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1978-021AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS AMENDING CHAPTER 27 ENTITLED "CABLE TELEVISION", pROVIDING A SEVERABILITY CLAUSE AND DECLARING AN EFFECTIVE DATE THE COUNCIL OF THE CITY OF DENTON, TEXAS, HEREBY ORDAINS SECTION I The Code of Ordinances of the City of Denton, Texas zs hereby amended by amending Chapter 2?,Articles I through X entitled "Cable Television", and shall hereafter read as follows ARTICLE I SECTION 27-1 FRANCHISE GRANTED AND LIMITATIONS The franchise to be granted by the City of Denton pursuant to th~s ordinance shall grant to the grantee, the r~ght, privilege and franchise to erect, construct, operate and maintain in, upon, along, across, above, over and under the streets, alleys, public ways and public places now laid out or dedicated and all such extensions thereto and additions thereto ~n the C~ty, and poles, w~res, cables underground, condu~ts, manholes, and other television conductors and fixtures necessary for the maintenance and operation of a CATV system for the interception, sale, transmission and d~s- tribution of television programs and other aud~o-v~sual electrical smgnals and the right to transmit the same to the ~nhab~tant~ of the City on the terms and conditions hereinafter set forth The C~ty of Denton expressly reserves the r~ght to grant a s~m~lar use o£ said streets, alleys, public ways and places to any person at any t~me during the period of th~s franchise It ~s further the ~ntention of this ordinance to limit the activity of a grantee hereunder solely to the operation of cable television systems w~th- · n the City of Denton SECTION 27-2 DURATION OF FRANCHISE GRANT The term of the franchise to be granted by the C~ty of Denton pursuant to this ordinance shall be for a per~od of ten (10) years from and after the grant and acceptance date of the franchise to be awarded, subject to the conditions and restrictions as herein- after provided, and further provided that the Mayor and C~ty Council shall have the right to review such franchise periodically at such time as the Mayor and City Council may from t~me to t~me elect to do so and as hereinafter provided SECTION 27-3 FRANCHISE RIGHTS SUBJECT TO POLICE POWERS In accepting th~s franchise, the grantee acknowledges that its rights hereunder are subject to the police power of the C~ty to adopt and enforce general ordinances necessary to the safety and welfare of the public, and ~t agrees to comply w~th all appli- cable general laws and ordinances enacted by the C~ty pursuant to such power ARTICLE II Th~s ordinance shall be known and may be c~ted as the "Denton Cable Television Ordinance" and ~t shall become a part of the Code of Ordinances of the City of Denton, Texas, with the following definitions applicable thereto DEFINITIONS SECTION 27-4 AGENCY Agency means the person, department, or agency designated by the City Council to act in matters related to CATV SECTION 27-5 CABLECASTING, ORIGINATION AND ACCESS Cablecast~ng means prograrmm~ng (exclusive of broadcast signals) carried on a cable television system 1 Origination Cablecast~ng Programming (exclusive of broad- cast signals) carried on a cable television system over one or more channels, and subject to the exclusive control of the cable operator 2 Access Cablecastlng Services provided by a cable tele- vision system on its public, education, local government, or leased channels (a) Public Access Channel A specially designated non-commercial publmc access channel avamlable on a first-come non-discrlmmnatory basis for whmch the system shall maintain and have available for publmc use at least the mlnmmal eqump- ment and facllmtIes necessary for the production of programming for such a channel -2- (b) Education Access Channel A specially designated channel for use by local educational authorities (c) Local Government Access Channel A specially designated channel for local govern- ment uses (d) Leased Access Channel Portions of the system's nonbroadcast bandwidth including unused portions of the specially desig- nated channels for leased access services SECTION 27-6 CATV Community antenna television system or cable television sys- tem or CATV system means any facility, the primary function of which 15 either to receive and amplify the broadcast signals of one or more television and radio stations or to provide s~gnals for additional closed circuit programmzng, and to redistribute such signals to members of the public who subscribe thereto or to whom redmstributlon of such s~gnals is required by the ordinance, by means of w~res, cables, conduzts, or any other devices which are above, below, on, ~n, or along highways or other public places SECTION 27-7 CERTIFICATE HOLDER Certificate holder means the person or company awarded a Cer- tificate of Public Convenience and Necessity for the operation of a CATV system ~n the C~ty of Denton, the certificate to be awarded ~n accordance w~th the provisions of applzcable law, ~ncludzng this ordinance SECTION 27-8 CONVERTER Converter means an electronic device, which converts signals to a frequency not susceptible to ~nterference within the television receiver of a subscriber, and by an appropriate channel selector also permits a subscriber to vzew all signals delivered at desig- nated d~al locations SECTION 27-9 DISTRICT District means the area w~thln which the cable operator w~ll provide servlce -3- SECTION 27-10 GROSS RECEIPTS, REVENUES, GROSS ANNUAL RECEIPTS As compensation for the franchise granted herein and in con- slderatlon of permission to use the streets and public ways of the City and the Service Area for the construction, operation, mainten- ance, and reconstruction of a cable communications system wlthln the City and Service Area, the grantee shall pay to grantor an annual amount equal to three (3%) percent of the grantee's gross annual revenues from all sources attributable to the operations of the grantee wlthln the City and the Service Area Ail funds re- ceived pursuant to th~s subsection shall be deposited into the General Fund of the grantor SECTION 27-11 PROGRAMMER Programmer means any person, f~rm, corporation, or entity who or which produces or otherwise provides program material for trans- mission by v~deo, audio, digital, or other signals, either live or from recorded tapes, to subscribers, by means of the cable communi- cations system SECTION 27-12 SCHOOL School means any ~nstitutlon of the Denton Independent School District, any non-profit day care center, and any other non-profit educational institution SECTION 27-13 SERVICE. BASIC AND ADDITIONAL 1 Basic subscriber service means the total of all the follow- lng (a) The transmission of all broadcast video channel signals provided for herein, (b) The transmission of the public, educational, and local government access channel