RES-8565 Approving Cable Television Franchise AgreementRESOLUTION NO. 8565
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF ORANGE APPROVING A CABLE
TELEVISION FRANCmSE AGREEMENT BElWEEN
THE CITY OF ORANGE AND TIME WARNER
ENTERT~NT-ADVANCEnNE~
OUSE PARTNERSHIP, A NEW YORK PARTNERSHIP,
DBA CABLEVISION OF
ORANGE.WHEREAS, pursuant to regulations of the Federal
Communications Commission, the City of Orange is authorized to enter into franchise agreements
with cable operators for the provision of cable service within the City;
and WHEREAS, in determining whether or not to renew a franchise, the City
is limited to the review offour criteria;
and WHEREAS, the City fmds that (1) Cablevision of Orange has
substantially complied with the existing franchise; (2) its quality of service has been reasonable; (
3)it has the financial, legal and technical ability to provide cable service and (4)
the proposed franchise is reasonable to meet future cable-related interests and needs
of
the community.NOW, THEREFORE, BE IT RESOLVED by the City Council of the
City of Orange
as follows:That the Cable Television Franchise Agreement attached hereto is
approved and shall become effective on January 1, 1996, upon issuance of a
written acknowledgment by the City Attorney attesting that all required documents have been provided
to
the City.Adopted this 12th day of
December
1995.ATIEST:
hf"_7 City Clerk of Ity
I hereby certify that the foregoing Resolution was duly and regularly adopted by
the City Council of the City of Orange at a regular meeting thereof held on the
12th th of December, 1995, by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
MURPHY/BARRERA/MAYOR COONTZ/SPURGEON/SLATER
NONE
NONE
NONE
Reso. No. 8565 DAD:ld
CABLE TELEVISION FRANCHISE AGREEMENT
This Agreement between the City of Orange ("City") and Time Warner
Entertainment-AdvancelNewhouse Partnership, a New York Partnership, dba
Cablevision of Orange ("Gnntee") is entered into to be effective as of January I, 1996, (
hereinafter referred to as "
Agreement").Section
I:
Sectionll:Section
ill:Section
IV:Section
V:Section
VI:Section
Vll:Section
vm:Section
IX:Section
X:Section
XI:
SectionXll:
Sectionxm:Section
XIV:Section
XV:Section
XVI:Section
XVll:Section
xvm:Section
XIX:Section
XX:Section
XXI:Section
XXll:Section
xxm:Section
XXIV:Section
XXV:Section
XXVI:Section
XXVll:Section :
xxvm:Section
XXIX:
INDEX
Intent
Definitions Nature and Extent of
Gnnt Duration of
Gnnt Limitations Upon
Grant Rights Reserved to
City Franchise
Fee Customer Service
Standards Technical
Standards Rate
Review
Programming Services to City and
Schools Institutional
Network Use of City
Streets Failure to Perform Street
Work
Undergrounding ConstIUction
Standards Approval of Construction
by C~; Ins~on; Correction
m Defects in System; Breach
or Default by
Gnntee Inspection of
Facilities Subscriber Satisfaction
Surveys Identification
Required Procedure for
Remedying Franchise
Violations Review and
Update Auditing and Financial
Records Right to Purchase
System Alternative
Remedies
Non-Enforcement
Franchise Renewal
Financial
Obligations
2
2
5
7
10
12
13
14
15
16
16
16
17
21
21
22
22
22
22
23
23
23
23
25
25
25
26
Section XXX:
Section XXXI:
Section XXXII:
Indemnification by Grantee
Grantee Insurance
Compliance with City, State and
Federal Laws
Acts of God
Separability
27
28
29
Section XXXIII:
Section XXXIV:
29
29
Section I: Intent
The City of Orange ("City") finds that the development of cable television and
communications systems has the potential of having great benefit and impact upon its
residents. Because of the complex and rapidly changing technology associated with cable
television, the City 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 grant of a cable
television franchise to further the public interest in these matters.
Section II: Definitions
For the pmposes of this Agreement the definitions contained in the Franchise Ordinance
shall apply. The following additional terms shall be defined as follows:
A. "Affiliate" means any person or entity which directly or indirectly owns or
controls Grantee, any person or entity which Grantee directly or indirectly owns or which
it controls, or any person under common ownership or control with Grantee.
B. "Basic Cable Service" shall have the meJlning provided in Federal law and Federal
Communications Commission regulations.
C. "Cable Act" means the Cable Communications Policy Act of 1984, as amended by
the Cable Television Consumer Protection and Competition Act of 1992, and as they may
be subsequently amended.
2
D. "Cable-Mile" means a linear mile of cable bearing strand or
trench.E. "Ciible Service" means one-way transmission to subscribers of
video programming or other programming service and subscriber interaction, if any, which is required
for the selection 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 Federal
Communications Commission.G. "City" means the City of Orange, and all the territory within its present
and future boundaries and including any area over which the City exercises jurisdiction.
