Morgan Hill Municipal Code Ch. 5.20 Franchises for Cable Television Systems and Telecommunications Systems

A. Authority. In accordance with applicable federal and state law, the city is authorized to grant one or more nonexclusive franchises to construct, reconstruct, operate, and maintain cable television systems within the city limits.

B. Findings. The city council finds that the development of cable television and telecommunications systems may provide significant benefits for, and substantial impacts upon, the residents of the city. Because of the complex and rapidly changing technology associated with cable television, the city council further finds that the public convenience, safety, and general welfare can best be served by establishing regulatory powers to be vested in the city. It is the intent of this chapter to specify the means for providing the best possible cable television and telecommunications services to the public, and the issuance of all franchises under this chapter are intended to achieve this primary objective. It is the further intent of this chapter to establish regulatory provisions that permit the city to regulate cable television and telecommunications franchises to the extent authorized by federal and state law, including but not limited to the federal Cable Communications Policy Act of 1984, the federal Cable Television Consumer Protection and Competition Act of 1992, the federal Telecommunications Act of 1996, applicable regulations of the Federal Communications Commission, and applicable California law.

(Ord. 1371 N.S. § 1 (part), 1997)

This chapter may be cited as the "cable television and telecommunications regulatory ordinance" of the city of Morgan Hill.

(Ord. 1371 N.S. § 1 (part), 1997)

Various terms and phrases used in this chapter are defined below in Section 5.20.170.

(Ord. 1371 N.S. § 1 (part), 1997)

A. Franchise Purposes. A franchise granted by the city under the provisions of this chapter may authorize the grantee to do the following:

1. To engage in the business of providing cable television services, and such other telecommunications services as may be authorized by law that the grantee chooses to provide to subscribers within the designated franchise service area.

2. 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 franchise service area.

3. To maintain and operate the franchise properties for the origination, reception, transmission, amplification, and distribution of television and radio signals, and for the delivery of cable services and such other services as may be permitted by law.

B. Franchise Required. It is unlawful for any person to construct, install, or operate a cable television system in the city within any street or public way without first obtaining a franchise under the provisions of this chapter.

C. Term of the Franchise.

1. A franchise granted under this chapter will be for the term specified in the franchise agreement, commencing upon the effective date of the ordinance or resolution adopted by the city that authorizes the franchise.

2. A franchise granted under this chapter may be renewed upon application by the grantee in accordance with the applicable provisions of state and federal law and of this chapter.

D. Franchise Territory. A franchise is effective within the territorial limits of the city, and within any area added to the city during the term of the franchise, unless otherwise specified in the ordinance or resolution granting the franchise or in the franchise agreement.

E. Federal or State Jurisdiction. This chapter will be construed in a manner consistent with all applicable federal and state laws, and is applicable to all franchises granted or renewed after the effective date of this chapter, to the extent authorized by applicable law.

F. Franchise Nontransferable.

1. The grantee may not sell, transfer, lease, assign, sublet, or dispose of, in whole or in part, either by forced or involuntary sale, or by ordinary sale, contract, consolidation, or otherwise, the franchise or any of the rights or privileges therein granted, without the prior consent of the city council and then only upon such terms and conditions as may be prescribed by the city council, which consent may not be unreasonably denied or delayed. Any attempt to sell, transfer, lease, assign or otherwise dispose of the franchise without the consent of the city council is null and void. The granting of a security interest in any assets of the grantee, or any mortgage or other hypothecation, will not be deemed a transfer for the purposes of this subsection.

2. The requirements of subsection (F)(1) of this section apply to any change in control of the grantee. The word "control" as used herein is not limited to major stockholder or partnership interests, but includes actual working control in whatever manner exercised. If the grantee is a corporation, prior authorization of the council is required where ownership or control of more than ten percent of the voting stock of the grantee is acquired by a person or a group of persons acting in concert, none of whom, singularly or collectively, own or control the voting stock of the grantee as of the effective date of the franchise.

3. The grantee must notify the city in writing of any foreclosure or judicial sale of all or a substantial part of the grantee's franchise property, or upon the termination of any lease or other interest covering all or a substantial part of that franchise property. Such notification will be considered by the city as notice that a change in control of ownership of the franchise has taken place, and the provisions of this subsection that require the prior consent of the city to that change in control of ownership shall apply.

4. For the purpose of determining whether it will consent to an acquisition, transfer, or change in control, the city may inquire as to the qualifications of the prospective transferee or controlling party, and the grantee must assist the city in that inquiry. In seeking the city's consent to any change of ownership or control, the grantee or the proposed transferee, or both, must complete Federal Communications Commission Form 394 or its equivalent. This application must be submitted to the city not less than one hundred twenty days prior to the proposed date of transfer. The transferee must establish that it possesses the legal, financial, and technical capability to operate and maintain the cable system and to comply with all franchise requirements for the remaining term of the franchise. If the legal, financial, and technical qualifications of the applicant are satisfactory, the city shall consent to the transfer of the franchise. The consent of the city to that transfer shall not be unreasonably denied or delayed.

5. Any financial institution holding a pledge of the grantee's assets to secure the advance of money for the construction or operation of the franchise property has the right to notify the city that it, or a designee satisfactory to the city, will take control of and operate the cable television system upon the grantee's default in its financial obligations. Further, that financial institution also must submit a plan for such operation within ninety days after assuming control. The plan must insure continued service and compliance with all franchise requirements during the period that the financial institution will exercise control over the system. The financial institution may not exercise control over the system for a period exceeding one year unless authorized by the city, in its sole discretion, and during that period of time it will have the right to petition the city to transfer the franchise to another grantee.

6. The grantee shall reimburse the city for the city's reasonable review and processing expenses incurred in connection with any transfer or change in control of the franchise. These expenses include, 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 these experts), notice and publication costs, and document preparation expenses. No reimbursement may be offset against any franchise fee payable to the city during the term of the franchise.

G. Geographical Coverage.

1. The grantee shall design, construct, and maintain the cable television system so as to have the capability to pass every dwelling unit in the city, subject to any service-area line extension requirements of the franchise agreement.

2. After service has been established by activating trunk or distribution cables for any service area, the grantee shall provide service to any requesting subscriber in that service area within thirty days from the date of request, provided that the grantee is able to secure on reasonable terms and conditions all rights-of-way necessary to extend service to that subscriber within that thirty day period.

H. Nonexclusive Franchise. Any franchise granted pursuant to this chapter is nonexclusive. The city specifically reserves the right to grant, at any time, such additional franchises for a cable television system, or any component thereof, as it deems appropriate, subject to applicable state and federal law. However, if an additional franchise is granted on terms more favorable to the second grantee (whether involving the grant of greater benefits or the imposition of lesser obligations), then the initial grantee shall have the right to modify its franchise to incorporate the more favorable terms, or to reduce its obligations, to achieve competitively neutral and nondiscriminatory treatment.

I. Multiple Franchises.

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

a. The capacity of the public rights-of-way to accommodate multiple cables in addition to the cables, conduits, and pipes of the existing utility systems, such as electrical power, telephone, gas, and sewerage.

