1j Cable TV Franchise Renewal
10 City Center Drive, PO Box 147 FROM:
Cbanhassm, Minnesota 55317
Phone 612.937.1900 DATE:
Gmeral Fax 612.937.5739
Slgineering Fax 612.937.9152 SUBJ:
'lIb/ic SafefJl Fax 612.934.2524
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CITY OF
CHANHASSEN
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MEMORANDUM
TO:
Mayor and City Council
Don Ashworth, City Manager
11W1\ j.L
May 6, 1998
Cable TV Franchise Renewal, Triax, First Reading
Note: This item has been placed on the consent agenda recognizing that it is first
reading of these two ordinances. It is anticipated that the city council will raise
various issues which staff/consultants will address prior to the time these items
are re-presented for final consideration. It is anticipated that the following people
will be present: Brian Grogan, our attorney specializing in FCC/franchising rules
and regulations; Jane Bremer, Triax attorney; and Paul Pecorra, Regional Manager
for Triax.
The following documents are attached. A brief description of each is as follows:
· Cable Television Regulatory Ordinance: One of the FCC regulations is that
a city must establish a generalized regulatory ordinance which would then
become the basis under which any cable operator could provide service within
a community. The attached "Cable Television Regulatory Ordinance" meets
the FCC regulations and again becomes the basis upon which the city would
negotiate with any cable provider who wished to provide cable services within
the City ofChanhassen. As the Cities ofWayzata, Chanhassen, Waconia, and
Mound all had similar expiration dates for their existing franchise, we carried
out all of the negotiations for both the generalized ordinance and the city
specific ordinance jointly. To the best of my knowledge, the attached general
ordinance is exactly the same as previously presented to the city council; and
· Cable Television Franchise Agreement: This ordinance represents the
specific franchise between the City of Chanhassen and Triax Cablevision.
Again, this document was jointly negotiated between the four cities. As the
Wayzata franchise (previously distributed) has now been approved, the name
ofWayzata has been replaced by each of the remaining three cities. Again,
most of the language remains the same as the generalized ordinance. The
specific franchise with Triax establishes exhibits of some of the additional
enclosures listed below.
One of the more time consuming negotiation items was the playback
-:ity ojChall/JilSsf1/. A growing commullity with deall lakes, qualifJl schook a cha/7nillg downtown, thriving businesses, and beautiful parks. A y,reat place to Iii,/" lI'ork. aud pll)~
Mayor and City Council
May 6, 1998
Page 2
studiollocal programming access. The FCC regulations established these costs
as local programming costs which can be passed through by the provider. Our
position through the entire negotiations was that Triax is currently paying
these costs (salaries, equipment, space, etc.), and that these should not become
"new" costs to existing customers. Following several sessions of bantering, a
general agreement was reached that the 54~ being expended by Triax would
become a reduction in existing bills under basic services from Triax.
However, the 54~ would then reappear under the title oflocal programming
fees, including a slight increase for equipment replacement that Triax has not
carried out in a timely manner. The overall affect should be less than 30~ on a
typical $30 bill; and
. Lake Minnetonka, MN System Upgrade Overview: This document
represents generalized specifications of how Triax will upgrade their existing
services within the City of Chanhassen. For negotiation purposes, the city
used the services of Dave MacKenzie of incNET to scrutinize the proposed
upgrade. Mr. MacKenzie will riot be present Monday evening, but his opinion
is that the proposed upgrade by Triax does represent reasonable state of the art
technology. The looped fiber system throughout the community should assure
individual neighborhoods of continuous cable service should the line be cut at
any point. The SONET technologies allows Triax to continue to use its
coaxial cable investment for service to homes within that neighborhood. This
design should ensure that each home can operate in a 750 MHz network. By
comparison, the typical copper telephone line coming into your home operates
at a 1-2 MHz; and
. Larkin-Hoffman Correspondence: This document represents Triax's
request for renewal of their franchise. I asked Jane to ensure that she included
a construction schedule along with elements of such (attached); and
. Franchise Renewal Process: This document provides an overview of
requirements cities must meet in going through a franchise renewal process.
(This is a skipper unless you're a nut for reading.)
RECOMMENDATION
Staff recommends approval of first reading of both the general Cable Television
Regulatory Ordinance as well as the ordinance specific to Triax.
g: \mgr\lriaxfranc hise .doc
LAW OFFICES
BRIAN T. GROGAN
(612) 347-0340
E-Mail: GroganB@moss-bameu.com
MOSS & BARNETT
A PROFESSIONAL ASSOCIATION
4800 NORWEST CENTER
90 SOUTH SEVENTH STREET
MINNEAPOLIS, MINNESOTA 55402-4129
TELEPHONE (6121 347-0300
FACSIMILE (612) 339-6686
May 5, 1998
VIA MESSENGER
Mr. Don Ashworth
City Manager
690 Coulter Drive
P.O. Box 147
Chanhassen, MN 55317
Re: Revised Franchise Documents
Our File No.: 27981.3
Dear Don:
Pursuant to our meeting and my recent meetings with Jane Bremer, enclosed herewith are
the revised franchise documents for the Cityof Chanhassen, Minnesota. The key changes in the
documents relate to the funding for PEG access as well as the changes proposed by Ms. Bremer
in her correspondence dated April 17, 1998. Exhibit F remains open pending review of our
engineer's comments by Triax.
After you have had an opportunity to review this document, please feel free to contact me
with any questions or concerns you may have. I plan to be in attendance at the city council
meetings on Monday, May 11, 1998 and Tuesday, May 26, 1998. As we discussed, Triax
Midwest Associates, L.P. and their attorney, Ms. Jane Bremer, have yet to conduct a final review
of these documents. While I do not anticipate any significant issues being raised, it is important
for all parties to understand that the documents are not yet in final form until each party has had
an opportunity to conduct a final review.
Once again, if you should have any questions, please feel free to contact me.
Very truly yours,
.p .
U~
Brian T. Grogan
BTG/laa
Enclosures
cc: Jane Bremer
179766/1
RECEIVED
MAY 0 5 1998
crr'( Ur lit1AI~I1f'\tiSEN
THE CITY OF CHANHASSEN, MINNESOTA
CABLE TELEVISION
REGULATORY ORDINANCE
MAY 5, 1998
Prepared by:
BRIAN T. GROGAN, ESQ.
Moss & Barnett
A Professional Association
4800 Norwest Center
90 South Seventh Street
Minneapolis, MN 55402-4129
(612) 347-0340
175338/1
SECTION 1.1.
SECTION 1.2.
SECTION 1.3.
SECTION 1.4.
SECTION 1.5.
SECTION 1.6.
SECTION 1.7.
SECTION 1.8.
SECTION 1.9.
SECTION 1.10.
SECTION 1.11.
SECTION 1.12.
SECTION 1.13.
SECTION 1.14.
SECTION 1.15.
SECTION 1.16.
SECTION 1.17.
SECTION 1.18.
SECTION 1.19.
SECTION 1.20.
SECTION 1.21.
SECTION 1.22.
SECTION 1.23.
SECTION 1.24.
SECTION 1.25.
SECTION 1.26.
SECTION 1.27.
SECTION 1.28.
SECTION 1.29.
SECTION 1.30.
SECTION 1.31.
SECTION 1.32.
SECTION 1.33.
SECTION 1.34.
SECTION 1.35:
SECTION 1.36.
SECTION 1.37.
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TABLE OF CONTENTS
INTENT. ................ .............. .................................................................. 1
DEFI N ITIONS. ........... ................. ........................................................... 1
FRANCHISE TO INSTALL AN D OPERATE. ............................................. 5
FRANCH ISE REQU I RED...... ................................................................... 5
TERM OF THE FRANCHiSE....................................................................5
FRANCH ISE TE RRITORY ................ .............. ....... ................................... 6
FEDERAL, STATE AND CITY JURiSDICTION.......................................... 6
FRANCH ISE N ON- TRANSFERAB LE........................................................ 6
CITY'S RIGHT TO PURCHASE SYSTEM. ................................................ 8
PURCHASE BY CITY UPON EXPIRATION OR REVOCATION. ..............8
EME RG E NCY USE......... ......................................................................... 9
GEOG RAPH ICAL COVERAGE. ............................................ ..................9
NONEXCLUSIVE FRANCH ISE. .......................................... .....................9
MULTIPLE FRANCHISES. ..................................................................... 10
FRANCH ISE APPLICATIONS. .............. .................. ....... ........................ 11
CONSIDERATION OF INITIAL APPLICATIONS. .................................. 12
FRANCH ISE RE N EW AL............................ ....... ..................................... 12
CONSUMER PROTECTION AND SERVICE STANDARDS. ................... 12
RATE REG U LA TION. ....... .................................................................... 1 5
FRANCH ISE FEE....... ................................................... ......................... 1 5
DESIGN AND CONSTRUCTION REQUIREMENTS. ............................. 16
TECH N ICAL STAN DARDS.. ................................................. ................ 19
TRIMMI N G OF TREES. ............... ......................................................... 20
USE OF GRANTEE FACILITIES. ............................................................20
PROGRAMMI NG DECISIONS. ...................... ...... ...................... ..........20
IN DEMN I FICA TION. .......... ...................... ........................................... 20
INS U RAN CEo ........ ................. .............................................................. 21
RECORDS REQUIRED AND GRANTOR'S RIGHT TO INSPECT. ..........22
AN N UAL REPORTS. ..................... ................... ..... ............................... 23
FRANCH ISE VIOLATION. ............................................................. .......23
FORCE MAJEURE; GRANTEE'S INABILITY TO PERFORM. ................... 24
ABANDONMENT OR REMOVAL OF FRANCHISE PROPERTY. ...........24
EXTENDED OPERATION AND CONTINUITY OF SERVICES................ 25
RECEIVERSH IP AN D FORECLOSURE................................................... 26
RIGHTS RESERVED TO GRANTOR...................................................... 26
RIG HTS OF IN DIVI DUALS. ........................................................... ...... 26
SEVE RAB I LITY. .................................................................................... 28
ORDINANCE NO.
THE CITY COUNCIL OF THE CITY OF CHANHASSEN, MINNESOTA
DOES HEREBY ORDAIN AS FOLLOWS:
The following Chapter is added to the City of Chanhassen, MN Municipal Code:
CHAPTER
CABLE TElEVISION REGULATORY ORDINANCE
SECTION 1.1.
INTENT.
a. The City of Chanhassen, Minnesota, pursuant to Applicable Laws, is
authorized to grant one or more nonexclusive Franchises to construct, operate, maintain
and reconstruct Cable Television Systems within the City limits.
b. The City Council finds that the development of Cable Television Systems has
the potential of having great benefit and impact upon the residents of the City. Because of
the complex and rapidly changing technology associated with cable television, the City
Council further finds that the public convenience, safety and general welfare can best be
served by establishing regulatory powers which should be vested in the City or such
Persons as the City shall designate. It is the intent of this Ordinance and subsequent
amendments to provide for and specify the means to attain the best possible cable
television service to the public and any Franchises issue~ pursuant to this Ordinance shall
be deemed to include this finding as an integral part thereof.
SECTION 1.2.
DEFINITIONS.
For the purpose of this Ordinance, the following terms, phrases, words and their
derivations shall have the meaning given herein. Words used in the present tense include
the future, words in the plural number include the singular number, and words in the
. singular number include the plural number. All capitalized terms used in the definition of
. any other term shall have their meaning as otherwise defined in this Section. The words
"shall" and "will" are mandatory and "may" is permissive. Words not defined shall be
given their common and ordinary meaning.
a. "Applicable Laws" means any law, statute, charter, ordinance, rule,
regulation, code, license, certificate, franchise, permit, writ, ruling, award, executive order,
directive, requirement, injunction (whether temporary, preliminary or permanent),
judgment, decree or other order issuep, executed, entered or deemed applicable by any
Governmental Authority.
b. "Basic Cable Service" means any service tier which includes the
retransmission of local television broadcast signals. Basic Cable Service as defined herein
shall not be inconsistent with 47 U.S.c. 9 543(b)(7)(1993).
175338/1
c. "Cable Act" means the Cable Communications Policy Act of 1984, Pub. L.
No. 98-549, 98 Stat. 2779 (1984) (codified at 47 U.S.c. 99 521-611 (1982 & Supp. V
1987)) as amended by the Cable Television Consumer Protection and Competition Act of
1992, Pub. L. No. 102-385 and the Telecommunications Act of 1996, Pub. L. No. 104-458
and as the same may, from time to time, be amended.
d. "Cable Television System." "Svstem" or "Cable Svstem" means a facility,
consisting of a set of closed transmission paths and associated signal generation, reception
and control equipment that is designed to provide Cable Service which includes video
programming and which is provided to multiple Subscribers within a community, but such
term does not include:
1. A facility that serves only to retransmit the television signals of one (1)
or more television broadcast stations;
2. A facility that serves subscribers without using any public rights-of-
way;
3. A facility of a common carrier which is subject, in whole or in part, to
the provisions of 47 U.S.c. 99 201-226, except that such facility shall be considered
a Cable System (other than for purposes of 47 U.S.c. 9 541) to the extent such
facility is used in the transmission of video programming directly to subscribers;
unless the extent of such use is solely to provide interactive on-demand services;
4.