The City Council is the legislative authority of
the City.H. "Communitv Video Advisory Board" means representatives from
the community selected by the City Council to perform the various functions set forth in
the Franchise Ordinance and as may be desigrll.ted to it from time to time by the
City Council.I. "Distribution Facilities" means non-subscriber specific
cable equipment including trunk and distribution lines, excluding drop lines
to specific locations.J. "DWelline: Unit" means any building or portion thereof which
is designed, built,rented, based, let or hired out to be occupied and which is occupied
as
a residence.K. "Federal Communications Commission or FCC" means the present
Federal agency of that name as constituted by the Communications Act of 1934, or any
successor agency created by the United
States
L. "Franchise Ordinance" means the ordinance contained in Chapter 13.80 et seq., of
the City's Code and as may be amended. The Franchise Ordinance sets forth the
minimum conditions and obligations of Grantee. In the event of any-oonflict between
the terms of this Agreement and the Franchise Ordinance, the terms off this Agreement
shall control to the extent it does not violate state or federal law, prclvided that City
may unilaterally adopt additional requirements if federal or state law authorizes such
unilateral
changes.M. "Gross Annual Revenue" or "Gross Annual ReceiDts" means all revenue,
as determined in accordance with generally accepted accounting principles, and
including the fair market value of any non-monetary compensation which is received,
directly or indirectly, by Grantee from or in counection with the distribution of any service
on the cable system or the provision of any service related activity in connection with
the cable system, whether or not authorized by this franchise. It shall also include
any revenue received through any means which is intended to have the effect of avoiding
the payment of compensation which would otherwise be paid to the City for the franchise
granted by this Agreement. It shall also include any bad debt recovered and
advertising revenue which is received directly or indirectly by Grantee, in connection with the
distribution of any service over the cable system or the provision of any service related
activity in connection with the cable system. Gross Annual Revenue shall not include
the revenue of any person to the extent the revenue is also included in the Gross Annual
Revenue of Grantee or taxes on subscribers which Grantee is required to collect: Grantee
and City disagree on whether monies paid as a franchise fees should be included as
Gross Annual Revenue, but agree to be bound by any controlling law, regulation 'Or court
decision in
this regard N. "Interactive Service" means two-way communications
between
and the system headend or hub.
O. "Public. Educational or Government Access or 'PEG' Access" means
programming, channel capacity, facWties and equipment desigJIllted for public, education
or governmental use.
P. "Redeveloument A~encv" means the City of Orange Redevelopment Agency.
Q. "School" means any accredited primary and secondary public school. college and
university.
R. "Suecial Service Areas" means those areas which do not have 20 residential units
per cable mile (or any proportionate amount, measured over a shorter distance). In the
case of predominantly commercial areas, special service area shall mean those areas
which do not have 20 businesses and/or residential units per cable mile willing to
subscribe in advance to Grantee's cable services for at least a 12-month
period.Section ill: Nature and Extent of
Grant A The franchise granted by this Agreement to Grantee, constitutes authority to
use the public streets, other public right-of-ways or public places in the City, to
engage in the business of constructing, o~ operating and maintaining a
cable television system within the franchise area subject to all of the terms and conditions
contained in this Agreement and the Franchise Ordinance in order to provide cable service
and such other services as Grantee may lawfully provide. Pursuant to such
authority, until lawfully revoked, Grantee may construct, maintain and operate wires,
cables, poles, conduits,manholes and other television conductor and equipment necessary
for the maintenance and operation of a cable television system. This Agreement shall not,
except as otherwise provided herein, in any way, impact any rights the City now has to
regulate
Grantee shall provide written notice to the City at least thirty (30) days before
commencing the offering or distribution of any non-cable service. City and
Grantee expressly reserve the right to seek judicial determination of whether or not any
particular service offered by Grantee on its cable system constitutes cable service for purposes
of the
Agreement.
r B. Grantee shall extend its cable system and make cable service available to
every residential area within the franchise area which is unserved by another cable
system whenever density of at least 20 dwelling units per cable mile (or any
proportionate amount thereof measured over a shorter distance) is realized, as measured from
the existing facilities of Grantee's cable system in the franchise area. Density per cable
mile shall be computed by dividing the number of residential dwelling units in the area by
the length, in miles or fractions thereof: of the total amount of aerial or underground
cable necessary to make service available to the residential dwelling units in such area
in accordance with the system design parameters. The cable length shall be measured
from the nearest point of access to the then existing system, provided that extension
is technically and otherwise feasible from that point of access. The total cable length
shall exclude the drop cable necessary to serve individual subscriber
premises.C. Grantee shall make cable service available to any business in a special service
area if the business subscriber agrees to pay for the labor costs incurred and materials used
in rnalcing the
extension.D. In any residential area that is unserved by an existing cable system and has
fewer than 20 dwelling units per cable mile (or any proportionate amount thereof measured
over a shorter distance), Grantee shall extend its cable system and make cable service
available in such area upon request, provided that the residents of such area agree to pay
the incremental difference in cost, including labor and material, between Grantee's costs
per
subscriber, based on 20 dwelling units per cable mile and the costs per subscriber where
subscribed commitments are less than 20 per cable mile, including cost of inter-
connecting trunkline. Grantee shall be responsible for the percentage of the total costs
incurred which equals the number of residents agreeing to pay for a portion of the costs
divided by 20. For example, if there are five such persons, Grantee's share would be
5/2Oths of the cost. The remaining costs shall be borne on a pro-rata basis by
each subscriber. If additional residents move in and request cable service within two years
of Grantee's initial provision of the cable service in areas with less than 20 dwelling
units per cable mile, Grantee shall adjust the amount owed by each resident in accordance
with the formula set forth in this paragraph and shall reimburse residents who paid more
than their proportional
share.Section IV: Duration of
Grant A. The franchise shall become effective upon January 1, 1996, once there has been
an issuance of a written acknowledgment by the City Attorney attesting that the
following documents have been provided to the City, or acts completed by the Grantee, in a
form acceptable to the City Attorney and shall continue in force and effect for eight years
from that date unless extended as set forth in paragraph C
below.1. All bonds, insurance policies, and security deposits required by
the Franchise Ordinance and this
Agreement;2. Grantee's agreement to be bound by and to comply with and to do all
things required by the provisions of the Franchise Ordinance and this Agreement.