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

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

2. Developers of new residential housing with underground utilities shall provide conduit to accommodate cables for at least two cable television systems and must dedicate the use of that conduit to the city.

3. The city may require that any new grantee be responsible for its own underground trenching and the associated costs if, in the city's opinion, the rights-of-way in any particular area cannot reasonably accommodate additional cables.

J. Limitation on Expense Reimbursement. Any obligation imposed on the grantee to reimburse the city in reviewing any new franchise application or the transfer or renewal of any existing franchise or in otherwise regulating a franchise under this chapter shall be subject to any limitations on the amount of such reimbursement provided for in the franchise agreement.

(Ord. 1416 N.S. §§ 1, 2, 1998; Ord. 1371 N.S. § 1 (part), 1997)

A. Filing of Applications. Any person desiring an initial franchise for a cable television system shall file an application with the city. A reasonable nonrefundable application fee in an amount established by resolution of the city council must accompany the application. That application fee will cover all costs associated with reviewing and processing the application, including without limitation costs of administrative review, financial, legal, and technical evaluation of the applicant, consultants (including technical and legal experts and all costs incurred by those experts), notice and publication requirements, and document preparation expenses. If those actual costs exceed the application fee, the applicant shall pay the difference to the city within thirty days following receipt of an itemized statement of those costs.

B. Applications—Contents. An application for an initial franchise for a cable television system shall contain, where applicable:

1. A statement as to the proposed franchise service area.

2. A resume of the applicant's prior history, including the experience and expertise of applicant in the cable television field.

3. A list of the partners, general and limited, of the applicant, if a partnership, or the percentage of stock owned or controlled by each stockholder, if a corporation.

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

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

6. A current financial statement of the applicant verified by an independent certified public accountant or otherwise certified to be true, complete, and correct to the reasonable satisfaction of the city.

7. The proposed construction and service schedule.

8. Any additional information that the city deems reasonably necessary.

C. Consideration of Initial Applications.

1. Upon receipt of any application for an initial franchise, the city manager or the city manager's designee shall prepare a report and make recommendations to the city council concerning that application.

2. A public hearing shall be set prior to any initial franchise grant, at a time and date approved by the city council. Within thirty days after the close of the hearing, the city council shall make a decision based upon the evidence received at the hearing as to whether the franchise should be granted, and, if granted, subject to what conditions. The city council may grant one or more franchises, or may decline to grant any franchise.

D. Franchise Renewal. Franchise renewals shall be made in accordance with applicable law. The city and the grantee, by mutual consent, may enter into renewal negotiations at any time during the term of the franchise.

(Ord. 1371 N.S. § 1 (part), 1997)

A. Operational Standards.

1. Except as otherwise provided in the franchise agreement, the grantee shall maintain the necessary facilities, equipment, and personnel to comply with the following consumer protection and service standards under normal operating conditions:

a. Sufficient toll-free telephone line capacity during normal business hours to assure that telephone calls are answered before the fourth ring. Telephone answer time by a customer service representative, including wait time, may not exceed thirty seconds. Callers needing to be transferred may not be required to wait more than thirty seconds before being connected to a service representative.

b. Under normal operating conditions, a caller shall receive a busy signal less than three percent of the time.

c. 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 an answering service in accordance with the telephone answering standards set forth in subsections (A)(1)(a) and (b) of this section. Calls received after normal business hours shall be responded to by a trained company representative on the next business day.

d. A conveniently located local business and service or payment office open during normal business hours at least eight hours per day on weekdays, and at least four hours weekly on evenings or weekends, and adequately staffed with trained customer service representatives to accept subscriber payments and to respond to service requests, inquiries and complaints.

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

f. A trained installation staff will install service to any subscriber requiring a standard installation within five days after receipt of a request, in all areas where trunk and feeder cable have been activated. "Standard installations" are those that are located up to one hundred twenty-five feet from the existing distribution system, unless otherwise defined in any franchise agreement.

g. The grantee shall schedule, within a specified four hour time period Monday through Saturday (legal holidays excluded), all appointments with subscribers for installation of service, service calls, and other activities at the subscriber location. The grantee may schedule installation and service calls outside of normal business hours for the convenience of the subscriber. The grantee may not cancel an appointment with a subscriber 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 subscriber and will not be able to keep the scheduled appointment, the subscriber must be contacted prior to the time of the scheduled appointment and the appointment shall be rescheduled, as necessary, at a time that is convenient for the subscriber. The grantee shall attempt to contact every customer within two weeks after an installation or repair work is completed to assure that the customer is satisfied with the work.

h. Subscribers who have experienced one missed appointment due to the fault of the grantee shall receive an installation free of charge if the appointment was for an installation. If an installation was to have been provided free of charge, and for all other appointments, the subscriber shall receive one month of the most widely subscribed to service tier, free of charge. Subscribers also shall be entitled to receive a free installation or one month free service as provided above in the event that the grantee fails to complete a standard installation within five days of receiving an installation request due to its fault, fails to schedule an appointment within a specified four hour time period, or fails to contact the subscriber if the grantee's representative will be late for an appointment. Subscribers who have experienced two missed appointments due to the fault of the grantee shall receive two months of the most widely subscribed to service tier, free of charge in addition to the free installation or free month of service provided for the first missed appointment.

i. Upon subscriber request, the grantee shall arrange for pickup and/or replacement of convertors or other equipment provided by the grantee at the subscriber's address within fourteen days after the request is made if the subscriber is mobility-limited.

2. The standards of subsections (A)(1)(a) and (c) of this section shall be met not less than ninety percent of the time, measured on a quarterly basis.

B. Service Standards.

1. The grantee shall render efficient service, make repairs promptly, and interrupt service only for good cause and for the shortest time possible. Except in emergency situations, scheduled interruptions shall occur during a period of minimum use of the cable system, preferably between midnight and 6:00 a.m. Unless the scheduled interruption lasts for no more than two hours and occurs between midnight and 6:00 a.m. (in which event twenty-four hours prior notice shall be given to the city), forty-eight hours prior notice shall be given to subscribers.

2. The grantee shall maintain a repair force of technicians who shall respond to subscriber requests for service within the following time frames:

a. For a System Outage. Within two hours, including weekends, of receiving subscriber calls or requests for service that by number identify a system outage of sound or picture of three or more channels, affecting five or more subscribers of the system.

b. For an Isolated Outage. Within twenty-four hours, including weekends, of receiving requests for service identifying an isolated outage of sound or picture for one or more channels.

c. For Inferior Signal Quality. No later than the following business day, excluding Sundays and holidays, of receiving a request for service identifying a problem concerning picture or sound quality.

3. The grantee will be deemed to have responded to a request for service under the provisions of this subsection when a technician arrives at the service location and begins work on the problem. If a subscriber is not home when the technician arrives, the technician must leave written notification of arrival.

4. The grantee may not charge for the repair or replacement of defective or malfunctioning equipment provided by the grantee to subscribers, unless the defect was caused by the subscriber.

5. The grantee shall determine the nature of the problem within twenty-four hours of commencing work and resolve all cable system related problems within three business days, unless technically infeasible.

