Cypress Municipal Code Ch. 6 Community Antenna Television Systems

Editor's note: Ord. No. 726, § 1, adopted May 29, 1984, enacted provisions relative to CATV systems, designated as Ch. 6, §§ 6-1—6-31, to read as herein set out. Formerly, Ch. 6, §§ 6-1—6-15, had pertained to cable television systems as derived from Ord. No. 496, §§ 1—15, adopted Nov. 27, 1972, and repealed by Ord. No. 701, § 1, adopted Jan. 10, 1983.

For the purposes of this chapter, the following terms, phrases, words, abbreviations, and their derivations shall have the meaning given herein. When not inconsistent with the context, words used in the present tense include the future tense; words in the plural number include the singular number; and words in the singular number include the plural number.

"Annual gross receipts"

shall mean any and all compensation, in whatever form, grant, subsidy, exchange, or otherwise, directly or indirectly received by a grantee, not including any taxes on services furnished by such grantee imposed directly on any subscriber or user by a city, county, state or other governmental unit, and collected by the grantee for such activity and shall specifically include gross annual receipts, basic service receipts, gross annual non-basic service receipts, gross annual advertising receipts and gross annual lease receipts.

"CATV"

means community antenna television system as hereinafter defined.

"City"

means the City of Cypress, a municipal corporation of the State of California, in its present incorporated form or in later reorganized, consolidated, enlarged or reincorporated form.

"City clerk"

shall mean the city clerk of the city, or his designee.

"City engineer"

shall mean city engineer of the city, or his designee.

"City manager"

shall mean the city manager of the city, or his designee.

"Community antenna television system (CATV)"

means a system of antenna, satellite receiving and transmitting apparatus, coaxial cables, fiber optics, wires, wave guides, and/or other conductors, amplifiers, electronic processors, equipment and facilities designed, constructed or used for the purpose of providing over-the-air, satellite-delivered, and locally originated television or FM radio service by cable within the city. Such a definition does not include those services which are classified as MDS (multiple distribution systems), DBS (direct broadcast satellite), or STV (subscription television) services, all of which are delivered without wires from a central originating point directly to a subscriber without the use of wires.

"Council"

means the present governing body of the city or any future board constituting the legislative body of the city.

"Day"

shall mean a calendar day.

"Franchise"

means and includes any authorization granted hereunder in terms of a franchise, privilege, permit, license or otherwise to construct, operate and maintain a CATV system in the city. Any such authorization, in whatever term granted, shall not mean nor include any license or permit required for the privilege of transacting and carrying on a business within the city in accordance with any other provision of this code, or any amendment thereto, or any supplemental provisions, sections or articles. Any such authorization, in whatever term granted, shall not relieve grantee from any type of tax or fee now or hereafter imposed by the city; provided that franchise payments shall be determined pursuant to this chapter.

"Grantee"

means a person, firm or corporation to whom or which a franchise is granted by the council under this chapter, and the lawful successor, transferee or assignee of said person, firm, or corporation.

"Property of grantee"

means all property owned, installed or used by a grantee in the conduct of a CATV business in the city under the authority of a franchise granted pursuant to this chapter.

"Street" or "public street"

means only a street, road, highway, freeway, lane, path, alley, court, sidewalk, parkway or drive which is owned by a public entity in fee or as to which a public entity has an easement for street purposes, and with respect to which, and to the extent that, the city has a right to grant the use of the surface of, and space above and below in connection with a franchise for a CATV system.

"Subscriber"

means any person or entity receiving for any purpose the CATV service of a grantee.

(Ord. No. 726, § 1, 5-29-84)

(a) A nonexclusive franchise to install, construct, operate, and maintain a CATV system on streets within all or a specific portion of the city may be granted by the council to any person, whether or not operating under an existing franchise, who or which offers to furnish and provide such system under and pursuant to the terms and provisions of this chapter.

(b) When and in the event that the grantee of any franchise granted hereunder uses in its CATV system distribution channels furnished to the grantee by a telephone company pursuant to tariff or contract on file with a regulatory body having jurisdiction and said grantee makes no use of the streets independent of such telephone-company-furnished facilities, said grantee shall be required to comply with all of the provisions hereof as a "licensee," and in such event whenever the term "grantee" is used herein it means and includes "licensee." No provision of this chapter shall be deemed or construed as requiring the granting of a franchise hereunder to a telephone company furnishing such a channel service.

(Ord. No. 726, § 1, 5-29-84)

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 within all or a specific portion of the city, and for that purpose to erect, install, construct, repair, replace, reconstruct, maintain and retain in, on, under, upon, across, and along any public street, such wires, cable, conductors, ducts, conduits, 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, firms or corporations, including but not limited to any public utility or other grantee franchised or permitted to do business in the city.

A grantee may make charges to subscribers for installation of or connection to its CATV system and fixed monthly charges as filed and approved as herein provided. No increase in the rates and charges to subscribers, as set forth in the franchise agreement, may be made without the prior approval of the council expressed by resolution as provided for in section 6-26 of this chapter (except to the extent that applicable federal or state law prevents the city from enforcing such restriction).

(Ord. No. 726, § 1, 5-29-84)

(a) Every franchise granted under this chapter shall be nonexclusive. Neither the granting of any franchise hereunder 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, firm, or corporation, within all or any portion of the city.

(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 such franchise by the grantee in any public street or other public property shall be subordinate to any prior or subsequent lawful occupancy or use thereof by the city or any other governmental entity and shall be subordinate to any easements therein, whether created prior or subsequent to the granting of any franchise hereunder.

(d) Any such franchise 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, after receipt of any proposed contractual documents, including the consideration, and then only under such conditions as may in said resolution 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 30 days after any such transfer or assignment. The said consent of the council, except as to assignment or transfers as specified in section 6-9, may not be unreasonably withheld; provided, however, the proposed assignee must show financial responsibility and must agree to comply with all provisions of this chapter and of the franchise; and provided further, that no such consent shall be required for a transfer in trust, mortgage or other hypothecation to secure an indebtedness unless it shall have been made to avoid or evade the other provisions of this chapter affecting transfers. A request for council consent must be accompanied with a fee reasonably determined by the council to recover city expenses connected with processing the change.

(e) Time shall be of the essence of any such franchise granted hereunder. 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 requirements of city ordinances, rules, regulations and specifications heretofore or hereafter enacted or established to protect the public safety and general welfare and/or which apply generally to persons or businesses in the community, and shall comply with all applicable state and federal laws and regulations heretofore or hereafter enacted or established.

(i) Any such franchise shall not relieve the grantee of any obligation involved in obtaining pole space from any department of the city, utility company, or from others maintaining poles in the streets.

(j) Any franchise granted hereunder 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, or pertaining to the construction, operation, or maintenance of any CATV system in the city; and the acceptance of any franchise hereunder shall operate, as between a grantee and the city as an abandonment of any and all of 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 system in the city shall be, and shall be deemed and construed in all instances and respects to be, under and pursuant to said franchise, and not under or pursuant to any other right, privilege, power, immunity, or authority whatsoever.

(Ord. No. 726, § 1, 5-29-84)

(a) Nothing herein 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 a grantee, either by a mutually agreed purchase or through the exercise of the right of eminent domain, at a fair and just value, 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) In the event the city desires to acquire all or part of the CATV system (acquisition of part of the CATV system is restricted to those portions of the system which, if owned by the city, would not substantially undermine the economic viability of the remainder of the system), fair market value shall include consideration of the cable television system as a going concern, except that, in the event of cancellation or revocation or nonrenewal of the franchise due to significant noncompliance with this chapter pursuant to section 6-9(b) or section 6-9(c) hereof or the franchise agreement, or significant or on-going violations of this and/or other city and/or state or federal rules and regulations, no value shall be given the nonphysical asset of goodwill or the franchise itself.

(c) In the event of purchase by the city, or a change of grantee, the current grantee shall cooperate with the city, or with a representative appointed by the city, to operate the system for a temporary period in maintaining continuity of service.

(d) There is reserved to the city every right and power which is required to be herein reserved or provided by any ordinance of the city; and a 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.

(e) Neither the granting of any franchise hereunder 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, firm or corporation, within all or any portion of the city.

(f) There is reserved to the city the power to amend any section or part of this chapter so as to require additional or greater standards of construction, operation or maintenance or otherwise, on the part of a grantee. Such additional or greater standards shall apply only to additions to existing systems of a grantee unless mutually agreed to by the city and a grantee or as dictated by the public safety and welfare.

(g) Neither the granting of any franchise nor any provision hereof shall constitute a waiver or bar to the exercise of any governmental right or power of the city, now existing or hereafter granted.

(h) 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 hereunder. The city manager is 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 city manager may appeal the matter to the council for hearing and determination. The council may accept, reject or modify the decision of the city manager, 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 the chapter. All actions by the council under this paragraph shall be after hearing, upon ten days' advance written notice to grantee at its address on file with the city. Such actions may be by either resolution or minute order, except that revocation of franchise pursuant to section 6-9 shall be by ordinance.

(i) The city reserves the right, in special circumstances, to construct such portions of a grantee's proposed facilities and equipment as public safety and convenience may dictate, at the grantee's sole expense.

(j) The city reserves the right to remove any portion of a grantee's equipment and facilities as may be required in any emergency as determined by the city without liability for interruption of service, and the city shall not be obligated to restore service or to pay the costs of expenses of restoring service.

(Ord. No. 726, § 1, 5-29-84)

(a) Application for a franchise hereunder shall be in writing, shall be filed with the city clerk, and shall contain:

(1) All information required in a cable television franchise request for proposals approved by the council; and

(2) Such supplementary, additional or other information as the council may deem reasonably necessary to determine whether the requested franchise should be granted.

(b) An application fee, the amount as established by council resolution or as indicated in a cable television franchise request for proposal approved by the council, shall be submitted concurrently with each application for franchise.

(c) The council reserves the right to accept or reject franchise applications which propose a cost effective initial community facilities and equipment package with guarantees of future improvements during the term of the franchise to meet or exceed the minimum standards and which base the future improvements upon predetermined increases in subscriber penetration rates and local programming production activities.

(Ord. No. 726, § 1, 5-29-84)

This chapter shall be incorporated by reference in any franchise award(s), and any and every provision hereof shall be incorporated as though the same were set out in full, except to those provisions of the award which expressly alter or modify this chapter, and all provisions shall be binding upon grantee.

(Ord. No. 726, § 1, 5-29-84)

(a) Any and all CATV systems for the city shall be designed and installed to meet all of the standards set forth in the franchise agreement.

(b) The CATV system shall be designed as a "switchable" network, between the subscriber network and an institutional network with full, two-way capability (upstream and downstream transmission and reception) of both audio and video signals. Pursuant to the terms of the franchise agreement, and in no event later than by the end of the third year of the term of the franchise, the grantee shall submit to the city manager, for his approval, a plan for implementation of the institutional network. Such a plan shall include, as a minimum, all subscriber services to be offered, dates for implementation and marketing of those services, and the fees to be charged subscribers for each and every service and/or level of service proposed. Following council approval, the grantee shall implement those services pursuant to the terms of the franchise agreement or no later than the end of the fifth year of the term of the franchise. Failure to meet any of the provisions of this section shall subject the grantee to liquidated damages of $1,000 per day, or such greater amount as may be specified in the franchise agreement, for each and every day's delay beyond the deadline(s) referenced herein.

(c) As part of its proposal to the city, the franchise applicant shall indicate a proposed construction schedule for the completion of the installation of the cable television system throughout the entire city or the portion thereof for which a franchise is being requested. Service to the areas prescribed in that proposal or as modified in the franchise agreement shall be provided within the periods stated and failure on the part of the grantee to complete each of the matters set forth therein shall be grounds for termination of the franchise, as well as invocation of the penalties prescribed in sections 6-11 and 6-22 and any other penalties specified herein or in the franchise agreement. The proposed construction schedule shall not, in any event, exceed two years, except that, by resolution, the council, in its discretion, may extend the time for the commencement and completion of installation and construction for additional periods in the event the grantee, acting in good faith, experiences delays by reason of circumstances beyond his control.

(Ord. No. 726, § 1, 5-29-84)

(a) No franchise granted by the council under this chapter shall be for a term longer than 15 years following the date of acceptance of such franchise, or the renewal thereof, by the grantee. Any such franchise shall terminate in whole if the city acquires the CATV system or proportionately if the city acquires a portion thereof.

(b) Any such franchise granted hereunder may be terminated prior to its date of expiration by the council in the event that the city acquires the CATV system property of the grantee or if the council shall have found, after 30 days' notice of any proposed termination and public hearing, that:

(1) The grantee has failed to comply with any material provision of this chapter or has by act or omission violated any material term or condition of any franchise or permit issued hereunder; or

(2) The application of the grantee, including accompanying reports or data, contains a material misrepresentation, whether intentional or not.

(c) A franchise granted hereunder shall, at the option of the council, cease and terminate 120 days after the appointment of a receiver or receivers or trustee or trustees to take over and conduct the business of the grantee whether in a receivership, reorganization, bankruptcy or other action or proceeding unless such receivership or trusteeship shall have been vacated prior to the expiration of said 120 days, or unless:

(1) Such receivers or trustees shall have, within 120 days after their election or appointment, fully complied with all the terms and provisions of this chapter and the franchise granted pursuant hereto, and the receivers or trustees within said 120 days shall have remedied all defaults under the franchise; and

(2) Such receivers or trustees shall, within said 120 days, execute an agreement duly approved by the court having jurisdiction in the premises, whereby such receivers or trustees assume and agree to be bound by each and every term, provision and limitation of the franchise herein granted.

(d) In the case of a foreclosure or other judicial sale of the plant, property and equipment of a grantee, or any part thereof, including or excluding its franchise, the council may serve notice of termination upon the grantee and the successful bidder at such sale, in which event the franchise and all rights and privileges of the grantee thereunder shall cease and terminate 30 days after service of such notice, unless:

(1) The council shall have approved the transfer of the franchise, as and in the manner in this chapter provided; and

(2) Such successful bidder shall have covenanted and agreed with the city to assume and be bound by all the terms and conditions of the franchise.

(e) In the event a grantee wishes to renew a franchise prior to its expiration, the following shall apply. No later than two years prior to the expiration date of this franchise, the grantee shall file notice of request for renewal of the franchise. Such request shall, at the minimum, specify the following:

(1) Justification, based on prior experience, for the extension;

(2) Number of years of the requested franchise extension;

(3) Changes, modifications, improvements, such as an increase in channel capacity, services provided, or other additions/deletions which the grantee is proposing to provide during the term of the requested extension;

(4) Proposed rate schedules for all services and level of services proposed; and

(5) Any and all other information the grantee shall deem relevant to the request.

(Ord. No. 726, § 1, 5-29-84)

(a) Any grantee granted a franchise under this chapter shall pay to the city, during the life of such franchise, a sum equal to 5% of the annual gross receipts and, in addition thereto, such other sums as may be provided for by the franchise, other agreements, or ordinance. If, during any part of the franchise term, there is in effect a federal or state limit regulating the franchise fee percentage to a different amount, the maximum rate allowed thereby shall apply, but only to the extent required by law and only for that time period such limit is legally operational. Franchise fee payment by the grantee to the city shall be made quarterly by delivery of the same to the city clerk not later than April 15, July 15, October 15, and January 15 for the preceding quarter.

