Commerce Municipal Code Art. 3 Franchise Terms and Conditions

A franchise granted by the city under the provisions of this chapter shall encompass the following purposes:

(1) To permit the grantee to engage in the business of providing cable service to subscribers within the designated service area;

(2) To permit the grantee to erect, install, construct, repair, rebuild, reconstruct, replace, maintain and retain, cable lines, related electronic equipment, supporting structures, appurtenances, and other property in connection with the operation of the cable system in, on, over, under, upon, along and across streets or other public places within the designated service area;

(3) To permit the grantee to maintain and operate such franchise properties for the origination, reception, transmission, amplification, and distribution of television and radio signals and for the delivery of cable services; or

(4) To set forth the obligations of the grantee under the franchise.

(Ord. 570 §1(part), 2003).

After the effective date of this chapter, it is unlawful for any person to construct, install or operate a cable system in the city within any public way without a properly granted franchise awarded pursuant to the provisions of this chapter. Any person who violates this section is deemed guilty of a misdemeanor and, upon conviction thereof, is punishable by a fine of not more than five hundred dollars, or by imprisonment in the county jail, or both such fine and imprisonment.

(Ord. 570 §1(part), 2003).

(a) A franchise granted in this section shall be for a term established in the franchise agreement, commencing on the grantor's adoption of an ordinance or resolution authorizing the franchise.

(b) A franchise granted in this section may be renewed upon application by the grantee pursuant to the provisions of applicable law.

(Ord. 570 §1(part), 2003).

Any franchise shall 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.

(Ord. 570 §1(part), 2003).

This chapter shall be construed in a manner consistent with all applicable law, and shall apply to all franchises granted or renewed after the effective date of this chapter to the extent permitted by applicable law.

(Ord. 570 §1(part), 2003).

(a) Except as specified in any franchise, the grantee shall be subject to all applicable law.

(b) The city retains every power and right that the city has under applicable law.

(c) Nothing in any franchise shall be deemed to waive any of the city's governmental rights or police powers.

(d) The city administrator may adjust, settle or compromise any controversy involving performance or charges arising from a grantee's operations. The city council may accept, reject or modify the city administrator's decision and may adjust, settle or compromise any controversy or cancel any charge arising from a grantee's operations.

(Ord. 570 §1(part), 2003).

(a) Grantee shall 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 written consent of the council. Any attempt to sell, transfer, lease, assign or otherwise dispose of the franchise without the consent of the council shall be null and void. The granting of a security interest in any 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, shall not be considered a transfer for the purposes of this section. The granting of consent for a transfer in one instance will not render unnecessary approval of any subsequent transfer.

(b) The requirements of subsection (a) shall apply to any change in control of grantee. The word "control" as used in this chapter includes majority ownership, and actual working control in whatever manner exercised. In the event that grantee is a corporation, prior consent of the council shall be required where ownership or control of more than twenty percent of the ownership or voting stock of the grantee, or grantee's immediate, intermediate or ultimate parent 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) Grantee shall notify grantor 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 such franchise property. 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) Grantee shall promptly notify grantor of any proposed transfer. If any transfer should take place without prior notice to grantor, grantee shall promptly notify grantor that such a transfer has occurred. At least one hundred twenty calendar days before the contemplated effective date of a transfer, grantee will submit to grantor an application for approving the transfer. Such application will provide complete information on the proposed transaction, including details on the legal, financial, technical and other qualifications of the transferee.

(e) The following information must be included in the application, provided that grantee is not required to duplicate information that it submits to grantor to comply with its obligations under applicable law. No application shall be considered complete until all required information below is received by the grantor.

(1) All information and forms required under applicable law, including Federal Communication Commission Form 394 or equivalent;

(2) All information required in this section for franchise grants, renewals, modifications or transfers;

(3) A detailed statement of the corporate or other business entity organization and management structure of the proposed transferee, together with an explanation of how decisions regarding the cable system will be made if the proposed transaction is approved;

(4) Any contracts or other documents that relate to the proposed transaction, including all documents, schedules, exhibits or the like referred to therein;

(5) Any shareholder reports or filings with the Securities and Exchange Commission that discuss the transaction;

(6) Complete information regarding any potential impact of the transfer on subscriber rates and services;

(7) A brief summary of the proposed transferee's plans for at least the next five years regarding line extension, plant and equipment upgrades, channel capacity, expansion or elimination of services and any other changes affecting or enhancing the performance of the cable system; and

(8) Legal, technical and financial qualifications of the prospective transferee.

