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O-1340-6-95ORDINANCE NO. 1340-6-95 CITY OF ALLEN, TEXAS CABLE COMMUNICATIONS ORDINANCE July 20, 1995 TABLE OF CONTENTS Paae Section 1. Short title . . . . . . . . . . . . . . . . . . 1 Section 2. Definitions . . . . . . . . . . . . . . . . . . 1 Section 3. Intent and Purposes . . . . . . . . . . . . . . 9 Section 4. Grant of authority; franchise required. . . 10 Section 5. Franchise characteristics. . . . . . . . . . . 11 Section 6. Franchise, franchisee subject to other laws, police power . . . . . 13 Section 7. Interpretation of franchise terms. . . . . . . 13 Section 8. Applications for grant, renewal, modification or transfer of franchises. 14 Section 9. Grant of franchises . . . . . . . . . . . . . 20 Section 10. Insurance; surety; indemnification. . . . . . 23 Section 11. Security fund . . . . . . . . . . . . . . . . . 26 Section 12. Construction bond . . . . . . . . . . . . . . 28 Section 13. Minimum facilities and services. . . . . . . 31 Section 14. Technical standards . . . . . . . . . . . . . . 33 Section 15. Access channels and facilities. . . . . . . . 35 Section 16. Franchise fee . . . . . . . . . . . . . . . . . 36 Section 17. Reports and records . . . . . . . . . . . . . 39 Section 18. Customer service requirements. . . . . . . . 43 Section 19. Subscriber privacy. . . . . . . . . . . . . 52 Section 20. Discrimination prohibited. . . . . . . . . . 52 Section 21. Use of Streets. . . . . . . . . . . . . . . 53 Section 22. Enforcement remedies. . . . . . . . . . . . 59 Section 23. Renewal of franchise. . . . . . . . . . . . 61 Section 24. Transfers . . . . . . . . . . . . . . . . . . 62 Section 25. Revocation or termination of franchise. . . 65 Section 26. Arbitration . . . . . . . . . . . . . . . . . 71 Section 27. Continuity of service mandatory. . . . . . . 72 Section 28. Rates . . . . . . . . . . . . . . . . . . . . 72 Section 29. Performance evaluation . . . . . . . . . . . . 73 Section 30. Administration . . . . . . . . . . . . . . . . 74 Section 31. Applicability . . . . . . . . . . . . . . . . 74 Section 32. Municipal cable system ownership authorized. 75 Section 33. Reservation of rights . . . . . . . . . . . . 75 Section 34. Citizens' Advisory Committee . . . . . . . . . 75 Section 35. Repeal of Conflicting Ordinances . . . . . . . 78 Section 36. Severability . . . . . . . . . . . . . . . . . 78 Section 37. Posting and Effective Date . . . . . . . . . . 79 ii ORDINANCE NO. 1340-6-95 AN ORDINANCE OF THE CITY OF ALLEN, TEXAS, GOVERNING THE GRANTING OF FRANCHISES FOR, AND THE INSTALLATION, CONSTRUCTION, OPERATION AND REGULATION OF, CABLE TELEVISION SYSTEMS IN THE CITY OF ALLEN. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ALLEN, TEXAS: Section 1. Short title. This Ordinance shall be known and may be cited as City of Allen, Texas Cable Communications Ordinance. Section 2. Definitions. For the purpose of this Ordinance, the following terms, phrases, words and their derivations shall have the meanings given herein. When not inconsistent with the context, words used in the present tense include the future, words in the plural number include the singular number, and words in the singular number include the plural.number. The words "shall" and "will" are mandatory, and "may" is permissive. Words not defined herein shall be given the meaning set forth in the Cable Communications Policy Act of 1984, 47 U.S.C. § 521 et sea., and as hereinafter may be amended, including without limitation the Cable Television Consumer Protection and Competition Act of 1992, Pub. 1. No. 102- ` 1 385, 106 Stat. 1460, and, if not defined therein, their common and ordinary meaning. (a) "Access channel" means any channel on a cable system set aside without charge by the franchisee for public, educational and/or local governmental use. (b) "Affiliate" means any person that owns or controls a grantee or franchisee, any person that a grantee or franchisee owns or controls, or any person under common ownership or control with a grantee or franchisee. (c) "Applicant" means any person submitting an application within the meaning of this Ordinance. (d) "Basic Cable Service" or "Basic Service" means any service tier that includes the retransmission of any local television broadcast signals. (e) "Cable Act" means the Cable Communications Policy Act of 1984, 47 U.S.C. §§ 521 j2L sea., and as hereinafter may be amended, including without limitation the Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102- 385, 106 Stat. 1460. (f) "Cable system," "cable television system," or "system," means any facility, operating by means of coaxial cable, optical fiber, or any other transmission lines or forms of transmission 2 and associated signal generation, reception and control equipment that is designed to provide cable service which includes video programming and which is provided to multiple subscribers within the City. Such term does not include (a) a facility that serves only to retransmit the television signals of one (1) or more television broadcast stations; (b) a facility that serves only subscribers in one (1) or more multiple unit dwellings under common ownership, control, or management, unless such facility uses or crosses any Street; (c) a facility of a common carrier that is subject, in whole or in part, to the provisions of Title II of the Communications Act of 1934, 47 U.S.C. § 201 et sea., except that to the full extent permitted by law, such facility will be considered a cable system (other than for purposes of Section 621(c) of the Cable Act) to the extent such facility is used in the transmission of video programming directly to subscribers; or (d) any facilities of any electric utility used solely for operating its electric utility systems. The foregoing definition of "cable system" shall not be deemed to circumscribe or limit the valid authority of the City to regulate or franchise the activities of any other communications system or provider of communications services to the full extent permitted by law. 3 (g) "Cable service" means the one-way transmission to subscribers of video or other programming services over a cable system together with any subscriber interaction, if any, which is required for the selection of such programming services. (h) "City" means the City of Allen, a municipal corporation of the State of Texas, in its present incorporated form or in any later reorganized, consolidated, enlarged or reincorporated form. (i) "City Council" or "Council" means the legislative body of the City. (j) "Control of a franchisee, grantee or applicant" means actual working control of a franchisee, grantee, or applicant, in - whatever manner exercised. (k) "Designated Access Organization" or "DAO" means any non-profit entity established or designated by the City pursuant to Section 15 of this Ordinance for the purpose of developing, managing, administering or using any access channel or access channels. (1) "FCC" means the Federal Communications Commission, or any successor governmental entity thereto. (m) "Franchise" means the initial authorization or renewal granted by the City to a franchisee to construct, maintain and operate a cable system under, on, and over City Streets within 4 all or specified areas of the City. The term does not include any license or permit that may be required by other applicable laws of the City for the privilege of transacting and carrying on a business within the City or for disturbing, or carrying out any work upon, any Street. (n) "Franchise agreement" means a contract entered into in accordance with the provisions of this Ordinance and all applicable law between the City and a franchisee that sets forth the terms and conditions under which the franchise will be exercised. (o) "Franchisee" means any person granted a franchise pursuant to this Ordinance that has entered into a franchise agreement with the City. (p) "Grantee" means any person granted a franchise pursuant to this Ordinance that has not yet entered into a franchise agreement with the City. (q) ."Gross revenues" means all revenues of a franchisee and any person which constitutes a cable operator as defined in Section 602(5) of the Cable Act derived from the operation of a• cable system by that franchisee within the City. Gross revenues includes, but is not limited to, fees charged subscribers for basic service; fees charged subscribers for any optional, 5 premium, per -channel or per -program service; fees charged subscribers for any tier of service other than basic service; installation, disconnection, re -connection and change -in-service fees; leased channel fees; equipment charges; fees for maintenance or service of cable equipment or facilities; revenues derived from programmers for carriage of programming on the system; converter and remote rentals or sales; additional outlet charges; advertising revenues; revenues from home shopping channels; and the sale, exchange or cablecast by the franchisee of any programming developed on or for access channels or institutional users. Gross revenues shall be the basis for computing the franchise fee imposed pursuant to Section 16 hereof. Gross revenues shall not include (i) to the extent consistent with generally accepted accounting principles, actual bad debt write-offs, provided, however, that all or any part of such actual bad debt that is written off but subsequently collected shall be included in Gross Revenues in the period collected; and (ii) any taxes on services furnished by the franchisee which are imposed upon any subscriber or user by the state, County, City or other governmental unit and collected by the franchisee on behalf of said governmental unit. 0 (r) "Leased access channel" means a channel designated in accordance with Section 612 of the Cable Act, 47 U.S.C. § 532, for commercial use by persons unaffiliated with the franchisee. (s) "Person" means any individual, corporation, partnership, association, joint venture, organization or legal entity of any kind, and any lawful trustee, successor, assignee, transferee or personal representative thereof, but shall not mean the City. (t) "Pro Forma Transfer of a Franchise" means any transfer of a franchise that involves no substantial change in the ultimate ownership or control of the franchisee. (u) "Service Tier" means a category of cable service provided by the franchisee and for which a separate charge is made by the franchisee. (v) "Street or Streets" means the surface, the air space above the surface and the area below the surface of any public street, highway, road, freeway, thoroughfare, parkway, sidewalk, bridge, court, lane, path, alley, way, drive, circle, easement, or any other public right-of-way, public way, or public place, including public utility easements, or any property in which the City holds any kind of property interest and any temporary or permanent fixtures or improvements located thereon. 