2 Award of Cable TV Franchise
CITY OF
CHANHASSEN
) City Cmttr Dri/J(, PO Box I47
'},anhllSStn, MinnðOta 55317
Phont612.937.1900
Gtntral Fax 612.937.5739
'gin",ing Fax 612.937.9152
,blit 54ft/} Fax 612.934.2524
1tb www.ci.chanhllSStn.mn.us
~,
-
MEMORANDUM
TO:
Mayor
City Council
Scott Botcher, City Manager~
FROM:
DATE:
November 8, 71)00
SUBJ:
Consider Award of Cable TV Franchise Agreement
Enclosed in your packet is an agreement negotiated between Everest
Communications and the City ofChanhassen for the provision of cable services
within the City. You have already awarded Everest the franchise; approval of this
agreement and its pursuant execution is all that remains to be completed at this
point. Please take the time to read the agreement yourself and ask questions about
anything you do not understand. Following our participation in these
negotiations, staff recommends approval of the enclosed agreement. Thank you.
c: Todd Gerhardt, Assistant City Manager
g:\user\scottb\cabJe franchise agrecment.doc
City of Chanhassm. A flOwin, community wilh cltan lak", aualitv schools, a charminr downlown, Ihrivinr busin"Sts. and btaulilûl Parks. A malolact 10 !i/J(. work. and ola.
DRAFT
Prepared by:
BRIAN T. GROGAN, ESQ.
Moss & Barnett
A Professional Association
4800 Norwest Wells Farpn Center
90 South Seventh Street
Minneapolis, MN 55402-4129
Telenhnne: (612) 347-0340
Fax: (612) 339-6686
Rmai1: øroøanhrQ)mo!li:!Ii:_harnett.com
TABLE OF CONTENTS
SECTION I. GIDŒRÞ..L 1 GENERAL PROVISIONS ................................................................................................1
1.1)
1.2)
SECTION 2.
2.1)
2.2)
2.3)
2.4)
2.5)
2.6)
SECTION 3.
3.1)
3.2)
3.3)
3.4)
3.5)
3.6)
3.7)
3.8)
3.9)
3.10)
3.11)
3.12)
SECTION 4.
4.1)
4.2)
4.3)
~
DefInitions. ......... ................. ............... ................. ..................... ................... .................................... ..1
Written Notice. ... .......... ........ ................ ................. ................... .................... ..................................... 1
lŒÞÆW.^.L GRANT OF FRANCHISE ...........................................................................................1
Grant. ................................................................................................................................................1
Right of Grantor to Issue aR<i ReBe", Franchise. ...............................................................................2
Effective Date sf Rene\V£H. " ...................... .............. ................. ... .................."............. ,_. ,.......... .... ..2
Tenn. .................................................................................................................................................2
Franchise Not Exclusive......... .................... ................ .................... .............................. ...... ...............2
Ownership of Grantee. ........... .................... ................................... .......................... ... .................. .....2
GENERAL REQUIREMENTS ........................................................................................................2
Governiug Requirements............. ................ ................ .................... .................................................. 2
Franchise Fee. .............. ................. ............... .................. .....................: ...... ........................... ....... .....2
Not Franchise Fees. .... ................. ................... ............... .......:............. ... ....................................... .....3
Recovery of Processing Costs. .. .... ............... ................. ............................. ...................... .................3
Liability Insurance. ...... ............... ................. ................... ...................... ............................................3
IndemnifIcation. .......... .................. ................ ................ ................... .................................................4
Grantee's Insurance...... ................... ............... ................. ....................... ............ ............ ...................5
Workers' Compensation Insurance. ................. ................. ..................... ............ ...... ..................... .... 5
Security Fund. .................. ................... ................ ................. .................... ............ ............. ................5
Procedure for Enforcing Franchise Agreement. ................................................................................6
Reservation of Rights. ............................... ............... ..................... ....................................................6
Annual Report. ............ .............. .................. ................. ......................... ................ ...... ......................6
DESIGN PROVISION ......................................................................................................................6
Minimum Channel Capacity. ............. .... ............. .... ................. ................ .........................................6
System Design.... ................................... ........................................ .................................................... 6
Operation and Maintenance of System. ............................................................................................ 7
VetificatÎon of Svstem ConstnIction ............... ................. ........................... ................ ..................... 7
~ ~Special Testing................................................................................................................................... 7
~ ~FCC Reports. .....................................................................................................................................8
W +.é)Emergency Alert Capability.. ................... ...................... ...................... .............. ................................ 8
~ +.+jParental Control Lock. ............. ........................ ................. ................................................ ............. .... 8
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~ 4.8jT echnical Standards. ..... ..... ................................ ................................... .............................................8
iJj)J 4,9jRight of Inspection. ................................ ...................................................... .................................... 8
~ ~Periodic Evaluation, Review and ModifIcation. ............................................................................8
SECTION 5.
5.1)
5.2)
5.3)
SECTION 6.
6.1)
6.2)
SERVICES AND PROGRAMMING ...............................................................................................9
Services and Programming.............. ........ .................................................. ...................... .................. 9
Leased Channel Service. ............................. ..... ....... ................ ........ ..................................................9
Periodic Subscriber Survey. ...................... ...... ................... ............................. ........ .............. ............9
PUBLIC ACCESS PROVISIONS ....................................................................................................9
Public, Educational and Government Access...... ................................................... .... .......................9
Grantee Support for PEG Usage. ......................................................................................................9
SECTION 7. REGULATIOÞT 7 REGULATION ........................................................................................................10
7.1)
7.2)
7.3)
7.4)
~
EXHIBIT A
EXHIBIT B
EXHIBIT C
EXHIBIT D
EXHIBIT E
EXHIBIT EI
EXHIBIT E2
EXHIBIT F
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Amendment of Franchise Agreement............................... .... ........................................... ........ ........ 10
Conflict Between Ordinance and Agreement. .................................................................................10
Force Majeure. ......................... ........................................ ...................... ......................................... 10
Rate Regulation. ............... ................... ................................................................... ............ .............10
Franchisim:! Cost Reimbursement. .................................................................................................. 10
GRANTEE'S OWNERSHIP INFORMATION
FRANCHISE FEE PAYMENT WORKSHEET
ANNUAL·PERFORMANCE REVIEW CHECKLIST
CHANNEL LINE-UP
GRANTEE COMMITMENT TO PEG ACCESS FACILITIES AND
EQUIPMENT
SERVICE TO PUBLIC FACILITIES
PUBLIC BUILDINGS TO BE PROVIDED WITH TWO-WAY CABLE
DESCRIPTION OF SYSTEM UPGRADE
ii
FRANCHISE AGREEMENT
THIS FRANCHISE AGREEMENT (hereinafter the "Agreement''), made and entered into this day of
. +998~, by and between the City ofChanhassen, a municipal corporation of the State of
Minnesota (hereinafter the "City" or "Grantor"), and Tri.æt M:iEl'::est !..aeasia.es, l..P. Everest Connections
Comoration (hereinafter the "Grantee").
WITNESSETH
WHEREAS, pursuant to Ordinance No. (the "Ordinance"), the City is authorized to grant and
renew one or more nonexclusive revocable Franchises to operate, construct, maintain and reconstruct a cable
television system within the City: and
WHEREAS, the City, after due evaluation of the Grantee's technical ability, fmancial condition and legal
qualifIcations, and after public hearings, has determined that it is in the best interest of the City and its residents to
FenO':: iii. &m!!1A Franchise I1eI<I-èy ~ the Grantee.
NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1.
GENERAL PROVISIONS
l.l) Defmitions.
Capitalized tenns used in this Agreement shall be defmed as set forth in the Ordinance unless (i) otherwise
defmed herein, or (ii) the context otherwise requires.
1.2) Written Notice.
All notices, reports or demands required or pennitted to be given under this Agreement and/or the
Ordinance shall be in writing and shall be deemed to be given when delivered personally to the party designated
below, or when fIve (5) days have elapsed after it has been deposited in the United States mail in a sealed envelope,
with registered or certifIed mail, postage prepaid thereon, or on the next business day if sent by express mail or
nationally recognized overnight air courier addressed to the party to which notice, report or demand is being given,
as follows:
If to City:
City Clerk
690 GeaiIef City Center Drive, P.O. Box 147
Chanhassen, MN 55317
If to Grantee:
Regieøal. Þ.fanager Everest Connections Comoration
TRaK Caèls,'isieB 5555 Winllhaven Boulevard
212 lSthJ¿:sRlieÞÆ, guite 2919
'''.'aseee, Þ.RT ~f399J O'FalJon MO 63366
Such addresses may be changed by either party upon notice to the other party given as provided in this Section.
SECTION 2.
GRANT IŒÞÆ'J.','\!. OF FRANCHISE
2.1) Grant.
UpBB aeeeptaBee efthis FnmekisB BY GFaßtee. the FfaBaRise gfBBteà Inu:su&Rt ta OFàinaneB Þre. , passed
&REI adapted aD the àay sf . 19 ta, THan Þ.fià~.~:est :\sseeiateà, L.P" is aSFeB)' rsplaeeå aRd
SUfJ8FSeàed BY the pravisieBs artke OæiÐanee, saèjeet ta the teffBS and eaBdiâeBB efthis :\greemeat. This
Franchise hereby provides Grantee with the authority, right and privilege to construct, reconstruct, operate and
maintain a Cable Television System to provide Cable Services within the Franchise Area.
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2.2) Right of Grantor to Issue aaà ROBS':: Franchise.
Grantee acknowledges and accepts the right of Grantor to issue aadler FeRev: the Franchise under the law as
it existed on the Effective Date hereof and Grantee agrees that it shall not now or at any time hereafter challenge any
lawful exercise of this right by Grantor in any local, State or Federal court.
2.3) Effective Date efReRe'~:a1.
The reBewal eflhe Franchise provided for in this Agreement shall be effective on the date that both parties
have executed this Agreement (the "Effective Date"), provided that said date is no later than thirty (30) days after
the date the City Council, by Resolution, approves this Agreement (the "Approval Date"). The roaewal aflhe
Franchise provided for in this Agreement is further contingent upon the filing by Grantee with the City Clerk of the
City, of this Agreement duly executed by Grantee together with the security fund and insurance certifIcates provided
for in this Agreement and the Ordinance, except that if such filing does not occur within sixty (60) days after the
Approval Date, the Grantor may, in its sole discretion, declare Iho F.ReVlal efthe Franchise provided for herein to be
null and void.
2.4) Tenn.
The tenn of the Franchise FeBeweà ~ pnrsuant to this Agreement shall be for the period of fIfteen
(15) years commencing on the Effective Date, at which time it shall expire and be of no force or effect unless the
Franchise is then renewed in accordance with the Ordinance and Applicable Laws.
2.5) Franchise Not Exclusive.
The Franchise rOBe":eà ~ pursuant to this Agreement shall not be construed as limiting the right of
Grantor, through its proper offices, and in accordance with the Ordinance and Applicable Law, to grant other
Franchises containing tenns and conditions that are no more favorable or less burdensome than those imposed on
Grantee in the same Franchise Area the Grantee is entitled to occupy hy this Agreement, pennit or othelWise:
provided, however, that such additional grants shall not operate to materially modify, revoke or tenninate any rights
granted to Grantee herein and shall be in accord with the provisions of the Ordinance.
2.6) Ownership of Grantee.
Grantee represents and warrants to Grantor that the names of the shareholders, partners, members or other
equity owners of the Grantee and of any of the shareholders, partners, members and/or other equity owners of
Grantee are as set forth in Exhibit A hereto.
SECTION 3.
GENERAL REQUIREMENTS
3.1) Governing Requirements.
Grantee shall comply with all lawful requirements of this Agreement, the Ordinance and Applicable Laws.
3.2) Franchise Fee.
(a) In consideration of the reBe...:al efthe Franchise provided for herein, the Grantee shall, at all times
during the tenn of this Agreement, pay to Grantor a Franchise Fee of five percent (5%) of Grantee's Gross Revenues
as defmed in the Ordinance but excluding any Access Operating Fee funds collected. The Franchisee Fee shall be
payable quarterly within thirty (30) days of the expiration of the preceding calendar quarter. Each payment shall be
certifIed by Grantee's controller or chieffmancial officer and shall be accompanied by a report in such fonn as the
City may reasonably request showing the computation of the Franchise Fee as it relates specifIcally to the
Chanhassen ttanchise area (CUID # MN~S77) MN ) for the preceding calendar quarter and such other
relevant facts as may be required by the City, including the completion of a Franchise Fee Payment Worksheet in
the fonn attached hereto as Exhibit B.
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3.3) Not Franchise Fees.
(a) Grantee acknowledges and agrees that the Franchise Fees payable by Grantee to the City pursuant
to Section 3.2 hereof shall take precedence over all other payments, contributions, Services, equipment, facilities,
support, resources or other activities to be provided or perfonned by the Grantee pursuant to this Agreement and/or
the Ordinance and that the Franchise Fees provided for in Section 3.2 of this Agreement shall not be deemed to be in
the nature of a tax, and shall be in addition to any and all taxes of general applicability and other fees and charges
which the Grantee shall be required to pay to the City and/or to any other Governmental Authority, all of which shall
be separate and distinct obligations of Grantee.
(b) Grantee shall not apply or seek to apply or make any claim that all or any part of the Franchise
Fees or other payments or contributions to be made by Grantee to Grantor pursuant to this Agreement and/or the
Ordinance shall be deducted from or credited or offset against any taxes, fees or assessments of general applicability
levied or imposed by the City or any other Governmental Authority, including any such tax, fee or assessment
imposed on both utilities and cable operators or their services.
(c) Grantee shall not apply or seek to apply all or any part of any taxes, fees or assessments of general
applicability levied or imposed by the City or any other Governmental Authority (including any such tax, fee or
assessment imposed on both utilities and cable operators or their services) as a deduction or other credit from or
against any of the Franchise Fees or other payments or contributions to be paid or made pursuant by Grantee to
Grantor to this Agreement and/or the Ordinance, each of which shall be deemed to be separate and distinct
obligations of the Grantee.