Such acceptance and agreement shall be acknowledged by Grantee before a
notary public and shall be in a form and content satisfactory to and approved by the
City
Attorney.
3. Evidence satisfactory to the City Attorney that the person signing on behalf
of Grantee is authorized to do so.
B. Grantee has represented that it intends to upgrade its cable television system in the
following manner:
1. Grantee's cable television system will be upgraded to a fiber backbone with
a dedicated single mode fiber running downstream from the headend to each node
in the system which will support an average of 500 passings per node. Two fibers
will initially be activated at 1310 nm wavelengths. One will provide services from
the headend to the subscribers and the other will be used for upstream interactive
services from each subscriber and status monitoring at electronic equipment
locations for performance measurements. All fibers to each node will be spliced
and tested at both wavelengths (1310 nm and 1550 nm) when the plant is initially
activated.
2.
The coaxial cable plant will be activated 54 MHz through 750 MHz downstream.
This system will be capable of providing: (1) downstream (54 MHz through
550 MHz) 77 analog television channels; (2) audio, data. status monitoring
and control signals; (3) 550 MHz through 750 MHz digitally transmitted
services (such as compressed television, digital audio, etc.); and (4)upstream
capacity (5 MHz through 40 MHz) capable of retrieving audio data. and monitoring
and controlling responses from the customers' and system's equipment.c"*
3.
The system will be upgraded using jacketed aluminum shield coaxial cable and
the newest state of the art amplifiers with power doubling hybrid chips which provide
the highest output power with the least distortion. All coaxial cables,8
directional taps and power dividers will be capable of carrying services to 1 GHz.
Should the subscribers require additional bandwidth for new services in the future,
this system will allow cost-effective expansion with minimum disruption
to customer services during any future upgrade
process.4. Initially, analog addressable set-top terminals, capable of
receiving and processing 77 television channels, will be made available to subscribers.
The set-top terminals planned for the system upgrade will have the
following basic
features available:a) capability to receive 77
analog channels;b) two-way addressable "ordering with
a remote control";c) full
function remote control;
d) volume control;e) on-screen
display with menu selections;
t) channel program guide;g) individual messaging with turn
off message system control;h) VCR
timer and sleep timer;i) parental
control on all channels;j)
switched convenience outlet; and
k) converter by-pass switch.S. The cable system will meet or exceed all parts of
Section 76.605 of the FCC's technical performance standards. The system will be
designed and set up to provide greater than 0 dbmv of signals on all
video channels at the subscribers'terminals of no more than two active outlets. A
subscriber
RF
two-way amplifier to provide adequate signals to three or more additional
outlets at the subscriber's terminal.
6. Grantee may modify the technical requirement specifications set forth in
this Agreement, provided that such modifications shall not adversely affect the
technical quality of the system.
7. A standby generator will be installed at the cable system's headend to
sustain services to subscribers in the event of a utility power loss. Standby power
supplies, with a minimum of 1.5 hours of standby time, will be provided to all
parts of the plant.
C. Should Grantee complete construction of the upgraded fiber backbone cable
television system as set forth in paragraph B of this section within three years of the
effective date of this franchise, then this franchise shall be extended for an additional
seven years. City is not requiring Grantee to construct the upgraded fiber backbone cable
television system as a condition of this franchise, but City agrees to grant the seven-
year extension contained herein should Grantee determine to undertake such construction
and complete it within the time specified. Grantee shall submit a report to City
evidencing that the upgrade has been completed in accordance with paragraph B above and
within the time specified. In no event shall construction of the fiber optic system upgrade
take longer than three years from the effective date of this franchise or commence more
than two years from the effective date of this franchise. Failure to complete
construction within two years from the date construction commences shall be deemed
non-compliance with this paragraph and Grantee shall not be entitled to a franchise term of
greater than eight years. Grantee shall notify City of both the time of commencement
and completion of the fiber optic
system
upgrade.
Section V: Limitations Uoon Grant
A. No privilege or exemption is granted or conferred by this Agreement except as
specifically prescribed herein.
B. The franchise granted by this Agreement is a personal privilege to the Grantee. It
may not in any event be sold, transferred, leased, assigned or disposed of as a whole, or
in part, either by forced sale, merger, consolidation, opemtion of law, or otherwise,
without the prior consent of the City expressed by resolution, and then only under such
conditions as may be prescribed in the Franchise Ordinance. However, no such consent
shall be required for a transfer in trust, mortgage, or other hypothecation, as a whole, to
secure an indebtedness or for transfer to an entity under common control with Grantee.
The requirements of this subsection shall apply to any change in control of Grantee. The
word "control" as used herein is not limited to major stockholders or partnership interests,
but includes actual working control in whatever manner exercised. In the event that
Grantee is a corporation, there shall be a rebuttable presumption of a change in control
where ownership or control of more than ten percent (10"10) of the voting stock of Grantee
is acquired by a person or group of persons acting in concert, none of whom own or
control fifty percent (50"10) of the voting stock of the Grantee as of the effective date of
the franchise, singularly or collectively.
