shall be dedicated to governmental access,
and two channels shall be dedicated to educational access.
B. Grantee shall provide to each of its Subscribers who receive all or any
part of the total services offered on the System, reception of each public,
educational and governmental Access Channel.
C. Grantee shall provide at least one specially designated access channel
available for lease on a first come, nondiscriminatory basis by commercial
and noncommercial users. This Section is not applicable to Subscribers
receiving only alarm system services or only data transmission services for
computer operated functions. The VHF spectrum shall be used for at
least one of the specially designated noncommercial public Access
Channels required.
D. Whenever any of the Access Channels are in use during 80 percent of the
weekdays (Monday-Friday), for 80 percent of the time during any
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October 16, 1996 - Fage 3
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 Hiles 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 lazge 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
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
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Francbiae Agreement Ordinance
October 16, 1996 -Page 6
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 Commutications 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.
7.5 Override of the Goverment 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;
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Frmehiu Agreement Ordinance
October 16, 1996 -Page 7
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.
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.
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Franchise Agroement Ordimnce
October 16, 1996 -Page 8
SECTION 10. GENERAL FINANCIAL. AND INSURANCE PROVISIONS.
10.1 PaXment 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 6U 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 7 .
10.2 B nds.
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
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, includwg
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
368636
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October 16, 1996 -Page 9
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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 Securit, Fund.
A. In the event the Grantee is given notice of anon-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 constriction, 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.
B. Provision shall be made to permit the City to withdraw funds from the
Security Fund. Grantee shall not use the Security Fund for other purposes
and shall not assign, pledge or otherwise use this Security Fund as
security for any purpose.
C. .Within ten (10) days after notice to it that any amount has been withdrawn
by the City from the Security Fund pursuant to (A) of this section,
Grantee shall deposit a sum of money sufficient to restore such Security
Fund to the required amount.
D. In addition to recovery of any monies owed by Grantee to City or
damages to City as a result of any acts or omissions by Grantee pursuant
to the 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.
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October 16, 1996 -Pogo 10
2. For failure to provide data, documents, reports or information or
to cooperate with City during an Application process or System
review, the penalty shall be $50.00 per day for each day, or part
thereof, such failure occurs or continues.
3. For failure to comply with any of the provisions of this Franchise
for which a penalty is not otherwise specifically provided pursuant
to this Paragraph C, the penalty shall be $50.00 per day for each
day, or part thereof, such failure occurs or continues.
4. For failure to test, analyze and report on the performance of the
System following a request by City, the penalty shall be $50.00
per day for each day, or part thereof, such failure occurs or
continues.
5. For failure by Grantee to provide additional services as negotiated
. between City and Grantee at a periodic review session within 45
days after a request by City the penalty shall be $200.00 per day
for each day, or part thereof, such failure occurs or continues.
6. Forty-five days following notice from City of a failure of Grantee
to comply with construction, operation or maintenance standards,
the penalty shall be $200.00 per day for each day, or part thereof,
such failure occurs or continues.
7. For failure to provide the services Grantee has proposed, including
but not limited to the implementation and the utilization of the
Access Channels and the making available for use of the
equipment and other facilities to City, the penalty shall be $100.00
per day for each day, or part thereof, such failure occurs or
continues.
8. Each violation of any provision of this Franchise shall be
considered a separate violation for which a separate penalty can be
imposed.
E. Exclusive of the contractual penalties set out above in this section, a
violation of any provision of this Franchise is a misdemeanor.
F. If Grantee fails to pay to the City any taxes due and unpaid; or fails to
repay to the City, any damages, costs or expenses which the City shall be
compelled to pay by reason of any act or default of the Grantee in
connection with this Franchise; or fails, after thirty (30) days notice of
such failure by the City to comply with any provision of the Franchise
wltich the City reasonably determines can be remedied by an expenditure
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October 16, 1996 - Pege 11
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 fords 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
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Fnncbiae Agisement Ordimm
October 16, 1996 -Page 12
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.
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
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October 16, 1996 - Psge 13
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
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,
588638
Franchise Agreement Ordinance
October 16, 1996 -Page 14
educational or governmental Access Channels, then the City shall reducb
the number of Access Channels required of Grantee as follows:
(i) If the wired competitor passes less than 25 °6 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 R6 or more but less than 50°,6 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°6 or more of the homes and
customers in the cities of Edina, Eden Prairie, Hopkins,
Minnetonka and Richfield, Grantee shall provide at least one
public, educational and governmental Access Channel.