3.4) Recovery of Processing Costs.
(a) During the tenn of this Agreement, if the Grantee initiates a request for approval regarding the
transfer of this Franchise or a change in control of the Grantee, the Grantee shall, to the extent pennitted by
Applicable Laws, reimburse the Grantor for all reasonable out-of-pocket costs, including attorneys' and consultants'
fees and costs, incUlTed by the Grantor in connection with Grantor's review and processing of Grantee's request up
to a mutually agreed upon reasonable cap.
(b) To aid in the analysis and resolution of any future disputed matters relative to this Agreement, the
Grantor and Grantee may, by mutual written agreement (both as to whether to hire and whom to hire), employ the
services of technical, fInancial and/or legal consultants, as mediators. All reasonable fees of the consultants incUlTed
by the Grantor and/or the Grantee in this regard shall, unless the parties otherwise agree, be borne equally by
Grantor and Grantee.
3.5) Liability Insurance.
(a) Upon the Effective Date, the Grantee shall, at its sole expense and in addition to all required
insurance under Section 1.27 of the Ordinance, take out and maintain during the tenn of this Agreement public
liability insurance with a company licensed to do business in the State of Minnesota with a rating by A.M. Best &
Co. of not less than "A" that shall protect the Grantee, the Grantor and their officials, officers, directors, employees
and agents from claims which may arise from operations under this Agreement, whether such operations be by the
Grantee, its officials, officers, directors, employees and agents or any subcontractors of Grantee. This liability
insurance shall include, but shall not be linúted to, protection against claims arising from bodily and personal injury
and damage to property, resulting from Grantee's vehicles, products and operations. The amount of insurance for
single linút coverage applying to bodily and personal injury and property damage shall not be less than Two Million
Dollars ($2,000,000.00). The following endorsements shall attached to the liability policy:
(I)
(2)
The policy shall provide coverage on an "occurrence" basis.
The policy shall cover personal injury as well as bodily injury.
175312/RED
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(3) The policy shall cover blanket contractual liability subject to the standard nniversal
exclusions of contractual liability included in the carrier's standard endorsement as to
bodily injuries, personal injuries and property damage.
(4) Broad fonn property damage liability shall be afforded.
(5) The Grantor shall be named as an additional insured on the policy.
(6) An endorsement shall be provided which states that the coverage is primary insurance
and that no other insurance maintained by the Grantor will be called upon to contribute to
a loss nnder this coverage.
(7) Standard fonn of cross-liability shall be afforded.
(8) An endorsement stating that the policy shall not be canceled without thirty (30) days
notice of such cancellation given to the Grantor.
(b) Grantor reserves the right to adjust the insurance limit coverage requirements of this Agreement
no more often than once every three (3) years. Any such adjustment by the Grantor will be no greater than the
increase in the State of Minnesota Consumer Price Index (all consumers) for such three (3) year period.
(c) Grantee shall submit to Grantor documentation of the required insurance, including a certificate of
insurance signed by the insurance agent and companies named, as well as all properly executed endorsements.
3.6) IndemnifIcation.
(a) In addition to Grantee's indemnifIcation obligations nnder Section 1.26 of the Ordinance, Grantee
shall indemnify, defend and hold Grantor, its officers, boards, commissions, agents and employees (collectively the
"IndemnifIed Parties") hannless from and against any and all lawsuits, claims, causes of action, actions, liabilities,
demands, damages, judgments, settlements, disability, losses, expenses (including attorney's fees and disbursements
of counsel) and costs of any nature that any of the IndemnifIed Parties may at any time suffer, sustain or incur
arising out of, based upon or in any way connected with the Grantee's operations, the exercise of the Franchise
FORe'l:.à ~ pursuant to this Agreement, the breach by Grantee of its obligations under this Agreement or the
Ordinance and/or the activities of Grantee, its subcontractor, employees and agents herennder. Grantee shall be
solely responsible for and shall indemnify, defend and hold the IndemnifIed Parties hannless from and against any
and all matters relative to payment of Grantee's employees, including compliance with Social Security and
withholdings.
(b) The indemnifIcation obligations of Grantee set forth in this Agreement are not limited in any way
by the amount or type of damages or compensation payable by or for Grantee under Workers' Compensation,
disability or other employee benefIt acts, acceptance of insurance certifIcates required nnder this Agreement, or the
tenns, applicability or limitations of any insurance held by Grantee.
(c) Grantor does not, and shall not, waive any rights against Grantee which it may have by reason of
the indemnifIcation provided for in this Agreement, because of the acceptance by Grantor, or the deposit with
Grantor by Grantee, of any of the insurance policies described in this Agreement.
(d) The indemnifIcation of Grantor by Grantee provided for in this Agreement shall apply to all
damages and claims for damages of any kind suffered by reason of any of the Grantee's operations refelTed to in this
Agreement, regardless of whether or not such insurance policies shall have been detennined to be applicable to any
such damages or claims for damages.
(e) Grantee shall not be required to indemnify Grantor for negligence or misconduct on the part of
Grantor or its officials, boards, commissions, agents, or employees. Grantor shall hold Grantee hannless, subject to
the limitations in Minnesota Statutes Chapter 466, for any damage resulting from the negligence or misconduct of
the Grantor or its officials, boards, commissions, agents, or employees in utilizing any PEG access channels,
1753121RED
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equipment, or facilities and for any such negligence or misconduct by Grantor in connection with work perfonned
by Grantor and pennitted by this Agreement, on or adjacent to the Cable System.
ID In order for the Grantor to assert it~ rii;~'hts to be indemnified defended and held hannless Grantor
must with resnect to each c1aim'
œ
such riohte;'
Pmmntlv notify Grantee in writing of any claim or leRaI nroceedina which !lives rise to
œ Afford Grantee the onnortnnitv to narticinate and fullv control any comnromise.
settlement or other resolution or disnosition of any claim or nroceedinl1s' and
œ PUny coonerate with reasonable reauest~ of Grantee at Grantee's exnense in it.c;
narticination in. and control comnromise settlement or resolution or other disnosition of such claim or
nroceedinll subiect to naraQ1"3nh two (2) ahove.
3.7) Grantee's Insurance.
Grantee shall not commence any Cable System feeeB6tfustieB constnIction work or permit any
subcontractor to commence work until all insurance required under this Agreement and the Ordinance has been
obtained. Said insurance shall be maintained in full force and effect until the expiration of this Agreement.
3.8) Workers' Compensation Insurance.
Grantee shall obtain and maintain Workers' Compensation Insurance for all of Grantee's employees, and in
case any work is sublet, Grantee shall require any subcontractor similarly to provide Workers' Compensation
Insurance for all of their employees, all in compliance with State laws, and to fully indemnify the Grantor from and
. against any and all claims arising out of occurrences on the work. Grantee hereby indemnifIes Grantor for any and
all costs, expenses (including attorneys' fees and disbursements of counsel), damages and liabilities incurred by
Grantor as a result of any failure of either Grantee or any subcontractor to take out and maintain such insurance.
Grantee shall provide the Grantor with a certifIcate of insurance indicating Workers' Compensation coverage on the
Effective Date.
3.9) Security Fund.
(a) Within sixty (60) days of the Approval Date, Grantee shall establish and provide to Grantor a
security fund, as security for the full and timely payment and perfonnance by Grantee of all of its obligations under
this Agreement and the Ordinance. The security fund shall consist of two (2) parts. The fIrst part shall be in the
amount of One Hundred Thousand Dollars ($100,000) and shall be in the fonn ofaperfonnance bond, which shall
be in a fonn acceptable to Grantor's City Attorney. The second part shall be in the amount of at least Ten Thousand
Dollars ($10,000) and shall be in the fonn of an irrevocable letter of credit, established in a local bank.
(b) The fIrst part of the security fund shall be maintained at the One Hundred Thousand Dollar
($100,000) level until the System ""gra~e 9Bd!ar ...bøil~ constnlction provided for in Section 4.1 hereof is
completed, at which time that part of the fund shall be released, provided there are then no outstanding material
violations or breaches of this Agreement or the Ordinance by Grantee. The second part of the security fund shall be
maintained at the Ten Thousand Dollar ($10,000) level throughout the tenn of this Franchise Agreement. If, at any
time during the tenn of this Franchise, Grantee seeks consent to a transfer or assignment of its rights hereunder,
Grantor may unilaterally increase the security fund up to Twenty Thousand Dollars ($20,000) if it so chooses.
(c) The security fund maybe drawn upon by Grantor for those purposes specifIed in Section 3.10
hereof, in accordance with the procedures of Section 3.10 and the Ordinance. Grantee's recourse, in the event
Grantee believes that Grantor's actions in taking any security funds is improper, shall be through legal action after
the security has been drawn upon. Actions brought by Grantee hereunder may be subject to 47 U.S.C. §555A-
Limitations of Franchising Authority Liability - which is hereby incorporated by reference as if fully set forth
herein.
175312/RED
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(d) Nothing herein shall be deemed a waiver of the normal pennit requirements made of all
contractors working within the City's rights-of-way.
3.10) Procedure for Enforcing Franchise Agreement.
(a) The procedures for enforcing violations or breaches of this Franchise Agreement and/or the
Ordinance shall be consistent with the procedures set forth in the Ordinance.
(b) In the event the Council fmds that a material violation or breach exists and that Grantee has not
cured the same in a satisfactory manner, has not diligently commenced correction of such violation or breach or has
not diligently proceeded to fully remedy such violation or breach, the Council may impose liquidated damages,
assessable from the security fund, of up to Three Hundred Dollars ($300) per day or per incident, for unexcused
violations or breaches of the System 1I !gfBàe anà!ar febHilà aalll 1letioB construction schedule provided in Section
4.1 herein, and up to One Hundred and Seventy-Five fiR Dollars ($175) per day or per incident for all other
violations or breaches of this Agreement and/or the Ordinance, provided that all violations or breaches of a similar
nature occurring at the same time shall be considered one (1) incident.
3.11) Reservation of Rights.
Grantor and Grantee reserve all rights that they may possess under Applicable Laws unless expressly
waived herein.
3.12) Annual Report.
In addition to the requirements of Section 1.20 and 1.29 of the Ordinance, Grantee shall submit a written
end of the year report to Grantor utilizing the fonnat outlined in the Annual Perfonnance Review Checklist attached
hereto as Exhibit C. In addition, Grantee and Grantor agree that the Annual Perfonnance Review Checklist may be
modified from time to time by mutual agreement of Grantee and Grantor. In accordance with Section 1.18 of the
Ordinance, Grantee shall also provide City with a quarterly customer service compliance report HliliziBg !He feRRat
eathBeà iß 81Lhièit F anaeàeà kSFete.",
SECTION 4.
DESIGN PROVISION
4.1) Minimum Channel Capacity.
(a) OR af esfsfe tke date ,,~ieR is eigHteen Within thirtv-six (36) months from the date Grantee
executes this agreemoBt A2reement, Grantee shall develop, construct and operate within the City a ~ .8Q(! MHz
fIber/coaxial hybrid cable system which shall be capable of delivering a minimum of eigllly (8Q) three hundred (300)
video program channels and which shall initially deliver to all subscribers capable of receiving said channels a
minimum of sj¡,~' (ti9) one hundred fIfty (150) to one hundred ei2htv 1(80) video program channels.
(b) All programming decisions remain the sole discretion of Grantee provided that Grantee complies
with federal law regarding notice to City and Subscribers prior to any channel additions, deletions, or realignments,
and further subject to Grantee's signal carriage obligations pursuant to 47 U.s.C. §§ 531-536, and subject to City's
rights pursuant to 47 U.S.C. § 545. Grantee shall conduct programming surveys from time to time to obtain input on
programming decisions from Subscribers.
4.2) System Design.
(a) The System required herein will be engineered and built to provide a minimum of eiglHy (89)
three hundred (300) channels using a ~ ~ MHz bandwidth technology. Grantee shall meet with City to review
its system design and construction plans prior to the commencement of construction and shall, at the request of City,
participate in a public meeting designed to infonn residents of City of said design and construction plans. Prior to
System construction Grantee and Citv shan mutua1lv 8Œ1'ee on the nrocess which wil1 be used to notify residents of
uDcomin2 construction In those residential areas where fIber optic cable will be deployed, the system shall
1753121RED
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incorporate multiple strands of fIber and serve an average of fi¥e ~ hundred ~ fIftv hlmdred (250) homes per
fIber node. The System shall at all times meet the technical standards established by the FCC as they may be
amended from time to time and shall be operated so as to minimize disruption of signal to Subscribers. The precise
System specifIcations are outlined in Exhibit F, which is incorporated herein by reference.
(b) GFØÐtes shall BBl.)' Be auth9Äzeà fa SSBBWGt a sable system 1~.qth eight fæer 9~tiB pairs 19 easll
:'~ .~ ~~~~ e~ ~~1 fiBeR! lll<eagileat lit. &y&Iem. Prior to initial Svstem constnlCtinn Grantee shall file mans
h' ch fl e I emp.nt of a11 cable conduit noles and other hardware of the Svstem with the City and receive
written annmval of such strand mans bv Citv
(c) OR aF aBeat 1BÎ:rt}' (J9) Bye pFi9r 19 s9B6tfaetisa arme Uf'gæeleà system, ¡«sated &uÐ&~~~ ~~l
fSsep:e a l~K;;B~tif;'..:.ng tBelR efsame. !4IIJf9nimately feR)" eight (1R) aeUfS BSrBre asaswetiea, aU at:fested
keYS9S -.'till Feeei~:e åeBr tags RSHF)'ÌRg tBsm sf GRHHee's eeR6HØetieB sekeàule.
~ An emnlovees or subcontractors of Gmntee who come in to face.tn.face contact with notentia}
~~~~~~r: ~~~: ~~~:~~:ff~~~~;,ar a ?hoto identifIcation card a~ all ~mes All vehicles used bv Grantee or
err 1 or mamtenance shall he clearlv 1dentified Rnd bear the local telenhone
number of l11'8ntee.