C. Prior approval of the City Council, expressed by resolution, shall be required in
accordance with the Franchise Ordinance prior to any transfer. Any such acquisition
occurring without prior approval of the City Council shall be null and void and constitute
grounds for revocation of the franchise. Approval of any transfer request shall not be
deemed to constitute a waiver of any prior violations of this Agreement by Grantee. Any
subsequent Grantee which accepts the benefits of this Agreement shall be responsible for
correcting any previous violations by Grantee which have not been rectified at the time of
11
transfer and within the time period given the transferring Grantee to correct. Transfer
requests may be denied for reasonable cause.
D. Any privilege claimed under this franchise by Grantee in any public street or other
public property shall be subordinate to: (1) any prior or subsequent lawful occupancy or
use thereof by the City or any other governmental entity; (2) any prior lawful occupancy
c-
or use thereof by any other person; and (3) any public use thereon, whether created prior
to or subsequent to the granting of this franchise.
E. Grantee shall notify City in writing (in advance, if possible) of any foreclosure or
any other forced sale of all or a substantial portion of the franchise property or assets of
the Grantee, including action by an financial institution having a claim a8llin~t the
Grantee or its assets. Such notification shall be considered by City as notice that a
change in control of ownership of the franchise has taken place and the provisions under
this Section governing the consent of City to such change in control of ownership shall
apply.
F. At the time of filing a written request for any transfer, Grantee and transferee shall
provide City with all relevant information and documents regarding the transfer or its
potential impact on rates subject to the jurisdiction of the City including, but not limited
to, unedited and unredacted copies .of all purchase-sale documents with all exhibits
and schedules, pro forma information for the shorter of the remaining franchise term or
ten 10) years. relating tofutul"!;.financial performance under the transferee, audited
financial statements for the past three (3) years for the proposed transferee, and all parents of
the proposed transferee. To the extent permitted by law, City shall maintain
the confidentiality of any information which is reasonably designated as
confidential.
12
Section VI: Rights Reserved to City
All rights and privileges granted hereby are subject to the police power of the City to
adopt and enforce generally applicable local laws, rules and regulations nec.essary to the
health, safety and general welfare of the public. However, this shall not be deemed a
waiver by Grantee of any right to compensation or damages resulting from the City's
exercise of said power. Expressly reserved to the City is the right to adopt, in addition to
th.: provisions of this franchise and existing laws, ordinances and regulations, such
reasonable additional generally applicable laws and regulations as it may find necessary
in the exercise of its police power which are not materially in conflict with the privileges
granted in this franchise.
Section VII: Franchise Fee
A As compensation for the use of valuable public right-of-ways, and to
defray a portion of the costs associated with cable regulation during the franchise
term, Grantee shall pay the City five percent (5%) of the gross annual receipts it derives
from the provision of cable service. The franchise shall be read to prevent Grantee
from avoiding the provisions of this section by lease, contract or
other arrangement.B. Grantee shall not make any deductions from the franchise fee for costs
incurred in complying with any of the provisions of this Agreement or the
Franchise Ordinance.C. Within 30 days of the close of each of Grantee's fiscal years the City
shall be furnished a statement, either audited and certified by an independent
certified public accountant or certified by a financial officer of the Grantee, reflecting the
total
amounts I of gross annual receipts and all cOmputations for the period covered by
the payment.City shall have the right to conduct an independent audit of Grantee's records
which are reasonably necessary to compute the franchise fee. If such audit indicates a
franchise fee underpayment of three percent or more, the Grantee shall assume all costs of
the
D. Absent fraud or intentional misrepresentation or failure to provide the applicable
financial reports, acceptance of a franchise fee payment for more than four years after its
receipt shall amount to a release and accord and satisfaction as to a particular claim the
City
may have for additional sums payable. The Grantee shall maintain gross revenue records
for a minimum of five years.E.
Any delinquent franchise fee payment shall be subject to an interest charge of one and
one-half percent per month. In addition, failure to pay a franchise fee payment which
is due and payable within 15 days after receipt of notice of delinquency from the City
shall subject the quarterly payment to a five percent penalty.
F. The franchise fee shall be received by City within 60 days after the close of each
quarter of the Grantee's fiscal year. A franchise fee shall be considered delinquent on the
61st day after the close of each quarter of the Grantee's fiscal year.
G. The franchise fee payment is not a payment in lieu of any other tax, fee or
assessment
H. Each payment shall be accompanied by a detailed report stating revenues and
subscriber levels by category. The Director of Finance of the City and Grantee shall
agree upon the form of the report.
I. Should the maximum franchise fee permitted by state and federal law increase
beyond five percent (5%), the City may by Resolution of the City Council increase the
franchise fee to that maximum upon 45 days written notice to Grantee or as permitted by
such law, whichever is longer.
14
Section VIll: Customer Service Standards
Grantee shall comply with those customer services standards set forth in the Franchise
Ordinance and as may be amended from time to time as provided by federal or state law
or regulation.
Section IX: Technical Standards
A. Grantee shall construct, install and maintain its cable system in a manner
consistent with and in compliance with the Franchise Ordinance.