7 M "Subscriber" means any person who legally receives any service delivered over a cable system. (x) "System malfunction" means any cable system equipment or facility failure or malfunction that results in the loss of signal strength and quality levels as specified by the FCC on one or more channels to one or more subscribers. A malfunction is major if it affects eleven (11) or more subscribers. (y) "Transfer of a franchise" means any transaction in which (1) control of a franchisee or its cable system is transferred from one person or group of persons to another person or group of persons; or (2) the rights and/or obligations held by the franchisee under a franchise agreement are transferred or assigned from one person or group of persons to another person or group of persons. (z) "Two-way capability" means the incorporation into a cable system of all appropriate design and engineering characteristics and features so that two-way transmission over the system can be implemented and activated. (aa) "Video channel or 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, Ea3 including the associated audio signal, as television channel is defined by the FCC by regulation or otherwise. Section 3. Intent and Purposes. (a) It is the intent of the City and the purpose of this Ordinance to promote the public health, safety, and general welfare by providing for the grant of one or more franchises for the construction and operation of a cable system within the City; to provide for the regulation, to the extent provided for by law, of each cable system within the City in the public interest; to provide for the payment of compensation by a franchisee to the City for the use of Streets by its cable system; to promote the widespread availability of quality cable service to City residents and businesses, the City, and other public institutions; to encourage the development of cable and other communications technologies and cable systems as a means of communication between and among members of the public, City businesses, the City, and other public institutions; to promote competitive cable rates and services; to promote the safe and efficient use of City Streets; to enhance and maximize the communicative potential of Streets used by cable systems; and to encourage the provision of a diversity of information sources to Pi City residents, businesses,,the community, the City, and other public institutions by cable technology. (b) Recognizing the continuing development of communications technology and uses, it is the policy of the City to encourage experimentation and innovation in the development of cable system uses, services, programming and techniques that will be of general benefit to the community to the extent all such experiments and innovations are consistent with applicable laws. Section 4. Grant of authority; franchise required. (a) The City may grant one or more franchises in accordance with this Ordinance. The material provisions of such franchises shall be reasonably comparable, taking into account differences in the timing and circumstances of the grants, in order that one franchisee is not given an unfair competitive advantage over another so as to provide all parties equal protection under the law. (b) No person may construct or operate a cable system or any other communications transmission facilities over, on, or under the Streets in the City without first obtaining a franchise granted by the City pursuant to this Ordinance, and no person may 10 be granted a franchise without having entered into a franchise agreement with the City pursuant to this ordinance. Section 5. Franchise characteristics. (a) A franchise authorizes use of City Streets, or specified portions thereof, for installing cables, wires, lines, optical fiber, underground conduit, and other facilities to operate a cable system or other communication systems within all or a specified area of the City, but does not expressly or implicitly authorize the franchisee to provide service to, or install cables, wires, lines, underground conduit, or any other equipment or facilities upon private property without owner consent (except for use of compatible easements pursuant to Section 621 of the Cable Act, 47 U.S.C. § 541(a)(2)), or to use publicly or privately owned conduits without a separate agreement with the owners. (b) A franchise is nonexclusive, and will not expressly or implicitly preclude the issuance of other franchises to operate cable systems within the City, or affect the City's right to use the Streets or to authorize use of City Streets to other persons as it determines appropriate. 11 (c) Any privilege claimed under any franchise by a franchisee in any Street shall be subordinate to the City's use thereof, and to any other prior lawful occupancy of the Streets. (d) Once a franchise agreement has been accepted and executed by the City and a franchisee, such franchise agreement shall constitute a contract between the franchisee and the City, and the terms, conditions and provisions of such franchise agreement, together with this Ordinance and all other duly enacted and applicable laws, shall define the rights and obligations of the franchisee and the City relating to the franchise. (e) Any franchise granted hereunder shall be a privilege held in personal trust by the original franchisee, and may not be transferred, nor may control of a franchisee be transferred, without the prior written consent of the City as provided in Section 24 hereof. (f) No privilege or exemption shall be conferred or granted by any franchise granted under this Ordinance except those specifically prescribed herein, and/or the franchise agreement granting the franchise. (g) No franchise shall authorize the use of any public property other than public Streets and public utility easements 12 owned by the City, unless the franchise agreement or subsequent resolution of the Council expressly authorizes use of such other public property. Section 6. Franchise, franchisee subject to other laws. police power. (a) A franchisee shall at all times be subject to and shall comply with all generally applicable laws. A franchisee shall at all times be subject to all lawful exercise of the police power of the City. (b) Except as may be specifically provided in this Ordinance or under the terms of a franchise agreement, the failure of the City, upon one or more occasions, to exercise a right or to require compliance or performance under the Ordinance or a franchise agreement shall not be deemed to constitute a waiver of such right or a waiver of compliance or performance. Section 7. Interpretation of franchise terms. (a) The provisions of this Ordinance shall apply to a franchise agreement as if fully set forth in the franchise agreement, provided, however, that where the terms of a franchise agreement conflict with the provisions in this 13 Ordinance, the Franchise Agreement, as a negotiated agreement shall prevail. (b) Except as to matters which are governed solely by federal law or regulation, a franchise agreement will be governed by and construed in accordance with the laws of the State of Texas. Section B. Applications for grant, renewal, modification or transfer of franchises. (a) A written proposal or application (as applicable) shall be filed with the City for (1) grant of a new franchise; (2) renewal of a franchise under either the formal or informal procedures in accordance with Section 626 of the Cable Act, 47 U.S.C. § 546; (3) modification of a franchise agreement; (4) a transfer of a franchise (other than a pro forma transfer); or (5) any other relief from the City pursuant to this Ordinance or a franchise agreement. An applicant has the burden to demonstrate in its application compliance with all requirements of all applicable laws. (b) To be acceptable for filing, a signed original of the application shall be submitted together with five (5) copies, be accompanied by any required application filing fee, conform to 14 any applicable request for proposals, and contain all required information. All applications shall include the names and addresses of persons authorized to act on behalf of the applicant with respect to the application. (c) All applications accepted for filing shall be made available by the City for public inspection. (d) An application for the grant of a new franchise may be filed pursuant to a request for proposals issued by the City or on an unsolicited basis. The City, upon receipt of an unsolicited application, may issue a request for proposals. If the City elects to issue a request for proposals upon receipt of an unsolicited application, the applicant may submit an amended application in response to the request for proposals, or may inform the City that its unsolicited application should be considered in response to the request for proposals, or may withdraw its unsolicited application. An application which does not conform to the requirements of a request for proposals may be considered nonresponsive and denied on that basis. (e) An application for the grant of a new franchise shall contain, at minimum, the following information: (1) Name and address of the applicant and identification of the ownership and control of the applicant, 15 including: the names and addresses of the ten (10) largest holders of an ownership interest in the applicant, and all persons with five percent (590 or more ownership interest, including the names and addresses of parents or affiliates holding such ownership interests directly or indirectly; the names and addresses of any subsidiaries of the applicant; the persons who control the applicant; and all officers and directors of the applicant; (2) An indication of whether the applicant, or any person controlling the applicant, or any officer or director of the applicant, has been adjudged bankrupt, had a cable franchise or license revoked, or been found by any court or administrative agency to have violated a security or antitrust law, or to have committed a felony, or any crime involving moral turpitude; and, if so, identification of any such person and a full explanation of the circumstances; (3) A demonstration of the applicant's technical, legal and financial ability to construct and/or operate the proposed cable system, including identification of key personnel; (4) A complete and detailed financial statement of the applicant and a statement prepared by a certified public accountant regarding the applicant's financial ability to 16 complete the construction and operation of the cable system proposed; (5) A description of the applicant's prior experience in cable system ownership, construction and operation, and identification of the ten largest communities in which the applicant or any of its affiliates have, or have had, a cable franchise or license or any interest therein; (6) Identification of the area of the City to be served by the proposed cable system, including a description of the proposed service area's boundaries, the number of households in the area, the potential subscriber density in the area, and a detailed map showing the proposed service area's boundaries; (7) A detailed description of the physical facilities proposed, including channel capacity, technical design, performance characteristics, headend, and access facilities; (8) Where applicable, a description of the construction of the proposed system,,including-an estimate of plant mileage and its location, the proposed construction schedule, a description, where appropriate, of how services will be converted from existing facilities to new facilities, and information on the availability of space in conduits including, 17 where appropriate, an estimate of the cost of any necessary rearrangement of existing facilities; (9) A description of the services to be provided initially, including all broadcast and non -broadcast signals to be carried and all non -television services to be delivered over the cable system, and if services will be offered by tiers, identification of the signals and/or services to be included on each tier; (10) A statement setting forth all proposed classifications of rates and charges, including proposed charges for each service tier, installation, converters, and other equipment or services, and the applicant's ownership interest in any proposed program services to be delivered over the cable system; (11) A demonstration of how the applicant's proposal will reasonably meet the future cable -related needs and interests of the community, including a description of how the proposal will meet the needs described in any recent community needs assessment conducted by or for the City; (12) Pro forma financial projections for the first five (5) years of the franchise term, including a statement of projected income, and a schedule of planned capital additions, E ., with all significant assumptions explained in notes or supporting schedules; (13) Any other information as may be reasonably necessary to demonstrate compliance with the requirements of this Ordinance and information that the City may request of the applicant that is relevant to the City's consideration of the application; and (14) An affidavit or declaration of the applicant or authorized officer certifying the truth and accuracy of the information in the application, acknowledging the enforceability of application commitments, and certifying that the proposal meets, and that the applicant will comply with, all federal and state law requirements. (f) An application for