(b) The grantee shall file with the city clerk, within 90 days after the expiration of the grantee's fiscal year or portion thereof during which such franchise is in force, a balance sheet and statement of profit and loss certified to by a certified public accountant, or persons otherwise satisfactory to the city manager, showing in detail the annual gross receipts, as defined herein, of the grantee during the preceding fiscal year, or portion thereof. It shall be the duty of the grantee to pay to the city, within 15 days after the time for filing such statement, any unpaid balance thereof for the fiscal year or portion thereof covered by such statements.

(c) The city shall have the right to inspect and audit a grantee's fiscal records. If an independent audit of a grantee's records directed by the city shows a franchise fee error in excess of 2% in the city's favor, the grantee shall assume all reasonable costs for said audit. 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 additional sums payable under this section or for the performance of any other obligation hereunder.

(Ord. No. 726, § 1, 5-29-84)

(a) Within 60 days after acceptance of franchise the grantee shall apply for and proceed with due diligence to obtain all necessary permits and authorizations which are required in the conduct of its business, including but not limited to, any utility joint use attachment agreements, microwave carrier licenses, and any other permits, licenses and authorizations to be granted by duly constituted regulatory agencies having jurisdiction over the operation of CATV systems, or their associated microwave transmission facilities.

(b) Within 180 days after obtaining all necessary permits, licenses and authorizations, the grantee shall commence construction and installation of the CATV system.

(c) Within 90 days after the commencement of construction and installation of the system, the grantee shall proceed to render service to subscribers; and the completion of the construction and installation shall be pursued with reasonable diligence thereafter, so that service to all areas designated on the map accompanying the application for franchise or as modified in the franchise agreement shall be provided within one year from the date on which service was first provided.

(d) For failure either to apply for all necessary permits and approvals or to commence construction in accordance with this section, unless the council approves the delay because of reasons beyond the control of the grantee, the franchise term shall be reduced four days for each day of delay.

(e) For failure to begin service to subscribers or complete construction and installation of the system as provided for in this section, or as provided for in the grantee's proposal to the city and adopted or amended in the franchise agreement, unless the council approves the delay because of reasons beyond the control of the grantee, the franchise term shall be reduced four days for each day of delay.

(f) By acceptance of the franchise granted hereunder, the grantee agrees that, in the event of its failure to comply with any time requirements referred to in subsections (a) through (e), of this section, or as may be extended by the council, in addition to the liquidated damages provisions specified elsewhere in this chapter, the grantee will pay to the city the sum of $1,000 or such other amount as set forth in the franchise agreement per day for each and every day's delay beyond the time prescribed, plus authorized extensions therefor, for completion of any of the acts required to be done by this section.

(g) Any requests for extensions of the proposed construction deadlines proposed by a grantee, due to acts of God, acts of the public enemy, fires, floods, epidemics, quarantine restrictions, strikes, lockouts, freight embargoes, unusually severe weather, or from any other cause beyond the reasonable control of the grantee and/or its employees, agents, or contractors, must be submitted to the city manager in writing within 14 days after the cause for such delay first occurs. Such request must specify the exact reason for the delay and the total number of extension days requested. Whenever and wherever possible, such requests for extensions of the proposed or required construction deadlines should be supported with written justification of the cause for such delay, such as newspaper articles, letters from vendors, agents, contractors, etc. Within 14 days of receipt of such a request, the city manager will reply in writing, approving, partially approving, or denying the request.

(Ord. No. 726, § 1, 5-29-84)

(a) Any wires, cable lines, conduits or other properties of a grantee to be constructed or installed in streets, shall be so constructed or installed only at such locations and in such manner as shall be approved by the city engineer acting in the exercise of his reasonable discretion within the general guidelines of CATV construction standards approved by the council.

(b) A grantee shall utilize existing poles, conduits and other facilities whenever possible and shall not install or erect any facilities or apparatus in or on other public property, places or rights-of-way, 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, except those installed or erected upon public utility facilities then existing, without obtaining the prior written approval of the city engineer.

(c) Notwithstanding any other provision in this chapter or any franchise granted pursuant thereto, all facilities of a grantee in any public street or in any public or private easement, and service lines to subscribers off the main lines, shall be located underground at such depths and locations as required by the city engineer, except where a grantee uses existing poles, with permission from the owner, and as to such service lines where and so long as electric and telephone lines to the subscribers are overhead. Upon the undergrounding of the utility lines of the owner using said poles, the grantee shall concurrently (or earlier) place its facilities underground at depths and locations approved by the city engineer at no expense to the city or to the customer. All underground wires or cables of a grantee shall be placed in conduits.

(d) Amplifiers in a grantee's underground transmission and distribution lines shall be in appropriate low profile housing, and at locations as approved by the city engineer.

(e) All transmission lines, equipment and structures shall be so installed and located as to cause minimum interference with the rights and reasonable convenience of property owners and at all times shall be kept and maintained in a safe, adequate and substantial condition and in good order and repair. A grantee shall, at all times, employ ordinary care and shall install and maintain in use, commonly accepted methods and devices for preventing failures and accidents which are likely to cause damage, injuries or nuisances to the public. Suitable barricades, flags, lights, flares or other devices shall be used at such times and places as are reasonably required for the safety of all members of the public. Any poles or other fixtures placed in the public right-of-way by a grantee shall be placed in such a manner so as not to interfere with the usual travel on such public right-of-way.

(f) The grantee shall use boring augur techniques in lieu of transverse cuts for crossing arterial streets and driveways. Exceptions may be authorized by the city engineer when conditions such as street contours, utilities or other factors make boring techniques impractical. If any paved surface is disturbed during the construction or installation of CATV facilities, said surface shall be replaced by the grantee in conformance with city's specifications.

(g) The grantee shall not place any transmission lines or fixtures where the same will interfere with any gas, electric or telephone fixtures, water hydrant or main and all such transmission lines or fixtures placed in any street shall be placed within the areas specified by the city engineer and those placed in alleys shall be placed close to the line of the lot abutting on said alley, and then in such manner as not to interfere with the usual travel on said streets, alleys, and public ways.

(h) The grantee shall make every reasonable effort during the course of construction to maintain all streets, driveways, sidewalks and other paved surfaces in a usable condition.

(i) The grantee shall perform all backfilling and return property to original condition within 24 hours except by specified written approval of the city engineer.

(j) All landscaped public and private areas shall be returned to a condition as existed prior to the construction work, and the grantee shall maintain such area until, in the opinion of the city engineer, the plant materials are reestablished.

(k) The grantee shall not remove any tree or trim any portion, either above, at or below ground level, of any tree within any public place without the prior consent of the city. The city shall have the right to do the work with the actual cost thereof to be paid by the grantee. If such trimming is not performed by city, the grantee shall be responsible for any and all damages to any tree as a result of trimming, or to the land surrounding any tree, whether such tree is trimmed or removed.

(l) Any grantee awarded a franchise within the city agrees to the city's acceptance and approval of any and all subcontracting firms employed by the grantee within the city. Such acceptance and approval by the city shall not be unreasonably withheld. In the event the city determines that any subcontractor employed by the grantee is performing unsatisfactory or inferior work, as determined by the city engineer, or is the cause of numerous citizen complaints, the city manager shall notify the grantee in writing of such determination, and the grantee shall within 30 days of such notice employ another subcontractor that meets the provisions of this subsection. If the city invokes its right hereunder regarding any subcontractor employed by the grantee, then the grantee shall be given an extension on any construction deadlines for 30 additional days from the date of receipt of written notification of any such action by the city.

(m) The grantee shall notify the city at least 10 days prior to the intention of the grantee to commence any construction in any streets. The city shall cooperate with the grantee in issuing any permits required, provided such grant and subsequent construction by the grantee shall not unduly interfere with the use of such streets and that proposed construction shall be done in accordance with the pertinent provisions of the ordinances of the city.

(Ord. No. 726, § 1, 5-29-84)

(a) In the event that the use of any part of the CATV system is discontinued for any reason for a continuous period of 12 months, or in the event such system or property has been installed in any street or public place without complying with the requirements of the grantee's franchise or this chapter or the franchise has been terminated, cancelled or has expired, the grantee shall promptly, upon being given 30 days' written notice, initiate removal from the streets or public places all such property of such system other than any which the city engineer may permit to be abandoned in place. In the event of such removal, the grantee shall promptly restore the street or other area from which such property has been removed to a condition satisfactory to the city engineer.

(b) Any such property of the grantee on public property or in the public rights-of-way remaining in place 180 days after the termination or expiration of the franchise shall be considered permanently abandoned. The city engineer may extend such time not to exceed an additional 60 days.

(c) Any such property of the grantee to be abandoned in place shall be abandoned in such manner as the city engineer shall prescribe. Upon permanent abandonment of the property of the grantee in place, the property shall become that of the city, and the grantee shall submit to the city engineer an instrument in writing, to be approved by the city attorney, transferring to the city the ownership of such property, except as may be included within the provisions of any utility joint-use attachment agreements.

(Ord. No. 726, § 1, 5-29-84)

The grantee shall from time to time protect, support, dislocate, temporarily or permanently as may be required, remove or relocate, without expense to the city or any other government entity any facilities installed, used, and maintained under the franchise if and when made necessary by any lawful change of grade, alignment, or width of any public street, including the construction of any storm drain, sewer, subway or viaduct, by the city or any other government entity, or made necessary by any other governmental entity, or made necessary by any other public improvement or alteration in, under, on, upon or about any public street or other public property, whether such public improvements or alteration be at the instance of the city or another governmental entity, and whether such improvement or alteration is for a governmental or proprietary function, or made necessary by traffic conditions, public safety, street vacation or any other public project or purpose of city or any other governmental entity. The decision of the city engineer under this section shall be final and binding on the grantee.

(Ord. No. 726, § 1, 5-29-84)

Upon failure of the grantee to commence, pursue, or complete any work required by law or by the provisions of this chapter or by its franchise to be done in any street or other public place, within the time prescribed, and to the satisfaction of the city engineer, the city may, at its option, cause such work to be done, and the grantee shall pay to the city the cost thereof in the itemized amounts reported by the city engineer, to the grantee within 10 days after receipt of such itemized report. In the alternative, at the city's option, the city may demand of grantee the estimated cost of such work as estimated by the city engineer, and such shall be paid by grantee to the city within 10 days of such demand. Upon award of any contract or contracts therefor, the grantee shall pay to the city within 10 days of demand any additional amount necessary to provide for cost of such work. Upon completion of such work, the grantee shall pay to city or city shall refund to the grantee such sums so that the total received and retained by city shall equal the cost of such work. "Cost" as used herein includes 15% of other costs for city's overhead.

(Ord. No. 726, § 1, 5-29-84)

(a) In order to secure the faithful performance of each and all of its obligations under and pursuant to the provisions of this chapter and the applicable franchise agreement, concurrently with the filing and acceptance of award of a franchise granted hereunder, the grantee shall deposit with the city clerk cash, a negotiable certificate of deposit payable to the city, and/or a letter of credit in an aggregate amount equal to one million dollars ($1,000,000.00), or such other amount as may be specified in the franchise agreement. Any such certificate of deposit or letter of credit shall be in a form acceptable to the city attorney and shall be issued by a bank or savings and loan association whose most recently issued unsecured long-term debt securities are rated not less than AA or its equivalent by Standard & Poor's Corporation or Moody's Investors Service, Inc.; provided, however, that a certificate of deposit may be issued by any bank which is a member of the Federal Deposit Insurance Corporation ("FDIC") or by any savings and loan association which is a member of the Federal Savings and Loan Insurance Corporation ("FSLIC") if the principal amount of such certificate does not exceed the limits of the deposit insurance provided by FDIC or FSLIC, as the case may be. Unless otherwise specified in the franchise agreement, said amount shall be maintained on deposit with the city clerk throughout the period of construction of the system; and in the event said amount is reduced by reason of any drawing thereof by the city, the grantee shall restore the deposit to the original principal amount thereof within 30 days after such drawing.

(b) Subsequent to the completion of construction of the system to the satisfaction of the city, the aggregate amount so deposited with the city clerk may be reduced to $100,000 or such other amount as may be specified in the franchise agreement. Said amount shall be maintained on deposit with the city clerk throughout the remainder of the term of the franchise and any renewal thereof and thereafter until the grantee shall have liquidated all of its obligations arising from its acceptance of the franchise or the renewal thereof or from its exercise of any privilege therein granted. In the event said amount is reduced by reason of any drawing thereof by the city, the grantee shall restore the deposit to the original principal amount thereof within 30 days after such drawing.

(c) In the event that the grantee fails to comply with any one or more of the provisions of this chapter or of the franchise agreement, the city shall be entitled, after five days' written notice to the grantee prior to a withdrawal, to recover from the grantee, and may draw from the amount deposited by the grantee pursuant hereto, the following:

(1) Any amounts payable to (pursuant to the provisions of this chapter or otherwise) or expended by the city by reason of such failure of grantee;

(2) Any damages or loss suffered by the city as a result of any such failure;

(3) Interest at 10% per year, or such other rates as may be established by resolution of the council, from the date due as to the amount finally determined, whether liquidated or not in amount when due; and

(4) In the event of litigation, the reasonable attorney's fees, court costs and other expenses of the city, in the event the city is the prevailing party.

(Ord. No. 726, § 1, 5-29-84)

(a) The grantee shall, concurrently with the filing of an acceptance of award of any franchise granted under this chapter, furnish to the city and file with the city clerk, and at all times during the existence of any franchise granted hereunder, maintain in full force and effect, at its own cost and expense, a liability insurance policy in the amount and in a company approved by the city manager, and in a form satisfactory to the city attorney, indemnifying and saving harmless the city, its officers and employees from and against any and all claims, demands, actions, suits, and proceedings by others, against all liability to others related in any manner to the exercise or failure to exercise or the enjoyment or use of the franchise, including but not limited to any liability for damages by reason of or arising out of any failure by the grantee to secure consents from owners, authorized distributors or licensees of programs to be delivered by grantee's CATV system, and against any loss, cost, expense and damages resulting therefrom, including reasonable attorney's fees, irrespective of the amount of the comprehensive liability insurance policy required hereunder.

(b) The grantee shall, concurrently with the filing of an acceptance of award of any franchise granted under this chapter, furnish to the city and file with the city clerk, and at all times during the existence of any franchise granted hereunder, maintain in full force and effect, at its own cost and expense, a general comprehensive liability insurance policy, in protection of the city, its officers, boards, commissions, agents and employees, in a company approved by the city manager, and a form satisfactory to the city attorney, protecting the city and all persons against liability for loss or damage for personal injury, death and property damage, occasioned by the operations of grantee under such franchise, with minimum liability limits for personal injury or death and for damage to property acceptable to the city manager and approved by the city attorney.

(c) The policies mentioned above shall be endorsed to name the city, its officers, boards, commissions, agents and employees, as additional insureds and to act as primary and noncontributory with any other insurance available to the city and shall contain a provision that a written notice of cancellation or reduction in coverage of said policy shall be delivered to the city 30 days in advance of the effective date thereof. If such insurance is provided by a policy which also covers grantee or any other entity or person other than those above named, then such policy shall contain the standard cross-liability endorsement.

