San Marcos Municipal Code Ch. 5.72 Communications Systems

This ordinance shall be known and may be cited as the "Cable Communication Franchise Ordinance."

For the purpose of this chapter, the following words, terms, phrases, and their derivations shall have the meanings given herein. When not inconsistent with the context, words used in the present tense include the future tense, words in singular number include the plural number. The word "shall" is always mandatory and not merely directory.

(a)

Additional Service means any service not included in Basic Service or Institutional Service.

(b)

Agency Subscriber means a subscriber who receives a service in a government or public agency, school, or nonprofit corporation facility.

(c)

Administrative Officer means the City Manager or his or her designated representative.

(d)

Attachment Point means the point at which Grantee's drop attaches to subscriber owned equipment.

(e)

Basic Service means the lowest service tier which includes the retransmission of local television broadcast signals.

(f)

Broadcast Signal means a signal transmitted over the air to a wide public geographic audience and received by a cable system.

(g)

Cable Communications System or System, Cable TV System, CATV System, or Broadband Communications Network or Network, means a system within the City of San Marcos of antennas, cables, amplifiers, towers, microwave links, cable casting studios, and any other conductors, converters, terminals, equipment or facilities designed and constructed for the primary purpose of distributing television programming to subscribers or users, and for the secondary purpose of producing, receiving, amplifying, storing, processing, or distributing audio, video, digital, or other forms of electronic or electrical signals.

(h)

Cablecast Signal means a nonbroadcast signal that originates within the facilities of the Cable Communications System, whether from a live or recorded source.

(i)

Closed Circuit or Institutional Service means services provided to institutional users on an individual or collective basis. The information contained in such a service may or may not be simultaneously available to other system subscribers or users.

(j)

Channel means a frequency band capable of carrying a standard video signal or some combination of video signals, or a frequency band assigned to carry a nonstandard video signal or some combination of such video signals.

(k)

Commercial Subscriber means a subscriber who receives a residential service in a place of business, or anyone whose service is utilized in a business, trade, or profession, including but not limited to, hotels, motels, bars, restaurants and other similar establishments.

(l)

Cable Usage Corporation or CUC means a nonprofit, public corporation, hereinafter further defined, established or authorized by the Grantor, whose duties shall include the review of the management and operation of services designated by Grantor.

(m)

Complaint means a billing dispute or service call in which a subscriber is notifying Grantee of an outage and/or degradation in picture quality.

(n)

Converter or Terminal means a device which converts signals from one frequency to another.

(o)

Drop means the cable and related equipment connecting the system's plant to equipment at the subscriber's premises.

(p)

Education Channel means any channel where nonprofit educational institutions are the primary designated programmers.

(q)

FCC means the Federal Communications Commission or its designated representative(s).

(r)

Franchise means a written legal undertaking or action of the Grantor which awards permission to a specific named person or entity to use the streets and public ways for the purpose of installing, operating and maintaining a Cable Communications System.

(s)

Government Channel means any channel where local government agencies are the primary designated programmers and programming is a noncommercial informational programming regarding government activities and programs.

(t)

Grantee means the entity to which a franchise is granted for the construction, operation, maintenance, and reconstruction of a Cable Communications System and the lawful successors, transferees, or assignees of said entity.

(u)

Grantor means the City of San Marcos for territory within its present and future jurisdiction, its elected governing body, and/or such representative person or entity as it may designate to act on cable communication matters in its behalf.

(v)

Gross Annual Receipts or Gross Receipts or Gross Revenues. Gross revenues shall mean the annual total monies, revenues, or other things of value actually received by Grantee related to, or stemming from any San Marcos cable operations, programming, channel

leasing, advertising, interconnection or retransmission of signals to/from other cable systems, except for taxes collected by a system Grantee on behalf of taxing authorities.

Gross revenues shall include, but shall not be limited to: (i) Basic Cable Service, Expanded or Tier Cable Service, Premium Service, audio services, commercial service, pay-per-view service and related per-event services, or for the distribution of any cable service over the system; (ii) charges for additional outlets, changes in service and reconnection charges and similar fees; (iii) revenue received from subscribers for converters, remote controls or other equipment leased or rented to subscribers in connection with the delivery of cable service to such subscribers; (iv) revenue received from subscribers for service charges and late fees attributable to delinquent accounts; and (v) revenues received from leasing of any channels, advertising, intraconnections, sales of subscription preference information and/or any other revenue received by Grantee arising from any San Marcos cable operations which Grantor is not prohibited from sharing or receiving by applicable State or federal regulation.

Gross Revenues shall not include any tax of general applicability imposed upon a Grantee or upon the Grantee's subscribers by the City, State, federal or any other governmental entity and required to be collected by the Grantee and passed through to the taxing entity (including, but not limited to, user taxes, service taxes and communications taxes), provided such taxes are identified as a separate line item on subscriber statements. Gross revenues shall not include amounts which cannot be collected by Grantee and are identified as bad debt; provided that if amounts previously representing bad debt are collected, then those amounts shall be included in Gross Revenues for the period in which they are collected.

(Ord. No. 99-1061, 6-8-99)

(w)

Headend means that central portion(s) of the system where signals are introduced into and received from the balance of the system.

(x)

Institutional Network or Institutional System means a system or portion of a system intended primarily to service nonresidential subscribers.

(y)

Lease Channel means any channel where someone other than Grantor or Grantee is sold the rights to air programming.

(z)

Local Origination Channel means any channel where the Grantee is the primary designated programmer.

(aa)

Monitoring or Tapping means observing or receiving a signal, or the absence of a signal, where the observer is neither the sending nor receiving party and is not authorized by the sending and/or receiving party to observe said signal whether the signal is observed or received by visual, electronic, or any other means whatsoever.

(bb)

Nonbroadcast Signal means a signal that is not involved in over-the-air broadcast for general public reception.

(cc)

Open Channel means any channel that can be received by all subscribers, without the use of special equipment not normally possessed by, or available to, anyone who may become a subscriber.

(dd)

Pay Cable or Pay Service, Premium Service, or Pay Television means signals for which there is a fee or charge to users over and above the charge for Basic Service including any tiers of service; provided, however, the sale or lease of studio facilities, equipment, and/or tapes to local users shall not be deemed pay or premium services.

(ee)

Plant means the transmitting medium and related equipment which transmits signals between the headend and subscribers, including drops.

(ff)

PEG Channel means a Public, Education or Government channel.

(gg)

Person means any corporation, partnership, proprietorship, individual or organization authorized to do business in the State of California, or any natural person.

(hh)

Private Channel means any channel carrying material available in intelligible form only to subscribers provided with special equipment to receive such signals and render them intelligible.

(ii)

Program or Programming means the information content of a signal and the act or process of creating such content, whether that content is intended to be pictures and sound, sound only, or any other form of information whatsoever.

(jj)

Programmer means any person or entity who or which provides program material or information for transmission by means of a system.

(kk)

Property of Grantee means all property owned or leased within the franchise area by Grantee in the conduct of its system business under a franchise granted hereunder.

(ll)

Public Channel, Community Service Channel or Community Channel means any channel for which members of the public or any community organization may provide nonadvertiser supported programming; provided, however, sponsorship identification fees may be paid and accepted to further community programming.

(mm)

Resident means any person residing in the franchised area or as otherwise defined by applicable law.

(nn)

Residential Subscriber means a subscriber who receives a service in a dwelling unit, and whose service is not utilized in a business, trade or profession.

