Ordinance 077CABLE TEL VISION FRANCHISE ORDINANCE
oR D/t✓M/G No. i f
CITY OF CHANHASSEN
Prepared by:
Thomas D. Creighton
STERN, LEVINE, SaiWARTZ,
LIFSON, CREIMTON & BUNIN, P.A.
5005 Old Cedar Lake Road
Mirmeapolis, Minnesota 55416
• Telephone: (612) 377-8620
( i)
TABLE OF CONTENTS
Page
STATE= OF rMNT
AND PURPOSE
1
FINDINGS
1
ARTICLE I. SHORT TITLE AND DEFINITIONS
Section 1.
Short Title
3
Section 2.
Definitions
3
ARTICLE II. GRANT OF AUTHORITY AND GENERAL PROVISIONS
Section 1.
Grant of Franchise and Acceptance
7
Section 2.
Authority Granted
8
Section 3.
Agreement
8
Section 4.
Franchise Term
8-
Section 5.
Area
9
•
Section 6.
Police and Eminent Domain Powers
9
Section 7.
Use of Grantee Facilities
9
Section 8.
Written Notice
9
Section 9.
Rights of Individuals
10
Section 10.
Certificate of Confirmation
11
ARTICLE III. DESIGN OF SYSTEM.
Section 1.
Channel Capacity-Subscriber Network
12
Section 2.
Picture Quality and Technical Requirements
12
Section 3.
Two-Way Capacity
14
Section 4.
Facilities
14
Section 5.
Special Charmel and Access Requirements
14
Section 6.
Service to Public Building
18
and Educational Institutions
Section 7.
Interconnection
18
Section 8.
Regional Channel
19
( i)
ARTICLE VII. INDEMNIFICATION, INSURANCE, LEITER OF
CREDIT AND.BOND
Section 1. General 41
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.
Page
• ARTICLE IV. SERVICES AND PROGR�I'i1G, SUBSCRIBER
CONTRACTS, CUPKAINTS
Section 1.
Services and Programming
20
Section 2.
Interruption of Service and
Complaints
21
ARTICLE V. CONSTRUCTION, INITIAL SERVICE AREA,
LINE EMNSION AND CONSTRUCTION STANDARDS
Section 1.
Initial Service Area
23
Section 2.
Line Extension Policy
23
Section 3.
Construction Timetable
23
Section 4. .
Construction Standards
25
Section 5.
Conditions of Use
28
ARTICLE VI. SYSTE4S
OPERATIONS
Section 1.
Information Availability
29
• Section 2.
Service Contract
29
Section 3.
Subscriber Practices
30
Section 4.
Franchise Fee, Rates, Charges,
Changes in Fees and Procedures
32
A. Rate Change Procedure
32
B. Franchise Fee
32
C. Rates and Other (1,.arges
33
D. Rate Changes
34
E. Periodic Reviews, Renegotiations
and Technological Update of Systen
37
Section 5.
Franchise Renewal
39
ARTICLE VII. INDEMNIFICATION, INSURANCE, LEITER OF
CREDIT AND.BOND
Section 1. General 41
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Page
ge
Section 2. Indemnification and Insurance
41
Section 3. Insurance
43
Section 4. Letter of Credit
44
Section 5. Bonds
48
ARTICLE VIII. DEFAULT
Section 1. Notice and Default
49
ARTICLE IX. FORECLOSURE, RECEIVERSHIP AND ABANDOIZ=
Section 1. Foreclosure
51
Section 2. Receivership
51
Section 3. Abandoriment
52
ARTICLE X. PURCHASE OF SYSTEM
Section 1. General
52
•
Section 2. Procedures
53
ARTICLE XI. MISCELLANEOUS
Section 1. Transfer of Ownership or Control
56
Section 2. Removal After Termination or
Revocation
58
Section 3. Work Performed by Others
60
Section 4. General Provision on Rights
and Remedies
60
Section 5. Applicable Laws and Court
Decisions: Severability
61
Section 6. Grantee Acknowledgement of
Validity of Franchise
62
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Page
• ARTICLE XII. ADMMISTRATION AND ADVISORY BODY
Section 1. Administrator
63
Section 2. Advisory Body
63
Section 3. Delegation of Authority by City
63
ARTICLE XIII. ACCEPTANCE, INCORPORATION
OF OFFERING, EXHIBITS, PUBLICATION
Section 1. Time of Acceptance; Guarantee;
Incorporation of Offering; Exhibits
64
is
0
ORDINANCE N0.
AN ORDINANCE, INCLUDING ADDENDUM WITH EXHIBITS, GRANTING A FRANCHISE TO
DOW -SAT OF t IT�]l`i ;ESOTA, INCORPORATED TO OPERATE AND MAINTAL-4 A CABLE COn4UNICATION
SYSTEM IN THE CITY; SETTING FORTH CONDITIONS ACCOMPANYING THE GRANT OF
FRANCAISE; PROVIDING FOR REGULATION, AND USE OF THE SYSTEM; AND PRESCRIBING
PENALTIES FOR THE VIOLATION OF ITS PROVISIONS
The City Council of the City of Chanhassen ordains:
The City intends, by the adoption of this Franchise, to bring about the
development of a Cable Communications System, and the continued operation of it.
Such a development can contribute significantly to the communication needs and
desires of many. Further, the City may achieve better utilization and improve-
ment of public services with the development and operation of a Cable
Connunications System.
• Past studies, participated in by City,'have led the way for organizing
•
a means of procuring and securing a Cable Communications System which, in the
judgement of the Council, is best suited to the City. This has resulted in the
preparation and adoption of this Franchise.
FINDINGS
In the review of the proposal and application of Dow -Sat of Minnesota,
Incorporated ("Grantee"), and as a result of the public hearings, the City
Council makes the following findings:
A. The Grantee's technical ability, financial condition, legal qualifica-
tions, and character were considered and approved in a full public pro-
ceeding after due notice and reasonable opportunity to be heard;
1
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0
B. Grantee's plans for constructing and operating the System were con-
sidered and found adequate and feasible in a full public proceeding
after due notice and reasonable opportunity to be heard;
C. The Franchise granted to Grantee by City complies with the existing
applicable :Minnesota Statutes and regulations and Franchise standards
of the Minnesota Cable C ma nications Board; and
D. The Franchise granted to Grantee is nonexclusive.
2
`a
f
ARTICLE I.
SHORT TITLE AND DEFINITIONS
SECTION 1. SHORT TITLE
This Ordinance shall be known and cited as the Cable Communications
Ordinance.
SECTION 2. DEFINITIONS
For the purpose of the Franchise, the following terms, phrases, words
and their derivations shall have the meaning given herein. When not incon-
sistent 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 singu-
lar number include the plural number. The words "shall" and "will" are man-
datory and "may" is permissive. Words not defined shall be given their common
and ordinary meaning.
40 A. "Basic Service" means the delivery by Grantee to all subscribers of
satellite delivered special interest programming, automated programming,
broadcast stations and access programming, and local origination chan-
nels by Grantee as covered by regular monthly charges paid by all
subscribers, which service is initially described in Offering as
Basic I and Basic II. This definition excludes optional services
for which a separate charge is made.
B. "Board" means the Minnesota Cable Communications Board, or its lawful
successor.
C. "City" means City of Chanhassen, a municipal corporation, in the State
of Minnesota, acting by and through its City Council.
D. "Class IV Channel" means a signaling path provided by a System to
transmit signals of any type from a subscriber terminal to another
point in System.
3
E. "Converter" means an electronic device, which converts signals to a
frequency acceptable to a television receiver of a subscriber, and by
an appropriate charnel selector permits a subscriber to view all
subscriber signals included in the service.
F. "Council" means the governing body of the City.
G. "Drop" means the cable that connects the subscriber terminal to
the nearest feeder cable of the system.
H. "FCC' means the Federal Communications Commission and any legally
appointed, designated or elected agent or successor.
I. "Grantee" is Dow -Sat of Minnesota, Incorporated, a wholly owned sub-
sidiary of Dowden Communications, its agents or employees.
J. "Gross Revenues" means all revenue derived. directly or indirectly
by Grantee, its affiliates, subsidiaries, parent, and person in
• which Grantee has financial interest of five percent (5%) or more from
or in connection with the operation of the System, including but not
limited to, basic subscriber service monthly fees, pay cable fees,
installation and reconnection fees, leased channel fees, converter ren-
tals, studio rental, production equipment and personnel fees, and
advertising revenues. The term does not include any taxes on services
furnished by Grantee and imposed directly upon any subscriber or user
by the State, City or other governmental unit. Gross Revenues shall
not include revenues for signals originating in or passing through the
franchise area for transmission to a cable system or subscriber without
the franchise area unless Grantee receives revenue for such signal
which has not already otherwise been directly or indirectly subject to
a franchise fee or similar tax, in which case said revenues will be
considered Gross Revenues for the purpose of this franchise.
K. "Installation" means the connection of the System from feeder cable to
• the point of connection.
L. "Lockout Device" means an optional mechanical or electrical accessory
to a subscriber's terminal which inhibits the viewing of a certain
program, certain charnel or certain channels provided by way of the
cable communications system.
M. "Metropolitan Area" means the seven-county/Mirmeapolis/St. Paul,
Minnesota major metropolitan area.
N. "Offering of Grantee" or "Offering" means that certain document dated
August 25, 1983, entitled "Cable Communications Franchise Proposal" and
signed by Grantee, as amended from time to time by mutual written
agreement between Grantee and City or its delegatee, which document is
on file with the City Clerk.
0. "Pay Cable" or "Service other than Basic Service" means the delivery
over the System of per channel or per program audio-visual signals in
intelligible form to subscribers for a fee or charge, in addition to
the charge for Basic Service.
P. "Prime Rate" means the interest charged from time to time by the First
National Bank of Mirmeapolis for 90 day unsecured loans to commercial
borrowers of the highest credit rating.
Q. "Public Property' means any real property owned by city other than a
Street.
0 5
R. "Scrambler/Descrambler" refers respectively to the equipment installed
• in the cable communication system's headend equipment and subscriber
terminal used to isolate pay cable and other ancillary service channels
from basic service which is accomplished by electronically distorting
the signal prior to its transmission through the cable communications
system and reconstituting the signal at each authorized location for
subsequent display.
S. "Sidewalk" is the portion of a street delineated for pedestrian travel.
T. "Street" means the surface of and the space above and below any
public street, road, highway, freeway, lane, path, public way, alley,
court, sidewalk, boulevard, parkway, drive or any easement or right-of-
way now or hereafter held by City.
U. "Subscriber" means any person or entity who subscribes to a service
Sprovided by Grantee by means of or in connection with the System
E
regardless of whether a fee is paid for such service.