Act; or
An open video system that complies with Section 653 of the Cable
5. Any facilities of any electric utility used solely for operating its electric
utility system.
e. "Cable Service" means:
1. The one-way transmission to Subscribers of (i) video programming, or
(ii) other programming service; and
2. Subscriber interaction, if any, which is required for the selection or
use of such video programming or other programming service.
f. "Channel" or "Cable Channel" means a portion of the electromagnetic
frequency spectrum which is used in a Cable System and which is capable of delivering a
television Channel as defined by the ~ederal Communications Commission.
g. "Council" means the City Council of the City of Chanhassen, Minnesota.
h. "Franchise" means an initial authorization, or renewal thereof, issued by the
City, whether such authorization is designated as a Franchise, permit, license, resolution,
175338/1
2
contract, certificate, agreement or otherwise, which authorizes the construction or
operation of a Cable System over publicly owned rights-of-way.
i. "Franchise Agreement" means a Franchise granted pursuant to this
Ordinance containing the specific provisions of the Franchise granted, including
references, specifications, requirements and other related matters.
j. "Franchise Fee" means any tax, fee or assessment of any kind imposed by the
City or any other Governmental Authority on a Grantee or cable Subscriber, or both, solely
because of their status as such. The term "Franchise Fee" does not include: (i) any tax, fee
or assessment of general applicability (including any such tax, fee or assessment imposed
on both utilities and cable operators or their services but not including a tax, fee, or
assessment which is unduly discriminatory against cable operators or cable subscribers); (ii)
capital costs which are required by the Franchise Agreement to be incurred by the Grantee
for PEG Access Facilities; (iii) requirements or charges incidental to the awarding or
enforcing of the Franchise, including payments for bonds, security funds, letters of credit,
insurance, indemnification, penalties or liquidated damages; or (iv) any fee imposed under
Title 17 of the United States Code.
k. "Governmental Authority" means any Court or other federal, state, county,
municipal or other governmental department, commission, board, agency or
instrumental ity.
I. "Grantee" means any Person receiYing a Franchise pursuant to this
Ordinance and its agents, employees, officers, designees, or any lawful successor,
transferee or assignee.
m. "Grantor" or "City" means the City of Chanhassen, Minnesota as represented
by the Councilor any delegate acting within the scope of its jurisdiction. The City
Administrator shall be responsible for the continuing administration of the franchise.
n. "Gross Revenues" means all revenue received directly or indirectly by the
Grantee, its affiliates, subsidiaries, parents, or any Person in which Grantee has a financial
interest of five percent (5%) or more arising from or attributable, to the provision of Cable
Service by the Grantee within the City including, but not limited to, monthly fees charged
to Subscribers for Basic Cable Service; monthly fees charged to Subscribers for any optional
service; monthly fees charged to Subscribers for any tier of service other than Basic Cable
Service; Installation, disconnection and reconnection fees; leased Channel fees; converter
and remote revenues; advertising revenues; and revenues from home shopping Channels.
Gross Revenues shall be the basis for computing the Franchise Fees imposed pursuant to
Section 1.20 hereof. Grantee shall not be required to pay a franchise fee on gross revenues
derived from any Person receiving free Cable Service pursuant to a Franchise Agreement.
Gross Revenues shall include franchise fees collected by Grantee on behalf of the City.
o. "Initial Service Area" means the area of the City which will receive Cable
Service initially, as set forth in any Franchise Agreement.
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p. "Installation" means the connection of the System to a Subscriber and the
provision of Cable Service.
q. "Normal Business Hours" means those hours during which most similar
businesses in the City are open to serve customers. In all cases, "Normal Business Hours"
must include some evening hours at least one night per week and/or some weekend hours.
r. "Normal Operating Conditions" means those service conditions which are
within the control of the Grantee. Those conditions which are not within the control of the
Grantee include, but are not limited to, natural disasters, civil disturbances, power outages,
telephone network outages, and severe or unusual weather conditions. Those conditions
which are ordinarily within the control of the Grantee include, but are not limited to,
special promotions, pay-per-view events, rate increases, regular peak or seasonal demand
periods, and maintenance or upgrade of the System.
s. "Person" means any individual or any association, firm, general partnership,
limited partnership, joint stock company, joint venture, trust, corporation, limited liability
company or other legally recognized entity, private or public, whether for-profit or not-for-
profit.
t. "Public. Educational or Government Access Facilities" or "PEG Access
Facilities" means:
1.
use; and
Channel capacity designated for public, educational or governmental
2.
Facilities and equipment for the use of such Channel capacity.
u. "Section" means any Section, subsection or provision of this Ordinance.
v. "Service Area" or "Franchise Area" means the entire geographic area within
the City as it is now constituted or may in the future be constituted, unless otherwise
specified in the Franchise Agreement.
w. "Service Interruption" means the loss of picture or sound on one or more
Cable Channels.
X. "State" means the State of Minnesota.
y. "Street" or "publiclv owned right of wav" means each of the following which
have been dedicated to the public or are hereafter dedicated to the public and maintained
under public authority or by others arid located within the City limits: streets, roadways,
highways, avenues, lanes, alleys, sidewalks, easements, rights-of-way and similar public
property and areas that the Grantor shall permit to be included within the definition of
Street from time to time.
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z. "Subscriber" means any Person who or which lawfully elects to subscribe to,
for any purpose, a service provided by the Grantee by means of or in connection with the
Cable System whether or not a fee is paid for such service.
SECTION 1.3.
FRANCHISE TO INSTALL AND OPERATE.
a. A Franchise granted by the City under the provisions of this Ordinance shall
encompass the following purposes:
1. To engage in the business of providing Cable Service, and such other
lawful services as may be permitted by the City, to Subscribers within the Service
Area.
2. To erect, install, construct, repair, rebuild, reconstruct, replace,
maintain and retain cables, lines, related electronic equipment, supporting
structures, appurtenances and other property in connection with the operation of a
Cable System in, on, over, under, upon, along and across Streets within the Service
Area.
3. To maintain and operate said Franchise properties for the origination,
reception, transmission, amplification and distribution of television and radio signals
for the delivery of Cable Services.
4. To set forth the obligations of a Grantee under the Franchise
Agreement.
b. Nothing contained in this Ordinance relieves a Person from liability arising
out of failure to exercise reasonable care to avoid injuring Grantee's facilities while
performing work connected with grading, regarding or changing the line of a Street or
public place or with the construction or reconstruction of a sewer or water system.
SECTION 1.4.
FRANCHISE REQUIRED.
It shall be unlawful for any Person, other than the City unless specifically required
by Applicable laws, to construct, install or operate a Cable Television System in the City
in, on, over, under, upon, along or across any Street or publicly owned right of way
without a Franchise properly granted pursuant to the provisions of this Ordinance.
SECTION 1.5.
TERM OF THE FRANCHISE.
a. A Franchise granted her.eunder shall be for the term established in the
Franchise Agreement and shall not exceed fifteen (15) years.
b. A Franchise granted hereunder may be renewed upon application by the
Grantee pursuant to the provisions of this Ordinance and Applicable laws.
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SEOION 1.6.
FRANCHISE TERRITORY.
Any Franchise granted pursuant to this Ordinance shall be valid within the Service
Area.
SECTION 1.7.
FEDERAL, STATE AND CITY JURISDICTION.
a. This Ordinance shall be construed in a manner consistent with Applicable
Laws.
b. This Ordinance shall apply to all Franchises granted or renewed after the
effective date of this Ordinance. This Ordinance shall further apply to the extent permitted
by Applicable Laws to all existing Franchises granted prior to the effective date of this
Ordinance.
c. The rights of all Grantees are subject to the policing powers of the City to
adopt and enforce ordinances necessary to the health, safety and welfare of the public. All
Grantees shall comply with all Applicable Laws enacted by the City pursuant to that power.
d. No Grantee shall be relieved of its obligation to comply with any of the
provisions of this Ordinance or any Franchise granted pursuant to this Ordinance by reason
of any failure of the City to enforce prompt compliance.
e. This Ordinance and any Franchise granted pursuant to this Ordinance shall
be construed and enforced in accordance with the substantive laws of the City, State of
Minnesota and applicable federal laws, including the Cable Act.
f. This Ordinance together with any Franchise granted hereunder shall comply
with the Minnesota franchise standards contained in Minnesota Statutes Section 238.084.
g. Grantee and the City shall conform to state laws and rules regarding cable
communications not later than one year after they become effective, unless otherwise
stated, and shall conform to federal laws and regulations regarding cable communications
as they become effective.
SEOION 1.8.
FRANCHISE NON-TRANSFERABLE.
a. Grantee shall not voluntarily or involuntarily, by operation of law or
otherwise, sell, assign, transfer, lease, sublet or otherwise dispose of, in whole or in part,
the Franchise and/or Cable System or any of the rights or privileges granted by the
Franchise, without the prior written consent of the Council and then only upon such terms
and conditions as may be prescribed by the Council with regard to the proposed
transferee's legal, technical and financial qualifications, which consent shall not be
unreasonably denied or delayed. Any attempt to sell, assign, transfer, lease, sublet or
otherwise dispose of all or any part of the Franchise and/or Cable System or Grantee's
rights therein without the prior written consent of the Council shall be null and void and
175338/1
6
shall be grounds for termination of the Franchise pursuant to Section 1.30 hereof and the
applicable provisions of any Franchise Agreement.
b. Without limiting the nature of the events requiring the Council's approval
under this Section, the following events shall be deemed to be a sale, assignment or other
transfer of the Franchise and/or Cable System requiring compliance with this Section: (i) the
sale, assignment or other transfer of all or a majority of Grantee's assets or the assets
comprising the Cable System to any Person; (ii) the merger of the Grantee or any of its
parents with or into another Person (including the merger of Grantee or any parent with or
into any parent or subsidiary corporation or other Person); (iii) the consolidation of the
Grantee or any of its parents with any other Person; (iv) the creation of a subsidiary
corporation or other entity; (v) the sale, assignment or other transfer of capital stock or
partnership, membership or other equity interests in Grantee or any of its parents by one or
more of its existing shareholders, partners, members or other equity owners so as to create
a new Controlling Interest in Grantee; (vi) the issuance of additional capital stock or
partnership, membership or other equity interest by Grantee or any of its parents so as to
create a new Controlling Interest in Grantee; and (vii) the entry by the Grantee into an
agreement with respect to the management or operation of the Grantee, any of Grantee's
parents and/or the System or the subsequent amendment thereof. The term "Controlling
Interest" as used herein is not limited to majority equity ownership of the Grantee, but also
includes actual working control over the Grantee, any parent of Grantee and/or the System
in whatever manner exercised.
c. Grantee shall notify Grantor in writing of any foreclosure or any other
judicial sale of all or a substantial part of the property and assets comprising the Cable
System of the Grantee or upon the termination of any lease or interest covering all or a
substantial part of said property and assets. Such notification shall be considered by
Grantor as notice that a change in control or ownership of the Franchise has taken place
and the provisions under this Section governing the consent of Grantor to such change in
control or ownership shall apply.
d. For the purpose of determining whether it shall consent to such change,
fr~nsfer or acquisition of control, Grantor may inquire into the qualifications of the
prospective transferee or controlling party, and Grantee shall assist Grantor in any such
inquiry. In seeking Grantor's consent to any change of ownership or control, Grantee shall
have the responsibility of insuring that the transferee completes an application in form and
substance reasonably satisfactory to Grantor, which application shall include the
information required under this Ordinance and Applicable Laws. The transferee shall be
required to establish to the satisfaction of the City that it possesses the legal, technical and
financial qualifications to operate and. maintain the System and comply with all Franchise
requirements for the remainder of the term of the Franchise. If, after considering the legal,
financial, character and technical qualities of the transferee and determining that they are
satisfactory, the Grantor finds that such transfer is acceptable, the Grantor shall permit such
transfer and assignment of the rights and obligations of such Franchise as may be in the
175338/1
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public interest. The consent of the Grantor to such transfer shall not be unreasonably
denied.
e. Any financial institution having a security interest in any and all of the
property and assets of Grantee as security for any loan made to Grantee or any of its
affiliates for the construction and/or operation of the Cable System must notify the Grantor
that it or its designee satisfactory to the Grantor shall take control of and operate the Cable
Television System, in the event of a default in the payment or performance of the debts,
liabilities or obligations of Grantee or its affiliates to such financial institution. Further, said
financial institution shall also submit a plan for such operation of the System within thirty
(30) days of assuming such control that will insure continued service and compliance with
all Franchise requirements during the term the financial institution or its designee exercises
control over the System. The financial institution or its designee shall not exercise control
over the System for a period exceeding one (1) year unless extended by the Grantor in its
discretion and during said period of time it shall have the right to petition the Grantor to
transfer the Franchise to another Grantee.
f. In addition to the aforementioned requirements in this Section 1.8, the City
and Grantee shall, at all times, comply with the requirements of Minnesota Statutes Section
238.083 regarding the sale or transfer of a franchise and with all other Applicable Laws.
SECTION 1.9.
CITY'S RIGHT TO PURCHASE SYSTEM.
The City shall have a right of first refusal to purchase the Cable System in the event
the Grantee receives a bona fide offer to purchase the Cable System from any Person.
Bona fide offer as used in this Section means a written offer which has been accepted by
Grantee, subject to the City's rights under this Ordinance and any Franchise Agreement.
The price to be paid by the City shall be the amount proyided for in the bona fide offer,
including the same terms and conditions as the bona fide offer. The City shall notify
Grantee of its decision to purchase within sixty (60) days of the City's receipt from Grantee
of a copy of the written bona fide offer and such other relevant and pertinent information
as the City shall deem appropriate.
SECTION 1.10. PURCHASE BY CITY UPON EXPIRATION OR
REVOCATION.