signals, (c) The transmission o£ the local or~gznat~on channel signals, (d) The transmisszon of such other cablecast channel signals as are required by the FCC to match the number of broadcast channel signals being trans- mitted, and (e)The ~nstallat~on and re-connection of subscriber service outlets --4-- 2 Additional services means any o4 the following (a) Such v~deo services as the transmission o4 all leased access channel s~gnals not ~n- cluded in basic subscriber service, as well as the transmission of cablecast v~deo advertising messages and pay television signals SECTION 27-14 SUBSCRIBER Subscriber means any person, firm, corporation, or other entity receivmng for any purpose the servmce o4 the grantee heremn SECTION 27-15 STREETS AND HIGHWAYS Streets means streets, avenues, highways, boulevards, concourses, driveways, bridges, tunnels, parks, parkways, waterways, docks, bulk- heads, wharves, piers, alleys, all other publmc r~ghts o4 way, and public grounds or waters wmthin or belongmng to the C~ty SECTION 27-16 SYSTEM i System means the broadband communications £acmlmty whzch ms to be constructed, operated, and mamntamned by the Company w~th~n the C~ty o4 Denton The system shall have a m~n~mum 20 channel capacity and provmde at least one channel for composite public, educatmonal~ local government and leased access use SECTION 27-17 TWO WAY CAPABILITY The franchise shall maintain a plant having technical capacity for non-vomce return con~nunications SECTION 27-15 USER User denotes a person or organization utilizing a system channel for purposes of productmon and/or transmission of mater~al, as con- trasted with recempt thereof, mn a subscriber capacmty ARTICLE III PROVISIONS GOVERNING THE LENGTH, RENEWAL AND TRANSFER OF A CERTIFICATE OF FRANCHISE SECTION S?-19 FRANCHISE REQUIRED, DURATION, EXCLUSIVITY 1 The Cmty shall grant a franchmse £or the use of the streets wmthmn the City for the construction, operatmon, and mamntenance of a CATV system No system shall be allowed to occupy or use the streets of the City or be allowed to operate wmthout a CATV fran- chise 2 The franchise shall be granted for a term of ten (10) years, thereafter, after full public hearings, and according to the franchmse renewal procedure that follows, the franchise may be renewed for perlods of reasonable duration not to exceed ten (10) years as in the opinion of the City Council will serve the public mnterest (a) Procedure to consider franchise renewal I Thirteen months before expmrat~on of the franchise the City Council may appoint in the manner provided for ~n Section 2?-40 (2), a CATV Advisory Board to review the performance of the franchmsee and the content of the CATV ordmnance After giving public not~ce, the Board shall proceed to determine whether the operator has satisfactorily performed h~s obligations under the franchise To determine satisfactory performance, the Board shall look at the technical developments and performance of the system, programming, other services offered, cost of service, and any other particular requirement set forth in the ordinance, such as the avamlab~l~ty of programming equipment and personnel to aid access channel users, also, the Board shall consider the franchlsee's annual reports made to the C~ty or the FCC, provision shall be made for community comment, and ~ndustry performance on a national basis shall be considered A four month per~od shall be provmded to determine the franch~see's eligibility for renewal The Board shall then prepare amendments to determine the franchise ordinance that mt believes necessary 5 The Board shall submmt to the C~ty Counczl recommen- dations in regard to (1) renewal of the franchise, (2) changes to the franchise, and (3) amendments to the franchise ordinance 6 If the C~ty Councml f~nds the franchmsee's performance satisfactory, a new franchise may be granted pursuant to the ordinance as amended 7 In the event the current franchisee ms determined by the C~ty Council to have performed unsatlsfactormly, new applicants shall be sought and evaluated by the CATV Advisory Board and a franchise award made by the City Council according to CATV franchising procedures adopted by the City Council SECTION 27-20 REEVALUATION 1 The City and the franchisee shall hold scheduled reevalu- ation sessions within thirty (30) days of the f~fth annmversary dates of the franchmsee's obtamnlng cert~f~catmon for the system from the Federal Communmcations Commmssion All such reevaluatmon sessions shall be open to the public and announced mn a newspaper -6- of general circulation at least five (5) days be£ore each session 2 Special reevaluation sessions Special reevaluation ses- sions may be held at anytime durzng the term of the franchise All such reevaluation sessions shall be open to the public and announced in a newspaper of general c~rculat~on at least f~ve (5) days before each session S Topics to be reevaluated The following top~cs shall be d~scussed at every scheduled reevaluation session service rate structures, free or discounted services, application of new tech- nology, system performances, services provided, programming offered, customer complaints, amendments to th~s ordinance, undergroundlng progress, and judicial and FCC rulings 4 Topics ~n addition to those listed may be added ~f agreed upon by the parties Members of the general public may add top~cs e~ther by working through the negotiating part~es or by presenting a petition If such a petition bears the valid s~gnatures of f~fty or more residents of the C~ty, the proposed topic or top~cs shall be added to the list of top~cs to be d~scussed at the reevaluation session SECTION 27-21 CANCELLATION AND TERMINATION i The C~ty Council may cancel the franchise conferred by this ordinance at any time prior to its expiration date upon a finding, made after thirty (SO) days not~ce of the proposed can- cellat~on and public hearing, that the grantee has fa~led to cure one or more of the following defects during a sixty (00) day per~od following written notice by the City Manager to the grantee of such a defect (a) Material breach, wh&ther by act or omission, of any terms or conditions of th~s franchise ordinance (b) Mater~al m~srepresentat~on of fact in the application for or negotiation of the franchise (c) Failure to provide subscribers or users with adequate service ~n the best ~nterest of the public convenience and welfare SECTION 27-22 CONTINUITY OF SERVICE I Continuity of Service Mandatory The grantee shall be -7- required to provide continuous service to all subscribers ~n re- turn for payment of the established fee If the grantee over builds, rebuilds, modifies or sells the system, or the grantor revokes or fa~ls to renew this franchise, or grantor elects to purchase the system, the grantee is required as part of th~s franchise to con- tinue to operate the system until an