V. "System" means a system of antennas, cables, wires, lines, towers,
waveguides or other conductors, converters, equipment or facilities,
designed and constructed for the purpose of producing, receiving,
transmitting, amplifying and distributing, audio, video and other forms
of electronic electrical signals, located in City. Said definition
shall not include any system wholly internal to one or more multiple
unit dwellings under common ownership, control or management, and which
does not use City streets or other public property. In any event,
system as defined herein shall not be inconsistent with the definition
as set out in the rules of the Board.
G
ARTICLE II.
GRANT OF AUTHORITY AND GENERAL PROVISIONS
SECTION 1. GRANT OF FRANCHISE AND ACCEPTANCE
City hereby grants to Grantee, to be effective upon certification by
Board, a nonexclusive franchise subject to all of the terms and conditions as
herein provided:
A. Grantee shall accept this Franchise in the following manner:
(1) This franchise will be properly executed and acknowledged by
Grantee and delivered to City.
(2) At the same time'as delivery of the executed Franchise, Grantee
shall deposit with City -its nonrefundable acceptance fee in a
sun to be determined at the time of acceptance of this Franchise
0 for the purpose of defraying the costs and expenses of developing
this Franchise and for the enforcement and administration costs to
be incurred until Franchise fees may be realized. After the ini-
tial payment of the acceptance fee, should costs in excess of the
acceptance fee be incurred by City prior to the payment of the
first -Franchise fee, City may charge such excess costs to Grantee
and Grantee shall pay them on demand by City, as an advance on the
payment of Franchise fees.
(3) All security deposits, Letters of Credit, certificates of
insurance, acceptances, bonds, attorneys' opinions, organizational
and creation documents and guarantees required of Grantee by this
Franchise, shall be delivered 7 for to the effective date of this
0 Franchise with the executed Franchise and in accordance therewith.
7
SECTION 2. AUTHORITY GRANTED
• A. City grants to Grantee permission to use Streets for erecting,
constructing, operating and maintaining the System. Other rights
necessary for the System on other public or private property mist be
obtained by Grantee, but City shall have no obligation to give or grant
or assist in obtaining the same.
B. Grantee shall construct and maintain the System so as not to interfere
with other uses of Streets. Grantee shall make use of existing poles
and other facilities available to Grantee.
C. Notwithstanding the above grant to use Streets, no Street stall be used
by Grantee if City in its sole opinion determines that such use is
inconsistent with the terms, conditions or provisions by which such
Street was created or dedicated, or with the present use of the Street.
• SECTION 3. AGREEMENT
A. Grantee agrees to be bound by all the terms and conditions of this
Franchise.
B. Grantee also agrees to provide all services specifically set forth
in, and to comply with all provisions of, its Offering to provide a
System within the boundaries of City. Failure of Grantee to provide a
System as described in its Offering, at City's option, shall be viola-
tion of the provisions of this Franchise. In the event of conflicts or
discrepancies between the Offering of Grantee and the provisions of
this Franchise, the provisions which provide the greatest benefit to
City shall prevail.
SECTION 4. FRANCHISE TERM
This Franchise shall commence upon the effective date of the regular
• certificate of confirmation issued by Board and shall expire fifteen
(15) years from date of acceptance.
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SECTION 5. AREA
This Franchise is granted for City as it exists from time to time
during the term of this Franchise.
SECTION 6. POLICE AND EMINENT DOMAIN POWERS
A. Grantee's rights are subject to the rights of eminent domain of the
City and to the police power of City to adopt and enforce ordinances
necessary to the health, safety and welfare of the public.
B. Any conflict between the provisions of this Franchise and any other
present or future lawful exercise of the right of eminent domain and
the police powers of City shall be resolved in favor of City.
SECTION 7. USE OF GRANTEE FACILITIES
City shall have the right to install and maintain, free of charge,.upon
the poles and within the underground pipes and conduits of Grantee any wires and
fixtures desired by City. Grantee waives any claim against City arising from
City's exercise of these rights.
SECTION 8. WRITTEN NOTICE
All notices, reports or demands required to be given in writing under
this Franchise shall be deemed to be given when delivered personally to any
officer of Grantee or City's Administrator of this Franchise or 48 hours after
it is deposited in the United States mail in a sealed envelope, with registered
or certified mail postage prepaid thereon, addressed to the party to which
notice is being given, as follows:
If to City: City Manager - City of Chanhassen
690 Coulter Drive
Chanhassen, Minnesota 55317
If to Grantee: Dow -Sat of Minnesota, Inc.
4853 Shoreline Boulevard
Mound, Minnesota 55364
ATTN: System Manager
9
With a copy Dowden Communications, Inc.
• to: One Piedmont Center, Suite 220
3565 Piedmont Road, N.E.
Atlanta, Georgia 30305
Such addresses may be changed by either party upon notice to the other party given
as provided in this Section.
SECTION 9. RIGHTS OF INDIVIDUALS
A. No signals, including signals of a Class IV Charnel, shall be
transmitted from a subscriber terminal except as required to provide a
service authorized by this Franchise and the subscriber. Grantee and
any other person shall neither initiate nor use any procedure or device
for monitoring individual viewing patterns or practices or otherwise
procuring or storing or selling information or data from a subscriber's
terminal(s) by any other means, without the prior authorization of the
affected subscriber which shall not have been obtained from the
subscriber as a condition of providing service. 'Ihe request for such
authorization shall be contained in a separate document which promi-
nently states that the subscriber is authorizing with full knowledge of
the authorization provisions and which identifies the purpose for which
the data or information is being gathered or stored. Such authoriza-
tion shall be for a limited period of time not to exceed one year. The
authorization shall be revocable at any time by the subscriber without
penalty of any kind whatsoever. A separate authorization shall be,
required for each type or classification of data or information sought
from a subscriber terminal.
B. Grantee shall not, without the written authorization of the affected
subscriber, provide to anyone data identifying or designating any
isubscriber. Any data, the collection of which is authorized, shall be
-10-
made available upon request by and without charge to the authorizing
subscriber in understandable fashion, including specification of the
purpose for which the information is being gathered and to whom and for
what fee the information is to be sold.
C. Grantee shall not tap or monitor, arrange for the tapping or moni-
toring, or permit any other person to tap or monitor, any cable, line,
signal input device, or subscriber outlet or receiver for any purpose
whatsoever, without the prior written authorization of the affected
subscriber as required by paragraph A of this Section.
D. Nothing herein contained shall prohibit Grantee from verifying System
operation and the transmission of signals to an affected subscriber or
from monitoring for the purpose of billing. The information obtained
0 pursuant to this subsection shall be subject to the provisions of this
sedrion relating to confidentiality.
SECTION 10. CERTIFICATE OF CONFIRMATION
Grantee shall abide by the then current rules and regulations of Board
regarding the application, approval, and renewal of a Certificate of
Confirmation. Failure of Grantee to obtain a Certificate of Confirmation or a
renewal thereof shall result in automatic termination of this Franchise, and
this Franchise shall cease to be of any force or effect. However, Grantee may
operate the System while the Board is considering an application for renewal of
the Certificate of Confirmation.
11
y
ARTICLE III.
• DESI&1 OF SYSM
SECTION 1. MANNEL CAPACITY - SUBSCRIBER NETMRK
A. The System shall be capable of providing at least 54 downstream chan-
nels and four upstream charnels. 'Ihe System shall provide access to
information data bases with the capacity as detailed in the Offering.
B. The System shall provide two tiers of basic subscriber service. Tier 1
shall be a minimum 24 video channel Basic I Service Tier. Tier 2 shall
be a minimum 24 plus 11 video -channel Basic II Service Tier.
SECTION 2. PICTURE QUALITY AND TECHNICAL REQUIREL=
A. The System shall produce a picture upon each subscriber's television
screen in black and white or color, depending upon whether color is
being telecast and provided the subscriber's television set is capable
• of producing a color picture, that is not materially distorted and that
9
is free from ghost images, without material degradation of color fide-
lity. The System shall produce a sound that is not materially
distorted on any receiver of a subscriber. Grantee, at its expense,.
shall install and maintain the System so as not to interfere with any
subscriber's ability to receive local broadcast stations.
B. The System shall transmit or distribute signals to all television and
radio receivers of all subscribers without causing unreasonable
crossmodulation in the cables or unreasonably interfering, in the sole
opinion of City, with other electrical or electronic systems or the
reception of other television or radio receivers.
12
C. Grantee shall construct and maintain a System that at least meets mini -
0 mum technical standards now or hereafter promulgated by the FCC
relating to cable communication systems; provided, however, that in no
event shall the technical standards required to be met by Grantee be
less stringent than the FCC standards in effect at the time of the
adoption of the Ordinance, nor shall Grantee be required to meet mini-
mum FCC technical standards which apply solely to cable communications
systems for which franchises are granted subsequent to the acceptance
of this Franchise. The FCC technical standards relating to cable com-
munications systems contained in subpart K of part 76 of the FCC rules
are hereby incorporated by reference and made a part hereof. In any
event, Grantee shall, ata minimums, comply with the technical standards
of the Offering.
• D. The System shall be designed for and operated on a 24 hours a day con-
tinuous operation basis.
E. Grantee shall initially and subsequently test the technical capacity of
the System according to the procedures delineated in the Offering.
Additionally, Grantee agrees to allow City to select a consultant if
City deems -it is necessary to review and perform such testing proce-
dure. The results of any tests required by the FCC shall be filed
within ten days of the conduct of such tests with the City and the
Board. Other representatives of City may be present during testing.
Tests may be done annually at such times as is determined by City, with
notice to Grantee. The expenses of any tests required by the FCC shall
be paid by Grantee. The expenses of tests required by City in addition
to FCC required tests shall be paid by City from the Franchise fee.
Should the tests show System to be not in compliance with this
13
Franchise, Grantee shall pay upon demand of City all expenses asso-
ciated with City - required tests.
SECTION 3. TWO-WAY CAPACITY
Grantee shall initially install and thereafter maintain a two-way
capable System (audio, video and data impulse). Grantee shall not activate the
two-way capacity at the time of System activation. If subscriber interest
exists, full upstream capacity will be activated in the system's third year of
operation by installing diplex filters and reverse active components in all
amplifiers.
SECTION 4. FACILITIES
The Grantee shall construct, maintain and continue to provide all faci-
lities and equipment set forth in the Offering including, but not limited to,
the headend, distribution system, studio, equipment and other facilities.
Grantee's plan; as set forth in the Offering, for implementing the construction,
utilization, System performance, and maintenance of these facilities, including
its plans for accomodatirmig future growth and changing needs and desires, shall
be fully and timely performed.
SECTION 5. SPECIAL CHANNEL AND ACCESS REQUIREHMS
A. Grantee will carry broadcast stations in accordance with FCC rules as
from time to time -revised.
B. The Government Access Channel shall be dedicated as an emergency
override channel operated by City.
C. Grantee will provide an audio emergency alert override system that will
permit the interruption by designated City officials of all audio
(including FNn, instructing citizens to switch to the Government Access
Charnel for emergency announcements.
14
D. Grantee shall provide at least four (4) channels for access use for
the following uses: educational, goverment, public and leased.
