CR 2012-072 Cable Franchise RenewalJuly 2, 2012 Council Report 2012-072
Cable Franchise Renewal
Proposed Action
Staff recommends adoption of the following motion: Approve Ordinance 2012-1051 for first reading.
This action will continue the process of renewing the cable franchise in the City of Hopkins.
Overview
The Southwest Suburban Cable Commission ("Commission") consists of the cities of Eden Prairie,
Edina, Hopkins, Minnetonka and Richfield, Minnesota ("Member Cities"). The Commission
administers and enforces the cable franchises on behalf of its Member Cities.
On January 1, 1997, each of the Member Cities granted a Cable Television Franchise to KBL
Cablesystems of the Southwest, Inc ("Existing Franchise"). At that same time the Member Cities each
adopted a Cable Television Regulatory Ordinance ("Regulatory Ordinance") to be incorporated into the
City Code of each Member City.
In 2000, the Commission and Member Cities approved a transfer of the Existing Franchise to Time
Warner, Inc. In June of 2005, Time Warner transferred the Existing Franchise to Comcast
Communications ("Comcast"). Comcast currently operates the cable systems in each of the Member
Cities under authority granted in the Existing Franchise. The initial term of the Existing Franchise ran
for fifteen years and was extended by the Member Cities to now expire on July 31, 2012.
A franchise renewal has now been negotiated with Comcast. The Commission has recommended that
each of the Member Cities adopt the new franchise ordinance. The renewed franchise will ensure
continued cable services as well as continued financial support for City communications activities, for
the next ten years. As with previous cable franchises, this is a non-exclusive franchise which allows for
the opportunity for other companies to also provide cable services in the future.
Primary Issues to Consider
• What does a cable franchise cover?
• Can a renewal be denied?
• What were the main issues in the renewal negotiations?
Supporting Information
• Analysis of the Issues
• Ordinance 2012-1051
• SWSCC Resolution 2012-1
James Genellie
Assistant City Manager
Council Report 2012-072
Page 2
Analysis of the Issues
What does a cable franchise cover?
A cable franchise is required for a cable company to operate in Minnesota. The franchise deals with
subjects such as construction standards and maintenance; system performance; customer service; and
public, education and government (PEG) access. The franchise does not give cities the ability to
control rates or channel alignments.
Can a renewal be denied?
Although franchise renewals have to be negotiated between the franchising authority and the cable
operator; an existing cable franchise must be renewed, according to federal law, as long as:
(A) the cable operator has substantially complied with the material terms of the existing franchise and
with applicable law;
(B) the quality of the operator's service, including signal quality, response to consumer complaints, and
billing practices, but without regard to the mix or quality of cable services or other services provided
over the system, has been reasonable in light of community needs;
(C) the operator has the financial, legal, and technical ability to provide the services, facilities, and
equipment as set forth in the operator's proposal; and
(D) the operator's proposal is reasonable to meet the future cable -related community needs and
interests, taking into account the cost of meeting such needs and interests.
What were the main issues in the renewal negotiations?
The Southwest Suburban Cable Commission's primary goals during renewal negotiations were:
1. Incorporate the provisions of the Regulatory Ordinance into a renewed franchise — resulting in
one governing document addressing cable regulations in each Member City.
2. Ensure that the provision of each Member City's Code is incorporated into the renewed
franchise so that the same right-of-way (ROW) regulations governing all right-of-way users will
apply to Comcast.
3. Streamline regulation in the Comcast Franchise — eliminated unnecessary provisions that are no
longer applicable to cable providers in today's regulatory environment.
4. Address digital migration of local government and educational channels.
Increase the level of capital support for local channels.
6. Maintain the 5% franchise fee as consideration for use of the City's ROW.
7. Eliminate the Comcast public access studio in Eden Prairie due to limited use by residents and
cable subscribers and redirect the resources to other local programming options to be
determined by the Member Cities.
Improve customer service standards applicable to Comcast and enforceable by the Commission
and the Member Cities.