(oo)

Section means any section, subsection, or provision of this ordinance, or of a franchise hereunder.

(pp)

Service means any specific kind or type of benefit provided by Grantee, or group of related benefits or abilities, obtained or made available to any person or entity, involving the use of a signal transmitted via a cable communications system, whether the signal and its content are the entire service or comprise only a part of a service which involves other elements of any number or kind.

(qq)

Service Area means the City of San Marcos.

(rr)

Service Outage means a substantial or complete disruption in cable service.

(ss)

School means a substantial or complete disruption in cable service.

(tt)

Streets and Public Ways means the surface and the space above and below any public street, sidewalk, alley, or other public way or right-of-way of any type whatsoever.

(uu)

Subscriber means any person or other entity electing to subscribe to, for any purpose, a service provided by Grantee by means of or in connection with its cable system.

(vv)

Tier shall mean a combination of signals and/or channels for which a specific identifiable price is charged.

(ww)

Unit means a discrete place where system services are used, such as a residence, apartment, office, store, etc.

(xx)

User(s) means any person or entity who either receives services from a cable system or who accomplishes any purpose by, in part or in whole, transmitting or receiving information via a cable system, or who creates programming for that purpose, or who receives and uses programming.

(yy)

Year means a specific year or part of a year referred to, or a full calendar year.

Terms Not Defined. Words, terms, or phrases not defined herein shall first mean their special meanings or connotations in any industry, business, trade or profession where they commonly carry such special meanings. In the event such special meanings are not common, they shall mean their standard definitions as set forth in commonly used and accepted dictionaries of the English language.

It is unlawful for any person to construct, install, or maintain in any public place within Grantor's territory, or upon any easement owned or controlled by a public utility, or within any other public property of Grantor, or within any privately-owned area within Grantor's jurisdiction which is not yet, but is designated as, a proposed public place on a tentative subdivision map approved by Grantor, any equipment, facilities, or system for distributing signals or services through a cable television system, unless a franchise has first been obtained hereunder, and is in full force and effect. Violation of this section is a misdemeanor punishable pursuant to the provisions of Chapter 1.12 of this Code.

It is unlawful for any person to make or use any unauthorized connection to, or to monitor, tap, receive or send any signal or service via a franchised system, or to enable anyone to receive or use any service, television or radio signal, picture, program, or sound, or any other signal without payment to the owner of said system. Violation of this section is a misdemeanor punishable pursuant to the provisions of Chapter 1.12 of this Code.

It is unlawful, without the consent of the owner, to willfully attach to, tamper with, modify, remove or injure any physical part of a franchised cable television system. Violation of this section is a misdemeanor punishable pursuant to the provisions of Chapter 1.12 of this Code.

(a)

Authority to Grant Franchises. The Grantor may grant a franchise to any person who offers to provide a system under and pursuant to this ordinance.

(b)

Form. A franchise may, at Grantor's sole option, take the form of an ordinance, license, permit, contract, agreement, resolution or any other form elected by Grantor.

(c)

Grants Not Required. Consistent with applicable State and federal law, no provision of this ordinance shall require the granting of a franchise when, in the opinion of the Grantor, it is in the public interest not to do so.

(d)

Purpose. The purpose of a franchise shall be to identify and authorize its specific Grantee and to identify and specify those terms, conditions, definitions, itemizations, specifications and other particulars of the agreement between the Grantor and Grantee which it represents. In so doing a franchise may clarify, extend and interpret the provisions of this chapter. Where a franchise and this chapter conflict both shall be liberally interpreted to achieve a common meaning or requirement. In the event this is not possible within reasonable limits, the franchise shall prevail.

(e)

Mutual Consideration. The award of a franchise authorizing the use of public property or public rights for private purposes shall be deemed consideration by the Grantee in the form of agreement to provide the system and services offered in accordance with the provisions hereof and of the franchise.

(f)

Compliance with Law. Neither this chapter nor a franchise granted under it relieves Grantee of any requirement of Grantor or of any ordinance, rule, regulation, or specification of Grantor now or hereafter in effect, including, but not limited to, the payment of all normal permit and inspection fees so long as said ordinance, rules, regulations or specifications do not materially conflict with or alter the express terms of this chapter and the franchise.

(g)

Franchise Non-Exclusive. Grantor may, at its option, grant one or more franchises to construct, operate, maintain, and reconstruct a Cable Communications System. Said franchises shall constitute both a privilege and an obligation to provide the system and services required by this chapter and the Franchise.

(h)

Limitation. No privilege shall be granted or conferred by a franchise except those specifically prescribed herein or in the Franchise Agreement.

(i)

Duration. The term of any franchise, and all rights, privileges, obligations and restrictions pertaining thereto shall be specified in the franchise agreement. The effective date of any franchise shall be as specified in the Franchise.

(j)

Use of Public Streets and Ways. For the purposes of operating and maintaining a Cable Communications System in the franchised area, a Grantee may place and maintain within the public rights-of-way such property and equipment as are necessary and appurtenant to the operation of the Cable Communications System. Prior to construction or alteration of plant in public rights-of-way, the Grantee shall apply for and receive all necessary encroachment, construction or other permits required by any City law or regulation.

(k)

Use of Other Utilities. Any person or entity who provides a system or services as defined herein shall be deemed a Grantee and shall not do so except in accordance with a franchise granted hereunder. If such Grantee uses distribution channels furnished by a telephone company or other public utility, said Grantee shall be required to comply with all of the provisions hereof as a "Licensee," and the term "Grantee" herein shall include "Licensee" in its meaning.

(l)

Non-transferable. Except for transfers between and among wholly-owned subsidiaries of Grantee, or Affiliates of Grantee which are wholly-owned by the same parent, the franchise shall not be sublet or assigned, nor shall any of the rights or privileges therein granted

or authorized be leased, assigned, sold or transferred, either in whole or in part, nor shall title thereto, either legal or equitable, or any right, interest or property therein, pass to or vest in any person, except the Grantee, either by act of the Grantee or by operation of law, without the prior written consent of the Grantor, which consent shall not be unreasonably withheld. The granting of such consent shall not render unnecessary any subsequent consent. The Grantor shall approve, disapprove, or conditionally approve said request within a reasonable period of time upon the receipt of all reasonably necessary requested information.

(m)

Change in Control.

(1)

The Grantee shall promptly notify Grantor of any proposed change in control of the Grantee. Such change in control shall make the franchise null and void unless and until the Grantor shall have consented thereto, which consent shall not be unreasonably withheld. The Grantor may condition said transfer upon reasonable terms and conditions.

(2)

Except for transfers between and among wholly-owned subsidiaries of Grantee, or affiliates of Grantee which are wholly-owned by the same parent, for the purpose of this section, a change in control shall mean any acquisition or transaction resulting in control of 51 percent or more of Grantee's or Grantee's parent's voting stock by an entity or group of entities acting in concert.

(Ord. No. 99-1061, 6-8-99)

(n)

Sales Notice. The Grantee, at least 90 days prior to any franchise transfer or change in control as heretofore described, shall file with the Grantor a Notice of Intent to enter into said transfer and then file a certified statement attesting to said sale within 90 days of approval of said transfer.

(o)

Sales Approval. Every such transfer or change in control as heretofore described, whether voluntary or involuntary, shall be deemed void and of no effect unless Grantee shall have filed said certified statement as is required and Grantor has given written approval by resolution of the City Council.