If at any time, a wired competitor provides channels for public,
educational and governmental access which exceed the channels provided
by Grantee, Grantee shall provide the same number of channels as the
wired competitor. In no event shall Grantee be required to provide more
public, educational or governmental Access Channels than it has agreed
to in this Franchise Agreement Ordinance.
If the wired competitor discontinues providing multichannel video
services, the Grantee's requirement for the provision of public,
educational and governmental Access Channels shall immediately return
to its original level.
C. If a wired competitor obtains a cable Franchise which requires it tb
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:
368638
Franchise Agreemrnt Ordmance
October 16, 1996 -Page IS
(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 wined 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 govemmental
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 govemmental access
that exceed the funds, equipment or facilities provided by Grantee under
this paragraph, Grantee shall provide the same amount of funds,
equipment and facilities. In no event shall Grantee be required to provide
more funds, equipment or facilities than it has agreed to provide in
Section 7 of this Franchise Agreement Ordinance.
If the wired competitor discontinues providing multichannel video
services, the Grantee's requirement for the provision of funding and,
equipment and facilities for public, educational and govemmental access
and, facilities and equipment shall immediately return to its original level.
D. For all other Franchise provisions imposed upon Grantee in this
Ordinance, if a wired competitor obtains a cable Franchise which does not
require it to meet the same Franchise provision, the City shall not require
Grantee to meet that Franchise provision. If the wired competitor does
not obtain a cable Franchise and it is not required to meet the same
Franchise provision, then the City shall relieve the Grantee from that
Franchise provision as follows:
(i) If the wired competitor passes less than 50 % of the homes and
customers in the cities of Edina, Eden Prairie, Hopkins,
588638
Franchise Agreement Ordinance
October 16, 1996 -Page 16
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 imposa~ by the City upon Grantee
which is not also imposed by the City or the State of Minnesota upon a wired
competitor, it shall identify the wired competitor, including the basis for stating,
that the entity is a "wired competitor" as defined above; it shall identify the
Franchise provision in question; and it shall provide this information to the City.
Within 90 days, the City shall: (1) pass a resolution declaring that Grantee is
subject to this section for that requirement; (2) declare why the entity in question
is not a wired competitor; or (3) state that the "wired competitor" is subject to a
requirement that substantially duplicates the Franchise provision. During the
above process, the Grantee shall escrow any funds at issue in the above process,
that the Franchise requires be remitted during the time period of the above',
process and Grantee shall continue to meet any and all requirements in question.
If the City declares such requirement void as to Grantee, the City is not liable for
Grantee's past compliance with the requirement, including any past fees remitted
to the City.
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 party,.
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 Ptairie, 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
388638
FnmcLiae Agreement Ordinance
October 16, 1996 -Page 17
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. U n acce tance of this Franchise Ordinance No lA~Y~
Po P _, also known as the
Cable Communications Ordinance, and Ordinance No.9~'?~-; 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. 7C-~9L, 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.
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
January 1, 1997.
588638
Franchise Agreement Ordinance
October 16, 1996 -Page ~
rr
IN WITNESS Vw~HEREOF, Grantor and Grantee have executed this Franchise Agreement
the date and year first above written.
(SEAL;
(Corporate Seal)
CITY OF Hopkins ,Minnesota
$y Charles D. Redepenning, i4ayor
ate: November 20, 1996
_ ~ ~~
Mayor
.~
ATTEST:
Ter Obe er
,City Clerk
KBL CABLE SYSTEMS OF THE SOLTTFiWEST,
INC., A WHOLLY-OWNED SUBSIDIARY OF
TIME WARNER INC.
Date: ~ ~-C ~3 ~~~'
•
STATE OF i~li nnesota
COUNTY OF Hennepi n
The fore ing instrument was acknowledged before me on /(/v~,~r~~~-- 2 U, 199 G , by
the of the City of ~ ,~~r ,
on behalf of the Ci
••^'•,, JAMES A. GENELLIE
?'3 NOTARY PUBIIC MINNESOTA
• ~ MY COMMISSION EXPIRES ;
q;.rr.•~ JANUARY 31, 2000
588638
Franchise Agreement Ordioaace
OcWber 16, 1996 -Page 19
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
First Reading of Ordinance #96-790:
Second Reading of Ordinance #96-790 and
approval of the Summary of Ordinance #96-790
Date of Publication of the Summary:
Effective Date of the Ordinance:
388638
Prancbi~e Agreement Ordinance
October 16, 1996 -Page 20
November 6, 1996
November 19, 1996
November 27, 1996
January 1, 1997
~~