(Ord. No. 726, § 1, 5-29-84; Ord. No. 763, § 1, 7-28-86)

(a) No franchise granted pursuant to the provisions of this chapter shall become effective for any purpose unless and until written acceptance thereof shall have been filed with the city clerk; and unless and until all things required in this section and section 6-17 are done and completed in the time and manner required, the council may declare the franchise null and void.

(b) Within 20 days after the effective date of the ordinance 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, in form satisfactory to the city attorney, of the franchise, together with the security and insurance policies specified in this chapter 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 shall in form and content be satisfactory to and approved by the city attorney.

(Ord. No. 726, § 1, 5-29-84)

In the event any territory located outside the boundaries of the city which is covered by an existing cable system franchise or license granted by the governmental entity having jurisdiction over such territory is annexed to the city after the franchise thereof has commenced or completed construction and installation of a cable system within said territory, the rights reserved under such franchise or license to said governmental entity or to any officer thereof shall inure to the benefit of the city; and all regulatory provisions of this chapter and any rules and regulations applicable to CATV systems operating within the city, whether then in effect or subsequently adopted, shall be applicable to and binding upon said grantee. In addition, the grantee shall be obligated to pay annually to the city the percentage of gross receipts established by the governmental entity in said franchise or license which are derived from its operations within the annexed territory for three years (or until termination of the franchise if the franchise is terminated, by expiration thereof or otherwise, prior to the expiration of said period), at which time the same percentage of gross receipts required by franchises granted pursuant to this chapter will apply.

(Ord. No. 726, § 1, 5-29-84)

The grantee shall assume the following costs associated with a franchise:

(a) Costs of publication of any and all notices and ordinances relating to the franchise as such publication is required by law. Proof of such publication shall be promptly filed with the city clerk by the grantee.

(b) Reasonable and customary costs associated with the city employing an independent consultant to assist with the development of the franchise ordinance and any negotiations required to grant or amend (at the request of the grantee) the franchise.

(c) Reasonable and customary costs of an independent engineering firm to witness the initial design, installation and proof of performance testing of the system as a verification of the grantee's adherence to the terms and conditions of the franchise.

(d) All fees related to construction of the CATV facilities, including, but not limited to, city excavation permit fees, construction inspection fees, and other city costs related to CATV installation and construction.

(e) City costs of advertising and noticing for any public hearings related to rate increases or changes in this franchise.

(f) All city administrative costs associated with the granting of the franchise, including but not limited to the public hearings established for community needs assessments, costs associated with the performance of a cable television advisory committee, attorney fees, and city staff time committed to the franchising process and award and negotiation of the franchise.

(Ord. No. 726, § 1, 5-29-84)

Services shall be offered to all city residents in accordance with the provisions of the franchise agreement.

(Ord. No. 726, § 1, 5-29-84)

(a) The CATV system shall be designed, installed, maintained and tested in accordance with the best CATV industry practice and, as a minimum, shall conform with the technical performance standards as contained in the franchise agreement or in a request for proposal subsequently authorized by the council. In addition, should the Federal Communications Commission (FCC), or other state or federal authority having jurisdiction, impose CATV system technical performance standards either outside the scope of the technical performance standards referenced herein, or requiring a higher level of CATV system performance, those standards are hereby incorporated herein by reference.

(b) Thirty days prior to the last regular working day of each of the first three operating quarters of each year, the city manager may request the grantee to submit system performance data taken within the previous seven days. Measurements for said data shall be taken at the same test points selected to satisfy subsection (c), below, during the last annual system performance test that the data has been submitted to the city. Quarterly test data shall be limited to:

(1) Visual signal level for all channels carried;

(2) Visual signal-to-noise measurements on one active lowband and one active highband VHF channel; and

(3) Visual hum modulation on one channel or pilot carrier.

(c) The grantee shall, during the last month of the fourth operating quarter of each year, perform annual CATV system performance tests. Such tests shall be in full compliance with FCC regulations and such tests shall be independently witnessed and the resultant data analyzed by a representative of the city if directed by the city manager. All necessary test instrumentation shall be supplied by the grantee. A current certificate of calibration by an independent calibration laboratory shall be supplied for each test instrument upon request of the city manager. All costs for instrumentation and calibration shall be borne by grantee. Measurement locations for system compliance with subsection (b), above, except those requirements regarding twenty-four-hour visual signal amplitude and channel amplitude characteristics, shall include:

(1) End of each system major trunk; and

(2) End of each system trunk branch four or more trunk amplifiers deep.

(d) The grantee shall maintain the system so it consistently operates within the substantial compliance of the technical standards herein; substantial compliance being defined as 95% of the channels received shall meet all applicable technical standards. Simultaneously, at the time of measurement, 100% of the local origination equipment in current operation shall meet all applicable technical standards specified herein. Equipment not in current operation, or not meeting the technical standards, will be repaired to meet the applicable technical standards within 30 days.

(e) In the event that service to any subscriber is interrupted for 24 consecutive hours, the grantee shall provide a pro rata rebate of the monthly fees for each such period of 24 consecutive hours during which the interruption occurs, to all affected subscribers.

(f) In the event that the system fails to meet any technical performance standards specified in the franchise agreement for a full three-month period, the grantee shall reduce all subscribers' fees by 25% until all performance standards are met. The city manager shall notify the grantee in writing during the first month of the three-month period that the system has failed to meet performance standards.

(Ord. No. 726, § 1, 5-29-84)

(a) Pursuant to FCC Rules, the following procedure shall be adhered to in the event of subscriber complaints by city residents:

(1) Each grantee shall establish procedures for receiving, acting upon and resolving subscriber complaints to the satisfaction of the city manager. The grantee shall furnish a notice of such procedure to each subscriber at the time of initial subscription to the system.

(2) Each grantee shall maintain a written record, or "log," listing date and time of customer complaints, identifying the subscriber and determining the nature of the complaints and when and what action was taken by the grantee in response thereto; such record shall be kept at grantee's local office, reflecting the operations to date for a period of at least three years, and shall be available for inspection during regular business hours without further notice or demand by the city manager.

(3) In the event that a customer complaint is not resolved to the mutual satisfaction of the customer or the grantee, either customer or the grantee may request that the matter be presented to the city manager for a hearing and resolution.

(4) When there have been similar complaints made or where there exists other evidence which, in the judgment of the city manager casts doubt on the reliability or quality of cable service, or the grantee's ability to meet the technical standards herein adopted, the city manager shall have the right and authority to compel the grantee to test, analyze, and report on the performance of that part of the system involved in the problem. Such test or tests shall be made and the reports of such test or tests shall be delivered to the city no later than 14 days after the city formally notifies the grantee. Such report shall include the following information:

(i) The nature of the complaint which precipitated the special test;

(ii) What system component was tested;

(iii) The equipment used and procedures employed in such testing;

(iv) The names of the individuals performing and witnessing the testing;

(v) The date, time, and location of testing;

(vi) The results of such test; and

(vii) The method in which such complaints were resolved.

(5) Any other information pertinent to the special test shall also be recorded. The resultant report shall be submitted to the city manager and will form the basis for resolution. In the event either the subscriber or grantee determines that the resolution was unsatisfactory, either may appeal the issue to the council for a final and binding resolution.

(6) If, in the judgment of the city manager and/or council, the resultant tests indicate the service problem(s) are preventable and within the grantee's control, the city manager shall file such a written notice to the grantee to remedy the problem within a reasonable period agreed to by both the city and the grantee.

(b) Prior to construction of the cable system, the grantee shall notify in writing each resident in the area in which construction is to commence, and shall deliver to each resident, notice of such construction either in person, by a representative of the grantee, or by mail, at least 48 hours in advance of such construction work.

(c) Each grantee will provide a method of employee/subcontractor identification, acceptable to the city, for all such individuals who may make personal contact with Cypress residents of the city for the purpose of construction, marketing, or other services of the cable television system.

(d) Unless otherwise specified in the franchise agreement, each grantee will provide services to the entire residential area of the city, including future annexations, herein referred to as the "subscriber network." Any limitations on system extensions, or exclusions, shall be approved by the council and referenced as part of the grantee's proposal, or adopted by resolution of the council and attached hereto as additional exhibits.

(e) A grantee shall furnish the city with as-built drawings of the entire cable television system. Within 30 days of completion of construction of five miles of city streets, and for each five miles thereafter until the system is completed, the grantee shall file as-built drawings and all equipment operational manuals with the city manager. In the event any changes or modifications are made to the cable system that would alter the city's as-built plans, grantee shall, after seeking city approval of such changes, file revised plans to reflect the changes within 30 days of completion of the changes.

(f) After the grantee's CATV system is operative, the grantee shall give notice of any interruption for repairs, adjustments or installation, in the same manner as subsection (b) of this section.

(g) All notices which the city may give to a grantee or which grantee may give to the city shall be given in writing and may be given by first class mail, postage prepaid, addressed to the grantee's most recent address on file with the city, and addressed to city at the official city hall address. Such notices, so sent by mail shall be deemed given one business day after deposit in the United States mail if so deposited in Orange County or Los Angeles County, otherwise they will be deemed given upon receipt.

(Ord. No. 726, § 1, 5-29-84)

(a) At all reasonable times, the grantee shall permit any duly authorized representative of the city to examine all property of the grantee together with any appurtenant property of the grantee situated within or without the city, and to examine and transcribe any and all maps and other records kept or maintained by the grantee or under its control which deal with the operations, affairs, transactions, or property of the grantee with respect to its franchise. If any such maps or records are not kept in the city, or upon reasonable request not made available in the city, and if the council determines that an examination thereof is necessary or appropriate, then all travel and maintenance expense necessarily incurred in making such examination shall be paid by the grantee.

(b) The grantee shall prepare and furnish to the city manager and the director of finance at the time and in the form prescribed by either of said officers, such reports with respect to its operations, affairs, transactions or property, as may be reasonably necessary or appropriate to the performance of any of the rights, functions, or duties of the city or any of its officers in connection with the franchise.

(c) The grantee shall at all times make and keep in the city full and complete plans and records showing the exact location of all CATV system equipment installed or in use in streets and other public places in the city.

(Ord. No. 726, § 1, 5-29-84)

When any portion of the CATV system is to be installed on public utility poles and facilities, copies of the agreements for such joint use of poles and facilities shall be filed with the city clerk.

(Ord. No. 726, § 1, 5-29-84)

(a) The service rates and installation and connection charges for CATV system use, as contained in the franchise agreement as adopted or amended by the council, may be reduced at the sole discretion of the grantee (notice thereof to be filed with the city clerk at least 10 days prior to the effective date of any such reduction) and may be increased from time to time by resolution of the city council pursuant to this section.

(b) All such rates and charges shall remain in effect with no increase for the period of time indicated in the franchise agreement or such time as is adopted or amended by the council. In no event shall that term be less than three years from award of franchise. All rate and charge increase requests submitted or proposed by the grantee after said time period shall be based upon the following criteria, which shall be considered and evaluated by the council. The initial rates as hereinabove set may be adjusted after the initial period described above and at such time thereafter as hereunder specified, based upon the Consumer Price Index (CPI), All Urban Consumers Scale, prepared by the Bureau of Labor Statistics of the United States Department of Labor, relating to all items, Series A, for the Los Angeles/Long Beach/Anaheim area (1967 = 100, or as may be hereafter revised) in accordance with the following formula:

(1) For the initial rate increase request, the grantee shall submit to the city a report of the most recent CPI information for the twelve-month period preceding the report;

(2) For subsequent rate increase requests, the grantee shall submit to the city a report of the most recent CPI information for the period since the effective date of the last previous rate increase;

(3) CPI information shall include computations of percentage changes, to the nearest one-tenth of one percent, that have occurred since the rates were last established or adjusted.

(c) The grantee may request and the city may thereon grant a rate increase subject to the provisions herein, provided that:

(1) The amount of such rate adjustment divided by the current subscriber rates shall not exceed the percentage increase in the CPI during the period covered by the grantee's report;

(2) The grantee submits an itemization of capital assets, both tangible and intangible, with the accounting basis for depreciation and the depreciation schedule. If intangible assets such as good will are being amortized, the amortization period shall be stated;

(3) The grantee submits a detailed breakdown of operating, marketing and general and administrative costs by category for each of the three preceding years;

(4) The grantee reports the number of subscribers for "basic cable service" and "nonbasic cable service" for each of the three preceding years;

(5) The grantee reports the number of cable plant-miles and dwelling units passed by the cable plant for each of the three preceding years;

(6) The grantee submits a statement as to any allocation of funds to parent company overhead or operating costs, and the basis for such allocation;

(7) The grantee provides verification that it has notified all subscribers of rate increase request in a manner and form acceptable to the council.

(d) Upon receipt of a rate increase request, accompanied by all of the supporting information of paragraph (b) above, it shall be the obligation of the council to act upon such request within a period of 60 days from the date upon which all supporting materials have been submitted in adequate form. Prior to taking action on the request, at least one public hearing shall be held upon the rate increase. The council shall approve, partially approve, or disapprove, any increase of rates or rates for additional services on the basis of the following considerations:

(1) Performance of the grantee in abiding by the terms and conditions of this chapter and the franchise;

(2) Whether the grantee has adequately served or serviced the subscribers in the city and the community in general;

(3) Rates for comparable CATV service(s) in surrounding communities;

(4) Revenue and profits from services offered;

(5) Operating and construction expenses of the system;

(6) Completeness of the information submitted by grantee in support of the request for increases; and

(7) Other such evidence or testimony as may arise during the public hearing.

(e) The decision by the council approving, partially approving, or disapproving the request for increase shall not be unreasonably withheld and such decision shall be in resolution form, which shall contain finding(s) indicating the basis for the decision and any new rates thereby approved and adopted. Any increase in rates or charges thereby approved shall not become effective prior to 30 days after approval of the resolution.

(f) In the event a rate increase is granted as requested, the grantee shall refrain from applying for further increases for a period of 15 months from the effective date of the prior increase. If the rate request is denied, or a lesser increase than requested is approved, the grantee shall refrain from applying for further increases for a period of six months from the date of the resolution denying the request or approving the lesser request.

(g) A grantee shall maintain and file with the city a complete schedule of subscriber rates, including all fees and charges for services not subject to approval by the city.

(h) There shall be no charge for disconnection from the network. However, if a subscriber has failed to pay properly due monthly fees or if a subscriber disconnects for seasonal periods, a grantee may require, in addition to full payment of any delinquent fees, a reasonable fee for reconnection.

(i) A grantee shall receive no consideration whatsoever for or in connection with its provision of service to its subscribers other than as set forth in this section or as filed with and/or approved by the council.

(j) If a grantee fails to provide any service request by a subscriber or programmer, the grantee shall, after adequate notification and being afforded the opportunity to provide the service, promptly refund all deposits or advance charges paid for the service in question by said subscriber or programmer.

(k) In the event that any subscriber has made an annual payment in advance, a pro rata portion of the monthly payments shall be refunded by the grantee, where said subscriber terminates service because of a failure of the grantee to render the service in accordance with the standards set forth in the permit.

(l) Loss of or damage to the property of the grantee in the possession of or located on the property of any subscriber is the responsibility of said subscriber but only in amounts approved by the council and clearly stated in the grantee-subscriber agreement. Subscribers suffering a loss or damage to the property of the grantee due to acts or events which are beyond the control of the subscriber will be exempt from any loss, damage or replacement charges.