orderly change of operation ~s effectuated In the event the grantee fails to operate the system for five consecutive days without prior approval of the City Council, the City or its agent may operate the system until such time that a new operator is selected 2 Grantor purchase of System upon Revocation In the event that the grantor revokes this franchise, pursuant to appropriate provisions of th~s ordinance, the grantor shall have the right to purchase the CATV system at a price not to exceed ~ts then book value (that is, original cost of property less accumulated depre- ciation) The book value shall be determined by the grantor in accordance with generally accepted appraisal and accounting prin- ciples Under no circumstances shall any valuation be made for "good will" or any right or privilege granted by this franchise Should a dispute arise over the determination of the fair market value of the system, the dispute shall be resolved by arbitration as provided an the sections of th~s ordinance entitled "Provision for Arbitration of Disputes" 4 TRANSFERS AND ASSIGNMENTS (a) The franchisee operating under this ordinance shall not be permitted to sell, transfer, or otherwise change more than ten (10%) percent of the ownership herein granted without prior written consent of the City of Denton If after f~ve (5) years the franchisee would consider sale of more than ten (10%) percent or a transfer o£ control, then provided the transferee met the character financial, and experience criteria established by the FCC and the C~ty Council of Denton, the consent of the City Council of Denton would not be unreasonably withheld -8- (b) The franchisee operating under this ordinance shall not be permitted to sell, lease, sublease, transfer, or otherwise change working control of the franchise here~n granted without prior written consent of the City of Denton For the purpose of determining whether it shall consent to such change transfer, or acquisition of control, the City Council may inquire into the prospective controlling party, and the franchisee shall assist the C~ty Council in any such inqumry If the City Council does not schedule a hearing on the matter within sixty ($0) days after not~ce of the change or proposed change and the f~l~nE of a petition re- questing ~ts consent, the City shall be deemed to have consented In the event that the City Council adopts a resolution denying ~ts consent, and such change, transfer, or acquisition of control has been effected, the C~ty Council may terminate the franchise (c) The consent or approval of the C~ty Council to any assignment, lease, transfer, sublease, or mortgage of the franchise granted to the franchisee shall not constitute a waiver or release of the rights of the City in and to the streets (d) In the absence of extraordinary c~rcumstances, the City Council will not approve the assignment of the franchise by the franchise prior to completion of construction of the CATV system (e) The Council reserves the right to review the purchase price of any trans£er or assignment of the system, and any assignee to this franchise expressly agrees that any negotiated sale value which the Council deems unreasonable w~ll not be considered ~n the rate base for any subsequent request for rate ~ncreases ARTICLE IV FRANCHISE TERRITORY - EXTENSION OF SERVICE SECTION 27-2S FRANCHISE AREA Grantee shall submit, in addition to the application for franchise, a map showing the franchise area and the projected con- struction completion date The m~p shall clearly delineate any -9- areas which will not be served, if any SECTION 27-24 REVIEW OF FRANCHISE AREA At two year intervals, beginning the third year after the franchise is awarded, the map shall be reviewed, and changes in the service areas shall be incorporated by mutual agreement I Before requesting extension of service ~nto pre- viously unserved areas, the C~ty Council must take into consideration the costs of said exten- sion, population density and averages, and terrain problems 2 The review shall take place at a public meeting SECTION 27-25 ARBITRATION OF DISPUTES Should the Council and the grantee fall to agree upon new service areas requested by the Council, the matter shall be arbi- trated as provided in this ordinance SECTION 27-26 SERVICE OUTSIDE FRANCHISE AREA Grantee shall negotiate with any citizen or group of citizens desiring service who are located outside the servzce area Should the grantee and such citizens fall to reach an agreement upon the costs of service to be extended, the matter shall be submitted to an arbitration board as provided in th~s ordinance SECTION 27-27 ANNEXATION Upon the annexation of any new territory by the City of Denton, the portion of the CATV system that may be located or operated with- in such territory, and the streets, alleys, or public grounds there- of, shall thereafter be subject to all the terms of th~s grant as though it were an extension made thereunder ARTICLE V SECTION 27-28 ACCESS PROGRAMMING FACILITIES All cable system franchises must provide reasonable equipment to be used by access cablecasters w~th the a~d of a technical and production staff to be provided by the operator Included should be equipment that can store programs for later showing In addition, a centrally located studio must be made available to all access users on a first-come, first-served basis Any applicant to operate the -10- system will be expected to demonstrate in its application how ~t plans to make available the equipment, the studio, and production and technical staff Applicants will be given preference in the selection process for plans that will most adequately meet these requirements A full schedule of rates for use of equipment, studio, and technical and production staff must be submitted If separate rates are planned for mobile facilities, these must be also included Rate preference may be g~ven to non-commercial users SECTION 27-29 RUB SYSTEM The cable system design shall ~ncorporate the use of a HUB system with sufficient hubs to ~nsure the quality of reception re- quired by the Federal Communications Commission The franchisee shall be required to maintain the capability for non-voice return communications SECTION 27-30 ENERGENCY OVERRIDE The cable system shall include an "Emergency Alert" capability which will permit the mayor, or the mayor's designated represen- tative, to override, by remote control, the audio and/or video of all channels Involved in retransm~sslon of television broadcast programming The cable operator shall designate a channel which wlll be used for emergency broadcasts SECTION 27-31 STANDBY POWER The cable system operator shall maintain equipment capable of providing standby powering for headend transportation and trunk amplifiers for a m~nlmum of two hours The equipment shall be con- structed so as to automatically notify