B. Grantee's cable system shall include an "Emergency Alert Capability" which will
pennit the City, in times of emergency, to simultaneously override by remote control, the
audio of all channels. The cable system shall include the capability to broadcast from the
City's headquarters for civil defense, disaster and emergency services. Grantee shall test
the emergency alert capability in March of each calendar year and provide a report to the
City summarizing the results of the test. City may, at its request, participate in such
testing. Grantee shall provide adequate training to designated City staff for utilization of
the emergency alert capability.
C. Grantee shall lease or sell to subscribers, upon request, an A-B switch
pennitting conversion from cable to antenna
reception.D. Grantee shall include equipment capable of providing standby power for
headend,transportation and trunk amplifiers for a minimum of1-1/2 hours. The
equipment shall be so constructed as to automatically notify the cable office when it is in operation
and to automatically revert to the standby mode when the AC power returns. The
system shall incorporate reasonable or generally used safeguards necessary to prevent
injury to linemen resulting from a standby generator powering a "dead"
utility
E. Grantee's cable television system may provide high definition television
programming as it becomes technically and commercially feasible. City may require,
upon request, as part of Grantee's semi-annual performance reports,
information concerning this
capability.
Section X: Rate Review
A Grantee sball submit all proposed rate increases for the basic cable service tier and
related equipment to the City in accordance with FCC regulations or as may be
prescribed by the City to the extent permitted by FCC regulations.
B. Grantee shall also notify the City of any proposed increase in rates for any cable
programming service, as defined by FCC regulations, 30 days in advance of any proposed
mcrease.
Section XI: Pr02r8IIllIling
Grantee sball provide on its cable system a variety of programming generally provided on
comparable cable systems and designed to meet the needs and interests of its subscribers
in Orange.
Section XU:
Services to the City and Schools Within six
months of the effective date of this Agreement and where applicable, within six months
of the completion of the fiber optic system upgrade, Grantee sball furnish and maintain at
its sole expense and without any deduction to the franchise fee or treatment as an external
cost in setting its rates pursuant to FCC regulations, the facilities and services set forth
in this section. Within seven months of the effective date of this Agreement or when applicable,
within seven months of the completion of the fiber optic system upgrade, Grantee
sball provide a written report to the City evidencing compliance with 16
this section. The facilities and services to be provided are as follows:
A. A standard drop and intemal wiring necessary for installation of cable service to
two television sets in each City and Redevelopment Agency facility within the franchise
area as designated in Attachm~t 1. City shall obtain or furnish to Grantee all necessary
easements and rights necessary to provide such service.
B. A standard drop and internal wiring necessary for installation of cable service to
two television sets at Chapman University, each public library, public school site, and
public school educational adminilltrative site within the franchise area, provided that each
entity obtains or furnishes to Grantee all necessary easements and rights necessary to
provide such service.
C. In the event that the City, Redevelopment Agency, Chapman University, public
library or any public school within the franchise area desires to have any non-
standard installation or more than two standard installations for cable television service
installed by Grantee, at any facility designated in Attachment 1, Grantee shall make
such connection or installations. Grantee may charge the actual costs of such connections
or installations. Installation of all such additional connections shall be completed within
60 days of receipt of a
request.D. Grantee shall not charge the City, Redevelopment Agency, Chapman
University,public library, or any school for delivering the basic service tier or preferred tier to
two television sets at any of the buildings described in subsections A, B or C of this
section.E. Grantee shall provide without cost, one channel to be programmed by and for
the use of the City for governmental programming. Grantee may place programming on
the chllnnel as long as such programming does not contain material which would
be
considered indecent or obscene. If City is not fully utilizing the governmental channel,
Grantee may file a written request with the Community Video Advisory Board for such
use 30 days prior to the proposed utili7-lltion. Grantee shall terminate such use upon
90 days written notice from City of City's intent to utilize previouslyunutili7.ed
programming time slots. Grantee may not move such channel without prior written approval of
City,which shall not be unreasonably withheld. If such channel is moved, Grantee
shall provide written notice to all subscribers of the move and its effective date. Advertising
is not permitted on such channels except for the pwpose of identifying sponsors of
the programming. The City shall save and hold harmless Grantee from any uses made by
the City in the distribution of
programming.F. Grantee shall provide, without cost, one channel for use by schools for
educational pwposes. Grantee may place programming on the channel as long as such
programming does not contain material which would be considered indecent or obscene, provided
that Grantee files a written request for such use with the schools. The schools shall act
upon such request within 30 days of receipt of such request. Grantee shall terminate
such programming within ninety (90) days notice by the schools of its intent to utili7,
e previously unused capacity. Grantee shall not move any educational channels
without
I :prior written notice to the schools. Advertising is not permitted on such channels
except for the pwpose of identifying sponsors of the programming. The schools shall save
and hold harmless Grantee from any uses made by the schools in the distribution
of
programming G. Grantee shall provide a local origination channel and agrees to carry
programming which receives grant money from tIle Community Video Advisory Board. Grantee
shall retain control over the times at which such programming will be
broadcast.H. Grantee shall provide on the government access channel without additional
cost,
an automated community bulletin board using communications from community groups
as well as schools and government. Communications on the bulletin board will be
exhibited in the language submitted, provided the equipment permits. Grantee shall not
place any programming on the community bulletin board without the prior written
consent of the Community Video Advisory Board. Grantee shall provide a character
generator and necessary connections to City for remote programming of bulletin board
channels.