All residential subscribers who receive all or any part of the total
services offered on the System shall also receive all of said four (4)
access channels at no additional charge. All channels shall be
activated upon System activation and thereafter maintained. Grantee
shall establish rules and regulations prior to System activation for
the use of access channels which shall be approved by City before
implementation and thereafter shall not be altered or amended without
approval of City. In preparing such rules:
(1) Grantee shall provide an equal opportunity for use of access ser-
vices.
(2) Grantee will consider and use its best effort to implement needs
0 assessments prepared by City.
•
(3) The hours of operation of the access studio shall be established
by Grantee with the prior written approval of City and shall not
be modified without the prior written approval of City.
(4) Grantee will comply, at a minimum, with the requirements of City
and the Board now or hereafter adopted or determined by City or
the Board regarding access charnels. Such requirements of the
Board are hereby made a part of this ordinance and include the
following:
(a) Grantee shall, to the extent of the System's available charnel
capacity, provide to each of its subscribers who receive all
or any part of the total services offered on the System,
15
reception on at least one specially designated noncommercial
I* public access channel available for use by the general public
on a first come, nondiscriminatory basis; at least one spe-
cially designated access channel for use by local educational
authorities; at least one specially designated access channel
for local government use; and at least one specially
designated access channel available for lease on a first come,
nondiscriminatory basis by commercial and noncommercial users
(the preceding hereinafter referred to as the "access
charnels"). Subscribers receiving only alarm system services
or only data transmission services for computer operated
functions shall be exempt from this requirement. The VHF
spectrum shall be used for at least one of the specially
• designated noncommercial public access channels required. No
charges shall be made for channel time or playback of prere-
corded programming on at least one of the specially designated
noncommercial public access channels. Any fees for use of
public access channels shall be consistent with the goal of
affording the public a low cost means of television access.
Access facilities, equipment and/or channel time will be made
available to the general public, any group or individual resi-
dent in City for the production and/or cablecasting of noncom-
mercial programming free of charge on a first come, non-
discriminatory basis.
(b) Whenever any of the access charnels is in use during 80 per-
cent of the weekdays (Nbnday-Friday), for 80 percent of the
time during any consecutive three hour period for six weeks
16
running, and there is demand for use of an additional channel
• for the same purpose, Grantee shall then have six months in
which to provide a new specially designated access channel for
the same purpose at no additional cost to subscribers.
(c) The rules and regulations established by the Grantee and
approved by City governing the access channels shall be filed
with the Board within 90 days after any such charnels are put
into use.
(d) Subscribers receiving programs on one or more special service
channels without also receiving the regular subscriber ser-
vices may receive only one specially designated composite
access charnel composed of the programming on access channels.
This composite channel shall not include programming from the
leased access charnel. Subscibers receiving only alarm system
services or only data transmission services for computer
operated functions shall not be included in this requirement.
(5) The Grantee shall comply, at a minimum, with the requirements of
City and Board, now or hereafter adopted by City or Board
regarding public use of its equipment, including but not limited
to the following:
(a) Grantee shall make readily available for public use at least
minimal equipment as stated in Offering necessary for the pro-
duction of programming and playback of prerecorded programs
for the specially designated non-ccmmercial.public access
channel. Grantee shall also make readily available upon need
40
being shown,
the minimum equipment as stated in
Offering
necessary to
make it possible to record progams
at remote
locations with battery operated portable equipment.
17
(b) Need within the meaning of this paragraph shall be determined
• by subscriber petition. Said petitions must contain the
signatures of at least 10 percent of the subscribers of
System, but in no case more than 500 nor fewer than 100 signa-
tures.
SECTION 6. SERVICE TO PUBLIC BUILDING AND EDUCATIONAL INSTITUTIONS
Grantee shall provide, at a minimum, one free installation and free
Basic I and Basic II service to the City -owned buildings in the initial service
area, all private and public school buildings in the initial service area, and
such other public institutions as City may from time to time designate in
substitution thereof or in addition thereto.
SECTION 7. INTERCONNECTION
Grantee will comply with all present and future rules, regulations and orders of
the Board regarding interconnection of systems, and will cooperate with any
agencies or utilities involved with interconnection. At such times as intercon-
nection is required, Grantee shall accomplish this without additional charge to
subscribers. System shall be initially constructed so that other systems now or
hereafter constructed in any area adjacent to System or within the metropolitan
area (if technologically feasible) may be interconnected with System upon
request of City and agreement with other System's Grantor and Cable Company. If
Grantee owns geographically contiguous systems they shall be interconnected with
System upon request of City in all situations and to such extent such intercon-
nection is technically and economically feasible. Grantee shall interconnect
channels designated by City with channels of other systems in all cases in which
other system(s) indicate in writing a desire to provide an adequate share of
W
facilities and budget for such interconection. In any event, both parties to
• this agreement desire interconnection of the system to the.greatest extend of
technical and economic feasibility.
SECTION 8. REGIONAL CHANNEL
The standard VHF Charnel 6 is hereby designated for uniform regional
charnel usage. However, until the regional charnel becomes operational, Grantee
may utilize the standard VHF Channel 6 as it deems appropriate. Use of time on
the regional charmel shall be made available without charge.
0
0 19
ARTICLE IV.
• SERVICES AND PROGRA%M4ING,
SUBSCRIBER CONTRACTS, COMPIAINTS
SECTION 1. SERVICES AND PROGRMUNG
A. Grantee shall provide those services and programming as specified in its
Offering.
B. City recognizes that services and programing in cable communications
is rapidly changing. While any addition or deletion of programming or
services will not require the amendment of this Franchise, any addition
or deletion of programming will be subject to all terms and conditions
of this Franchise.
C. City and Grantee recognize that certain programming was proposed by
Grantee in its Offering and that Grantee was selected at least in part
on the programming that it offered. Therefore, Grantee agrees:
1. Programming shall not be deleted unless it is unavailable or can be
replaced by programming of similar type and quality which is acceptable
to City, such acceptance not being unreasonably withheld or delayed;
and
2. Programming shall not be added to the System which City determines
violates Grantee's pledge in its Offering regarding the type and
quality of programming offered on System. In any event, City shall not
unreasonably withhold its consent to the addition of programming which
is consistant with the type and quality of programming which was origi-
nally offered on the System.
0 20
0
SECTION 2. INTERRUPTION OF SERVICE AND COMPLAINTS
• A. Whenever it is necessary to shut off or interrupt service, Grantee
0
shall do so during periods of minimum use of the System. Unless such
interruption is unforeseen and immediatel,r necessary, Grantee shall
give reasonable notice thereof to subscribers. All costs incurred
in repairing System and handling complaints shall be paid by Grantee,
and if service is interrupted or discontinued for a total period of
more than 48 hours in any 30 day period, subscribers shall be credited
pro rata for such interruption. The caus: of any such interruption
shall be removed and service restored as promptly as reasonably
possible.
B. Grantee shall maintain an office in the Wayzata area which shall be
open during all usual business hours, have a listed local telephone,
and be so operated that complaints and requests for repairs or adjust-
ments may be received at any time, seven days per week, consistent with
the procedures for same in*the Offering.
(1) Notice of this information shall be provided to all new subscri-
bers at time of subscription and to existing subscribers annually.
(2) Grantee shall not engage in the sale of television sets or provide
other television repair service, but in the event such service is
required, shall promptly notify subscriber of that need for ser-
vice.
(3) All complaints by City, subscribers, or other persons regarding
the quality of service, equipment malfunction, billing disputes,
and any other matters relative to the System, shall be investi-
gated and responded to by a service representative at the location
21
' of the complaint by Grantee within 24 hours. If reasonably
tpossible, Grantee shall rectify the cause of all valid complaints.
CJ
If a complaint is not rectified within seven days, the complainant
may then file the complaint with City.
(4) City and Grantee shall prepare and maintain a record of all
complaints made to them. If at any time after the filing of a
complaint with City, City determines, in its sole discretion, that
the complaint represents a violation of this Franchise, any law,
ordinance or regulation, or represents a failure in the perfor-
mance of Grantee pursuant to this Franchise, City may, in addition
to any other remedy available to it, issue written notice
specifying the nature of the complaint and ordering Grantee to
appear at the next regularly scheduled Council meeting or at a
special meeting of the Council called for this purpose. At said
Council meeting, Grantee shall -explain its failure to rectify the
complaint and show cause why the Council should not institute
default proceedings. Failure by Grantee to appear may result, at
the sole discreiton of City, in the termination of this Franchise.
22
0
ARTICLE V.
CONSTRUCTION, INITIAL SERVICE AREA
LINE EXTENSION AND CONSTRUCTION STANDARDS
SECTION 1. INITIAL SERVICE AREA
Grantee shall construct as the initial service area all areas con-
taining dwelling units within the corporate limits of City, as
designated in the Offering. Grantee shall extend service to any area
within or contiguous to the designated initial service area which was
not constructed as a part of the initial service area, which sub-
sequently exceeds a density of 30 dwelling units per street mile or
greater, at the same rates and charges which are set forth in Exhibit
"A" of this Franchise.
SECTION 2. LINE EXTENSION POLICY
• Grantee shall extend service to any area within or contiguous to the
0
designated initial service area, which was not constructed as part of
the initial service area, where the density meets or exceeds 30
dwelling units per street mile. Grantee shall extend service to any
other areas on a cost of material and labor basis. Service to extended
areas will be provided at the same rates and charges as those units
within the initial service area. However, Installation rates for ser-
vice drops over 200 feet, as well as special or unusual installations,
shall be charged at the company's cost.
SECTION 3. CONSTRUCTION TIMETABLE
A. Within 90 days after the effective date of the Board Certification of
Franchise, Grantee shall apply for all necessary permits, licenses,
23
certificates and authorizations which are required in the conduct of
• its business, including, but not limited to, any joint use attachment
agreements, microwave carrier licenses, or any other permits, licenses
and authorizations to be granted by duly constituted regulatory
agencies having jurisdiction over the operation of cable communication
systems, or their associated microwave transmission facilities. If
after one year from the comencement of Franchise term, Grantee has not
received the permits, licenses, certificates and authorizations
described in this paragraph, City may terminate this Franchise without
regard to fault for delay in obtaining such permits, licenses, cer-
tificates and authorizations.
B. Within 90 days after obtaining all. necessary permits, licenses, cer-
tificates and authorizations, Grantee shall give written notice thereof
• to City and commence construction and installation of System. Grantee
0
shall construct all areas of the initial*service area which contain
dwelling units within twelve months of the granting of the state cer-
tificate of confirmation so that persons along the route of the
energized cable will have individual "drops" as desired during the same
period of time.
C. Any delays in the construction timetable or commencement of construc-
tion shall result in penalties as provided in this Franchise, and con-
tinued delays may result in the termination of this Franchise and all
rights and privileges of Grantee hereunder.
(1) Grantee shall promptly notify City in writing of all delays known
or anticipated in the construction of System.
