Article II — Franchise

It shall be unlawful for any person to establish, operate or carry on the business of distributing to any persons in this city any television signals or radio signals by means of a CATV system unless a franchise therefor has first been obtained pursuant to the provisions of this chapter, and unless such franchise is in full force and effect.

It shall be unlawful for any person to construct, install, maintain or operate within any public street in the city, or within any other public property of the city, or within any privately-owned area within the city which has not yet become a public street but is designated or delineated as a proposed public street on any

tentative subdivision map approved by the city, any equipment or facilities for distributing any television signals or radio signals by means of a CATV system, unless a franchise authorizing such use of such street or property or area has first been obtained pursuant to the provisions of this chapter, and unless such franchise is in full force and effect.

(Ord. No. 262, § 18, 23.)

Application for a franchise under this chapter shall be in writing, shall be accompanied by an application fee of five hundred dollars, non-refundable, and shall be filed with the city clerk for transmission to the council and shall contain the following information:

(1)

The name and address of the applicant If the applicant is a partnership, the application shall state the name and address of each partner. If the applicant is a corporation, the application shall state the names and addresses of its directors, main offices, major stockholders and associates, and the names and addresses of parent and subsidiary companies.

(2)

A statement and description of the CATV system proposed to be constructed, installed, maintained or operated by the applicant; the proposed location of such system and its various components; the manner in which the applicant proposes to construct, install, maintain and operate such system; and, particularly, the extent and manner in which existing or future poles or other facilities of other public utilities will be used for such system.

(3)

A description, in detail, of the public streets, public places and proposed public streets within which the applicant proposes or seeks authority to construct, install, maintain or operate any CATV equipment or facilities proposed to be constructed, installed, maintained or operated therein; and the proposed specific location thereof.

(4)

A map specifically showing and delineating the proposed service area or areas within which applicant proposes to provide CATV services and for which a franchise is requested if the area is less than the entire city.

(5)

A statement or schedule setting forth the number of channels and all of the television or radio stations proposed to be received, transmitted, conducted, relayed or otherwise conveyed over the CATV system.

(6)

A statement or schedule in a form approved by the city clerk of proposed rates and charges to subscribers for installation and services, and a copy of the proposed service agreement between the grantee and its subscribers shall accompany the application. For unusual circumstances, such as underground cable required, or more than one hundred fifty feet of distance from cable to connection of service to subscribers, an additional installation charge over that normally charged for installation as specified in the applicant's proposal may be charged, with easements to be supplied by subscribers. For remote, relatively inaccessible subscribers within the city, service may be made available on the basis of cost of labor and easements if required by the grantee. The decision of the council as to what shall be remote or relatively inaccessible under this paragraph shall be final.

(7)

A copy of any contract, if existing, between the applicant and any public utility providing for the use of facilities of such public utility, such as poles, lines or conduits.

(8)

A statement setting forth all agreements and understandings, whether written, oral or implied, existing between the applicant and any person with respect to the proposed franchise or the proposed CATV operation. If a franchise is granted to a person posing as a front or as the representative of another person, and such information is not disclosed in the original application, such franchise shall be deemed void and of no force and effect whatsoever.

(9)

A current financial statement prepared by a certified public accountant, or person otherwise satisfactory to the council, showing applicant's financial status and his financial ability to complete the construction and installation of the proposed CATV system.

(10)

Such supplementary, additional or other information as the council may demand at any time, and the applicant shall provide, and which the council may deem reasonably necessary to determine whether the requested franchise should be granted.

(Ord. No. 262, § 20.)

A non-exclusive franchise to construct, operate and maintain a CATV system within all or any portion of the city may be granted, by the council, by resolution, to any person whether operating under an existing franchise or not, who offers to furnish and provide such system under and pursuant to the terms and provisions of this chapter.

No provision of this chapter shall be deemed or construed so as, to require the granting of a franchise when, in the opinion of the council, it is in the public interest not to do so or to restrict the number of grantees.