(p)

Violation. If the Grantee violates any provision of this Section, the Franchise shall terminate subject to all applicable due process safeguards.

(q)

Franchise References. A franchise which cites, refers to, or otherwise incorporates this entire ordinance or portions thereof shall be deemed to be a franchise issued under and subject to this ordinance. Such a franchise may employ, as sufficient for citation, reference, or incorporation the section or subsection number and caption hereof, followed by a statement of the detail specification, or requirement of the franchise pursuant to such reference.

(a)

Reservation. There is hereby reserved to Grantor every right it may have in relation to its power of eminent domain over Grantor's franchise and property.

(b)

Non-waiver or Bar. Neither the granting of any franchise, nor any provisions hereof, shall constitute a waiver or bar to the exercise of any governmental right or power by Grantor.

(c)

Delegation of Powers. Any right or power in, or duty retained by or imposed upon Grantor, or any commission, officer, employee, department, or board of Grantor, may be assigned or transferred by Grantor to any officer, employee, department or board of Grantor.

(d)

Right of Inspection of Construction. The Grantor shall have the right to inspect all construction or installation or other physical work performed by Grantee in connection with the franchise, and to make such tests as it shall find necessary to ensure compliance with the terms of the franchise and other pertinent provisions of law, so long as said inspection and testing does not unreasonably interfere with Grantee's operations.

(e)

Right to Require Removal of Property. Consistent with applicable law, at the expiration of the term or any renewal term or extension for which the franchise is granted, or upon its lawful revocation, expiration, or termination, the Grantor shall have the right to require the Grantee to remove, at Grantee's expense, all portions of its System and any other property from all streets and public ways within the franchise area within a reasonable period of time.

(f)

Right of Intervention. The Grantor shall have the right of intervention in any suit, proceeding or other judicial or administrative proceeding in which the Grantor has any material interest, to which the Grantee is party.

(g)

Place of Inspection. The Grantor shall have the right to inspect and request copies of all relevant information that is reasonably necessary for the exercise of Grantor's regulatory authority upon reasonable notice on Grantee's local premises at any time during normal business hours, and any Grantee records kept at another place shall, within ten days of Grantor's request, be made available at Grantee's premises within the County of San Diego for Grantor's inspection and or copying, so long as said inspection does not unreasonably interfere with Grantee's operations. Grantor shall pay all reasonable costs for copying any relevant information needed.

(a)

Discriminatory Practices Prohibited. The Grantee shall not deny cable television service or otherwise discriminate against subscribers, or others on the basis of race, color, religion, national origin, sex, age, disability or sexual preference. The Grantee shall strictly adhere to the equal employment opportunity requirements of federal, State or local governments and shall comply with all applicable laws and executive and administrative orders relating to non-discrimination.

(b)

Tapping and Monitoring. The Grantee shall not tap or monitor or permit any other person controlled by Grantee to tap or monitor any cable, line, signal input device or subscriber outlet or receiver for any purpose whatsoever without the express written consent of the subscriber or a court order therefore; provided, however, that the Grantee shall be entitled to monitor customer service calls for quality control purposes and to conduct system-wide or individually addressed "sweeps" for the purpose of verifying system integrity, controlling return path transmission, or checking for unauthorized connections to the cable television system or service levels or billing for pay services.

(c)

Data Collection.

(1)

Except to obtain information necessary to render a cable service or other service provided by the Grantee or to detect unauthorized reception of cable communications, the Grantee shall not use the cable system to collect personally identifiable information concerning any subscriber without the prior affirmative written consent of the subscriber concerned.

(2)

The Grantee shall not disclose personally identifiable information concerning any subscriber without the prior affirmative written consent of the subscriber concerned unless: (i) the disclosure of such information is necessary for the Grantee to render, or conduct a legitimate

business activity related to, the provision of cable services; or (ii) the disclosure is pursuant to a court order.

(Ord. No. 1061, 6-8-99)

(d)

Revealing Subscriber Preferences.

(1)

Grantee shall not reveal 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 prior written consent of the subscriber.

(2)

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 subscriber.

(3)

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

(4)

Such a subscriber may revoke without penalty or cost any consent previously made by delivering to the Grantee in writing a substantial indication of his intent to so revoke.

(e)

Revealing Subscriber Lists. The Grantee shall not reveal, or sell, or permit the release or sale of its subscriber list without the prior affirmative written consent of each subscriber, 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 concomitant billing of subscribers for said services; and further, provided that consistent with applicable law, Grantor may use Grantee's subscribers list for the purpose of communication with subscribers in connection with matters relating to operation, management, and maintenance of the cable system.

(f)

Other Persons Affected. The prohibitions contained in subsections (a) through (f) inclusive of this Section shall extend and apply to all of the foregoing as well as to the Grantee:

(1)

Officers, directors, employees and agents of the Grantee;

(2)

General and Limited Partners of the Grantee;

(3)

Any person or combination of persons owning holding or controlling five percent or more of any corporate stock or other ownership interest of the Grantee;

(4)

Any affiliated or subsidiary entity owned or controlled by Grantee, or in which any officer, director, stockholder, general or limited partner or person or group of persons owning, holding or controlling any ownership interest in the Grantee, shall own, hold or control five percent or more of any corporate stock or other ownership interest; and

(5)

Any person, firm or corporation acting or serving in the capacity of holding or controlling company of the Grantee.

(g)

Subscriber Bill of Rights. Grantee shall provide, at the time of initial connection and annually thereafter to all subscribers a publication, in a form prior approved by Grantor, delineating and describing, in clear and understandable language, the consumer rights granted herein.

(h)

Notice to New Subscribers. Before providing cable television service to any subscriber, grantee shall provide a written notice to the subscriber covering substantially the following information:

Customer understands that Company uses telephone and power company facilities and public rights-of-way in providing service and that this continued use cannot be guaranteed.

Customer agrees not to make any claim against Company or the telephone company, or power company, or counties and/or incorporated cities of the franchise area or their officers and/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)

Complaint Advice. Grantor may require that Grantee advise each subscriber as may be set forth in the franchise that the Grantor's representative is the official to whom complaints of poor service should be made if such complaints of poor service are not resolved by Grantee to the satisfaction of each subscriber.

(a)

As compensation for any franchise to be granted, and in consideration of permission to use the streets and public ways of Grantor for the construction, operation, maintenance, and reconstruction of a Cable Communications System, the Grantee shall pay to the Grantor such amounts as specified in the franchise.

(b)

Payments due the Grantor under this provision shall be computed quarterly for the succeeding quarter, and shall be paid within 30 days of the close of each calendar quarter. The payment shall be accompanied by a report showing the basis for the computation and such other relevant facts as may be required by the Grantor to determine the accuracy of said payment.

(c)

In the event that any franchise payment or recomputed amount is not made on or before the dates specified herein, Grantee shall pay as additional compensation the greater of the following:

(1)

An interest charge, computed from such due date, at the annual rate equal to the prevailing commercial prime interest rate in effect upon the due date.

(2)

A sum of money equal to $2,000.00 for each month or part thereof of delay which sum shall also bear interest from the due date at an annual rate equal to the prevailing commercial prime interest rate in effect upon the due date.