the cable off~ce when it ~s ~n operation and to automatically revert to the standby mode when the AC power returns Ail utility safety regulations must be fol- lowed to prevent a standby generator from powering the "dead" util- ity line, with possible injury to an unwitting l~neman SECTION 27-32 PRIVACY 1 USE OF DATA FROM SUBSCRIBER A grantee shall not mnitmate or use any form, procedure, or -ll- device for procuring information or data from cable subscribers' premises by use of the cable system without prior valid written authorization from each subscriber so affected Valid authori- zation shall mean written approval from the subscriber for a per- iod of time not to exceed one (1) year, and said authorization shall not have been obtained from the subscriber as a condition of service Further, it shall be unlawful for a grantee, without such authorization, to activate and/or utilize any "Class IV Cable rslevlslon Channel" in any manner from the subscriber's premises In any case the subscriber shall have the right and opportunity to deactivate the return path from his or her premises 2 IDENTIFYING SUBSCRIBERS The City or a grantee shall not, w~thout prior valid written authorization from each subscriber so affected, provide any data · dentif¥inE subscribers' names or address to any other party 3 PROCUREMENT OF INFORMATION It shall be unlawful for any f~rm, person, group, company, corporation, governmental body, or agency to procure ~nformatlon or data from cable subscribers' premises by use of the cable sys- tem without prior written authorization from each subscriber so affected Valid authorization shall mean written approval from a subscriber for a period of t~me not to exceed one (1) year and shall not have been obtained as a condition of the grantee pro- vid~ng cable service to the subscriber 4 SPECIFIC AUTHORIZATION No authorization for procurement or dlsslmlnatlon of sub- scriber identifiable ~nformation or data shall be valid unless ~t (1) specifies the type or types of ~nformatlon or data covered, and (2) the part~es authorized to collect, receive, store, record, transmit, or otherwise convey th~s ~nformat~on or data Further, all authorizations shall specify the maximum period of t~me that any subscriber identifiable ~nformatlon or data shall be preserved · n any manner or form -12- 5 SUBSCRIBER COPY REQUIRED A written copy of all subscriber ldentmflable lnformatmon or data which is retamned and/or dmsclosed and the dmspositlon of this information or data, together with any explanation necessary to make it understandable to the subscriber, shall be provided to the affected subscrmber wmthin thmrty (30) days of procurement Further disclosures shall be fully detamled mn wrztmng to the affected subscriber within thirty (30) days of such disclosure SECTION 27-33 ANTENNA SWITCH FOR ALTERNATIVE USE OF OFF-AIR ANTENNAS Grantee shall install an RF switch upon request by a subscriber ARTICLE VI TECHNICAL STANDARDS & SPECIFICATIONS SECTION 27-34 Methods of constructmon, installatmon, and mamntenance of the City's cable television system shall comply wmth the Natmonal Elec- trmcal Safety Code, National Electrical Code of 1975, National Bureau of Standards Handbook 81 (Part 2), National Bureau of Stan- dards, U S Department of Commerce November l, 1961, to the extent that such Codes are consmstent with local law affectmng the construc- tmon, installation, and maintenance of electrmc supply and communm- cations lines To the extent that such Code ms mnconsistent with other provisions of this franchise or with local law, the latter shall govern SECTION 27-35 Any tower constructed for use mn the City's cable televmsmon system shall comply with the standards contamned mn Structural Standards for Steel Antenna Towers and Antenna Supporting Structures~ EIA Standards RS-222-A as published by the Engmneermng Department of the Electronic Industries Assocmation, 2001 Eye Street, N W Washing- ton, D C. 20006 SECTION 27-36 Installation and physical d~menslons of any tower constructed for use in the C~ty's cable televxsmon system shall comply w~th all -13- appropriate Federal Avzatlon Agency regulatmons zncludlng, but not llmzted to, Objectives Affecting Navzgable Azrspace, 14 C F R 77 1 et seq , February, 1965 SECTION 27-37 Any antenna structure used in the Czty's cable telev~smon sys- tem shall comply wmth Constructmon Markzng, and Lighting of Antenna Structure, 47 C F R 17 I et seq , September, 1967 SECTION 27-38 All working facllztzes and condztzons used durzng constructzon, installation, and mazntenance of the C~ty's cable televzslon system shall comply with the standards of the Occupatzonal Safety and Health Adminlstratzon SECTION 27-39 The Company shall comply fully with the rules and standards for cable televzsion operations as adopted by the Federal Communmcatlons Commission 47 C F R 76 601-76 613 (1972) SECTION 27-40 The Company shall comply fully with the rules and regulations contained and promulgated wlthzn thms ordmnance and all other Czty ordznances which apply to the operation of the cable system SECTION 27-41 Stray radlatzon (Rf leakage) shall be checked at receptzon locations for emergency radio services to prove no interference szgnal combmnatzons are possible Stray radzatzon shall be measured adjacent to any proposed aeronautzcal navigation radio s~tes to prove no interference to airborne navigational reception ~n the normal flight patterns ARTICLE VII LOCAL REGULATORY FRAMEWORK AND REGULATIONS SECTION 27-42 REMEDIES FOR BREACHES i In the event that its service to any subscriber is inter- rupted for twenty-four (24) consecutive hours, except for acts of God, and except in circumstances for which the prior approval of the ~nterruption ~s obtained from the City Council, grantee shall -14- provide a ten (10%) percent rebate of the monthly fees to affected subscriber 2 In the event that its service to any subscriber is inter- rupted for forty-eight (48) or more consecutive hours, except for acts of God, and except ~n circumstances for which the prior approval of the interruption is obtained from the City Council, grantee shall provide a twenty (20%) percent rebate of the monthly fees to affected subscribers 3 In the event that its service to any subscriber is inter- rupted for seventy-two (72) or more consecutive hours, except for acts of God, and except in circumstances for which the prior approval of the interruption is obtained from the City Council, grantee shall provide a hundred percent (100%) rebate of the monthly fees to the affected subscribers SECTION 27-43 SECURITY FUND 1 Within ten (lO) days after the effective date of th~s con- tract, the Company shall deposit with the Finance D~rector, and maintain on deposit through the term of this contract, the sum of $ Dollars in monies or securlties~ as security for the faithful performance by it