C. Billing and Information Standards.

1. Subscriber bills shall be clear, concise, and understandable. Bills shall be fully itemized, with itemizations including, but not limited to, basic and premium service charges and equipment charges. Bills also must clearly delineate all activity during the billing period, including optional charges, rebates, and credits.

2. The first billing to a subscriber after a new installation or service change shall be prorated based upon when the new or changed service commenced. Subscribers shall not be charged a late fee or otherwise penalized for any failure by the grantee, including the failure to timely or correctly bill the subscriber.

3. In case of a billing dispute, the grantee shall respond in writing to a written complaint from a subscriber within thirty days.

4. The grantee shall provide credits or refunds to subscribers, upon their request, whose service has been interrupted for four or more hours. For each day that service has been interrupted for four hours or more, the credit shall equal a pro-rata share of the monthly billing for one full day. All credits for service must 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 thirty days after the return of any grantee-supplied equipment.

5. The grantee shall provide written information approved by the city on each of the following areas at the time of the installation of service, at least annually to all subscribers, and at any time upon request:

a. Products and services offered.

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

c. Installation and service maintenance policies.

d. Instructions on the use of the cable service.

e. Channel positions of programming carried on the system.

f. Billing and complaint procedures, including the address and telephone number of the city's office designated for dealing with cable-related issues.

g. Consumer protection and service standards and penalties for noncompliance.

6. Subscribers shall be notified of any changes in rates, programming services, or channel positions as soon as possible through announcements on the cable system and in writing. Notice shall be given to subscribers a minimum of thirty days in advance of those changes if the change is within the control of the grantee. In addition, the grantee shall notify subscribers through announcements on the cable system and in writing thirty days in advance of any significant changes in the information required in subsection (C)(5) of this section.

7. The grantee shall maintain a public file containing all notices provided to subscribers under these consumer protection and service standards and all promotional offers made to subscribers.

D. Verification of Compliance with Standards.

1. Upon fifteen days notice, the city may require the grantee to provide a written report demonstrating its compliance with the customer service standards specified by the city. The city shall require the preparation of such reports no more frequently than on a quarterly basis.

2. A repeated and verifiable pattern of noncompliance with the consumer protection and service standards of this section, after the grantee's receipt of due notice and an opportunity to cure, may be deemed a material breach of the franchise agreement.

E. Subscriber Complaints and Disputes.

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

2. The city has the right to review the grantee's response to subscriber complaints in order to determine the grantee's compliance with the franchise requirements.

3. All subscribers have the right to continue receiving service so long as their financial and other obligations to the grantee are honored. If the grantee elects to rebuild, modify, or sell the system, or if the city gives notice of intent to terminate or not to renew the franchise, the grantee must act so as to ensure that all subscribers receive service while the franchise remains in force.

4. Upon a change of control of the grantee, or if a new operator acquires the cable system, the original the grantee must cooperate with the city, the new grantee, or the new operator in maintaining continuity of service to all subscribers. During that transition period, the grantee is entitled to the revenues derived from its operation of the system.

F. Disconnection/Downgrades.

1. A subscriber may terminate or downgrade service at any time, and the grantee shall promptly comply with the subscriber's request without charge within five days. No period of notice prior to voluntary termination or downgrade of service may be required of subscribers.

2. The grantee may disconnect a subscribers service if the subscriber fails to pay a monthly fee or charge, but such disconnection shall not occur prior to forty-five days after the fee or charge is due plus ten days prior written notice to the subscriber of the grantee's intent to disconnect service. In the event that the subscriber pays all past due amounts, including late charges, before the scheduled disconnection date, the grantee shall not disconnect service. In the event that service is disconnected for nonpayment of past due fees or charges, the grantee shall promptly reinstate service upon payment by the subscriber in full of all such fees and charges, including late charges.

3. Notwithstanding the requirements of subsection (F)(2) of this section, the grantee may immediately disconnect service to a subscriber if the subscriber is damaging or destroying the grantee's cable system or equipment. In the event of disconnection on such grounds, the grantee shall resume service to the subscriber upon receiving adequate assurances that the subscriber has ceased the practices or conduct that resulted in disconnection and has paid all proper fees and charges, including any amounts reasonably owed the grantee for the damage caused by the subscriber.

4. The grantee also may disconnect service to a subscriber that is causing signal leakage exceeding federal limits. Such disconnection may occur after five days written notice to the subscriber if the subscriber fails to correct the problem. In the event that service is disconnected, the grantee shall immediately resume service without charge upon the satisfactory correction of the signal leakage problem by the subscriber.

5. Upon termination of service to a subscriber, the grantee shall remove its equipment from the subscriber's premises within fourteen days. The equipment shall be deemed abandoned if it is not removed within thirty days after termination of service unless the grantee has been denied access to the subscriber's premises.

G. Changes in Service. Except as otherwise provided by federal law, subscribers shall not be required to pay any additional fee or charge, other than the regular service fee, in order to receive the services selected (such as upgrade or downgrade charges). No charge may be imposed for any service or product that the subscriber has not affirmatively selected. Payment of the regular monthly bill shall not by itself constitute an affirmative selection.

H. Deposits. The grantee may require a reasonable, nondiscriminatory deposit on equipment provided to subscribers. Such deposits shall be placed in an interest bearing account. The deposit shall be returned, with interest earned to the date of repayment, within thirty days after the equipment is returned to the grantee.

I. Parental Control Option. The grantee shall provide parental control devices to all subscribers who want to be able to block the video or audio portion of any programming that the subscriber finds objectionable. Such devices shall be provided at no charge to the subscriber, unless a converter box is required to be installed or unless otherwise required by federal law.

J. Additional Requirements.

1. If the grantee fails to operate the system for seven consecutive days without the city's prior approval or subsequent ratification, the city may, at its sole option, operate the system or designate an operator until the grantee restores service under conditions acceptable to the city, or until a permanent operator is selected. If the city satisfies this obligation on behalf of the grantee, then during that period the city is entitled to collect all revenues derived from the system, and the grantee shall indemnify the city against any damages that the city may suffer as a result of the grantee's failure to operate the system.

2. All officers, agents, or employees of the 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, must carry a photo-identification card in a form approved by the city. The grantee must account for all identification cards at all times. All vehicles of the grantee or its subcontractors shall be clearly identified as vehicles engaged in providing services for the grantee.

3. Additional standards relating to service, customer protection, and response by the grantee to subscriber complaints not otherwise provided for in this chapter may be established in the franchise agreement or by separate ordinance, before or after a franchise is granted. A verified and continuing pattern of noncompliance may be deemed a material breach of the franchise, provided that the grantee is entitled to receive written notification and an opportunity to cure, before any sanction is imposed.

K. Penalties for Noncompliance.

1. Purpose. The purpose of this subsection is to impose penalties for the violation of the customer service standards established by this chapter as authorized by the Video Customer Service Act (Government Code Section 53088 et seq.) These penalties are in addition to the remedies provided by Section 5.20.130. The imposition of such penalties shall not prevent the city from exercising any other remedy provided by law.