(a)

Within 30 days after the effective date of the franchise, the Grantee shall deposit into a bank account established by the Grantor, and maintain on deposit through the term of the franchise, a sum specified in the franchise as security for the faithful performance by it of all of the provisions of the franchise, and compliance with this ordinance, and compliance with all orders, permits and directions of any agency of the Grantor having jurisdiction over its acts or defaults, and the payment by the Grantee of any claims, fees, liens, taxes due the Grantor which arise by reason of the construction, operation or maintenance of the system.

(b)

Except as provided in the Franchise Agreement, if the Grantee fails, after 20 days notice to pay to the Grantor any fees due and unpaid, or fails to repay within such 20 days, any damages, costs or expenses which the Grantor shall be compelled to pay by reason of any act or default of the Grantee in connection with its franchise; or fails, without just cause after 30 days notice of such failure, to comply with any provision of the franchise and after full hearing and a determination by the Grantor that such failure was without just cause which the Grantor reasonably determines can be remedied by an expenditure of the security, the Grantor may immediately withdraw the amount thereof, with interest and any liquidated damages, from the security fund. Upon such withdrawal, the Grantor shall notify the Grantee of the amount and the date thereof.

(c)

Within 30 days after notice to it that any amount has been withdrawn by Grantor from the security fund, the Grantee shall deposit a sum of money sufficient to restore such security fund to the original amount.

(d)

Grantee shall be entitled to the return of such security fund, or portion thereof, with interest, as remains on deposit at the expiration of the franchise, or its termination, once all amounts due to the Grantor have been paid.

(e)

The rights reserved to the Grantor with respect to the security fund are in addition to all other rights of the Grantor and no action, proceeding or exercise of a right with respect to such security fund shall affect any other right the Grantor may have.

Within 30 days after the effective date of the franchise, and in addition to the security fund established pursuant to Section 5.72.100, the Grantee shall furnish proof of the posting of a faithful performance bond in favor of the Grantor, with surety approved by the Grantor in the sum specified in the franchise conditioned that the Grantee shall well and truly observe, fulfill, and perform each term and condition of the franchise, provided, however, that such bond shall not be required upon certification by Grantor of completion of construction of Grantee's cable system. As defined in the Franchise Agreement, during the course of construction, the amount of the bond may from time to time be reduced as provided in the Franchise. Written evidence of payment premiums shall be filed and maintained with the Grantor.

(Ord. No. 99-1061, 6-8-99)

(a)

At the option of the Grantor, it may allow the Grantee to post in lieu of Security Fund and/or Faithful Performance Bond, an irrevocable letter of credit, issued by a bank approved by the Grantor, in the amount specified in the franchise. Said letter of credit shall incorporate wording approved by the Grantor enabling it to draw such sums from time to time as the Grantor may find necessary to satisfy any defaults of Grantee or to meet any payments due Grantor under or in connection with Grantee's franchise upon ten days' written notice. Said letter of credit shall further provide for 60 days' written notice by certified mail by its issuer to Grantor of any pending expiration or cancellation, or other language acceptable to the City Attorney, and said notice shall without further cause constitute reason for the Grantor to draw the full sum to be held in its own accounts until such letter shall be re-established in good and satisfactory form to Grantor.

(b)

If Grantor shall require such a letter of credit, Grantee shall pay all fees or other charges required to keep it in force and shall, within 30 days of any draw by Grantor, restore its face value to the original amount.

(c)

All provisions herein applying to bonds or security funds shall also apply to letters of credit.

(a)

To the extent specified in the franchise agreement, the Grantor may utilize a portion of the cable system capacity, and associated facilities and resources, to develop and provide non-commercial cable services that will be in the public interest. In furtherance of this purpose, the Grantor may establish a nonprofit or cooperative corporation, and adopt by-laws, to receive and allocate facilities, support funds and other considerations provided by the Grantee, and/or others. Such a public corporation, if established, may be delegated the following responsibilities:

(1)

Receive, and utilize or reallocate for utilization, channel capacity, facilities, funding and other support provided specifically for public non-commercial usage of the cable system.

(2)

Review the status and progress of each non-commercial service developed for public benefit.

(3)

Report to the Grantor annually on the utilization of resources, the new public services developed and the benefits achieved for the Grantor and its residents.

(4)

Reallocate resources on a periodic basis to conform with changing priorities and public needs.

(b)

Grantee shall provide to the Grantor or the Cable Usage Corporation, at Grantor's election, equipment, facilities, and channel capacity as provided in the franchise.

(a)

A franchised system shall provide, as a minimum, the services and broad programming categories listed in the franchise.

(b)

Grantee shall inform Grantor at least 45 days and Subscribers at least 30 days in advance of making any change in a programming service or in the reoccurring rates charged.

(c)

Grantee shall not discriminate between or among subscribers within one type or class in the availability of services at either standard or differential rates according to published rate schedules. No charges may be made for services except as listed in published schedules which are available to inspection by anyone at Grantee's office, quoted by Grantee on the telephone, and displayed or communicated to all potential subscribers.

(d)

Upon completion of system construction and/or system reconstruction, Grantee may, at its option, charge subscribers for services no more than one month in advance unless an individual subscriber requests a longer period. Prior to completion of system reconstruction, Grantee may continue any existing advance billing practices which provide for up to a maximum of two months of advance billing. Bills may be due and payable upon mailing but shall not be delinquent, and no late charge penalties shall be assessed, until the later of: (1) 30 days from postmark; or (2) service has actually been provided for the billed period. All bills and billing statements shall clearly indicate the billing period, the actual due date, and the delinquent or late remedy or assessment.

(e)

Grantee may disconnect a subscriber only for cause, which shall include, without limitation, the following:

(1)

Payment delinquency in excess of 45 days.

(2)

Willful or negligent damage to or misappropriation of Grantee property.

(3)

Monitoring, tapping, or tampering with Grantee's system, signals, or service.

(4)

Threats of violence to Grantee's employees or property.

(f)

Grantee shall, upon subscriber's written request, reconnect service which has been disconnected for payment delinquency when payment has removed the delinquency. A published standard charge may be made for reconnection. Grantee shall not be required to make more than three reconnections for the same subscriber if the disconnections involved were caused by payment delinquency within the past 24 months. Reconnection for disconnects covered by subsections (d)(2), (3), or (4) shall be at Grantee's sole discretion.

(a)

Grantee shall promptly provide and maintain service to the residential, commercial, and industrial structures as provided in the Franchise Agreement, in the service area as defined in the Franchise Agreement, upon request of the lawful occupant or owner.

(b)

In the case of a new drop, Grantee shall advise each subscriber that he/she has the right to require his/her installation be done over any route on his property, and in any manner he/she may elect which is technically feasible and consistent with proper construction practices. Grantee may, if he/she so elects, require that any such request be made in writing. If the subscriber requests installation other than a standard installation, then the subscriber may be required to pay a reasonable fee for the time and materials occasioned by the installation and to sign an Agreement releasing the Grantee from liability for poor service or damage to person or property resulting from the non-standard installation.

(c)

Standard Installation. For purposes of this subsection, a standard installation shall include installation of drop cable with fittings up to 125 feet from the existing CATV distribution system. Also included as part of a standard installation is the grounding cable, fine tuning of the television set and the provision of the appropriate literature.

(Ord. No. 99-1061, 6-8-99)

(a)

At such time as a converter or terminal becomes necessary for subscribers to have access to all services on its system, Grantee shall make them available to subscribers. Grantee may require each subscriber who elects to take a converter or terminal to furnish a security deposit therefore.