modification of a franchise agreement shall include, at minimum, the following information: (1) The specific modification requested; (2) The justification for the requested modification, including the impact of the requested modification on subscribers and others, and the financial impact on the applicant if the modification is approved or disapproved; (3) A statement whether the modification is sought pursuant to Section 625 of the Cable Act, 47 U.S.C. § 545, 19 and, if so, a demonstration that the requested modification meets the standards set forth in 47 U.S.C. § 545;` and (4) Any other information reasonably necessary for the City to make an informed determination on the application for modification. (g) A proposal for renewal of a franchise shall comply with the requirements of Section 23 hereof. (h) An application for approval of a transfer of a franchise shall comply with the requirements of FCC rules and regulations regarding transfers and Section 24 hereof. (i) To be acceptable for filing, an application for a new or initial Franchise or a transfer of a franchise shall be accompanied by a filing fee in the following amount, as appropriate: 1) For a new or initial franchise: $3000 2) For a transfer of a franchise (other than a pro forma transfer) : $2000 Section 9. Grant of franchises. (a) The City may grant a franchise to serve all or a specified area of the City, and for a period not to exceed fifteen (15) years. (b) The City may make the grant of a franchise conditioned upon the completion of construction within a prescribed time or upon the performance of other specific obligations which are to be set forth in the franchise agreement, (c) In evaluating an application for a new franchise, the City may consider, among other things, the following factors: the applicant's technical, financial, and legal qualifications to construct and operate the proposed system; the nature of the proposed facilities, equipment, and services; the applicant's experience in constructing and operating cable systems and providing cable service'in other communities, if any; the ability of City Streets to accommodate the proposed system; the potential disruption to users of City Streets and any resultant inconvenience to the public; whether the proposal will meet reasonably anticipated community needs and serve the public interest; whether any adverse consequences to the public interest will result if the application is granted; and any other criteria as required by federal or state law. In evaluating any application for a franchise, the City shall not consider the 21 content of the programming that the applicant proposes to provide. (d) The City may hold a public hearing to consider an application or applications for a Franchise. The applicant(s) shall be notified of the hearing and shall be given an opportunity to be heard. Based upon the application(s), the testimony presented at the public hearing, any recommendations of the City Manager, and any other information relevant to the application(s), the City Council shall decide by ordinance whether to grant or deny a franchise application(s) and decide the terms and conditions of any franchise(s) granted. (e) If the City Council grants a franchise application for a new franchise, the City Manager and the grantee shall agree on the terms of a franchise agreement within sixty (60) calendar days from the date of the Council ordinance making the grant. This period may be extended for good cause by the City. If agreement is not reached with the City within sixty (60) calendar days from the date of the Council ordinance making the grant, or if the period is not extended by the City, the franchise grant will be null and void without further action by the City. (f) Following at least ten (10) days prior notice to the grantee and the public, the City Council may hold a public 22 hearing at which it will receive comment on the proposed franchise agreement. (g) After complying with the above requirements, the City Council shall approve or disapprove the proposed franchise agreement by ordinance, or may direct that it be subject to further negotiation. (h) The grant of an initial franchise, a renewed franchise, an application to modify a franchise agreement, or an application to transfer a franchise may be subject to a processing fee in an amount not to exceed the City's actual publishing costs. Within thirty (30) calendar days from the date of the resolution approving or denying the franchise agreement or modification or transfer thereof by the City Council, the City shall notify the grantee of the amount of any publishing costs. The publishing costs shall be paid to the City within sixty (60) calendar days of the date of the City Council ordinance approving or denying the franchise agreement or a modification or transfer thereof. Section 10. Insurance; surety; indemnification. (a) A franchisee shall maintain, and by its acceptance of the franchise specifically agrees that it will maintain, throughout the entire length of the franchise period and at its 23 .sole cost and expense, the following liability insurance coverage: (1) Workers Compensation and Employee Liability Insurance in conformance with the laws of the State of Texas. (2) Franchisee's vehicles, including owned, non - owned (e.g., owned by franchisee's employees and used in the course and scope of employment), leased or hired vehicles, shall each be covered with Automobile Liability Insurance in the minimum amount of one million dollars ($1,000,000) combined single limit per accident for bodily injury, death and property damage. (3) Franchisee shall obtain and maintain comprehensive or commercial General Liability Insurance coverage in the minimum aggregate annual amount of one million dollars ($1,000,000) combined single limit, including bodily injury, personal injury, death, and broad form property damage. Such insurance coverage shall include, without limitation: (A) Contractual liability coverage; and (B) A cross -liability clause. (b) All insurance policies shall be with sureties qualified to do business in the State of Texas; and shall be with sureties 24 with an A-1 or better rating of insurance by Best's Key Rating Guide, Property/Casualty Edition. (c) A franchisee shall keep on file with the City certificates of insurance. (d) The certificates of insurance shall name the City, its officers, boards, commissions, commissioners, and employees, as additional insureds and shall further provide that any cancellation or reduction in coverage shall not be effective unless thirty (30) days prior written notice thereof has been given to the City. A franchisee shall not cancel any required insurance policy without submission of proof that the franchisee has obtained alternative insurance which complies with this Ordinance. (e) A franchisee shall, at its sole cost and expense, indemnify, hold harmless, and defend the City, its officials, boards, commissions, commissioners, and employees, against any and all claims, suits, causes of action, proceedings and judgments for damages or equitable relief arising out of the franchisee's installation, construction, maintenance or operation of its cable system, or in any way arising out of the franchisee's enjoyment or exercise of a franchise granted hereunder, regardless of whether the act or omission complained 25 of is authorized, allowed or prohibited by this Ordinance or a franchise agreement. This provision includes, but is not limited to, claims arising out of franchisee's copyright infringements or a failure by the franchisee to secure consents from the owners, authorized distributors, or franchisees of programs to be delivered by the cable system (excluding any PEG access programming). Section 11. Security fund. (a) Except as otherwise provided in a franchise agreement, prior to the franchise becoming effective, the franchisee shall post with the City a cash security deposit in an amount of not less than Twenty -Five Thousand Dollars ($25,000) to be used as a security fund to ensure the faithful performance of all provisions of this Ordinance, the franchise agreement, and other applicable law, and compliance with all orders, permits and directions of the City, and the payment by the franchisee of any claims, liens, fees, or taxes due the City which arise by reason of franchisee's construction, operation or maintenance of a cable system in the City. A franchise agreement may provide for a security fund greater than the minimum specified in this subsection where the City determines, under circumstances 26 existing at the time, that such larger security fund is necessary to protect the public or to provide adequate incentive to the franchisee to comply with this Ordinance and the franchise agreement. (b) Unless a franchise agreement provides otherwise, the entire balance of the security fund shall be deposited by franchisee in the form of a certified or cashier's check made payable to the City. (c) The City shall place the security deposit in an interest bearing account. The interest will accrue to the benefit of the franchisee but may not be withdrawn by the franchisee; all interest will be added to and become part of the security fund during the term of the franchise. (d) If a franchisee fails to pay the City any fees or taxes, liquidated damages, damages, or costs or expenses incurred by the City by reason of any act or default of the franchise,• or if the franchisee fails to comply with any provision of the franchise agreement or this Ordinance that the City determines can be remedied by an expenditure of the security fund, the City may, after thirty (30) calendar days notice to the franchisee, withdraw that amount with any interest or penalties from the 27 security fund. After such withdrawal, the City shall promptly notify the franchisee of the amount and date of the withdrawal. (e) The security fund will become the property of the City in the event the franchise is revoked. The franchisee is entitled to the return of the balance of the security fund that remains following expiration of the franchise, provided that there is no outstanding default or unpaid amounts owed to the City by the franchisee. (f) The rights reserved to the City with respect to the security fund are in addition to all other rights of the City, whether reserved by this ordinance or authorized by other law, or the franchise agreement, and no action, proceeding or exercise of a right with respect to such security fund will affect any other right the City may have. Section 12. Construction bond. (a) A franchise agreement may provide that, prior to any cable system construction, upgrade, or other work in the Streets, a franchisee shall establish in the City's favor a performance bond in an amount specified in the franchise agreement or other authorization as necessary to ensure the franchisee's faithful Nu: performance of the construction, upgrade, or other work, but the amount of such performance bond shall not exceed One Hundred Twenty Five Percent (125%) of the estimated cost of the Street work and repair associated with such construction, upgrade or other work. The franchisee shall submit an estimate of such cost to the City for the City's approval. The bond may be in the form of a letter of credit or other surety acceptable to the City. The bond must remain in force throughout the period specified in the franchise agreement; if the bond is canceled by the issuer for any reason, the franchisee shall obtain a replacement for the bond which shall enter into effect before the date on which the original bond lapses or terminates. (b) In the event a franchisee subject to such a performance bond fails to complete the cable system construction, upgrade or other work in the Streets in a safe, timely and competent manner in accord with the provisions of the franchise agreement, there shall be recoverable, jointly and severally from the principal and surety of the bond, any damages or loss suffered by the City as a result, including the full amount of any compensation, indemnification or cost of removal or abandonment of any property of the franchisee, or the cost of completing or repairing the system construction, upgrade or other work in