(Ord. No. 726, § 1, 5-29-84)

(a) The grantee shall make all reasonable efforts to electrically interconnect the city CATV system with CATV systems in adjacent communities for the purposes of sharing noncommercial locally originated public and educational programming. Such an interconnect shall be effected by coaxial cable, fiber optic cable, microwave, or other bi-directional signal transportation means as appropriate to permit programming interchange in compliance with the technical provisions hereof. Within two years of the effective date of a franchise, the grantee shall contact all franchised operators in the communities adjacent to the city for the purposes of exploring and securing a mutually acceptable system interconnect agreement and report the results of said activity to the city manager. Said report shall state each contacted operator's name, city, and response, list all programming activity available to city residents via such an interconnect agreement as well as list programming to similarly be transmitted from the city to the adjacent community and explain the substance of the governing business agreement reached with the other operators.

(b) If an adjacent operator(s) "IS" responsive to the grantee's inquiry for noncommercial interconnect, the council must first approve all details, plans and other agreements before implementation of the interconnect. The council may approve such an agreement by resolution.

(c) If an adjacent operator(s) "IS NOT" responsive to the grantee's inquiry, a letter report, stating that all reasonable attempts to gain an interconnect agreement were made but unsuccessfully, shall similarly be filed with the city.

(d) In the case of adjacent new CATV systems constructed in surrounding communities after the city's system, a grantee shall have six months after the new system becomes operational to make the required inquiries and attempt at an interconnect agreement.

(e) In the case of adjacent CATV systems operated by the grantee, the grantee shall have two years from acceptance of this franchise in which to provide a plan to interconnect with the city's system, the implementation of which shall be mutually accepted and agreed to by the cities, except such other city's approval is waived where grantee certifies that it is not required in order to execute implementation of the plan, where such franchises operated by the grantee exist.

(f) Revenue realized by the grantee, including any affiliate corporation indirect revenues from interconnection activity involving the city's CATV system shall be reported as gross receipts and will be subject to the current franchise fees. All affiliate corporation interconnect service agreement(s) revenue which includes the city's CATV system will be reported and the city's interconnect indirect system revenue will be calculated from the total affiliate corporation revenue based on the pro rata share of grantee's subscribers to all interconnected systems subscribers or other amounts as approved by the council.

(Ord. No. 726, § 1, 5-29-84)

(a) On or about the third anniversary date of the franchise agreement and each three years thereafter, the city and the grantee shall hold a system and services review session. The purposes of the review session shall be to study technological, economic and regulatory changes 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, modern, economically viable cable system.

(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 this ordinance and the franchise agreement; services provided to subscribers, institutions and community groups; programming; rate structure; market conditions; the financial condition of the grantee; subscriber complaints; user complaints; possible amendments to the franchise agreement; and developments in the law and regulation. Either the city or the grantee may select additional topics for discussion at any system and services review session.

(c) Sixty days prior to the scheduled system and services review, the grantee shall provide to the city the following reports:

(1) All cable system services that are being provided on an operational basis, excluding tests and demonstrations, to cities in the United States with populations above 10,000, or other such levels of population or numbers of subscribers as the city may establish from time to time, that are not provided to the city.

(2) A plan for provision of such services, or a justification indicating why such services are not feasible for the franchise area.

(3) The results of an opinion survey report which identify satisfaction or dissatisfaction among subscribers with cable communication services offered by the grantee. The surveys required to make said report shall be in a format mutually approved by the city and grantee.

(4) Other reports documenting the grantee's compliance with the provisions of this ordinance and/or the franchise agreement as requested by the city in writing 120 days prior to the scheduled review.

(d) The city and the grantee shall discuss new developments in technology and the desirability and feasibility of incorporating such new technological developments into the cable system. Technical factors, market conditions and economical viability shall be considered. The city and the grantee shall equally share the costs of any independent studies conducted by the mutual agreement of the parties. Either the city or the grantee may conduct its own studies at its own expense.

(e) At the conclusion of such system and services review session, the city shall issue a report summarizing the discussions and setting forth its findings. The grantee shall submit to the city a plan and schedule for the implementation of any improvements mutually agreed by the city and the grantee. After mutual agreement to such plan and schedule by the city and the grantee, the franchise agreement shall be amended to incorporate the plan and schedule for improvement.

(Ord. No. 726, § 1, 5-29-84)

(a) Each grantee shall strictly observe and protect the rights of privacy and of property of subscribers and users at all times. Information on individual subscribers, individual subscriber preferences of any kind, viewing habits, political, social or economic philosophies, beliefs, creeds, religions or names, addresses or telephone numbers shall not be revealed to any person, governmental unit, police department, investigating agency, company, other agency or entity, unless upon the authority of a court of law, or upon prior written permission of the subscriber. The request for permission must be contained in a separate document with a prominent statement that the subscriber is authorizing the permission in full knowledge of its provision. Such authorization shall not in any event be required as a condition of receiving service, and no such authorization shall be valid for more than one year.

(b) A franchisee may release the number of its subscribers but only as a total number and as a percentage of the potential subscribers throughout the city. When indicating the number of subscribers viewing a particular channel at a particular time, franchisee shall indicate only the total number of subscribers viewing during the relevant time and the percentage of all subscribers which they represent, but never the identity of a particular subscriber.

(c) A franchisee may maintain such information as is necessary to bill subscribers for the purchase of any system service.

(d) Neither a franchisee nor any other person shall initiate in any form, the discovery of any information on or about a subscriber's premises without prior valid authorization from the subscriber potentially affected.

(e) A subscriber may, at any time, revoke any authorization previously made, by delivering to franchisee in writing, by mail or otherwise, his/her decision to so revoke. Any such revocation shall be effective upon receipt by franchisee.

(f) No monitoring of any subscriber terminal shall take place without specific prior valid authorization by the user of the terminal in question, provided, however, the franchisee may conduct systemwide or individually addressed "sweeps" for the purpose of verifying system integrity, security monitoring, and/or other addressable premium service implementation or verification which the subscriber has contracted for. In no event shall residential aural or visual monitoring of any kind take place without a clear indication to the subscriber that such monitoring is taking place.

(g) A grantee may, without prior subscriber approval, monitor those subscriber terminals which are connected to utility monitoring devices which measure utility usage and which have been first approved by the council.

(h) Prior to implementation of any interactive subscriber response mechanism, the grantee must first demonstrate to the city manager that such a system can operate effectively and provide reasonable protection against any invasion of privacy.

(i) A grantee shall not tabulate any test results, nor permit the use of the system for such tabulation, which would reveal the commercial product preferences or opinions of subscribers, members of their families or their invitees, licensees or employees, without prior valid authorization of the subscriber.

(j) Each compilation, publication, tabulation or other dissemination of each piece of information made or permitted to be made in violation of this section shall be considered a misdemeanor.

(Ord. No. 726, § 1, 5-29-84)

(a) When not otherwise prescribed herein, all matters herein required to be filed with the city shall be filed with the city clerk.

(b) A grantee shall have no financial interest, directly or indirectly, in any TV or radio sales or repair business, nor shall a grantee or any of such persons accept or receive referral fees or gratuities from any such sales or repair business. Any violation of this paragraph, unknown to grantee, by an employee of a grantee who is not an officer shall not constitute a breach of this paragraph unless the grantee fails to discharge any such person upon discovery thereof.

(c) Within 180 days following award of franchise or prior to the start of system construction, the grantee will establish and maintain a local business office within the city for the purposes of conducting its local activities. The grantee will also maintain a twenty-four-hour toll-free answering service for service-related problem calls, as well as separate toll-free telephone numbers for the system manager, the sales/marketing department, and service department. A minimum of three lines shall be maintained for service and, in the event the city determines through subscriber complaints that those are insufficient to meet current demands, grantee agrees to add such additional lines as may be deemed necessary by the city manager to provide prompt, efficient response to subscriber inquiries. All such telephone numbers indicated in this subsection shall be listed in directories of the telephone company serving the city, and be so operated that complaints and requests for repairs or adjustments may be received at any time, day or night, seven days a week. All complaints shall be acknowledged within 24 hours of receipt.

(d) In the event that: (1) a court of competent jurisdiction for any reason holds invalid or unenforceable any provision of this chapter, or any provision of a franchise granted pursuant hereto, which pertains to: (i) the fees and charges which are payable to the city in connection with a franchise, (ii) public access channels, (iii) use by the city, other governmental agencies or the public of CATV facilities to be supplied by a grantee, (iv) the institutional network and noncommercial services to be provided by a grantee, or (v) a grantee's commitment to provide support for local origination facilities and programming; and (2) the council reasonably determines that said provision was a material consideration to the granting of a franchise; and (3) a grantee cannot or will not voluntarily waive such invalidity or unenforceability and agree to continue to comply with the provisions hereof and of such franchise without regard to such holding, then the city and the grantee shall negotiate in good faith to so amend the applicable franchise agreement as to provide the city with alternate arrangements which are the substantial equivalent of those held invalid or unenforceable. If the parties have not reached agreement with respect thereto within 60 days after the city requests such negotiations (or such longer period as the city may permit), at the option of the city, either: (1) the dispute will be submitted to an arbitrator pursuant to rules of the American Arbitration Association, who will determine what modifications of the franchise agreement are appropriate and whose decision shall be binding on the parties; or (2) the grantee shall immediately pay to a nonprofit organization designated by the council to promote and develop public benefit use of the CATV system an amount reasonably determined by the council to represent the approximate equivalent monetary value to the city of the provision held invalid or unenforceable.

(Ord. No. 726, § 1, 5-29-84)

(a) From and after the effective date of this chapter, it is unlawful for any person to establish, operate or to 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.

(b) From and after the effective date of this chapter, it is unlawful for any person to construct, install or maintain 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 an adopted general plan of arterial highways or on any tentative subdivision map approved by the city, and equipment or facilities for distributing any television signals or radio signals through 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.

(c) It is unlawful for any person, firm or corporation to make any unauthorized connection, whether physically, electrically, acoustically, inductively or otherwise, with any part of a franchised CATV system within this city for the purpose of taking or receiving television signals, radio signals, pictures, programs, or sound.

(d) It is unlawful for any person, firm or corporation to make any unauthorized connection, whether physically, electrically, acoustically, inductively or otherwise, with any part of a franchised CATV system within this city for the purpose of enabling himself or others to receive any television signal, radio signal, picture, program or sound, without payment to the owner of said system.

(e) It is unlawful for any person, without the consent of the owner, to wilfully tamper with, remove or injure any cables, wires or equipment used for distribution of television signals, radio signals, pictures, programs or sound.

(Ord. No. 726, § 1, 5-29-84)

Existing Ordinance No. 726, sections 6-1 through 6-31, shall apply to any cable system franchise in force prior to the effective date of Ordinance No. 1071.

(Ord. No. 1071, 12-12-05)

Ordinance No. 1071, sections 6-32 through 6-50, is hereby enacted to apply to any cable system franchise granted or renewed subsequent to the effective date of said ordinance.

(Ord. No. 1071, 12-12-05)

(1) Authority. The city, pursuant to applicable law, is authorized to grant one or more nonexclusive franchises to construct, operate, maintain and reconstruct cable systems within the city limits.

(2) Findings. The city council finds that the development of cable systems has the potential of having great benefit and impact upon the residents of the city. Because of the complex and rapidly changing technology associated with cable systems, the city council further finds that the public convenience, safety and general welfare can best be served by establishing regulatory powers which should be vested in the city or such persons as the city may designate. It is the intent of Ordinance No. 1071 and subsequent amendments to provide for and specify the means to attain the best possible cable service to the public and any franchises issued pursuant to Ordinance No. 1071 shall be deemed to include this as an integral finding thereof. It is the further intent of Ordinance No. 1071 to establish regulatory provisions that permit the city to regulate cable system franchises to the extent permitted by applicable law, including but not limited to the Cable Communications Policy Act of 1984, the Cable Television Consumer Protection and Competition Act of 1992, the Telecommunications Act of 1996 as amended or hereafter amended, applicable Federal Communications Commission rules and regulations and applicable California law.

(Ord. No. 1071, 12-12-05)

Ordinance No. 1071 shall constitute the "2005 Cable System Regulatory Ordinance" of the City of Cypress and may be referred to as such.

(Ord. No. 1071, 12-12-05)

For the purposes of Ordinance No. 1071, the following terms, phrases, words and their derivations shall have the meaning given herein. Words used in the present tense include the future, words in the plural number include the singular number, and words in the singular number include the plural number. Words not defined shall be given their common and ordinary meaning.

"Applicable law"

means all lawfully enacted federal, state and local laws, ordinances, codes, rules, regulations, orders and any amendments or successors thereto.

"Affiliate" or "affiliated person"

means each person who falls into one or more of the following categories: (1) each person having, directly or indirectly a controlling interest in grantee; (2) each person in which grantee has, directly or indirectly a controlling interest; (3) each officer, director, general partner, limited partner holding an interest of 35% or more, joint venturer, or joint venture partner in grantee's cable system in the city; and (4) each person, directly or indirectly, controlling, controlled by, or under common control with grantee; provided that "affiliated person" excludes the grantor, any limited partner holding an interest of less than 35% in the grantee, or any creditor of grantee, solely by virtue of its status of creditor, and which is not otherwise an affiliated person by reason of owning a controlling interest in, being owned by, or being under common ownership, common management, or common control with grantee. "Controlling interest" shall have the same meaning as "control," as defined in subsection 6-37.7 herein.

"Basic cable service"

means any service tier which includes the retransmission of local television broadcast signals.

"Cable operator"

means any person or group of persons who:

(a)

Provides cable service over a cable system and directly or through one or more affiliates owns a significant interest in such cable system; or

(b)

Otherwise controls or is responsible for, through any arrangement, the management and operation of such cable system.

"Cable service"

means:

(a)

The one-way transmission to subscribers of

(1)

Video programming; or

(2)

Other programming service; and

(b)

Subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service.

"Cable system" or "system,"

means a facility, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide cable service which includes video programming and which is provided to multiple subscribers within a community, but such term does not include:

(a)

A facility that serves only to retransmit television signals of one or more television broadcast stations;

(b)

A facility that serves subscribers without using any public rights-of-way;

(c)

A facility of a common carrier which is subject, in whole or in part, to the provisions of title II of the Communications Act of 1934, as amended, except that such facility shall be considered a cable system (other than for the purposes of 47 U.S.C. 541) to the extent such facility is used in the transmission of video programming directly to subscribers; unless the extent of such use is solely to provide interactive on-demand services;

(d)

An open video system that complies with title VI of the Communications Act of 1934 (47 U.S.C. 573) as amended; or

(e)

Any facilities of any electric utility used solely for operating its electric utility system.

"Channel" or "cable channel"

means a portion of the electromagnetic frequency spectrum which is used in a cable system which is capable of delivering a standard video signal as defined by the Federal Communications Commission.

"City manager"

means the City Manager of the City of Cypress, or his or her designee.

"Council" or "city council"

means the City Council of the City of Cypress.

"Franchise"

means an initial authorization, or renewal thereof, issued by the council, whether such authorization is designated as a franchise, permit, license, resolution, contract, certificate, agreement, or otherwise, which authorizes the construction or operation of a cable system. Any such authorization, in whatever form granted, shall not supersede the requirement to obtain any license or permit required for the privilege of transacting business within the city as required by the other ordinances and laws of the city.