Upon consideration of any application for a franchise, the council may refuse to grant the requested franchise or the council, by resolution, may grant a franchise for a CATV system to ay such applicant as may appear from the application to be in its opinion best qualified to render proper and efficient CATV service to the television viewers and subscribers in the city. The council's decision in the matter shall be final. If favorably considered, the application submitted shall constitute and form a part of the franchise as granted. It is the intention of this chapter that the franchise shall not be granted upon a cash auction bid, but that the council shall consider those factors set forth in California Government Code, section 53066. In granting the franchise, including but not limited to the following:

(1)

Quality of service offered.

(2)

Rates to the subscriber.

(3)

Experience and financial responsibility of the applicant.

(4)

Applicant's proposals for providing service to local school and city installations.

(5)

Whether applicant has a contract with a public utility providing for use of facilities such as poles, lines or conduits of such public utility in the city.

(6)

Such other factors as the council considers necessary in protecting the public interests.

Any franchise granted under this chapter shall include the following condition:

"The CATV system herein franchised shall be used and operated solely and, exclusively for the purpose expressly authorized by ordinance of the city and no other purpose whatsoever."

Inclusion of the foregoing statement in any such franchise shall not be deemed to limit the authority of the city to include any other reasonable condition, limitation or restriction which it may deem necessary to impose in connection with such franchise pursuant to the authority conferred by this chapter.

(Ord. No. 262, §§ 3, 20.)

(a)

Any franchise granted under this chapter shall be non-exclusive.

(b)

No privilege or exemption shall be granted or conferred by any franchise granted under this chapter except those specifically prescribed herein.

(c)

Any privilege claimed under any franchise by the grantee in any street or other public property shall be subordinate to any prior lawful occupancy of the streets or other public property.

(d)

Any franchise granted under this chapter shall be a privilege to be held in personal trust by the original grantee It cannot in any event be sold, transferred, leased, assigned or disposed of, in whole or in part, either by forced or involuntary sale, or by voluntary sale, merger, consolidation or otherwise, without the prior consent of the council expressed by resolution, and then only under such conditions as may therein be prescribed Any such transfer or assignment shall be made only by an instrument in writing, a duly executed copy of which shall be filed in the office of the city clerk within thirty days after any such transfer or assignment. The consent of the council may not be arbitrarily refused; provided, the proposed assignee must show financial responsibility and must agree to comply with all provisions of this chapter, and provided further, that no such consent shall be required for a transfer in trust, mortgage or other hypothecation as a whole, to secure an indebtedness.

(e)

Time shall be of the essence of any franchise granted under this chapter. The grantee shall not be relieved of his obligation to comply promptly with any of the provisions of this chapter or by any failure of the city to enforce prompt compliance.

(f)

Any right or power in, or duty impressed upon, any officer, employee, department or board of the city shall be subject to transfer by the city to any other officer, employee, department or board of the city.

(g)

The grantee shall have no recourse whatsoever against the city for any loss, cost, expense or damage arising out of any provision or requirement of this chapter or of any franchise issued hereunder or because of its enforcement.

(h)

The grantee shall be subject to all provisions, rules, regulations and conditions prescribed by federal, state, city and local law heretofore or hereafter enacted or established during the term of any franchise granted under this chapter. Copies of all petitions, applications and communications submitted by the grantee to the Federal Communications Commission, Securities and Exchange Commission or any other federal or state regulatory commission or agency having jurisdiction in respect to any matters affecting CATV operations authorized pursuant to this franchise shall also be submitted simultaneously to the city clerk.

(i)

Any franchise granted under this chapter shall not relieve the grantee of any obligation involved in obtaining pole space from any department of the city, from any utility company, or from others maintaining poles in streets.

(j)

Any franchise granted under this chapter shall be in lieu of any and all other rights, privileges, powers, immunities and authorities owned, possessed, controlled or exercisable by the grantee, or any successor to any interest of the grantee, of or pertaining to the construction, operation or maintenance of any CATV system in the city, and the acceptance of any franchise granted under this chapter shall operate, as between grantee and the city, as an abandonment of any and all such rights, privileges, powers, immunities and authorities within the city, to the effect that, as between grantee and the city, any and all construction, operation and maintenance by any grantee of any CATV sys tem in the city shall be, and shall be deemed and construed in all instances and respects to be, under and pursuant to the franchise, and not under or pursuant to any other right, privilege, power, immunity or authority whatsoever.