Consistent with Section 627 of the Cable Act and all other Applicable Laws, at the
expiration, cancellation, revocation or termination of any Franchise Agreement, the City
shall have the option to purchase, condemn or otherwise acquire and hold the Cable
System.
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SECTION 1.11. EMERGENCY USE.
In the case of any emergency or disaster, Grantee shall, upon request of the City or
emergency management personnel, make its Cable System and related facilities available
to the City for emergency use.
SECTION 1.12. GEOGRAPHICAL COVERAGE.
a. Grantee shall design, construct and maintain the Cable Television System to
have the capability to pass every dwelling unit in the Service Area, subject to any Service
Area line extension requirements of the Franchise Agreement.
b. After service has been established by activating trunk and/or distribution
cables for any Service Area, Grantee shall provide Cable Service to any requesting
Subscriber within that Service Area within thirty (30) days from the date of request,
provided that the Grantee is able to secure all rights-of-way necessary to extend service to
such Subscriber within such thirty (30) day period on reasonable terms and conditions.
c. No Subscriber shall be refused service arbitrarily. However, for unusual
circumstances such as the existence of more than 150 feet of distance from distribution
cable to connection of service to Subscribers, or a density equivalent of less than 40 homes
per mile, service may be made available on the basis of a capital contribution in aid of
construction, including cost of material, labor and easements. For the purpose of
determining the amount of capital contribution in aid of construction to be borne by the
Grantee and Subscribers in the area in which service may be expanded, the Grantee will
contribute an amount equal to the construction and other costs per mile, multiplied by a
fraction whose numerator equals the actual number of residences per mile, and whose
denominator equals 40 residences. Subscribers who request service hereunder, will bear
the remainder of the construction and other costs on a pro rata basis. The Grantee may
require that the payment of the capital contribution in aid of construction borne by such
potential subscribers be paid in advance.
d. Grantee shall immediately bury all drops to subscribers dwellings when
required by local construction standards. In the event the ground is frozen or otherwise
unsuitable to permit immediate burial, Grantee shall be permitted to delay such burial until
the ground becomes suitable for burial and shall complete said burial no later than June 151
of each year.
SECTION 1.13. NONEXCLUSIVE FRANCHISE.
Any Franchise granted under tliis Ordinance shall be nonexclusive. The Grantor
specifically reserves the right to grant, at any time, such additional Franchises for a Cable
Television System as it deems appropriate on terms and conditions no more favorable nor
less burdensome than those imposed in previously granted Franchises, subject to
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Applicable Laws. The Grantor also specifically reserves the right to operate a municipal
Cable Television System pursuant to Applicable Laws.
SECTION 1.14. MULTIPLE FRANCHISES.
a. Grantor may grant one or more Franchises for a Service Area. Grantor may,
in its sole discretion, limit the number of Franchises granted, based upon, but not
necessarily limited to, the requirements of Applicable Laws and specific local
considerations; such as:
1. The capacity of the public rights-of-way to accommodate multiple
coaxial cables in addition to the cables, conduits and pipes of the utility systems,
such as electrical power, telephone, gas and sewage.
2. The impact on the City of having multiple Franchises.
3. The disadvantages that may result from Cable System competition,
such as the requirement for multiple pedestals on residents' property, and the
disruption arising from numerous excavations of the rights-of-way.
4. The financial capabilities of the applicant and its guaranteed
commitment to make necessary investment to erect, maintain and operate the
proposed System for the duration of the Franchise term.
b. Each Grantee awarded a Franchise to serve the entire City shall offer service
to all residences in the City, in accordance with construction and service schedules
mutually agreed upon between Grantor and Grantee, and consistent with Applicable Laws.
c. The City may, in its sole discretion, require developers of new residential
housing with underground utilities to provide conduit to accommodate cables for a
minimum of two (2) Cable Systems in accordance with the provisions of Section 1.21 (d).
d. Grantor may require that any new Grantee be responsible for its own
underground trenching and the costs associated therewith, if, in Grantor's opinion, the
rights-of-way in any particular area cannot feasibly and reasonably accommodate
additional cables.
e. Any additional Franchise granted by the City to provide Cable Service in a
part of the City in which a Franchise has already been granted and where an existing
Grantee is providing service shall require the new Grantee to provide service throughout
its Service Area within a reasonable ti.me and in a sequence which does not discriminate
against lower income residents.
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SECTION 1.15. FRANCHISE APPLICATIONS.
Any Person, other than the City unless specifically required by Applicable Laws,
desiring an initial Franchise for a Cable Television System shall file an application with the
City. A reasonable nonrefundable application fee in an amount established by the City
shall accompany the initial application. Such application fee shall not be deemed to be
"franchise fees" within the meaning of Section 622 of the Cable Act (47 U.S.c. 9 542), and
such payments shall not be deemed to be (i) "payments in kind" or any involuntary
payments chargeable against the Franchise Fees to be paid to the City by Grantee pursuant
to Section 1.20 hereof and applicable provisions of a Franchise Agreement, or (ij) part of
the Franchise Fees to be paid to the City by Grantee pursuant to Section 1.20 hereof and
applicable provisions of a Franchise Agreement.
An application for an initial Franchise for a Cable Television System shall be in a
form reasonably acceptable to Grantor and shall contain, where applicable:
a. A statement as to the proposed Service Area.
b. A resume of prior history of applicant, including the legal, technical and
financial expertise of applicant in the cable television field.
c. A list of the general and limited partners of the applicant, if a partnership, or
the shareholders, if a corporation.
d. The percentage ownership of the applicant of each of its partners,
shareholders or other equity owners;
e. A list of officers, directors and managing employees of applicant or its
general partner, as applicable, together with a description of the background of each such
Person;
f. The names and addresses of any parent or subsidiary of applicant or any
, Qther business entity owning or controlling applicant in whole or in part, or owned or
controlled in whole or in part by applicant;
g. A current financial statement of applicant verified by an audit or otherwise
certified to be true, complete and correct to the reasonable satisfaction of the City;
h.
Proposed construction and service schedule.
I.
Any additional informa~ion that the City deems applicable.
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SECTION 1.16. CONSIDERATION OF INITIAL APPLICATIONS.
a. Upon receipt of any application for an initial Franchise, the City
Administrator shall prepare a report and make his or her recommendations respecting such
application to the City Council.
b. A public hearing shall be set prior to any initial Franchise grant, at a time and
date approved by the Council. Within thirty (30) days after the close of the hearing, the
Council shall make a decision based upon the evidence received at the hearing as to
whether or not the Franchise(s) should be granted, and, if granted subject to what
conditions. The Council may grant one (1) or more initial Franchises, or may decline to
grant any Franchise.
SECTION 1.17. FRANCHISE RENEWAL.
Franchise renewals shall be in accordance with Applicable Laws. Grantor and
Grantee, by mutual consent, may enter into renewal negotiations at any time during the
term of the Franchise. To the extent consistent with Applicable Laws, a reasonable non-
refundable renewal application fee in an amount established by the City may be required
to accompany any renewal application. Such application fee shall not be deemed to be
"franchise fees" within the meaning of Section 622 of the Cable Act (47 u.s.c. 9 542), and
such payments shall not be deemed to be (i) "payments in kind" or any involuntary
payments chargeable against the Franchise Fees to be paid to the City by Grantee pursuant
to Section 1.20 hereof and applicable provisions of a Franchise Agreement, or (ij) part of
the Franchise Fees to be paid to the City by Grantee pursuant to Section 1.20 hereof and
applicable provisions of a Franchise Agreement.
SECTION 1.18. CONSUMER PROTECTION AND SERVICE STANDARDS.
Grantee shall maintain a convenient local customer service or bill payment location
for receiving Subscriber payments. Grantee shall also maintain or arrange for a location
where equipment can be dropped-off or exchanged as is necessary or, in the alternative,
establish a system for having Subscriber equipment picked-up at the Subscriber residence
free-of-charge. Grantee shall also provide the necessary facilities, equipment and
personnel to comply with the following consumer protection standards under Normal
Operating Conditions:
a. Cable Svstem office hours and telephone availabilitv:
1. Grantee will maintain a local, toll-free or collect call telephone access
line which will be available to its Subscribers 24 hours a day, seven (7) days a week.
(j) Trained Grantee representatives will be available to respond to
customer telephone inquiries during Normal Business Hours.
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(ii) After Normal Business Hours, the access line may be answered
by a service or an automated response system, including an answering
machine. Inquiries received after Normal Business Hours must be responded
to by a trained Grantee representative on the next business day.
2. Under Normal Operating Conditions, telephone answer time by a
customer representative, including wait time, shall not exceed thirty (30) seconds
when the connection is made. If the call needs to be transferred, transfer time shall
not exceed thirty (30) seconds. These standards shall be met no less then ninety
(90%) percent of the time under Normal Operating Conditions, measured on a
quarterly basis.
3. The Grantee will not be required to acquire equipment or perform
surveys to measure compliance with the telephone answering standards above
unless an historical record of complaints indicates a clear failure to comply.
4. Under Normal Operating Conditions, the customer will receive a
busy signal less than three percent (3%) of the time.
5. Customer service center and bill payment locations will be open at
least during Normal Business Hours.
b. Installations. outages and service calls. Under Normal Operating Conditions,
each of the following four standards will be met no less than ninety-five percent (95%) of
the time measured on a quarterly basis:
1. Standard Installations will be performed within seven (7) business
days after an order has been placed. "Standard" Installations are those that are
located up to 125 feet from the existing distribution system.
2. Excluding conditions beyond the control of Grantee, Grantee will
begin working on "service interruptions" promptly and in no event later than 24
hours after the interruption becomes known. The Grantee must begin actions to
correct other service problems the next business day after notification of the service
problem.
3. The "appointment window" alternatives for Installations, service calls,
and other Installation activities will be either a specific time or, at maximum, a four-
hour time block during Normal Business Hours. (The Grantee may schedule service
calls and other Installation activities outside of Normal Business Hours for the
express convenience of the customer.)
4. Grantee may not cancel an appointment with a customer after the
close of business on the business day prior to the scheduled appointment.
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5. If Grantee's representative is running late for an appointment with a
customer and will not be able to keep the appointment as scheduled, the customer
will be contacted prior to the time of the scheduled appointment. The appointment
will be rescheduled, as necessary, at a time which is convenient for the customer.
c. Communications between Grantee and Subscribers:
1. Notifications to Subscribers:
(i) The Grantee shall provide written information on each of the
following areas at the time of Installation of service, at least annually to all
Subscribers, and at any time upon request:
(A) Products and services offered;
(B) Prices and options for programming services and
conditions of subscription to programming and other services;
(C) Installation and service maintenance policies;
(0) Instructions on how to use the Cable Service;
(E) Channel positions of the programming carried on the
System; and
(F) Billing and complaint procedures, including the address
and telephone number of the Grantee's office within the Service Area.
(ii) Customers will be notified of any changes in rates,
programming services or channel positions as soon as possible in writing.
Notice must be given to Subscribers a minimum of thirty (30) days in
advance of such changes if the changes are within the control of the Grantee.
In addition, the Grantee shall notify subscribers thirty (30) days in advance of
any significant changes in the other information required by this Section
1.18(cH1 Hi). Grantee shall not be required to provide prior notice of any rate
changes as a result of a regulatory fee, franchise fee, or other fees, tax,
assessment or charge of any kind imposed by any federal agency, state or
franchising authority on the transaction between the operator and the
subscriber.
2: Billing:
(i) Bills will be clear, concise and understandable. Bills must be
fully itemized, with itemizations including, but not limited to, basic and
premium service charges and equipment charges. Bills will also clearly
delineate all activity during the billing period, including optional charges,
rebates and credits.
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(ii) In case of a billing dispute, the Grantee must respond to a
written complaint from a Subscriber within thirty (30) days.
3. Refunds: Refund checks will be issued promptly, but no later than
either:
(i) The customer's next billing cycle following resolution of the
request or thirty (30) days, whichever is earlier, or
(ii) The return of the equipment supplied by the Grantee if service
is terminated.
4. Credits: Credits for service will be issued no later than the customer's
next billing cycle following the determination that a credit is warranted.
Grantee shall provide City with a quarterly customer service compliance report
specific to the system serving the City of Chanhassen in a form mutually agreed to, which
report shall, at a minimum, describe in detail Grantee's compliance with each and every
term and provision of this Section 1.18 and any additional customer service requirements
contained in Grantee's Franchise and shall outline and summarize all subscriber
complaints received by Grantee during the preceding calendar quarter.
SECTION 1.19. RATE REGULATION.
The City reserves the right to regulate rates for Basic Cable Service and any other
services offered over the Cable System, to the extent not prohibited by Applicable Laws.
The Grantee shall be subject to the rate regulation provisions provided for herein, and
those of the Federal Communications Commission (FCC) at 47 C.F.R., Part 76, Subpart N,
as the same may be amended from time to time. The City shall follow the rules relating to
cable rate regulation promulgated by the FCC at 47 C.F.R., Part 76, Subpart N, as the same
may be amended from time to time.