24
(2) City may extend the time for beginning construction or may extend
the construction timetable in the event Grantee, acting in good
faith, experiences delays by reason of circumstances beyond its
control.
SECTION 4. CONSTRUCTION STANDARDS
A. Grantee shall not open or disturb the surface of any streets or public
property without first obtaining a permit from City for which permit
city may impose a reasonable fee to be paid by Grantee. The lines,
conduits, cables and other property placed in the Streets, Public, or
private Property pursuant to such permit shall be located in such part
of the Street, Public, or private Property as shall be determined by
City. Grantee shall, upon completion of any work requiring the opening
of any Streets, Public, or private Property, restore the same,
• including the pavement and its grounds to as good a condition as for-
merly and in a manner and quality approved by City, and shall exercise
41
reasonable care to maintain the same thereafter in good condition.
Such work shall be performed with diligence and due care, and if
Grantee shall fail to perform the work promptly, to remove all dirt and
rubbish and to put the Street, Public, or private Property back into
the condition required hereby, City shall have the right after seven
business days notice to Grantee to put the Streets, Public, or private
Property back into good condition at the expense of Grantee. Grantee
shall, upon demand, pay to City the reasonable cost of such work
done or performed.
B. All wires, conduits cable and other property and facilities of Grantee
shall be so located, constructed, installed and maintained as not to
25
endanger or unnecessarily interfere with the usual and customary trade,
traffic and travel upon, or other use of, the streets and public pro-
perty of City. Grantee shall keep and maintain all of its property in
good condition, order and repair so that the same shall not menace or
endanger the life or property of any person. City shall have the right
to inspect and examine at all reasonable times and upon reasonable
notice the property owned or used, in part or in whole, by Grantee.
Grantee shall keep accurate maps and records of all of its wires, con-
duits, cables and other property and facilities located, constructed and
maintained in the City. Further, Grantee shall, without charge, fur-
nish copies of such maps and records from time to time as requested by
City.
C. All wires, conduits, cables and other property and facilities of
0 Grantee, shall be constructed and installed in an orderly and work-
manlike manner. All wires, conduits and cables shall be installed,
where possible, parallel with electric and telephone lines. Multiple
cable configurations shall be arranged in parallel and bundled with due
respect for engineering considerations.
D. Grantee shall at all tines comply with all applicable laws, ordinances,
rules, regulations and codes, federal, state and local. In any event,
the installation, operation or maintenance of System shall not endanger
or interfere with the safety of persons or property in the City.
E. Whenever City shall undertake any public improvement which affects
Grantee's equipment or facilities, City shall, with due regard to
reasonable working conditions and with reasonable notice, direct
• Grantee to remove its wires, conduits, cables and other property
26
J
located in Streets, Public, or private Property. Grantee shall relo-
0 cate or protect its wires, conduits, cables and other property at its
own expense.
F. Grantee's plans for constucting its System, and the construction of the
System, shall be in accordance with its Offering. However, Grantee
shall comply with the following minimums requirements:
(1) Grantee shall construct underground in any area where all other
utility lines are underground.
(2) Grantee shall change from aerial to underground, at its own
expense, in any area where (i) all other lines are hereafter
changed from aerial to underground.or (ii) any aerial line is
changed to underground by the open trench method and City requests
Grantee to share the trench.
(3) To enable Grantee reasonable opportunity to change its wiring from
aerial to underground, and also to allow it to prewi.re all new
multiple dwelling.units, subdivisions or new development areas,
City shall provide Grantee with at least 15 days prior written
notice of the following, but in no event shall City have any
liability for failure to provide notice of the following:
(a) Any changes of which City has knowledge, or which City may
order, regarding a change from aerial to underground of any
line (telephone or electrical) within its boundaries.
(b) Any underground trenching that may be pending.
(c) All subdividers or developers of new subdivisions and deve-
lopments shall be notified of the Franchise and the System.
• (d) All Franchise changes affecting the wiring of the System.
27
SECTION 5. CONDITIONS OF USE
• A. Grantee shall not place poles or other fixtures where the same will
interfere with any gas, electric or telephone fixture, water hydrant or
main, or sewer line.
B. Grantee, at.the request of any person holding a building moving permit
and with not less than five days advance notice, shall temporarily
remove, raise or lower its wires, conduits and cables. The expense of
such temporary removal, raising or lowering of wires, conduits and
cables shall be paid by person(s) requesting the same, and Grantee
shall have the authority to require such payment in advance.
C. Grantee shall have the authority, upon written consent by the City and
to the extent the City has authority to grant the same, to trim trees
• upon or overhanging any Street or Public Property only to the extent
reasonably necessary to prevent the branches of such trees from coming
in contact with the wires, conduits and cables of Grantee. All
trimning for the benefit of Grantee shall be done under the supervision
and direction of City and at the expense of Grantee. Any activities of
the Grantee which are undertaken pursuant to authority granted under
this paragraph are specifically made subject to the indemnification and
insurance provisions of Article VIII, Section 2 of this Franchise.
D. Nothing contained in this Franchise shall relieve any person, other
than City, from liability arising out of the failure to exercise reaso-
nable care to avoid injuring the Grantee's facilities while performing
any work connected with grading, regrading or changing the line of any
street or public place or with the construction or reconstruction of
• any sewer or water system.
0
0
ARTICLE VI.
SYSTEMS OPERATIONS
SECTION 1. INFORMATION AVAILABILITY
A. Throughout the tern of this Franchise, Grantee shall maintain books and
records in accordance with normal and accepted bookkeeping and
accounting practices for the cable communications industry, and allow
for inspection and copying of them by City at reasonable times at
Grantee's designated office.
B. City shall give Grantee at least 24 hours notice before making inspec-
tions of any books or records of Grantee.
C. City, its agents and representatives shall have authority to arrange
for and conduct an audit of and copy the books and records of Grantee.
The City and Grantee shall establish reasonable procedures to protect
the confidentiality of information. Grantee shall first be given five
days notice of the audit request, the description of and purpose for
the audit, and description, to the best of City's ability, of the
books, records and documents it wants to review. Grantee shall receive
at least 24 hour's notice before an actual inspection of such books,
records and documents.
SECTION 2. SERVICE CONTRACT
A. If a service contract is used the service contract shall include, at a
minimum, a schedule of all applicable rates and charges, description of
services, instructions on the use of the system, billing and collection
practices.
0 29
B. Grantee shall have authority to promulgate such rules, regulations,
• terms and conditions governing the conduct of its business as shall be
reasonably necessary to enable Grantee to exercise its rights and per-
form its obiligations under this Franchise and to assure uninterrupted
service to each and all of its subscribers; provided, however, that
such rules, regulations, terms and conditions shall not be in conflict
with the provisions of this Franchise, ordinances of City, and laws of
the State of Minnesota or the United States.
C. Each subscriber shall be provided with instructions on filing
complaints or otherwise obtaining information or assistance from
Grantee.
D. All items described in this section shall be provided to each new
subscriber at the time a contract is entered into or service begun, and
• to all existing subscribers not less than once each year.
E. The term of a subscriber contract shall not be for more than 12 months
0
duration. The contract may be terminated by the subscriber at his
option at any time, with no penalty to subscriber.
SECTION 3. SUBSCRIBER PRACTICES
A. There shall be no charge for disconnection of any installation or
outlet. If any subscriber fails to pay a properly due monthly
subsciber fee, or any other properly due fee or charge, Grantee
may disconnect the subscriber's service outlet, provided, however, that
such disconnection shall not be effected until after the later of (i)
45 days after the due date of said delinquent fee or charge or (ii)
ten days after delivery to subscriber of written notice of the intent
30
to disconnect. If a subscriber pays before expiration of the later of
(i) or (ii), Grantee shall not disconnect. After disconnection, upon
payment in full of the delinquent fee or charge and the payment of a
reconnection charge, Grantee shall promptly reinstate the subscriber's
cable service.
B. Refunds to subscribers shall be made or determined in the following
(1) If Grantee fails, upon request by a subscriber, to provide any
service then being offered, Grantee shall within 60 days of
subscriber request refund all deposits or advance charges paid for
the service in question by said subscriber. This provision does
not alter Grantee's responsibility to subscribers under any
separate contractual agreement or relieve Grantee of any other
0 liability..
(2) If any subscriber terminates any monthly service because of
failure of Grantee to render the service in accordance with
Franchise, Grantee shall refund to such subscriber the propor-
tionate share of the charges paid by the subscriber for the ser-
vices not received provided that the proportionate share of
such charges due the subscriber are one dollar or greater. This
provision does not relieve Grantee of liability established in
other provisions of this Franchise.
C. If any subscriber terminates any monthly service prior to the end of a
prepaid period, a proportionate amount of any prepaid subscriber ser-
vice fee, using the number of days as a basis, shall be refunded to the
0 subscriber by Grantee.
31
D. Continued failure by Grantee to provide services required by this
0 Franchise may, in the discretion of City, be cause for imposition of a
penalty or termination of this Franchise.
SECTION 4. FRANCHISE FEE, RATES, CHARGES, CHANGES IN FEES AND PROCEDURES
A. Rate Change Procedure.
(1) To the extent permitted by law, all increases in subscriber rates
and charges shall be charged by Grantee in a manner provided for
herein. Grantee, as a condition precedent to its acceptance of
this Franchise hereby knowingly and voluntarily consents to these
procedures for the term of this Franchise of all rates and
charges.
(2) The territory for rates applicable to System shall be City.
B. Franchise Fee.
0 (1) Commencing after the first full or partial fiscal year of opera-
tion of the system, Grantee shall pay to Commission, within 90
days after the end of each fiscal year and for each year
thereafter, an annual franchise fee of five percent (5%) of all
Gross Revenues. No payment will be allowed of any franchise fee
thatis different from five percent, other than the filing fee and
payment required of the succesful applicant as established by City
to recover the costs of franchising and any other additional
payments which are required by the terms of this Franchise.
Grantee agrees to support any waiver required by the FCC for the
established franchise fee. The annual fee may be subject to rene-
gotiation at any time after the fourth year_of this Franchise. If
• Grantee and City do not agree in renegotiations, the Franchise fee
shall remain unchanged.
32
(2) Payment will be made to City with an itemization of the Gross
• Revenues.
C. Rates and Other Charges:
(1) Rates and charges charged by Grantee for monthly service and
installation and other charges hereunder shall be uniform, fair
and reasonable and designed to meet all necessary costs of ser-
vice, including a fair rate of return on the original cost, less
depreciation, of the properties devoted to such service (without
regard to any subsequent sale or transfer price or cost of such
properties) .
(2) For one year after the date of the beginning of continuous service
to regular subscribers within the initial service area, the maxi-
mum rates shall be the specified rates of Grantee as included in
Exhibit A, attached hereto and made a part of this Franchise and
known as Grantee Schedule of Rates.
(3) Service requests for maintenance or repair of Grantee's property
shall be performed at no charge to a subscriber. If such main-
tenance or repair is required as a result of damage caused by
subscriber, Grantee may charge to the subscriber as a maximum its
direct costs for material and labor for service calls to
subscriber's home.