(Ord. No. 262, § 7.)

No franchise granted under this chapter shall be for a term longer than twenty years following the date of acceptance of such franchise by the grantee or the renewal thereof.

Any franchise granted under this chapter may be terminated prior to its date of expiration by the council in the event that the council shall have found, after thirty days notice of any proposed termination and public hearing, that:

(a)

The grantee has failed to comply with any provision of this chapter, or, by act or omission, has violated any term or condition of any franchise or permit issued hereunder.

(b)

Any provision of this chapter has become invalid or unenforceable and the council further finds that such provision constitutes a consideration material to the grant of the franchise.

(c)

The city acquires the CATV system property of the grantee.

(Ord. No. 262, § 5.)

over after termination.

Any grantee granted a franchise under this chapter shall, during the calendar years of 1969, 1970 and 1971, pay to the city, during the life of such franchise, a sum equal to at least three per cent of the gross

annual receipts of the grantee. Any grantee granted a franchise under this chapter shall, during the calendar year 1972, pay to the city, during the life of such franchise, a sum equal to at least four per cent of the gross annual receipts of the grantee. Any grantee granted a franchise under this chapter shall, during the calendar year 1973 and thereafter during the life of such, pay to the city, a sum equal to at least five per cent of the gross annual receipts of the grantee, or, if larger, the maximum amount then authorized by statute of the state. Such payment by the grantee to the city shall be made annually, on or before March 15th of each year hereafter, or as otherwise provided in the grantee's franchise, by delivery of the same to the city clerk. Such payment by the grantee to the city shall be in lieu of any occupation tax, business license tax or similar levy but shall not excuse the grantee from obtaining business license or other permits where required by law.

The grantee shall file with the city, within sixty days after the expiration of any calendar year or portion thereof during which such franchise is in force, a financial statement prepared by a certified public accountant, or person otherwise satisfactory to the council, showing in detail the gross annual receipts, as defined herein, of grantee during the preceding calendar year or portion thereof. It shall be the duty of the grantee to pay to the city, within fifteen days after the time for filing such statements, the sum hereinabove prescribed or any unpaid balance thereof for the calendar year or portion thereof covered by such statements.

In any year, or portion thereof, following the first full year service has been provided and during which payments under this section amount to less than nine hundred dollars per year, grantee shall pay the city as a minimum an amount equal to nine hundred dollars per year, payable as of the same dates above specified.

The city shall have the right to inspect the grantee's records showing the gross receipts from which its franchise payments are computed and the right of audit and recomputation of any and all amounts paid under this chapter. No acceptance of any payment shall be construed as a release or as an accord and satisfaction of any claim the city may have for further or additional sums payable under this chapter or for the performance of any other obligation hereunder.

In the event of any holding over after expiration or other termination of any franchise granted under this chapter, without consent of the city, the grantee shall pay to the city reasonable compensation and damages, of not less than one hundred per cent of its total gross profits during such period.

(Ord. No. 262, § 6.)

(a)

Nothing in this chapter shall be deemed or construed to impair or affect, in any way, to any extent, the right of the city to acquire the property of the grantee, either by purchase or through the exercise of the right of eminent domain, at a fair and just value, which shall not include any amount for the franchise itself or for any of the rights or privileges granted, and nothing herein contained shall be construed to contract away or to modify or abridge, either for a term or in perpetuity, the city's right of eminent domain.

(b)

There is hereby reserved to the city every right and power which is required to be herein reserved or provided by any ordinance of the city, and the grantee, by its acceptance of any franchise, agrees to be bound thereby and to comply with any action or requirements of the city in its exercise of such rights or power, heretofore or hereafter enacted or established.

(c)

Neither the granting of any franchise under this chapter nor any of the provisions contained herein shall be construed to prevent the city from granting any identical or similar franchise to any other person within all or any portion of the city.