SECTION 1.20. FRANCHISE FEE.
a. Following the issuance and acceptance of a Franchise, the Grantee shall pay
to the Grantor a Franchise Fee in the amount set forth in the Franchise Agreement.
b. The Grantor, on an annual basis, shall be furnished a statement within ninety
(90) days of the close of the calendar year, certified by the Company controller or chief
financial officer, reflecting the total amounts of Gross Revenues and all payments, and
computations of the Franchise Fee for-the previous calendar year. Upon ten (10) days prior
written notice, Grantor shall have the right to conduct an independent audit of Grantee's
records. If such audit indicates a Franchise Fee underpayment of five percent (5%) or
more, the Grantee shall assume all of City's out-of-pocket costs associated with the conduct
of such an audit and shall remit to Grantor all applicable Franchise Fees due and payable
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together with interest thereon at the lesser of the maximum rate permitted by Applicable
Laws or 18% per annum.
c. Except as otherwise provided by law, no acceptance of any payment by the
Grantor shall be construed as a release or as an accord and satisfaction of any claim the
Grantor may have for further or additional sums payable as a Franchise Fee under this
Ordinance or any Franchise Agreement or for the performance of any other obligation of
the Grantee.
d. In the event that any Franchise Fee payment or recomputed amount is not
made on or before the dates specified in the Franchise Agreement, Grantee shall pay as
additional compensation an interest charge, computed from such due date, at an annual
rate equal to the lesser of the maximum rate permitted by Applicable Laws or 18% per
annum during the period for which payment was due.
e. Franchise Fee payments shall be made in accordance with the schedule
indicated in the Franchise Agreement.
SECTION 1.21. DESIGN AND CONSTRUCTION REQUIREMENTS.
a. Grantee shall not construct any Cable System facilities until Grantee has
secured the necessary permits from Grantor, or other applicable Governmental Authorities.
b. In those areas of the City where transmission or distribution facilities of all
the public utilities providing telephone and electric power service are underground, the
Grantee likewise shall construct, operate and maintain its transmission and distribution
faci lities therein underground.
c. In those areas of the City where Grantee's cables are located on the above-
ground transmission or distribution facilities of the public utility providing telephone or
electric power service, and in the event that the facilities of both such public utilities
subsequently are placed underground, then the Grantee likewise shall construct, operate
and maintain its transmission and distribution facilities underground, at Grantee's cost.
Certain of Grantee's equipment, such as pedestals, amplifiers and power supplies, which
normally are placed above ground, may continue to remain in above-ground closures,
however, the City specifically reserves all of its rights to approve above-ground or
underground locations for pedestals subject to Appl icable Laws.
d. In new residential developments in which all the electric power and
telephone utilities are underground, the City may, in its sole discretion, require that the
following procedure apply with respect to access to and utilization of underground
easements:
1. The developer shall be responsible for contacting and surveying all
Grantees to ascertain which Grantees desire (or, pursuant to the terms and
provisions of this Ordinance and any Franchise Agreement, may be required) to
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provide Cable Service to that development. The developer may establish a
reasonable deadline to receive responses from Grantees. The final development
map shall indicate the Grantees which have agreed to serve the development.
2. If one (1) or more Grantees wish to provide service within all or part
of the development, they shall be accommodated in the joint utilities trench on a
nondiscriminatory shared basis. If fewer than two (2) Grantees indicate interest, the
developer shall provide conduit to accommodate a minimum of two (2) sets of cable
television cables and dedicate to the City any initially unoccupied conduit. The
developer shall be entitled to recover the cost of such initially unoccupied conduit
in the event that Grantor subsequently leases or sells occupancy or use rights to any
Grantee.
3. The developer shall provide at least ten (10) business days notice of
the date that utility trenches will be open to the Grantees that have agreed to serve
the development. When the trenches are open, such Grantees shall have two (2)
business days to begin the Installation of their cables, and five (5) business days after
beginning Installation to complete Installation.
4. The final development map shall not be approved until the developer
submits evidence that:
A. It has notified each Grantee that underground utility trenches
are to open as of an estimated date, and that each Grantee will be allowed
access to such trenches, including trenches from proposed Streets to
individual homes or home sites, on specified nondiscriminatory terms and
conditions; and
B. It has received a written notification from each Grantee that the
Grantee intends to install its facilities during the open trench period on the
specified terms and conditions, or such other terms and conditions as are
mutually agreeable to the developer and Grantee, or has received no reply
from a Grantee within ten (10) days after its notification to such Grantee, in
which case the Grantee will be deemed to have waived its opportunity to
install its facilities during the open trench period.
5. Sharing the joint utilities trench shall be subject to compliance with
State regulatory agency and utility standards. If such compliance is not possible, the
developer shall provide a separate trench for the cable television cables, with the
entire cost shared among the participating Grantee(s). With the concurrence of the
developer, the affected utilities and the Grantees, alternative Installation procedures,
such as the use of deeper trenches, may be utilized, subject to the requirements of
Applicable Laws.
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6. Any Grantee wishing to serve an area where the trenches have been
closed shall be responsible for its own trenching and associated costs and shall
repair all property to the condition which existed prior to such trenching.
e. Construction Codes and Permits.
1. Grantee shall obtain all necessary permits from City before
commencing any construction upgrade or extension of the System, including the
opening or disturbance of any Street, or private or public property within City.
Grantee shall strictly adhere to all state and local laws and building and zoning
codes currently or hereafter applicable to construction, operation or maintenance of
the System in City and give due consideration at all times to the aesthetics of the
property.
2. The City shall have the right to inspect all construction or installation
work performed pursuant to the provisions of the Franchise and to make such tests
at its own expense as it shall find necessary to ensure compliance with the terms of
the Franchise and applicable provisions of local, state and federal law.
f. Repair of Streets and Propertv. Any and all Streets or public property or
private property, which are disturbed or damaged during the construction, repair,
replacement, relocation, operation, maintenance or reconstruction of the System shall be
promptly and fully restored by Grantee, at its expense, to a condition as good as that
prevailing prior to Grantee's work, as approved by City in the case of Streets and other
public property. If Grantee shall fail to promptly perform the restoration required herein,
City shall have the right to put the streets, public, or private property back into good
condition. City reserves its rights to pursue reimbursement for such restoration from
Grantee.
g. Conditions on Street Use.
1. Nothing in this Franchise shall be construed to prevent City from
constructing, maintaining, repairing or relocating sewers; grading, paving,
maintaining, repairing, relocating and/or altering any Street; constructing, laying
down, repairing, maintaining or relocating any water mains; or constructing,
maintaining, relocating, or repairing any sidewalk or other public work.
2. All System transmission and distribution structures, lines and
equiprr.ent erected by the Grantee within City shall be located so as not to obstruct
or interfere with the proper use of Streets, alleys and other public ways and places,
and to cause minimum interference with the rights of property owners who abut any
of the said Streets, alleys and other public ways and places, and not to interfere with
existing public utility installations. The Grantee shall furnish to and file with City
Administrator the maps, plats, and permanent records of the location and character
of all facilities constructed, including underground facilities, and Grantee shall file
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with City updates of such maps, plats and permanent records annually if changes
have been made in the System.
3. If at any time during the period of this Franchise City shall elect to
alter, or change the grade or location of any Street, alley or other public way, the
Grantee shall, at its own expense, upon reasonable notice by City, remove and
relocate its poles, wires, cables, conduits, manholes and other fixtures of the
System, and in each instance comply with the standards and specifications of City.
If City reimburses other occupants of the Street, Grantee shall be likewise
reimbursed.
4. The Grantee shall not place poles, conduits, or other fixtures of
System above or below ground where the same will interfere with any gas, electric,
telephone, water or other utility fixtures and all such poles, conduits, or other
fixtures placed in any Street shall be so placed as to comply with all requirements of
City.
5. The Grantee shall, on request of any Person holding a moving permit
issued by City, temporarily move its wires or fixtures to permit the moving of
buildings with the expense of such temporary removal to be paid by the Person
requesting the same, and the Grantee shall be given not less than ten (10) days
advance notice to arrange for such temporary changes.
SECTION 1.22. TECHNICAL STANDARDS.
a. The Grantee shall construct, install, operate and maintain its System in a
manner consistent with all Applicable Laws and the Federal Communications Commission
technical standards, and any standards set forth in its Franchise Agreement. In addition, the
Grantee shall provide to the Grantor, upon request, a copy of the results of the Grantee's
periodic proof of performance tests conducted pursuant to Federal Communications
. Commission standards and guidelines.
b. Failure to comply with the FCC's technical standards shall entitle the City to
utilize the procedures of Section 1.30 hereof.
c. All construction practices shall be in accordance with all applicable sections
of the Occupational Safety and Health Act of 1970, as amended, as well as all other
Applicable Laws.
d. All Installation of electronic equipment at the time of installation shall be of a
permanent nature, durable and installed in accordance with the provisions of the National
Electrical and Safety Code and National Electrical Code, as amended, and as said code may
from time to time be amended.
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e. Antennae and their supporting structures (towers) shall be painted, lighted,
erected and maintained in accordance with all applicable rules and regulations of the
Federal Aviation Administration and all other Applicable Laws.
f. All of Grantee's plant and equipment, including, but not limited to, the
antenna site, headend and distribution system, towers, house connections, structures,
poles, wire, coaxial cable, fixtures and appurtenances shall be installed, located, erected,
constructed, reconstructed, replaced, removed, repaired, maintained and operated in
accordance with good engineering practices, performed by experienced maintenance and
construction personnel so as not to endanger or interfere with improvements the City may
deem appropriate to make or to interfere in any manner with the rights of any property
owner, or to unnecessarily hinder or obstruct pedestrian or vehicular traffic.
g. Grantee shall at all times employ ordinary care and shall install and maintain
in use commonly accepted methods and devices preventing failures and accidents which
are likely to cause damage, injury or nuisance to the public.
SECTION 1.23. TRIMMING OF TREES.
Grantee shall have the authority to trim trees, in accordance with all applicable
utility restrictions, ordinance and easement restrictions, upon and hanging over Streets and
public places of the City so as to prevent the branches of such trees from coming in contact
with the wires and cables of Grantee. City representatives shall have authority to supervise
and approve all trimming of trees conducted by Grantee.
SECTION 1.24. USE OF GRANTEE FACILITIES.
The City shall, at its own expense, have the right to install and maintain upon the
poles and within the underground pipes and conduits of Grantee, any wires and fixtures
desired by the City to the extent that such installation and maintenance does not interfere
with existing operations of Grantee.
SECTION 1.25. PROGRAMMING DECISIONS.
All programming decisions shall be at the sole discretion of Grantee; provided,
however, that any change in the mix, quality or level of service pursuant to 47 U.S.c.
9 545(a) shall require the prior approval of the City. Such approval by the City shall not be
unreasonably withheld.
SECTION 1.26. INDEMNIFICATION.
Grantee shall indemnify, defend and hold the City, its officers, boards, commissions,
agents and employees (collectively the "Indemnified Parties") harmless from and against
any and all lawsuits, claims, causes of action, actions, liability, demands, damages,
judgments, settlements, losses, expenses (including reasonable attorneys' fees) and costs of
any nature that any of the Indemnified Parties may at any time, directly or indirectly, suffer,
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sustain or incur arising out of, based upon or in any way connected with the grant of a
Franchise to Grantee, the operation of Grantee's System and/or the acts and/or omissions of
Grantee or its agents or employees, whether or not pursuant to the Franchise. This
indemnity shall apply, without limitation, to any action or cause of action for invasion of
privacy, defamation, antitrust, errors and omissions, theft, fire, violation or infringement of
any copyright, trademark, trade names, service mark, patent, or any other right of any
Person, whether or not any act or omission complained of is authorized, allowed or
prohibited by this Ordinance or any Franchise Agreement, but shall exclude any claim or
action arising out of the acts or omissions of the Indemnified Parties or related to any City
programming or other access programming for which the Grantee is not legally
responsible.
SECTION 1.27. INSURANCE.
Within sixty (60) days following the grant of a Franchise, the Grantee shall obtain,
pay all premiums for and make available to the City at its request copies of the following
insurance policies:
a. A general comprehensive liability insurance policy insuring, indemnifying,
defending and saving harmless the Indemnified Parties from any and all claims by any
Person whatsoever on account of injury to or death of a Person or Persons occasioned by
the operations of the Grantee under any Franchise granted hereunder, or alleged to have
been so caused or occurred with a minimum coverage of One Million Dollars ($1,000,000)
for personal injury or death of one Person, and Three Million Dollars ($3,000,000) for
personal injury or death of any two (2) or more Persons in anyone occurrence. The policy
limits provided for in this Section 1.27(a) shall be reviewed and adjusted by the city as
necessary not more than once every three (3) years.
b. Property damage insurance for property damage occasioned by the operation
of Grantee under any Franchise granted pursuant to this Ordinance, or alleged to have
been so caused or occurred, with minimum coverage of One Million Dollars ($1,000,000)
for property damage to the property of anyone Person and Three Million Dollars
($3,000,000) for property damage to the property of two or more Persons in anyone
occurrence. The policy limits provided for in this Section 1.27(b) shall be reviewed and
adjusted by the city as necessary not more than once every three (3) years.
c. Workers Compensation Insurance as provided by Applicable Laws.
d. All insurance policies called for herein shall be in a form satisfactory to the
City 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," and shall require thirty (30) days written notice of any
cancellation to both the City and the Grantee. The Grantee shall, in the event of any such
cancellation notice, obtain, pay all premiums for, and file with the City, written evidence of
the issuance of replacement policies within thirty (30) days following receipt by the City or
the Grantee of any notice of cancellation.
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e. If Grantee sells or transfers the Cable System, or in the event of expiration,
termination or revocation of a Franchise, insurance tail coverage shall be purchased and
filed with the City for the then applicable amounts, providing coverage for the time periods
according to applicable statutes of limitation, insurance for any issues attributable to the
period Grantee held its Franchise.
f. It shall be the obligation of Grantee to promptly notify the City of any
pending or threatened litigation that would be likely to affect the Indemnified Parties.