2. Administration and Appeals.

a. The city manager or his designee is authorized to administer this subsection. Decisions by the city manager to assess penalties against the grantee shall be in writing and shall contain findings supporting the decisions. Decisions by the city manager shall be final, unless appealed to the city council.

b. In the event that the grantee, any interested person, or the city is aggrieved by a decision of the city manager, the aggrieved party may, within ten days of the written decision, appeal that decision in writing to the city council. The appeal letter must be accompanied by the fee established by the city council for processing the appeal. The city council may affirm, modify, or reverse the decision of the city manager.

c. Schedule of Penalties. The following schedule of monetary penalties may be assessed against the grantee for material breach of the provisions of the customer service standards set forth in Section 5.20.060 of this chapter, provided the breach is not out of the reasonable control of the grantee.

i. The maximum penalty shall be two hundred dollars for each day of material breach, but shall not exceed six hundred dollars for each occurrence of the material breach.

ii. For a second material breach of the same nature within a twelve-month period for which the city has provided notice and a penalty has been assessed, the maximum penalty shall be four hundred dollars for each day of the material breach, but shall not exceed one thousand two hundred dollars for each occurrence of the material breach.

iii. For a third material breach of the same nature within a twelve-month period for which the city has provided notice and a penalty has been assessed, the maximum penalty shall be one thousand dollars for each day of the material breach, but shall not exceed three thousand dollars for each occurrence of the material breach.

d. Judicial Remedy. Nothing in this schedule shall preclude a party affected by this subsection from utilizing any judicial remedy available to that party.

e. Notification of Breach. The city shall give the grantee written notice of any alleged breaches of the consumer service standards and allow the grantee at least thirty days from receipt of the notice to remedy the specified breach. For the purpose of assessing penalties, a material breach shall be deemed to have occurred for each day, following the expiration of the period specified herein, that any breach has not been remedied by the grantee, irrespective of the number of subscribers affected.

L. Free Service for Noncompliance. Notwithstanding any other penalties or remedies provided by this chapter or any other law, the grantee shall provide the following months of the most widely subscribed to service tier to subscribers affected by the grantee's failure to comply with the specified consumer protection and service standard:

1. One Month Free Service. The grantee shall provide one month of free service to each subscriber affected by the failure of the grantee to timely and satisfactorily comply with the following requirements:

a. Pick-up and/or replacement of converters or other equipment within fourteen days after subscriber request (Section 5.20.060(A)(1)(i)).

b. Forty-eight hour notice of service interruption (Section 5.20.060(B)(1)).

c. Response time for system outages and inferior signal quality (Section 5.20.060(B)(2)).

d. Resolution of cable system related problems within three business days (Section 5.20.060(B)(5)). One additional month of free service shall be provided for each seven-day period that the problem remains unresolved.

e. Written response to billing complaints. (Section 5.20.060(C)(3)).

f. Credits and refunds (Section 5.20.060(C)(4)).

g. Provision of all required information to subscribers (Section 5.20.060(C)(5)).

h. Completion of termination or downgrade of service (Section 5.20.060(F)(1)).

2. Three Months Free Service. The grantee shall provide three months of free service to each subscriber affected by the failure of the grantee to timely and satisfactorily comply with the following requirements:

a. Disconnection of subscriber service without just cause and such service is not reconnected within two hours after notice to the grantee during normal business hours (Section 5.20.060(F)(2)).

b. Refusal to provide parental control devices (Section 5.20.060(I)).

A subscriber shall not be entitled to free service under this subsection unless the subscriber provides notice to the grantee of the applicable violation within ten days after the violation occurs. If a dispute exists between the grantee and the subscriber as to whether a violation has occurred, the city shall make the final determination as to whether free service must be provided.

(Ord. 1416 N.S. §§ 3—12, 1998; Ord. 1371 N.S. § 1 (part), 1997)

A. Franchise Fee.

1. Following the issuance and acceptance of the franchise, the grantee shall pay to the city a franchise fee on cable service revenues in the amount and at the times set forth in the franchise agreement. For revenues from other telecommunications services, the grantee shall pay to the city an in-lieu franchise fee in the maximum amount permitted by applicable law.

2. On an annual basis, the grantee shall submit to the city a statement within one hundred and twenty days of the close of the calendar year setting forth the computation of gross revenues used to calculate the franchise fee for the preceding year and a detailed explanation of the method of calculation. The statement shall include a detailed analysis of gross revenues received during the preceding year, including without limitation, (i) total gross revenues by category (e.g., basic, pay, pay-per-view, advertising, installation, equipment, late charges, and other recurring sources of revenue); (ii) the types and amounts of revenues, if any, excluded from the calculation of gross revenues; (iii) the value of any non-cash compensation received; (iv) any deductions made from gross revenues such as bad debts, and the amount of such deductions; and (v) if an outside agency was used to collect revenue, how much revenue was received by such agency. The statement shall be certified by the chief financial officer of the grantee and if requested by the city an independent certified public accountant.

3. Upon thirty days prior written notice, the city has the right to conduct an independent audit of the grantee's records in accordance with generally accepted accounting principles. If that audit indicates a franchise fee or in-lieu fee underpayment of two percent or more, the grantee shall assume and pay all reasonable costs of that audit.

4. Except as otherwise provided by law, no acceptance of any payment by the city will be construed as a release or as an accord and satisfaction of any claim the city may have for additional sums payable as a franchise fee or in-lieu fee under this chapter, or for the performance of any other obligation of the grantee.

5. If any franchise or in-lieu fee payment or recomputed amount is not made on or before the dates specified in the franchise agreement, the grantee shall pay as additional compensation:

a. An interest charge, computed from the specified due date until the date that payment is made, at an annual rate equal to the prime lending rate of any national bank selected by the city, plus one percent; and

b. If the payment is late by forty-five days or more, a sum of money equal to five percent of the amount due in order to defray additional expenses and costs incurred by the city by reason of the delinquent payment.

6. Franchise fee or in-lieu fee payments shall be made in accordance with the schedule specified in the franchise agreement.

B. Security Fund.

1. The city may require the grantee to provide a security fund, in an amount and in the form specified in the franchise agreement. The amount of the security fund will be established based on the nature and extent of the grantee's obligations under the terms of the franchise agreement.

2. The security fund shall be available to the city to satisfy all claims, liens, and taxes due the city from the grantee that arise by reason of the construction, operation, or maintenance of the system, and to satisfy any actual or liquidated damages or penalties arising out of a breach of the franchise, subject to the procedures and conditions set forth in the franchise agreement.

3. If the security fund is drawn upon by the city in accordance with the procedures established in this chapter and the franchise agreement, the grantee shall cause the security fund to be replenished to its original amount no later than thirty days after any withdrawal by the city. Failure to replenish the security fund will be deemed a material breach of the franchise.

(Ord. 1416 N.S. § 13, 1998; Ord. 1371 N.S. § 1 (part), 1997)

A. System Construction.

1. The grantee may not construct any cable system facilities until the grantee has secured the necessary permits from the city, or from other public agencies having jurisdiction over that construction.

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

3. In those areas of the city where the grantee's cables are located on the above-ground transmission or distribution facilities of any public utility providing telephone or electric power service, and if the facilities of both those city's public utilities are subsequently placed underground, then the grantee must likewise reconstruct, operate, and maintain its transmission and distribution facilities underground, at the grantee's sole cost. The grantee's equipment, which normally is placed above ground, such as pedestals, amplifiers, and power supplies, may continue to remain in above-ground enclosures, unless otherwise provided in the franchise agreement.