~ Upon completion of system construction, Grantee shall comply with the cable industry's on-time
guaranty as endorsed by the National Cable Television Association. This on-time guaranty generally provides that if
installation is not accomplished within the time frame specifIed by the operator, installation shall be free for the
subscriber and operator shall provide said subscriber with a Twenty Dollar ($20) credit.
4.3) Operation and Maintenance of System.
The Grantee shall render effective service, make repairs promptly, and intelTUpt service only for good cause
arid for the shortest time possible. Such intelTUption, to the extent feasible, shall be preceded by notice in
accordance with Section 1.2 herein and all applicable provisions of the Ordinance, and shall occur during periods of
minimum use of the System.
4.4) Verification ofSvstern Construction.
~~~~h~a~~~~~ ~~~ ~i:::~n~:~\~ a te.chnical ~onsultant to cnnd~ct an on-site ~eview of.Grantee's
~~~ ~ V~!!~ r~ ~c ~ t;d m cnmnhance wIth all reoUlrements of thIS FranchIse and
O:~:~:':;"':~ ft~~~~~~'::~~;fE~:;¡'o~~~ical consultant for Ollrnoses descrihed within this Section 44 un
~:~~;:~;:;u~:~ ¡:;;;;.,¡;;,.; f;.;~~~:;'ts I.a $IO.OO?\. shall be borne bv G~tee and ~all not b~ deducted
which Grantee IS reoUlred to remit to Cttv under this FranchIse. .
~ Special Testing.
City may require special testing of a location or locations within the System if there is a particular matter of
controversy or unresolved complaints pertaining to such location(s). Demand for such special tests may be made on
the basis of complaints received or other evidence indicating an unresolved controversy or noncompliance. Such
tests shall be limited to the particular matter in controversy or unresolved complaints. The City shall endeavor to so
arrange its request for such special testing so as to minimize hardship or inconvenience to Grantee or to the
Subscribers caused by such testing. Before ordering such tests, Grantee shall be afforded thirty (30) days to correct
problems or complaints upon which tests were ordered. The City shall meet with Grantee prior to requiring special
tests to discuss the need for such and, if possible, visually inspect those locations which are the focus of concern. If,
after such meetings and inspections, City wishes to commence special tests and the thirty (30) days have elapsed
without correction of the matter in controversy or unresolved complaints, the tests shall be conducted by a qualified
engineer selected by City. In the event that special testing is required by City to determine the source of technical
difficulties, the cost of said testing shall be borne by the Grantee if the testing reveals the source of the technical
difficulty to be within Grantee's reasonable control. If the testing reveals the difficulties to be caused by factors
which are beyond Grantee's reasonable control then the cost of said test shall be borne by City.
1753121RED
7
4ðj ~FCC Reports.
The results of tests required to be fIled by Grantee with the FCC shall also be copied to City.
~ ~ Emergency Alert Capability.
Grantee shall at all times comply with all Applicable Laws regarding the provision of emergency alert
services. At a minimum, Grantee shall at all times have the capability for an emergency override alert.
4,.7j ilU Parental Control Lock.
Grantee shall provide, for sale or lease, to Subscribers, upon request, a parental control locking device or
digital code that pennits inhibiting the video and audio portions of any Channels offered by Grantee.
4,8j ~ Technical Standards.
Grantee shall, at a minimum, comply at all times with all applicable Federal Communications Commission
(FCC) Rules and Regulations, including but not limited to, Part 76, Subpart K (Technical Standards), as may be
amended from time to time.
~~
Right ofInspection.
Grantor shall have the right to inspect all construction, reconstruction or installation work perfonned by
Grantee under the provisions of this Agreement and Applicable Laws, to ensure Grantee's compliance and to protect
the health, safety and welfare of Grantor's citizens.
4.Wj il!.ì
Periodic Evaluation, Review and ModifIcation.
Grantor and Grantee acknowledge and agree that the fIeld of cable television is a relatively new and rapidly
changing one which may see many regulatory, technical, fmancial, màrketing and legal changes during the tenn of
this Agreement. Therefore, in order to provide for the maximum degree of flexibility in this Agreement, and to help
achieve a continued, advanced and modern Cable System, the following evaluation provisions will apply:
(a) The City reserves the right to adopt rules and regulations controlling the procedures as set forth
below and the subjects for evaluation sessions. In the absence of any City action taken to exercise these rights,
Grantee shall be subject to the procedures and the subjects described in this Section 4,.W "lll.
(b) The City may require, in its sole discretion, that the Grantee participate in evaluation sessions with
the City at any time and !Tom time to time during the tenn of this Agreement; provided, however, there shall not be
more than one (1) evaluation session during any calendar year.
(c ) Topics which may be discussed at any evaluation session include, but are not limited to, rates,
channel capacity, the System perfonnance, programming, PEG access, municipal uses of the System, Subscriber
complaints, judicial rulings, FCC rulings and any other topics the City or Grantee may deem relevant.
(d) During an evaluation session, Grantee shall fully cooperate with the City and shall provide without
cost and in a timely manner such infonnation and documents as the City may request to perfonn the evaluation.
(e) As a result of an evaluation session, the City or Grantee may detennine that an amendment in the
terms of this Agreement may be required; ~ that the requirements of the SystoHl or this Agreement should be
updated, changed or revised, QBEiler tàat aååitiaaal S8F"?Îees slundà 13e prs·,'iàeà BY GfaBtee (collectively a "Proposed
ModifIcation"). If the Proposed ModifIcation is consistent with the tenns of this Agreement, the Ordinance, the
needs of the City and existing state-of-the-art technology, including what is provided by Grantee in other Systems
owned, operated or managed by it, its parent company or any affiliated company, Grantee and the City will, in good
faith, review the tenns of the Proposed ModifIcation and consider amending this Agreement accordingly.
175312/RED
8
SECTION 5.
SERVICES AND PROGRAMMING
5.1) Services and Programming.
Prior to ooeration of the SYstem. Grantee shall provide Grantor with a list of programming services and
other services offered, which list shall be attached hereto as Exhibit D (the "Channel Line-up''). The Channel Line-
up shall include all applicable charges and pricing schedules. The Channel Line-up shall be updated each time a
change is made by Grantee. Grantee shall not alter the number of program services or other services without thirty
(30) days prior written notifIcation to the Grantor and System Subscribers.
5.2) Leased Channel Service.
Grantee shall offer leased channel service on reasonable tenns and conditions and in accordance with
Applicable Laws.
5.3) Periodic Subscriber Survey.
(a) To the extent Grantee conducts customer surveys with respect to all or a portion of the system
serving the City, it shall provide the City with all non-confIdential information and fmdings ftom such surveys.
(b) As a part of each annual report, Grantee shall provide the City with the results of any survey
conducted and shall report in writing what steps Grantee is taking to implement the fIndings of the survey, such as
correcting problems and expanding services.
SECTION 6.
PUBLIC ACCESS PROVISIONS
6.1) Public, Educational and Government Access.
(a) City or its designee is hereby designated to operate, administer, promote, and manage access
(public, education, and government programming) (bereinafter "PEG access") to the cable system established
pursuant to this Section 6. Grantee shall have no responsibility whatsoever for PEG access except as expressly
stated in this Section 6.
6.2) Grantee Support for PEG Usage.
In accordance with the provisions of the Cable Act and Minn. Stat. § 238.084, Grantee shall provide and
make available for public, educational and governmental (PEG) access nsage within the Service Area the following:
(a) Provision and use of the grant funds and Channels designated in Exhibit E of this Agreement for
local educational and governmental programming and access use at no charge in accordance with the requirements
of Exhibit E.
(b) Maintenance of the Access Facilities and Channels, and support of educational and governmental
programming to the extent specifIed in Exhibit E of this Agreement.
(c) Provision of free public building Installation and cable service as more clearly specifIed in
Exhibit E, and provision of two-way capability to the locations specifIed in Exhibit E.
(d)
Access Facilities shall be operated by the City.
1753121RED
9
SECTION 7.
REGULATION
7.1) Amendment of Franchise Agreement.
Grantee and City may agree, !Tom time to time, to amend this Franchise. Such written amendments may be
made subsequent to a review session pursuant to Section 4.10 or at any other time if City and Grantee agree that
such an amendment will be in the public interest or if such an amendment is required due to changes in federal, state
or local laws. City shall act pursuant to local law pertaining to the ordinance amendment process.
7.2) Conflict Between Ordinance and Agreement.
In the event of any conflict between the terms and conditions of this Franchise Agreement and the
provisions of the Ordinance, the provisions of this Franchise Agreement shall control. Grantee expressly
acknowledges and agrees that the City hereby retains all of its police powers and the City may unilaterally amend
the Ordinance in the exercise of its police powers and Grantee shall comply with said Ordinance as may be
amended; provided, however that City hereby agrees to use reasonable efforts to address public health, welfare and
safety needs without resorting to amending the Ordinance. By executing this Franchise Agreement both City and
Grantee acknowledge and agree that neither is aware of any conflicts between this Franchise Agreement and the
Ordinance.
7.3) Force Majeure.
In accordance with Section 1.31 of the Ordinance, in the event Grantee's perfonnance ofany of the tenns,
conditions, obligations or requirements of this Agreement or the Ordinance is prevented or impaired due to any
cause beyond its reasonable control, such inability to perfonn shall be deemed to be excused for the period of such
inability and no penalties or sanctions shall be imposed as a result thereof, provided Grantee has notifIed Grantor in
writing within ten (10) days of its discovery of the occurrence of such an event. Such causes beyond Grantee's
reasonable control shall include, but shall not be limited to, acts of God, civil emergencies and labor unrest or
strikes, untimely delivery of equipment, inability of Grantee to obtain access to an individual's property and
inability of Grantee to secure all necessary pennits to utilize utility poles and conduit so long as Grantee utilizes due
diligence to timely obtain said pennits.
7.4) Rate Regulation.
Nothing in this Agreement shall in any way prevent Grantor !Tom regulating any rates charged by Grantee.
If Grantor elects to so regulate, Grantor shall follow the procedures ontlined in Section 1.19 of the Ordinance or
Applicable Laws.
~ Franchising: Cost Reimbursement
Grantee shaH nrovide Citv full reimbursement for 811 reasonable and necessarY franchisinl! costs not
already covered bv Grantee's annlication fee Grantee's reimbursement offranchisinQ" costs shaH not he deducted or
off~et from any franchise fees which Grantee is reauired to remit nursuant to Section 3.2 of this Franchise.
IN WITNESS WHEREOF, Grantor and Grantee have executed this Agreement the day, month and year
fIrst above written.
CITY OF CHANHASSEN, MINNESOTA
Dated;
By;
ATTEST;
175312/RED
10
By:
Its:
(SEAL)
TPJ.:"-X ~fII)'.}.~ST ~A~SSQCIl_TI!S, L.P. EVEREST
CONNRCTJONS CORPORA nON
Dated:
By:
Its:
(CORPORATE SEAL)
STATE OF MINNESOTA )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me on
. the of the City of
. +9--20 . by
. on behalf of the City.
Notary Public
STATE OF MiNNESOTA )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me on . +9--20 . by
. the of Tria31 Þ.fiEh·;est l~sseeiate6 1..P. Rverest Connections Comoration on
behalf of the Company.
Notary Public
1753121RED
11
EXHIBIT A
OWNERSHIP
EVEREST CONNECTIONS CORPORATION
is..¡¡ TRIA.." MUH¥Ii£T A££OCIATIi£, L.P.i6 a [ wholly owned subsidiary of pare at Bnæe]. Everest Global
Technoloaies Grono LLC
175312/RED
A-1
EXHIBIT B
FRANCHISE FEE PAYMENT WORKSHEET
TåW'( :MiEl';:est !&ssasiates, I..P. Everest Connections Comoration
(Chanhassen)
Subs
Franchise Fee: 5% Gross
Date
, . .99g ~
Revenue Source
Basic
Pay
Tier
Advertising and Pay-Per-View
Other
Total $ .
1753121RED
B-1
EXHIBIT C
ANNUAL PERFORMANCE REVIEW CHECKLIST
1. RATES AND CHARGES
No change
Changed
Notices sent to City and subscriber
Changes in rates and costs identifIed by attachment
Change "reasonable" and consistent with the standards prescribed by the FCC
Other (describe in attachment)
2. PROGRAMS AND SERVICES
No change in programs and services
New programs and services added
Identify new programs and services and decision for introduction
The programs and service changes meet demand expressed in customer satisfaction
surveys
Other (describe in attachment)
3.
PUBLIC, GOVERÞ!H¡¡NTAl. .^.ÞID EI)UC:\TION1\L Þ.CŒSS
CUSTOMER SERVICE
Customer service requirements complied with
Summary of complaints (attached)
System outages summary (attached)
Description of new customer services, promotions (attached
~ FILINGS WITH FCC
~.
Summary of all fIlings with FCC described in attachment
175312/RED
C-1
Check Where
ADDlicable
1.
é PERFORMANCE TEST IN FRANCHISE COMPLETED
~.
Summary of perfonnance test results (attached)
:¡. FRANCHISE FEE PAYMENTS MADE (ATTACH COMPLETED FRANCHISE FEE
~. PAYMENT WORKSHEETS - EXHIBIT B TO FRANCHISE AGREEMENT)
&, COMPLETION OF CONSTRUCTION
9: CO~4Pl.E'I'I9N OF COÞJgTRUCTI~r Y¡1gæàeJfeèailà (sæmnar)' attaekeEl) Ns's
1. teelmelegies ÎBeBFf18æteEl ØHe 8ystem Ckal1Rel 6&f'aeity manaseå
Construction (sumrnarv att.ached)
Service extended to new areas
Other
.J.G NEW SERVICES
j¡.