SECTION 1.28. RECORDS REQUIRED AND GRANTOR'S RIGHT TO
INSPECT.
a. Grantee shall at all times maintain the following records and information
relating specifically to the Cable System serving the City as identified by the FCC
Community Unit Identifier ("CUID") as opposed to a regional cable system or other
operating unit of Grantee:
1. A full and complete set of plans, records and "as-built" drawings
and/or maps in an electronic form agreed to by City and Grantee which shall be
updated annually showing the location of the Cable Television System installed or
in use in the City, exclusive of Subscriber service drops and equipment provided in
Subscribers' homes.
2. If requested by Grantor, a summary of service calls, identifying the
number, general nature and disposition of such calls, on a monthly basis. A
summary of such service calls shall be submitted to the Grantor within thirty (30)
days following its request in a form reasonably acceptable to the Grantor.
b. Upon reasonable notice, and during Normal Business Hours, Grantee shall
permit examination by any duly authorized representative of the Grantor, of all Franchise
property and facilities, together with any appurtenant property and facilities of Grantee
situated within or without the City, and all records relating to the Franchise, provided they
are necessary to enable the Grantor to carry out its regulatory responsibilities under
Applicable Laws, this Ordinance and the Franchise Agreement. Grantee shall have the
right to be present at any such examination.
c. The City shall also have the right to inspect, upon twenty-four (24) hours
written notice, at any time during Normal Business Hours at Grantee's office, all books,
records, maps, plans, financial statements, service complaint logs, performance test results,
records of request for service, and other like materials of Grantee.
d. Copies of all petitions, applications, communications and reports submitted
by Grantee or on behalf of or relating to Grantee to the Federal Communications
Commission, Securities and Exchange Commission, or any other Governmental Authority
having jurisdiction with respect to any matters affecting the Cable System authorized
pursuant to this Ordinance and any Franchise shall, upon request, be submitted, upon
175338/1
22
request to the City. Copies of responses from the Governmental Authority to Grantee shall
likewise be furnished to the City.
SECTION 1.29. ANNUAL REPORTS.
a. Grantee shall, upon request, within ninety (90) days of each calendar year
end, submit a written end of the year report to Grantor with respect to the preceding
calendar year containing the following information:
1. A Summary of the previous year's (or in the case of the initial
reporting year, the initial year's) activities in development of the Cable System,
including but not limited to, services commenced or discontinued during the
reporting year;
2. A list of Grantee's officers, members of its board of directors, and
other principals of Grantee;
3. A list of stockholders or other equity investors holding five percent
(5%) or more of the voting interest in Grantee; and
4. Information as to the number of Subscribers, additional television
outlets, and the number of basic and pay service Subscribers.
b. All reports required under this Ordinance, except those required by law to be
kept confidential, shall be available for public inspection in the Grantee's offices during
Normal Business Hours.
c. All reports and records required under this Ordinance shall be furnished at
the sole expense of Grantee, except as otherwise provided in this Ordinance or the
Franchise agreement.
SECTION 1.30. FRANCHISE VIOLATION.
a. In the event Grantor believes that Grantee has breached or violated any
material provision of this Ordinance or a Franchise granted hereunder, Grantor may act in
accordance with the following procedures:
b. Grantor may notify Grantee of the alleged violation or breach and demand
that Grantee cure the same within a reasonable time, which shall not be less than ten (10)
days in the case of an alleged failure of the Grantee to pay any sum or other amount due
the Grantor under this Ordinance or t.he Grantee's Franchise and thirty (30) days in all
other cases. If Grantee fails either to cure the alleged violation or breach within the time
prescribed or to commence correction of the violation or breach within the time prescribed
and thereafter diligently pursue correction of such alleged violation or breach, the Grantor
shall then give written notice of not less than fourteen (14) days of a public hearing to be
held before the Council. Said notice shall specify the violations or breaches alleged to
175338/1
23
have occurred. At the public hearing, the Council shall hear and consider relevant
evidence and thereafter render findings and its decision. 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 or has not diligently commenced to cure of such violation or breach
after notice thereof from Grantor and is not diligently proceeding to fully cure such
violation or breach, the Council may impose penalties from any security fund required in a
Franchise Agreement or may terminate Grantee's Franchise and all rights and privileges of
the Franchise. If the City chooses to terminate Grantee's Franchise, the following
additional procedure shall be followed:
1. The City shall provide Grantee with written notice of the City's intention to
terminate the Franchise and specify in detail the reason or cause for the
proposed termination. The City shall allow grantee a minimum of fifteen
(15) days subsequent to receipt of the notice in which to cure the default.
2. Grantee shall be provided with an opportunity to be heard at a regular or
special meeting of City prior to any final decision of City to terminate
Grantee's Franchise.
3. In the event that City determines to terminate Grantee's franchise, the
Grantee shall have an opportunity to appeal said decision in accordance with
all Appl icable Laws.
4. If a valid appeal is filed, the Franchise shall remain in full force and affect
while said appeal is pending, unless the term of the Franchise sooner expires.
SECTION 1.31. FORCE MAJEURE; GRANTEE'S INABILITY TO PERFORM.
In the event Grantee's performance of any of the terms, conditions or obligations
required by this Ordinance or a Franchise granted hereunder is prevented by a cause or
event not within Grantee's control, such inability to perform shall be deemed excused for
the period of such inability and no penalties or sanctions shall be imposed as a result
thereof. For the purpose of this Section, causes or events not within the control of Grantee
shall include, without limitation, acts of God, strikes, sabotage, riots or civil disturbances,
restraints imposed by order of a governmental agency or court, failure or loss of utilities,
explosions, acts of public enemies, and natural disasters such as floods, earthquakes,
lands/ides and fires.
SECTION 1.32. ABANDONMENT OR REMOVAL OF FRANCHISE
PROPERTY. .
a. In the event that the use of any property of Grantee within the Franchise Area
or a portion thereof is discontinued for a continuous period of twelve (12) months, Grantee
shall be deemed to have abandoned that property.
175338/1
24
b. Grantor, upon such terms as Grantor may impose, may give Grantee
permission to abandon, without removing, any System facility or equipment laid, directly
constructed, operated or maintained in, on, under or over the Franchise Area. Unless such
permission is granted or unless otherwise provided in this Ordinance, the Grantee shall
remove all abandoned facilities and equipment upon receipt of written notice from Grantor
and shall restore any affected Street to its former state at the time such facilities and
equipment were installed, so as not to impair its usefulness. In removing its plant,
structures and equipment, Grantee shall refill, at its own expense, any excavation made by
or on behalf of Grantee and shall leave all streets and other public ways and places in as
good condition as that prevailing prior to such removal without materially interfering with
any electrical or telephone cable or other utility wires, poles or attachments. Grantor shall
have the right to inspect and approve the condition of the streets, public ways, public
places, cables, wires, attachments and poles prior to and after removal. The liability,
indemnity and insurance provisions of this Ordinance and any security fund provided for in
the Franchise Agreement shall continue in full force and effect during the period of removal
and until full compliance by Grantee with the terms and conditions of this Section.
c. Upon abandonment of any Franchise property in place, the Grantee, if
required by the Grantor, shall submit to Grantor a bill of sale and/or other an instrument,
satisfactory in form and content to the Grantor, transferring to the Grantor the ownership of
the Franchise property abandoned.
d. At the expiration of the term for which the Franchise is granted, or upon its
earlier revocation or termination, as provided for herein and/or in the Franchise
Agreement, in any such case without renewal, extension or transfer, the Grantor shall have
the right to require Grantee to remove, at its own expense, all above-ground portions of the
Cable Television System from all Streets and public ways within the City within a
reasonable period of time, which shall not be less than one hundred eighty (180) days.
e. Notwithstanding anything to the contrary set forth in this Ordinance, the
. Grantee may, with the consent of the Grantor, abandon any underground Franchise
property in place so long as it does not materially interfere with the use of the Street or
public rights-of-way in which such property is located or with the use thereof by any public
utility or other cable Grantee.
SECTION 1.33. EXTENDED OPERATION AND CONTINUITY OF
SERVICES.
Upon termination or forfeiture of a Franchise, the Grantee shall remove its cable,
wires, and appliances from the streetsJ alleys, or other public places within the Service
Area if the City so requests. Failure by the Grantee to remove its cable, wires, and
appliances as referenced herein shall be subject to the requirements of Section 1.32 of this
Ordinance.
175338/1
25
SECTION 1.34. RECEIVERSHIP AND FORECLOSURE.
a. A Franchise granted hereunder shall, at the option of Grantor, cease and
terminate one hundred twenty (120) days after appointment of a receiver or receivers, or
trustee or trustees, to take over and conduct the business of Grantee, whether in a
receivership, reorganization, bankruptcy or other action or proceeding, unless such
receivership or trusteeship shall have been vacated prior to the expiration of said one
hundred twenty (120) days, or unless: (1) such receivers or trustees shall have, within one
hundred twenty (120) days after their election or appointment, fully complied with all the
terms and provisions of this Ordinance and the Franchise granted pursuant hereto, and the
receivers or trustees within said one hundred twenty (120) days shall have remedied all the
defaults and violations under the Franchise and/or this Ordinance or provided a plan for
the remedy of such defaults and violations which is satisfactory to the Grantor; and (2) such
receivers or trustees shall, within said one hundred twenty (120) days, execute an
agreement duly approved by the court having jurisdiction in the premises, whereby such
receivers or trustees assume and agree to be bound by each and every term, provision and
limitation of the Franchise and this Ordinance.
b. In the case of a foreclosure or other judicial sale of the Franchise property, or
any material part thereof, Grantor may give notice of termination of any Franchise granted
pursuant to this Ordinance upon Grantee and the successful bidder at such sale, in which
the event the Franchise granted and all rights and privileges of the Grantee hereunder shall
cease and terminate thirty (30) days after such notice has been given, unless (1) Grantor
shall have approved the transfer of the Franchise in accordance with the provisions of the
Franchise and this Ordinance; and (2) such successful bidder shall have covenanted and
agreed with Grantor to assume and be bound by all terms and conditions of the Franchise.
SECTION 1.35. RIGHTS RESERVED TO GRANTOR.
In addition to any rights specifically reserved to the Grantor by this Ordinance, the
Grantor reserves to itself every right and power which is required to be reserved by a
provision of any ordinance or under the Franchise.
SECTION 1.36. RIGHTS OF INDIVIDUALS.
a. Grantee shall not deny service, deny access, or otherwise discriminate
against Subscribers, Channel users, or general citizens on the basis of race, color, religion,
disability, national origin, age, gender or sexual preference. Grantee shall comply at all
times with all ~ther Applicable Laws, relating to nondiscrimination.
b. Grantee shall adhere to"the applicable equal employment opportunity
requirements of Applicable Laws, as now written or as amended from time to time
including 47 U.S.c. Section 551, Protection of Subscriber Privacv.
175338/1
26
c. Neither Grantee, nor any Person, agency, or entity shall, without the
Subscriber's consent, tap or arrange for the tapping, of any cable, line, signal input device,
or Subscriber outlet or receiver for any purpose except routine maintenance of the System,
detection of unauthorized service, polling with audience participating, or audience viewing
surveys to support advertising research regarding viewers where individual viewing
behavior cannot be identified.
d. In the conduct of providing its services or in pursuit of any collateral
commercial enterprise resulting therefrom, Grantee shall take reasonable steps to prevent
the invasion of a Subscriber's or general citizen's right of privacy or other personal rights
through the use of the System as such rights are delineated or defined by Applicable Laws.
Grantee shall not, without lawful court order or other applicable valid legal authority,
utilize the System's interactive two-way equipment or capability for unauthorized personal
surveillance of any Subscriber or general citizen.
e. No cable line, wire, amplifier, converter, or other piece of equipment owned
by Grantee shall be installed by Grantee in the Subscriber's premises, other than in
appropriate easements, without first securing any required consent. If a Subscriber requests
service, permission to install upon Subscriber's property shall be presumed. Where a
property owner or his or her predecessor was granted an easement including a public
utility easement or a servitude to another and the servitude by its terms contemplates a use
such as Grantee's intended use, Grantee shall not be required to service the written
permission of the owner for the Installation of cable television equipment.
f. No signals of a class IV cable communications channel may be transmitted
from a Subscriber terminal for purposes of monitoring individual viewing patterns or
practices without the express written permission of a Subscriber. The request for
permission must be contained in a separate document with a prominent statement that the
Subscriber is authorizing the permission in full knowledge of its provisions. The written
permission must be for a limited period of time not to exceed one year which is renewal at
the option of the Subscriber. No penalty may be invoked for a Subscribers failure to
provide or renew the authorization. The authorization is revocable at any timeby the
Subscriber without penalty of any kind. The permission must be required for each type or
classification or class IV cable communications activity planned.
1. No information or data obtained by monitoring transmission of a
signal from a Subscriber terminal, including but not limited to the lists of the names
and addresses of the Subscribers or lists that identify the viewing habits of
Subscribers may be sold or otherwise made available to any Person other than to
Grantee and its employees for internal business use, or to the Subscriber who is the
subject of that information, unless the Grantee has received specific written
authorization from the Subscriber to make the data available.
2. Written permission from the Subscriber must not be required for the
systems conducting system wide or individually addressed electronic sweeps for the
175338/1
27
purpose of verifying system integrity or monitoring for the purpose of billing.
Confidentiality of this information is subject to paragraph 1 above.
3. For purposes of this Section 136, a "class IV cable communications
channel" means a signaling path provided by a System to transmit signals of any
type from a Subscriber terminal to another point in the System.