9. Renew for a 10 year term.
10. Adopt enforcement procedures and security to ensure compliance.
Council Report 2012-072
Page 3
Final Results of Franchise Negotiations
1997
2012
5% Franchise fee
"Gross Revenue" definition
Same 5% fee
Stronger definition
Comcast run studio
- $.25/sub/mo paid to Comcast to support
studio
Comcast studio closed
$.60 - $.65 /sub/mo PEG Fee paid to City
Educational & Public Access programming
through Comcast
Educational & Public Access programming
provided through SWSCC
-provided
15 year term
10 year term
4 PEG channels
3 PEG channels
Digital migration addressed
Option for 1 high definition channel
drops at public buildings
Same + up to 3 digital boxes per site
-Complementary
Maintain fiber return feeds
Obligation completed, will be maintained
Performance bond
$100,000 per Cit
fund
$10,000 per Cit — upon notice of violation
-Security
Reporting/compliance
Obligations from Regulatory Ordinance merged
into franchise and strengthened
ROW management
Operator held to City Code provisions
Alternatives
1. Approve Ordinance 2012-1051 for first reading. This will continue the process of renewing
the Comcast cable franchise.
2. Continue for additional information.
Staff recommends Alternative #1.
RESOLUTION NO. 2012-1
RECOMMENDATION OF THE SOUTHWEST SUBURBAN CABLE COMMISSION
REGARDING THE ADOPTION OF A CABLE FRANCHISE TO COMCAST OF ARKANSAS /
FLORIDA / LOUISIANA / MINNESOTA / MISSISSIPPI / TENNESSEE, INC.
Recitals
The Southwest Suburban Cable Commission ("Commission") consists of the cities of
Eden Prairie, Edina, Hopkins, Minnetonka and Richfield, Minnesota ("Member Cities").
The Commission administers and enforces cable franchises on behalf of its Member
Cities.
Comcast of Arkansas / Florida / Louisiana / Minnesota / Mississippi / Tennessee, Inc.
("Comcast") currently operates a cable system in each of the Member Cities under cable
television franchises granted on or about January 1, 1997 ("Existing Franchises").
4. In 2009 Comcast contacted each of the Member Cities seeking renewal of the Existing
Franchises.
6. The Commission's legal counsel, the law firm of Moss & Barnett, a Professional
Association, assisted the Commission in conducting the franchise renewal process.
Extensive informal franchise renewal negotiations between Comcast and the
Commission have been completed and a new model Cable Television Franchise
Ordinance ("Model Franchise") has been finalized.
8. The Commission finds that the Model Franchise will benefit the Member Cities and will
protect the rights and interests of residents and cable subscribers in each of the Member
Cities.
NOW THEREFORE, the Commission hereby resolves as follows:
The May 30, 2012 Model Franchise will protect the Member Cities and its residents and
cable Subscribers regarding the provision of cable services by Comcast.
2. The Commission recommends that each Member City take action to adopt the Model
Franchise.
1
PASSED AND ADOPTED this day of (74,, 12012.
SOUTHWEST SUBURBAN CABLE COMMISSION
m
Ron Case, Chair
ATTEST:
17
20059990
City of Hopkins, Minnesota
Ordinance Granting a Cable Television Franchise
to
Comcast of Arkansas / Florida / Louisiana / Minnesota / Mississippi / Tennessee, Inc.
June 25, 2012
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TABLE OF CONTENTS
SECTION1
DEFINITIONS....................................................................................................... 1
SECTION2
FRANCHISF.........................................................................................................
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..............................................................................................
25
SECTION11
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 ...............................................
('-1
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SECTION1 DEFINITIONS.......................................................................................................... 1
SECTION 2 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................................................................... I
SECTION 6 PROGRAMMING AND SERVICES..................................................................... 16
SECTION 7 PUBLIC, EDUCATIONAL AND GOVERNMENTAL ACCESS ........................ 18
SECTION 8 REGULATORY PROVISIONS............................................................................. 24
SECTION 9 BOND.
SECTION 10 SECURITY FUND............................................................................................... 25
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
ii
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CITY OF HOPKINS
COUNTY OF HENNEPIN
ORDINANCE NO. 2012-1051
AN ORDINANCE RENEWING THE GRANT OF A FRANCHISE TO COIVICAST OF
ARKANSAS / FLORIDA / LOUISIANA / MINNESOTA / MISSISSIPPI / TENNESSEE,
INC. TO OPERATE AND MAINTAIN A CABLE SYSTEM IN THE CITY OF
HOPKINS; SETTING FORTH CONDITIONS ACCOMPANYING THE GRANT OF
FRANCHISE; PROVIDING FOR CITY REGULATION AND ADMINISTRATION OF
THE CABLE SYSTEM; AND TERMINATING ORDINANCE NO. 96-790.
RECITALS
The City of Hopkins, 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. 96-790.
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 HOPKINS 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 Hopkins, a municipal corporation in the State of Minnesota.
"City Code" means the Municipal Code of the City of Hopkins, 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
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Channel selector also pen -nits a Subscriber to view all signals included in the Basic Cable
Service tier delivered at designated converter dial locations.