4. Any changes in or extensions of any poles, anchors, wires, cables, conduits, vaults, laterals, or other fixtures and equipment ("structures"), or the construction of any additional structures in, upon, along, across, under, or over the streets, alleys, and public ways, shall be subject to the approval of the city engineer. If the proposed change, extension, or construction conforms to the provisions of this chapter and this code, the city engineer will issue written permits for that work. The height of all aerial wires above public thoroughfares must conform to the requirements of the California regulatory agency having jurisdiction over this matter.

a. All transmission and distribution structures, lines, and equipment erected by the grantee must be located so as not to interfere with the proper use of streets, alleys, and other public ways and places, and so as to cause minimum interference with the rights or reasonable convenience of property owners who adjoin any of those streets, alleys, or other public ways and places. These facilities must not interfere with existing public utility installations.

b. If any property or improvements of the city in the public rights-of-way are disturbed or damaged by the grantee, or by any of its contractors, agents, or employees, in connection with the performance of any work authorized by this chapter or by the franchise agreement, the grantee shall promptly, at the grantee's sole cost and expense, restore as nearly as practicable to its former condition the property or those improvements that were disturbed or damaged. If any such property or improvements at any later time become uneven, unsettled, or otherwise require restoration, repair, or replacement because of such disturbance or damage by the grantee, then the grantee, as soon as reasonably possible, shall, upon receipt of notice from the city and at the grantee's sole cost and expense, restore as nearly as practicable to their former condition the property or improvements that were disturbed or damaged. Any such restoration by the grantee must be made in accordance with those specifications that may, from time to time, be adopted by the city.

c. Before commencing any work in the public rights-of-way, the grantee shall obtain all permits lawfully required for that work by this code. However, if emergency work is required, the grantee shall obtain all permits within three working days after commencing that emergency work.

d. The grantee may not unreasonably or unnecessarily obstruct the public rights-of-way in performing any of the work authorized by this chapter. The grantee shall maintain such barriers, signs, and warning signals during the performance of work on or adjacent to the public rights-of-way as may be necessary to reasonably avoid injury or damage to life and property.

e. If at any time during the term of the franchise the city lawfully elects to alter or change the grade or location of any street, alley, or other public rights-of-way, the grantee shall, upon at least ninety days written notice by the city, remove and relocate its poles, wires, cables, underground conduits, manholes, and other fixtures at its own expense, and in each instance comply with the requirements of the city. The requirement for ninety days prior written notice shall not apply in the event of an emergency threatening the public health or safety.

f. The grantee may not place poles, conduits, or other fixtures above or below ground where they will interfere with any gas, electric, or telephone fixtures, water hydrants, or other utilities. All such poles, conduits, or other fixtures placed in any street shall be placed so as to comply with all laws or regulations of the city.

g. The grantee may be required by the city to permit joint use by other utilities of its property and appurtenances located in the streets, alleys, or other public rights-of-way, insofar as that joint use is reasonably practicable and payment of reasonable rental is required; provided, however, that in the absence of agreement regarding such joint use, the city will provide for arbitration of the terms and conditions of that joint use, including the compensation to be paid for it, and the arbitration award will be final.

h. The grantee shall, on request of any person holding a moving permit issued by the city, temporarily move its wires or fixtures to permit the moving of buildings. The expense of that temporary removal will be paid by the person requesting it, and the grantee must be given not less than forty-eight hours advance notice to arrange for that temporary removal.

i. The grantee has the authority, except when in conflict with any existing law, to trim trees that are upon or overhanging the streets, alleys, sidewalks, and public places so as to prevent the branches of those trees from coming in contact with the grantee's wires and cables. However, at the option of the city, such trimming may be done by the city, or under its supervision and direction, at the expense of the grantee.

B. Multiple Franchises.

1. If more than one franchise is awarded, the city reserves the right to limit the number of drop cables per residence, or to require that the drop cable or cables be used only by the cable operator selected by the resident to provide service.

2. The city reserves the right to grant an encroachment permit to an applicant for a cable franchise to install conduit or cable in anticipation of the granting of that franchise. Such installations are at the applicant's sole risk, with no recourse against the city if the pending franchise application is not granted. The city may require an applicant to provide a separate trench for its conduit or cable, at the applicant's sole cost.

(Ord. 1416 N.S. § 14, 1998; Ord. 1371 N.S. § 1 (part), 1997)

A. Applicable Technical Standards. The grantee shall construct, install, operate, and maintain its system in a manner consistent with all applicable laws, ordinances, construction standards, governmental requirements, FCC technical standards, and any additional standards that may be set forth in the franchise agreement. In addition, the grantee must provide to the city, upon request, a written report of the results of the grantee's periodic proof of performance tests that are conducted in accordance with FCC standards and guidelines.

B. Noncompliance with Standards. The repeated and verified failure of the grantee to maintain specified technical standards will constitute a material breach of the franchise.

(Ord. 1371 N.S. § 1 (part), 1997)

A. Hold Harmless. The grantee will indemnify, defend, and hold harmless the city, its officers, agents, and employees, from any liability, claims, damages, costs, or expenses, to the extent provided in the franchise agreement.

B. Insurance.

1. On or before the commencement of franchise operations, the grantee shall obtain policies of liability, workers' compensation, and property insurance from qualified insurance companies that are admitted surety insurers in the state of California.

2. The policies of liability insurance shall comply with the following requirements:

a. Be issued to the grantee and name the city, its officers, agents, and employees, as additional insureds.

b. Indemnify for all liability for personal and bodily injury, death, and damage to property arising from activities conducted and premises used under the authority of this chapter by providing coverage that includes, without limitation, the following:

i. Negligent acts or omissions of the grantee, and its agents, servants and employees, that are committed in the conduct of franchise operations; and

ii. Use of motor vehicles.

c. Provide a combined single limit for comprehensive general liability and comprehensive automobile liability insurance in the amount provided for in the franchise agreement. The liability insurance policy is subject to review and approval by the city risk manager.

d. Be subject to cancellation only upon thirty days prior written notice directed to the city.

3. The policy of workers' compensation insurance shall comply with the laws of the state of California.

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

5. Prior to commencement of its franchise operations, the grantee shall file with the city a certificate of insurance for each of the required policies. The certificate of insurance must be executed by the company issuing the policy, or by a broker authorized to issue that certificate, and must certify that the policy is in force and must provide the following information with respect to the insurance policy:

a. The policy number;

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

c. The names of the named insureds and any additional insureds required by the franchise agreement;

d. The subject of the insurance;

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

f. The amount or limit of coverage provided by the insurance policy.

The grantee shall provide copies of all relevant insurance policies required by this chapter to the city upon request.

6. Franchise operations may not commence until the grantee has complied with the provisions of this subsection.

7. If the grantee fails to maintain any of the above-described policies in full force and effect, the city, upon forty-eight hours notice to the grantee, has the right to procure the required insurance and to recover its cost from the grantee. The city also has the right to suspend the franchise during any period that the grantee fails to maintain the insurance policies in full force and effect. In order to account for increases in consumer prices, the city has the right, no more than once during any five year period, to order the grantee to increase the amounts of the insurance coverage specified in the franchise agreement. Increases in insurance coverage will be based upon current prudent business practices of like enterprises involving the same or similar risks.