the Streets, 29 including, but not limited to, repair of any damage caused by subsidence, plus a reasonable allowance for attorneys' fees, up to the full amount of the bond. The City may also recover against the bond any amount recoverable against the security fund pursuant to Section 11(d) where such amount exceeds that available under the security fund. (c) The franchise agreement may specify that upon completion of the system construction, upgrade or other work in the Streets and payment of all construction obligations of the cable system to the satisfaction of the City, the City may eliminate the bond or reduce its amount. However, the City may subsequently require an increase in the bond amount for any subsequent construction, upgrade or other work in the Streets. In any event, the total amount of the bond shall not exceed the amount specified in subsection (a) of this section. (d) Any performance bond required by a franchise agreement shall be issued by a surety with an A-1 or better rating of insurance in Best's Key Rating Guide, Property/Casualty Edition; and shall contain the following endorsement: "This bond may not be canceled, or allowed to lapse, until thirty (30) days after receipt by the City, by certified mail, return receipt requested, of a written notice from 30 the issuer of the bond of intent to cancel or not to renew." (e) The rights reserved by the City with respect to any performance bond established pursuant to this section are in addition to all other rights and remedies the City may have under this Ordinance, the franchise agreement, or at law or equity. Section 13. Minimum facilities and services. (a) The following minimum requirements for facilities and services apply to all franchises granted by the City. The City may require in a franchise agreement that a franchisee exceed these minimum requirements where it determines, under circumstances existing at the time of the application, that the additional requirements are necessary to meet public needs. (1) Any cable system constructed, upgraded, or reconstructed after the effective date of this Ordinance shall, at a minimum, (1) be able to provide at least fifty-four (54) video channels activated and in use; and (2) have addressability. A franchise agreement may provide for a larger minimum channel capacity requirement. (2) The City may require that a franchisee provide access channels for public, educational and/or governmental use. 31 (3) A cable system shall provide leased access channels as required by federal law. (4) A franchisee may be required to provide cable service without charge to all facilities within the City passed by the cable system that are owned or predominantly occupied by the City or a school and devoted to predominantly educational or governmental use. Such cable service shall be provided by means of a single drop extending to each building selected by the City or the educational institution. Each such drop, shall provide all services available over the cable system, with the exception of optionally charged per -channel or per -program services. A franchisee may be required in a franchise agreement to extend a drop internally to particular locations within the City or a school. If a franchise agreement does not require a franchisee to extend a drop internally, the drop may be internally extended by the City or the school without cost to, or responsibility of the franchisee, subject to the condition that all such internal extensions shall be inspected for signal leakage by the franchisee, at no cost to the City or the educational institution, to ensure they meet all FCC requirements relative to signal leakage. 32 (5) A franchisee shall design its system to allow the City to interrupt cable service in an emergency to deliver necessary information to subscribers. (6) Standard installation shall consist of a drop, not exceeding one hundred fifty (150) feet, to a subscriber's residence, provided, however, that where unusual circumstances require a franchisee to incur extraordinary boring expenses in installing an underground drop, a franchisee may charge the subscriber according to its rate schedule. Subscribers requesting drops in excess of one hundred fifty (150) feet may be charged according to the franchisee's rate schedule. (b) Unless a franchise agreement provides otherwise, a franchisee shall make cable service available to every dwelling within the franchisee's service area. Section 14. Technical standards. (a) Any cable system within the City shall meet or exceed all FCC and other applicable federal or state technical and signal quality standards for cable systems, including any such standards or regulations as hereinafter may be amended or adopted to the extent that compliance with such amended standards is mandated by federal and state law or regulation. 33 (b) All television signals transmitted on a cable system shall include any closed circuit captioning information for the hearing impaired that is included within the signal as received. (c) Antennas, supporting structures, headend and associated equipment, and outside plant used in the system shall comply with any applicable federal, state, county, or City laws. (d) All construction, installation and maintenance shall comply with the National Electrical Safety Code, the National Electric Code, and all laws, and as hereinafter may be amended or changed to the extent compliance is mandated. (e) A franchisee shall not design, install or operate its facilities in a manner that will interfere with the signals of any broadcast station, the electrical or telephone system located in any building, the cable system of another franchisee, or individual or master antennas used for receiving television or other broadcast signals. (f) A franchisee is required to be in substantial compliance with FCC technical standards at all times. (g) Upon request, a franchisee shall provide the City with at least ten (10) days advance written notice before each of 34 the FCC -required performance tests so that a City representative may be present. (h)- A franchisee shall maintain all of its real property, headend facilities and outside plant in a safe condition. Section 15. Access channels and facilities. (a) Applications for an initial or renewed franchise may and, at the City's request, shall include proposals for the provision of access channel capacity and equipment and facilities relating to such channels sufficient to meet community needs taking into consideration costs associated therewith. (b) In addition to any access facilities and equipment provided by a franchisee pursuant to a franchise agreement, a franchise agreement may set forth terms and conditions under which a franchisee shall provide, at the request of the City Manager or a duly designated DAO, use of franchisee's studio equipment and technical services for production of live and/or video-taped access programs. (c) The City may, at any time and in its sole discretion, delegate responsibility for developing, managing, administering 35 or utilizing any access channel or access channels to one or more DAOs. (d) Upon a franchisee's consent, and upon terms and conditions mutually agreed on by the City and a franchisee, whether in a franchise agreement or otherwise, the City may delegate responsibility for developing, managing, administering or utilizing any access channel or access channels to a franchisee. Section 16. Franchise fee. (a) A franchisee, as compensation for the privilege granted under a franchise for the use of the City's Streets to construct and operate a cable system, shall pay to the City a franchise fee in an amount not to exceed the maximum amount permitted by applicable law. The amount of the franchise fee shall be set forth in a franchise agreement. (b) A franchisee shall pay the franchise fee due to the City on a quarterly basis. Payment for each quarter shall be made to the City not later than forty-five (45) days after the end of each calendar quarter. (c) Unless a franchise agreement provides otherwise, a franchisee shall file with the City within forty-five (45) days 36 of the end of each calendar quarter a statement showing franchisee's gross revenues during the preceding quarter and the number of subscribers served. (d) No acceptance by the City of any franchise fee payment shall be construed as an accord that the amount paid is in fact the correct amount, nor shall such acceptance of payment be construed as a release of any claim the City may have for additional sums payable. (e) The franchise fee payment is not a payment in lieu of any other tax, fee or assessment . (f) A franchisee shall file within three (3) months following the end of each of its fiscal years a statement setting forth the computation of gross revenues used to calculate the franchise fee for the preceding year and a detailed explanation of the method of computation. The statement shall be certified by a certified public accountant or the franchisee's chief financial officer. The franchisee will bear the cost of the preparation of such revenue statements. (g) The City may, from time to time, and upon reasonable notice, -inspect and audit any and all books and records of the franchisee relevant to the determination of gross revenues and the computation of franchise fees due, and may recompute any 37 amounts determined to be payable under the franchise. The cost of the audit will be borne by the franchisee if, as a result of the audit, it is determined that the franchisee has underpaid the franchise fees owed in an amount exceeding three percent (30) of the franchise fees actually paid. The audit shall be performed in the City or in Collin County, and it shall be the responsibility of the franchisee to have all books and records necessary to satisfactorily perform the audit readily available to the auditors. (h) In the event that a franchise fee payment is not received by the City on or before the due date set forth in subsection (b) above, or is underpaid, the franchisee will be charged interest on the unpaid or underpaid amount from the due date at an interest rate equal to three percent (30) above the rate for three-month federal Treasury Bills at the most recent United States Treasury Department sale of such Treasury Bills occurring prior to the date of the due date of the franchise fee payment. (i) When a franchise terminates for whatever reason, the franchisee shall file with the City within ninety (90) calendar days of the date its operations in the City cease a financial statement, certified by a certified public accountant or the franchisee's chief financial officer, showing the gross revenues received by the franchisee since the end of the previous fiscal year. Adjustments will be made at that time for franchise fees due to the date that the franchisee's operations ceased. Section 17. Reports and records. (a) Within three (3) months of the close of its fiscal year, a franchisee shall provide the City an annual report that includes a summary of the previous year's activities in development of the system, including but not limited to, services initiated or discontinued; total number of subscribers (including gains and losses); number of subscribers for each tier of service (including gains and losses); homes passed; miles of cable distribution plant in service; and copies of the results of system performance tests conducted during the prior year, such tests being conducted in conformity with applicable FCC rules. The summary shall also include a comparison of any construction, including system upgrades, during the year with any projections previously provided to the City, as well as rate and charge increases and/or decreases for the previous fiscal year. 39 (b) A franchisee shall maintain the following records and make them available for inspection and copying on the City request: (1) A detailed copy of updated maps depicting the location of all cable plant in City streets, showing areas served and locations of all trunk lines and feeder lines in the City. This requirement shall not be deemed to require a franchisee to make proprietary information about system electronics and design available for copying, but franchisee shall make such information available at its offices for inspection on reasonable City request. (2) A summary of subscriber or consumer complaints, identifying the number and nature of complaints and their disposition. Where complaints involve recurrent system problems, the nature of each problem and the corrective measures taken shall be identified. More detailed information on complaints shall be submitted upon request of the City. (3) A summary of the number of outages, number of planned outages, number of outages during prime viewing hours, and number of outages by duration. (4) If the franchisee is a corporation, a list of officers and members of the board of directors; and if the 40 franchisee or its parent corporation's stock or ownership interests are publicly traded, a copy of its most recent annual report. (5) If the franchisee is a partnership, a list of the partners, including any limited partners, and their addresses; and if the general partner is a corporation, a list of officers and members of the board of directors or the corporate general partner, and the officers and directors of any parent corporation; and where the general partner or its parent corporation's ownership interests are publicly traded, a copy of its most recent annual report. (6) A list of all partners or known stockholders holding five percent (5%) or more ownership interest in the franchisee; provided, however, when any such entity has fewer than ten (10).persons holding five percent (50) or greater ownership interest, the ten (10) largest such holders. (7) A copy of the franchisee's rules and regulations applicable to subscribers of the cable system. (8) A report on the number of elderly and handicapped subscribers receiving any rate discounts and the amount of the discounts for specific services. 