I. Grantee shall provide at no cost throughout the year, a minimum of four two-
hour community video workshops within the franchise area to instruct interested
persons within the community in the use of equipment which is needed to produce
programs,including, but not limited to, cameras, editing equipment, lighting and video
tape machines. Such use is subject to rules and regulations adopted by the Community
Video Advisory
Board.J. Grantee shall provide a fully-equipped cablecasting and production
studio within the City of Orange with a lighting system, three cameras with tripods and
dollies, editing and switching equipment, plus playback equipment. Remote equipment shall
include two field cameras with VCRs, batteries and cases. A production truck equipped
with editing and switching equipment and designed for modulation of live programming
shall be available for PEG uses. Maintenance and repair of said equipment shall
be the responsibility of Grantee. All such equipment shall be provided at no cost to the
user and shall be used for the sole purpose of producing PEG
access programming.K. Grantee shall participate on the Community Video
Advisory Board.L. Grantee shall provide a $10,000.00 donation per year to encourage
public agencies and community members to produce programming. The distribution of this fund
shall
the responsibility of the Community Video Advisory Board.
Section
XIII; Institutional Network A.
At its option, the City may require Grantee to make available capacity on Grantee's cable
system to the facilities as described in Attachment I to be used by the City and/orpublic
schools as an Institutional Network ("I-Net"). If the City wishes Grantee to
provide the I-Net, it shall notify Grantee in writing no later than sixty (60) days from
the effective date of the Franchise. As part of such notification, the City shall advise
Grantee which of the sites listed on Attachment 1 are to be included on the
I-Net B. Within fifteen working days of such notification, Grantee shall provide to
the City an estimate of the cost of constructing the I-Net as set forth in this
section. Within fifteen working days of the receipt of such estimate, the City will
notify Grantee whether Grantee should provide
the I-Net facilities.C. The facilities and capacity provided pursuant to this Section shall
be used only for non-commercial public, educational and governmental
access purposes. In addition, the facilities provided pursuant to this Section may not be connected
with any site other than those locations specified in Attachment 1 and may not be used
to transmit or receive any communications in whatever fonn, whether video, audio data,
voice or otherwise to or from any place other than the locations specified
in Attachment 1, including. without limitatiOn, to any site outside the City, to any site used
for commercial purposes. or to any site which is a facility of a local or
long-distance telephone company without the consent of Grantee. However, nothing herein
will prevent the tpnlmli!:sion of information including video to or from
or connection with any communication or informational system of
a governmental or non-commercial educational entity.D. If the City wishes to transmit communications to
or
other site or system, Grantee may not refuse consent unless it is willing to provide such
technically equivalent transmission or connection at a charge no greater than that which
the City would pay any other party for such transmission or connection.
E. The cost of constructing and maintaining the I-Net shall be credited llgllinq
the
I franchise fee payments made by Grantee to the City pursuant to section VII. The cost
of installing the I-Net is the incremental cost to Grantee of installing facilities
required for the I-Net, i.e., capital costs incurred by Grantee which would not have
been incurred in the upgrade of the system pursuant to Section IV, but for the requirements
of the I-Net.Such deduction of the construction cost from the franchise fees shall
be prorated over the term. of the franchise or such other shorter period as determined
by the City. Such deductions shall include an amount to compensate Grantee for the time
value of money at a rate of
10 percent per annum.Section
XIV: Use ofCitv Streets A For the purposes of o~ and maintaining a cable
system in City, Grantee shall comply with applicable provisions of the Franchise Ordinance relating
to the use of and construction in
or on City streets.B. In order to minimi7'-C inconvenience to
subscribers, Grantee may perform maintenance work and construction work at hours when there
is less television viewing subject to the
City's reasonable approval.Section XV: Failure
to Perform Street Work Upon failure of Grantee, after reasonable notice to commence,
pursue or complete any work required by law or by the provisions of this Agreement to be
done in any street,within the time prescribed and to th~ satisfaction of the City, in the
sole discretion of theDirector of Public Works/City Engineer, such work may be done
by
contractor. Grantee shall pay all costs incurreJ by the City in performing such work
within 30 days after receipt of an itemi7.ed report of such costs.
Section XVI: Undemrounding
In all areas of the City where the cables, wires and other like facilities of a public utility
or public utility district are placed underground, Grantee shall construct and install its
cables, wires and other facilities underground in accordance with the Franchise
Ordinance.
Section XVII: Construction Standards
The Grantee shall adhere to those construction standards set forth in the Franchise
Ordinance.
Section xvm: AnDroval of Construction by City: Insoection: Correction of Defects in
System: Breach or Default by Grantee
Except for individual service drops, Grantee shall obtain all necesS8I}' permits from the
City prior to performing any construction. Grantee shall be able to make emergency
repairs as needed. The City shall have the right to inspect the construction, operation and
maintenance of the cable system by Grantee to insure the proper performance of the terms
of this Agreement
Section XIX: Insoection of Facilities
The Grantee shall permit the City to make inspections of any of the Grantee's facilities
and equipment relevant to the franchise at any time upon three days notice, or in a case of
emergency, upon demand.
Section XX: Subscriber Satisfaction SurveyS
Grantee shall conduct, at least annually, a subscriber satisfaction survey. The City may
22
add to this survey a reasonable number of cable-related questions which
concern Grantee's performance of the terms and conditions of this Agreement. The Grantee
shall provide the City with copies of the survey
results.Section XXI: Identification
Reauired Grantee shall provide its emplbyees, contractors and subcontractors with
identification for all individuals who may make personal contact with residents of the City.