SECTION 1.37. SEVERABILITY.
If any provision of this Ordinance is held by any Governmental Authority of
competent jurisdiction, to be invalid as conflicting with any Applicable Laws now or
hereafter in effect, or is held by such Governmental Authority to be modified in any way in
order to conform to the requirements of any such Applicable Laws, such provision shall be
considered a separate, distinct, and independent part of this Ordinance, and such holding
shall not affect the validity and enforceability of all other provisions hereof. In the event
that such Applicable Laws are subsequently repealed, rescinded, amended or otherwise
changed, so that the provision hereof which had been held invalid or modified is no longer
in conflict with such laws, said provision shall thereupon return to full force and effect and
shall thereafter be binding on Grantor and Grantee, provided that Grantor shall give
Grantee thirty (30) days written notice of such change before requiring compliance with
said provision or such longer period of time as may be reasonably required for Grantee to
comply with such provision.
PASSED, APPROVED, AND ADOPTED this
day of
, 1998.
THE CITY OF CHANHASSEN, MINNESOTA
By:
Its:
ATTEST:
By:
Its: City Administrator
175338/1 28
C~ j'/~
....,. c:; ·
1r)~
O(J.
THE CITY OF CHANHASSEN, MINNESOTA
CABLE TELEVISION
FRANCHISE AGREEMENT
MAY 5, 1998
Prepared by:
BRIAN T. GROGAN, ESQ.
Moss & Barnett
A Professional Association
4800 Norwest Center
90 South Seventh Street
Minneapolis, MN 55402-4129
(612) 347-0340
175312/1
SECTION 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)
4.4}
4.5}
4.6)
4.7}
4.8)
4.9}
4.10}
SECTION 5.
5.1 )
5.2)
5.3}
SECTION 6.
6.1 )
6.2)
SECTION 7.
7.1)
175312/1
TABLE OF CONTENTS
GEN ERAL PROVIS ION S .............................................................................. 1
Defi n itions. .................. ............................................................................... 1
Written Notice. ............... ............................................................................ 1
RENEWAL OF FRANCH ISE ........................................................ .................2
Grant. ....... .................... ........................... ................................................... 2
Right of Grantor to Issue and Renew Franchise. ...........................................2
Effective Date of Renewal. .................................................... .......................2
Term. ............................... ........................................................................... 3
Franchise Not Exclusive. .................................................... ..... ............. ........3
Ownersh i p of Grantee. ................................................................................ 3
GENERAL REQU IREMENTS. ..... ............................................ ........... .... ........3
Govern i ng Requ i rements. ............................................................................ 3
Franchise Fee. .. ......................... ........... ......................... ................ ..............3
Not F ranch ise Fees. ............. ........................................................................ 4
Recovery of Processi ng Costs....................................................................... 4
Liabi I ity Insurance. ...................................... ......... ............. ..................... .....5
Indemn ification. ...... ............. ...................... ................. ........ .................. ...... 6
Grantee's Insurance..................................................................................... 7
Workers' Compensation Insurance. ............... .......... ........................ ....... .....7
Security Fund. ............................................................................................. 7
Procedure for Enforcing Franchise Agreement. ............................................. 8
Reservation of Rights. .................................................................................. 8
Annual Report. ........... ................... ...... ....................... ........... ............ ..........8
DESIG N PROVISION. ......................... .................... ............. ............... ........9
Mi ni mum Channel Capacity. ............ .................... ......... ...................... ........9
System Design.. .................. ....................................... .......................... ........9
Operation and Maintenance of System. ..................................................... 10
Special Testing. ...... .............. ...... .......................... ................................ ..... 10
FCC Reports. ............................................................................................. 10
Emergency Alert Capabi I ity........................................................................ 10
Parental Control Lock................................................................................ 10
T echn ical Standards............................................................................ ....... 11
Right of Inspection. ....................... ...... ...................................................... 11
Periodic Evaluation, Review and Modification. .......................................... 11
SERVICES AND PROGRAMMING ............................................................. 12
Services and Programm i ng.... ..................................................................... 12
Leased Channel Service............................................................................. 12
Period ic Subscri ber Survey. .................................. ..................................... 1 2
PU B L1C ACCESS PROVISIONS ............................................................ ...... 12
Public, Educational and Government Access.............................................. 12
Grantee Support for PEG Usage. ................................................................ 13
RE G U LA TION ................................ ..... ...................................................... 1 3
Amendment of Franchise Agreement. ........................................................ 13
7.2)
7.3)
7.4)
EXHIBIT A
EXHIBIT B
EXHIBIT C
EXHIBIT D
EXHIBIT E
EXHIBIT E1
EXHIBIT E2
EXHIBIT F
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Conflict Between Ordinance and Agreement. ............................................ 13
Force Majeure. .......... ............................. .......... ........... .............................. 14
Rate Regulation. ................................................................................ .... .... 14
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 , 1998, by and between the City of Chanhassen, a
municipal corporation of the State of Minnesota (hereinafter the "City" or "Grantor"), and
Triax Midwest Associates, L.P. (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 renew the Franchise held by 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) Definitions.
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 Coulter Drive, P.O. Box 147
Chanhassen, MN 55317
175312/1
If to Grantee:
Regional Manager
Triax Cablevision
212 - 15th Avenue NE
Suite 2010
Waseca, MN 56093
Such addresses may be changed by either party upon notice to the other party given as
provided in this Section.
SECTION 2.
RENEWAL OF FRANCHISE
2.1) Grant.
Upon acceptance of this Franchise by Grantee, the Franchise granted pursuant to
Ordinance No. . passed and adopted on the day of ,
19_ to, Triax Midwest Associated, L.P., is hereby replaced and superseded by the
provisions of the Ordinance, subject to the terms and conditions of this Agreement. 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 and Renew Franchise.
Grantee acknowledges and accepts the right of Grantor to issue and/or renew 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 of Renewal.
The renewal of 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 renewal of 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 renewal of the Franchise provided for herein to be null and
void.
175312/1
2
2.4) Term.
The term of the Franchise renewed 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 renewed 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.
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 renewal 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 # MN0569) for the preceding calendar quarter and such other relevant facts as may
175312/1
3
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 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.
175312/1
4
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 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 limited to, protection against claims arising from bodily and
personal injury and damage to property, resulting from Grantee's vehicles, products and
operations. The amount of insurance for single 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.
(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 will be no greater than the increase in the State of Minnesota Consumer Price
Index (all consumers) for such three (3) year period.
175312/1
5
(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 under Section 1.26 of
the Ordinance, Grantee shall indemnify, defend and hold Grantor, its officers, boards,
commissions, agents and employees (collectively 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 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 renewed 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 shall 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 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 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 shall 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.
175312/1
6
3.7) Grantee's Insurance.
Grantee shall not commence any Cable System reconstruction 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
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 Five Thousand Dollars ($5,000) and shall 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 upgrade and/or rebuild 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
Five Thousand Dollar ($5,000) 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 unilaterally 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.
175312/1
7
S555A - Limitations of Franchising Authority Liability - which is hereby incorporated by
reference as if fully 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 shall 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 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 upgrade and/or rebuild completion
schedule provided in Section 4.1 herein, and up to One Hundred and Seventy-Five 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 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 utilizing the format outlined in Exhibit F attached hereto.
SECTION 4.
DE.5IGN PROVISION
4.1) Minimum Channel Capacity.
(a) On or before December 31, 1998, Grantee shall develop, construct and
operate within the City a 750 MHz fiber/coaxial hybrid cable system which shall be
175312/1
8
capable of delivering a minimum of eighty (80) video program channels and which shall
initially deliver to all subscribers capable of receiving said channels a minimum of sixty
(60) 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. 99 531-536, and subject to City's rights pursuant
to 47 u.s.c. 9 545. Grantee shall conduct programming surveys from time to time to
obtain input on programming decisions from Subscribers.
4.2) System ~esign.
(a) The System required herein will be engineered and built to provide a
minimum of eighty (80) channels using a 750 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. In
those residential areas where fiber optic cable will be deployed, the system shall
incorporate multiple strands of fiber and serve an average of five hundred (500) 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) Grantee shall only be authorized to construct a cable system with eight fiber-
optic pairs to each node and a total of 154 fibers throughout the system.
(c) On or about thirty (30) days prior to construction of the upgraded system,
affected subscribers will receive a letter notifying them of same. Approximately forty-eight
(48) hours before construction, all affected houses will receive door tags notifying them of
Grantee's construction schedule. 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.
175312/1
9
4.4) 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.
4.5) FCC Reports.
The results of tests required to be filed by Grantee with the FCC shall also be copied
to City.
4.6) 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.
,4.7) 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.
4.8) Technical Standards.
Grantee shall, at a minimum, c;.omply 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.
175312/1
10
4.9) 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.
4.10) 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 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 4.10.
(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 (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 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 fully 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, that the requirements of
the System or this Agreement should be updated, changed or revised, and/or that
additional services should be provided by Grantee (collectively 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.
175312/1
11
SECTION 5.
SERVICES AND PROGRAMMING
5.1) Services and Programming.
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 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.
(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 c:able 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. 9 238.084,
Grantee shall provide and make available for public, educational and governmental (PEG)
access usage within the Service Area the following:
175312/1
12
(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 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 publ ic
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
175312/1
13
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 shall in any way prevent Grantor from regulating any
rates charged by Grantee. If Grantor elects to so regulate, Grantor shall follow the
procedures outlined in Section 1.19 of the Ordinance or Applicable Laws.
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)
TRIAX MIDWEST ASSOCIATES, L.P.
Dated:
By:
Its:
(CORPORATE SEAl)
175312/1
14
STATE OF MINNESOTA )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me on
, the of the City of
, 1 9 , by
, on behalf of the
City.
Notary Public
STATE OF MINNESOTA )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me on , 19_, by
, the of Triax Midwest Associates, L.P. on behalf of the
Company.
Notary Public
175312/1
15
EXHIBIT A
OWNERSHIP
TRIAX MIDWEST ASSOCIATES, L.P.
is a [wholly owned subsidiary of parent name].
175312/1
A-1
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175312/1
EXHIBIT B
FRANCHISE FEE PAYMENT WORKSHEET
Triax Midwest Associates, L.P.
Date
(Chanhassen)
Subs
Franchise Fee: 50;0 Gross
, 1998
Revenue Source
Basic
Pay
Tier
Advertising and Pay-Per-View
Other
Total $
B-1
ARniuR ANDERSEN LLP
REPORT OF INDEPEND1=:NT PUBLIC ACCOUNTANTS
To Triax Midwest Associates, L.P.:
We have audited, in accordance with generaDy accepted auditing standards, the balance sheet ofTriax
Midwest Associates, L.P. (the "Partnership.) as of December 31, '1995, and the related statements
of operations. partners' deficit and cash flows for the year then ended, and have issued our repon
thereon dated April 9, 1996.
In connection with our audit, nothing came to our attention that caused us to believe that (a) the
Partnership. was not in compliance with any of the terms, covenants, provisions, or conditions of
Aniele VI Section 4B of the Cable Television Franchise Ordinance, dated April 18, 1984 between
the C"tty ofChanhassen, Minnesota, and the PartDelsbip, iusoDr IS they relate 10 """"unting matters,
aItbough OUT audit was not directed prlmariJy loward obtaining knowJedge of such noncompliancc,
and (b) the information set forth and as defined in the accompanying ExIu"bit I is not fairly stated, in
all material respects, in relation to the financial statements from which it has been derived.
This report is intended solely for the information and use ofth. management of the Partnership and
the City of Chanhassen, Minnesota, and should not be used for any other purpose.
Denver, Colorado,
Apri19, 1996.
p.. ~ l.L~
City of Chanhassen, Minnesota
EXHIBIT I
Basic Revenues
Tier Revenues
AlO Revenues
Late Charge
Guides
Equipment
Install
HBO
Showtime
TMC
Cinemax
Disney
DCR
PPV .
. Encore
Home Wiring
Starz
Sega
Advertising
HSN Commission
Gross Revenues
Franchise Fee Rate
Payments Made Within 90 Days of
December 31,-1995
$ 359,794
398,790
1,793
25,652
335
8,089
13,257
59,238
21,925
8,129
18,270
10,904
1,830
4,317
26,232
521
3,263
934
15,352
1.808
$ 980,433
5%
$ 49 022
$ 49 022
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, GOVERNMENTAL AND EDUCATIONAL ACCESS
175312/1
C-1
Check
Where
Applicable
Check
Where
Aoplicable
4. CUSTOMER SERVICE
Customer service requirements complied with
Summary of complaints (attached)
System outages summary (attached)
Description of new customer services, promotions (attached
5. FILINGS WITH FCC
Summary of all filings with FCC described in attachment
6. PERFORMANCE TEST IN FRANCHISE COMPLETED
Summary of performance test results (attached)
7. FRANCHISE FEE PAYMENTS MADE (ATIACH COMPLETED
FRANCHISE FEE PAYMENT WORKSHEETS - EXHIBIT B TO
FRANCHISE AGREEMENT)
8.
9. COMPLETION OF CONSTRUCTION
Upgrade/rebuild (summary attached)
175312/1
C-2
Check
Where
Aopl icable
New technologies incorporated into System
Channel capacity increased
Service extended to new areas
Other
10. NEW SERVICES
No Changes
Services other than programming made available in the subscriber
network (summary attached)
11. 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
12. OTHER PERFORMANCE HIGHLIGHTS OR PLANS TO BE
INTRODUCED WITHIN THE NEXT TWELVE (12) MONTHS
(SUMMARY ATTACHED)
Dated this _ day of
Officer of 0
,19_, by
, a duly authorized
City of
, Minnesota Verification:
The above Ann'ual Performance Review has been filed by Triax Midwest Associates, L.P. 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 , 19_.