(d)

There is hereby reserved to the city the power to amend any section or part of this chapter so as to require additional bonding, insurance or greater standards of construction, operation, maintenance or otherwise on the part of the grantee.

(e)

Neither the granting of any franchise under this chapter nor any provision hereof shall constitute a waiver or bar to the exercise of any governmental right or power of the city.

(f)

The council may do all things which are necessary and convenient in the exercise of its jurisdiction under this chapter and may determine any question of fact which may arise during the existence of any franchise granted under this chapter. The mayor is hereby authorized and empowered to adjust, settle, or compromise any controversy or charge arising from the operations of any grantee under this chapter; either on behalf of the city, the grantee or any subscriber, in the best interest of the public. Either the grantee or any member of the public who may be dissatisfied with the decision of the mayor may appeal the matter to the council for hearing and determination. The council may accept, reject or modify the decision of the mayor, and the council may adjust, settle or compromise any controversy or cancel any charge arising from the operations of any grantee or from any provision of this chapter.

(g)

In connection with the issuance of any franchise under this chapter, the council may impose such reasonable restrictions, conditions and limitations as to the area or areas of the city to be served, operating conditions and cooperative working arrangements relative to local television broadcasting stations serving the city with the best possible television reception. However, every proposal shall include the entire city.

(Ord. No. 262, § 8.)

(a)

No franchise granted under this chapter shall become effective unless and until the resolution granting the franchise has become effective and, in addition, unless and until all things required in this section and

sections 7A-30 and 7A-31 are done and completed, all of such things being hereby declared to be conditions precedent to the effectiveness of any such franchise granted under this chapter. In the event any of such things are not done and completed in the time and manner required, the council may declare the franchise null and void.

(b)

Within ten days after the effective date of the resolution awarding a franchise, or within such extended period of time as the council in its discretion may authorize, the grantee shall file with the city clerk his written acceptance of the franchise together with the bond and insurance policies required by sections 7A- 30 and 7A-31, and his agreement to be bound by and to comply with and to do all things required of him by the provisions of this chapter and the franchise. Such acceptance and agreement shall be acknowledged by the grantee before a notary public, and in form and content shall be satisfactory to and approved by the city attorney.

(Ord. No. 262, § 22.)

Any franchise granted under this chapter is renewable at the application of the grantee, in the same manner and upon the same terms and conditions as required herein for obtaining the original franchise, except those which are by their terms expressly inapplicable, provided, that the council at its option may waive compliance with any or all of the requirements of section 7A-12.

(Ord. No. 262, § 21.)

The grantee may make a charge to subscribers for installation or connection to its CATV system and a fixed monthly charge as filed and approved as herein provided. No increase in the rates and charges to subscribers, as set forth in the schedule filed and approved with the grantee's application, may be made without the prior approval of the council expressed by resolution. The council shall have the right to require the reduction of the monthly subscription charge to subscribers when, after a rate analysis study is made, the council in its discretion shall decide such reduction is justice.

(Ord. No. 262, 4.)

The granting of a franchise pursuant to this chapter shall not be construed as permission or authority to enter on, occupy or otherwise use private property without the express consent of the owner or agent in possession thereof.

No franchise granted under this chapter shall be construed as a franchise, permit or license to transmit any special program or event for which a separate and distinct charge is made to the subscriber in the manner commonly known and referred to as "pay television," and no grantee, directly or indirectly, shall install, maintain or operate on any television set, coin box or any other device or means for the collection of money for individual programs.

(Ord. No. 262, § 4.)

Any franchise granted pursuant to the provisions of this chapter shall authorize and permit the grantee to engage in the business of operating and providing a CATV system in the city, and for that purpose to erect, install, construct, repair, replace, reconstruct, maintain and retain in, on, over, under, upon, across and along any public street such poles, wires, cables, conductors, ducts, conduit, vaults, manholes, amplifiers, appliances, attachments and other property as may be necessary and appurtenant to the CATV system; and in addition, so to use, operate and provide similar facilities or properties rented or leased from other persons, including, but not limited to, any public utility or other grantee franchised or permitted to do business in the city.

(Ord. No. 262, § 4.)