(4) Rates for new or additional services not initially included in
Offering of Grantee and therefore not listed in Exhibit A shall be
established by resolution of Council of City according to the
terms of this Franchise.
0
33
D. Rate Changes
(1) The standards for reviewing a proposed Basic Service rate
change will include at least the following:
(a) The ability of the Grantee to render System services and to
derive a reasonable profit therefrom under the existing rate
schedule and proposed rate schedule;
(b) All revenues and profits or actual losses derived from
System;
(c) Tax benefits and tax costs received by Grantee, its partners
or shareholders, as the result of their investment in the
System;
(d) Cash flow generated by System;
(e) The efficiency of Grantee;
(f) The quality of the service offered by Grantee;
(g) The original cost of the system, less depreciation.
(h) A fair rate of return with respect to investments having
similar risks to that of providing cable communication
services;
(i) The extent to which Grantee has adhered to the terms of this
Franchise;
(j) Fairness to residents and subscribers;
(k) Capital expenditures (actual and, if the situation so
warrants, projected) by Grantee in providing updated tech-
nology and service to subscribers;
(1) The extent to which Grantee has then provided service to
schools, hospitals, libraries, publicly owned or leased
buildings and similar institutions within City;
(m) The extent to which Grantee has technologically upgraded the
System; and
(n) increased or decreased expenses incurred by Grantee in the
purchase of services; and
(o) Such other factors as City or Grantee may deem relevant.
(2) The procedures to be followed in changing a Basic Service rate or
charge shall include at least the following:
(a) Grantee shall give City written notice of any requested Basic
Service rate increase.
(b) The application shall be supported by statistical and other
• proof indicating that the existing rate or charge is inade-
quate and unreasonable and that the proposed increases are
required to enable Grantee to render service to fulfill its
obligations Linder this Franchise and to derive a reasonable
profit therefrom.
(c) The notice shall include current financial and other infor-
oration with at least the following:
1. Balance Sheet;
2. Income Statement;
3. Statement of sources and applications of funds;
4. Detailed supporting schedules of expenses, income, assets
and other items as may be required by City;
5. Statement of current and projected subscribers;
35
6. A current list of rates and charges of Grantee applicable
• to systems owned or operated by its parent corporation
or other subsidiaries or affiliates of its parent cor-
poration at other locations;
7. A current list of rates and charges for other systems in
the seven county Metropolitan area;
8. Cash flow derived from System services since the
commencement of this Franchise; and
9. Statement of tax benefits received by Grantee, its part-
ners or shareholders, as a result of their investment in
System.
(d) City shall notify Grantee and Board and shall schedule a
public hearing on the requested increase in Basic Service
is
rates within tm weeks from the date of receipt of the
request. Grantee will notify the public through providing
notice for one week, each day between 7:00 p.m. and 9:00 p.m.
on two lowest tier channels of the date, place and time of
the hearing. City will publish notice ten days prior to
hearing in its official newspaper.
(e) After closing the public hearing, City will have 60 days
within which to make its determination. Approval of City
shall not be unreasonably withheld.
(f) City may utilize a rate consultant to advise it on proposed
rate changes and to assist it in maintaining uniform rates
within the rate territory. A rate consultant may be any per-
son who has sufficient background and experience, in the sole
• opinion of City, properly to evaluate and analyze rates and
charges.
36
(g) All costs for the review of a request for a Basic Service
• rate or charge change shall be paid by City from the
Franchise fee.
(h) Any time limit may be waived only if City and Grantee
consent.
(i) If City fails to approve the change of Basic Service rates,
Grantee may appeal said determination to the Board.
(3) In the event the law should provide for the regulation of other
than Basic Service rates by City, the procedure for the change of
other than Basic Service rates shall be as outlined above.
E. Periodic Reviews, Renegotiations and Technological Update of System.
The field of cable communications is a relatively new and rapidly
changing one which shall no doubt see many regulatory, technical,
• financial, marketing and legal changes during the term of the
Franchise: 'Therefore, in order to provide for a maximum degree of
flexibility in this Franchise, and to help achieve a continued advanced
and modern system, the following renegotiation provisions will apply:
(1) City reserves the right to adopt rules and regulations controlling
the -procedures and subjects for periodic reviews ,and renego-
tiation. In the absence of any City action taken to exercise
these rights, Grantee shall be subject to at least the procedures
and requirements described in this section.
(2) City may require, in its sole discretion, System performance eva-
luation sessions at any time during the term of this Franchise or
as required by federal or state law. In addition -o these discre-
tionary evaluation sessions, regular evaluation sessions shall be
37
conducted by City within 30 days of the third, fifth and eighth
anniversary dates of the date of acceptance of this Franchise by
Grantee.
(3) All evaluation sessions shall be open to the public and notice of
sessions published in the same way as a legal notice. Grantee
shall notify its subscribers of all evaluation sessions by announ-
cement on at least two charnels of the system between the hours of
7:00 p.m. and 9:00 p.m. for five consecutive days preceding each
session.
(4) Topics which may be discussed at any evaluation session may
include, but not be limited to, service rate structures; franchise
fee; penalties; free or discounted services; application of new
technologies; system performance; services provided; programming
•
offered;
community access;
local origination; customer
complaints;
privacy;
amendments to this
Franchise; judicial, Board
and FCC
rulings; line extension policies; and Grantee or City Rules.
(5) During a review and evaluation by City, Grantee shall fully
cooperate with City and shall provide without cost such infor-
mation and documents as City may request to reasonably perform the
evaluation.
(6) If at any time dining its review, City determines that reasonable
evidence exists of inadequate System performance, it may require
Grantee to perform tests and analysis directed toward such
suspected inadequacies at the Grantee's own expense. Grantee
shall fully cooperate with City in performing such testing and
shall prepare results and a report, if requested, within 30 days
• after notice. The report prepared by Grantee shall include at
least:
0
(a) A description of the problem in System performance which pre-
cipitated the special tests.
(b) What System component was tested.
(c) The equipment used and procedures employed in testing.
(d) The method, if any, by which such System performance problem
was resolved.
(e) Any other information pertinent to said tests and analyses
which may be required by City, or determined when the test is
performed.
City may require that tests be supervised at Grantee's expense by
a consultant designated by City. The consultant shall sign all
records of special tests and forward to City such records with a
report interpreting the results of the tests and recommending
• actions to be taken. If no such inadequacy is found to
exist, City shall pay all expenses of such tests from the
franchise fee.
(7) Grantee shall exercise its best efforts to maintain a modern
state-of-the-art System which is comparable to other operating
cable television systems similarly situated. As a result of the
periodic review sessions, City may request Grantee to modify or to
upgrade the System, or to provide addditional services, and
authorize rate increases sufficient to insure the economic
feasibility of these changes.
SECTION 5. FRANCHISE RENEWAL
A. Grantee may apply for renewal of this Franchise at any time prior to
• the expiration of this Franchise on forms provided by City. In any
39
1
event renegotiation shall commence at least 12 months before the
• expiration of the Franchise term, unless the City determines not
0
to reissue the Franchise to Grantee or desires to consider additional
applicants for a franchise.
B. Grantee may be approved, and this Franchise or modification to it may
be renewed, by City in accordance with then existing rules of the FCC,
the Board, the City and all other applicable laws, ordinances, rules or
regulations.
C. Nothing in this Franchise shall be construed to require renewal of
this Franchise.
D. City shall conduct an investigation and evaluation of the Grantee and
the System and the renewal application. This investigation and eva-
luation shall be completed by City within six months after receipt
of the application and determination by City of its completeness.
E. Renewal of this Franchise may be for any length of time but not more
than fifteen years, unless otherwise permitted by federal or state law,
and may be on a year-to-year basis in the sole discretion of City.
we,
ARTICLE VII.
• INDEMNIFICATION, INSURANCE, LETTER OF CREDIT AND BOND
SECTION 1. GENERAL
A. All rights of City pursuant to indemnification, insurance, Letter of
Credit or Bond, as provided for by this Franchise, are in addition to
all other rights the City may have under this Franchise or any other
ordinance, rule, regulation or law.
B. The exercise or failure to exercise by City of any rights pursuant to
any section of this Franchise shall not affect in any way the right of
City to subsequently exercise any such rights or any other right of
City under this Franchise or any other ordinance, rule, regulation or
law.
SECTION 2. INDEMIFICATION AND INSURANCE
A. Grantee shall fully indemnify, defend and hold harmless, City, its
officers, boards, commissions, elected officials, agents and employees
against any and all costs, damage, expense, claims, suits, actions,
liability and judgments for damages, including but not limited to,
expenses for legal fees, whether suit be brought or not, and disbur-
sements and liabilities incurred by City related to this Franchise or
the System in connection with:
(1) Damage to persons or property, in any way arising out of or
through the acts or omissions of Grantee, their respective ser-
vants, officials, agents, or employees or to which Grantee's
negligence or that of their respective servants, agents, officials
or employees shall in any way contribute;
• (2) Any claim for invasion of the right of privacy, for
defamation of any person, firm or corporation, or the violation or
41
infringement of any copyright, trademark, trade name, service mark
• or patent, or of any other right of any person, firm or cor-
poration, except claims because of City's own programming; or
(3) Grantee's failure to comply with the provisions of
this Franchise, any federal, state or local law, ordinance or
regulation applicable to Grantee or the system.
B. Grantee shall release, discharge, acquit, or absolve City in connection
with any and all claims which Grantee may now or hereafter have or
claim to have against City, its servants, agents, employees or offi-
cials, due to or arising out of damage to any of Grantee's property or
equipment, including, without limitation, resulting or consequential
loss of income, injury to reputation, or any other resulting or con-
sequential damages of any kind, caused by or resulting from acts or
• omissions of City or any of its servants, agents employees or offi-
cials.
C. If suit be brought or threatened against City, either independently or
jointly with Grantee, or with any person or municipality, Grantee, upon
notice given by City, shall defend City at the cost of Grantee, and if
final judgment is obtained against City, either independently or
jointly with Grantee, or any other defendants, Grantee shall indemnify
City and pay such judgment with all costs and satisfy and discharge the
same.
D. City reserves the right to cooperate with Grantee and participate in
the defense of any litigation either through intervention or otherwise.
Grantee shall pay upon receipt of written demand from City, all expen-
ses incurred by City in defending itself with regard to any matters in
this section. These expenses shall include, but not be limited to,
42
1
attorney's fees, and the reasonable value of services (as determined by
• City) rendered by City or any employees, agents or representatives of
city.
SECTION 3. INSURANCE
A. Grantee shall maintain liability insurance covering its obligations of
indemnificaiton provided for in or as a result of the exercise of this
Franchise covering both the City and Grantee and shall maintain said
insurance during the entire term of this Franchise in the minimum
amount of:
(1) $500,000 for property damage to any one person;
(2) $2,000,000 for property damage in any one act or occurence;
(3) $1,000,000 for personal injury to any one person; and
(4) $2,000,000 for personal injury in any one act or occurence.