"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 tenninal 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 tens 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 forni, 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 progranuners 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,
2032143vl
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
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.
2032143x1
"PEG" means public, educational and governmental.
"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 tern 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
2032143v1
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
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
20321430
(30) Days of receipt of said request, or the request shall be deemed approved as a matter
of law.
(c) If a public hearing is deemed necessary pursuant to (b) above, such
hearing shall be commenced within thirty (30) Days of such detennination 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 atter 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 tenn
"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 tide 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:
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(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;
(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.
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(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
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, detennines that such
use is inconsistent with the terns, 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
cost).
2032143v1
(d) utilities are overhead but residents prefer underground (service provided at
M
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
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
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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,
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
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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
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
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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 atter written notice of the City's demand for
removal is given, the City shall have the right to exercise one of the following options:
(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.
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(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
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.
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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.
(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 perforin 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.
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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).
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
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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
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 (125) 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
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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.
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").
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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
this Franchise, such control and administration to various entities as detennined 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 snake 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
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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
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
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(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 1 s` in the year proceeding the request for
any costs exceeding Twenty-five Thousand and No/100 Dollars (525,000). The cost estimate
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.
7.16 Access Channel Support.
2032143x1
(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 (5th) 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
new technologies also utilized for commercial Channels carried on its Cable System.
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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 fi•om City Hall;
(b) Replay government access programming fi•om City Hall; and
(c) Transmit character generated programming.
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(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.
8.4 Regulation of Rates and Charges.
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(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.
SECTION 10
SECURITY FUND
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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,
the liquidated damage shall be One Hundred Fifty Dollars ($150.00) per Day for each
Day, or part thereof, such failure occurs or continues.
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(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 detennines 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
written findings of fact relative to its determination. If a violation is found, Grantee may
petition for reconsideration.
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(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;
hereof,
(b) Attempted to evade any provision of this Franchise or the acceptance
(c) Practiced any fraud or deceit upon City or Subscribers;
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(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
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.
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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. ti 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 Privacv
(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 pennission 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 pennission 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 pennission. 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 pennission 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 pennission 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 pennission. The pennission
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 thele 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
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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.
(e) 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 teens 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.
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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. 96-790 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:
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To the City: City Manager, City of Hopkins
1010 South First Street
Hopkins, MN 55343
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 pen -nits 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 perfonned 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
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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 MVPD.
Section 18. The effective date of this ordinance shall be August 1, 2012.
First Reading: July 10, 2012
Second Reading: July 17, 2012
Date of Publication: July 26, 2012
Date Ordinance Takes Effect: August 1, 2012
44
2032143vl
ATTEST
Gene Maxwell, Mayor
Kristine Luedke, City Clerk
CITY OF HOPKINS, MINNESOTA
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:
SWORN TO BEFORE ME this
day of 2012.
NOTARY PUBLIC
45
2032143v1
Exhibit A
Free Cable Service to Public Buildings
1. SERVS,HOPKINS M
2. ELEMENTARY,JOHN I
3. SCHOOL,HOPKINS ARTS
4. GARAGE,HOPKINS
5. ELEM SCHOOL,EISENHOWER
6. ELEMENTARY,ALICE SMITH
7. CENTER,HOPKINS
8. CITY HALL,HOPKINS
9. FIRE STATION,HOPKINS
10. POLICE DEPT,HOPKINS
11. PAVILLION,HOPKINS
12. SCHOOL,HOPKINS PUBLIC
13. FIRE DEPT,HOPKINS
14. TOWERS,DOW
15. FOR THE ARTS,HOPKINS CENTE
20321430 A-1
1001 HIGHWAY 7 APT B
1320 MAINSTREET APT ELEM
1320 MAINSTREET # ART
11100 EXCELSIOR BLVD
1001 HIGHWAY 7 APT A
801 MINNETONKA MILLS RD
33 14TH AVE N
1010 IST ST S APT HALL
1010 IST ST S APT FIRE
1010 IST ST S APT COPS
11000 EXCELSIOR BLVD STE A
1001 HIGHWAY 7
101 17TH AVE S
22 5TH AVE S STE CMCL
1111 MAINSTREET
,
, • .. ' f _ ,a....w, �::_ �."'d{.,+��$I� �r \� Art i; �� 36 �F �
v V� a c a • -r{.
o
Jim
L4
Exhibit C
Franchise Fee Payment Worksheet
TRADE SECRET — CONFIDENTIAL
Fee Factor: 5%
2032143v1 C-1
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%
2032143v1 C-1