of all the provisions of this contract, and compliance with all orders, permits and directions of any agency of the C~ty having jurisdiction over ~ts acts or defaults under this contract, and the payment by the Company of any claims, liens and taxes due the City which ar~se by reason of the construction, opera- tlon or maintenance of the system 2 Within ten (10) days after notice to ~t that any amount has been withdrawn from the security fund deposited pursuant to sub- d~v~sion (1) of this section, the Company shall pay to or deposit with, the F~nance Director a sum of money or securities sufficient to restore such security fund to the original amount of $ Dollars 3 If the Company fails to pay to the City any compensation within the time f~xed herein, or, falls, after ten (10) days notice to repay to the City any taxes due and unpaid, or, falls to repay -15- to the City, within ten (10) days~ any damages, costs, or expenses which the City shall be compelled to pay by reason o£ any act or de- fault of the Company in connection w~th th~s franchise, or, £alls~ after three (3) days not~ce of such £allure by the C~ty Manager, to comply with any provision of this contract which the City Mana- ger reasonably determines can be remedied by an expenditure of the security, the Flnance Director may ~mmedlately withdraw the amount thereof, with interest and any penalties, from the security £und Upon such w~thdrawal, the Finance Director shall not~fy the Company of the amount and date thereof 4 The security fund deposited pursuant to th~s Section shall become the property of the City in the event that th~s contract ~s cancelled by reason of the default of the Company The Company, however, shall be entitled to the return of such security fund, or port~on thereof, as remains on deposit with the Finance Dzrector at the expiration of the term of th~s contract, provided that there is then no,outstand~nE default on the part of the Company 8 The r~ghts reserved to the C~ty w~th respect to the security fund are in addition to all other r~ghts of the C~ty whether reserved by this contract or authorized by law, and no action, proceeding or exercise of a riEht w~th respect to such security £und shall ~ffect any other right the City may have SECTION ~?-~4 CONSTRUCTION TIMETABLES i Service shall be made available to seventy (?0%) percent of the C~ty within three (3) years o~ the date of the cert~£1cate and n~nety (~0) percent of the City w~th~n four (4) years of the date of certificate Upon the reasonable request for service by any person located within the C~ty, the company shall, w~th~n s~xty (80) days, £urnlsh service to such person A request £or service shall be unreasonable £or the purpose of th~s subd~v~szon, zf occurr~E within f~ve (8) years from the effective date o~ the certificate and no trunk line installation capable of serv~c~nE that person's block has as yet been Installed, or, ~f occurring at any t~me and direct access cannot be obtained to such person's -16- premises and all other means of access are highly impracticable SECTION 2?-45 FORECLOSURE, RECEIVERSHIP 1 Upon the foreclosure or other Judicial sale of all or a substantial part of the system, or upon the termination of any lease covering all or a substantial part of the system the Company shall notify the City of such fact, and such notification shall be treated as a notification that a change in control of the Company has taken place, and the requirements of th~s ordinance governing the consent of the City Council to such change in control of the Company shall apply 2 The City Council shall have the r~ght to cancel the fran- chise one hundred twenty (120) days after the appointment of a receiver, or trustee, to take over and conduct the business of the company, whether in receivership, reorganization, bankruptcy, or other action or proceeding, unless such receivership or trusteeshmp shall have been vacated prior to the expiration of the sa~d one hun- dred twenty (120) days, or unless (a) W~thin one hundred twenty (120) days after hms election or appointment, such receiver or trustee shall have fully compiled with all the provisions of this ordinance and remedied all defaults there- under, and, (b) Such receiver or trustee, within sa~d one hundred twenty (120) days shall have executed an agreement, duly approved by the Court having jur~sdmctlon in the matter, whereby such receiver or trustee assumes and agrees to be bound by each and every provision of this ordinance and the certificate granted to the company SECTION 27-46 ESTABLISHMENT OF A REGULATORY ENTITY 1 Continuing Regulatory Jurisdiction The City shall have contlnumng regulatory jurisdictmon and supervmslon over the opera- tmon of any franchise granted hereunder and may from tmme to tmme adopt such reasonable rules and regulatmons as they may deem neces- sary for the conduct of the business contemplated thereunder 2 Authority to establish CATV Advisory Board The contmnumng regulatory jurisdmctlon of the City shall be exercised by the City of Denton City Council The Clty Councml shall have the authority to establish and appoint a CATV Advisory Board consmstlng of fmve -l?- (5) members who shall serve for three (S) year terms with such terms to be staggered Such Board's duration shall be at the pleasure of the Council and should such board be established ~t shall advise the City Council on its regulatory jurisdiction and may have the following responsibilities and duties at the d~rect~on of the City Council (a) Resolving disputes or disagreements between sub- scribers and the grantee after an ~nvestigation should the subscriber and the grantee not first be able to resolve their v~ew or d~saEreement Sa~d decision or findings may be appealed to the City Council (b) Reviewing and auditing all reports and f~linEs submitted to the City as required hereunder and such other correspondence as may be submztted to the City concerning the operation of the cable television network, and reviewing the rules and regulations set by the grantee company (c) Assuring that all tariffs, rates, and rules per- t~nent to the operation of the CATV system In the City of Denton are made available for ~nspect~on by the public at reasonable hours and upon reason- able requests (d) Reviewing rates and recommending any rate chan~es to the C~ty Council SECTION 27-47 PROCEDURE FOR ANY DAY TO DAY REGULATION i Any formal ~nquiry, proceeding, investigation, or other formal action to be taken or proposed to be taken by the C~ty Council in regard to the operations of the company's cable tele- vision system, including action in regard to an increase in sub- scr~ptlon rates, shall be taken only after thirty (30) days public not~ce of such action or proposed action ~s published in a local daily or weekly newspaper having general c~rculat~on in the C~ty of Denton, a copy of such action or proposed action ~s served directly on the company, and the company has been g~ven an oppor- tunity to respond in writing and/or a hearing as may be specified by the City Council, and general members of the public have been given an opportunity to respond or comment ~n writing on the action or proposed action 2 The public notice required by th~s action shall state clearly the action or proposed action to be taken, the time pro- -15- vided for response and the person or persons and authority to whom such responses should be addressed, and such other procedures as may be specified by the CATV Advisory Board If a hearing 1s to held, ~ public participation will be allowed The grantee ~s a necessary party to any hearing conducted ~n regard to th~s operation SECTION 2?