• B. Such insurance shall be with a company acceptable to City and shall
otherwise be in form and substance acceptable to City. Such insurance
policy with written evidence of payment of required premiums shall be
filed and maintained with City during the term of the Franchise. The
above minimum amounts shall be changed from time to time by Grantee as
requested by City. Grantee shall immediately give notice to City of
any threatened or pending litigation affecting this insurance.
C. Neither the provisions of this -section nor any damages recovered by
City or any individual shall be construed to, or shall limit the liabi-
lity of Grantee.
D. No recovery by City of any sum by reason of the Letter of Credit or
Bond required in this Franchise shall be any limitation upon the liabi-
43
lity of
Grantee to City under the
terms of this
section, except
that
the sum
so received by City from
such Letter of
Credit or Bond
shall be
43
0
0
0
deducted from a recovery by City under this section, if for the same
act or occurrence.
E. All insurance policies maintained pursuant to this Franchise shall con-
tain the following endorsement:
It is hereby understood and agreed that this insurance policy may
not be cancelled nor may a refusal to renew become effective until
60 days after receipt by City, by registered mail, of written
notice of such intention to cancel or not to renew.
SECTION 4. LEITER OF CREDIT
A. At the time of acceptance of this Franchise, Grantee shall deliver to
City an irrevocable and unconditional Letter of Credit, in form and
substance acceptable to City, from a National or State bank approved by
City, in the amount of $10,000.00. The amount of the Lettar of Credit
may be reduced by City.
B. The Letter of Credit shall provide that funds will be paid to City,
upon written demand of City, and in an amount solely determined by City
in payment for penalties charged pursuant to this section, in payment
for any monies owed by Grantee pursuant to its obligations under this
Franchise, -or in payment for any damage incurred as a result of any
acts or omissions by Grantee pursuant to this Franchise.
C. In addition to recovery of any monies owed by Grantee to City or dama-
ges to City as a result of any acts or omissions by Grantee pursuant to
the Franchise, City in its sole discretion may charge to and collect
from the Letter of Credit the following penalties:
(1) For failure to complete System construction in accordance with
Grantee's initial service area plan, unless City approved the
delay, the penalty shall be Two Hundred Dollars ($200.00) per day
44
for each day, or part thereof, such failure occurs or continues.
• (2) For failure to provide data, documents, reports or information or
to cooperate with City during an application process or System
review, the penalty shall be Fifty Dollars ($50.00) per day
for each day, or part thereof, such failure occurs or continues.
(3) For failure to comply with any of the provision of this Franchise
for which a penalty is not otherwise specifically provided pur-
suant to this Paragraph C, the penalty shall be Fifty
Dollars ($50.00) per day for each day, or part thereof, such
failure occurs or continues.
(4) For failure to test, analyze and report on the performance of the
System following a request by City, the penalty shall be Fifty
Dollars ($50.00) per day for each day, or part thereof,
• such failure occurs or continues.
(5) Forty-five days following notice from City of a failure of Grantee
0
to comply with construction, operation or maintenance standards,
the penalty shall be ltao Hundred Dollars ($200.00) per day for
each day, or part thereof, such failure occurs or continues.
(6) For failure to provide the services Grantee has -proposed,
including but not limited to the implementation and the utiliza-
tion of the access charnels and the making available for use of
the equipment and other facilities, the penalty shall be Two
Hundred dollars ($200.00) per day for each day, or part thereof,
such failure occurs or continues.
45
{
(7) Each violation of any provision of this Franchise shall be coni-
0- sidered a separate violation for which a separate penalty can be
imposed.
D. Whenever City finds that Grantee has violated one or more terms, con-
ditions or provisions of this Franchise, a written notice shall be
given to Grantee informing it of such violation. At any time after
fifteen days following local receipt of notice, provided Grantee
remains in violation of one or more terms, conditions or provisions of
this Franchise, in the sole opinion of City, City may draw from the
Letter of Credit all penalties and other monies due City.
E. Whenever a penalty has been assessed, Grantee may, within thirty days
of local receipt of notice, notify City that there is a dispute as to
whether a violation or failure has, in fact, occured. Such notice by
9 Grantee to City shall specify with particularity the matters disputed
0
by Grantee.
(1) City shall hear Grantee's dispute at the next regularly scheduled
Council meeting. City shall supplement the Council decision with
written findings of fact.
(2) Upon determination by City that no violation has taken place, City
shall refund to Grantee without interest all monies drawn from the
Letter of Credit by reason of the alleged violation.
F. If said Letter of Credit or any subsequent Letter of Credit delivered
pursuant hereto expires prior to 15 months after the expiration of the
term of this Franchise, it shall be renewed or replaced during the term
of this Franchise to provide that it will not expire earlier than 15
0
months after the expiration of this Franchise. The renewed or replaced
0 Letter of Credit shall be on the same form and with a bank authorized
herein and for the full amount stated in paragraph A of this section.
Failure to renew or replace the Letter of Credit shall be grounds for
termination of this Franchise.
G. If City draws upon the Letter of Credit or any subsequent Letter of
Credit delivered pursuant hereto, in whole or in part, Grantee shall
replace the same within fifteen days and shall deliver to City a like
replacement Letter of Credit for the full amount stated in paragraph A
of this section as a substitution of the previous Letter of Credit.
H. If any Letter of Credit is not so replaced, City may draw on said
Letter of Credit for the whole amount thereof and hold the proceeds,
without interest, and use the proceeds to pay costs incurred by City in
0 performing and paying for any or all of the obligations, duties and
responsibilities of Grantee under this Franchise that are not performed
or paid for by Grantee pursuant hereto, including attorneys' fees
incurred by the City in so performing and paying. The failure to
replace any Letter of Credit may also, at the option of the City, be
deemed a default by Grantee under this Franchise. The drawing on the
Letter of Credit by City, and use of the money so obtained for payment
or performance of the obligations, duties and responsibilities of
Grantee which are in default, shall not be a waiver or release of such
default.
I. The collection by City of any damages, monies or penalties from the
Letter of Credit shall not affect any other right or remedy available
• to City, nor shall any act, or failure to act, by City pursuant to the
letter of Credit, be deemed a waiver of any right of City pursuant to
47
this Franchise or otherwise.
SECTION 5. BONDS
A. At the commencement of this Franchise, and at all times thereafter
until Grantee has liquidated all of its obligations with City, Grantee
shall maintain with City a bond in the total sum of Seventy-five
Thousand and N01100 Dollars ($75,000.00) in such form and with such
sureties as shall be acceptable to City, conditioned upon the faithful
performance by Grantee of this Franchise and the acceptance hereof
given by Grantee and upon the further condition that in the event
Grantee shall fail to comply with any law, ordinance or regulation,
there shall be recoverable jointly and severally from the principal and
surety of the bond, any damages or losses suffered by City as a result,
including the full amount of any compensation, indemnification or cost
of removal of any property of Grantee, including a reasonable allowance
for attorneys' fees and costs (with interest at two percent (2%) in
excess of the then Prime Rate), up to the full amount of the bond, and
which bond shall further guarantee payment by Grantee of all claims and
liens against City or any public property, and taxes due to City, which
arise by reason of the construction, operation, maintenance or use of
the System.
B. The rights reserved by City with respect to the bond are in addition to
all other rights the City may have under this Franchise or any other
law.
C. City may, in its sole discretion, reduce the amount of the bond upon
the completion of construction of the initial service area to not less
• than $1,000.00.
W
•
ARTICLE VIII.
DEFAULT
SECTION 1. NOTICE AND DEFAULT
A. City shall give written notice of default to Grantee if City, in its
sole discretion, determines that Grantee has:
(1) Violated any material provision of this Franchise or the accep-
tance hereof, or any rule, order, regulation or determination of
the City, state or federal government, not in conflict with this
Franchise;
(2) Attempted to evade any provision of this Franchise or the accep-
tance hereof;
(3) Practiced any fraud or deceit upon City or subscribers;
(4) Made a material misrepresentation of fact in the application for
• or negotiation of the Franchise; or
(5) Incurred a six (6) month or more delay in the construction sche-
dule.
B. If Grantee fails to cure such default within thirty (30) days after the
giving.of such notice (or if such default is of such a character as to
require more than thirty (30) days within which to cure the same, and
Grantee fails to commence to cure the same, within said thirty (30)
days period and thereafter fails to use reasonable diligence, in City's
sole opinion, to cure such default as soon as possible), then and in
any event, such default shall be a substantial breach of this Franchise
and City,.at its option may elect to either cure the default or ter-
minate and cancel this Franchise and all rights and privileges of this
• Franchise as follows:
M
+ (1) City may cure any default and all suns expended by City, including
• attorney's fees incurred in curing such default, whether suit be
brought or not, with interest thereon at a rate per annum of two
percent (27.) in excess of the then Prime Rate, shall be paid by
Grantee to City, upon demand, and failure to so pay upon demand
likewise may be deemed by City to be a default under this
Franchise.
(2) City may place the issue of revocation and termination of the
Franchise before the Council at a regular or special meeting of
the City Council. If City decides there is cause or reason to
terminate, the following procedure shall be followed:
(a) City shall provide Grantee with a written notice of City's
intention to terminate the Franchise and the reason or cause
• for proposed termination. City shall allow Grantee a minimum
of thirty (30) days subsequent to receipt of the notice in
which to correct the default.
(b) Grantee shall be provided with an opportunity to be heard at
a public hearing prior to any decision to terminate this
Franchise.
(c) In the event that City determines to terminate this
Franchise, the Grantee shall have a period of thirty (30)
days, beginning the day next following written notice to
Grantee of such decision, within which to file an appeal with
the Board, pursuant to the then applicable statutes and pro-
cedures of the Board. Any such appeal to the Board shall be
a contested case to which the Board shall not be a party.
• During such thirty (30) day period and until the Board deter -
50
mines the appeal, if an appeal is taken, the Franchise shall
• remain in full force and effect, unless the term thereof
sooner expires. Grantee shall pay all costs of any unsuc-
cessful appeal, including reasonable attorneys fees incurred
by City.
(d) If Board approves of the action of City, the Franchise shall
terminate mediately. If Board disapproves of the action of
City , the Franchise shall remain in full force and effect
for the full term hereof unless sooner terminated in accor-
dance with the provisions hereof, or applicable law or rules
of Board.
ARTICLE IX.
FORECLOSURE, RECEIVERSHIP AND ABANDONMU
SECTION 1. FORECLOSURE
Upon the foreclosure or other judicial sale of all or a part of the
System, Grantee shall notify City of such fact and such notification shall be
treated as a notification that a change in control of Grantee has taken place,
and the provisions of this Franchise governing the consent to transfer or change
in ownership occurred.