The Grantee shall provide a list of current employees, contractors and subcontractors to
the City upon
request.Section XXII: Procedure forRemedvinl!: Franchise
Violations In the event that City determines that Grantee has violated any material provision of
this Agreement, City may make a written demand on Grantee that it remedy such
violation.The procedure for remedying such violations and the imposition of penalties,
therefore,
I up to and including termination shall be as set forth in the Franchise
Ordinance.Section xxm: Review and
UDdate A On or about the fifth anniversary of the effective date of the franchise
agreement,the City and Grantee shall hold a system and services review session. The purpose of
the review session shall be to study technological, economic and regulatory change in
cable communications; to assess cable system performance; to facilitate renewal procedures;
to promote the maximum degree of flexibility in the cable system; and to maintain
an advanced, modem economically viable
system.
I
i B. Topics for discussion and review at the system and services review sessions
may include, but are not limited to, new developments in technology; condition and
operation of equipment and facilities; compliance with the Ordinance and this Agreement;
services provided to subscribers, institutions and community groups; programming; rate
structure;
I
I
DIlIIket conditions; the tinancialcondition of Grantee; subscriber complaints; user
complaints; possible amendments to this Agreement; and developments in the law and
I
regulation. Either the Grantee or City may select additional topics for discussion.
C. City and Grantee shall discuss new developments and technology and the
desirability and feasibility of ini:orporating such new technological developments into the
cable system. Technical factors, regulatory environment, DIlIIket conditions and
economical viability shall be considered.
D. At the conclusion of such system and service review session, City shall issue a
report summarizing the discussions and setting forth its factual findings and specifying in
detail, any franchise and/or system modifications and/or amendments and/or
implementation plan which are determined appropriate by City. The Grantee shall submit
to City a plan and schedule for (i) the curing of any violations of this Agreement or the
Franchise Ordinance and (ii) the:: implementation of any modifications to the terms of this
Agreement. After mutual agreement to such plan and schedule by City and Grantee, this
Agreement shall be amended to incorporate the plan and a reasonable schedule for
improvements requested by City so long as the following conditions are met:
1. Said changes has been identified as a significant need in the Assessment,
I
2. The need(s) cannot be met at least as well by an alternative business or
commercial entity at a reasonable price;
3.
The present system cannot meet the specified need either as presently operating
or with some alternative modification consistent with this Agreement which
imposes a significantl~ lesser economic burden on the Grantee;24
4.
The change will meet the community need as defined in the Assessment and there
is market demand for the new services which would be implemented with the change;
5.
Said
change is technically feasible, will not impose an unreasonable financial hardship
on Grantee or otherwise prevent the Grantee from earning a reasonable return
on its investment in the City of Orange cable system at a reasonable and
competitive price in the time remaining in the tenD of this Agreement.Section
XXIV:
Auditine: and Financial Records A. During
the tenD of the franchise, the City may, not more frequently than once each year, conduct
an audit of the books, records and accounts of the Grantee for the purpose of detennining
whether the Grantee has paid franchise fees in the amounts prescribed by this Agreement.
The audit may be conducted by the City or by an accountant retained by the City,
and shall be conducted at the sole expense of the City, unless such audit reveals that Grantee
has underpaid franchise fees by three percent or more.B. Grantee
shall make available for inspection by authorized representatives of the City, Grantee'
s books. accounts, and all other financial records at reasonable times and upon reasonable
advance notice for the purpose of permitting exercise of the authorities conferred by
this Section.Section XXV:
Right to Purchase Svstem A. Upon
the revocation of the franchise or the expiration of the franchise term and denial of
renewal, and upon payment by the City to the Grantee, of the fair market value of the
Grantee's cable television system, the City may purchase, acquire, takeover, or hold said system.
For purposes of this Section, "fair market value" shall be determined by valuing the
Grantee's system as a going concern. No value shall be assigned to the 25
franchise
granted hereunder. Immediately upon a determination of revocation or expiration
of the franchise, the City and Grantee shall attempt to agree upon the fair marlcet
value of the system. However, if within a reasonable period of time they cannot agree
upon the fair marlcet valuation, then said valuation shall be determined by a three-member
board of appraisers, one selected by the City, one selected by the Grantee, and one
selected by the appraisers themselves. The cost of said appraisal shall be borne equally
by the City and Grantee. The determinAtion of the appraisers shall be subject to review
and/orappeal by a court of competent jurisdiction and nothing herein shall prevent
either party from seeking such review and/orappeal.Section
XXVI: Alternative Remedies No
provision of this Agreement shall be deemed to bar the right of the City or Grantee to seek
or obtain judicial relief from a violation of any provision of this Agreement or under other
laws unless the parties agree to binding arbitration. Neither the existence of other remedies
nor the exercise thereof: shall be deemed to bar or otherwise limit the right of the
City to recover monetary dAmAges.Section
XXVII: Non-Enforcement
Grantee shall not be relieved of any obligation to comply with any of the provisions of
this Agreement or any other law or regulation by reason of any failure of the City to
enforce prompt compliance.
Section XXVIII: Franchise Renewal
Franchise renewal procedures shall be those as established by federal law and as may be
amended or as otherwise agreed upon by City and Grantee.