(b)

Each device shall be and remain the property of the Grantee unless Grantor approves its sale to the subscriber. Grantee shall be responsible for maintenance and repair of all equipment owned by Grantee and may replace it as he/she may from time-to-time elect, except that subscriber shall be responsible for loss of or damage to any such device while in his/her possession.

(c)

Upon termination or cancellation of subscriber's service, subscriber shall promptly return Grantee's property to Grantee in the same condition as received, reasonable wear and tear excepted.

(d)

Grantee may apply the security deposit against any sum due from subscriber for loss of or damage to such converter exceeding reasonable wear and tear. In the event that no security deposit has been required, the Grantee may charge the subscriber for any such damage exceeding reasonable wear and tear.

(e)

If Grantee has no claim against the deposit, Grantee shall return it, or the balance, to the subscriber within 45 days of return of the converter.

For each non-standard drop installed, the Grantee may charge the subscriber for the cost of material and labor in excess of that for a standard drop. Grantee shall provide each subscriber a written estimate of all charges prior to installation and obtain subscriber's written authorization in advance for all non-standard drop charges.

(a)

The System shall be constructed in accordance with the provisions of the franchise agreement. Construction components and techniques shall be in accordance with the franchise and all applicable law. Consistent with applicable law, system technical and performance standards shall be in accordance with the franchise.

(b)

The Grantee shall strictly adhere to all building and zoning codes currently or hereafter in force and obtain all necessary permits. The Grantee shall arrange its lines, cables, and other appurtenances, on both public and private property, in such a manner as to cause no unreasonable interference with the use of said property by any person. In the event of such interference, the Grantor may require the removal of the Grantee's lines, cables, and appurtenances from the property in question. Grantee shall give at least 48 hours advance notice to all property owners and the Grantor prior to installing any above ground and underground structures upon easements located on private property. Grantor shall not modify its construction requirements subsequent to the completion of construction so as to require reconstruction or retrofit unless the public health and safety so requires.

(c)

Cables shall be installed underground at Grantee's cost where all existing utilities are already underground. Previously installed aerial cable shall be installed underground at Grantee's pro rata cost in concert with other utilities when all such other utilities may convert from aerial to underground construction.

(d)

No franchise shall relieve Grantee of any obligations involved in obtaining pole or conduit space from any department of Grantor, utility company, or from others maintaining utilities in streets.

(e)

Any and all streets and public ways disturbed or damaged by the Grantee or its contractors, during the construction, operation, maintenance, or reconstruction of the System, shall be restored within the time frame and limits specified by Grantor or agent of Grantor, at Grantee's expense, to their original condition unless otherwise authorized in writing by Grantor.

(f)

The Grantee shall not erect any pole on or along any street or public way in an existing aerial utility system. If additional poles in an existing aerial route are required, Grantee shall negotiate with public utility for their installation. Any such installation shall require the advance written approval of the Grantor. Subject to applicable federal and State law, the Grantee shall negotiate the lease of pole space and facilities from the existing pole owners for all aerial construction, under mutually acceptable terms and conditions.

(g)

Grantee may cut or trim any trees in any street and Grantee may cut or trim trees pursuant to a prior agreement with the owner of property on which they stand, or as otherwise authorized in writing by Grantor.

(a)

The Grantee shall begin to offer cable television service no later than the schedule contained in the franchise.

(b)

The Grantee shall provide a detailed construction plan indicating progress schedule, area construction or reconstruction maps, test plan, and projected dates for offering service.

The Grantee shall design and construct the System to have the capability to service every residential structure within the service area of the franchise and any annexations thereto, as defined and provided by the Franchise Agreement, with any exceptions requiring specific Grantor approval. Service shall be provided to subscribers in accordance with the schedules and line extension policies specified in the franchise. The route of separate cables serving institutional subscribers shall be as approved by Grantor and specified in the franchise.

After service has been established for any area, the Grantee shall provide service to any requesting subscriber within that area within times and terms set forth in the franchise.

Upon the failure, refusal or neglect of Grantee to cause any construction, repair, or other necessary work to comply with the terms of the franchise agreement to be properly completed in, on, over, or under any right-of-way within a time prescribed in the Franchise Agreement or the construction permit, Grantor may (but shall not be required to) cause such work to be completed in whole or in part, and upon so doing shall submit to Grantee itemized statement of costs thereof. Grantee shall be given reasonable notice of Grantor's intent to exercise this power and 15 days to cure thereafter. Grantee shall, within 30 days of billing, pay to Grantor the actual costs thereof.

In the event any street, alley, public highway or portion thereof used by the Grantee shall be vacated by the Grantor, or the use thereof discontinued by the Grantee, upon reasonable notice, the Grantee shall forthwith remove its facilities therefrom unless specifically permitted to continue the same, and on the removal thereof restore, repair or reconstruct the area where such removal has occurred, to such condition as may be required by the Grantor not in excess of the original condition. In the event of failure, neglect or refusal of the Grantee, after 30 days' notice by the Grantor to do such work, Grantor may cause it to be done, and the cost thereof shall be paid by the Grantee within 30 days and collection may be made by Grantor.

Grantor may, upon written application by Grantee, approve the abandonment of any property in place by Grantee, under such terms and conditions as Grantor may approve. Upon Grantor-approved abandonment of any property in place, Grantee shall cause to be executed, acknowledged, and delivered to Grantor such instruments as Grantor shall prescribe and approve, transferring and conveying the ownership of such property to Grantor.

In the event that Grantee's plant is deactivated for a continuous period of 30 days except for reasons outside Grantee's control, without prior written notice to and approval by Grantor then Grantee shall, at Grantor's option, and at the expense of Grantee and at no expense to Grantor, and upon demand of Grantor, promptly remove from any streets or other area all property of Grantee, and Grantee shall promptly restore the street or other area from which such property has been removed to its condition prior to Grantee's use thereof, provided that Grantee shall not be required to remove conduit from underground, where Grantor may determine no damage to the surface of any structures may result from such non-removal.

(a)

Upon order by Grantor, Grantee shall relocate facilities at Grantee's sole expense in order to accommodate the widening, relocation, change of grade, or other work or improvement of a City street or right-of-way. Nothing in a franchise shall prevent the Grantor from constructing, repairing and/or altering any public work. If any such property of Grantee shall interfere with the construction, maintenance

or repair of any public improvement, all such property shall be removed or replaced in such manner as directed by Grantor so that the same shall not interfere with the said public work, and such removal or replacement shall be at the expense of the Grantee.

(b)

In the event it is necessary to temporarily move or remove any of the Grantee's property at Grantor's direction for a public purpose in order lawfully to move a large object, vehicle, building or other structure, Grantee, upon reasonable notice, shall move, at the expense of Grantee, its property as may be required to facilitate such movements. No such movement shall be deemed a taking of Grantee's property. Nothing herein shall limit the right of Grantee to seek reimbursement from any party other than Grantor.

If Grantor elects to grant one or more franchises hereunder, and if thereafter one or more of the franchises expires or is otherwise ended, Grantor may, if it so elects, require a remaining Grantee, or more than one, to extend its system to provide service to the area served by the ended franchise unless Grantee demonstrates to Grantor's reasonable satisfaction that it is not commercially practicable to do so, provided, however, Grantee shall not be required to overbuild any existing system. The terms and requirements of such extension shall not exceed those contained herein or in Grantee's franchise.