SECTION 2. RECEIVERSHIP
City shall have the right to cancel this Franchise 120 days after the
appointment of a receiver or trustee to take over and conduct the business of
Grantee, whether in receivership, reorganization, bankruptcy or other action or
51
proceeding, unless such receivership or trusteeship shall have been vacated
• prior to the expiration of said 120 days, or unless:
(a) Within 120 days after his election or appointment, such
receiver or trustee shall have fully complied with all the
provisions of this Franchise and remedied all defaults
hereunder; and
(b) Such receiver or trustee, within said 120 days, shall have
executed an agreement with City duly approved by the Court
having jurisdiction in the premises, whereby such receiver
or trustee assumes and agrees to be bound by each and every
prevision of this Franchise
SECTION 3. ABANDONMENT
Grantee may not.abandon any portion of System without having given not
• less than three months prior notice to City and Board. Further, Grantee may not
abandon any portion of System without compensating City for damages resulting
from the abandonment. The amount of damages resulting from abandonment and due
city shall be determined in the.sole discretion of City. An abandonment of any
portion of the System as determined in the sole discretion of City shall be a
cause for termination of this Franchise by City.
PURCHASE OF SYSTEM
SECTION 1. GENERAL
A. If at any time Grantee offers System for sale, City shall have the
right to purchase System. If at any time Grantee receives a bona fide
purchase offer for the System which Grantee is willing to accept, a
• complete copy of such offer shall promptly be given to City and City
52
shall have the right to purchase the System according to the terms of
• that offer. If the terms of such offer to purchase include terms which
are other than cash, the City's rights to purchase shall be for an
equivalent cash value of such terms. City shall exercise such right by
submitting to Grantee, within 60 days after City's actual receipt of
the bona fide offer, notice that City desires to purchase the System
pursuant to said offer. If City does not exercise such right the
System may be sold, but only on the terms submitted to City. If any
changes are made in the purchase offer given to City, such purchase
offer, as so changed, shall again be given to City and City shall have
60 days from actual receipt by City of the Offer, as changed, within
which to exercise its right to purchase the System pursuant to the
offer, as changed, all as above provided. If City does not exercise
• its right to purchase the System pursuant to any offer given to City
pursuant to this paragraph, and the System is not sold to the buyer and
on the terms set out in the offer given to City, then the right of City
to purchase the System shall continue, and all subsequent purchase
offers shall be given to City pursuant to this paragraph. Also, the
City's right to purchase pursuant to this paragraph shall survive every
sale to a buyer and shall continue to be binding upon every buyer of
the System.
B. Upon forfeiture, revocation or termination of this Franchise, City
shall have the right to purchase the System. Such right shall be exer-
cised upon written notice to Grantee within six months after the
occurrence of any such event.
SECTION 2. PROCEDURES
0 In the event City elects to exercise its right to purchase the System
as provided in Section 1B of this Article, the following shall then apply:
A. City and Grantee shall negotiate all terms and conditions of the
53
purchase of the System.
• B. If City and Grantee cannot agree upon the terms and conditions of the
purchase, City shall have the right to proceed to arbitration.
Arbitration shall commence and proceed according to applicable
Minnesota law except as follows:
(1) The parties shall, within 15 days of City's decision to proceed to
arbitration, appoint one arbitrator each who is experienced and
knowledgeable in the purchase and valuation of business property.
Arbitrators shall each agree upon the selection of a third
arbitrator, similarly qualified, within 15 days after appointment
of the second arbitrator.
(2) Within 30 days after appointment of all arbitrators and upon ten
days written notice to parties, the arbitrators shall commence a
• hearing on the terms and conditions of the purchase in dispute.
(3) The hearing shall be recorded and may be transcribed at the request
n
U
and expense of either party. All hearing proceedings, debates and
deliberations shall be open to the public and at such times and places
as contained in the notice or as thereafter publicly stated in the
order to adjourn.
(4) The arbitration panel shall be required to determine the purchase
price of the System according to the standards established in
paragraph C below.
(5) At the close of the hearings and within 30 days, the arbitrators shall
prepare written findings and make a written decision agreed upon by a
majority of the arbitrators which shall be served by mail upon City
54
and Grantee.
. (6) The decision of a majority of the arbitrators shall be binding upon
both parties except that City may, in its sole discretion and without
any penalty or cost to City of any kind, withdraw its offer to
purchase within 90 days of receipt of the final decision of a majority
of the arbitrators.
(7) Either party may seek judicial relief to the extent authorized under
Minnesota Statutes, §572.09 and 5572.19 as the same may be amended,
and in addition, under the following circumstances:
(a) A party, fails to select an arbitrator;
(b) The arbitrators fail to select a third arbitrator;
(c) One or more arbitrator is unqualified;
(d) Designated time limits have been exceeded;
(e) The arbitrators have not proceeded expeditiously; or
(f) Based upon the record the arbitrators abused their discretion.
(8) In the event a Court of competent jurisdiction determines the arbitra-
tors have abused their discretion, it may order the arbitration proce-
dure repeated and issue findings, orders and directions, with costs of
suit to be awarded to the prevailing party.
(9) Cost of arbitration shall be borne equally. Reasonable attorneys fees
shall be borne by the party who retains an attorney.
C. In the event of forfeiture, revocation or termination, the purchase price
of the System shall be the fair market value of material and equipment in
place. Good will shall not be included in the purchase price of the
System.
D. In the event City is purchasing upon normal expiration of the Franchise,
55
is
9
the purchase price shall be the value of an ongoing business.
E. Grantee expressly waives its rights, if any, to relocation costs that might
otherwise be provided by law.
F. The date of valuation shall be the date City makes a written offer for the
System.
r NSAVAM
SECTION 1. TRANSFER OF OWNERSHIP OR CONTROL
A. This Franchise shall not be assigned or transferred, either in whole or in
part, or leased, sublet or mortgaged in any manner, nor shall title
thereto, either legal or equitable or any right, interest or property
therein, pass to or vest in any person without the prior written consent of
City, which consent shall not be unreasonably withheld. Further, Grantee
shall not sell or transfer any stock or ownership interest so as to create
a new controlling interest except with the consent of City, which consent
shall not be unreasonably withheld. The transfers described in this
paragraph shall, in the sole discretion of City, be considered a sale or
transfer of Franchise within the meaning and intent in the following
paragraph.
B. Any sale or transfer of Franchise, including a sale or transfer by means of
a fundamental corporate change, requires the written approval of City.
Any sale or transfer of Franchise shall be subject to the provisions of
Board rules prohibiting certain ownership. The parties to the sale or
transfer of Franchise shall make a written request to City of its con-
sent. City shall reply in writing within 30 days of actual receipt of the
request and shall indicate its approval of the request or its determination
56
that a public hearing is necessary. City shall conduct a public hearing on
& the request within 30 days of such determination if it determines that a
sale or transfer of Franchise may adversely affect the Grantee's subscri-
bers.
C. Unless otherwise already provided for by local law, notice of any such
hearing shall be given 14 days prior to the hearing by publishing notice
thereof once in a newspaper of general circulation in the City. The notice
shall contain the date, time and place of the hearing and shall briefly
state the substance of the action to be considered by City.
D. Within 30 days after the public hearing, City shall approve or deny in
writing the sale or transfer request.
E Any sale or transfer of Franchise, including a sale or transfer by means. of
a fundamental corporate change, requires notification to the Board by
City. The notification shall be accompanied by the written certification
of the transferee that it meets all of the requirements established by City
for original Grantee including but not limited to technical ability and
financial stability. City shall cause to be sent to the Board at Grantee's
expense a copy of all public documents related to sale or transfer of the
Franchise.
F. The parties to the sale or transfer of only this Franchise, without the
inclusion of the System in which at least substantial construction has com-
menced, shall be required to establish to the sole satisfaction of City
that the sale or transfer of only this Franchise is in the public interest.
G. For purposes of this section, a fundamental corporate change means any sale
or transfer of the stock of a corporation which results in a change of
controlling interest or the sale or transfer of all or a majority of a
corporation's assets, merger (including a parent and its subsidiary
57
r
corporation), consolidation or creation of a subsidiary corporation.
H. The word "control", or the phrase "controlling interest", as used herein,
is not limited to major stockholders, but includes actual working control
in whatever marmer exercised. As a minimum, "control", as used herein,
means a legal or beneficial interest (even though actual working control
does not exist) of at least five (5%) percent. Every change, transfer or
acquisition of control of Grantee shall make the Franchise subject to can-
cellation unless and until City shall have consented,in writing thereto,
which consent shall not be unreasonably withheld. For the purpose of
determining whether it shall consent to such change, transfer or acquisi-
tion of control, City may inquire into the qualifications of the prospec-
tive -controlling party, and -Grantee shall assist City in any such inquiry
and pay all costs incurred by City in so inquiring, including City staff
. time at a value determined by City.
I. In the absence of extraordinary circumstances, City will not approve any
•
transfer or assignment of the Franchise prior to substantial completion of .
construction of System, as determined solely by City.
J. In no event shall a transfer or assignment of ownership or control
be approved without transferee becoming a signator to this
Franchise.
K. Any transferee shall be subordinate to any right, title or
interest of City.
SECTION 2. REMJVAL AF'i'IIt TERMINATION OR REVOCATION
A. At the expiration of the term for which this Franchise is granted, or
upon its revocation or termination, as provided for herein, City shall
E0
have the right to require Grantee to remove, at Grantee's expense, all
• or any aerial portion of the System from all Streets, Public or
private Property within City. In so removing the System, Grantee shall
refill and compact at its own expense any excavation that shall be made
by it and shall leave all Streets, Public and private Property in as
good a condition as that prevailing prior to Grantee's removal of the
System, and without affecting, altering or disturbing in any way
electric, telephone or other utility cables, wires or attachments.
City shall have the right to inspect and approve the condition of such
Streets, public and private Property after removal. The Letter of
Credit, Bonds, Insurance, Indemnity and Penalty provisions of this
Franchise shall remain in full force and effect during the entire term
of removal.
B. If, in the sole discretion of City, Grantee has failed to commence -
removal of system, or such part thereof as was designated by City,
within 30 days after written notice of City's demand for removal is
given, or if Grantee has failed to complete such removal within one
year after written notice of City's demand for removal is given, City
shall have -the right to exercise one of the following options:
(1) Declare all right title and interest to the system to be in City
with all rights of ownership including, but not limited to, the
right to operate the System or transfer the System to another for
operation by it. Insurance, Letter of Credit or Performance
Bond proceeds may be used to remove any encumbrance on System.
(2) Declare the System abandoned and cause the System, or such part
thereof as City shall designate, to be removed at no cost to
•
59
t `I
City. the cost of said removal shall be recoverable from the
0 Letter of Credit, Bonds, Insurance, Indemnification and Penalties
provided for in this Franchise, or from Grantee directly as a
liquidated damage.
C. Any portion of the System not designated by City for removal shall
belong to and become the property of City without payment to Grantee
and Grantee shall execute and deliver such documents, as City shall
request, in form and substance acceptable to City, to evidence such
ownership by City.