"Franchise agreement"

means a franchise grant ordinance or a contractual agreement, containing the specific provisions of the franchise granted, including references, specifications, requirements and other related matters.

"Franchise fee"

means any fee or assessment of any kind imposed by the city on a grantee or affiliated person as compensation for the grantee's use of the public rights-of-way. The term "franchise fee" does not include:

(a)

Any tax, fee or assessment of general applicability (including any such tax, fee, or assessment imposed on both utilities and cable operators or their services, but not including a tax, fee or assessment which is unduly discriminatory against cable operators or cable subscribers);

(b)

Capital costs which are required by the franchise to be incurred by grantee for public, educational, or governmental access facilities;

(c)

Requirements or charges incidental to the awarding or enforcing of the franchise, including payments for bonds, security funds, letters of credit, insurance, indemnification, penalties, or liquidated damages; or

(d)

Any fee imposed under title 17, United States Code.

"Grantee"

means any "person" receiving a franchise pursuant to Ordinance No. 1071 and under the granting franchise ordinance or agreement, and its lawful successor, transferee or assignee.

"Grantor" or "city"

means the City of Cypress as represented by the council or such representative as the council may designate to act on cable matters on its behalf.

"Gross annual revenue" or "gross annual receipts" or "gross receipts"

means all revenue which is received, directly or indirectly, by grantee and by each affiliated person from or in connection with the distribution of any cable service, and any other service which may, under now or then applicable federal law, shall be included in the revenue base definition for the purpose of calculating and collecting the maximum allowable franchise fee for operation of the system whether or not authorized by a franchise. It is intended that all revenue collected by the grantee or any affiliated person from the provision of cable service over the system, whether or not authorized by the franchise, shall be included in this definition. Gross annual revenue also specifically includes any revenue received, as reasonably determined from time to time by the grantor, through any means which is intended to have the effect of avoiding the payment of compensation that would otherwise be paid to the grantor for the franchise granted. Gross annual revenue does not include: (i) the revenue of any person to the extent that said revenue is also included in the gross annual revenue of grantee; (ii) taxes imposed by law on subscribers which grantee is obligated to collect; (iii) amounts which must be excluded pursuant to applicable law.

"Installation"

means the connection of the system to subscribers' terminals, and the provision of service.

"Normal operating conditions"

means those service conditions which are within the control of grantee. Those conditions which are not within the control of the grantee include, but are not limited to, natural disasters, civil disturbances, power outages, telephone network outages, and severe or unusual weather conditions. Those conditions which are ordinarily within the control of the cable operator include, but are not limited to, special promotions, pay-per-view events, rate increases, regular peak or seasonal demand periods, and maintenance or upgrade of the cable system.

"Person"

means an individual, partnership, association, joint stock company, trust, corporation, proprietorship or governmental entity.

"Prime" or "prime rate"

means the base rate on corporate loans posted by at least 75% of the nation's 30 largest banks, which base rate is published in the Money Rates column of the Wall Street Journal on the date nearest to the applicable due date of a payment obligation of the grantee that is subject to an interest charge determined, in whole or in part, by reference to the prime rate.

"Public, educational or government access facilities" or "PEG access facilities"

means the total of the following:

(a)

Channel capacity designated for public, educational, or government use; and

(b)

Facilities and equipment for the use of such channel capacity.

"Section"

means any section, subsection or provision of Ordinance No. 1071.

"Service area" or "franchise area"

means the entire geographic area within the municipal boundaries of the city as it is now constituted or may in the future be constituted, unless otherwise specified in the franchise.

"Service tier"

means a category of cable service or other services provided by a cable operator and for which a separate rate is charged.

"State"

means the State of California.

"Street" or "public way" or "public rights-of-way"

means each of the following which have been dedicated to the public or are hereafter dedicated to the public and maintained under public authority or by others and located within the service area: streets, roadways, highways, avenues, lanes, alleys, sidewalks, easements, rights-of-way and similar public property.

"Subscriber" or "customer" or "consumer"

means any person who or which elects to subscribe to, for any purpose, cable service provided by the grantee by means of or in connection with the cable system, and who pays the charges therefor.

(Ord. No. 1071, 12-12-05)

(1) Franchise purposes. A franchise granted by the city under the provisions of Ordinance No. 1071 shall encompass the following purposes:

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

(b) To identify and specify those conditions, definitions, itemizations, specifications and other particulars of the franchise agreement between grantor and grantee.

(c) To identify and authorize 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.

(d) To permit the grantee to maintain and operate said franchise properties for the origination, reception, transmission, amplification, and distribution of television and radio signals and for the delivery of cable services.

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

(2) Franchise required. After the effective date of Ordinance No. 1071, it shall be 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 Ordinance No. 1071.

(a) Any person who violates this section shall be deemed guilty of a misdemeanor and, upon conviction thereof, shall be punishable by a fine of not more than $5,000, or by imprisonment in the county jail for a term not to exceed 12 months, or both such fine and imprisonment.

(b) In addition to [subsection] (a) herein, failure to obtain a franchise as required may result in any or all of the following: 1) forfeiture of the person's facilities located in the public right-of-way; 2) the removal at the person's expense any facilities from the public rights-of-way; or 3) damage awards.

(3) Term of the franchise.

(a) A franchise granted hereunder 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 hereunder may be renewed upon application by the grantee pursuant to the provisions of applicable law.

(4) Franchise territory. 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.

(5) Federal or state jurisdiction. Ordinance No. 1071 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 Ordinance No. 1071 to the extent permitted by applicable law.

(6) Applicable law; police power.

(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.

(7) Franchise nontransferable.

(a) Grantee shall not sell, transfer, 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 any of the rights or privileges therein granted, or the cable system, without the prior written consent of the council. 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 herein includes ownership interest of 35% or more, 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 35% 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 already 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 said 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 120 calendar days before the contemplated effective date of a transfer, grantee will submit to grantor application (hereinafter "application") for approving the transfer. Such application will provide the required complete information on the proposed transaction.

(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 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 unredacted copies of 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 summary of the proposed transferee's plans for at least the next five years regarding line extension, plant and equipment upgrades, channel capacity, maintenance, expansion or elimination of services, customer service 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 written 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 system and/or franchise.

(h) Any transfer without grantor's prior written approval constitutes a material breach of a franchise 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. 537 and grantor fails to act by the time required under 47 U.S.C. 537.

(i) Grantor shall 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 submission of an application for transfer of a franchise shall be accompanied by a nonrefundable franchise processing fee in the amount of $5,000 per proposed transfer. Upon transfer, grantee shall reimburse grantor for grantor's 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.

(8) Geographical coverage.

(a) Grantee shall design, construct and maintain the cable system 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 30 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.

(9) Nonexclusive franchise. Any franchise granted pursuant to Ordinance No. 1071 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.

(10) Multiple franchises.

(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.

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, nonincumbent 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 accommodate additional cables.

(11) Franchise modification. The grantee may be required to pay any 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.

(12) Contents of franchise agreements. If there is any conflict or inconsistency between the provisions of a franchise agreement authorized by the city council and provisions of Ordinance No. 1071 as of the effective date of the franchise agreement, the provisions of Ordinance No. 1071 shall control except where a provision of the franchise agreement expressly states otherwise.

(Ord. No. 1071, 12-12-05)

(1) Filing of applications. Any person desiring an initial franchise for a cable system shall file an application with the city. A nonrefundable initial application fee established by resolution of the city shall accompany the initial franchise application to cover all validly documented costs associated with processing and reviewing the application, including without limitation costs of administrative review, financial, legal and technical evaluation of the applicant, notice and publication requirements with respect to the consideration of the application and document preparation expenses. In the event such validly documented costs exceed the application fee, the selected applicant(s) shall pay the difference to the city within 30 days following receipt of an itemized statement of such costs.

(2) Applications—Contents. An application for an initial franchise for a cable system shall contain, where applicable:

(a) The names and addresses of persons authorized to act on behalf of the applicant with respect to the application;

(b) The name and address of the applicant and identification of applicant's ownership and control, including the names and addresses of the 10 largest holders of an ownership interest in the applicant and all persons in the applicant's direct ownership chain; the names and addresses of all persons owning 10% or more in the applicant and in persons in the applicant's direct ownership chain; the persons controlling the applicant and persons in the applicant's direct ownership chain; and all of applicant's officers and directors and persons in the applicant's direct ownership chain;

(c) A demonstration of the applicant's technical ability to construct and/or operate the proposed cable system, including identification of key personnel;

(d) A demonstration of the applicant's legal qualifications to construct and/or operate the proposed cable system;

(e) A statement prepared by an independent certified public accountant regarding the applicant's financial ability to complete the construction and operation of its proposed cable system;

(f) A description of the applicant's prior experience in cable system ownership, construction, and operation;

(g) Identification of California cities and counties where the applicant or its principals own, or have an interest in, a cable franchise. If an applicant does not have a cable franchise in California, it will provide the information for its operations in other states;

(h) Identification of the area of the city to be served by the proposed cable system, including a description of the boundaries of the proposed service area;

(i) A detailed description of the physical facilities proposed, including channel capacity, technical design, performance characteristics, headend, and PEG access facilities;

(j) A plan for constructing the proposed cable system, including estimated plant mileage and location; proposed construction schedule; a description, where appropriate, of how services will be converted from existing facilities to new facilities;

(k) The proposed rate structure, including projected charges for each service tier, installation, converters, and all other proposed equipment or services;

(l) A demonstration of how the applicant will meet the community's future cable-related needs and interests, including descriptions of the capacity, facilities, and support for public, educational, and governmental use of the cable system (including institutional networks);

(m) Pro forma financial projections for a minimum of five years for the proposed cable franchise term, including a statement of projected income and a schedule of planned capital additions, with all significant assumptions explained in notes or supporting schedules;

(n) If the applicant proposes to provide cable service to an area already served by an existing franchisee, the ability of public rights-of-way and other property that would be used by the applicant to accommodate an additional system;

(o) Any other information as may be necessary to demonstrate compliance with the requirements of applicable law; and

(p) An affidavit or declaration of the applicant or its authorized officer certifying the truth and accuracy of the information in the application, acknowledging the enforceability of application commitments, and certifying that the application meets all requirements of applicable law.

(3) Consideration of initial applications.

(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 council.

(b) A public hearing shall be set prior to any initial franchise grant, at a time and date approved by the council. Within 60 days after the close of the hearing, the council shall make a decision based upon the evidence received at the hearing as to whether or not the initial franchise(s) should be granted, and, if granted, subject to what conditions. The council may grant one or more franchises, or may decline to grant any franchise.

(4) Franchise renewal. Franchise renewals shall be in accordance with applicable law. Grantor and grantee, by mutual consent, may enter into renewal negotiations at any time during the term of the franchise.

(Ord. No. 1071, 12-12-05)

(1) Operational standards.

(a) Except as otherwise provided in the franchise agreement, grantee shall meet or exceed the following consumer protection and service standards under normal operating conditions which standards may be modified by action of the city council from time to time:

1. Sufficient toll-free telephone line capacity during normal business hours to assure that telephone answer time by a customer service representative, including wait time, shall not exceed 30 seconds; and callers needing to be transferred shall not be required to wait more than 30 seconds before being connected to a service representative.

Under normal operating conditions, a caller shall receive a busy signal less than 3% of the time. Grantee's customer service telephone number(s) shall be listed in the telephone directories of all telephone service providers serving the City of Cypress.

2. Emergency toll free telephone line capacity on a twenty-four-hour basis, including weekends and holidays. After normal business hours, the telephone calls may be answered by a service or an automated response system, including an answering machine and calls received after normal business hours by such service or automated response system must be responded to by a trained company representative by the next business day. During periods when an answering device, including, but not limited to voice-mail, is used, grantee shall provide personnel who shall contact the answering device or machine, at a minimum, every four hours to check on requests for service or complaints.

3. A business and service and payment office conveniently located to subscribers open during normal business hours where grantee provides adequate staffing to accept subscriber payments and the return or exchange of subscriber equipment. "Conveniently located" shall either be within the city, or at such different location as may be detailed in grantee's franchise agreement. Normal business hours shall include some evening hours, at least one night per week, and/or some weekend hours, but in no case less than 48 hours per week. The grantee may petition the grantor to reduce its business hours if the extended hours are not justified by subscriber demand, and grantor may not unreasonably deny the petition.

4. An emergency system maintenance and repair staff, capable of responding to and repairing major system malfunction on a twenty-four-hour-per-day basis.

5. An installation staff, capable of installing service to any subscriber requiring a standard installation within seven days after receipt of a request, in all areas where trunk and feeder cable have been activated. "Standard installations" shall be those that are located up to 125 feet from the existing distribution system, unless otherwise defined in any franchise agreement.

6. Grantee shall schedule, within a specified four-hour time period during normal business hours, all appointments with subscribers for installation of service, service calls and other activities at the subscriber location. Grantee may schedule installation and service calls outside of normal business hours for the express convenience of the customer. Grantee shall not cancel an appointment with a customer after the close of business on the business day prior to the scheduled appointment. If a grantee representative is running late for an appointment with a customer and will not be able to keep the appointment as scheduled, the customer shall be contacted and the appointment rescheduled, as necessary, at a time which is mutually agreeable to the grantee and the customer.

(b) Under normal operating conditions, the standards of paragraphs (a)(1) and (a)(2) above shall be met not less than 90% of the time measured on a quarterly basis. For the purposes of this section, "quarterly" shall mean any consecutive three-calendar-month period and is not necessarily coincident with a calendar quarter. The standards of paragraphs (a)(4) through (a)(6) above shall be met not less than 95% of the time measured on a quarterly basis.

(c) Grantee shall not be required to acquire equipment or perform surveys to measure compliance with the telephone answering standards above unless a historical record of complaints indicates a clear failure to comply.

(d) The grantee shall offer and fully describe to those wishing to become a subscriber and existing subscribers who have experienced a missed appointment (where the missed appointment was not the subscriber's fault) that the potential or existing subscriber may choose from at least the following options:

1. Installation or service call free of charge, if the appointment was for an installation or service call for which a fee was to be charged;

2. An opportunity to elect remedies under California Civil Code section 1722, if applicable.

(2) Service standards.

(a) Grantee shall render efficient service, make repairs promptly, and interrupt service only for good cause and for the shortest time possible. Scheduled interruptions, insofar as possible, shall be preceded by notice and shall occur during a period of minimum use of the cable system, preferably between 1:00 a.m. and 5:00 a.m. local time.

(b) The grantee shall maintain a repair force of technicians normally capable of responding to subscriber requests for service within the following time frames:

1. For a system outage. Within two hours, including weekends, of receiving subscriber calls or requests for service which by number identify a system outage of sound or picture of one or more channels, affecting at least 10% of the subscribers of the system.

2. For an isolated outage. Within 24 hours, including weekends, of receiving requests for service identifying an isolated outage of sound or picture for one or more channels that affects five or more subscribers. On weekends, an outage affecting fewer than five subscribers shall result in a service call no later than the next business day.

3. For inferior signal quality. Within two business days of receiving a request for service identifying a problem concerning picture or sound quality.

(c) Grantee shall be deemed to have responded to a request for service under the provisions of this section when a technician arrives at the service location and begins work on the problem. In the case of a subscriber not being home when the technician arrives, the technician shall leave written notification of arrival.