175312/1
C-3
THE CITY OF
, MINNESOTA
Dated:
By:
Its:
175312/1
C-4
EXHIBIT D
CHANNEL LINE-UP
Service
Description
Rate!
Charge
175312/1
0-1
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 (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 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. S 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.
S 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.
175312/1
E-1
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 otherwise
acquired pursuant to the previous Chanhassen franchise Ordinance No. ----:.
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-1 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 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 Grant~e shall provide the same service to such new public
building as required in this paragraph (a).
E-2.
(b) Two-way capability shall be provided to the public buildings listed in Exhibit
175312/1
E-2
6. PEG ACCESS OPERATING SUPPORT.
Grantee shall also collect on behalf of City a per Subscriber fee of eighty-four cents
($.84) per month solely to fund public, educational and governmental access -related
expenditures (hereinafter "Access Operating Fee"). The Access Operating Fee may be
adjusted by the City during the term of this Franchise on or about the fifth and tenth
anniversary dates upon ninety (90) days advance written notice to Grantee in an amount
equal to the cumulative increase in the consumer price index (CPI) during the pre!:eding
years. In the event Grantee becomes subject to "effective competition" as defined by
Applicable Law, from another Multi-Channel Video Programming Distributor, the Access
Operating Fee shall, following ninety (90) days written notice to City, be reduced to the
level of expenditure at which the multi-channel video Programming Distributor, is
obligated or fifty cents ($.50) per subscriber per month, whichever is greater.
175312/1
E-3
EXHIBIT El
SERVICE TO PUBLIC FACILITIES
1. PUBLIC BUILDINGS:
CITY OF CHANHASSEN, MINNESOTA BUILDINGS;
City Hall
Fire Station
Public Works
Chanhassen Recreation Center
Other:
690 Coulter 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
Chanhassen Elementary School
St. Hubert's Catholic Church School
Minnetonka Middle School - West
2300 Coulter Blvd.
7600 Laredo Drive
8215 Main Street
6421 Hazeltine Blvd.
175312/1
E 1-1
EXHIBIT E2
1. 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 Coulter 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
Chanhassen Elementary School
S1. Hubert's Catholic Church School
Minnetonka Middle School - West
2300 Coulter Blvd.
7600 Laredo Drive
8215 Main Street
6421 Hazeltine Blvd.
175312/1
E2-1
EXHIBIT F
DESCRIPTION OF SYSTEM UPGRADE
[REMAINS OPEN-SUBJECT TO CHANGES
PROPOSED BY CITY'S ENGINEER]
TRIAX MIDWEST ASSOCIATES, L.P.
Chanhassen
The need for an enhanced network
Triax Midwest Associates, L.P.'s (Triax) currently services the area, while still
functional, is operating near its designed channel capacity. In order to respond to requests
for additional services from our customers, it is necessary to increase the available capacity
of the system.
Beyond traditional cable television video service, there are a host of other services
that can be supported by an upgraded network. High speed data, Internet access, cost-
effective telecommunications across the network, and even telephony can be implemented
according to the needs of the communities served.
Along with the potential for increasing the number of services supported by the
network, increased reliability and picture quality will be major priorities. Individual
communities can be isolated on the network so that unexpected outages in one area do not
. affect several other areas, as is the case in many conventional coaxial cable television
systems.
The same techniques that allow additional signals to be carried, and keep service
interruptions to a minimum, provide an added benefit of improving the quality of pictures
seen by our customers. In every coaxial cable television system, picture quality is
degraded as the signal moves further out into the system, passing through amplifier after
amplifier. In an upgraded network, there are significantly less amplifiers between the
origination site and the customer, resulting in better picture quality regardless of where the
customer may be in the system.
What the new network will look like
The proposed upgraded HFC (hybrid fiber/coax) network will be designed to
operate with a bandwidth of 5 MHz to 750 MHz, with 50 MHz to 550 MHz being
allocated for 77 conventional analog channels. The remaining upper 200 MHz of
175312/1
F-1
bandwidth will be reserved for future use. Through the use of digital compression, many
channels can be carried in the same space as one analog channel. 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 utilizes spectrum from 5 MHz to 40 MHz, and 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 of locally-originated programming, monitoring of certain key
components in the network, and transmission of data from set-top terminals 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 500 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 to reach the limits of the community, while still maintaining
measurable picture quality better than current FCC requirements. "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.
Each customer will 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" 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 new 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.
The combination of optical transmitters and cables allow more reliable, higher-
quality pictures to be received in each- community. Earlier means of transmission,
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 storms, isolated outages, vandalism, and isolated equipment
175312/1
F-2
failure will have much less of an effect on the new network than on the coaxial system in
the past.
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 500 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 6 individual fibers to each node location.
Although it currently requires only one of these fibers 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.
Since most of the currently existing coaxial cable is still serviceable and electrically
sound, it will be reused along most of the coaxial portion of the network. Reuse of the
cable will, in many cases, eliminate the need for construction in residential areas, causing
fewer upgrade construction issues.
All of the electronic components in the existing coaxial system will be replaced with
new 750 MHz devices. This insures a complete 750 MHz network, and provides a simpler
construction solution should any future upgrade work be required.
The upgrade process
There will be a considerable amount of work required to upgrade the entire existing
system to the new network. Since the upgrade work will be performed on an already-
active system, care must be taken to keep customers and communities well-informed, and
service interruptions to a minimum.
The first step will be to install the fiber optic network alongside the existing coaxial
system. Normally, this work does not affect the operation of the existing system. In areas
where the cables are already carried on utility poles, the new fiber will be attached to the
existing cables yvere possible. In areas where existing cables are underground, additional
construction will be required to install the new fiber optic cables. Any new coaxial cable
required by the network design, in the path of the fiber optic cable, will be installed at the
same time.
175312/1
F-3
Once the fiber "backbone" is in place, the optical receivers are installed. The
optical system is then activated and tested. When testing of the optical network is
complete, then the upgrading of the coaxial plant in each community can begin.
When the coaxial plant is upgraded, each existing amplifier and distribution device
are removed, and replaced with a newer, 750 MHz device. The new equipment is
activated, and any customers served from that equipment are switched to the new
equipment. This process begins at the node, branching out through each leg of the coaxial
plant. It is this portion of the upgrade that causes several brief interruptions in service. As
the upgrade crews move further out into the coaxial system, fewer and fewer customers
experience the interruptions in service. When the upgrade of a node is finally complete,
all customers served from that node are now receiving service from the new network.
During the primary upgrade of each node, installation upgrade crews sweep
through the same area, inspecting each of the service lines that connect customers' homes
to the distribution system. Connections are checked, updated splitting equipment is
installed if necessary, and in some cases, the entire line is replaced. At this point, the
upgrade of that node is complete, and work moves on to the next node area.
Community access and use of the network
The upgraded network will allow for individual communities to produce their own
legal programming, and place it on an available channel on the system. Normally, 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
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.
175312/1
F-4
The converter system is controlled by a master computer connected to Triax's
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, 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 will not function properly if removed without
authorization.
Potential for future expansion
The upgraded 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.
175312/1
F-5
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Lake Minnetonka, MN System Upgrade Overview
~,
The need for an enhanced network
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Triax' system currently serving the area, while still functional, is operating near its
designed channel capacity. In order to respond to requests for additional services from
our customers, it is necessary to increase the available capacity of the system.
'.
rl'
t...,....<.
I-
r ..:..~
..,)
Beyond traditional cable television video service, there are a host of other services that
can be supported by an upgraded network. High speed data, Internet access, cost-
effective telecommunications across the network, and even telephony can be
implemented according to the needs of the communities served.
fl,
(lor'
"f' .
.' 'r
Along with the potential for increasing the number of services supported by the network,
increased reliability and picture quality will be major priorities. Individual communities
can be isolated on the network so that unexpected outages in one area do not affect
several other areas, as is the case in many conventional coaxial cable television systems.
The same techniques that allow additional signals to be carried, and keep service
interruptions to a minimum, provide an added benefit of improving the quality of pictures
seen by our customers. In every coaxial cable television system, picture quality is
degraded as the signal moves further out into the system, passing through amplifier after
amplifier. In an upgraded network, there are significantly less amplifiers between the
origination site and the customer, resulting in better picture quality regardless of where
the customer may be in the system.
What the new network will/ook like
The proposed upgraded lIFe (hybrid fiber/coax) network will be designed to operate
with a bandwidth of 5MHz to 750MHz, with 50MHz to 550MHz being allocated for 77
conventional analog channels. The remaining upper 200MHz of bandwidth will be
reserved for compressed digital signals. Through the use of digital compression, as many
as 12 channels can be carried in the same space as one analog channel. 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 utilizes spectrum from 5MHz to 40MHz, and will be activated on both the
coaxial and optical systems. The return system can be used to transmit both 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 for pay-per-view and other customer services.
1
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 500 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 to reach the limits of the community, while still maintaining
measurable picture quality better than current FCC requirements. "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.
Each customer will use an "addressable" set-top terminal to access programming carried
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 cOlu;ial plant in tlte nehvork
The optical transmission system will be the backbone of the new 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.
The combination of optical transmitters and cables allow more reliable, higher-quality
pictures to be received in each community. Earlier means of transmission, 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 storms, isolated outages, vandalism, and isolated equipment
failure will have much less of an effect on the new network than on the coaxial system in
the past.
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 500 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 6 individual fibers to each node location. Although it
currently requires only one of these fibers to provide all the programming required by the
2
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 remote monitoring
capability.
Since most of the currently existing coaxial cable is still serviceable and electrically
sound, it will be reused along most of the coaxial portion of the network. Reuse of the
cable will, in many cases, eliminate the need for construction in residential areas, causing
fewer upgrade construction issues.
All of the electronic components in the existing coaxial system will be replaced with new
750MHz devices. This insures a complete 750MHz network, and provides a simpler
construction solution should any future upgrade work be required.
The upgrade process
There will be a considerable amount of work required to upgrade the entire existing
system to the new network. Since the upgrade work will be performed on an already-
active system, care must be taken to keep customers and communities well-informed, and
service interruptions to a minimum.
The first step will be to install the fiber optic network alongside the existing coaxial
system. Normally, this work does not affect the operation of the existing system. In
areas where the cables are already carried on utility poles, the new fiber will be attached
to the existing cables. In areas where existing cables are underground, additional
construction will be required to install the new fiber optic cables. Any new coaxial cable
required by the network design, in the path of the fiber optic cable, will be installed at the
same time.
Once the fiber "backbone" is in place, the optical receivers are installed. The optical
system is then activated and tested. When testing of the optical network is complete, then
the upgrading of the coaxial plant in each community can begin.
When the coaxial plant is upgraded, each existing amplifier and distribution device are
removed, and replaced with a newer, 750MHz device. The new equipment is activated,
and any customers served from that equipment are switched to the new equipment. This
process begins at the node, branching out through each leg of the coaxial plant. It is this
portion of the upgrade that causes several brief interruptions in service. As the upgrade
crews move further out into the coaxial system, fewer and fewer customers experience
the interruptions in service. When the upgrade of a node is finally complete, all
customers served from that node are now receiving service from the new network.
3
After the primary upgrade of each node is complete, installation upgrade crews sweep
through the same area, inspecting each of the service lines that connect customers' homes
to the distribution system. Connections are checked, updated splitting equipment is
installed if necessary, and in some cases, the entire line is replaced. At this point, the
upgrade of that node is complete, and work moves on to the next node area.
Community access and use of the network
The upgraded network will allow for individual communities to produce their own local
programming, and place it on an available channel on the system. Normally, 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
transmit their own programming to only the residents of that community, if they desire.
The addressable converter system
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 Triax' 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, information about that transaction is immediately
transmitted to the network, and the customers converter receives immediate authorization
to receive HEO. The entire process takes just a few seconds, and the customer has
immediate access to the programming that was ordered, without the need to wait for a
visit from a service technician. Services can be added, changed, or removed in the same
manner.
4
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 will not function properly if removed without
authorization.
Potential for future expansion
The upgraded 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.
There will be further additional fibers at each of the four corners of the network, to
accommodate interconnection with other neighboring systems, communities, or
businesses, as needs arise.
". .:.
5
.
Frail): 'davld mackenzie To: Don Ashworth
Date: 1/16/97 Time: 09:53:55
01) /
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Communication Technologies
for
Cable Systems
Presented by:
David C. MacKenzie
incNE T, Incorporated
6458 City West Parkway
Suite 100
Eden Prairie, MN 55344
Voice: 612.943.3946
Fax: 612.942.6128
Email: david@incnet.com
January 16, 1997
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Page 1 of4
F;O~: devid mackenzie To: Don Ashworth
Date: 1/16/97 Time: 09:54:29
Page 2 of 4
Overview
The purpose of this presentation is to provide the participants with some
understanding of the technology and services which may become available over the re-
engineered cable system being proposed by Triax Cablevision - Minnesota. The following
gives a brief overview of what will be discussed.
Traditionally, the Cable Service Providers have delivered broadcast entertainment,
television and radio, to the home and office. During the first half of the 1990's
communication technologies have emerged that are expected to revolutionize the way we
are entertained and conduct business. One of the problems created by these technologies
is that they require a rebuilding of the communications infra-structure to be effectively
deployed on a large scale at an affordable price to the individual or business consumer.