(a)

The Grantee shall maintain an office in the franchise area, or such other location approved by the Grantor in writing, open during all usual business hours, but in no case less than 48 hours per week including at least one weekend day per week. Grantor shall have a publicly listed non-toll-charge telephone number, and operated as to receive subscriber complaints and requests on a 24-hour basis. Current information shall be maintained of all complaints and their disposition and a summary thereof shall be submitted to Grantor upon request but no more often than monthly.

(b)

Maintenance. The Grantee shall maintain a preventative maintenance crew plus a force of technicians capable of promptly responding to requests for repairs relating to a service interruption and in no event shall such response occur later than 24 hours after the interruption becomes known. No charge shall be made to the subscriber for such a service or repair except that Grantee may charge for service calls not related to the system.

(Ord. No. 99-1061, 6-8-99)

(c)

Telephone System. The Grantee shall provide a state-of-the-art telephone system to receive all construction and service complaints, including without limitation those of hearing impaired persons. A sufficient number of customer service representatives will be provided so that callers are not required to wait beyond 30 seconds for live-answered phone service during normal operating conditions. This standard shall be met no less than 90 percent of the time measured on a quarterly basis. Under normal operating conditions, the customer will receive a busy signal less than three percent of the time. The telephone number of the local office shall be listed in the Pacific Bell telephone directory serving the City of San Marcos or equivalent directory if placement in the Pacific Bell directory is not possible. The telephone service shall be operable to accept complaints 24 hours a day, seven days a week. The Grantee will not be required to measure compliance with the telephone answering standards above unless an historical record of compliance indicates a clear failure to comply.

(Ord. No. 99-1061, 6-8-99)

(d)

Grantee shall provide and guarantee subscribers with the option of scheduling a four-hour period in which the service call will be made either in the morning or afternoon.

Grantee shall establish a process for resolving complaints from subscribers about the quality of the television signal delivered. Records of complaints received and how they were handled shall be maintained by Grantee for at least one year. Aggregate data based upon these complaints shall be made available for inspection by Grantor, upon request. Subscribers shall be advised, at least once each calendar year, of the procedures for resolution of complaints by Grantee, including the address of the responsible officer of Grantor.

(Ord. No. 99-1061, 6-8-99)

(a)

Receipt and acknowledgement of any complaint made in person or by telephone within 12 business hours.

(b)

Acknowledgement of any complaint received by mail at Grantee's office within five business days of the date such complaint is received.

(c)

Maintain information available to Grantor upon Grantor's request, of all complaints, including the complainants' name, address and telephone number, the date of its acknowledgement, and information given as to how the complaint would be resolved, and the action taken.

(d)

Information on complaints not resolved within 48 hours of receipt shall be maintained by Grantee and include the information above and add the detailed reasons for non-resolution within the 48-hour period.

(e)

Provide complete information to the complainant regarding his ability to take his complaint to the Grantor's representative if it is not resolved by the Grantee.

(f)

Grantee shall respond within eight business hours to complaints made or referred by Grantor.

(a)

In the event of the material breach by Grantee of its obligations under the franchise, including all disputes regarding franchise payments, construction defaults, technical standards and customer service standards, Grantor, through its City Manager, Council, or a Hearing Officer, may, in its discretion, assess penalties for the following:

(1)

For technical standards violations, if more than ten percent of the locations tested pursuant to FCC regulations fail to meet the FCC technical standards, the Grantor may impose penalties not to exceed $100.00 per day plus the full actual cost of enforcement as measured from the date of the last scheduled FCC test until the standards have been satisfied at each retested location. Penalties for all other violations shall be in accordance with the following Sections 5.72.300(a)(2)—(4).

(2)

Up to $200.00 for each day of each material breach, not to exceed $600.00 for each occurrence of material breach, plus costs of enforcement, including, but not limited to, attorney's fees and costs.

(3)

For a second material breach of the same nature occurring within 12 months where a fine or penalty was previously assessed, up to $400.00 for each day of each material breach, not to exceed $1,200.00 for each occurrence of the material breach, plus costs of enforcement, including, but not limited to, attorney's fees and costs.

(4)

For a third or further material breach of the same nature occurring within those same 12 months, where a fine or penalty was previously assessed, up to $1,000.00 for each material breach, not to exceed $3,000.00 for each occurrence of the material breach, plus costs of enforcement, including, but not limited to, Attorney's fees and costs.

(b)

Cure. Prior to assessing any damages against the Grantee, Grantor shall have provided Grantee with notice and 30 days for an opportunity to cure, in those instances where this Chapter 5.72 does not provide for a longer cure period. If Grantee does not correct a material breach within the applicable cure period, Grantor may impose penalties from the date of the original violation.

(c)

Appeal and Payment. In the event Grantee fails to respond to said notice of alleged violation, or to cure the alleged violation within the acceptable cure period, or to provide an explanation for failure to cure acceptable to Grantor, Grantor or its designee shall schedule a hearing no sooner than ten days after written notice to Grantee of the expiration of the cure period and the scheduling of said hearing. Grantee shall be provided an opportunity to be heard at such hearing, including the right to present evidence, cross-examine witnesses, and be represented by counsel. Within 30 days after said hearing, the Grantor shall determine whether or not Grantee is in violation and submit written findings of facts supporting such determination. In the event said hearing is not held before the City Council, Grantee shall possess the right to appeal said determination to the City Council within ten days of issuance of the statement of decision and findings of fact. The City Council shall decide said appeal pursuant to a hearing at which Grantee has an opportunity to be heard. Grantee shall have the right to appeal the City's Council's decision to a court of competent jurisdiction. All penalties shall be due and owing 30 days after the final decision by either the City Council or the Hearing Officer in the event of no appeal to the City Council. The aforesaid assessment may be levied directly against the letter of credit and collected by Grantor 20 days from date such damages are due and owing. Any imposition of monetary damages may be collected and retained by Grantor as liquidated damages without any reduction, offset or recoupment, for example, for costs incurred by Grantee to cure its default(s), whatsoever. Such assessment shall not constitute a waiver by the Grantor of any other right or remedy it may have under the Franchise Agreement or under applicable law.

(Ord. No. 99-1061, 6-8-99)

(a)

In addition to the provisions of Sections 5.72.070(d) and (g), and except as provided in the Franchise Agreement Grantor may require, at its option, that performance audits of the system be conducted as often as every three years by an independent technical consultant, selected and employed by Grantor and at Grantor's sole expense, to verify compliance of the system to all technical standards and other specifications of the franchise, as provided in the Franchise Agreement. Periodic technical specification testing, if provided for in the Franchise Agreement and actually conducted pursuant thereto, shall eliminate this performance audit.

(b)

Upon completion of a performance audit, the Grantor and Grantee shall meet to review the performance of the Cable Television System. The reports required herein regarding subscriber complaints, the records of performance tests and the opinion survey report shall be utilized as the basis for review. In addition, any subscriber may submit complaints during the review meetings, either orally or in writing, and these shall be considered.

(c)

Within 30 days after the conclusion of the system performance review meetings, Grantor shall issue findings with respect to the adequacy of system performance and quality of service. If inadequacies are found, Grantor may direct Grantee to correct the inadequacies within a reasonable period of time.

(d)

Grantor's and Grantee's participation in this process shall not waive any rights they may possess under applicable federal and/or State law.

(e)

In addition to the Triennial Audit described above, Grantor may conduct an annual audit of the same magnitude, at its sole expense, when and if determined necessary or appropriate by Grantor.