A. Grantee shall give notice to City specifying the names and addresses of
any other entity, other than Grantee, which performs services pursuant
to this Franchise, provided, however, that all provisions of this
• Franchise remain the responsibility of Grantee.
B. All provisions of this Franchise shall apply to any subcontractor or
others performing any work or services pursuant to the provisions of
this Franchise.
SECTION 4. GENERAL PROVISION ON RIGHTS AND REMMIES
A. All rights and remedies given to City by this Franchise shall be in
addition to and cumulative with any and all other rights or remedies,
existing or implied, now or hereafter available to City at law or in
equity, and such rights and remedies shall not be exclusive, but each
and every right and remedy specifically given by this Franchise or
otherwise existing or given may be exercised from time to time and as
often and in such order as may be deemed expedient by City, and the
exercise of one or more rights or remedies shall not be deemed a waiver
of the right to exercise at the same time or thereafter any other right
or remedy. No delay or omission of City in the exercise of any right
or remedy shall impair any such right or remedy, nor shall any such
delay or omission be construed to be a waiver of or acquiescence to any
default. The exercise of any such right or remedy by City shall not
release Grantee from its obligations, or any liability, under this
Franchise.
B.
In addition to all other remedies granted or available to City, City
shall be entitled to the restraint by injunction of the violation, or
attempted or threatened violation, by Grantee of any terms or provi-
sions of this Franchise, or to a decree compelling performance by
Grantee of any term or provision of this Franchise.
•
SECTION 5. APPLICABLE IAWS AND COURT DECISIONS: SEVERABILITY
A.
This Franchise shall at all tines be in compliance with the rules of
the Board.
B.
Grantee and City shall, at all times, comply with all laws, ordinances
and regulations of federal, state and City government relating to
System and -this Franchise, as they become effective.
C.
If any Law, ordinance or regulation shall require or permit Grantee to
perform any service or shall prohibit Grantee from performing any ser-
vice which may be in conflict with the terms of this Franchise, then as
soon a possible following Rnowledge thereof, Grantee shall notify City
of the point of conflict believed to exist between such law, ordinance
or regulation and this Franchise.
• D.
If City determines that any provision of this Franchise is effected by
61
0
such law, ordinance or regulation, City shall have the right to amend,
modify, alter or repeal any of the provisions of this Franchise to such
reasonable extent as may be necessary to carry out the intent and pur-
pose of this Franchise, and Grantee hereby agrees to such amendment,
modification, alteration or repeal of this Franchise.
E. To the extent any provision of the Offering is not specifically set out
in this Franchise or not validly incorporated herein by reference, City
from time to time may amend this Franchise to include such provision
effective as of the date of commencement of the Franchise term or any
such rule effective as of the date of commencement of the Franchise
term or adoption of the rule, which is later. Grantee, by acceptance
of this Franchise, consents to and agrees to be bound by any such
amendments.
F. If any term, condition or provision of this Franchise or the applica-
tion thereof to any person or circumstance shall, to any extent, be
held to be invalid or unenforceable, the remainder hereof and the
application of such term, condition and provision to persons and cir-
cumstances other than those as to wham it shall be held invalid or
unenforceable shall not be affected thereby, and this Franchise and all
the terms, provisions and conditions hereof shall, in all other
respects, continue to be effective and to be complied with, subject to
the rights of City as delineated in paragraph D of this Section.
SECTION 6. GRANTEE ACKNOWLEDGMM OF VALIDITY OF FRANCHISE
Grantee acknowledges that it has had an opportunity to review the terms
and conditions of this Franchise and that under current law Grantee believes
that said terns and conditions are not unreasonable or arbitrary, and that
62
Grantee believes the City has the power to make the terms and conditions con-
tained in this Franchise.
ARTICLE XII.
ADMINISTRATION AND ADVISORY BODY
SECTION 1. ADMINISTRATOR
The City Manager or such other person or persons as designated by the
City shall be responsible for the continuing administration of this Franchise.
The administrator may be changed by City from time to time by written notice
given to Grantee.
SECTION 2. ADVISORY BODY
City may appoint an advisory body to monitor the performance of Grantee
in executing the provisions of this Franchise. The advisory body shall perform
• all -functions required of it by the Council and applicable laws, ordinances,
rules and regulations.
SECTION 3. DELEGATION OF AUTHORITY BY CITY
A. City reserves the right to delegate and redelegate from time to time
any of its rights or obligations under this Franchise to any body or
organization.
B. Any delegation by City shall be effective upon written notice by City
to Grantee of such delegation.
C. Upon receipt of notice by Grantee of City's delegation, Grantee shall
be bound by all terms and conditions of this delegation not in conflict
with this Franchise.
D. Any such delegation, revocation or redelegation, no matter how often
made, shall not be deemed an amendment to this Franchise or require any
consent of Grantee.
63
ARTICLE XIII.
• ACCEPTANCE,
INCORPORATION OF OFFERING, EXHIBITS, PUBLICATION
0
SECTION 1. TIME OF ACCEPTANCE; GUARANTEE; INCORPORATION
OF OFFERING; EXHIBITS
A. Grantee shall have 30 days from the date of adoption of the Franchise
to accept this Franchise in form and substance acceptable to City.
However, in no event will acceptance occur later than 90 days after the
effective date of this Franchise, unless the time for acceptance is
extended by City. Such acceptance by Grantee shall be deemed the grant
of this Franchise for all purposes.
B. Upon acceptance of this Franchise, Grantee shall be bound by all the
terms and conditions contained herein. Grantee shall provide all ser-
vices and offerings specifically set forth in the Offering to provide
cable communication service within City and, by its acceptance of this
Franchise, Grantee specifically agrees that the Offering of Grantee,
including all promises, offers, representations and inducements con-
tained therein, is specifically incorporated by reference and made part
of this Franchise. The failure to refer to the Offering in any speci-
fic provisions of this Franchise shall not be a limitation on the obli-
gation of Grantee to comply fully with the Offering. Grantee further
acknowledges that all promises, offers, representations and inducements
contained in the Offering of Grantee were freely and voluntarily made
to City by Grantee.
C. The Offering shall be permanently kept and filed in the Office of the
W
r
City Clerk and the originals or reproductions thereof shall be
•` available for inspection by the public during normal business hours.
Also, the Grantee may summarize the Offering in a manner acceptable to
City or reproduce the entire Offering, and shall have either at the
following locations in the following quantities:
(1) Office of the City Clerk - 1 copy;
(2) Administrator designated in this Franchise - 1 copy;
(3) Public libraries - 1 copy each;
(4) Office of the City Attorney - 1 copy;
(5) County Law Library - 1 copy each;
(6) Local office of Grantee - 1 copy;
(7) Office of any School District in City - 1 copy;
(8) Minnesota Cable Communications Board.
• D. In the event of conflicts or discrepancies between any part of the
-offering and the provisions of this Franchise or between any part of
the summary made by Grantee and the Offering, those provisions which
provide the greatest benefit to City, in the opinion of the Council,
shall prevail.
E. Grantee shall have continuing responsibility for this Franchise, and if
Grantee be a subsidiary or wholly owned corporate entity of a parent
corporation, performance of this Franchise shall be secured by guaran-
tees of the parent corporation in form and substance acceptable to
City, which shall be delivered at time of, and as part of, acceptance
of this Franchise.
F. With its acceptance, Grantee also shall deliver to City an opinion from
•
65
0 0
• its legal counsel, acceptable to City, stating that this Franchise has
ceable against Grantee and the guarantors in accordance with their
respective terms, and which opinion shall otherwise be in form and
substance acceptable to City.
G. With its acceptance, Grantee also shall deliver to City true and
correct copies of documents creating Grantee and evidencing the power
and authority referred to in the opinion of Grantee's counsel, cer-
tified as of a then current date by public office holders to the extent
possible and otherwise by an officer of Grantee.
H. Each exhibit is part of this Franchise and each is specifically incor-
porated herein by reference. the exhibits are as follows:
Exhibit A - Grantee Schedule of Rates
• Exhibit B - Offering of Grantee
Passed and adopted this day of /n�
1984.
ATTEST: CITY OF CHANHASSEN
13X . c By /' �l
Mayor
been duly
accepted by Grantee,
that the guarantees have been duly exe-
cuted and
delivered, that this
Franchise and the guarantees are enfor-
ceable against Grantee and the guarantors in accordance with their
respective terms, and which opinion shall otherwise be in form and
substance acceptable to City.
G. With its acceptance, Grantee also shall deliver to City true and
correct copies of documents creating Grantee and evidencing the power
and authority referred to in the opinion of Grantee's counsel, cer-
tified as of a then current date by public office holders to the extent
possible and otherwise by an officer of Grantee.
H. Each exhibit is part of this Franchise and each is specifically incor-
porated herein by reference. the exhibits are as follows:
Exhibit A - Grantee Schedule of Rates
• Exhibit B - Offering of Grantee
Passed and adopted this day of /n�
1984.
ATTEST: CITY OF CHANHASSEN
13X . c By /' �l
Mayor
0
This Franchise is accepted, and we agree to be bound by all its terms and con-
ditions.
Dow -Sat of Minnesota
DATED: J B
�% 1 ( Q y
67
By
Dowden Communications, Inc.
By rn
(/ r
Its �
EXHIBIT A
• CITY OF CHANHASSEN
RATES AND CHARGES
SUBSCRIBER RATES INSTALIMON
Basic I Service - 22 Channels
0
First Outlet:
Additional Outlet:
Disconnect Charge:
Reconnect Charge:
FM Service with Cable:
FM Service without Cable:
Converter Charge:
Basic II Service - 9 Channels
First Outlet:
Additional Outlet:
Disconnect Charge:
Reconnect Charge:
Converter Charge:
Premium Service - 3 Charnels
$25.00 * $7.00
No extra charge at time $3.00
of basic service in-
stallation; $10.00,
if added later.
None
None
$10.00
None
No extra charge at time
$2.50
of basic installation..
$10.00, if added later.
$25.00
$7.50
None- included in
None
first outlet.
No extra charge at time
of basic service in-
stallation; $10.00,
if added later.
Same as first outlet,
above.
None
$10.00
None
$4.00
No additional, over
Basic I charge.
None
None
None
HBO No extra charge at time $9.95, each
Showtime of basic installation;
The Disney Channel $10.00, if added later.
* For substantially all Chanhassen homes, $35-40, in less dense areas.
SUBSCRIBER RATES
Multi -Unit Dwellings
Hospitals, Private Health
Care Institutions
Parental Control Device
Remote Control Device
is
0
INSTALLATION
Same as individual. rates,
after owners give per-
mission to wire building.
Negotiable; reasonable
rates based on number of
subscriber units.
One time deposit, usually
$20.00 for 42-channe1
converter; free on 64 -
channel converters.
42 -channel converter,
at company cost; 64 -
channel converter, $60
purchase, or $2.00 per
month rental.
MONTHLY