No Changes
Services other than programming made available in the subscriber network (summary
attached)
.u TERMS AND CONDITIONS IN THE FRANCHISE AGREEMENT HAVE BEEN
2. COMPLIED WITH
Company participated in planning studied and Cable Advisory Committee activities
(summary attached
AU insurance, bonds and deposits are updated and fIled with City
~ OTHER PERFORMANCE HIGHLIGHTS OR PLANS TO BE INTRODUCED WITHIN
lQ. THE NEXT TWELVE (12) MONTHS (SUMMARY ATTACHED)
-@@
Check Where
Aoolicable
Dated this _ day of
H
. W--20 . by
. a duly authorized Officer of
City of
. Minnesota VerifIcation:
The above Annual PeIformance Review has been filed by TÂæl M.iå\';est !.sseeiates, L.P. Everest Connections
Cornnration as required. The Office of for the City of has reviewed the
infonnation and fmds that the fIling is complete -----1is not complete _. The foUowing matters are deemed
incomplete and require further information and/or compliance by . W--20
1753121RED
C-2
Dated:
THE CITY OF
CHANHASSEN,MiNNESOTA
By:
Its:
1753121RED
C-3
EXHIBIT D
CHANNEL LINE-UP
Service
Description
Ratel
Charge
175312/RED
D-1
EXHIBIT E
GRANTEE COMMiTMENT TOPEG m
~ ACCESS FACILITIES AND EQUIPMENT
1. PUBLIC. EDUCATIONAL AND GOVERNMENT !PEG) ACCESS CHANNELS
Grantee shall provide to each of its subscribers who receive some or all of the services offered on the Cable
System, reception on at least one (1) specially designated noncommercial public access channel available for use by
the general public on a fIrst-come, first-served, nondiscriminatory basis; at least one (1) specially designated access
channel for use by local educational authorities; at least one (1) specially designated access channel available for
government use (hereinafter collectively referred to as the "PEG Channels"); and at least one (1) specially
designated access channel available for lease on a first-come, first-served, nondiscriminatory basis by commercial
and noncommercial users. The VHF spectrum must be used for at least one (1) of the PEG Channels required in this
paragraph. No charges may be made for channel time or playback of prerecorded programming on the specially
designated noncommercial access channels. Personnel, equipment and production costs may be assessed, however,
for live studio presentations exceeding five (5) minutes in length. Charges for those production costs and fees for
use of other public access channels must be consistent with the goal of affording the public a low-cost means of
television access.
Whenever the PEG Channels are in use during eighty percent (80%) of the weekdays, Monday to Friday,
for eighty percent (80%) of the time for any consecutive three (3) hour period for six (6) weeks running, and there is
demand for use of an additional channel for the same purpose, the Grantee shall then have six (6) months in which
to provide a new PEG Channel for the same purpose, provided that provision of the additional channel or channels
must not require the Cable System to install converters.
The PEG Channels shall be dedicated for PEG use for the tenn of the Franchise Agreement, provided that
Grantee may, utilize any portions of the PEG Channels not scheduled for PEG use. Grantor shall establish rules and
procedures for such scheduling in accordance with Section 611 of the Cable Act (47 U.S.c. § 531).
Grantee shall also designate the standard VHF channel 6 for unifonn regional channel usage currently
provided by "Metro Channel 6" as required by Minn. Stat. § 238.43. Programming on this regional channel shall
include a broad range of infonnational, educational, and public service programs and materials to cable television
subscribers throughout the Twin Cities metropolitan area.
2. PEG OPERATIONS
Grantor may in its sole discretion, negotiate agreements with neighboring jurisdictions served by the same
Cable System, educational institutions or others to share the operating expenses of the PEG Channels. Grantor and
Grantee may negotiate an agreement for management of PEG facilities, if so desired by both parties.
3. TITLE TO PEG EOUIPMENT
Grantor shall retain title to all PEG equipment and facilities purchased or othetwise acquired pursuant to
the pre·:ielis CßaBhass8a fænehise this Franchise Ordinance Ne..
4. PROMOTION OF PEG ACCESS
Grantee shall allow the Grantor to place bill stuffers in Grantee's Subscriber statements at a cost to the
Grantor not to exceed Grantee's cost, no less frequently than twice per year upon the written request of the Grantor
and at such times that the placement of such materials would not materially and adversely effect Grantee's cost for
the production and mailing of such statements. The Grantor agrees to pay Grantee in advance for the actual cost of
such bill stuffers. Grantee shall also make available access infonnation provided by Grantor in Subscriber packets
at the time of Installation and at the counter in the System's business office within the Service Area. Grantee shall
also distribute, at no charge to Grantor, through advertising insertion eqnipment, 28 weekly promotional and
awareness commercial spots at randomly selected times in unpurchased advertising space on a "run of schedule
1753121RED
E-1
basis" produced at the Grantor's cost and submitted by the Grantor in a format compatible with such advertising
insertion equipment once Grantee has acquired and activated such capability. Grantee sball also include a listing of
the known programming to be cablecast on PEG access Channels in or on any program guide of services for the
Cable System.
5. SERVICE TO PUBLIC BUILDINGS
(a) One (1) cable drop connection and the highest level of cable service excluding pay-per-view and
pay-per-channel programming shall be provided free of charge to each public building listed in Exhibit E-I with no
Installation charges or monthly service charges. Said drop connection and service provision shall be concurrent with
the construction schedule required by Section 4.1 of the Agreement. Grantee shall, in any public bnilding
hereinafter built, provide all materials, design specifIcations and technical advice for anyone cable outlet to be
installed during the construction of such building, without cost to the Grantor and Grantee shall provide the same
service to such new public building as required in this paragraph (a).
(b) Two-way capability shall be provided to the public buildings listed in Exhibit E-2.
6. PEG ACCESS OPERATING SUPPORT.
Grantee shall also collect on behalf of City a per Subscriber fee of eighty-four cents ($.84) per month solely
to fund public, educational and governmental access -related expenditures (hereinafter "Access Operating Fee"). In
the event Grantee becomes subject to "effective competition" as defIned by Applicable Law, from another Multi-
Channel Video Programming Distributor, the Access Operating Fee shall, following ninety (90) days written notice
to City, be reduced to the level of expenditure at which the multi-channel video Programming Distributor, is
obligated or fIfty cents ($.50) per subscriber per month, whichever is greater.
175312/RED
E-2
EXHIBIT EI
SERVICE TO PUBLIC FACILITIES
h PUBLIC BUILDINGS:
CITY OF CHANHASSEN, MINNESOTA BUILDINGS:
City Hall
Fire Station
Public Works
Chanhassen Recreation Center
Other:
690 booItef City Center Drive, P.O. Box 147 (5 Nodes)
7610 Laredo
1591 Park Road
2300 booItef City Center Drive (2 Nodes)
(to be detennined by mutual consent)
SCHOOLS IN CHANHASSEN:
Bluff Creek Elementary 2300 Coulter Blvd.
Chanhassen Elementary School 7600 Laredo Drive
St. Hubert's Catholic Church School 8215 Main Street
Minnetonka Middle School- West 6421 Hazeltine Blvd.
175312/RED
E1-1
EXHffiIT E2
-h PUBLIC BUILDINGS TO BE PROVIDED WITH TWO-WAY CAPABILITY:
CITY OF CHANHASSEN, MiNNESOTA BUILDINGS:
City Hall
Fire Station
Public Works
Chanhassen Recreation Center
Other:
690 Geü\Ief City Center Drive, P.O. Box 147 (5 Nodes)
7610 Laredo
1591 Park Road
2300 Coulter Drive (2 Nodes)
(to be detennined by mutual consent)
SCHOOLS IN CHANHASSEN:
Bluff Creek Elementary 2300 Coulter Blvd.
Chanhassen Elementary School 7600 Laredo Drive
St. Hubert's Catholic Church School 8215 Main Street
Minnetonka Middle School- West 6421 Hazeltine Blvd.
1753121RED
E2-1
EXHIBIT F
DESCRIPTION OF SYSTEM UPGRADE
[REMJ\.INS OPEN gUl ÆCT TO CW.1'IGEg PROPOgED BY CITY'g ENG¡ÞÆERJ EVEREST
CONNECTIONS CORPORATION
TIUAX MID\'ÆgT AggOCI.'\.TEg, h.P.
Chanhassen
The BeBel fer /Hi en..'laReed aeBNeFl(
TrllHc }'~ià·.·:est .:\ssesiates, l..P.·s (Tria1c) 6UFfeBtl~' sep,:iees the area, ",,,lUte still fuBstiBRal, is Bp8mting Rear
its designee! sàæmel e~aeity. 1ft eæer 1a r-espsRà te FeEfØests fer aààitiBRal sBF:iees freffi 8\1r sHstemsFS, it is
aesess&r)" 1a marease tlle s",'ailaele sapasit)' eftàe system.
BayaRå æuütieaal eaèle televisiaR '1ÍElea sBF:iee, theFe Bfa a hest Bf ether SBF!Ïees that san Be suppafteå èy
an \:tpgæåeà BetYlBfk. High speed èata, Imeæet aBsess, e9st e:ffeeth's teleee--mHsatisRS 8eFBSS the ßet\"9f1~ aad
eveR telephBBj' ean he im¡:IlemsRteà aeseræng 19 tBe Reeds afthe sSR1:HæBities seF~·eà.
ÞJeag '::ith the peteøtial fer iBsr.easiRg the JR-lIBber sf SBFi/iees supparteà by the aSW!BFk, mereaseà
reIiaèi1it-y aaEl }!ietaFe E)Uality 'llill Be majer }!risRties. lRdiyiooal eamnumit:Íes eaa Be isalateEl sa the aeB.':erk sa that
HRsJC-fJ8eteEl ÐHtages in eae Mea åe Bet atTest se~.:eFal stRer aFeas, as is the ease in maR)' eew.:satianal eeanial saBle
tele~.:isiea s~~tems.
The same teeh:lÍElUes that a11e':: aelàitianal sigaals ta be sam.eEl, aad keep seF\'Ìee intBfFUt1tiaas ta a
m1.aiFR1:Uß:, }!re';iåe aft aààeà B8aef.it Bf impraying tha E)Ualit:ì, sf pietu£es saea BY 81:1£ eHstem8fS, IR 8'.:al)' 8eanial
eaåle tele'/isiaR system, pietuFe Elual~' is àegæàeà as the sigaal ma'/as furtlter eat inte die system, passiRg ~ellgh
a~lifier after aæplif.ieF. In aa upgmàed BeB.'Ærk, theN are sigaifieaatly less amplif.iafS Ber::eea tke 8FiginatiaR site
aad the 6astemer, r-esaltiBg in hetter piemre EtHality regar-dless 9f\':hare the GHstemer may Be in the system.
What the new network will look like
The proposed IIf'gæàoà HFC (hybrid fIber/coax) network will be designed to operate with a bandwidth of 5
MHz to 759 Þ.Yk, '.7itk 59 Þ,iHz t9 ,SSQ þffIø BeiBg alleeateà fer 77 8sB'..eatisaal analBg ehaBBels. The reRlaiRiag
\:1fJper 299 Þ-1l!z afèaBà".iàtà will èe FeseR'ed far Ítitæ'a use. Thrsugli the HSS sf àigital sBmpr8ssisa, maay
shannols saB be soffÌeà in tåe s....e ""aee as "Be lIBolog shanael 860 MHz. The result is a large number of available
channels, with plenty of additional capacity for future needs.
The network will be capable of not only sending signals out to customers, but returning signals back to the
origination site from anywhere in the system, as well. This "return" capability atili;¡:os s~estrum 1tom 3 Þ-Yf. to 49
Mffi!, aRà will be activated on both the coaxial and optical systems. The return system can be used to transmit data
and video, and may be used for insertion oflocally-originated programming, monitoring of certain key components
in the network, and transmission of data from set-top tenninals used for pay-per-view and other customer services.
Fiber optic transmitters, cable, and optical receivers will be used to transport the signals from the
origination site, to at least one receiving location, or "node," in each community. There will be a maximum of ðOO
~ homes served from each node, which is an accepted industry standard used when considering implementation of
future services. This separation of communities on the optical network allows for "narrowcasting" or the
distribution of certain specialized kinds of programming to communities that have an interest. For example, one
community would not have to receive the local programs originated by a distant community.
After each node, the number of active electronics, or amplifIers, would be reduced to the minimum required
10 reach the limits of the community, while still maintaining measurable picture quality better than current FCC
reqnirements. "Standby" power supplies will automatically provide battery power to the coaxial system for several
hours in the event of a commercial power interruption. The batteries are automatically recharged after power is
restored.
175312/RED
F-1
Each customer will have the option to use an "addressable" set-top tenninal to access programming canied
on the network. Special programming, such as "impulse pay-per-view" will be available simply by pressing a
button to authorize the purchase.
Fiber optics and coaxial plan in the network
The optical transmission system will be the backbone of the _ network, providing the primary means of
moving signals !rom the origination site out to each community. At the origination site, all the progrannning to be
carried on the system will be converted to optical signals, and transmitted out into the system by a network of fIber
optic cables.
The combination of optical transmitters and cables allow more reliable, higher-quality pictures to be
received in each community. BafI.ier meßRS eftFan5J:ÐissisR than would be received on a coaxial system. A coaxial
~ involving many miles of metal-sheathed coaxial cable, and cascades of amplifiers, created the potential for
service interruptions anywhere along the transmission route. A problem appearing at one point mid-way into the
system affected all customers beyond that point. Power outages, lightning stonns, isolated outages, vandalism, and
isolated equipment failure will have much less of an effect on the _ network than on lite ª coaxial system iIHIIe
¡>ast.
In each community, at least one optical node will be placed, to convert the optical signal back into the
normal signals used in the coaxial system. Each node will serve a maximum of ~ ~ homes via coaxial cable.
This limitation on node size insures that the more reliable optical plant is as large as possible, and that coaxial
electronics are kept to the minimum required to deliver a good-quality picture to all customers.
The optical network will provide ¡; ~ individual fIbers to each node location. Although it OUR'OBtly reE Hifos
only one of these fIbers is reauired to provide all the programming required by the network, extra fIbers are included
for return transmission, and any special or future requirements, on an as needed basis.