-45 FUNCTIONS TO BE REGULATED I A franchisee shall maintain an off~ce in the City, which shall be open during all usual business hours, have a publmcly l~sted telephone, and be so operated that complaints and requests for repairs or adjustments may be received on a twenty-four (24) hour basis 2 A franchisee shall maintain a repair and trouble-shooting force capable of responding to subscriber complaints or requests for service within twenty-~our (24) hours after receipt of the com- plaint or request No direct charge shall be made to the subscriber for this service SECTION 27-49 SUBSCRIBER COMPLAINT PROCEDURE I Subscriber Not~ce of Complaint Procedures The £ranch~see shall establish procedures for receiving, acting upon, and resolving subscribSr complaints to the satisfaction of the Council The franchisee shall furnish a notice of such procedures to each sub- scriber at the t~me of ~nitial subscription to the system 2 Complaint Records The franchisee shall maintain a written record or "log", listing date and time of customer complaints, iden- tifying the subscriber and describing the nature of the complaints and when and what action was taken by the franchisee in response thereto, such record shall be kept at franch~see's local off~ce, reflecting the operations to date for a period of at least three (S) years, and shall be available for ~nspect~on during regular bus~ness hours wmthout further notice or demand by the Council S Repetition of Similar Complaints When there have been similar complaints made or where there exists other evidence, which, -19- in the judgment of the Council casts doubt on the relmabllmty or quality of cable servmce, the Council shall have the rmght and authormty to compel the franchmsee to test, analyze and report on the performance of the system Such test or tests shall be made, and the reports of such test or tests shall he delivered to the C~ty no later than 14 days after the City formally notifmes the franchisee Such report shall mnclude the following infor- mation (a) The nature of the complamnt which precmp~tated the special tests (b) What system component was tested (c) The equipment used and procedures employed in said testing (d)The method mn which such complaints were re~oEded Any other information pertinent to the specmal test shall be re- corded Said tests and analyses shall be supervised by a professmonal engmneer, not on the permanent staff of the franchmsee The afore- said engineer should sign all records of special tests and forward to the City such records with a report ~nterpretmng the results of the tests and recommending actions to be taken by the City The City's right under this provlsmon shall be lmmlted to re- quiring tests, analyses, and reports covering specmflc subjects and characteristics based on said complamnts or other evmdence when and under such circumstances as the C~ty has reasonable grounds to belmeve that the complaints or other evmdence require that tests be performed to protect the public against substandard cable ser- vice SECTION 27-50 EMPLOYMENT REQUIREMENTS A franchisee shall not deny service, deny access, or other- wmse discriminate agamnst subscribers, channel users, or general citizens on the basis of race, color, religion, natmonal origin, or sex A franchmsee shall strmctly adhere to the equal employ- ment opportunity requmrements of the FCC, as expressed mn Sectmon -20- 76 13 (h) and 76 311 of Chapter 1 of Title 47 of the Code of Federal Regulations The franchisee shall comply at all times with all other applicable federal, state, city, and county laws, and all executive and administrative orders relating to non-dlscrlm~natlon A franchisee shall make a positive effort to h~re racial minorities, women and other protected groups as subcontractor ~f available and qualified SECTION 27-51 FRANCHISE FEES The grantee shall pay, as compensation to the C~ty, an annual fee of three (3%) percent of its gross revenues SECTION 27-52 RATES 1 The ~niIial rates will be established through competitive b~dding of the applicants Once an applicant is selected and awarded a franchise, such rates shall become the applicable rate structure and shall be adopted by ordinance Such rates shall remazn in effect and not be changed for a minimum period of two (2) years after the award of the franchise 2 Absent actions reassigning 3urlsdlctlon for Basic Sub- scriber Service rates to some other authority, sa~d rates shall be subject to modification only by the Council and only in accordance with the following procedures (a) The Company may petition the Council for a change in rates by filing a revised rate schedule ~n- eluding ~ts 3ust~f~cation(s) for sa~d proposed new schedule (b) Wlthin ten (10) days of notification by the Council of the place and time establzshed for a hearing on said petition, the Company shall notify its subscribers of the same day by announcement on at least two (2) channels of its system, between the hours of 7 00 and 9.00 P M , for five (5) consecutive days Following all proper notice, but ~n no event later than ninety (90) days from the date of said petition, the Council shall hold an appropriate public hearing to consider the proposed new rates, at which hearing all par- ties desiring to be heard, including the Com- pany, shall be heard on any matters relating to the performance of this franchise, the Company's services, and the proposed new rates (c) Within ninety (90) days after sa~d hearing, the Council shall render a written decision on the Company's petition, e~ther accepting, rejecting, -21- or modifying the same and reciting the basis of its decision (d) If the Council fails to act wlthln slx (6) months of the Company's petition pursuant to paragraph (a) above, the Company shall there- after be entitled to put its proposed new rates into effect on a provisional basis, pro- vided that ~t shall keep a full and accurate accounting of all income resulting from said provisional rates and shall be obliged for a period of up to six (6) months thereafter to refund the amount by which said provisional rates exceed the rates