41 (9) A full schedule and description of services, service hours and location of the franchisee's customer service office or offices available to subscribers in the City, and a schedule of all rates, fees and charges for all services provided over the cable system. system; (10) Copyright filings reflecting the operation of the (11) FCC Forms 325 and 395 for the system, or their successor forms; (12) Any filing made at the FCC or any state or federal agency regarding the system; its proof -of -performance tests; or its RF signal leakage tests; and • (13) Any other documents and books and records necessary to enforce and monitor a franchisee's compliance with the Ordinance and a franchisee's franchise agreement. (c) A franchisee shall provide the following documents to the City reasonably promptly after they are received or filed: (1) Any notice of deficiency, forfeiture, or documents instituting any investigation, civil or criminal proceeding issued to franchisee by any state or federal agency regarding the system. 42 (2) Any request by the franchisee or any parent of franchisee for protection under bankruptcy laws, or any judgment related to a declaration of bankruptcy. (d) A franchisee shall make available at its local offices for inspection and audit by the City those books and records necessary for the enforcement of and monitoring of franchisee's compliance with this Ordinance and its franchise agreement. Such inspection and audit shall be upon reasonable notice and during normal business hours. (e) The City's access to a franchisee's books and records necessary to ensure compliance with the requirements of the franchise shall not be denied on the grounds that the information therein is proprietary or confidential. Upon written request by the franchisee and to the extent allowed by applicable law, information of a proprietary nature submitted by the franchisee to the City pursuant to this Ordinance or a franchise agreement will not be made available for public inspection. Section 18. Customer service requirements. (a) A Franchisee shall comply with all FCC customer service standards for -cable systems and cable operators, as now in effect or hereinafter amended. 43 (b) A franchisee shall maintain at least one business office in the City open during normal.business hours, which shall include, at a minimum, 8:00 a.m. through 5:00 p.m., Monday through Friday, and 9:00 a.m. through 1:00 p.m., on Saturday. In addition, a franchisee's business office shall be open in the evening until 8:00 p.m. one week -night (between Monday and Friday) per week as may be necessary to accommodate demand. If a franchisee's office is open one week -night per week to meet demand, the franchisee shall notify all subscribers and the City of the week -night that the office is open. (c) A franchisee shall maintain a listed local or toll-free telephone number and employ a sufficient number of telephone lines, personnel and answering equipment or service to allow reasonable access by subscribers and members of the public to contact the franchisee on a full-time basis, twenty-four (24) hours a day, seven (7) days a week including holidays. Telephone answering time (including hold time) shall not exceed thirty (30) seconds. If the call needs to be transferred, transfer time shall not exceed thirty (30) seconds. These standards shall be met ninety percent (90U of the time. When the business office is closed, an answering machine or service capable of receiving and recording service complaints and inquiries shall be employed. 44 The after-hours answering service shall comply with the same telephone answer time standard set forth in this subsection (b). Each franchisee shall, upon request, supply statistical data to verify it has met the standards set forth herein. (d) A franchisee shall employ and maintain sufficient qualified personnel and equipment to be available: (1) to accept payments during normal business hours; (2) to exchange or accept converters or other equipment during normal business hours; (3) to receive subscriber complaints or requests for service or repairs on a full-time basis, twenty-four (24) hours a day, seven (7) days a week; and (4) to initiate service installations, undertake normal repairs, and initiate action with respect to subscriber complaints on Monday through Friday, from 8:00 a.m. to 5:00 p.m., and on Saturday from 9:00 a.m. through 1:00 p.m. (e) Standard installation work shall be performed within five (5) business days after an order has been placed except in those instances where a subscriber specifically requests an installation date beyond the five (5) business day period. If scheduled installation is neither started nor completed as scheduled, the subscriber will be telephoned by an employee of 45 the franchisee the same day. Evening personnel shall also attempt to call subscribers at their homes between the hours of 5:30 and 8:00 p.m. If the call to the subscriber is not 0 answered, an employee of the franchisee shall telephone the subscriber the next day. (f) Subscribers who have experienced one (1) missed installation or service appointment due to the fault of franchisee shall receive installation free of charge. (g) All appointments for service or installation shall be specified by date. The franchisee shall offer a choice of morning (8:00 a.m. to 12:00 p.m.), afternoon (12:00 p.m. to 5:00 p.m.) or all -day (8:00 a.m. to 5:00 p.m.) appointment opportunities. A franchisee may not cancel an appointment with a customer after the close of business on the business day prior to a scheduled appointment and, if the installer is running late and will not be able to keep the service appointment as scheduled, the customer will be contacted and the appointment rescheduled at the customer's convenience. (h) Disconnection. (1) Voluntary Disconnection. (A) A subscriber may terminate service at any time. (B) A franchisee shall promptly disconnect any subscriber who so requests from the grantee's cable system. No period of notice prior to voluntary termination of service may be required of subscribers by any franchisee. So long as the subscriber returns equipment within five (5) business days of the disconnection, no charge may be imposed by any franchisee for such voluntary disconnection, or for any cable services delivered after the date of disconnect request. (C) Any security deposit and/or other funds due the subscriber shall be refunded on disconnected accounts after the converter has been recovered by the franchisee. The refund process shall take a maximum of thirty'(30) days from the date disconnection was requested to the date the customer receives the refund. (2) Involuntary Disconnection. If a subscriber fails to pay a monthly subscriber or other fee or charge, the franchisee may disconnect the subscriber's service outlet; however, such disconnection shall not be effected until forty- five (45) days after the due date of the monthly subscriber fee or other charge, and unless the franchisee has given at least ten (10) days advance written notice of intent to disconnect to the subscriber in question. If the subscriber pays within forty-five 47 (45) days of the due date or within ten (10) days after notice of disconnection has been given, the franchisee shall not disconnect. After disconnection, upon payment by the subscriber in full of all proper fees or charges, including the payment of the reconnection charge, if any, the franchisee shall reinstate service. (3) At the subscriber's request, a franchisee shall remove from the subscriber's premises all of its facilities and equipment external to the demarcation point within thirty (30) calendar days of the subscriber's request. Where removal is impractical, such as with buried cable or internal wiring, facilities and equipment may be disconnected and abandoned rather than removed. (i) If the City supplies information verifying the status of mobility -limited subscribers, upon such a subscriber's request, the franchisee shall arrange.for pickup and/or replacement of converters or other company equipment at the subscriber's address or else provide a satisfactory equivalent (such as the provision of a postage -prepaid mailer). (j) A franchisee shall have available at all times personnel, equipment and procedures capable of locating and correcting system malfunctions. A franchisee shall initiate BE corrective measures for major system malfunctions and service interruptions promptly, and in no event later than twenty-four (24) hours after the malfunction or interruption becomes known. Corrective action for all other service problems shall be initiated no later than the next business day after notification of the service problem. (k) A franchisee shall develop written procedures for the investigation and resolution of all subscriber or City resident complaints, including, but not limited to, those regarding the quality of service and equipment malfunction, which procedures shall be subject to the review by the City Manager. A subscriber, or City resident who has not been satisfied by following the franchisee's procedures may file a written complaint with the City Manager, who will investigate the matter and, in consultation with the franchisee as appropriate, attempt to resolve the matter. (1) A franchisee shall provide each subscriber at the time cable service is installed, and at least annually thereafter, written instructions for placing a service call, filing a complaint, or requesting an adjustment. Each subscriber shall also be provided with a schedule of the subscriber's rates and charges, a copy of the service contract, delinquent subscriber 49 disconnect and reconnect procedures, and a description of any other of the franchisee's policies in connection with its subscribers. Copies of these instructions shall be provided to the City. (m) A franchisee shall provide all subscribers and the City Manager with at least thirty (30) days advance written notice of any changes in rates, charges, programming, channel positions, or initiations or discontinuations of service over the cable system. (n) A franchisee shall maintain a complete record of all service complaints received, whether written, verbal, or telephonic, and action taken. These records shall be maintained in the City, and shall be available for inspection by the City during normal business hours upon reasonable prior notice. Such records shall be retained for at least five (5) years (o) Except for planned service outages where subscribers are provided reasonable notification in advance, upon a subscriber's request a franchisee shall provide a pro -rated 24- hour credit to the subscriber's account for any 24-hour period after receipt of notice from a subscriber during which the subscriber experienced an outage of service or substantial impairment of service, whether due to a system malfunction or other cause. 