Banning Municipal Code Art. II Grant of Franchise

No person or entity may construct, install or operate a cable system in the franchise area within any public way without a properly granted franchise awarded pursuant to this title and effectuated through a franchise agreement and the payment of franchise fees in the amount of five percent of gross annual revenues as set forth in the franchise agreement. Unless the franchise agreement provides otherwise, the franchise fees shall be paid quarterly no later than thirty days following the close of the previous quarter. Any person or entity constructing, installing or operating a cable system in the franchise area within any public way without a franchise agreement then in effect shall not receive any permits, licenses, or other permissions or authorizations from the city unless and until a franchise is obtained or construction, installation, or operation of the cable system is terminated. Any person or entity constructing, installing or operating a cable system without a franchise agreement in effect is subject to the provisions of this title to the maximum extent possible.

(Code 1965, § 6B-2.1; Ord. No. 1350, § 1 (part).)

Any person desiring an initial franchise must file an application with the city. A ten thousand dollar acceptance fee must accompany the initial franchise application. If the requested franchise is not awarded within one year of the franchise application being deemed complete by the city, the acceptance fee shall be refunded to the applicant.

(Code 1965, § 6B-2.2; Ord. No. 1350, § 1 (part).)

An application for an initial franchise must contain, where applicable:

A. A statement as to the proposed service area;

B. A resume of prior history of the applicant, including the expertise of applicant in the cable system field;

C. A list of the partners, general and limited, of the applicant, if a partnership, or the percentage of stock owned or controlled by each stockholder having a five percent or greater interest, if a corporation;

D. A list of officers, directors and managing employees of the applicant, together with a description of the background of each such person;

E. The names and addresses of any parent or subsidiary of the applicant or any other business entity owning or controlling the applicant in whole or in part, or owned or controlled in whole or in part by the applicant;

F. A current financial statement of the applicant verified by a certified public accountant audit or otherwise certified to be true, complete and correct to the reasonable satisfaction of the city;

G. A proposed construction and service schedule;

H. A detailed description including, without limitation, subscriber costs, basic cable service, service tiers, and channels proposed to be offered; and

I. Any reasonable additional information that the city deems applicable.

(Code 1965, § 6B-2.3; Ord. No. 1350, § 1 (part).)

A. Upon receipt of any application for an initial franchise, the city manager shall prepare a report and make recommendations respecting such application to the city council.

B. The city shall notice a public hearing prior to any initial franchise grant. Within sixty days after the close of the hearing, the city council shall make a decision based upon the evidence received at the hearing as to whether the initial franchise should be granted, and, if granted, subject to what conditions.

(Code 1965, § 6B-2.4; Ord. No. 1350, § 1 (part).)

Any franchise granted under this title will be for the term established in the franchise agreement, but in no event may the term exceed fifteen years from the effective date of the ordinance or resolution authorizing the franchise. A franchise granted hereunder may be renewed upon application by the grantee pursuant to the provisions of this chapter and applicable state and federal law.

(Code 1965, § 6B-2.5; Ord. No. 1350, § 1 (part).)

A franchise will be valid within all the municipal limits of the city, and within any area added to the city during the term of the franchise, unless otherwise specified in the franchise agreement.

(Code 1965, § 6B-2.6; Ord. No. 1350, § 1 (part).)

Any franchise granted pursuant to this title will be nonexclusive. The city specifically reserves the right to grant, at any time, such additional franchises for a cable system, as it deems appropriate, subject to applicable state and federal law.

(Code 1965, § 6B-2.7; Ord. No. 1350, § 1 (part).)

A. The city may grant any number of franchises subject to applicable state or federal law. The city may limit the number of franchises granted, based upon, but not necessarily limited to, the requirements of applicable law and specific local considerations, such as:

1. The capacity of the public rights-of-way to accommodate multiple cables and lines in addition to the cables, lines, conduits and pipes of the utility systems.

2. The benefits that may accrue to subscribers as a result of cable system competition, such as lower rates and improved service.

3. The disadvantages that may result from cable system competition, such as the requirement for multiple pedestals on residents' property, and the disruptions arising from numerous excavations of the public rights-of-way.

B. The city may require that any new entrant, non-incumbent grantee be responsible for its own underground trenching and the costs associated therewith if, in the city's opinion, the public rights-of-way in any particular area cannot feasibly and reasonably accommodate additional facilities.

(Code 1965, § 6B-2.8; Ord. No. 1350, § 1 (part).)

A. A grantee may not sell, transfer, lease, assign or dispose of, in whole or in part, either by forced or involuntary sale, or by ordinary sale, contract, consolidation or otherwise (collectively "transfer"), the franchise or any of the rights or privileges therein granted, without the prior consent of the city; provided, however, that the prior written consent of the city will not be required for an intracorporate or intracompany transfer from one subsidiary of the grantee's ultimate parent to another subsidiary in which the grantee's ultimate parent retains at least a seventy-five percent interest. The granting of a security interest in any of the grantee assets, or any mortgage or other hypothecation or by assignment of any right, title or interest in the cable system, or use of the cable system as collateral in order to secure indebtedness, will not be considered a transfer for the purposes of this section.