(d) Grantee shall not charge for the repair or replacement of defective or malfunctioning equipment provided by grantee to subscribers, unless the defect was caused by the subscriber, or the equipment owned by the subscriber requires repair or replacement.

(e) With regard to subscribers with mobility-limiting disabilities, upon subscriber request, each grantee shall arrange for pickup and/or replacement of converters or other grantee equipment at the subscriber's address or by a satisfactory equivalent (such as providing postage-prepaid mailer).

(f) Unless excused, grantee shall determine the nature of the problem resulting in a request for service within two business days of beginning work and resolve all cable system related problems within five business days unless technically infeasible.

(3) Billing and information standards.

(a) A franchisee's billing statement must be clear, concise, and understandable; must itemize each category of service and equipment provided to the subscriber; and must state clearly the charges therefor.

(b) A grantee's billing statement must show a specific payment due date not earlier than the later of:

1. Fifteen days after the date the billing statement is mailed; or

2. The tenth day of the service period for which the bill is rendered.

(c) A late fee or administrative fee (collectively referred to below as a "late fee") may not be imposed for payments earlier than 27 days after the due date specified in the bill.

1. A late fee may not be imposed unless the subscriber is provided written notice at least 10 days before the date the fee is imposed that a fee will be imposed, the date the fee will be imposed and the amount of the fee that will be imposed if the delinquency is not paid. A late fee may not be imposed unless the outstanding balance exceeds $10.

2. Subscribers shall not be charged a late fee or otherwise penalized for any failure by a grantee, including failure to timely or correctly bill the subscriber, or failure to properly credit the subscriber for a payment timely made. Payments shall be considered timely if received by the due date.

3. A grantee's bill must permit a subscriber to remit payment by mail or in person at the grantee's local office.

(d) In case of a billing dispute, the grantee shall respond to a written complaint from a subscriber within 30 days. Pending resolution of the billing dispute, grantee shall exercise care to ensure that no termination or late charge notices are issued for the disputed portions of the bill.

(e) Credits or refunds shall automatically be provided by grantee on a pro rata basis to any subscriber(s) affected by interruption(s) of service for more than three hours due to actions or outages under the control of the grantee, exclusive of scheduled repairs, maintenance or franchise-required construction that grantee has provided advance written notice of to subscribers. In cases where advance written notice is provided to subscribers, the time period detailed in said notice shall not exceed six hours in any twenty-four-hour period. In cases where said notice has been given to subscribers and the service interruption exceeds the period detailed in said notice, the provisions of this section shall apply.

In the event grantee has improperly or inadvertently disconnected cable services to a subscriber, grantee shall provide for restoration without charge to subscriber as soon as possible, but no later than within two days of discovery of disconnection. Grantee shall credit or provide refunds to any subscriber improperly or inadvertently disconnected from receiving cable services for the period of time without cable service.

All credits or refunds for service shall be issued no later than the customer's next billing cycle following the determination that a credit is warranted. For subscribers terminating service, refunds shall be issued promptly, but no later than 30 days after the return of any grantee-supplied equipment.

(f) Grantee shall provide written information on each of the following areas (i) at the time of the installation of service, (ii) at least annually to all subscribers, and (iii) at any time upon request:

1. Products and services offered; and

2. Prices and options for programming services and conditions of subscription to programming and other services; and

3. Installation and service maintenance policies; and

4. Instructions on how to use the cable service; and

5. Channel positions of programming carried on the system; and

6. Billing and complaint procedures, including the time to pay outstanding bills, the grounds for termination of service, the process for resolving billing disputes, and the address and telephone number of the grantor office designated for dealing with cable-related issues.

(g) Upon the initial provision of cable service to any subscriber, grantee shall pro rate the first invoice for cable service to reflect, to the extent appropriate, any partial billing period due to the introduction of service at a time other than the initiation of a billing cycle.

(h) Upon the initial provision of cable service to any subscriber, grantee shall provide a written notice to the subscriber containing substantially the following information:

"Subscriber understands that the Company uses public rights-of-way and other facilities of the City of Cypress in providing service and that this continued use cannot be guaranteed. Subscriber agrees not to make any claims against the City of Cypress or its officers or employees in the event that such use is denied for any reason, and Company is unable, in its discretion, to provide service over alternate routes."

(i) Subscribers and grantor shall be notified of any changes in rates, programming services or channel positions as soon as possible in writing and in accordance with applicable law. Notice must be given to subscribers and grantor a minimum of 30 days in advance of such changes if the change is within the control of the grantee. In addition, grantee shall notify subscribers and grantor 30 days in advance of any significant changes in the information required in paragraph (3)(f) above.

(4) Verification of compliance with standards.

(a) Upon 10 days' prior written notice, grantee shall respond to a request for information made by grantor regarding grantee's compliance with any or all of the standards required in subsections (1), (2), and (3) above. Grantee shall provide sufficient documentation related solely to the franchise area to permit grantor to verify grantee's compliance within the franchise area.

(b) A repeated and verifiable pattern of non-compliance with the consumer protection standards of subsections (1) through (3) above, after grantee's receipt of due notice and not less than a ten-day opportunity to cure, shall be deemed a material breach of the franchise agreement.

(c) The grantor, pursuant to subsection (1)(c), may require grantee to acquire equipment to determine compliance with the telephone answering standards of this section on a franchise-by-franchise basis. Should grantee have its own telephone equipment which can report on telephone line(s) usage, the grantee, upon written request from the grantor, shall submit such report from its own system in order to verify compliance with the telephone answering standards of this section.

(d) Grantee shall take necessary steps to ensure that adequate telephone lines and/or staffing are available to permit grantee to satisfy its obligations under Ordinance No. 1071 and the franchise. Consideration shall be given for periods of promotional activities or outages. The monthly billing period shall be considered as a normal, daily activity for purposes of determining the availability of adequate telephone lines and/or staffing.

(5) Subscriber complaints and disputes.

(a) Grantee shall establish written procedures for receiving, acting upon and resolving subscriber complaints without intervention by the grantor. The written procedures shall prescribe the manner in which a subscriber may submit a complaint either orally or in writing specifying the subscriber's grounds for dissatisfaction. Grantee shall file a copy of these procedures with grantor. The written procedures shall include a requirement that grantee respond to any written complaint from a subscriber within 30 days of receipt.

(b) Upon prior written request, grantor shall have the right to review grantee's response to any subscriber complaints in order to determine grantee's compliance with the franchise requirements, subject to the subscriber's right to privacy.

(c) Subject to applicable law, it shall be the right of all subscribers to continue receiving cable service insofar as their financial and other obligations to the grantee are honored. In the event that the grantee elects to rebuild, modify, or sell the system, or the grantor gives notice of intent to terminate or not to renew the franchise, the grantee shall act so as to ensure that all subscribers receive cable service so long as the franchise remains in force.

(d) In the event of a change of control of grantee, or in the event a new operator acquires the system, the original grantee shall cooperate with the grantor, new grantee or operator in maintaining continuity of service to all subscribers. During such period, grantee shall be entitled to the revenues for any period during which it operates the system.

(e) Grantee response to subscriber complaints, as well as complaints made by subscribers to grantor and provided by grantor to grantee, shall be initiated within one business day of receipt by grantor. The resolution of subscriber complaints shall be effected by grantee not later than three business days after receipt of the complaint, or a longer period if such complaint cannot reasonably be resolved within three business days. Should a grantee supervisor not be available when requested by a subscriber, a supervisor shall respond to the subscriber's complaint at the earliest possible time, and in no event later than the end of the next business day. For complaints received by grantor and provided by grantor to grantee, grantee shall notify grantor of grantee's progress in responding to, and resolving, said complaints.

(6) Truth in advertising.

(a) Each grantee shall take appropriate steps to ensure that all written promotional materials, announcements, and advertising of cable service to subscribers and the general public, where price information is listed in any manner, clearly and accurately discloses price terms. In the case of telephone orders, a grantee will take appropriate steps to ensure that price terms are clearly and accurately disclosed to potential customers in advance of taking the order.

(b) Each grantee will maintain a file available for public inspection containing all notices provided to subscribers under these customer service standards, as well as all promotional offers made to subscribers. The notices and offers will be kept in the file for at least one year from the date of such notice or promotional offer.

(7) Other requirements.

(a) In the event grantee fails to operate the system for seven consecutive days other than for reasons beyond the control of grantee, without prior approval or subsequent excuse of the grantor, the grantor may, at its sole option, operate the system or designate an operator until such time as grantee restores service under conditions acceptable to the grantor or a permanent operator is selected. If the grantor should fulfill this obligation for the grantee, then during such period as the grantor fulfills such obligation, the grantor shall be entitled to collect all revenues from the system, and the grantee shall reimburse the grantor for all costs or damages in excess of the revenues collected by grantor that are the result of grantee's failure to perform.

(b) All officers, agents or employees of grantee or its contractors or subcontractors who, in the normal course of work come into contact with members of the public or who require entry onto subscribers' premises shall carry a company issued photo-identification card. Every vehicle of the grantee or its major subcontractors shall be clearly identified as working for grantee.

(c) Additional service standards and standards governing consumer protection and response by grantee to subscriber complaints not otherwise provided for in Ordinance No. 1071 may be established in the franchise agreement or by separate ordinance as permitted by applicable law.

(Ord. No. 1071, 12-12-05)

(1) Franchise fee.

(a) Following the issuance and acceptance of the franchise, the grantee shall pay to the grantor a franchise fee on gross annual cable service revenues in the amount and at the times set forth in the franchise agreement.

(b) The grantor, on an annual basis, shall be furnished a statement within 120 days of the close of the calendar year, either audited and certified by an independent certified public accountant or certified by an officer or authorized financial representative of the grantee, reflecting the total amounts of gross revenues and all payments, deductions and computations for the period covered by the payment. Upon 30 days' prior written notice, grantor shall have the right to conduct an independent financial audit of grantee's gross annual cable service revenue and franchise fee records for the preceding four-year period, and if such audit indicates a franchise fee underpayment of 3% or more, the grantee shall assume all costs of such audit.

(c) No acceptance of any payment by the grantor shall be construed as a release or as an accord and satisfaction of any claim the grantor may have for further or additional sums payable as a franchise fee under Ordinance No. 1071 or for the performance of any other obligation of the grantee.

(d) In the event that any franchise fee payment or payment of any adjustment to any franchise fee is not made on or before the dates specified in the franchise agreement, unless otherwise excused, grantee shall pay:

1. An interest charge, computed from such due date, at an annual rate equal to the prevailing commercial prime interest rate in effect upon the due date, plus one percentage point; and

2. If the payment is late by 30 days or more, a sum of money equal to 5% of the amount due in order to defray those additional expenses and costs incurred by the grantor due to grantee's delinquent payment.

(e) Franchise fee payments shall be made in accordance with the schedule indicated in the franchise agreement.

(2) Security.

(a) Grantor may require grantee to provide security, in an amount and form established in the franchise agreement. The amount of the security shall be established based on the extent of the grantee's obligations under the terms of the franchise or past performance.

(b) The security shall be available to grantor to satisfy all claims, liens and/or taxes due grantor from grantee which arise by reason of construction, operation, or maintenance of the system, and to satisfy any actual or liquidated damages arising out of a material breach of the franchise agreement, subject to the procedures and amounts designated in the franchise agreement.

(c) If the security is drawn upon by grantor in accordance with the procedures established in Ordinance No. 1071 and the franchise agreement, grantee shall cause the security to be replenished to the original amount no later than 30 days after receiving written confirmation from the issuer where such security is maintained that grantor has made a draw against the security. Failure to replenish the security shall be deemed a material breach of the franchise.

(Ord. No. 1071, 12-12-05)

(1) System construction.

(a) Grantee shall not construct any cable system facilities until grantee has secured the necessary permits from grantor, or other responsible public agencies. The grantee shall be subject to all permit and bonding requirements applicable to contractors working within the public rights-of-way. No provision of Ordinance No. 1071 or the franchise agreement shall be deemed a waiver of the obligation of a grantee to pay grantor for the issuance of a permit.

(b) Prior to performing any work in the public right-of-way, grantee shall give appropriate notice to the "underground service alert" ("USA"), or any similar type service provider as designated by the grantor.

(c) In those areas of the city where transmission lines or distribution facilities of all public utilities providing telephone and electric power service are underground, the grantee likewise shall construct, operate and maintain its transmission and distribution facilities underground.

(d) In those areas of the city where the grantee's cables are located on the above-ground transmission or distribution facilities of the public and/or municipal utility providing telephone or electric power service, and in the event that the facilities of both the telephone and electric power utilities subsequently are placed underground, then the grantee likewise shall reconstruct, operate and maintain its transmission and distribution facilities underground, at grantee's sole cost. Certain of grantee's equipment, such as pedestals, amplifiers and power supplies, which normally are placed above ground, may continue to remain in above-ground enclosures, unless otherwise required by the city.

(e) Any changes in or extensions of any poles, anchors, wires, cables, conduits, vaults, laterals or other fixtures and equipment (herein referred to as "structures"), or the construction of any additional structures, in, upon, along, across, under or over the streets, alleys and public ways shall be made under the direction of public works director or a designee, who shall, if the proposed change, extension or construction conforms to the provisions hereof, issue written permits therefor. The height above public thoroughfares of all aerial wires shall conform to the requirements of the California regulatory body having jurisdiction thereof.

1. All transmission and distribution structures, lines and equipment erected by the grantee shall be located so as not to interfere with the proper use of the public rights-of-way, and to cause minimum interference with the rights or reasonable convenience of property owners who adjoin any of the said public rights-of-way, and not to materially interfere with existing public and municipal utility installations.

2. In the event that any property or improvement of the grantor in the public rights-of-way is disturbed or damaged by the grantee or any of its contractors, agents or employees in connection with undertaking any and all work pursuant to the rights granted to the grantee pursuant to Ordinance No. 1071 and the franchise agreement, the grantee shall promptly, at the grantee's sole cost and expense, restore to the grantor's satisfaction said property or improvement which was so disturbed or damaged. If such property or improvement shall, within three years (or in the case of street improvement, until the street is resurfaced if resurfaced prior to the expiration of the three years) of the date the restoration was completed, become uneven, unsettled or otherwise require additional restorative work, repair or replacement because of the initial disturbance or damage to the property by the grantee, then the grantee, as soon as reasonably possible, shall, promptly upon receipt of written notice from the grantor and at the grantee's sole cost and expense, restore to the grantor's satisfaction said property or improvement which was disturbed or damaged. Any such restoration by the grantee shall be made in accordance with such materials and specifications as may, from time to time, be established by the grantor.

3. If emergency work on the system in the public right-of-way is required, the grantee shall with all due diligence, seek to obtain any and all required permits, licenses and authorizations within three working days after commencing such emergency work

4. There shall be no obstruction of the public rights-of-way by the grantee in connection with any of the work provided for herein. The grantee shall maintain any barriers, signs and warning signals during any work performed on or about the public rights-of-way or adjacent thereto as may be necessary to reasonably avoid injury or damage to life and property.

5. If the city manager determines that the grantee has created an unsafe condition in the public right-of-way or adjacent thereto, the city manager shall have the authority to issue a work stoppage order restricting any work by grantee in the public rights-of-way until the unsafe condition has been corrected to the city's reasonable satisfaction. In cases where unsafe conditions are found by the city manager, the grantor shall correct the condition as soon as possible unless otherwise permitted by the city.