50 (p) Billing. (1) A franchisee's first billing statement after a new installation or service change shall be pro -rated as appropriate and shall reflect any security deposit. (2) A franchisee's billing statement must be clear, concise and understandable, must itemize each category of Service and equipment provided to the Subscriber, and must state clearly the charge therefor. It must include the name and address of the franchisee and the franchisee's community unit number. (3) A franchisee's billing statement must show a specific payment due date not earlier than twenty days after the date the statement is mailed. Any balance not received by the due date may be assessed an administrative or account handling fee (including those attributed to late payment) consistent with consumer protection and usury laws of the State of Texas. The administrative or account handling fee will appear on the following month's billing statement. (4) A franchisee -must notify the subscriber that he or she can remit payment in person at the franchisee's office in the City and inform the subscriber of the address of that office. (5) Subscribers shall not be charged a late fee or otherwise penalized for any failure by the franchisee, its 51 employees or contractors, including failure to timely or correctly bill the subscriber, or failure to properly credit the subscriber for a payment timely made. (6) In the event of a billing dispute, the franchisee shall waive a late fee during the period until a final resolution of the dispute is agreed upon between the franchisee and the City. Section 19. Subscriber privacy. (a) A franchisee shall at all times protect the privacy of all subscribers pursuant to the provisions of Section 631 of the Cable Act, 47 U.S.C. § 551 and any other applicable provisions of federal or state law. Section 20. Discrimination prohibited. (a) No franchisee may in its rates or charges, or in the availability of the services or facilities of its system, or in any other respect, make or grant undue preferences or advantages to any subscriber, potential subscriber, or group of subscribers or potential subscribers, nor subject any such persons or group of persons to any undue prejudice or any disadvantage, provided, however, that nothing herein shall be construed to prevent a franchisee from maintaining separate schedules of rates for 52 reasonably identifiable separate classes of subscribers or from offering promotional rates from time to time. (b) A franchisee shall not deny cable service to any potential subscriber because of the income of the residents of the area in which the subscriber resides. Section 21. Use of Streets. (a) All wires, cable lines, other transmission lines, amplifiers, pedestals, equipment and structures shall be installed and located to cause minimum interference with the rights and convenience of property owners. The City may issue such rules and regulations concerning the installation and maintenance of a cable system installed in, on, or over the Streets, as may be consistent with this Ordinance and other applicable law and generally applicable to all similarly situated users of the Streets. (b) All safety practices required by law shall be used during construction, maintenance and repair of a cable system. A franchisee shall not place facilities, equipment or fixtures where they will unreasonably interfere with any gas, electric, telephone, water, sewer or other utility facilities, or obstruct or unreasonably hinder in any manner the various utilities 53 serving the residents of the City use of any Street or any other public right of way. (c) A franchisee shall at all times maintain and keep in a good state of repair all of its cable system equipment, property and facilities. (d) A franchisee shall use existing poles, conduits, and other facilities whenever possible, and shall not construct or install any new, different or additional poles, conduits, or other facilities, whether on public property or on privately owned property, unless and until first securing the written approval of the City Manager, such approval not to be unreasonably withheld. (e) Whenever a franchisee does not use existing poles, conduits and other facilities, or whenever existing conduits and other facilities shall be.located beneath the surface of the Streets, or whenever the City shall undertake a program designed to cause all conduits and other facilities to be located beneath the surface of the Streets in any area or throughout the City, in the lawful exercise of its police power or pursuant to the terms hereof, upon reasonable notice to the franchisee, any such conduits or other facilities of franchisee shall be constructed, installed, placed, or replaced beneath the surface of the 54 Streets. Any construction, installation, placement, replacement, or changes which may be so required shall be made at the expense of the franchisee, whose costs shall be determined as in the case of public utilities. (f) Subject to any applicable state.or federal regulations or tariffs, the City shall have the right to make additional use, for any lawful purpose, of any poles, conduits, or other similar facilities owned exclusively by a franchisee in any Street, provided that: (i) such use by the City does not interfere with the current or future use of such facilities by a franchisee; and (ii) the City shall take reasonable precautions to prevent any use of the Franchisee's poles, conduits, or equipment in any manner that results in inappropriate use thereof, or any loss or damage to the Cable System. (g) In those areas of the City where the.transmission of distribution facilities or the respective public utilities providing telephone, communication and electric services are underground, or hereafter are placed underground, a franchisee likewise shall construct, operate and maintain all of its transmission and distribution facilities underground. The term "underground" shall include a"partial underground system; provided, that upon obtaining the written approval of the City 55 Manager (such approval not to be unreasonably withheld), amplifiers and other related equipment in a franchisee's transmission and distribution lines which must be placed above ground may be placed in appropriate pedestals upon the surface of the ground. (h) A franchisee, at its expense, shall, within thirty (30) days of written notice, protect, support, temporarily disconnect, relocate, or remove any property of franchisee when, in the reasonable opinion of the City Manager, the same is required by reason of traffic conditions, public safety, street vacation, freeway or street construction; change or establishment of street grade, installation of sewers, drains, waterpipes, power line, signal line, transportation facilities, tracks, or any other type of structure or improvements by governmental agencies, whether acting in a governmental or a proprietary capacity, or any other structure or public improvement, including but not limited to movement of buildings, urban renewal and redevelopment, and any general program under which the City shall undertake to cause all such properties to be located beneath the surface of the ground. A franchisee shall in all cases have the privilege, subject to the corresponding obligations, to abandon any property of franchisee in place, as herein provided. 56 (i) Upon the failure, refusal, or neglect of franchisee to cause any work or other act required by law or under this Ordinance to be properly completed in or over or under any Street within any time prescribed therefor, or upon notice given, where no time is prescribed, the City Manager may cause work or other act to be completed in whole or in part, and upon so doing shall submit to the franchisee an itemized statement of the reasonable costs thereof, including all additional incidental costs incurred as a result of franchisee's failure to undertake work within the time period specified. The franchisee shall, within thirty (30) days after receipt of such statement, pay to the City the entire amount thereof. (j) A franchisee shall obtain any required permits before causing any disturbance or damage to private property or the Streets as a result of its construction or operations. Upon completion of any work, a franchisee shall restore such property to its former condition. If such restoration is not performed in a reasonable and satisfactory manner within five (5) business days, the City, or the private property owner may,,after prior written notice to the franchisee, cause the repairs to be made at the reasonable expense of the franchisee. 57 W A franchisee shall not leave or install any cables across the surface of the ground or any Street but shall promptly bury any such cable within five (5) working days of its placement. (1) In the event that: (1) The use of any substantial and material part of the system of franchisee is discontinued for any reason (other than an Act of God or other similar reason beyond franchisee's control) for a continuous period of ninety (90) days, without written notice to and approval by the City, such approval not to be unreasonably withheld; or (2) Any part of such system has been installed in any Street or other area without substantially complying with the material requirements of the franchise; or (3) Any franchise shall be lawfully terminated, revoked, canceled or shall expire and renewal be lawfully denied, then the franchisee shall, at the option of the City, and at the expense of franchisee and at no expense to the City, and upon reasonable demand of the City, promptly remove from any Streets or other area all property of franchisee, and franchisee shall promptly restore the Streets or other area from which such 58 property has been removed to such condition as reasonably existed prior to distributing such property. (m) The Council may, upon written application therefor by a franchisee, approve the abandonment of any of such property in place by franchisee and under such terms and conditions as the Council may reasonably prescribe. Upon abandonment of any such property in place, franchisee shall cause to be executed, acknowledged, and delivered to the City such instruments as are reasonably necessary, transferring'and conveying the ownership of such property to the City. Section 22. Enforcement remedies. (a) In addition to the remedy set forth in paragraph (c) hereof, the City may invoke any one or combination of the following remedies in the event a franchisee violates this Ordinance or its franchise agreement, subject to reasonable notice and an opportunity to cure as set forth in a franchise agreement. (1) Impose liquidated damages in such amount, whether on a per -diem, per -incident, or other measure of violation, as provided in the franchise agreement. Payment of liquidated damages by the franchisee will not relieve the franchisee of its 59 obligation to comply with the franchise agreement and this Ordinance. (2) Revoke the franchise pursuant to the procedures specified in Section 25 hereof. (b) In determining what remedy is appropriate, the City shall take into consideration the nature of the violation, the person or persons bearing the impact of the violation, the nature of the remedy required in order to prevent further violations, and such other matters as the City determines are appropriate to the public interest. (c) The City may seek legal or equitable relief from any court of competent jurisdiction. (d) Failure of the City to enforce any requirements of a franchise agreement or this Ordinance shall not constitute a waiver of the City's right to enforce that violation or subsequent violations of the same type or to seek appropriate enforcement remedies. (e) The franchisee shall not be held in default or