(f) Grantor may require grantee or any prospective transferee, to provide additional information as it may deem necessary to determine whether the transfer is in the public interest and should be approved, denied or conditioned. Grantee and any prospective transferees shall assist grantor in any such inquiry and provide information requested. Failure to do so may result in the request for transfer being denied.

(g) In determining whether to grant, deny or grant subject to conditions an application for a transfer of a franchise, grantor's consideration may include, but is not necessarily limited to:

(1) The legal, financial and technical qualifications of the transferee to operate the cable system;

(2) Any potential impact of the transfer on subscriber rates or services;

(3) Whether the incumbent grantee is in compliance with its franchise and applicable law and, if not, the proposed transferee's commitment to cure such noncompliance;

(4) Whether the transferee owns or controls any other cable system in the service area and whether operation by the transferee may eliminate or reduce competition in the delivery of the cable service in the service area; and

(5) Whether operation by the transferee or approval of the transfer would adversely affect subscribers, the public or grantor's interest in the cable franchise or applicable law.

(h) Any transfer without grantor's prior written approval is ineffective, and will make a franchise subject to revocation and to any other remedies available under the franchise or applicable law, except where a request for approval or sale is subject to a deadline for action under 47 U.S.C. Section 537 and grantor fails to act by the time required under 47 U.S.C. Section 537.

(i) Grantor will not approve a transfer request unless the transferee agrees in writing that it will abide by and accept all terms of the cable franchise grant and applicable law and that the transferee will assume the obligations, liabilities and responsibility for all acts and omissions of the previous grantee under the franchise grant and applicable law for all purposes, including renewal, unless grantor, in its sole discretion, expressly waives this requirement in whole or in part.

(j) Any financial institution having a pledge of the grantee or its assets for the advancement of money for the construction and/or operation of the franchise shall have the right to notify the grantor that it or its designee satisfactory to the grantor shall take control of and operate the cable system, in the event of a grantee default of its financial obligations. Further, such financial institution shall also agree in writing to continue cable service and comply with all franchise requirements during the term the financial institution exercises control over the system.

(k) Any submission of an application for transfer of a franchise shall be accompanied by a nonrefundable franchise processing fee in the amount of three thousand dollars. Upon transfer, grantee shall reimburse grantor for grantor's reasonable processing and review expenses in connection with the transfer 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. Any such reimbursement shall not be charged against any franchise fee due to grantor during the term of the franchise.

(Ord. 570 §1(part), 2003).

(a) Grantee shall design, construct and maintain the cable system to have the capability to pass every residential 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 service to any requesting subscriber within that service area within thirty days from the date of request, provided that the grantee is able to secure all rights-of-way, permits and landlord agreements necessary to extend service to such subscriber within such thirty day period on reasonable terms and conditions.

(Ord. 570 §1(part), 2003).

Any franchise granted pursuant to this chapter shall be nonexclusive. The grantor specifically reserves the right to grant, at any time, such additional franchises for a cable system, as it deems appropriate, subject to applicable law.

(Ord. 570 §1(part), 2003).

(a) Grantor may grant any number of franchises subject to applicable law. Grantor 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 in addition to the cables, conduits and pipes of the utility systems, such as electrical power, telephone, gas and sewerage;

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

(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 public rights-of-way.

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

(Ord. 570 §1(part), 2003).

The grantee may be required to pay any reasonable costs incurred by the grantor in processing a grantee request for franchise modification. Upon written request from the grantee, the grantor shall provide grantee with an estimate of the total processing costs prior to entering into the review of the request. Such costs shall be paid by the grantee prior to final consideration of the request by the grantor.

(Ord. 570 §1(part), 2003).