(Ord. 1371 N.S. § 1 (part), 1997)

A. Records Required.

1. The grantee shall maintain at all times:

a. A record of all service calls and interruptions or degradations of service experienced for the preceding two years, provided that those complaints result in or require a service call.

b. A complete set of plans, records, and "as-built" maps showing the locations of the cable television system installed or in use in the city, exclusive of subscriber service drops and equipment provided in subscribers' homes.

c. If requested by the city, a summary of service calls, identifying the number, general nature, and disposition of those calls on a monthly basis. A summary of those service calls shall be submitted to the city within thirty days following any city request and in a form reasonably acceptable to the city.

2. The city may submit requests for additional information, records, and documents from time to time, provided that they reasonably relate to the scope of the city's rights under this chapter or the franchise agreement.

3. Upon reasonable notice, and during normal business hours, the grantee shall permit examination by any duly authorized representative of the city of all franchise property and facilities, together with any appurtenant property and facilities of the grantee situated within or outside the city, and all records relating to the franchise, provided they are necessary to enable the city to carry out its regulatory responsibilities under this chapter or the franchise agreement. The grantee has the right to be present at any such examination.

B. Annual Reports.

1. Within ninety days after the end of each calendar year, the grantee shall submit to the city, if requested, an annual report with respect to the preceding calendar year. This annual report must be in a form approved by the city, and may include, without limitation, the following information:

a. A summary of the previous year's activities relating to development of the cable system, including services commenced or discontinued during the reporting year.

b. A list of the grantee's officers, members of its board of directors, and other principals.

c. A list of stockholders or other equity investors holding five percent or more of the voting interest in the grantee.

d. Information as to the number of homes passed, subscribers, additional television outlets, and the number of basic and pay-per-view subscribers.

e. Any other information relevant to franchise regulation that the city may reasonably request.

2. Upon request, the grantee must submit to the city copies of all pleading, applications, reports, decisions, correspondence, and actions submitted to or received from any federal, state, or local court, regulatory agency, or other governmental body, which documents are non-routine in nature and which may materially affect the grantee's cable television operations within the franchise service area. Information submitted to the city that by law is protected from disclosure, and is so designated by the grantee, will be retained in confidence by the city and its authorized agents to the extent permitted by law, and will not be made available for public inspection. However, the grantee has no obligation to provide to the city copies of documents that contain the grantees's trade secrets or are otherwise of a confidential or proprietary nature unless it receives satisfactory assurances that such information will be held in strict confidence by the city. To the extent possible, the grantee will provide the city with summaries or copies of any required documents from which trade secrets and proprietary matters have been deleted. The burden of proof will be on the grantee to establish the confidential nature of any information submitted, to the reasonable satisfaction of the city.

3. If the grantee is publicly held, a copy of the grantee's annual and other periodic reports submitted to its shareholders shall be delivered to the city within forty-five days after their issuance.

4. Upon the city's request, but no more frequently than annually, the grantee shall submit to the city a privacy report indicating its compliance with the provisions contained in Section 5.20.160(C) and all measures taken to ensure that the privacy rights of individuals are being protected.

5. All reports required under this chapter, except those required by law to be kept confidential, will be available for public inspection in the city's offices during normal business hours.

6. All reports and records required under this chapter will be furnished at the sole expense of the grantee, unless otherwise provided in the franchise agreement.

7. The willful refusal, failure, or neglect of the grantee to file when due any of the reports required under this chapter may be deemed a material breach of the franchise agreement if those reports are not provided to the city within thirty days after written request. Any such material breach may subject the grantee to all remedies, legal or equitable, that are available to the city under this chapter or the franchise agreement.

8. Any materially false or misleading statement or representation that is knowingly and willfully made by the grantee in any report required under this chapter or the franchise agreement may be deemed a material breach of the franchise and may subject the grantee to all remedies, legal or equitable, that are available to the city.

(Ord. 1416 N.S. §§ 15, 16, 1998; Ord. 1371 N.S. § 1 (part), 1997)

A. Annual Review.

1. Each year during the term of the franchise, if requested by the city, the grantee and the city will meet publicly to review system performance and quality of service. The various reports required by this chapter, results of technical performance tests, the record of subscriber complaints and the grantee's response to those complaints, and the information obtained from any subscriber surveys will be used 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 comments or complaints also will be considered. Within thirty days after the conclusion of a system performance review meeting, the city may issue findings with respect to the grantee's compliance with the franchise and quality of service.

2. If the city determines that the grantee is not in compliance with the requirements of this chapter or the franchise agreement, the city may direct the grantee to correct the areas of noncompliance within a reasonable period of time. Failure of the grantee, after due notice, to correct the areas of noncompliance within the period specified, or to commence compliance within that period and diligently achieve compliance thereafter, will be deemed a material breach of the franchise, and the city may exercise any remedy provided by this chapter or the franchise agreement.

B. Special Review.

1. When complaints are made, or where other evidence exists that, in the city's judgment, casts reasonable doubt on the reliability or quality of cable service and indicates that the grantee is not in compliance with the requirements of this chapter or its franchise, the city has the right to compel the grantee to test, analyze, and report on the performance of the system in order to protect the public against substandard cable service.

2. The city may not compel the grantee to provide such tests or reports unless the city has provided the grantee with at least thirty days notice of its intention to exercise its rights under this subsection and has provided the grantee with an opportunity to be heard prior to the exercise of these rights.

3. The test or tests shall be made and the report delivered to the city, at the grantee's sole cost, no later than thirty days after the city notifies the grantee that it is exercising its rights. The report must include the following information: the nature of the complaints that precipitated the special tests; the system components that were tested; the equipment and procedures used in the testing; the results of the tests; and the method by which the complaints were resolved. Any other information pertinent to the special tests must be reported.

C. Special Evaluation Sessions. The city may hold special evaluation sessions at any time during the term of the franchise, provided that these sessions are held not more frequently than once every three years. The grantee shall be notified of the time, place, and date of the sessions and the topics to be discussed. These sessions will be open to the public and advertised in a newspaper of general circulation at least ten days before each session. The sessions may include an evaluation of any items considered relevant to the cable system, the subscribers, and the city. Either the city or the grantee may propose items for discussion or evaluation.

(Ord. 1371 N.S. § 1 (part), 1997)

A. Remedies for Franchise Violations. If the grantee fails to perform in a timely manner any obligation set forth in this chapter or in a franchise granted hereunder, following notice from the city and an opportunity to cure that nonperformance in accordance with the provisions of this section or the franchise agreement, the city may, in its sole discretion:

1. Cure the violation and recover the actual cost of cure from the security fund if the violation is not cured within thirty days after written notice to the grantee of the city's intention to cure and to draw upon the security fund.