6. If the grantor lawfully elects to alter or change the grade or location of any public right-of-way, the grantee shall, upon reasonable notice by the grantor, and in a timely manner, remove, relay and relocate its poles, wires, cables, underground conduits, manholes and other fixtures at it own expense.

7. The grantee shall not place poles, conduits or other fixtures above or below ground where the same will interfere with any gas, electric, telephone fixtures, sewer, water hydrants or other utility, and all such poles, conduits or other fixtures placed in any street shall be so placed as to comply with all ordinances of the grantor.

8. In accordance with applicable law, the grantee or any utility user of the public rights-of-way may be required by the grantor to permit joint use of poles located in the public rights-of-way, insofar as such joint use may be reasonably practicable and upon payment of a reasonable rental fee for such usage.

9. The grantee, on request of any person holding a moving permit issued by the grantor, shall temporarily raise or lower its wires or fixtures to permit the moving of buildings. The expense of such temporary raising or lowering of wires or fixtures shall be paid by the person, unless such person is the city, requesting the same, and the grantee shall have the authority to require such payment in advance. The grantee shall be given not less than five business days prior written notice to arrange for the temporary wire or equipment changes.

10. Subject to provisions of City Code, the grantee shall have the authority to trim any trees or other natural growth overhanging the public rights-of-way so as to prevent the branches of such trees or other natural growth from coming in contact with the grantee's wires, cables and other equipment. The grantor may require all trimming of trees and natural growth to be done under its supervision and direction at the expense of the grantee.

11. Grantee shall be subject to any and all requirements established by the grantor with regard to the placement and screening of facilities and equipment located in the public rights-of-way. Such requirements may include, but not be limited to, use of landscaping to screen pedestals and cabinets and requiring that construction be flush with the natural grade of the surrounding area.

12. Grantee shall use only chalk-based paints to mark the public rights-of-way in connection with the construction or maintenance of the cable system. All paint marks remaining after grantee's cleanup following the completion of the construction or maintenance work must be removed by grantee by means of sand blasting, nontoxic chemicals, water or high-pressure water within 30 days following receipt by grantee of grantor's written notice requiring such removal.

(2) Multiple franchises. If the grantor authorizes or permits another cable system to operate within the municipal limits of the city, grantee shall cooperate with such franchisee to the extent necessary in the event that the installation of such new cable system requires the strengthening of poles, replacing poles, rearranging attachments, placing underground facilities incident to the construction of an additional cable system in the franchise area. The cost of the construction and installation of the new entrant cable system shall, however, be borne by the new cable franchisee.

(Ord. No. 1071, 12-12-05)

(1) Applicable standards.

(a) The grantee shall construct, install, operate and maintain its cable system in a manner consistent with applicable law, and any detailed standards set forth in its franchise agreement. In addition, the grantee shall provide to the grantor, upon written request, a written report of the results of the grantee's periodic proof of performance tests conducted pursuant to FCC standards and guidelines.

(b) Should the FCC no longer require proof-of-performance tests, the grantee shall make and submit such proof-of-performance tests and reports in response to a written request from the grantor. Such report shall be submitted to the grantor within 30 days of issuance of the grantor request.

(2) Noncompliance with standards. Repeated failure to maintain specified technical standards shall constitute a material breach of the franchise.

(Ord. No. 1071, 12-12-05)

(1) Hold harmless. Grantee shall indemnify, defend and hold grantor, its officers, agents and employees harmless from any liability, claims, damages, costs or expenses, to the extent provided in the franchise agreement.

(2) Insurance.

(a) On or before commencement of franchise operations, the grantee shall furnish to grantor certificates of insurance for liability, workers' compensation and property insurance from appropriately qualified insurance companies, which shall be "admitted" in the state. The certificates of insurance shall provide that the insurance is in force and will not be cancelled or modified without 30 days' prior written notice to grantor. The certificates of insurance shall be in a form satisfactory to grantor. The grantee shall maintain at its cost throughout the term of the franchise, the insurance required herein and in any franchise agreement.

(b) The policy of liability insurance shall:

1. Name grantor, its officers, agents and employees as additional insured;

2. Indemnify all liability for personal and bodily injury, death and damage to property arising from activities conducted and premises used pursuant to Ordinance No. 1071 by providing coverage therefor, including but not limited to:

—Negligent acts or omissions of grantee, and its agents, servants and employees, committed in the conduct of franchise operations, and/or

—Use of motor vehicles;

3. Provide a combined single limit for comprehensive general liability and comprehensive automobile liability insurance in the amount provided for in the franchise agreement.

(c) The policy of workers' compensation insurance shall comply with the laws of the state.

(d) The policy of property insurance shall provide fire insurance with extended coverage on the franchise property used by grantee in the conduct of franchise operations in an amount adequate to enable grantee to resume franchise operations following the occurrence of any risk covered by this insurance.

The certificates of insurance shall indicate the following information:

1. The policy number;

2. The date upon which the policy will become effective and the date upon which it will expire;

3. The names of the primary insureds and any additional insured required by the franchise agreement;

4. The subject of the insurance;

5. The type of coverage provided by the insurance; and

6. The amount or limit of coverage provided by the insurance.

7. Any cancellation provisions.

(e) The commencement of franchise operations shall not begin until grantee has complied with the aforementioned provisions of this section.

(f) In the event grantee fails to maintain any of the above-described policies in full force and effect, grantor shall, upon 48 hours' notice to grantee, have the right to procure the required insurance and recover the cost thereof from grantee. Grantor shall also have the right to suspend the franchise during any period that grantee fails to maintain said policies in full force and effect.

(Ord. No. 1071, 12-12-05)

(1) Records required.

(a) Grantee shall at all times maintain:

1. A written or computer-stored record of all service calls and interruptions or degradation of service experienced for the preceding two years, provided that such complaints result in or require a service call, subject to the subscriber's right of privacy.

2. A full and complete set of "as-built" plans and record drawings showing the locations of the cable system and all aspects thereof, installed or in use in the city, exclusive of subscriber service drops and equipment provided in subscriber's homes.

3. If requested by grantor, a summary of service calls, identifying the number, general nature and disposition of such calls, on a quarterly basis. A summary of such service calls shall be submitted to the grantor within 30 days following any written request by grantor, in a form acceptable to the grantor.

4. If requested by grantor, a complaint record which shall contain a semi-annual (through June 30 and December 31) breakdown indicating the total number of complaints received for the preceding reporting period, and shall indicate the classifications of complaints as follows: construction, billing, Customer relations/service and miscellaneous.

5. A full and complete record of rates for programming services, equipment, installations and other Subscriber charges. This information shall include, but not be limited to, rates for the basic service tier, tiers of service beyond the basic tier, premium service, pay-per-view services, late fees, additional outlets, converters, remote controls and any charges for installation or service at the subscriber premises.

(b) The grantor may impose requests for additional information, records and documents from grantee, provided they relate to the scope of the city's rights under Ordinance No. 1071 or the grantee's franchise agreement.

(c) Upon reasonable notice, and during normal business hours, grantee shall permit examination, including the provision of copies, by any duly authorized representative of the grantor of all:

1. Franchise property and facilities, together with any appurtenant property and facilities of grantee situated within the service area; and

2. All records relating to the franchise, provided they are necessary to enable the grantor to determine grantee's compliance with the terms and conditions of Ordinance No. 1071 or the franchise agreement.

(2) Reports.

(a) Within 90 days after the end of the calendar year, grantee shall submit a written report to grantor with respect to the preceding calendar year in a form approved by grantor, including, but not limited to, the following information:

1. A summary of the previous year's (or in the case of the initial reporting year, the initial year's) activities in development of the cable system, including but not limited to, services begun or discontinued during the reporting year;

2. A list of grantee's officers and members of its board of directors;

3. A list of stockholders or other equity investors holding 10% or more of the voting interest in grantee;

4. An indication of any residences in grantee's service area where service is not available, and a schedule for providing service;

5. Information as to:

(i) The number of homes passed;

(ii) Total subscribers; and

(iii) The number of basic and pay subscribers.

6. A full and complete set of maps showing the locations of the cable system installed or in use in the city, exclusive of subscriber service drops and equipment provided in subscriber's homes. It is the intent of this section that the grantor have a complete set of "as-built" trunk and feeder maps as well as maps showing the location of all above and below ground ancillary equipment. After the initial submission of a complete set of drawings, the grantee may satisfy the provisions of this section by providing updated portions of those sections of the drawings which have changed.

7. Any other information relevant to franchise regulation which the grantor shall request, and which is relevant to grantor's regulatory responsibilities.

(b) The grantor may impose requests for additional reports, information, records and documents from grantee, provided they relate to the scope of the city's rights under Ordinance No. 1071 or the grantee's franchise agreement.

(c) Upon request, grantee shall submit to grantor copies of all pleadings, applications and reports submitted by grantee to any federal, state or local court, regulatory agency, or other governmental body as well as copies of all decisions issued in response to such pleadings, applications and reports, which are nonroutine in nature and which will materially affect its cable system within the franchise area.

(d) If grantee is publicly held, a copy of each grantee's annual and other periodic reports and those of its parent, shall be submitted to grantor upon request.

(e) Upon grantor's request, but no more than annually, grantee shall submit to a grantor a privacy report indicating the degree of compliance with the provisions contained in subsections 6-49(3)(c), (d), (e), (f) and (h) herein and all steps taken to assure that the privacy rights of individuals have been protected.

(f) All reports and records required to be delivered to grantor under Ordinance No. 1071 shall be furnished at the sole expense of grantee, except as otherwise provided in the franchise agreement.

(g) The willful refusal, failure, or willful negligence of grantee to file any of the reports required as and when due under Ordinance No. 1071, may be deemed a material breach of the franchise agreement if such reports are not provided to grantor within 30 days after written request therefor, and may subject the grantee to all remedies, legal or equitable, which are available to grantor under Ordinance No. 1071 or the franchise agreement.

(h) Any materially false or misleading statement or representation made knowingly and willfully by the grantee in any report required under Ordinance No. 1071, the franchise agreement or applicable law, shall be deemed a material breach of the franchise and may subject grantee to all remedies, legal or equitable, which are available to grantor.

(Ord. No. 1071, 12-12-05)

Review.

(a) Throughout the term of the franchise, but not more frequently than once in any five-calendar-year period, if requested by prior written notice from the grantor, grantor and grantee shall meet to review system performance and quality of service. The various reports required pursuant to Ordinance No. 1071, results of technical performance tests, the record of subscriber complaints and grantee's response to those complaints, and the information acquired in any subscriber surveys, shall be utilized as the basis for review. In addition, any subscriber may submit comments or complaints during the review meetings, either orally or in writing, and these shall be considered. Within 30 days after the conclusion of such a review meeting, grantor may issue findings with respect to the cable system's franchise compliance. Within 30 days of the issuance of such findings, the grantee shall provide the grantor with grantee's written response to the findings.

(b) If grantor determines that grantee is not in compliance with the requirements of Ordinance No. 1071 or the grantee's franchise agreement, grantor shall provide grantee, in the form of written findings, the specific details of each alleged noncompliance. Grantor may then direct grantee to correct the areas of noncompliance within a reasonable period of time. Failure of the grantee, after due notice, to:

1. Correct the area(s) of noncompliance within the period specified therefor; or

2. Commence compliance within such period and diligently achieve compliance thereafter; or

3. Demonstrate that the allegations of noncompliance are incorrect;

(Ord. No. 1071, 12-12-05)

(1) Remedies for violations. If grantee fails to perform in a timely manner any material obligation required by Ordinance No. 1071 or a franchise granted hereunder, following written notice from the grantor and an opportunity to cure such nonperformance in accordance with the provisions of this section, grantor may at its option and in its sole discretion:

(a) Cure the violation and recover the actual cost thereof from the security fund established in the franchise agreement, unless grantor, in its sole discretion, has provided grantee with additional time to effectuate a cure.

(b) Assess against grantee liquidated damages in an amount set forth in the franchise agreement for any such violations if such violation is not cured, or if grantee has not commenced a cure, on a schedule acceptable to grantor. Such assessment may be withdrawn from the security fund, and shall not constitute a waiver by grantor of any other right or remedy it may have under the franchise or applicable law, including without limitation, its right to recover from grantee such additional damages, losses, costs and expenses, including actual attorney's fees, as may have been suffered or incurred by grantor by reason of or arising out of such material breach of the franchise.

1. Within three days of a withdrawal from the security fund, grantor will mail, by certified mail, return receipt requested, written notification of the amount, date and purpose of such withdrawal to grantee.

2. If at the time of grantor's withdrawal, the amounts available are insufficient to provide the total payment toward which the withdrawal is directed, the balance of such payment will continue as grantee's obligation to grantor until it is paid.

3. Not later than 30 days after receipt of notification to grantee by certified mail, return receipt requested, of a withdrawal from the security fund, grantee will deliver to grantor for deposit in the security fund an amount equal to the amount so withdrawn.

4. Failure to make timely delivery of such amount to grantor or to restore the letter of credit will constitute a material violation of the cable franchise.

(2) Procedure for remedying franchise violations. Prior to imposing any remedy or other sanction against grantee specified in Ordinance No. 1071, grantor shall give grantee notice and opportunity to be heard on the matter, in accordance with the following procedures:

(a) The city manager shall first notify grantee of the alleged violation in writing by personal delivery or registered or certified mail, and demand correction, or evidence of nonviolation, within a reasonable time, which shall not be less than 10 calendar days. If grantee fails to:

1. Correct the alleged violation within the time prescribed; or

2. Commence correction of the alleged violation within the time prescribed and diligently remedy such alleged violation thereafter; or

3. Provide evidence that there is no violation, the city manager shall then give, by personal delivery or registered or certified mail written notice of not less than 15 days of a hearing. Said notice shall set forth in detail each of the violations alleged to have occurred.

(b) Subsequent to the hearing, the city manager shall hear and consider all other relevant evidence, and thereafter render findings and its decision.

(c) If the city manager finds that:

1. The grantee has corrected the alleged violation; or

2. The grantee has diligently commenced correction of such alleged violation after notice thereof and is diligently proceeding to fully remedy such alleged violation; or

3. No material violation has occurred, the proceedings shall terminate and no penalty or other sanction shall be imposed.

(d) If the city manager finds that a material violation exists and that grantee:

1. Has not corrected the same in a satisfactory manner; or

2. Has not diligently commenced correction of such violation after notice thereof and is not diligently proceeding to fully remedy such violation; then the city manager may impose one or more of the remedies provided in Ordinance No. 1071 and the franchise agreement as the city manager, in his or her discretion, deems appropriate under the circumstances.

(e) Grantee may appeal any findings of the city manager to the city council. The council shall schedule a hearing on the issue within 30 days of receipt by the city manager of grantee's appeal. The hearing will provide grantee with the full opportunity to participate and present evidence. The city council shall decide the matter de novo based upon the evidence presented to the city council.

(3) Grantor's power to revoke.