(a)

Grantee shall maintain in its office a complete and up-to-date set of as-built system maps and drawings upon completion of construction or reconstruction, equipment specification and maintenance publications, and signal level diagrams for each active

electronic piece of equipment in the system. As-built drawings show all lines and installed equipment, and tap values and spigots. The scale of maps and drawings shall be sufficient to show the required details in easily readable form and size. Technical data at the office shall also include approved pole applications, details and documentation of satellite and microwave equipment, mobile radio units, heavy construction vehicles and equipment, and video and audio equipment normally used in the operation of the system. If Grantor requires use of technical data in its own office it may make copies of any items at Grantor's expense.

(b)

All technical data shall be available to Grantor's inspection during normal business hours, upon reasonable notice, and, in the event of system failure or other operating emergency, at any time, so long as the provision of said data does not unreasonably interfere with Grantee's operations.

It shall be Grantee's responsibility to assure that its personnel qualified to make repairs are available at all reasonable times and that they are supplied with keys, equipment location instructions, and technical information necessary to begin repairs upon notification of need to maintain or restore continuous service to the system.

(a)

The Grantee shall, at the time service is initiated provide each new customer written information covering:

(1)

The time allowed to pay outstanding bills.

(2)

Grounds for termination of service.

(3)

The steps the Grantee must take before terminating service.

(4)

How the customer can resolve billing disputes.

(5)

The steps necessary to have service reconnected after involuntary termination.

(6)

The fact that customers shall have the right to speak with a supervisor, and if none is available, supervisor shall return customer call within one working day.

(7)

The appropriate regulatory authority with whom to register a complaint and how to contact such authority.

In addition, at least once each calendar year, Grantee shall notify each customer that information is available upon request concerning items (a)(1) through (7) above.

(b)

Grantee's billing procedures shall comply with the following minimum requirements:

(1)

Except as provided in Section 5.72.140(e), bills for service shall be rendered monthly, unless otherwise authorized by the customer and the Grantee or unless service is rendered for a period less than one month. The actual due date of the bill shall be no less than 30 days

from the date of the bill. The bill shall be mailed to subscribers on or shortly after its dated date. Bills shall be rendered as promptly as possible. All bills shall contain a telephone number and a mailing address for billing inquiries or disputes.

(2)

In the event of a dispute between the customer and the Grantee regarding the bill, the Grantee shall promptly make such investigation as is required by the particular case and report the results to the customer. In the event the dispute is not resolved to the satisfaction of both parties, the Grantee shall inform the customer of the complaint procedures of the Grantee. If the customer wishes to obtain the benefits of subsections (b) and (c) of this section, notification of the disputed bill must be given to the Grantee within five days after due date.

(3)

The customer shall not be required to pay the disputed portion of the bill until the earlier of the following:

a)

Resolution of the dispute;

b)

Expiration of the 45-day period beginning on the date of issuance, provided that the procedures established in subsection (a) above have been followed.

(4)

Pending resolution of the bill dispute, Grantee shall attempt to ensure that no termination notices shall be issued for the disputed portions of the bill, nor shall any other collection procedures be initiated for said amount.

(c)

When a subscriber voluntarily discontinues service Grantee shall refund the unused portion of any advance payments after deducting any charges currently due through the end of the present billing period within 45 days of discontinuance of service. Unused payment portions shall be the percentage of time for which subscriber has paid for service and will not receive it because of his discontinuation of service.

(d)

Uncollected accounts may be referred to private collection agencies for appropriate action if the bill has not been paid by the earlier of: (a) 15 days following date of involuntary termination; or (b) the 45 days following the date of issuance of the original uncollected amount, provided no notification of billing dispute has been made, or if procedures for resolution of billing disputes have not been followed as required above. If the account was voluntarily terminated, for any reason, the account may not be referred to a collection agency until at least 15 days following rendering of the final bill. If notification of a billing dispute is made, all collection procedures shall be delayed as required in subsection (b)(3), above. Referral to collection agent shall then occur no sooner than the 45 days following issuance of the original uncollected amount.

The quality of Grantee's service refers to the services associated with day-to-day operations (e.g., response to customer complaints; billing; interruptions of service; disconnection; rebates and credits; signal quality, and the provision to customers or potential customers of information on billing or services). In order to assess the quality of service, Grantee shall survey a representative telephonic sample of no less than 200 subscribers at least once every third calendar year. The form, content, and methodology of the telephonic survey shall be prior approved in writing by Grantor. The following questions at a minimum shall be asked:

—

Are you satisfied or dissatisfied with the cable television service you are receiving?

—

If you are dissatisfied, why?

The results of said survey, including the raw data and conclusions, shall be provided to Grantor within 30 days of completion.

(a)

Revocation. Consistent with applicable law, in addition to any rights set out elsewhere in this document, the Grantor reserves the right to revoke a franchise, subject to notice to Grantee and the provision of a hearing consistent with due process requirements, in the event that:

(1)

The Grantee willfully and/or negligently on a continuous basis violates any material provision of its franchise.

(2)

The Grantee's construction schedule is materially delayed as set forth in the franchise and such delays were within the control of Grantee.

(b)

Forfeiture. Consistent with applicable law, upon failure of the Grantee to comply with the material terms of its franchise, the Grantor may by resolution after a full hearing affording Grantee due process, declare a forfeiture, and the Grantee may be required to forthwith remove its structures or property from the streets and restore the streets to their prior condition within a reasonable period of time and upon failure to do so the Grantor may perform the work and collect all actual costs, including all direct and indirect costs, thereof from the Grantee. The cost thereof shall be a lien upon all plant, property, or other assets of the Grantee, within the City limits.

Applicants for a franchise, or renewal thereof, may submit to the Grantor, or to a designated agency, written application in a format provided by the Grantor, at the time and place designated by the Grantor for accepting applications, and including the designated application fee. This provision is deemed procedural and shall not constitute the grant of any right to the Grantee.

(a)

There shall be kept in the Grantor's offices a separate record for the franchise, which record shall show the things hereafter set forth in subsections (a)(1) and (2) below. The Grantee shall provide such information in such form as may be required by the Grantor for said records, as well as copies of any records of Grantee upon request for good cause, so long as the provision of said documents does not unreasonably interfere with Grantee's operations and said information is reasonably necessary for Grantor to carry out its regulatory functions.

(1)

Any amount collected annually from the Grantor and the character and extent of the service rendered therefore to the Grantor.

(2)

The amount collected annually from other users of service and the character and extent of the service rendered therefore to them.

(b)

Grantee shall keep true and accurate books and records in conformity with generally accepted accounting principles, consistently applied, showing all income, expenses, and expense transfers, borrowing, payments, investments of capital, and all other transactions relating to the system. Grantor shall, upon reasonable notice, have the right to inspect said records and receive copies thereof to the extent said information is reasonably necessary for Grantor to carry out its regulatory functions.

(a)

No later than 90 days after the close of Grantee's fiscal years, Grantee shall present a written report to the Grantor which shall include:

(1)

A financial report verified by the Chief Financial Officer or his/her designee of Grantee for all system activity during the previous fiscal year including gross receipts from all sources, and gross subscriber revenues from each service.

(2)

A summary of the previous year's activities, including, but not limited to, subscriber totals and new services.

(3)

If requested by Grantor, a summary of complaints received and remedial actions taken.

(b)

No later than April 15 of each year, the Grantee shall provide a written report of any FCC or other performance tests required or conducted. In addition, the Grantee shall provide reports of the Test and Compliance procedures established by its franchise agreement, or herein, no later than 30 days after the completion of tests.