2. Assess liquidated damages against the grantee in the amount set forth in the franchise agreement if the violation is not cured, or if the grantee has not commenced to cure, on a schedule acceptable to the city, within thirty days after written notice to the grantee of the city's intention to assess liquidated damages. This assessment may be withdrawn from the security fund, and will not constitute a waiver by the city of any other right or remedy it may have under the franchise or applicable law, including without limitation, its right to recover from the grantee any additional damages, losses, costs, and expenses, including actual attorney's fees, that may have been suffered or incurred by the city by reason of or arising out of that breach of the franchise.

B. Procedure for Remedying Franchise Violations. Prior to imposing any remedy or other sanction specified in this section, the city must give the grantee notice and the opportunity to be heard on the matter, in accordance with the following procedures:

1. The city must first notify the grantee of the violation in writing, by personal delivery or by certified mail, return-receipt requested, and demand correction within a reasonable time. That time period may not be less than fifteen days in the case of the failure of the grantee to pay any amount due the city under this chapter or the franchise agreement, and thirty days in all other cases. If the grantee fails to correct the violation within the time prescribed, or if the grantee fails to commence correction of the violation within the time prescribed and diligently remedy the violation, the city shall then give not less than thirty days written notice of a public hearing to be held by the city council. The notice must specify the violations alleged to have occurred.

2. At the public hearing, the city council shall hear and consider all relevant evidence, and then render its findings and decision.

3. If the city council finds that the grantee has corrected the violation, or has commenced correction of the violation after notice from the city and is diligently proceeding to remedy the violation, or that no violation has occurred, then the proceedings will terminate and no penalty or other sanction will be imposed.

4. If the city council finds that violations exist and that the grantee has not corrected them in a satisfactory manner, or has not commenced correction of the violation after notice from the city and is not diligently proceeding to remedy the violation to the satisfaction of the city, then the city council may, in its discretion, impose one or more of the remedies provided in this chapter or in the franchise agreement, as may be appropriate under the circumstances.

C. City's Power to Revoke. The city reserves the right to revoke any franchise granted under this chapter and to rescind all rights and privileges associated with it in any of the following circumstances, each of which constitutes a default by the grantee under the franchise:

1. The grantee's default in the performance of its obligations under this chapter or the franchise agreement and the continuance of that default after receipt of due notice and a reasonable opportunity to cure.

2. The grantee's failure to provide, or to maintain in full force and effect, the insurance coverage or security fund in the amounts specified in the franchise agreement.

3. The grantee's violation of any order or ruling of any regulatory body having jurisdiction over the grantee relative to the franchise, unless that order or ruling is being contested in good faith by the grantee in judicial or administrative proceedings.

4. The grantee's acts or omissions that involve any fraud or deceit as to the city.

5. The grantee's insolvency, inability to pay its debts, or adjudication as a bankrupt.

The revocation and termination of the grantee's franchise does not affect any right of the city to pursue any other remedy under the franchise or applicable law.

(Ord. 1416 N.S. § 17, 1998; Ord. 1371 N.S. § 1 (part), 1997)

If the grantee's performance of any of the terms, conditions, or obligations required by this chapter or by a franchise granted hereunder is prevented by a cause or event not within the grantee's control, that inability to perform will be deemed excused and no penalties or sanctions will be imposed; provided, however, that such inability to perform will not relieve the grantee from any obligations imposed by Section 5.20.060(C)(4) pertaining to refunds and credits for interruptions in service. For the purpose of this section, causes or events not within the control of the grantee include, without limitation, acts of God, strikes, sabotage, riots or civil disturbances, 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. Such causes or events do not include the financial inability of the grantee to perform, the failure of the grantee to obtain any necessary permits or licenses from other governmental agencies, the failure to obtain the right to use the facilities of any public utility where that failure is due solely to the acts or omissions of the grantee, or the failure of the grantee to obtain supplies, services, or equipment necessary for the installation, operation, maintenance, or repair of the cable television system where the grantee has failed to exercise reasonable diligence to secure those supplies, services, or equipment.

(Ord. 1371 N.S. § 1 (part), 1997)

A. Abandonment or Removal.

1. If the use of any property of the grantee within the public rights-of-way is discontinued for a consecutive twelve-month period, the grantee will be deemed to have abandoned that franchise property. 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 all or a portion of the system, will not be deemed to have been abandoned because of its lack of use.

2. Upon such terms as the city may impose, the city may authorize the grantee to abandon, and not remove, any underground facility or equipment that is laid, constructed, operated, or maintained under the franchise. Unless that authorization is granted, or unless otherwise provided in the franchise agreement, the grantee shall remove all underground facilities and equipment upon receipt of written notice from the city and restore any affected street to the state existing at the time such facilities and equipment were installed, so as not to impair its usefulness. In removing its plant, structures, and equipment, the grantee must refill, at its sole expense, any excavation made by it and must leave all public ways and places in as good condition as that prevailing prior to such removal and without materially interfering with any electrical or telephone cable or other utility wires, poles, or attachments. The city has the right to inspect and approve the condition of the public ways, public places, cables, wires, attachments, and poles prior to and after removal. The liability, indemnity, and insurance provisions of this chapter, and the security fund provided by the grantee will continue in full force and effect during the period of removal and until full compliance by the grantee with the terms and conditions of this subsection.

3. Upon abandonment in place of any franchise property, the grantee, if required by the city, shall submit to the city an instrument, satisfactory in form to the city, transferring to the city the ownership of the abandoned franchise property.

4. Upon expiration of the term of the franchise, or upon its earlier revocation or termination, the city has the right to require the grantee to remove, at its sole expense, all above-ground portions of the cable television system from all streets and public ways within the city within a reasonable period of time, which will be not less than one hundred eighty days.

B. Restoration by the City—Reimbursement of Costs. If the grantee fails to complete any work required by this chapter, the franchise agreement, or any other law, or if that work is not completed within thirty days after receipt of written notice from the city, or, if more than thirty days are reasonably required for that work, the grantee does not commence the work within that thirty day period and diligently complete the work, then the city may cause that work to be done. The grantee shall reimburse the city the costs of completing that work within thirty days after receipt of an itemized list of those costs, or the city may recover those costs from the security fund provided by the grantee.

C. Extended Operation and Continuity of Services. Upon either the expiration or revocation of the franchise, the city may authorize the grantee to continue to operate the cable television system for an extended period of time. In such event, the grantee must continue to operate the system under the terms and conditions of this chapter and the franchise and to provide the regular subscriber services and any other services that may then be provided. All subscribers will have the right to continue to receive all available services, provided their financial and other obligations to the grantee are honored. The grantee shall use all reasonable efforts to provide continuous, uninterrupted service to its subscribers, including operation of the system during any transition period following franchise expiration or termination.

D. Receivership and Foreclosure.

1. A franchise granted in accordance with this chapter will, at the option of the city, terminate one hundred twenty days after the appointment of a receiver or a trustee to take over and conduct the business of the grantee, whether in a receivership, reorganization, bankruptcy, or similar action or proceeding, unless that receivership or trusteeship is vacated prior to the expiration of that one hundred twenty day period, or unless:

a. The receiver or trustee, within one hundred twenty days after election or appointment, fully complies with all terms and provisions of this chapter and the franchise agreement, and remedies all defaults under the franchise or provides a plan to remedy those defaults that is satisfactory to the city; and

b. The receiver or trustee, within that one hundred twenty day period, executes an agreement, duly approved by the court having jurisdiction in the matter, whereby the receiver or trustee assumes and agrees to be bound by every provision of the franchise agreement.