B. The requirements of subsection A will apply to any change in control of a grantee. The word "control" as used herein includes majority ownership, and actual working control in whatever manner exercised. If a grantee is a corporation, prior consent of the city will be required where ownership or control of more than twenty-five percent of the voting stock of the grantee is acquired by a person or group of persons acting in concert, none of whom own or control the voting stock of the grantee as of the effective date of the franchise, singularly or collectively.

C. A grantee shall notify city in writing of any foreclosure or any other judicial sale of all or a substantial part of the franchise property of the grantee or upon the termination of any lease or interest covering all or a substantial part of the franchise property. Such notification will be considered by city 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 the city to such change in control or ownership will apply.

D. For the purpose of determining whether it will consent to such change, transfer, or acquisition of control, city may inquire into the qualifications of the prospective transferee or controlling party, in accordance with this section, and the grantee shall assist the city in such inquiry. In seeking the city's consent to any change of ownership or control, the grantee has the responsibility of insuring that the grantee or the proposed transferee completes an application in accordance with Federal Communications Commission Form 394 or equivalent. An application must be submitted to the city not less than one hundred twenty days prior to the proposed date of transfer. The transferee will be required to establish that it possesses the legal, technical and financial qualifications to operate and maintain the cable system and comply with all franchise requirements for the remainder of the term of the franchise. If the franchisee is then in compliance with the requirements of the franchise, and the legal, financial and technical qualifications of the applicant are satisfactory, the city will consent to the transfer of the franchise in accordance with federal regulations.

E. Any financial institution having a pledge of a grantee or its assets for the advancement of money for the construction or operation of the franchise has the right to notify the city that it or its designee satisfactory to the city will take control of and operate the cable system, in the event of a grantee default of its financial obligations. Further, the financial institution must also agree in writing to continue cable service and comply with all franchise requirements during the term the financial institution exercises control over the cable system.

F. Any submission of an application for transfer or change of control of a franchise must be accompanied by a deposit in the amount of four thousand dollars. Immediately upon transfer or change of control, the grantee shall reimburse the city for the city's reasonable processing and review expenses over four thousand dollars in connection with the transfer or change of control of the franchise including without limitation, costs of administrative review, financial, legal and technical evaluation of the proposed transferee, consultants (including technical and legal experts and all costs incurred by such experts), notice and publication costs and document preparation expenses, as specified in any franchise agreement. Any such reimbursement may not be charged against any franchise fee due to the city during the term of the franchise or identified as a pass through charge on subscribers' bills. If the city's processing expenses are less than four thousand dollars, any unused funds on deposit will be refunded to the applicant.

G. Approval by the city of a transfer or change of control application does not constitute a waiver or release of any rights of the city under this title or a franchise agreement, whether arising before or after the date of the transfer.

(Code 1965, § 6B-2.9; Ord. No. 1350, § 1 (part).)

A. If a grantee desires to modify the franchise, the grantee must submit the request in writing to the city. The city will then provide to the grantee a summary of all costs that the city anticipates it will incur in processing the grantee's request. Such costs may include, but are not limited to, the administrative review, financial, legal and technical evaluation of the proposal, consultants (including technical and legal experts and all costs incurred by such experts), notice and publication requirements with respect to the consideration of the application and document preparation expenses.

B. If the grantee agrees to pay and does pay all of these costs in advance, then the city will process the proposed modification. The fact that the city agrees to process the requested modification does not mean that the city has any obligation or intent to accept the proposed modification.

C. If the grantee does not agree to pay these costs in advance, or fails to make such payment within thirty days of receipt of the city's summary of costs, and city does not later expressly waive the provisions of this subsection C, then the grantee's request for franchise modification will be deemed withdrawn.

D. No modification of the franchise will take affect or be binding on the city unless and until such modification is approved by the city council.

(Code 1965, § 6B-2.10; Ord. No. 1350, § 1 (part).)

Franchise renewals will be in accordance with applicable law. The city and a grantee, by mutual consent, may enter into renewal negotiations at any time during the term of the franchise. A franchise will not be subject to renewal once it has expired or otherwise been terminated. A deposit of ten thousand dollars must be paid at the time the renewal is requested. Immediately upon renewal, the grantee shall reimburse the city for reasonable processing and review expenses in excess of ten thousand dollars in connection with the renewal including without limitation, costs of administrative review, financial, legal and technical evaluation of the proposed renewal, consultants (including technical and legal experts and all costs incurred by such experts), notice and publication costs and document preparation expenses. Any such reimbursement may not be charged against any franchise fee due to the city during the term of the franchise or identified as a pass through charge on subscribers' bills. If the city's expenses are less than ten thousand dollars, any unused funds on deposit will be refunded to the grantee.

(Code 1965, § 6B-2.11; Ord. No. 1350, § 1 (part).)