The coaxial portion of the plant will begin at the node itself, where signals will be distributed over a short
coax network, consisting of modern, high-quality network amplifIers. These amplifIers are specifIcally designed for
use in HFC networks, and incorporate return-transmission capability, surge protection, and remove monitoring
capability.
8inse mest ef1:ke &Ul'FeRíI)' eKisting aBaxial eaèle is still sBF:ieeaàle &REi eleetfieally SBUd" it "::i" Be Æ\l£ìeå
¡Haag Blest eetke eeædal peHieR eftke aet\T:erk. Rams efthe sable "}.'ill, iB Rl8ay eases, elHRiBate the Reed fer
eeRsmJ8kBB iø Fesiàsøâal areas, 88ÐSiRg fe"Ner 1:IfJgFQåe 8eBSà=Uetiea issaes.
All of the electronic components in the ædstiBg eSaKial system ~ will be replaeeà constructed with
BOW 71;9 ~ MHz devices. This insures a complete ~ j¡QQ MHz network, and provides a simpler construction
solution should any future upgrade work be required.
The upgæàe preeess
fiefe ·¡lill Be a eeBBiàeæèle BBlaæK ef'.-:eFk J!'eEfYiFeà te 8fJgæàe die emirs Buisting system fa tBe 88\·: Be~:rerk.
8mee the upgæEle -,-:ark \\'ill be peFfefIBed aB all alreaåy asw;e system, s8l'e BHlst be talŒB ta keep eustaJBem aBd
sa~es well ÏÐt<umeå, aBEI seFl'Ïse intemlfltiaBs ta a miÐ:iæøm.
The f1fSt step willl3e ta iBsiall the fil3er apas BeR-Jerk alaBgsiele the enistiDg 69aJLial system. ÞJaFlBtllly, this -.-¡arI:
daBs Bat &fIest the a¡Jeæ9aB efdte enisäBg system. Ie aFees -,-;here t:àe eahles Me elFeeely sameel 98 utility pales, the
8e-.-: fiÐer -:Jill Be aäasaeEl t9 the enistiBg eal:tles -¡¡eFe passiÐle. IB areas -:;hefS enistiBg saldes Me undeFgfßlJRå,
aeleliê9B81 69B5B=uSaaD -,ì,ill be reqøireà 1a iRatell tile Be\-,' fiÐer 8pge aaèles. ÞãPj Be-,-: Ga&iåal sable fSE¡uired 13)' the
aet\-:arI: elesig&, ie the path afthe fil3sr aptia aaBle, -;.ill be iastalled at tile same time.
ODee the fiØer "l3aeltbaRe" is iB plaes, die aptieat fSeeF:em are iastelled. The aptieat system is theB aetivatsel aBEI
tssteel. V.'£eB testiBg afthe apâeat eet\ì,'sÀí: is samplete, tkeB tile upgæEliBg efthe seædal. plaBt iR easa eemm\:lfl#y
GaB l3egiB.
't,~,q¡SR the GewlÌal plaat is apgøelså, sasa suistiBg 9IBflifier and disæ\Jutiee åe\~iee &Fe rema":ed, æul fSplaseel ".dtB a
ae\-,'e1, 73Q Þ1H1Z de-viee. Tae Be-:: eEJQÏpmeøt is aetp:ateå, aad &By sustemefS sep/ed Ham that eqøil'æaRt 8N
&"'.viteåeå ta the Be':; eE¡uipmsBt. Tæs preasss begins at the aeele, bæaeàiBg aut tIlreUgB saea leg eftlte 6a&iLialplaBt.
It is this pamaR efthe apgæåe t:hat eaases se-:eæl br'¡efinteø:uptiaB6 æ seF\'iee. .A.S the \lfJgHåe BfS-;:S me-/a Ru1ker
1753121RED
F-2
eHt iate the Beania} system, f-ewer aBå îev:er eustemeFS e]~erieRBe the inte~tieBS iø seryise. ',J,'lieB tile Uf3gmde ef
a Bede is [mally samplete, all sustamem served Hem tkat Bede are Be·,·: reeeiy:iÐg: servise f-ram tlie Re·:: øeRvefk
DHf'iag the f'rima¡:y Uf3gæde 9f eaeli Rede, installatiaR Uf3gæåe ere·:.~ s~.·:eefl tlmmgh the same &Fea, iuspeeting eaeli
ef1ke seF:iee lines that seBReet sHstemers' liames ta the distÅBøtiaB system. CenaeetieRs aA! slieelEed, updated
&¡)litting e~Ìf)meat is iBstalled ifReeessary, aad ia seme eases, the eRtiFe line is rBflaseå. ¿^.t this peint, tae Hflgmàe
afthat Bede is samplets, aRa n:eFl.: Maves aR fa the Rsn.-t BeEle aFe8.
Community access and use of the network
The IIJ'gmàeà network will allow for individual conununities to produce their own legal programming, and
place it on an available channel on the system. Normally, one site in a conununity is designated as a "studio" where
local programs are taped for later broadcast, or transmitted "live" over the system. It is also possible for the
conununity to originate informational services, such as public service messaging, school infonnation, or other items
of conununity interest.
The video feed from the conununity would be inserted on the network on a special channel, and transmitted
via the return system - through the coaxial network back to the node, and transmitted optically from the node back to
the origination site. From there, the signal would be reprocessed and retransmitted back through the normal
network, available to customers.
Since each of the nodes are conununity-based, it is possible to allow conununities to transmit their own
progranuning to only the residents of that conununity, if they desire.
The addressable converter system
The "addressable set-top tenninals" used in the network are computer-controlled "smart" converters. To
the customers, they function very much the same as the nonnal converters they are accustomed to. In reality, they
are very sophisticated computer tenninals that allow for the processing of progrannning infonnation both to and
from the customer.
The converter system is controlled by a master computer connected to ~ Everest Connections
Comoration billing system. The master computer is then connected to the network, by either a direct connection or
a satellite link. Information regarding the operation of each one of the converters is continually transmitted over the
network, and received by the converters.
If a customer calls one of our service centers, and orders HBO, the information regarding the change in
services is keyed into the billing system. Since the billing system and master computer are connected, infonnation
about that transaction is immediately transmitted to the uetwork, and the customer's converter receives inunediate
authorization to receive HBO. The entire process takes just a few seconds, and the customer has immediate access
to the programming that as ordered, without the need to wait for a visit from a service technician. Services can be
added, changed, or removed in the same manner.
Additionally, customers will have access to multiple channels of "impulse pay-per-view." This is one of
the most popular features of the converter. The "impulse" feature takes advantage of the return system on the
network, allowing a request for a pay-per-view event to be processed immediately. The customer simply tunes to
the channel desired, and presses a button to purchase the program. There is no need to make a phone call, and no
order to place in advance.
The addressable converters are equipped with several self-diagnostic and security features. If the converter
is not functioning properly, it will display a diagnostic code for troubleshooting. The master computer
conununicates with each converter at regular intervals, and can alert service personnel if a problem is found. There
are signal security safeguards built into each converter, to prevent unauthorized tampering. The converter
recognizes its "home" network, and will not function properly if removed without authorization.
Potential for future expansion
175312/RED
F-3
The II !graEied network is completely expandable, due to its fIber optic backbone. The optical system
incorporates extra fIbers that run to each node, along with additional extra fIbers along main routes. As
communities grow, there will be capacity available to serve their residents.
1753121RED
F-4
DRAFT
Prepared by:
BRIAN T. GROGAN, ESQ.
Moss & Barnett
A Professional Association
4800 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402-4129
Telephone: (612) 347-0340
Fax: (612) 339-6686
Email: groganb@moss-barnett.com
TABLE OF CONTENTS
SECTION I.GENERAL PROVISIONS .........................................................................................1
1.1) DefInitions..................................................................................................... ...........1
1.2) Written Notice...................................................... ....................................................1
SECTION 2. GRANT OF FRANCHISE ......................................................................................2
2.1) Grant. .................................................................................................... ............. ......2
2.2) Right of Grantor to Issue Franchise. ........................................................................2
2.3) Effective Date. ....... ..................................................................................................2
2.4) Term. ........................................................................................................................2
2.5) Franchise Not Exclusive. ........................................ ................................ ......... ...... ..2
2.6) Ownership of Grantee. ................................................... .... .................. ...... ... ... ........3
SECTION 3. GENERAL REQUIREMENTS ............................................................................:..3
3.1) Governing Requirements. ........................................... ........ ....... ...... ...... ............. .....3
3.2) Franchise Fee. .......................................................................................................... 3
3.3) Not Franchise Fees. ........................................... ...................... ... .... ...... ... ......... ... .....3
3.4) Recovery of Processing Costs.......................... ........... ....... .... ... .......... ......... ... ... ... ...4
3.5) Liability Insurance. ............................ ...................................................................... 4
3.6) IndemnifIcation. ............. ............................................................ ............. ... ... ....... ....5
3.7) Grantee's Insurance. ................................................................................................6
3 .8) Workers' Compensation Insurance. ................... ........ .................... ..........................6
3.9) Security Fund. ......................................................................... ...... ............ ...... .... .....7
3.10) Procedure for Enforcing Franchise Agreement. ......................................................7
3.11) Reservation of Rights. ........................................................... ............. .................. ....8
3.12) Annual Report. ..................................................................... ............................... .....8
SECTION 4. DESIGN PROVISION.............................................................................................8
4.1) Minimum Channel Capacity. ...................................................................................8
4.2) System Design. ......................................................................................... ....... ........8
4.3) Operation and Maintenance of System. ...................................................................9
4.4) VerifIcation of System Construction. ......................................................................9
372949/2
4.5) Special Testing.........................................................................................................9
4.6) FCC Reports.......... .......................................... ............................ ...... ..... ...... ...... ....10
4.7) Emergency Alert Capability. .................................................................................10
4.8) Parental Control Lock. ...........................................................................................10
4.9) Technical Standards. .............................................. ........... ... ... ... ........... .............. ...1 0
4.10) Right of Inspection.............................................................. ..................... ..............1 0
4.11) Periodic Evaluation, Review and Modification. ....................................................10
SECTION 5. SERVICES AND PROGRAMMING ...................................................................11
5.1) Services and Programming. ...................................................................................11
5.2) Leased Channel Service. ........................................................................................11
5.3) Periodic Subscriber Survey. ...................................................................................11
SECTION 6. PUBLIC ACCESS PROVISIONS.........................................................................12
6.1) Public, Educational and Government Access. .......................................................12
6.2) Grantee Support for PEG Usage............................................................................12
SECTION 7.REGULATION .........................................................................................................12
7.1)
7.2)
7.3)
7.4)
7.5)
Amendment of Franchise Agreement. .............. .............. ... ... ............. ........ ... ...... ...12
Conflict Between Ordinance and Agreement. .......................................................12
Force Majeure. .......................... ............................................ ... ... ........ ..... ........ ... ...13
Rate Regulation. ...................................................... ......... ........ ...... ..... ..... ........ ... ...13
Franchising Cost Reimbursement. .........................................................................13
EXHIBIT A
EXHIBIT B
EXHIBIT C
EXHIBIT D
EXHIBIT E
GRANTEE'S OWNERSHIP INFORMATION
FRANCHISE FEE PAYMENT WORKSHEET
ANNUAL PERFORMANCE REVIEW CHECKLIST
CHANNEL LINE-UP
GRANTEE COMMITMENT TO PEG ACCESS FACILITIES
AND EQUIPMENT
SERVICE TO PUBLIC FACILITIES
PUBLIC BUILDINGS TO BE PROVIDED WITH TWO- WAY
CABLE
DESCRIPTION OF SYSTEM
EXHIBIT El
EXHIBIT E2
EXHIBIT F
372949/2
jj
FRANCHISE AGREEMENT
THIS FRANCHISE AGREEMENT (hereinafter the "Agreement"), made and entered into this
day of . 2000, by and between the City of Chanhassen, a municipal
corporation of the State of Minnesota (hereinafter the "City" or "Grantor"), and Everest
Connections Corporation (hereinafter the "Grantee").
WITNESSETH
WHEREAS, pursuant to Ordinance No. (the "Ordinance"), the City is
authorized to grant and renew one or more nonexclusive revocable Franchises to operate,
construct, maintain and reconstruct a cable television system within the City; and
WHEREAS, the City, after due evaluation of the Grantee's technical ability, financial
condition and legal qualifications, and after public hearings, has determined that it is in the best
interest of the City and its residents to grant a Franchise to the Grantee.
NOW, THEREFORE, in consideration of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
SECTION 1.GENERAL PROVISIONS
1.1) Defmitions.
Capitalized terms used in this Agreement shall be defined as set forth in the Ordinance
unless (i) otherwise defined herein, or (ii) the context otherwise requires.
1.2) Written Notice.
All notices, reports or demands required or permitted to be given under this Agreement
and/or the Ordinance shall be in writing and shall be deemed to be given when delivered
personally to the party designated below, or when five (5) days have elapsed after it has been
deposited in the United States mail in a sealed envelope, with registered or certified mail,
postage prepaid thereon, or on the next business day if sent by express mail or nationally
recognized overnight air courier addressed to the party to which notice, report or demand is
being given, as follows:
If to City:
City Clerk
690 City Center Drive, P.O. Box 147
Chanhassen, MN 55317
If to Grantee:
Everest Connections Corporation
5555 Winghaven Boulevard
O'Fallon, MO 63366
372949/2
1
Such addresses may be changed by either party upon notice to the other party given as provided
in this Section.
SECTION 2. GRANT OF FRANCHISE
2.1) Grant.
This Franchise hereby provides Grantee with the authority, right and privilege to
construct, reconstruct, operate and maintain a Cable Television System to provide Cable Services
within the Franchise Area.
2.2) Right of Grantor to Issue Franchise.
Grantee acknowledges and accepts the right of Grantor to issue the Franchise under the
law as it existed on the Effective Date hereof and Grantee agrees that it shall not now or at any
time hereafter challenge any lawful exercise of this right by Grantor in any local, State or Federal
court.
2.3) Effective Date.