2. Upon a foreclosure or judicial sale of the franchise property, or any material part of that property, the city may serve notice of termination upon the grantee and the successful bidder at that sale, in which event the franchise and all rights and privileges of the grantee under that franchise will terminate thirty days after service of that notice, unless:

a. The city has approved the transfer of the franchise in the manner provided by this chapter; and

b. The successful bidder covenants and agrees with the city to assume and to be bound by all provisions of the franchise agreement.

(Ord. 1371 N.S. § 1 (part), 1997)

A. City's Reservation of Rights. In addition to the rights specifically reserved to the city by this chapter, the city reserves to itself every right and power that may be reserved by the provisions of any law or the franchise agreement.

B. Waiver. The city has the right to waive any provisions of the franchise agreement, except those required by federal or state laws or regulations, if the city determines that it is in the public interest to do so, and that the enforcement of those provisions will impose an undue hardship on the grantee or the subscribers. To be effective, a waiver must be in writing and signed by an authorized representative of the city. The waiver of any provision in one instance will not be deemed a waiver of that provision in any other instance, nor will it be deemed a waiver of any other provision of the franchise unless that fact is so stated.

C. Rights of Individuals.

1. The grantee may not deny service or access, or otherwise discriminate against subscribers, channel users, or residents on the basis of race, color, religion, national origin, age, or sex. The grantee must comply with all applicable federal, state, and local laws and regulations relating to nondiscrimination.

2. The grantee must comply with all applicable equal employment opportunity requirements of federal, state, and local laws and regulations, as they now exist or as they may be amended from time to time.

3. Neither the grantee, nor any other person or entity may, without a subscriber's consent, tap, or arrange for the tapping, of any cable, line, signal input device, or subscriber outlet or receiver for any purpose other than 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.

4. In providing its services, or in pursuing any collateral commercial enterprise relating to those services, the grantee must take all reasonable precautions to prevent the invasion of a subscriber's or a resident's right of privacy, and other civil rights, as delineated or defined by applicable law. The grantee may not, without a lawful court order or other legal authority, use any interactive two-way equipment or capability of the cable system for unauthorized personal surveillance of any subscriber or resident.

5. No cable, line, wire, amplifier, converter, or other equipment owned by the grantee may be installed in a subscriber's premises, other than in lawfully-obtained easements, without first obtaining any required consent. If a subscriber requests service, permission to install upon that subscriber's property will be presumed.

6. Neither the grantee, nor any of its agents, employees or subcontractors, may sell, or otherwise make available to any person, without the prior written consent of the subscriber under state and federal privacy laws, any of the following:

a. A list containing the names and addresses any subscribers who have requested in writing to be removed from that list.

b. Any list that identifies the viewing habits of individual subscribers. This does not prohibit the grantee from providing to other persons composite ratings of subscriber viewing preferences.

(Ord. 1371 N.S. § 1 (part), 1997)

For the purposes of this chapter, the following words, terms, phrases, and their derivations have the meanings set forth below. Words used in the present tense include the future tense, and words in the singular number include the plural number. Words not defined are to be given their common and ordinary meaning.

"Basic cable service" or "basic service" means any service tier that includes the retransmission of local television broadcast signals.

"Cable television system" or "system", also referred to as "cable communications system" or "cable 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, including video programming and any other lawful telecommunications services, and which is provided to multiple subscribers within the community; but this term does not include:

1. A facility that serves only to transmit the television signals of one or more television broadcast stations;

2. A facility that serves only subscribers in one or more multiple-unit dwellings under common ownership, control, or management, unless that facility uses any public rights-of-way;

3. A facility of a common carrier, except that such facility will be considered a cable system to the extent that facility is used in the transmission of video programming directly to subscribers;

4. Any facilities of an electric utility that are used solely for operating an electric utility system; or

5. An open video system that complies with Section 653 of Title VI of the Telecommunications Act of 1996.

"Cable service" means the total of the following:

1. The one-way transmission to subscribers of video programming or other programming service; and

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

"Channel" or "cable channel" means a portion of the electromagnetic frequency spectrum used in a cable system that is capable of delivering a television channel as defined by the federal communications commission.

"City" means the city of Morgan Hill as represented by the city council or by any delegate, acting within the scope of its jurisdiction.

"Council" means the city council of the city of Morgan Hill.

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

"Franchise agreement" means a franchise granted by 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 as compensation for the grantee's use of the public rights-of-way. The term "franchise fee" does not include:

1. 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);

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

3. 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

4. Any fee imposed under Title 17 of the United States Code.

"Grantee" means any person receiving a franchise in accordance with this chapter, and that person's lawful successor, transferee, or assignee.

"Gross annual cable service revenues" means the annual gross revenues received from all operations of the cable television system within the city, excluding refundable deposits, rebates, or credits, and further excluding any sales, excise, or other taxes or charges collected for direct pass-through to the local, state or federal government. Revenues collected as franchise fees from subscribers shall be included in gross annual cable service revenues as permitted by law.

"Gross annual telecommunications service revenues" means the annual revenues received by a grantee from the operation of a cable system to provide telecommunications services other than cable service.

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

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

"Public, educational or government access facilities" or "PEG access facilities" means the total of the following:

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

2. Facilities and equipment for the use of that channel capacity.

"Service area" or "franchise service area" means the entire geographic area of the city as it is now constituted, or may in the future be constituted, unless otherwise specified in the ordinance or resolution granting the franchise, or in the franchise agreement.

"Service tier" means a category of cable service or other services provided by a grantee and for which a separate rate is charged by the grantee.

"Street" or "public way" means each of the following that has been dedicated to the public or is later dedicated to the public and maintained under public authority or by others and located within the city limits: streets, roadways, highways, avenues, lanes, alleys, sidewalks, easements, rights-of-way, and similar public property and areas that the city authorizes to be included within the definition of street from time to time.

"Subscriber" or "customer" or "consumer" means any person subscribing to, for any purpose, a service provided by the grantee by means of or in connection with the cable system, and who pays the charges for that service.

(Ord. 1371 N.S. § 1 (part), 1997)

If any provision of this chapter is determined by any court of competent jurisdiction, or by any federal or state agency having jurisdiction over its subject matter, to be invalid and in conflict with any paramount federal or state law or regulation now or hereafter in effect, or is determined by that court or agency to require modification in order to conform to the requirements of that paramount law or regulation, then that provision will be deemed a separate, distinct, and independent part of this chapter, and such determination will not affect the validity and enforceability of any other provisions. If that paramount federal or state law or regulation is subsequently repealed or amended so that the provision of this chapter determined to be invalid or subject to modification is no longer in conflict with that law or regulation, then that provision will again become effective and will thereafter be binding on the city and the grantee; provided, however, that the city must give the grantee thirty days written notice of that change before requiring compliance with that provision or such longer period of time as may be reasonably required for the grantee to comply with that provision.

(Ord. 1371 N.S. § 1 (part), 1997)