Faced with the paradigm shift caused by the exponential growth in the use of the new
communications technologies Congress passed the Telecommunications Act of 1996.
The implementation of the Act is expected to ensure the rebuilding of the communications
infrastructure in this country and create new opportunities for the Cable Service Providers
to expand the services they deliver over their systems beyond their current entertainment
offerings.
The new services that will be deliverable over cable systems will include access to
the Internet, telephone service, video conferencing, corporate data communications,
sharing of educational resources, expanded entertainment offerings, online commerce and
other services yet to be imagined. The availability of these services will be vital for
community's seeking to attract and retain residents as well as businesses. Some of the
services can be utilized by the local governing bodies to improve the delivery of service to
their constituency.
The system upgrade being proposed by Triax has been discussed and reviewed
over the past several months with representatives of Triax, the City of Chanhassen, and
incNET, Incorporated. We have determined that Triax is proposing to build a system that
will be capable of delivering an expanding range of new services provided local demand
for those services justifies their implementation. The potential exists for immediate
improvements to the communications infrastructure of local government operations by
utilizing the proposed fiber-optic network to communicate by voice, video, and data
between government offices and operations facilities.
From,: davld mackenzie To: Don Ashwonh
Date: 1/16/97 Time: 09:55:19
Page 3 of 4
PRESENTATION OUTLINE
I. Introduction
1. Presenter
2. Technical Tenns and Statistics
II. Proposed System Upgrade
1. Type of System - Hybrid Fiber-Coax
2. Initial Limitations
3. Upgradeable Architecture
III. Communications Technologies for Cable Systems
1. Internet
2. Telephone Service
3. Video Conferencing
4. Corporate Data Communications
5. Sharing of Educational Resources
6. Expanded Entertainment Offerings
7. Online Commerce
8. Other Services
IV. Important Community Resource
I. Residents
2. Businesses
3. Local Government Operations
I <
Fro",: c'lavid mackenzie To: Don Ashworth
Date: 1/16/97 Time: 09:55:49
Page 4 of 4
I. Introduction
1. Presenter - David C. MacKenzie is the co-founder and President of incNET, Incorporated.
incNET, based in Eden Prairie, has been providing Internet access, solutions, and consulting
since September of 1994. During the past two plus years incNET has assisted in the
deployment of a state-wide Internet network through a consortium of independent rural
telephone companies as well as providing Internet solutions to metro area businesses, schools,
and organizations.
2. Technical Terms and Statistics - During the presentation we will try to limit the technical
jargon, however, some technical terms are necessary to the discussion. The following are some
of the terms which may come up, those terms not defmed here will be defmed as they are used:
Analog - Is a term used to describe the transmission of sound, data, or video using an electronic
wave signal.
Bandwidth - The range of transmission frequencies that a network can use. The greater the
bandwidth, the greater the amount of information that can travel on the network at one time. Data
networks measure bandwidth using the terms Kilobits Per Second (!<bps) and Megabits Per Second
(1vIbps). Cable systems measure bandwidth in KHz and MHz.
Digital - Is a term used to describe the transmission of sound, data, or video that has been converted
to binary code (O's & l's) to represent the information.
Internet - A worldwide, interconnected group of networks. Currently comprised of over 50,000
interconnected computer networks and 3 million dedicated computers that is accessed by over 50
million users worldwide. It is estimated that by the year 2000 there will be 5 to 10 times the current
number of users.
Protocols - The rules that govern interaction on a network. Protocols determine where, when. How
and in what format information is transmitted.
SONET - A set of standards that defme a hierarchy of high speed interfaces that support open
systems for public and private networks. SONET is not a service provided by carriers but rather an
infrastructure on which service is implemented.
Communication Statistics - To demonstrate the change in how we are communicating consider that
in 1991, voice accounted for 80% of a company's total network traffic with data at 20%. By 1994,
Data traffic rose to 35% while voice dropped to 65%. Industry analysts predict that by 2003 data
traffic will exceed voice and will account for 52% of a company's network traffic.
. FROM ·
05.05.1998 15:26
P. 2
LARKIN, HOFFMAN, DALY & LINDGREN, LTD.
ATTORNEYS AT LAW
Jane E. Bremer
DIR. DIAL (8H!) 8116.32117
E-MAIL JbremarGlhCll.oom
1 aoo NORWEST FINANCIAL CENTER
7eoo XEl\XES AVENUE SOUTH
BLOOMINGTON. MINNESOTA a54S1.11;4
TELEPHONE (812) 835.3800
FIIJI.. (612) 8e8.3333
May 5, 1998
DRAFT
Mr. Don Ashworth, City Manager
City of Chanhassen
690 Coulter Drive
P.O. Box 147
Chanhassen. MN 55317
VIA FAX (937-5739)
Dear Don:
On behalf of Triax Midwest Associates. L.P.. ("Triax"). we very much appreciate the hard work and
consideration given to us during the negotiation of the cable television franchise between the City of
Chanhassen and Triax. We are delighted to have the opportunity to continue working with the City of
Chanhassen.
The rebuild of the Chanhassen system is a top pl'iority for Triax. While our franchise agreement states
an eighteen month construction schedule from the Effective Date of the franchise, work has already
commenced on this rebuild. I have attached a preliminary schedule developed by the Construction
Management Department of Triax which indicates substantial progress toward the reconstruction of the
Chanhassen system has already begun. Further, I wish to assure you that we expoct and plan to use our
best efforts to complete this project as promptly as possible but felt that our legal commitment should be
somewhat cautious given the vagaries of Minnesota weather and the sometimes difficult permitting
process that we run into with state officials.
Again, we look forward to answering any questions you might have and are happy to have this
opportunity to continue working together.
Sincerely,
Jane E. Bremer, for
LARKIN, HOFFMAN, DALY & LINDGREN, Ltd.
cc: Paul Pecora
Tom Bordwell
Brian Grogan
JEB/dw
039S496.01
TRIAX Ceblevision
Lake Mmnetonlul System - Pre-construct;on Activities
The following items have already been completed or are in-progress:
. As-built mapping
Acquisition of base maps
Cleaning of base maps, plotting field copies
In-field survey of all existing facilities
Drafting of existing cable routes and equipment locations
. Warehouse setup
Locate warehouse
Hire warehouseman
Installation of shelving and material handling
Establishment of equipment receiving, handling, and shipping procedures
. Submission of Request for Proposals to equipment vendors. for architecture and cost
proposals
. Receive and evaluate RFP responses
. RF and optical equipment vendor selection
As of April 27, 1998, Triax has currently spent in excess of $40,000 on pre-construction
engineering activities for this project. We have committed to an additional $172,000 of
engineering work, which will take place during the remainder of 1998.
The following work is beginning:
. RF design
preparation of design criteria
Design calculations for the locations and operating parameters ofRF electronics
Posting ofRF design to maps
. Optical design
Preparation of optical loss budget
Calculation of optical splitter configurations
Transmitter selection
Posting of optical design to maps
. Construction contractor selection
Interview and establish a work agreement with an Installation contractor
Interview and establish a work agreement with a Construction and upgrade
contractor
Page 1 of3
TRIAX Ceblevision
Lake Murnetonka System - Tent/ltive Construction Schedule
Upon execution of a new franchise agreement, the following activities will begin:
Month 1
· Receive. review and approve the completed electronic design for the community to be
upgraded
Month 2
· Permits and Rights-of-Way
Contact local municipalities, obtain any permit requirements
Check for railroad, water crossing, or any other major permits
Gather any field data necessary to support permit applications
Submit required permit forms
Month J
· Purchasing
Prepare equipment orders from design Bill of Material
Months 4, 5 and 6
· Installation work
Upgrade service drops to each customer, to current Triax specifications
Replace service drops that are unable to be upgraded, as required
Momh 7
· Make applications for new power supply service connections to electric utility
· Receive initial shipments of fiber optic cable, hardware, and upgrade electronics
Month 8
· Power supply installation and activation by electric company
Momh 9
· Pre-construction meeting with all utilities
Page 2 of3
TRIAX Cablevision
Lake M;nnetonka System - Tentative Construction Schedule (continued)
Month 10 through 13
. Optical transport backbone construction
Install fiber optic cable from headend to OTN locations
Install the OTNs
Fiber optic splicing
Forward transport backbone activation and testing
Reverse transport backbone activation and testing
. Optical distribution backbone construction
Install fiber from OTN locations to individual nodes
Node installation
Fiber optic cable splicing
Forward node activation and testing
Reverse node activation and testing
Month 13 through 16
. RF plant upgrade
Install any new coaxial cable required by the design
Replace existing trunk amplifiers with new network amplifiers
Replace existing line extenders with new units
Replace existing passives with 750MHz devices
Replace existing customer taps with 750MHz taps
Activate the new forward RF equipment
Activate the new return RF equipment
Month 17, 18
. Acceptance testing of upgraded node, forward and reverse paths
. Connection of communities' local origination equipment to the reverse path
Page 3 of3
MOSS & BARNETT
A PROFESSIONAL ASSOCIATION
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Franchise Renewal Process
. Governed by federal law
. Formal process
- Structured timeframes
. Informal process
- Parties agree on process
Formal Process
. Six month notification window
- 36-30 months before franchise expires
. Needs assessment
- Must initiate within 6 months
- Identify cities' future needs
- Review Triax's past performance
1
MOSS & BARNETT
A PROFESSIONAL ASSOCIATION
Formal Process
. Triax submits proposal
. City has 4 months to decide
. Denial = administrative hearing
- Compliance with franchise
- Quality of service
- Legal, tech., fin. qual.
- Reasonableness of proposal
Informal Process
. Parties agree on process
. No timeframes involved
. Denial does not affect formal process
2
MOSS & BARNETT
A PROFESSIONAL ASSOCIATION
Letter Operator's
Requesting - Needs ~
Renewal Assessment Proposal
Decision Based Preliminary
Denial
on Preponderance
of the Evidence
t Ir
Judicial ... Final - Administrative
Review Denial Hearing
Informal Renewal Process
Renewal
Informal Negotiations
Back to
Formal Process
3
MOSS & BARNETT
A PROFESSIONAL ASSOCIATION
Typical Work Plan
. Compliance with franchise
- Prepare compliance matrix
- Meet with City representatives
- Brief review of franchise fee payments
Typical Work Plan
. Needs assessment
- Focus groups/ comm. leader surveys
- Customer service review
- PEG access review
- Internet applications
- Institutional services
4
MOSS & BARNETT
A PROFESSIONAL ASSOCIATION
Typical Work Plan
. Preparation of model documents
- Regulatory ordinance
- Govern all video providers
- Uniform regulatory plan
- Franchise agreement
- Unique Triax issues
- Incorporates ordinance requirements
Typical Work Plan
. Negotiation assistance
- Based on detailed needs assessment
5
Regulatory Ordinance
Topics
Intent
DefinItions
Franchise To Install And Operate
Franchise Required
Term Of The Franchise
Franchise Territory
Federal, State And City Jurisdiction
FrancWse Non-Transferable
City's Right To Purchase System
Purcha.c;e By City Upon Expiration Or Revocation
Emergency Use
Geographical Coverage
Nonexclusive Franchise
Multiple Franchises
Franchise Applications.
Consideration or Initial Applications
Frunehise Renewal
Consumer Protection And Service Standards
Rate Regulation
Franchise Fee
Design And Construction Requirements
Technical Standards
Trimming Of Trees
Use Of Grantee Facilities
Programming Decisions
Indemnification
rnsurance
Records Required And Grantor's Right To Inspect
AJIDual Reports
Franchise Violation
Force Majeure; Grantee's Inability To Perfoml
Abandonment Or Removal Of Franchise Property
Extended Operation And Continuity Of Services
Receivership And Foreclosure
Rights Reserved To Grantor
Rights or Individuals
Conflicts
Severability
323 I 7/_XPO 1I.00C
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Franchise Agreement
Topics
GENERAL PROVISIONS
Definitions.
Written Notice
RENEWAL OF FRANCHISE
Grant.
Right of Grantor to Issue and Renew Franchise.
Effective Date of Renewal.
Term.
Franchise Not Exclusive.
Conflict with Cable Ordinance.
Ownership of Grantee.
GENERAL REQUIREMENTS
Governing Requirements.
Franchise Fee.
Not Franchise Fees.
Recovery of Processing Costs.
Liability Insurance.
Indemnification.
Grantee's Insurance.
Workers' Compensation Insurance.
Security Fund.
Procedure for Enforcing Franchise Agreement.
Reservation of Rights.
Annual Report.
SYSTEM UPGRADE
Upgrade.
Future System Modifications.
Emergency Alert Capability.
Stc.'\ndby Power.
Parental Control Lock.
Status Monitoring.
Technical Standards.
Right of Inspection.
Periodic Evaluation, Review and Modification.
SERVICES AND PROGRAMMING
Services and Progl'amming.
32317/..XJlOI !.DOC
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Leased Channel Service.
Periodic Subscriber Survey.
SUPPORT FOR LOCAL CABLE USAGE
PEG Access Operating Costs.
Grantee Support for PEG Usage.
Institutional Network.
Compliance with Federal Law.
REGULATION
Franchise Regulation.
Force Majeure.
Rate Regulation.
EXHIBITS
Grantee's Ownership Infonnation
Franchise Fee Payment Worksheet
Corporate Guarantee
Annual Perfonnance Review Checklist
Services Offered By Grantee
Grantee Commitment To Peg Access Facilities and Equipment
Service To Public Facilities
Public Buildings To Be Provided With Free Cablo
Institutional Network Services
J2311,-XPOJ !.DOC
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