26
Section
XXIX: Financial Obligations Grantee
shall secure a performance bond in the amount of $500,000 which shall remain in
full force and effect until thirty (30) days after completion of the cable system upgrade as
set forth in this Agreement. Grantee shall make a security deposit of $15,000 in accordance
with the Franchise Ordinance. The security deposit shall be placed in a separate
bank account accessible only by the City. All interest shall accrue to the benefit of
the Grantee and shall be payable to Grantee at the end of the franchise term.Section
XXX: Indemnification by Grantee A
Grantee shall, at its sole expense, fully indemnify, defend and hold hannless the City,
its officers, agents, employees, or contractors, from and llgainq any and all claims,i .
suits,
actions, liability and judgments which in any way arise out of the acts or omissions,whether
negligent or willful, of the Grantee, its officers, agents, employees or contractors.This
shall include, but not be limited to the following:1.
Actual or alleged injury or death to persons or property, including loss of I
use
of property due to an occurrence, whether or not such property is physically damaged
or destroyed;2.
Damages for invasion of the right of privacy, defamation of any person,firm
or corporation, or the violation or infringement of any copyright, trade mark,I
trade
name, service mark or patent, or of any other right of any person, firm or corporation;
and 3.
Any failure to comply with the provisions of any statute, regulation or ordinance
of the United States, State of California or any local agency applicable to
the Grantee in its busfuess.27
B. Nothing herein shall be deemed to prevent the parties indemnified and held
harmless from participating in the defense of any litigation by their own counsel at their
own expense. Such participation shall not, under any circumstances, relieve the Grantee
from its duty of defense 8gl1in!lt ,liability or of paying any judgment entered a llgllind; such
party.
Section
XXXI: Grantee Insurance A
As a part of the indemnification required by this Agreement, but without limiting such
requirements, Grantee shall file with the application, and at all times thereafter maintain
in full force and effect at its sole expense, an acceptable policy or policies of liability
insurance including comprehensive general liability insurance products/
completed operations liability, personal injury liability, owners and contractors protective
liability, broad form property damage, contractual liability, automobile liability owned;
non owned and hired automobiles), workers compensation and employer liability.
The policy or policies shall name the City, its officers, agents and employees as additional
insureds. The policy or policies shall contain cross-liability endorsements.
Policies of insurance shall be in the minimum single limit amount of two million dollars
2,000,000) per occurrence and five million dollars ($5,000,000) aggregate. The
insurance policy or policies shall contain contractual liability insurance naming the
Grantee and shall insure agllin!lt the types of liabilities covered by the indemnification
and hold harmless provisions of this; Agreement.
f,,"~
B. The insurer(s) shall be licensed to write the required insurance in the State of
California and shall have a Besfs Guide rating of A-Class VII or better. The form
and substance of the policy or policies of insurance shall also be subject to approval by
the City
Attorney.
I C. The policy or policies of insurance shall be maintained by the Grantee in full
force
and effect during the entire term of the franchise. Each policy of insurance shall contain
a statement on its face that the insurer will not cancel the policy or fail to renew the
policy, whether for nonpayment of premium, or otherwise, and whether at the request of
the Grantee or for other reasons, except after 30 days advance written notice mailed by
the insurer to the City Clerk, and that such notice shall be transmitted postage prepaid,
with return receipt requested.
Section XXXII: ComDliance with City. State and Federal Laws
Subject to Grantee's rights under its franchise, the Grantee shall at all times comply with
all local, state and federal laws and regulations. However, if any such laws or regulations
shall require the Grantee to perform any service, or shall permit the Grantee to delete any
service, or shall prohibit the Grantee from performing any service, in conflict with the
terms of the Franchise or any law' or regulation of the City, then as soon as possible
following knowledge thereof: the Grantee shall notify the City of the point of conflict
believed to exist.
Section xxxm: Acts of God
Grantee shall not be deemed in default or non-compliance with provisions of
this Franchise Agreement where performance was rendered impossible by
strike,unavailability of materials or equipment, war or riots, civil disturbance, sabotage
or vanil~li~1T1., subscriber tampering or interference, hurricanes, earthquakes, fires, floods
or other natural catastrophes or other events beyond Grantee's control, and this
Agreement shall not be revoked or Grantee lpenalized for such non-compliance, provided
the Grantee takes immediate and diligent steps to bring itself back into compliance and to
comply as soon as possible with this Agreement under the circumstances without
endangering the health, safety and integrity of Grantee's employees or property, or the health,
safety and integrity of the public, or public streets or public and
private
property.
J
j
Section
XXXIV: Seoarability If
any provision of this Agreement is held by a court or by any federal or state agency of competent
jurisdiction to be invalid as conflicting with any federal or state law, rule or regulation
now or hereafter in effect, or is held by such court or agency to be modified in any
way in order to conform to the requirements of any such law, rule or regulation, such provision
shall be considered to be a separate, distinct and independent part of this Agreement,
and such holding shall not affect the validity and enforceability of any other provision
thereof.CITY
OF ORANGE By:
Mayor
ArrEST:
City
Clerk of the City of Orange TIME
WARNER ENTERTAINMENT-ADVANCFJNEWHOUSE
PARTNERSHIP By:
Its:
APPROVED
AS TO FORM:Assistant
City Attorney SH:
CABlEIVIFRNREVJS DAD".1dIII-22-
9S