(a) Grantor may revoke any franchise granted pursuant to Ordinance No. 1071 and rescind all rights and privileges associated with it in the following circumstances, each of which shall represent a default by grantee and a material breach under the franchise:

1. If grantee fails to perform any of its material obligations under Ordinance No. 1071 or the franchise agreement and continues such failure to perform after receipt of due notice and a reasonable opportunity to cure;

2. If grantee fails to provide or maintain in full force and effect the insurance coverage or security fund as required in the franchise agreement;

3. If grantee violates any final order or ruling of any regulatory body having jurisdiction over the grantee relative to the grantee's franchise;

4. If grantee makes any material false statement to the grantor.

(b) After completing the procedures set forth in subsection (2) above, the grantor shall cause to be served on grantee written notice of grantor's intent to revoke grantee's franchise. Such notice shall be served on grantee at least 30 days prior to the date of the hearing on the issue. The notice shall contain the time and place of the hearing. The notice shall be published pursuant to Section 420 of the Cypress City Charter.

(c) The council shall hear any person(s) interested in the revocation and within 90 days after the date of the hearing shall make its determination whether the grantee has committed a material breach of the franchise.

(d) If the grantor determines that the grantee has committed a material breach, then the grantor may, in its discretion:

1. Declare the franchise revoked and/or any security fund and bonds forfeited; or

2. If the material breach is curable by the grantee, direct the grantee to take appropriate remedial action within the time and manner and under the terms and conditions specified by the grantor.

(4) Appeal of council finding. The grantee may appeal any council finding made pursuant to subsections (2) and (3) to an appropriate court of jurisdiction. The matter shall be heard pursuant to the substantive and procedural standards set for in the Code of Civil Procedure § 1094.5. Any such appeal must be taken by the grantee within 60 days of the issuance of the council's written decision.

(Ord. No. 1071, 12-12-05; Ord. No. 1189, § 2, 8-23-21)

In the event grantee's performance of any of the terms, conditions or obligations required by Ordinance No. 1071 or a franchise granted hereunder is prevented by a cause or event not within grantee's control, such inability to perform shall be deemed excused and no penalties or sanctions shall be imposed as a result thereof; provided, however, that such inability to perform shall not relieve a grantee from the obligations imposed by subsection 6-39(3)(e) pertaining to refunds and credits for interruptions in service. For the purpose of this section, causes or events not within the control of grantee shall include, without limitation, acts of God, war, strikes, sabotage, riots or civil disturbances, labor disputes, restraints imposed by order of a governmental agency or court, explosions, acts of public enemies, and natural disasters such as floods, earthquakes, landslides, and fires, but shall not include financial inability of the grantee to perform or failure of the grantee to obtain any necessary permits or licenses from other governmental agencies or the right to use the facilities of any public utility where such failure is due solely to the acts or omissions of grantee, or the failure of the grantee to secure supplies, services or equipment necessary for the installation, operation, maintenance or repair of the cable system where the grantee has failed to exercise reasonable diligence to secure such supplies, services or equipment.

(Ord. No. 1071, 12-12-05)

(1) Abandonment or removal.

(a) If the grantee discontinues the use of any of its property within the public rights-of-way for a continuous period of six months, such property shall be deemed to have been abandoned by grantee. Any part of the cable system that is parallel or redundant to other parts of the system and is intended for use only when needed as a backup for the system or a part thereof, shall not be deemed to have been abandoned because of its lack of use.

(b) Grantor, upon such reasonable terms as grantor may lawfully impose, may give grantee permission to abandon, without removing, any system facility or equipment laid, directly constructed, operated or maintained under the franchise. Unless such permission is granted or unless otherwise provided in Ordinance No. 1071, the grantee shall remove all abandoned above-ground facilities and equipment upon receipt of written notice from grantor and shall restore to grantor's satisfaction any affected public right-of-way. In removing its plant, structures and equipment, grantee shall refill, at its own expense, any excavation that shall be made by it and shall leave all public rights-of-way in as good condition as that prevailing prior to such removal without materially interfering with any electrical or telephone cable or other utility wires, poles, or attachments. Grantor shall have the right to inspect and approve the condition of the public rights-of-way, cables, wires, attachments and poles prior to and after removal. The liability, indemnity and insurance provisions of Ordinance No. 1071 and the security fund as provided herein shall continue in full force and effect during the period of removal and until full compliance by grantee with the terms and conditions of this subsection.

(c) Upon the approved abandonment of any franchise property, the grantee, if required by the grantor, shall submit to the grantor an instrument, satisfactory in form to the grantor, transferring to the grantor the ownership of the abandoned franchise property.

(d) At the expiration, without renewal or extension, of the term for which the franchise is granted, or upon its revocation, as provided herein, the grantor shall have the right to require grantee to remove, at its own expense, all above-ground portions of the cable system from all streets and public ways within the service area within a reasonable period of time, which shall not be more than 180 days.

(e) Notwithstanding anything to the contrary set forth in Ordinance No. 1071, the grantee may abandon any underground franchise property in place so long as it does not materially interfere with the use of the public rights-of-way in which such property is located or with the use thereof by any public utility or other franchise holder.

(2) Restoration by grantor; reimbursement of costs. Upon written notice and upon the failure of the grantee to commence, pursue or complete any work to be done in any public right-of-way required by law or by the provisions of Ordinance No. 1071 or the franchise agreement, within the time prescribed and to the satisfaction of the grantor, the grantor may cause the work to be commenced and/or completed. The grantor shall provide to the grantee an itemized work order setting forth in detail the exact nature of the work completed and the supplies used in such work. The grantee shall pay to the grantor the costs for such work no later than 30 days after receipt of the itemized work order.

(3) Extended operation and continuity of services. Upon expiration or revocation of the franchise, the grantor shall have the discretion to permit grantee to continue to operate the cable system for an extended period of time. Grantee shall continue to operate the system under the terms and conditions of Ordinance No. 1071 as of the effective date of the franchise and the franchise, as existed immediately prior to said expiration or revocation, and to provide the regular subscriber service and any and all of the services that may be provided at that time. It shall be the right of all subscribers to continue to receive all available services provided that financial and other obligations to grantee are honored. The grantee shall use reasonable efforts to provide continuous, uninterrupted service to its subscribers, including operation of the system during transition periods following franchise expiration or termination.

(4) Receivership and foreclosure.

(a) At the option of the grantor and subject to applicable law, a franchise granted hereunder may be revoked 120 days after appointment of a receiver(s) or trustee(s) to take over and conduct the business of grantee, whether in a receivership, reorganization, bankruptcy or other action or proceeding, unless:

1. The receivership or trusteeship shall have been vacated within said 120 days; or

2. Such receivers or trustees within said 120 days shall have remedied all the defaults under the franchise or provided a plan for the remedy of such defaults which is satisfactory to the grantor; or

3. Such receivers or trustees shall, within said 120 days, have executed an agreement duly approved by the court having jurisdiction whereby such receivers or trustees assume and agree to be bound by each and every term, provision and limitation of the franchise.

(b) In the case of a foreclosure or other judicial sale of the cable system, in whole or in part, the grantor may serve notice of revocation upon grantee and the successful bidder at such sale, and all rights and privileges of the grantee hereunder shall be revoked 30 days after service of such notice, unless:

1. Grantor shall have approved the transfer of the franchise, in the manner provided by law; and

2. The successful bidder shall have covenanted and agreed with grantor to assume and be bound by all terms and conditions of the franchise.

(Ord. No. 1071, 12-12-05)

(1) Reservation of grantor rights.

(a) In addition to any rights specifically reserved to the grantor by Ordinance No. 1071, the grantor reserves to itself every right and power which is required to be reserved by a provision of applicable law or under the franchise.

(b) Any right or power in, or duty retained or imposed upon grantor, or any commission, officer, employee, department or board of grantor; may be delegated by grantor, or to such other person or entity as grantor may designate to act on its behalf.

(2) Waiver.

(a) The grantor shall have the right to waive any provision of the franchise imposing an obligation on grantee, except those required by applicable law, if the grantor determines (1) that it is in the public interest to do so, or (2) that the enforcement of such provision will impose an undue hardship on the grantee or on the subscribers. To be effective, such waiver shall be evidenced by a statement in writing signed by a duly authorized representative of the grantor. Waiver of any provision in one instance shall not be deemed a waiver of such provision subsequent to such instance nor be deemed a waiver of any other provision of the Franchise unless the statement so recites.

(b) The grantee shall not be excused from complying with any of the requirements of Ordinance No. 1071 or the franchise agreement by any failure of the grantor on any one or more occasions to require or seek compliance with any such terms or conditions.

(3) Rights of individuals.

(a) Grantee shall not deny service, deny access, or otherwise discriminate against subscribers, channel users, or general citizens on the basis of race, color, religion, national origin, age, sex, handicap, marital status or other protected classes. Grantee shall comply at all times with all other applicable law relating to nondiscrimination.

However, nothing in Ordinance No. 1071 or the franchise shall limit the right of the grantee to deny service to any household or individual who has a negative credit or service history with the grantee, which may include nonpayment of bills or theft or damage to grantee's equipment, or who has threatened or assaulted employees of the grantee in the course of their employment. In cases of bad or negative credit, grantee may require the payment of a deposit.

(b) Grantee shall adhere to the applicable equal employment opportunity requirements of applicable law, as now written or as amended from time to time.

(c) Without a lawful court order or applicable valid legal authority, neither grantee, nor any person, agency, or entity shall, without the subscriber's advance written consent, tap, or arrange for the tapping, of any cable, line, signal input device, or subscriber outlet or receiver for any purpose except routine maintenance of the system, detection of unauthorized service, polling with audience participation, or audience viewing surveys to support advertising research regarding viewers where individual viewing behavior cannot be identified.

(d) In the conduct of providing its cable services or in pursuit of any collateral commercial enterprise resulting therefrom, grantee shall take steps to prevent the invasion of a subscriber's or general citizen's right of privacy or other personal rights through the use of the system as such rights are delineated or defined by applicable law. The grantee shall not without lawful court order or other applicable valid legal authority utilize the system's interactive two-way equipment or capability, if such equipment or capability exists, for unauthorized personal surveillance of any subscriber or general citizen.

1. Except for its own use, or in connection with the provision of cable services or for release of data to the grantor, the grantee shall not permit its system to be used for data collection purposes, nor shall it otherwise collect data which would reveal the commercial product or other preferences or opinions of an individual subscriber, members of their families, or their guests, licensees or employees, unless the grantee shall have received the prior written consent of such subscriber which written consent shall be maintained by grantee in its files for at least three years.

2. In any event, the grantee shall not disclose or permit the release or sale of data on individual subscribers or groups thereof, but may disclose or permit the release or sale of aggregate data only.

(e) Grantee shall not disclose individual subscriber preferences, viewing habits, beliefs, philosophy, creeds, or religious beliefs to any third person, firm, agency, governmental unit, or investigating agency without court authority or the prior written consent of the subscriber.

1. Such written consent, if given, shall be limited to a period of time not to exceed one year, or a term agreed upon by the grantee and the subscriber.

2. The grantee shall not condition the delivery or receipt of cable services to any subscriber on any such consent.

3. A subscriber may revoke, without penalty or cost, any consent previously given by delivering to the grantee in writing a statement of the subscriber's intent to so revoke.

(f) The grantee shall not disclose, or sell, or permit the disclosure or sale of its subscriber list without the prior written consent of each subscriber on such list; provided that grantee may use its subscriber list as necessary for the construction, marketing, and maintenance of the grantee's services and facilities authorized by a franchise, and the billing of subscribers for cable services; and provided further, that consistent with applicable law, grantor may use grantee's subscriber list for the purpose of communication with subscribers in connection with matters relating to the operation, management, and maintenance of the cable system.

(g) No cable line, wire amplifier, converter, or other piece of equipment owned by grantee shall be installed by grantee in the subscriber's premises, other than in appropriate easements, without first securing any required consent. If a subscriber requests service, permission to install upon subscriber's property shall be deemed granted.

(h) In addition to the requirements above, grantee shall comply with applicable law regarding subscriber privacy including, but not limited to, section 631 of the Cable Act (47 U.S.C. 551).

(Ord. No. 1071, 12-12-05)

If any provision of Ordinance No. 1071 is held by any court or by any federal or state agency of competent jurisdiction, to be invalid as conflicting with any applicable law 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 applicable law, such provision shall be considered a separate, distinct, and independent part of Ordinance No. 1071, and such holding shall not affect the validity and enforceability of all other provisions hereof. In the event that applicable law is subsequently repealed, rescinded, amended or otherwise changed, so that the provision thereof which had previously been held invalid or modified is no longer in conflict with applicable law, said provision shall thereupon return to full force and effect and shall thereafter be binding on grantor and grantee, provided that grantor shall give grantee 30 days' written notice of such change before requiring compliance with said provision or such longer period of time as may be reasonably required for grantee to comply with such provision.

(Ord. No. 1071, 12-12-05)

Under state law effective January 1, 2007, the California Public Utilities Commission ("PUC") will have the authority to grant state video franchises ("state franchises"). The City of Cypress (the "City") will acquire certain rights and responsibilities with respect to state video franchise holders. These include the receipt of a franchise fee and a fee for public, educational and government ("PEG") purposes, both based on a percentage of gross revenues of state franchise holders, as well as the establishment and enforcement of penalties for violations of customer service rules.

(1) State video franchise fees.

a. Any state video franchise holder ("state franchisee") operating within the boundaries of the city shall pay a fee to the city equal to 5% of the gross revenue of that state franchisee.

b. Any state franchisee operating within the boundaries of the city shall pay an additional fee to the city equal to 1% of the gross revenue of that state franchisee, which fee shall be used by the city for PEG purposes consistent with state and federal law.

c. Gross revenue, for the purposes of [subsections] (a) and (b) above, shall have the definiti0on set forth in Public Utilities Code § 5860.

(2) Audit authority. Not more than once annually, the city may examine and perform an audit of the business records of a state franchisee to ensure compliance with subsection (1).

(3) Customer service penalties under state franchises.

a. The holder of a state franchise shall comply with all applicable state and federal customer service and protection standards pertaining to the provision of video service.

b. The city manager, or his/her designee, shall monitor the compliance of state franchisee(s) with respect to state and federal customer service and protection standards. The city manager, or his/her designee, shall provide the state franchisee(s) written notice of any material breaches of applicable customer service standards, and shall allow the state franchisee(s) 30 days from the receipt of the notice to remedy the specified material breach. Material breaches not remedied within the thirty-day time period shall be subject to the following penalties by the city manager, or his/her designee.

1. For the first occurrence of a violation, a fine of $500 shall be imposed for each day the violation remains in effect, not to exceed $1,500 for each violation.

2. For a second violation of the same nature within 12 months, a fine of $1,000 shall be imposed for each day the violation remains in effect, not to exceed $3,000 for each violation.

c. A state franchisee may appeal a penalty assessed to the city council within 60 days. After relevant speakers are heard, and any necessary staff reports are submitted, the city council will vote to either uphold or vacate the penalty. The city council's decision on the imposition of a penalty shall be final.

(4) City response to state franchise applications.

a. Applications [Applicants] for state franchises within the boundaries of the city must concurrently provide complete copies to the city of any application or amendments to applications filed with the PUC. One complete copy must be provided to the city clerk, and one complete copy to the city manager.

b. The city manager shall provide any appropriate comments to the PUC regarding an application or an amendment to an application for a state franchise.

(Ord. No. 1091, § 1, 6-11-07)