The Franchise provided for in this Agreement shall be effective on the date that both
parties have executed this Agreement (the "Effective Date"), provided that said date is no later
than thirty (30) days after the date the City Council, by Resolution, approves this Agreement (the
"Approval Date"). The Franchise provided for in this Agreement is further contingent upon the
filing by Grantee with the City Clerk of the City, of this Agreement duly executed by Grantee
together with the security fund and insurance certificates provided for in this Agreement and the
Ordinance, except that if such filing does not occur within sixty (60) days after the Approval
Date, the Grantor may, in its sole discretion, declare the Franchise provided for herein to be null
and void.
2.4) Term.
The term of the Franchise granted pursuant to this Agreement shall be for the period of
fifteen (15) years commencing on the Effective Date, at which time it shall expire and be of no
force or effect unless the Franchise is then renewed in accordance with the Ordinance and
Applicable Laws.
2.5) Franchise Not Exclusive.
The Franchise granted pursuant to this Agreement shall not be construed as limiting the
right of Grantor, through its proper offices, and in accordance with the Ordinance and Applicable
Law, to grant other Franchises containing terms and conditions that are no more favorable or less
burdensome than those imposed on Grantee in the same Franchise Area the Grantee is entitled to
occupy by this Agreement, permit or otherwise; provided, however, that such additional grants
shall not operate to materially modify, revoke or terminate any rights granted to Grantee herein
and shall be in accord with the provisions of the Ordinance.
372949/2
2
2.6) Ownership of Grantee.
Grantee represents and warrants to Grantor that the names of the shareholders, partners,
members or other equity owners of the Grantee and of any of the shareholders, partners,
members and/or other equity owners of Grantee are as set forth in Exhibit A hereto.
SECTION 3. GENERAL REQUIREMENTS
3.1) Governing Requirements.
Grantee shall comply with all lawful requirements of this Agreement, the Ordinance and
Applicable Laws.
3.2) Franchise Fee.
(a) In consideration of the Franchise provided for herein, the Grantee shall, at all
times during the term of this Agreement, pay to Grantor a Franchise Fee of five percent (5%) of
Grantee's Gross Revenues as defined in the Ordinance but excluding any Access Operating Fee
funds collected. The Franchisee Fee shall be payable quarterly within thirty (30) days of the
expiration of the preceding calendar quarter. Each payment shall be certified by Grantee's
controller or chief financial officer and shall be accompanied by a report in such form as the City
may reasonably request showing the computation of the Franchise Fee as it relates specifically to
the Chanhassen franchise area (CUID # MN ) for the preceding calendar quarter and such
other relevant facts as may be required by the City, including the completion of a Franchise Fee
Payment Worksheet in the form attached hereto as Exhibit B.
3.3) Not Franchise Fees.
(a) Grantee acknowledges and agrees that the Franchise Fees payable by Grantee to
the City pursuant to Section 3.2 hereof shall take precedence over all other payments,
contributions, Services, equipment, facilities, support, resources or other activities to be provided
or performed by the Grantee pursuant to this Agreement and/or the Ordinance and that the
Franchise Fees provided for in Section 3.2 of this Agreement shall not be deemed to be in the
nature of a tax, and shall be in addition to any and all taxes of general applicability and other fees
and charges which the Grantee shall be required to pay to the City and/or to any other
Governmental Authority, all of which shall be separate and distinct obligations of Grantee.
(b) Grantee shall not apply or seek to apply or make any claim that all or any part of
the Franchise Fees or other payments or contributions to be made by Grantee to Grantor pursuant
to this Agreement and/or the Ordinance shall be deducted from or credited or offset against any
taxes, fees or assessments of general applicability levied or imposed by the City or any other
Governmental Authority, including any such tax, fee or assessment imposed on both utilities and
cable operators or their services.
(c) Grantee shall not apply or seek to apply all or any part of any taxes, fees or
assessments of general applicability levied or imposed by the City or any other Governmental
Authority (including any such tax, fee or assessment imposed on both utilities and cable
372949/2
3
operators or their services) as a deduction or other credit from or against any of the Franchise
Fees or other payments or contributions to be paid or made pursuant by Grantee to Grantor to
this Agreement and/or the Ordinance, each of which shall be deemed to be separate and distinct
obligations of the Grantee.
3.4) Recovery of Processing Costs.
(a) During the term of this Agreement, if the Grantee initiates a request for approval
regarding the transfer of this Franchise or a change in control of the Grantee, the Grantee shall,
to the extent permitted by Applicable Laws, reimburse the Grantor for all reasonable out-of-
pocket costs, including attorneys' and consultants' fees and costs, incurred by the Grantor in
connection with Grantor's review and processing of Grantee's request up to a mutually agreed
upon reasonable cap.
(b) To aid in the analysis and resolution of any future disputed matters relative to this
Agreement, the Grantor and Grantee may, by mutual written agreement (both as to whether to
hire and whom to hire), employ the services of technical, financial and/or legal consultants, as
mediators. All reasonable fees of the consultants incurred by the Grantor and/or the Grantee in
this regard shall, unless the parties otherwise agree, be borne equally by Grantor and Grantee.
3.5) Liability Insurance.
(a) Upon the Effective Date, the Grantee shall, at its sole expense and in addition to
all required insurance under Section 1.27 of the Ordinance, take out and maintain during the term
of this Agreement public liability insurance with a company licensed to do business in the State
of Minnesota with a rating by A.M. Best & Co. of not less than "A" that shall protect the
Grantee, the Grantor and their officials, officers, directors, employees and agents ITom claims
which may arise from operations under this Agreement, whether such operations be by the
Grantee, its officials, officers, directors, employees and agents or any subcontractors of Grantee.
This liability insurance shall include, but shall not be limited to, protection against claims arising
ITom bodily and personal injury and damage to property, resulting ITom Grantee's vehicles,
products and operations. The amount of insurance for single limit coverage applying to bodily
and personal injury and property damage shall not be less than Two Million Dollars
($2,000,000.00). The following endorsements shall attached to the liability policy:
(1)
The policy shall provide coverage on an "occurrence" basis.
(2)
The policy shall cover personal injury as well as bodily injury.
(3)
The policy shall cover blanket contractual liability subject to the standard
universal exclusions of contractual liability included in the carrier's
standard endorsement as to bodily injuries, personal injuries and property
damage.
(4)
Broad form property damage liability shall be afforded.
(5)
The Grantor shall be named as an additional insured on the policy.
372949/2
4
(6) An endorsement shall be provided which states that the coverage is
primary insurance and that no other insurance maintained by the Grantor
will be called upon to contribute to a loss under this coverage.
(7) Standard form of cross-liability shall be afforded.
(8) An endorsement stating that the policy shall not be canceled without thirty
(30) days notice of such cancellation given to the Grantor.
(b) Grantor reserves the right to adjust the insurance limit coverage requirements of
this Agreement no more often than once every three (3) years. Any such adjustment by the
Grantor wiIl be no greater than the increase in the State of Minnesota Consumer Price Index (all
consumers) for such three (3) year period.
(c) Grantee shall submit to Grantor documentation of the required insurance,
including a certificate of insurance signed by the insurance agent and companies named, as welI
as alI properly executed endorsements.
3.6) Indemnification.
(a) In addition to Grantee's indemnification obligations under Section 1.26 of the
Ordinance, Grantee shall indemnify, defend and hold Grantor, its officers, boards, commissions,
agents and employees (colIectively the "Indemnified Parties") harmless from and against any and
all lawsuits, claims, causes of action, actions, liabilities, demands, damages, judgments,
settlements, disability, losses, expenses (including attorney's fees and disbursements of counsel)
and costs of any nature that any ofthe Indemnified Parties may at any' time suffer, sustain or
incur arising out of, based upon or in any way connected with the Grantee's operations, the
exercise of the Franchise granted pursuant to this Agreement, the breach by Grantee of its
obligations under this Agreement or the Ordinance and/or the activities of Grantee, its
subcontractor, employees and agents hereunder. Grantee shall be solely responsible for and shalI
indemnify, defend and hold the Indemnified Parties harmless from and against any and all
matters relative to payment of Grantee's employees, including compliance with Social Security
and withholdings.
(b) The indemnification obligations of Grantee set forth in this Agreement are not
limited in any way by the amount or type of damages or compensation payable by or for Grantee
under Workers' Compensation, disability or other employee benefit acts, acceptance of insurance
certificates required under this Agreement, or the terms, applicability or limitations of any
insurance held by Grantee.
(c) Grantor does not, and shalI not, waive any rights against Grantee which it may
have by reason of the indemnification provided for in this Agreement, because of the acceptance
by Grantor, or the deposit with Grantor by Grantee, of any of the insurance policies described in
this Agreement.
372949/2
5
(d) The indemnification of Grantor by Grantee provided for in this Agreement shalI
apply to all damages and claims for damages of any kind suffered by reason of any of the
Grantee's operations referred to in this Agreement, regardless of whether or not such insurance
policies shall have been determined to be applicable to any such damages or claims for damages.
( e) Grantee shall not be required to indemnify Grantor for negligence or misconduct
on the part of Grantor or its officials, boards, commissions, agents, or employees. Grantor shalI
hold Grantee harmless, subject to the limitations in Minnesota Statutes Chapter 466, for any
damage resulting from the negligence or misconduct of the Grantor or its officials, boards,
commissions, agents, or employees in utilizing any PEG access channels, equipment, or facilities
and for any such negligence or misconduct by Grantor in connection with work performed by
Grantor and permitted by this Agreement, on or adjacent to the Cable System.
(f) In order for the Grantor to assert its rights to be indemnified, defended, and held
harmless, Grantor must with respect to each claim:
(I) Promptly notify Grantee in writing of any claim or legal proceeding which
gives rise to such rights;
(2) Afford Grantee the opportunity to participate and fulIy control any
compromise, settlement or other resolution or disposition of any claim or proceedings;
and
(3) Fully cooperate with reasonable requests of Grantee, at Grantee's expense,
in its participation in, and control, compromise, settlement or resolution or other
disposition of such claim or proceeding subject to paragraph two (2) above.
3.7) Grantee's Insurance.
Grantee shall not commence any Cable System construction work or permit any
subcontractor to commence work until all insurance required under this Agreement and the
Ordinance has been obtained. Said insurance shalI be maintained in full force and effect until the
expiration of this Agreement.
3.8) Workers' Compensation Insurance.
Grantee shall obtain and maintain Workers' Compensation Insurance for all of Grantee's
employees, and in case any work is sublet, Grantee shall require any subcontractor similarly to
provide Workers' Compensation Insurance for all of their employees, all in compliance with
State laws, and to fulIy indemnify the Grantor from and against any and all claims arising out of
occurrences on the work. Grantee hereby indemnifies Grantor for any and all costs, expenses
(including attorneys' fees and disbursements of counsel), damages and liabilities incurred by
Grantor as a result of any failure of either Grantee or any subcontractor to take out and maintain
such insurance. Grantee shall provide the Grantor with a certificate of insurance indicating
Workers' Compensation coverage on the Effective Date.
372949/2
6
3.9) Security Fund.
(a) Within sixty (60) days of the Approval Date, Grantee shall establish and provide
to Grantor a security fund, as security for the fuIl and timely payment and performance by
Grantee of all of its obligations under this Agreement and the Ordinance. The security fund shall
consist of two (2) parts. The fIrst part shall be in the amount of One Hundred Thousand Dollars
($100,000) and shall be in the form of a performance bond, which shall be in a form acceptable
to Grantor's City Attorney. The second part shall be in the amount of at least Ten Thousand
DoIlars ($10,000) and shaIl be in the form of an irrevocable letter of credit, established in a local
bank.
(b) The fIrst part of the security fund shall be maintained at the One Hundred
Thousand Dollar ($100,000) level until the System construction provided for in Section 4.1
hereof is completed, at which time that part of the fund shaIl be released, provided there are then
no outstanding material violations or breaches of this Agreement or the Ordinance by Grantee.
The second part of the security fund shaIl be maintained at the Ten Thousand DoIlar ($10,000)
level throughout the term of this Franchise Agreement. If, at any time during the term of this
Franchise, Grantee seeks consent to a transfer or assignment of its rights hereunder, Grantor may
unilateraIly increase the security fund up to Twenty Thousand Dollars ($20,000) if it so chooses.
(c) The security fund may be drawn upon by Grantor for those purposes specifIed in
Section 3.10 hereof, in accordance with the procedures of Section 3.10 and the Ordinance.
Grantee's recourse, in the event Grantee believes that Grantor's actions in taking any security
funds is improper, shall be through legal action after the security has been drawn upon. Actions
brought by Grantee hereunder may be subject to 47 U.s.c. §555A - Limitations of Franchising
Authority Liability - which is hereby incorporated by reference as if fuIly set forth herein.
(d) Nothing herein shall be deemed a waiver of the normal permit requirements made
of all contractors working within the City's rights-of-way.
3.10) Procedure for Enforcing Franchise Agreement.
(a) The procedures for enforcing violations or breaches of this Franchise Agreement
and/or the Ordinance shaIl be consistent with the procedures set forth in the Ordinance.
(b) In the event the Council fInds that a material violation or breach exists and that
Grantee has not cured the same in a satisfactory manner, has not diligently commenced
correction of such violation or breach or has not diligently proceeded to fuIly remedy such
violation or breach, the Council may impose liquidated damages, assessable from the security
fund, of up to Three Hundred Dollars ($300) per day or per incident, for unexcused violations or
breaches of the System construction schedule provided in Section 4.1 herein, and up to One
Hundred and Seventy-fIve DoIlars ($175) per day or per incident for all other violations or
breaches of this Agreement and/or the Ordinance, provided that all violations or breaches of a
similar nature occurring at the same time shaIl be considered one (1) incident.
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3.11) Reservation of Rights.
Grantor and Grantee reserve all rights that they may possess under Applicable Laws
unless expressly waived herein.
3.12) Annual Report.