ultimately established by the Council Upon request by the Council the Company shall provide a bond or other rea- sonable surety to ensure that possible refunds due under this subsection shall be promptly made The bond or surety shall be ~n an amount not to exceed the d~fference between the amount of revenues generated in slx months at the pre- viously existing rates and the amount of reve- nues expected to be generated ~n slx months at the provisional rates (e) The criteria for the Council dec~slon ~n such matters shall be establishment of rates which are "fair and reasonable" to both the Company and its subscribers and shall be generally de- fined as the minimum rates necessary to meet all applicable cost of service, including fair return on all invested capital, all assuming efficient and economical management (f) In order for the Council to determine whether proposed rate changes comport w~th the criteria established in subsection (e) above, the Com- pany's petition for a rate ~ncrease shall in- clude the following f~nanc~al reports, which shall reflect the operations of the Denton sys- tem only i Balance Sheet 2 Income Statement S Cash Flow Statement 4 Statement of Sources & Applications of funds 5 Detailed Supporting Schedules of Expenses, Income, Assets & Other Items as may be required 6 Statement of Current ~ Projected Subscribers & Penetration The franchlsee's accounting records applicable to system shall be available for ~nspect~on by the City at all reasonable times The City shall have access to records of financial transactions for the purpose of verifying burden rate? or other indirect costs prorated to the Denton operation The docu- ments listed above shall include sufficient detail and/or footnotes as may be necessary to provide the City with the information needed to make accurate determinations as to the f~nanclal condition of the system All financial statements shall be certified as accurate by an officer of franchisee -29.- (g) Any disagreement between the City and the Com- pany concerning interpretation and calculations of the financial and statistical ~n£ormat~on provided by the Company may be submitted to arbitration at the request of e~ther party pur- suant to the provisions of Article IX F~nal decisions concerning rate ~ncreases or decreases shall not be subject to arbitration SECTION 27-53 USER CLASSES & DIVISIONS D~vls~on of users and subscribers and the classes FOR purposes or rates SubsGribers may be divided into commercial and residential classes Nothing in this provision shall prohibit the reduction or waiving of charges ~n conjunction with promotional campaigns for the purpose of attracting subscribers Rates for commercial and non-commercial users of access channels may be established sepa- rately ~othing herein shall prohibit preferential rates for non- commercial users ~f approved by the C~ty SECTION 27-54 ADVANCE CHARGES & DEPOSITS A fr~nchise may require subscribers to pay for each month of basic serMice in advance at the beginning of each month No other advance payment or deposit of any k~nd shall be required by fran- chisee for basic subscrmber service No deposit or advance pay- ment of a~y kind shall be charged for the provision of any conver- ter without prior approval of the City Nothing ~n th~s provision shall be construed to prohibit charges or waiver of charges for ~n~- rial ~nst~llation or reconnect~on SECTION 27-55 INSTALLATION & RECONNECTION Except as otherwise provided elsewhere ~n this ordinance, a franchise9 may make a charge to subscribers for the installation of service outlets and for the reconnection of service outlets The rateslfor such connection or reconnectlon shall be authorized by the City as provided ~n th~s Article SECTION 27-56 DISCONNECTION There shall be no charge for disconnection of any lnstallatlon or outlet If any subscriber falls to pay a properly due monthly subscriber fee, or any other properly due fee or charge, the fran- -23- chisee may disconnect the subscribers service outlet, provided, however, that such disconnection shall not be effected until thirty (30) days after the due date of said delinquent fee or charge and shall include ten (10) days written not~ce of the ~ntent to dis- connect delivered to the subscriber in question If a subscriber pays thirty (30) days after payment is due and after not~ce of dis- connection has been given, a franchisee shall not d~sconnect After d~sconnectlon, upon payment in full of the delinquent fee or charge the payment of reconnection charge, a franchisee shall promptly re- instate a subscribers cable service SECTION 27-57 RECORDS & REPORTS, NOTICE OF DOCUMENTS FILED WITH AGENCY i ANNUAL REPORTS No later than March 31 of each year, a franchisee shall submit a written report to the City, in a form d~rected by the C~ty Council, which shall ~nclude (a) A summary of the previous year activities and deve. lopment of this system, including, but not'limited to, services begun or dropped, subscribers gain or loss (b) Copies of the financial statements audited by a cer- tified public accounting firm acceptable and approved by the City, including the franchIsee's balance sheet, income statement, and working papers relating to sub- scriber accounts (c) A current statement of costs of construction by com- ponent categories (d) A summary of complaints, Identifying the number and nature of complaints and their disposition (e) A l~st of officers and members of the board of the franchisee and the parent corporation, if any (£) A list of all stockholders holding three (3%) percent or mere of the voting stock of a franchisee and the parent corporation, if any 2 FILINGS WITH FEDERAL COMMUNICATION Copies of all petitions, f~l~ngs, reports, and correspondence filed with the Federal Communication Commission will be f~led concur- rently with the City SECTION 27-58 INSURANCE & INDEMNIFICATION I A grantee or franchisee seeking to operate under the auth- ority of this ordinance shall prior to the granting of a franchise for cable television operation by the City of Denton submit to approval by the City Attorney satisfactory evzdence zn the form of -24- certificates of insurance or their equzvzlant including but not limited to the following coverage and risk areas (a) Workman's Compensation and employee's liability coverage on all employees of the franchisee as required by statute (b) Comprehensive general liability coverage ~nclud- lng a blanket contractual liability provision and a broad form damage endorsement covering but not limited to explosion, collapse or other under- ground activity (c) Comprehensive automobile liability coverage 2 The minimum limits of coverage on each of the above described coverages excepting l(a) above shall ~n no event be less than One Million ($1,000,000 00) Dollars 3 All insurance policies required by this section shall be so endorsed