noncompliance with the provisions of its franchise agreement or this Ordinance, nor suffer any enforcement or penalty relating thereto, where such noncompliance or alleged defaults are caused by acts of God, power outages, or other events reasonably beyond the franchisee's ability to control, provided that a franchisee takes all reasonable measures to cure the noncompliance as soon as practicable and provided, further, that the franchisee shall not be'excused by mere economic hardship nor by misfeasance, malfeasance or nonfeasance of its directors, officers, employees, agents or contractors. Section 23. Renewal of franchise. (a) Renewal of a franchise shall be governed by and comply with the provisions of Section 626 of the Cable Act as amended unless preempted or superseded by subsequent provisions of federal or state law. (b) If renewal of a franchise is lawfully denied, and, provided that franchisee agrees to continue to provide service pursuant to Section 27(b) hereof, upon the franchisee having been given a reasonable period of time to remove its system, sell its system (provided that no purchaser of the system shall thereby be deemed to have the right to occupy the streets or provide cable service without complying with Section 8 hereof), or to provide the City with notice of abandonment of its system, the City may acquire ownership of the cable system or effect a transfer of ownership of the system to another person upon approval of the M City Council. Any such acquisition or transfer shall be at fair market value, determined on the basis of the cable system valued as a going concern but with no value allocated to the franchise itself . (c) If renewal of a franchise is lawfully denied and the franchisee does not remove or sell its system pursuant to subsection (b) hereof, and the City does not purchase the cable system or approve or effect a transfer of the cable system to another person, the City may require the former franchisee to remove its facilities and equipment at the former franchisee's expense. If the former franchisee fails to do so within a reasonable period of time, the City may have the removal done at the former franchisee's and/or surety's expense, provided, nothing herein shall prevent the City from approving abandonment of parts or all of the system upon written request of the franchisee. Section 24. Transfers. (a) No transfer of a franchise (other than a pro forma transfer) shall occur without prior approval of the City Council. (b) Procedures for Transfers that are not Pro Forma. The following procedures shall be followed by a franchisee in requesting the City's consent to a transfer of its franchise that is not a pro forma transfer. (1) At least one hundred twenty (120) calendar days prior to the contemplated effective date of a transfer, franchisee shall submit to the City an application for approval of the transfer. Such an application shall include all information and forms required under federal law, all information required by Section 24(b)(3) hereof, and any information required by a franchisee's franchise agreement. (2) The City may request specific follow-up information consistent with the informational requirements of the FCC and other applicable law about a proposed transfer if such additional information is reasonably necessary for the City to make its determination pursuant to paragraph (d) hereof. (3) An application for a transfer of a franchise shall meet the requirements of Section 8 hereof, provide a description of the proposed transaction, a showing of the legal, financial, and technical qualifications of the proposed transferee, and a description of the anticipated potential impact of the proposed transfer on subscriber rates and service. At a minimum, the information required in subsections 8(e)(1) -(e)(5) and (e)(14) 63 hereof shall be provided with respect to the proposed transferee. The information required in subsections 8(e)(6) -(e)(13) hereof shall also be provided if the proposed transferee expects material changes to occur in those areas. (c) Procedures for Pro Forma Transfers. A pro forma transfer of a franchise shall not require prior City approval so long as: (1) the City is notified of the pro forma transfer no later than (30) days after the transfer is consummated; (2) the transferee shall insure that insurance coverage and all other commitments under the Franchise Agreement continue in force and without interruption and provide evidence of the same to -the City no later than thirty (30) days after the consummation of transfer; and (3) there is no increased risk of liability to the City or risk of.non-performance of the terms of the franchise's Franchise Agreement. (d) In making q determination on whether to grant an application for a transfer of a franchise, the City Council shall consider the legal, financial, and technical qualifications of the proposed transferee to operate the system; whether the incumbent franchisee is in compliance with its franchise 64 agreement and this Ordinance and, if not, the proposed transferee's commitment to cure such noncompliance; and whether operation by the transferee would adversely affect cable services to subscribers, or otherwise be contrary to the public interest. (e) No application for a transfer of a franchise shall be granted unless the transferee agrees in writing that it (or, where applicable, the new franchisee) will abide by and accept all terms of the franchise agreement, and that it (or, where applicable, the new franchisee) will assume the obligations and liabilities of the previous franchisee under the franchise agreement. (f) Approval by the City of a transfer of a franchise does not constitute a waiver or release of any of the rights of the City under this Ordinance or the franchise agreement, whether arising before or after the date of the transfer. Section 25. Revocation or termination of franchise. (a) A franchise may be revoked by the City Council for the franchisee's substantial failure to construct, operate or maintain the cable system as required by the material provisions of the franchise agreement, or for any other material breach of the franchise agreement. If within thirty (30) calendar days 65 following written notice from the City to the franchisee specifically stating the material breach of the franchise agreement, the franchisee has not taken corrective action or corrective action is not being actively and expeditiously pursued, the City may give written notice to the franchisee of its intent to consider revocation of the franchise, stating its reasons. (b), (1) No earlier than thirty (30) days after the notice given under subsection (a), the City shall conduct a hearing in which the franchisee and the City shall be afforded a fair opportunity for full participation, including the right to be represented, to introduce relevant evidence, to require the production of evidence, to compel the relevant testimony of officials, agents, employees or consultants of the other, to compel the testimony of other persons, and to question witnesses. The City and the franchisee shall attempt to select jointly a third party to conduct the hearings described above. If the parties are unable to agree upon a single hearing officer, each shall select one officer and the two officers so selected shall select a third officer. The costs of any such hearing officer(s) shall be borne equally by the City and the franchisee. W. (2) At the completion of a proceeding under section (b)(1), the administrative hearing officer(s) shall issue a written decision determining whether revocation is justified under the terms hereof and the franchisee's franchise agreement, and shall transmit a copy of the decision to the City and to the franchisee. After a public hearing at which the public and the franchisee may participate, the City Council may then adopt, reject or modify the decision of the hearing officer(s), and shall issue a written statement setting forth the reasons for its actions. Franchisee shall be bound by the City Council's decision, unless it appeals the decision within sixty (60) days of the date it is issued, and under the terms of subsection (b) (3) . (3) If the Franchisee is adversely affected by the decision of the City Council, it may file an appropriate action in any court of competent jurisdiction. For purposes of that action, the franchisee and the City shall stipulate that the record of the administrative hearing -and the decisions of the administrative hearing officer(s) and the City Council shall constitute the entire factual record. Franchisee shall be entitled to such relief as the court deems appropriate if (1) the franchisee demonstrates that the action of the City was not 67 supported by a preponderance of the evidence, based on the stipulated record; or (ii) if the court finds the City's actions were not in compliance with the procedural requirements of this subsection (b). (c) Subject to applicable law, any franchise may, at the option of the City following a public hearing before the City Council, be revoked one hundred twenty (120) calendar days after an assignment for the benefit of creditors or the appointment of a receiver or trustee to take over the business of the franchisee, whether in a receivership, reorganization, bankruptcy assignment for the benefit of creditors, or other action or proceeding, unless within that one hundred twenty (120) day period: (1) Such assignment, receivership or trusteeship has been vacated; or (2) Such assignee, receiver or trustee has fully complied with the terms and conditions of this Ordinance and the franchise agreement and has executed an agreement, approved by a court having jurisdiction, assuming and agreeing to be bound by the terms and conditions of this Ordinance and the franchise agreement. (d) In the event of foreclosure or other judicial sale of any of the facilities, equipment or property of a franchisee, the City may revoke the franchise, following a public hearing before the City Council, by serving notice upon the franchisee and the successful bidder at the sale, in which event the franchise and all rights and privileges of the franchise will be revoked and will terminate thirty (30) calendar days after serving such notice, unless: (1) The City has,approved the transfer of the franchise to the successful bidder; and (2) The successful bidder has covenanted and agreed with the City to assume and be bound by the terms and conditions of the franchise agreement. (e) If the City lawfully revokes a franchise, and, provided that franchisee agrees to continue to provide service pursuant to Section 27(b) hereof, upon franchisee having a reasonable period of time to remove its system, sell its system (provided that no purchaser of the system shall thereby be deemed to have the right to occupy the streets or provide cable without complying with Section 8 hereof), or to provide the City with notice of abandonment of its system, the following procedures and rights are effective: (1) The City may require the former franchisee to remove its facilities and equipment at the former franchisee's reasonable expense. If the.former franchisee fails to do so within a reasonable period of time, the City may have the removal done at the former franchisee's reasonable expense. (2) The City, by resolution of the City Council, subject to Section 627 of the Cable Act and other applicable law, may acquire ownership or effect a transfer of the cable system at an equitable price. (3) If a cable system is abandoned by a franchisee, the City may sell, assign or transfer all or part of the assets of the system. (f) The City may, upon resolution of the City Council, acquire ownership of and operate a cable system, whether or not such ownership is acquired following revocation or forfeiture of a franchise. (g) Where the City has issued a franchise specifically conditioned in the franchise agreement upon the completion of construction, system upgrade or other specific obligation by a specified date, failure of the franchisee to complete such construction or upgrade, or to comply with such other specific obligation as required will result in the automatic forfeiture of 70 the.franchise without