In addition to the requirements of Section 1.20 and 1.29 of the Ordinance, Grantee shall
submit a written end of the year report to Grantor utilizing the format outlined in the Annual
Performance Review Checklist attached hereto as Exhibit C. In addition, Grantee and Grantor
agree that the Annual Performance Review Checklist may be modified from time to time by
mutual agreement of Grantee and Grantor. In accordance with Section 1.18 of the Ordinance,
Grantee shall also provide City with a quarterly customer service compliance report.
SECTION 4. DESIGN PROVISION
4.1) Minimum Channel Capacity.
(a) Within thirty-six (36) months from the date Grantee executes this Agreement,
Grantee shall develop, construct and operate within the City a 860 MHz fiber/coaxial hybrid
cable system which shall be capable of delivering a minimum of three hundred (300) video
program channels and which shall initially deliver to all subscribers capable of receiving said
channels a minimum of one hundred fifty (150) to one hundred eighty (180) video program
channels.
(b) All programming decisions remain the sole discretion of Grantee provided that
Grantee complies with federal law regarding notice to City and Subscribers prior to any channel
additions, deletions, or realignments, and further subject to Grantee's signal carriage obligations
pursuant to 47 U.S.C. §§ 531-536, and subject to City's rights pursuant to 47 U.S.C. § 545.
Grantee shall conduct programming surveys from time to time to obtain input on programming
decisions from Subscribers.
4.2) System Design.
(a) The System required herein will be engineered and built to provide a minimum of
three hundred (300) channels using a 860 MHz bandwidth technology. Grantee shall meet with
City to review its system design and construction plans prior to the commencement of
construction and shall, at the request of City, participate in a public meeting designed to inform
residents of City of said design and construction plans. Prior to System construction Grantee and
City shall mutually agree on the process which will be used to notify residents of upcoming
construction. In those residential areas where fiber optic cable will be deployed, the system shall
incorporate multiple strands of fiber and serve an average of two hundred fifty hundred (250)
homes per fiber node. The System shall at all times meet the technical standards established by
the FCC as they may be amended from time to time and shall be operated so as to minimize
disruption of signal to Subscribers. The precise System specifications are outlined in Exhibit F,ewhich is incorporated herein by reference.
372949/2
8
(b) Prior to initial System construction, Grantee shall file maps which reflect the
placement of all cable, conduit, poles and other hardware of the System with the City and receive
written approval of such strand maps by City.
(c) All employees or subcontractors of Grantee who come in to face-to-face contact
with potential Subscribers or the general public shall wear a photo identification card at all times.
All vehicles used by Grantee or a subcontractor for System construction or maintenance shall be
clearly identified and bear the local telephone number of Grantee.
(d) Upon completion of system construction, Grantee shall comply with the cable
industry's on-time guaranty as endorsed by the National Cable Television Association. This on-
time guaranty generally provides that if installation is not accomplished within the time frame
specified by the operator, installation shall be free for the subscriber and operator shall provide
said subscriber with a Twenty Dollar ($20) credit.
4.3) Operation and Maintenance of System.
The Grantee shall render effective service, make repairs promptly, and interrupt service
only for good cause and for the shortest time possible. Such interruption, to the extent feasible,
shall be preceded by notice in accordance with Section 1.2 herein and all applicable provisions of
the Ordinance, and shall occur during periods of minimum use of the System.
4.4) Verification of System Construction.
The City may, in its sole discretion, retain a technical consultant to conduct an on-site
review of Grantee's System to veriry that construction has been completed in compliance with
all requirements of this Franchise and Applicable Laws. All costs associated with a technical
consultant for purposes described within this Section 4.4, up to an amount not to exceed Ten
Thousand Dollars ($10,000), shall be borne by Grantee and shall not be deducted nor offset from
any franchise fee payments which Grantee is required to remit to City under this Franchise.
4.5) Special Testing.
City may require special testing of a location or locations within the System if there is a
particular matter of controversy or unresolved complaints pertaining to such location(s).
Demand for such special tests may be made on the basis of complaints received or other
evidence indicating an unresolved controversy or noncompliance. Such tests shall be limited to
the particular matter in controversy or unresolved complaints. The City shaH endeavor to so
arrange its request for such special testing so as to minimize hardship or inconvenience to
Grantee or to the Subscribers caused by such testing. Before ordering such tests, Grantee shall
be afforded thirty (30) days to correct problems or complaints upon which tests were ordered.
The City shall meet with Grantee prior to requiring special tests to discuss the need for such and,
if possible, visually inspect those locations which are the focus of concern. If, after such
meetings and inspections, City wishes to commence special tests and the thirty (30) days have
elapsed without correction of the matter in controversy or unresolved complaints, the tests shall
be conducted by a qualified engineer selected by City. In the event that special testing is
required by City to determine the source of technical difficulties, the cost of said testing shall be
372949/2
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borne by the Grantee if the testing reveals the source of the technical difficulty to be within
Grantee's reasonable control. If the testing reveals the difficulties to be caused by factors which
are beyond Grantee's reasonable control then the cost of said test shall be borne by City.
4.6) FCC Reports.
The results of tests required to be filed by Grantee with the FCC shall also be copied to
City.
4.7) Emergency Alert Capability.
Grantee shall at all times comply with alI Applicable Laws regarding the provision of
emergency alert services. At a minimum, Grantee shall at all times have the capability for an
emergency override alert.
4.8) Parental Control Lock.
Grantee shall provide, for sale or lease, to Subscribers, upon request, a parental control
locking device or digital code that permits inhibiting the video and audio portions of any
Channels offered by Grantee.
4.9) Technical Standards.
Grantee shall, at a minimum, comply at all times with all applicable Federal
Communications Commission (FCC) Rules and Regulations, including but not limited to,
Part 76, Subpart K (Technical Standards), as may be amended from time to time.
4.10) Right of Inspection.
Grantor shall have the right to inspect all construction, reconstruction or installation work
performed by Grantee under the provisions of this Agreement and Applicable Laws, to ensure
Grantee's compliance and to protect the health, safety and welfare of Grantor's citizens.
4.11) Periodic Evaluation, Review and Modification.
Grantor and Grantee acknowledge and agree that the field of cable television is a
relatively new and rapidly changing one which may see many regulatory, technical, financial,
marketing and legal changes during the term of this Agreement. Therefore, in order to provide
for the maximum degree of flexibility in this Agreement, and to help achieve a continued,
advanced and modern Cable System, the following evaluation provisions wiIl apply:
(a) The City reserves the right to adopt rules and regulations controlling the
procedures as set forth below and the subjects for evaluation sessions. In the absence of any City
action taken to exercise these rights, Grantee shall be subject to the procedures and the subjects
described in this Section 4. I I.
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(b) The City may require, in its sole discretion, that the Grantee participate in
evaluation sessions with the City at any time and from time to time during the term of this
Agreement; provided, however, there shall not be more than one (I) evaluation session during
any calendar year.
(c) Topics which may be discussed at any evaluation session include, but are not
limited to, rates, channel capacity, the System performance, programming, PEG access,
municipal uses of the System, Subscriber complaints, judicial rulings, FCC rulings and any other
topics the City or Grantee may deem relevant.
(d) During an evaluation session, Grantee shall fuIly cooperate with the City and shall
provide without cost and in a timely manner such information and documents as the City may
request to perform the evaluation.
(e) As a result of an evaluation session, the City or Grantee may determine that an
amendment in the terms of this Agreement may be required and/or that the requirements of this
Agreement should be updated, changed or revised (coIlectively a "Proposed Modification"). If
the Proposed Modification is consistent with the terms of this Agreement, the Ordinance, the
needs of the City and existing state-of-the-art technology, including what is provided by Grantee
in other Systems owned, operated or managed by it, its parent company or any affiliated
company, Grantee and the City will, in good faith, review the terms of the Proposed
Modification and consider amending this Agreement accordingly.
SECTION 5. SERVICES AND PROGRAMMING
5.1) Services and Programming.
Prior to operation of the System, Grantee shall provide Grantor with a list of
programming services and other services offered, which list shaIl be attached hereto as Exhibit D
(the "Channel Line-up"). The Channel Line-up shall include all applicable charges and pricing
schedules. The Channel Line-up shall be updated each time a change is made by Grantee.
Grantee shaIl not alter the number of program services or other services without thirty (30) days
prior written notification to the Grantor and System Subscribers.
5.2) Leased Channel Service.
Grantee shall offer leased channel service on reasonable terms and conditions and in
accordance with Applicable Laws.
5.3) Periodic Subscriber Survey.
(a) To the extent Grantee conducts customer surveys with respect to all or a portion
of the system serving the City, it shall provide the City with all non-confidential information and
findings from such surveys.
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11
(b) As a part of each annual report, Grantee shall provide the City with the results of
any survey conducted and shall report in writing what steps Grantee is taking to implement the
findings of the survey, such as correcting problems and expanding services.
SECTION 6. PUBLIC ACCESS PROVISIONS
6.1) Public, Educational and Government Access.
(a) City or its designee is hereby designated to operate, administer, promote, and
manage access (public, education, and government programming) (hereinafter "PEG access") to
the cable system established pursuant to this Section 6. Grantee shall have no responsibility
whatsoever for PEG access except as expressly stated in this Section 6.
6.2) Grantee Support for PEG Usage.
In accordance with the provisions of the Cable Act and Minn. Stat. § 238.084, Grantee
shall provide and make available for public, educational and governmental (PEG) access usage
within the Service Area the following:
(a) Provision and use of the grant funds and Channels designated in Exhibit E of this
Agreement for local educational and governmental programming and access use at no charge in
accordance with the requirements of Exhibit E.
(b) Maintenance of the Access Facilities and Channels, and support of educational
and governmental programming to the extent specified in Exhibit E of this Agreement.
(c) Provision of free public building Installation and cable service as more clearly
specified in Exhibit E, and provision of two-way capability to the locations specified in
Exhibit E.
(d) Access Facilities shall be operated by the City.
SECTION 7. REGULATION
7.1) Amendment of Franchise Agreement.
Grantee and City may agree, from time to time, to amend this Franchise. Such written
amendments may be made subsequent to a review session pursuant to Section 4.10 or at any
other time if City and Grantee agree that such an amendment will be in the public interest or if
such an amendment is required due to changes in federal, state or local laws. City shall act
pursuant to local law pertaining to the ordinance amendment process.
7.2) Conflict Between Ordinance and Agreement.
In the event of any conflict between the terms and conditions ofthis Franchise
Agreement and the provisions of the Ordinance, the provisions of this Franchise Agreement shall
control. Grantee expressly acknowledges and agrees that the City hereby retains all of its police
372949/2
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powers and the City may unilaterally amend the Ordinance in the exercise of its police powers
and Grantee shaH comply with said Ordinance as may be amended; provided, however that City
hereby agrees to use reasonable efforts to address public health, welfare and safety needs without
resorting to amending the Ordinance. By executing this Franchise Agreement both City and
Grantee acknowledge and agree that neither is aware of any conflicts between this Franchise
Agreement and the Ordinance.
7.3) Force Majeure.
In accordance with Section 1.31 of the Ordinance, in the event Grantee's performance of
any of the terms, conditions, obligations or requirements of this Agreement or the Ordinance is
prevented or impaired due to any cause beyond its reasonable control, such inability to perform
shall be deemed to be excused for the period of such inability and no penalties or sanctions shall
be imposed as a result thereof, provided Grantee has notified Grantor in writing within ten (10)
days of its discovery of the occurrence of such an event. Such causes beyond Grantee's
reasonable control shall include, but shall not be limited to, acts of God, civil emergencies and
labor unrest or strikes, untimely delivery of equipment, inability of Grantee to obtain access to an
individual's property and inability of Grantee to secure all necessary permits to utilize utility
poles and conduit so long as Grantee utilizes due diligence to timely obtain said permits.
7.4) Rate Regulation.
Nothing in this Agreement shaH in any way prevent Grantor from regulating any rates
charged by Grantee. If Grantor elects to so regulate, Grantor shaH follow the procedures
outlined in Section 1.19 of the Ordinance or Applicable Laws.
7.5) Franchising Cost Reimbursement.
Grantee shall provide City full reimbursement for all reasonable and necessary
franchising costs not already covered by Grantee's application fee. Grantee's reimbursement of
franchising costs shaH not be deducted or offset from any franchise fees which Grantee is
required to remit pursuant to Section 3.2 of this Franchise.
372949/2
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IN WITNESS WHEREOF, Grantor and Grantee have executed this Agreement the day,
month and year first above written.
CITY OF CHANHASSEN, MINNESOTA
Dated:
By:
ATTEST:
By:
Its:
(SEAL)
EVEREST CONNECTIONS CORPORATION
)ated:
By:
Its:
(CORPORATE SEAL)
STATE OF MINNESOTA)
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me on
. the of the City of
. 20~ by
. on behalf of the City.
Notary Public
STATE OF MINNESOTA)
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me on . 20~ by
. the of Everest Connections Corporation on behalf of the
Company.