(c)

The Grantee shall prepare and furnish to the Grantor in writing at the times and in the form prescribed by Grantor, such additional reports with respect to its operation, affairs, transactions, or property, as may be reasonably necessary and appropriate to the performance of any of the rights, functions or duties of the Grantor, as specified by Grantor, and for good cause so long as the provision of said reports does not unreasonably interfere with Grantee's operations and said information is reasonably necessary for Grantor to carry out its regulatory functions.

Upon Grantor's request copies of all communications between the Grantee and the Federal Communications Commission or any other agency having jurisdiction in respect to any matters affecting cable communications operations authorized pursuant to a franchise, shall be submitted promptly to the Grantor upon receipt or mailing by Grantee.

(a)

Notice of Franchise Default. Except as provided in the Franchise Agreement, prior to formal consideration by Grantor of termination of Grantee's franchise because of willful or continuous negligent failure to correct a default attributed to Grantee, Grantor shall make written demand on Grantee to correct the default alleged. Grantor and Grantee shall expeditiously meet to discuss the alleged problem, at which time Grantee shall indicate, in writing, the amount of time necessary to resolve the alleged problem. During this time period, but in no event fewer than ten days before the final date for correction, Grantee may request additional time to correct the problem and Grantor shall grant said request if it determines, in the exercise of its discretion, that such time is necessary due to delays beyond Grantee's control. If the default continues for a period of 30 days following such deadline for corrections, plus any extension thereof, franchise termination may be placed on the next available regular Grantor's meeting agenda. The Grantee shall be served a written notice of such termination at least ten days in advance giving the time and place of the Grantor's meeting. At its meeting Grantor shall hear Grantee and any person interested in the matter and shall determine, at that or subsequent meetings, an appropriate course of action for enforcement or termination of Grantee's franchise.

(b)

Delegation of Enforcement Mechanisms. Such liquidated damages as Grantor may assess against Grantee which do not include loss of franchise may, at Grantor's option, be determined by an officer or agency of the Grantor to which it may delegate such administrative considerations and decisions subject to due process and the criteria contained in this chapter the franchise agreement subject to appeal to the City Council.

(a)

Interconnection With Systems Under Grantor's Jurisdiction. Upon direction of Grantor, Grantee shall interconnect the PEG Channels of its cable television system with those other cable television systems under Grantor's jurisdiction within no more than six months from the date of order. If Grantee has not negotiated a mutually agreeable cost allocation formula with those systems with which it is ordered

to interconnect within three months of Grantor's interconnection order, Grantor may establish said cost allocation formula and require all Grantees under its jurisdiction to so comply.

(b)

Interconnection With Systems Outside of Grantor's Jurisdiction. The Grantee shall interconnect access, local origination, and such other PEG channels as designated by Grantor of the cable system with any or all other CATV systems in contiguous areas as may be reasonably directed by the Grantor and agreed to by the other cable television systems and applicable jurisdiction(s). Interconnection of systems may be done by direct cable connection, microwave link, satellite, or other appropriate method subject to the Grantor's approval and generally accepted industry standards. Such interconnection shall not increase the number of channels Grantee must dedicate to such uses, nor influence any useable formula for triggering additional PEG channels.

(c)

Initial Technical Requirements to Assure Future Interconnection Capability. Grantee shall provide local origination equipment that is compatible so that video programming can be shared throughout its area cable television system.

A Grantee shall not be relieved of its obligation to comply with any of the provisions of this ordinance, or of its franchise or any law or regulation, by reason of any failure of the Grantor to force prompt compliance.

(a)

It shall be the right of all subscribers to receive all available services within the obligations of the franchise 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, the Grantee shall use due diligence and reasonable care to ensure that all subscribers receive continuous, uninterrupted service. In the event of purchase by the Grantor, or a change of Grantee, the current Grantee shall cooperate with the Grantor or new Grantee to operate the system for a temporary period, to maintain continuity of service to all subscribers. In the event that Grantee, through its own fault, discontinues system-wide service for 72 continuous hours and Grantee is in material default of its Franchise or said Franchise is revoked by Grantor, but not if Grantor fails to renew said Franchise, Grantor may, by resolution when it deems reasonable cause exists, assume operation of a system for the purpose of maintaining continuity of service until any circumstances which may, in the judgment of the Grantor, threaten the continuity of service are resolved to Grantor's satisfaction.

(b)

During any period when the system is being operated by Grantor pursuant to subsection (a), Grantor shall attempt to cause as little disruption of operations as is consistent with the maintenance of continuing service to subscribers. Notwithstanding the foregoing, Grantor shall, as it may deem necessary, make any changes in any aspect of operations desirable, in Grantor's sole judgment, for the preservation of quality of service and its continuity. Grantor shall further, during any such period, maintain to the best of its ability the system's records, physical plant, financial integrity and funds, and other details and activities normally involved in operations.

(c)

Grantor may, upon assuming operation of a system franchised hereunder, appoint a manager to act for it in the overall as well as detailed direction and conduct of the system's affairs. Such manager shall have the authority delegated to him by Grantor and shall be solely responsible to Grantor for management of the system. Grantee shall reimburse Grantor for all its reasonable costs or damages in excess of system revenues during Grantor operation if the franchise is in full force and effect during the period of Grantor operation.

All notices and other communications to Grantee shall be addressed to it at the address at which Grantee conducts its business. All notices and other communications to Grantor shall be addressed to it at its published address for receipt of public communications.

When not otherwise prescribed herein, all matters herein required to be filed with Grantor shall be filed with the Grantor's City Clerk or with such other official or agency as designated by Grantor.

In the event Grantee's performance of any of the terms, conditions, obligations, or requirements of this chapter or any franchise granted hereunder, is prevented or impaired due to any cause beyond its reasonable control and not reasonably foreseeable, such inability to perform shall be deemed to be excused, and no penalties or sanctions shall be imposed as a result thereof. Such causes beyond Grantee's reasonable control and not reasonably foreseeable shall include, but not be limited to, any acts of God, civil emergencies, labor unrest, strikes, inability to obtain gratis access to an individual's property, and any inability of the Grantor to secure all necessary permissions or permits to utilize necessary poles or conduits so long as Grantee utilizes due diligence to timely obtain said permissions or permits.

The section and subsection numbers and captions throughout this ordinance are intended to facilitate reading and reference. Such numbers and captions shall not affect the meaning or interpretation of any part of this chapter.

Except for Sections 5.72.020, 5.72.030 and 5.72.040, the provisions of this chapter shall be applicable with respect to franchise holders, only to those franchises granted or renewed subsequent to the enactment of Ordinance No. 92-941. With respect to prior franchises the provisions of Ordinance No. 83-610 and of Chapter 5.72 of the San Marcos Municipal Code as it existed prior to the enactment of Ordinance No. 92-941 shall apply.

If any provision of this chapter is determined to be void or invalid by any administrative or judicial tribunal, said provision shall be deemed severable and such invalidation shall not invalidate the entirety of this chapter or any other provision thereof.

(Ord. No. 92-941, 10-27-92)

Nothing in this chapter shall be deemed to prevent Grantor from negotiating terms in the Franchise that differ from the requirements of this chapter to its satisfaction, provided such modifications comply with applicable federal and State statutes and regulations.

(Ord. No. 99-1061, 6-8-99)