further action by the City where it is so provided in the franchise agreement, unless the City, at its discretion and for good cause demonstrated by the franchisee, grants an extension of time. Section 26. Arbitration. (a) No matter or dispute between the City and the franchisee relating to this Ordinance or a franchise agreement may be arbitrable unless specifically provided for in the franchise agreement. Any matter that is arbitrable under the specific provisions of a franchise agreement may be subjected to the arbitration procedures set forth in subsection (b) below. (b) The arbitration procedure employed shall be consistent with the rules and procedures of the American Arbitration Association. The City and the franchisee will each select a qualified arbitrator. The two (2) persons selected shall select a third qualified arbitrator, and the three (3) arbitrators will constitute a panel whose decision is binding on the City and the franchisee. The fees of the first two (2) arbitrators shall be paid by the party selecting such person, and the third person shall be compensated one-half by the City and one-half by the 71 franchisee. The general costs of the proceeding shall be shared equally by the City and the franchisee. Section 27. Continuity of service mandatory." (a) It is the right of all subscribers to receive all available services from the franchisee as long as their financial and other obligations to the franchisee are satisfied. (b) In the event of a lawful termination or transfer of a franchise for whatever reason, the franchisee shall make all reasonable efforts to ensure that all subscribers receive continuous, uninterrupted service. The City may request and the franchisee may agree to continue to operate the system for a temporary period following lawful termination or transfer as necessary to maintain continuity of service to all subscribers, provided, however, that neither the City nor the franchisee shall be deemed to have waived any rights they may have by reason of such continued operation. The temporary period will not exceed six (6) months without the franchisee's written consent. During such period the cable system shall be operated under such terms and conditions set forth in the franchise agreement between the City and the franchisee. Section 28, Rates. 72 (a) The City may regulate a franchisee's rates for the provision of basic cable service and equipment to the maximum extent permitted by applicable law, and may do so by separate ordinance, or in any other lawful manner. (b) Nothing in this Ordinance shall prohibit the City from regulating rates for cable services to the maximum extent permitted by law. (c) Regardless whether the City regulates rates for cable services, a franchisee may not change its rates and charges unless it has first given a minimum thirty (30) calendar days prior written notice of such change to the City and to all subscribers, unless such notice is preempted by federal law. Section 29. Performance evaluation. The City may conduct periodic performance evaluations -of a franchisee as the City determines is necessary, but no more often than annually. A franchisee shall cooperate with these evaluations. If the City implements a survey of cable subscribers in connection with a performance evaluation, the City may require a franchisee to distribute the City's questionnaire to its subscribers at the City's expense. The franchisee shall cooperate with the City to develop such a questionnaire. 73 Section 30. Administration. (a) The City Manager, either directly or through a duly appointed designee, shall have the responsibility for overseeing the day-to-day administration of this Ordinance and franchise agreements. The City Manager shall be empowered to take all administrative actions on behalf of the City, except for those actions specified in this Ordinance that are reserved to the City Council. The City Manager may recommend that the Council take certain actions with respect to the franchise. The City Manager shall keep the Council apprised of developments in cable and provide the Council with assistance, advice and recommendations as appropriate. (b) The City Council shall have the sole authority to regulate rates for cable services, grant franchises, authorize the entering into of franchise agreements, modify franchise agreements, renew franchises, revoke franchises, and authorize the transfer of a franchise. Section 31. Applicability. This Ordinance shall be applicable to all cable franchises issued by the City, to the full extent permitted by state and federal law. 74 Section 32. Municipal cable system ownership authorized. (a) To the full extent permitted by law, the City may construct, own, and/or operate a cable system. (b) Nothing in this Ordinance shall be construed to limit in any way the ability or authority of the City to construct, own, and/or operate a cable system to the full extent permitted by law. Section 33. Reservation of rights. (a) The City reserves the right to amend this Ordinance as it shall find necessary in the exercise of its lawful police powers. (b) The City shall at all times have the right, upon reasonable notice and during normal business hours, to examine and copy a franchisee's records and to inspect a franchisee's facilities to the extent needed to monitor a franchisee's compliance with and performance under this Ordinance, the franchisee's franchise agreement, and applicable state and federal law. Section 34. Citizens, Advisory Committee. (a) There is hereby established a Citizens' Advisory Committee ("Committee") for the purpose of advising and making 75 recommendations to the Council on cable television and telecommunications -related matters, and of gathering information and public input on such matters. The Committee shall serve an advisory, information -gathering and reporting function only, and shall have no authority to make any binding decisions with respect to the rights or obligations of a franchisee, the City or any subscriber. (b) The Committee shall be comprised of seven (7) members appointed by the Council, designated Seat 1 through Seat 7. All Committee members must be residents of the City, and none may be employed by a franchisee or any affiliate of a franchisee. Council shall appoint members to Seats 1, 3, 5 and 7 in odd - numbered years, and appoint members to Seats 2, 4 and 6 in even - numbered years. Except as necessary to comply with the foregoing on the initial appointment of members, all appointments shall be for a term of two (2) years. If any Committee member resigns or is unable or unwilling to fulfill his or her term, the Council . shall promptly appoint a successor to complete the departing member's term. The Council may, in its discretion, reappoint a person to one or more successive terms. (c) Upon appointment of the Committee, the Committee shall select individuals from among its members to serve as Committee 76 Chair, Committee Vice Chair, and Committee Secretary. The Committee shall adopt by-laws and such other rules and procedures as it reasonably determines are necessary to carry out its duties. The Committee's by-laws will be subject to approval by the Council. The Committee shall meet as often as necessary to fulfill its duties, providing adequate public notice of same. At a minimum, the Committee must meet at least bi-annually, and shall file with the Council a written report of its activities at least biannually. (d) (1) The Committee may perform the following functions: (A) Provide advice to the Council on cable television and telecommunications -related matters and changes in applicable law and technology; (B) Review, hold hearings and make reports to Council concerning a franchisee's compliance with this Ordinance and the terms of its franchise agreement; (C) Provide a public forum for residents and interested parties to provide comments about or make complaints about cable service or a franchisee's performance; (D) Develop rules for use of public, educational and/or governmental access channels; and 77 (E) Communicate, meet and exchange information with other jurisdictions and other groups concerning cable television and other telecommunications services and technologies and possible system interconnections. (2) The Committee may not perform any functions or duties prohibited by Section 34(a) hereof or reserved to the City Council or the City Manager by Section 30 hereof. Section 35. Repeal of Conflicting Ordinances. All preexisting ordinances or parts thereof conflicting or inconsistent with the provisions of this Ordinance are hereby repealed; provided, however, that nothing in this Ordinance shall be interpreted or construed to terminate or revoke the grant and subsequent amendment of a cable television franchise by City Ordinances No. 247 and No. 291, until or unless the aforesaid ordinances are superseded or repealed and a franchise agreement is entered into pursuant to this Ordinance. Section 36. Severability. If any part, section, subsection, or other portion of this Ordinance or any application thereof to any person or circumstance is declared void, unconstitutional or invalid for any reason, such part, section, subsection, or other portion, or W the prescribed application thereof, shall be severable, and the remaining provisions of this Ordinance, and all applications thereof not having been declared void, unconstitutional or invalid, shall remain in full force and effect. The City declares that no invalid or prescribed provision or application was an inducement to the enactment of this Ordinance, and that it would have enacted this Ordinance regardless of the invalid or prescribed provision or application. Section 37. Posting and Effective Date. The City Secretary shall cause this Ordinance to be published in a manner prescribed by law and this Ordinance shall become effective on the date of its adoption. PASSED, APPROVED AND ADOPTED in Regular Council Session this 20th day of July, 1995. CITY OF ALLEN TEXAS - 9�W�� BY: Mayor 79 ATTEST: C 0` — y Se etary APPROVED AS TO FORM BY: City Attorney :e AFFIDAVIT AND PROOF OF PUBLICATION THE STATE OF TEXAS COUNTY OF COLLIN BEFORE ME, the undersigned authority, on this day personally appeared DEBBIE TACKETT, who having been by me duly sworn, on oath deposes and says: That she is the General Manager of THE ALLEN AMERICAN, a newspaper published in COLLIN COUNTY, TEXAS, not less frequently than once a week, having a general circulation in said county, and having been published regularly and continously for more than twelve (12) months prior to publishing Ordinance #1340-6-95 of which the attached is a true and written copy, and which was published in THE ALLEN AMERICAN on July 26 & July 29,1995 and which was issued on July 26,1995 by C i t y O f A 11 e n I of COLLIN COUNTY, TEXAS A printed copy of said publi ' n is attached hereto. (:% . r SUBSCRIBED ANDORN to before me this //�� _ day , A.D. 19 `9: NOTARY PUBLIC in and for COLLIN COUNTY, TEXAS CITY OF ALLEN I PUBLIC NOTICE Publisher's fee $ 2 0 . 2 6 I Notice is hereby given that the Allen City theIlordinance on mThursday, thinheld July 20, 1995 (Title Only): Ordinance No. 1340-6-95: An Ordinance Allen, Texas, Governing the 'r. = V. A TODD of the City of Granting of Franchises for, and the Instal - ''i MY COMMISSION EXPIRES �r ;.. ration and Reg- lation, Construction, operation Systems in the • r o, ; ;.• December 5, 1996 ulation of, Cable Television City of Allen. fA copy of this ordinance may be read or purchased in the office of the City Secret- Allen, One Butler Circle, Allen, ary, City of Texas 75013. CITY OF ALLEN /s/ Judy Morrison PUBLIC NOTICE City Secretary _. Notice is hereby given that the Allen City Council adopted the following ordinance at their regular meeting held on Thursday, July 20, 1995 (Title Only): Ordinance No. 1340-6-95: An Ordinance of the City of Allen, Texas, Governing the Granting of Franchises for, and the Instal- lation, Construction, Operation and Reg- ulation of, Cable Television Systems in the City of Allen. A copy of this ordinance may be read or Purchasedin the office of the City Secret- ary, City of Allen, One Butler Circle, Allen Texas 75013. , /s/ Judy Morrison I -City_ Secretary_