Notary Public
372949/2
14
372949/2
EXHIBIT A
OWNERSIDP
EVEREST CONNECTIONS CORPORATION
is a wholly owned subsidiary of Everest Global Technologies Group, LLC
A-1
372949/2
EXHffiIT B
FRANCHISE FEE PAYMENT WORKSHEET
Everest Connections Corporation
Date
(Chanhassen)
Subs
Franchise Fee: 5% Gross
,20_
Revenue Source
Basic
Pay
Tier
Advertising and Pay-Per-View
Other
Total $
B-1
EXHffiIT C
ANNUAL PERFORMANCE REVIEW CHECKLIST
1. RATES AND CHARGES
No change
Changed
Notices sent to City and subscriber
Changes in rates and costs identified by attachment
Change "reasonable" and consistent with the standards prescribed by the
FCC
Other (describe in attachment)
2. PROGRAMS AND SERVICES
No change in programs and services
New programs and services added
Identify new programs and services and decision for introduction
The programs and service changes meet demand expressed in customer
satisfaction surveys
Other (describe in attachment)
3. CUSTOMER SERVICE
Customer service requirements complied with
Summary of complaints (attached)
System outages summary (attached)
Description of new customer services, promotions (attached
372949/2
C-1
Check Where
Applicable
4. FILINGS WITH FCC
Summary of all filings with FCC described in attachment
5. PERFORMANCE TEST IN FRANCHISE COMPLETED
Summary of performance test results (attached)
6. FRANCHISE FEE PAYMENTS MADE (ATTACH COMPLETED
FRANCHISE FEE PAYMENT WORKSHEETS - EXHIBIT B TO
FRANCHISE AGREEMENT)
7. COMPLETION OF CONSTRUCTION
Construction (summary attached)
Service extended to new areas
Other
8. NEW SERVICES
No Changes
Services other than programming made available in the subscriber network
(summary attached)
9. TERMS AND CONDITIONS IN THE FRANCHISE AGREEMENT
HAVE BEEN COMPLIED WITH
Company participated in planning studied and Cable Advisory Committee
activities (summary attached
All insurance, bonds and deposits are updated and filed with City
10. OTHER PERFORMANCE HIGHLIGHTS OR PLANS TO BE
INTRODUCED WITHIN THE NEXT TWELVE (12) MONTHS
(SUMMARY ATTACHED)
372949/2
C-2
Check Where
Applicable
Dated this _ day of
Officer of
. 20~ by
. a duly authorized
City of
. Minnesota Verification:
The above Annual Performance Review has been filed by Everest Connections Corporation as
required. The Office of for the City of has reviewed the
information and finds that the filing is complete lis not complete . The following
matters are deemed incomplete and require further information and/or compliance by
.20_.
THE CITY OF CHANHASSEN, MINNESOTA
Dated:
By:
Its:
372949/2
C-3
EXillBIT D
CHANNEL LINE-UP
Service
Description
372949/2
D-1
Rate/
Charge
EXHIBIT E
GRANTEE COMMITMENT TO
PEG ACCESS FACILITIES AND EQUIPMENT
1. PUBLIC. EDUCATIONAL AND GOVERNMENT (PEG) ACCESS CHANNELS
Grantee shall provide to each of its subscribers who receive some or all of the services
offered on the Cable System, reception on at least one (I) specially designated noncommercial
public access channel available for use by the general public on a first-come, first-served,
nondiscriminatory basis; at least one (I) specially designated access channel for use by local
educational authorities; at least one (I) specially designated access channel available for
government use (hereinafter collectively referred to as the "PEG Channels"); and at least one (I)
speciaIly designated access channel available for lease on a first-come, first-served,
nondiscriminatory basis by commercial and noncommercial users. The VHF spectrum must be
used for at least one (I) of the PEG Channels required in this paragraph. No charges may be
made for channel time or playback of prerecorded programming on the specially designated
noncommercial access channels. Personnel, equipment and production costs may be assessed,
however, for live studio presentations exceeding five (5) minutes in length. Charges for those
production costs and fees for use of other public access channels must be consistent with the goal
of affording the public a low-cost means of television access.
Whenever the PEG Channels are in use during eighty percent (80%) of the weekdays,
Monday to Friday, for eighty percent (80%) of the time for any consecutive three (3) hour period
for six (6) weeks running, and there is demand for use of an additional channel for the same
purpose, the Grantee shall then have six (6) months in which to provide a new PEG Channel for
the same purpose, provided that provision of the additional channel or channels must not require
the Cable System to install converters.
The PEG Channels shall be dedicated for PEG use for the term of the Franchise
Agreement, provided that Grantee may, utilize any portions of the PEG Channels not scheduled
for PEG use. Grantor shall establish rules and procedures for such scheduling in accordance
with Section 611 of the Cable Act (47 U.S.C. § 531).
Grantee shall also designate the standard VHF channel 6 for uniform regional channel
usage currently provided by "Metro Channel 6" as required by Minn. Stat. § 238.43.
Programming on this regional channel shall include a broad range of informational, educational,
and public service programs and materials to cable television subscribers throughout the Twin
Cities metropolitan area.
2. PEG OPERATIONS
Grantor may in its sole discretion, negotiate agreements with neighboring jurisdictions
served by the same Cable System, educational institutions or others to share the operating
expenses of the PEG Channels. Grantor and Grantee may negotiate an agreement for
management of PEG facilities, if so desired by both parties.
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E-1
3. TITLE TO PEG EOUIPMENT
Grantor shall retain title to all PEG equipment and facilities purchased or otherwise
acquired pursuant to this Franchise Ordinance.
4. PROMOTION OF PEG ACCESS
Grantee shall allow the Grantor to place bill stuffers in Grantee's Subscriber statements at
a cost to the Grantor not to exceed Grantee's cost, no less frequently than twice per year upon the
written request of the Grantor and at such times that the placement of such materials would not
materially and adversely effect Grantee's cost for the production and mailing of such statements.
The Grantor agrees to pay Grantee in advance for the actual cost of such bill stuffers. Grantee
shall also make available access information provided by Grantor in Subscriber packets at the
time of Installation and at the counter in the System's business office within the Service Area.
Grantee shall also distribute, at no charge to Grantor, through advertising insertion equipment, 28
weekly promotional and awareness commercial spots at randomly selected times in unpurchased
advertising space on a "run of schedule basis" produced at the Grantor's cost and submitted by
the Grantor in a format compatible with such advertising insertion equipment once Grantee has
acquired and activated such capability. Grantee shall also include a listing of the known
programming to be cablecast on PEG access Channels in or on any program guide of services for
the Cable System.
5. SERVICE TO PUBLIC BUILDINGS
(a) One (1) cable drop connection and the highest level of cable service excluding
pay-per-view and pay-per-channel programming shall be provided free of charge to each public
building listed in Exhibit E-l with no InstaIlation charges or monthly service charges. Said drop
connection and service provision shaIl be concurrent with the construction schedule required by
Section 4.1 of the Agreement. Grantee shall, in any public building hereinafter built, provide all
materials, design specifications and technical advice for anyone cable outlet to be installed
during the construction of such building, without cost to the Grantor and Grantee shaIl provide
the same service to such new public building as required in this paragraph (a).
(b) Two-way capability shaIl be provided to the public buildings listed in Exhibit E-2.
6. PEG ACCESS OPERATING SUPPORT.
Grantee shaIl also collect on behalf of City a per Subscriber fee of eighty-four cents
($.84) per month solely to fund public, educational and governmental access -related
expenditures (hereinafter "Access Operating Fee"). In the event Grantee becomes subject to
"effective competition" as defined by Applicable Law, from another Multi-Channel Video
Programming Distributor, the Access Operating Fee shall, following ninety (90) days written
notice to City, be reduced to the level of expenditure at which the multi-channel video
Programming Distributor, is obligated or fifty cents ($.50) per subscriber per month, whichever
is greater.
372949/2
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EXHIBIT El
SERVICE TO PUBLIC FACILITIES
PUBLIC BUILDINGS:
CITY OF CHANHASSEN, MINNESOTA BUILDINGS;
City Hall
Fire Station
Public Works
Chanhassen Recreation Center
Other:
690 City Center Drive, P.O. Box 147 (5 Nodes)
7610 Laredo
1591 Park Road
2300 City Center Drive (2 Nodes)
(to be determined by mutual consent)
SCHOOLS IN CHANHASSEN:
Bluff Creek Elementary 2300 Coulter Blvd.
Chanhassen Elementary School 7600 Laredo Drive
St. Hubert's Catholic Church School 8215 Main Street
Minnetonka Middle School- West 6421 Hazeltine Blvd.
372949/2
EH
EXHIBIT E2
PUBLIC BUILDINGS TO BE PROVIDED WITH TWO-WAY CAPABILITY:
CITY OF CHANHASSEN, MINNESOTA BUILDINGS;
City Hall
Fire Station
Public Works
Chanhassen Recreation Center
Other:
690 City Center Drive, P.O. Box 147 (5 Nodes)
7610 Laredo
1591 Park Road
2300 Coulter Drive (2 Nodes)
(to be determined by mutual consent)
SCHOOLS IN CHANHASSEN:
Bluff Creek Elementary 2300 Coulter Blvd.
Chanhassen Elementary School 7600 Laredo Drive
St. Hubert's Catholic Church School 8215 Main Street
Minnetonka Middle School- West 6421 Hazeltine Blvd.
372949/2
E2-1
EXHIBIT F
DESCRIPTION OF SYSTEM UPGRADE
EVEREST CONNECTIONS CORPORATION
Chanhassen
What the new network will look like
The proposed HFC (hybrid fiber/coax) network will be designed to operate with a
bandwidth of 5 MHz to 860 MHz. The result is a large number of available channels, with
plenty of additional capacity for future needs.
The network wiIl be capable of not only sending signals out to customers, but returning
signals back to the origination site from anywhere in the system, as well. This "return"
capability wiIl be activated on both the coaxial and optical systems. The return system can be
used to transmit data and video, and may be used for insertion of locally-originated
programming, monitoring of certain key components in the network, and transmission of data
from set-top terminals used forpay-per-view and other customer services.
Fiber optic transmitters, cable, and optical receivers will be used to transport the signals
from the origination site, to at least one receiving location, or "node," in each community. There
wiIl be a maximum of250 homes served from each node, which is an accepted industry standard
used when considering implementation of future services. This separation of communities on the
optical network aIlows for "narrowcasting" or the distribution of certain specialized kinds of
programming to communities that have an interest. For example, one community would not
have to receive the local programs originated by a distant community.
After each node, the number of active electronics, or amplifiers, would be reduced to the
minimum required to reach the limits of the community, while still maintaining measurable
picture quality better than current FCC requirements. "Standby" power supplies wiIl
automaticaIly provide battery power to the coaxial system for several hours in the event of a
commercial power interruption. The batteries are automaticaIly recharged after power is
restored.
Each customer wiIl have the option to use an "addressable" set-top terminal to access
programming carried on the network. Special programming, such as "impulse pay-per-view"
wiIl be available simply by pressing a button to authorize the purchase.
Fiber optics and coaxial plan in the network
The optical transmission system wiIl be the backbone of the network, providing the
primary means of moving signals from the origination site out to each community. At the
origination site, all the programming to be carried on the system will be converted to optical
signals, and transmitted out into the system by a network of fiber optic cables.
372949/2
F-1
The combination of optical transmitters and cables allow more reliable, higher-quality
pictures to be received in each community than would be received on a coaxial system. A
coaxial system, involving many miles of metal-sheathed coaxial cable, and cascades of
amplifiers, created the potential for service interruptions anywhere along the transmission route.
A problem appearing at one point mid-way into the system affected alI customers beyond that
point. Power outages, lightning storms, isolated outages, vandalism, and isolated equipment
failure will have much less of an effect on the network than on a coaxial system.
In each community, at least one optical node will be placed, to convert the optical signal
back into the normal signals used in the coaxial system. Each node will serve a maximum of250
homes via coaxial cable. This limitation on node size insures that the more reliable optical plant
is as large as possible, and that coaxial electronics are kept to the minimum required to deliver a
good-quality picture to all customers.
The optical network will provide 3 individual fibers to each node location. Although
only one of these fibers is required to provide all the programming required by the network, extra
fibers are included for return transmission, and any special or future requirements, on an as
needed basis.
The coaxial portion of the plant will begin at the node itself, where signals will be
distributed over a short coax network, consisting of modern, high-quality network amplifiers.
These amplifiers are specifically designed for use in HFC networks, and incorporate return-
transmission capability, surge protection, and remove monitoring capability.
All of the electronic components in the System will be constructed with 860 MHz
devices. This insures a complete 860 MHz network, and provides a simpler construction
solution should any future upgrade work be required.
Community access and use of the network
The network will allow for individual communities to produce their own legal
programming, and place it on an available channel on the system. NormalIy, one site in a
community is designated as a "studio" where local programs are taped for later broadcast, or
transmitted "live" over the system. It is also possible for the community to originate
informational services, such as public service messaging, school information, or other items of
community interest.
The video feed from the community would be inserted on the network on a special
channel, and transmitted via the return system - through the coaxial network back to the node,
and transmitted optically from the node back to the origination site. From there, the signal would
be reprocessed and retransmitted back through the normal network, available to customers.
Since each of the nodes are community-based, it is possible to allow communities to
transmit their own programming to only the residents of that community, if they desire.
The addressable converter system
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The "addressable set-top terminals" used in the network are computer-controlled "smart"
converters. To the customers, they function very much the same as the normal converters they
are accustomed to. In reality, they are very sophisticated computer terminals that allow for the
processing of programming information both to and from the customer.
The converter system is controlled by a master computer connected to Everest
Connections Corporation billing system. The master computer is then connected to the network,
by either a direct connection or a satellite link. Information regarding the operation of each one
of the converters is continually transmitted over the network, and received by the converters.
If a customer calls one of our service centers, and orders HBO, the information regarding
the change in services is keyed into the bilIing system. Since the bilIing system and master
computer are connected, information about that transaction is immediately transmitted to the
network, and the customer's converter receives immediate authorization to receive HBO. The
entire process takes just a few seconds, and the customer has immediate access to the
programming that as ordered, without the need to wait for a visit from a service technician.
Services can be added, changed, or removed in the same manner.
Additionally, customers will have access to multiple channels of "impulse pay-per-view."
This is one of the most popular features of the converter. The "impulse" feature takes advantage
of the return system on the network, allowing a request for a pay-per-view event to be processed
immediately. The customer simply tunes to the channel desired, and presses a button to purchase
the program. There is no need to make a phone call, and no order to place in advance.
The addressable converters are equipped with several self-diagnostic and security
features. If the converter is not functioning properly, it will display a diagnostic code for
troubleshooting. The master computer communicates with each converter at regular intervals,
and can alert service personnel if a problem is found. There are signal security safeguards built
into each converter, to prevent unauthorized tampering. The converter recognizes its "home"
network, and wilI not function properly if removed without authorization.
Potential for future expansion
The network is completely expandable, due to its fiber optic backbone. The optical
system incorporates extra fibers that run to each node, along with additional extra fibers along
main routes. As communities grow, there wilI be capacity available to serve their residents.
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