as to make the City of Denton a named insured under such policy Further, each policy shall be so endorsed as to require the carrier or carriers to give not less than sixty (60) days not,ce of cancellation or non-renewal to the City of Denton Such policies shall further carry an endorsement providing a waiver of any rights of subrogation in the favor of and to the City of Denton 4 A grantee or franchisee operating under authority of th~s ordinance shall hold harmless from and indemnify the City against all claims, suits, actions, costs, counsel fees, expenses, damages, judgments or decrees by reason of any person or persons or property being damaged or injured by the franchisee or any of his subcon- tractors, employees, agents, vendors, suppliers, or any capacity during the progress of the work, whether by negligence or otherwise Such indemnification provisions shall be a part of the franchisee agreement 5 A grantee or franchisee hereunder shall upon written notice thereof by the City Manager or his designee indemnify the City of Denton for any damage of any nature to property of the City of Denton whether real, personal or mixed SECTION 27-59 USE OF PUBLIC PROPERTY & CONDITIONS FOR USE i A grantee shall first obtain the approval of the City prior -25- to commencing construction on the streets, alleys, public grounds, or places of the City Applications for approval of the construction shall be in a form provided by the City A grantee shall give the City written notice of proposed construction at least ten days prior to such construction so as to coordinate all work between the City and grantee 2 A grantee shall not open or disturb the surface of any street, s~dewalk, driveway, or public place for any purpose without first hav- ing obtained a permit to do so in a manner provided by City ordinances S A grantee shall, at its expense, protect, support, temporarily disconnect, relocate In the same street or other public place, or re- move from the street or other public place, any property of the grantee when required by the City of Denton by reason of traffic conditions, public safety, street vacation, ~treet construction, change of estab- lishment of street grade, installation of sewer, drains, water p~pes, C~ty owned power or s~gnal lights, and tracks or any other type of structure or improvement by public agency 4 The grantee's use of existing poles or conduits belonging to the C~ty of Denton, or the erection or construction of new poles or conduits shall be governed by a separate Pole Use Agreement 5 All wires, conduits, cables and other property and facili- ties of the grantee shall be so located, constructed, ~nstalled and maintained as not to endanger or unnecessarily interfere with the usual and customary trade, traffic and travel upon the streets of public places of the City The grantee shall keep accurate maps and records of all its facilities and furnish cop~es of such maps and re- cords as requested by the City A grantee shall not place poles or other equipment where they will interfere with the rights or reason- able convenience of adjoining property owners, or w~th any gas, elec- tric, or telephone f~xtures, or with any water hydrants or mains All poles or other fixtures placed in a street shall be placed in the r~ght of way between the roadway and the property, as specified by the C~ty -26- 6 All wires, cables, amplifiers, and other property shall be constructed and installed in an orderly and workman like manner All cables and wires shall be installed parallel with existing tele- phone and electric wires whenever possible Multiple cable config- urations shall be arranged in parallel and bundled, w~th due respect for engineering and sa£ety consideration All Installations shall be underground in those areas of the City where public utilitie~ providing either telephone or electric service are underground In areas where both telephone and electric utility facilities are above ground at the time of installation, the grantee may ~nstall zts ser- vice above ground with the understanding that at such t~me as those facilities are required to be placed underground by the City, the grantee shall l~kewlse place ~ts service underground w~thout addi- tional cost to the residents of the C~ty other than as may be granted under the provisions of this ordinance 7 The City shall g~ve the grantee reasonable notice of plans for street improvement where paving or resurfaclng of a permanent nature is involved The notice shall g~ve the grantee suffIcient time to make any additions, alterations, or repairs to its facilities as it deems necessary in advance of the actual commencement of the work, so as to permit the grantee to maintain continuity of service 8 Requests for Removal or Change The grantee shall, on the request of any person holding a building moving permit, temporarily raise or lower ~ts wires to permit the moving of sa~d bu~llng The expense o~ such temporary removal, raising or lowering of wires shall be paid by the person requesting the same, and the grantee shall have the authority to require such payment zn advance 9 Authority to Trim Trees The grantee shall have the auth- ority to trim trees overhanging upon streets, alleys, sidewalks, and other public places of the City so as to prevent the branches of such trees from coming in contact w~th the w~res and cables of the company All tr~r~ning is to be done under the supervision and direction of the City and at the expense of the grantee The grantee shall make every effort to preserve the esthetic beauty and v~ablllty -27- of any trees trimmed The grantee may contract for such services, however, any £1rm or Individual so retained shall receive C~ty approval prior to commencing such activity l0 Free Connections for Public Buildings Public buildings should be connected to the cable system at no charge Such requests for service would be ~nlt~ated by authorized local government offi- cials For planning purposes, one service drop per facility should be anticipated at the C~vic Center, C~ty Hall, the County Courthouse, Police and Flre fac~l~tles~ public Llbrary~ all public and parochial schools If more than one drop zs required (per facility), the charge should be based on company's costs of time and materials No monthly charges should be made for providing basic subscriber services at these public buildings ll Free Connections to North Texas State University and Texas Womans University Upon the request of an authorized University official, academic buildings and residence halls at North Texas State University and Texas Womans University should be connected to the cable system at no charge If more than one service drop is required (per bulldlng), the charge should be based on the company's cost of time and materials No monthly charges should be made for providing basic subscriber services at the academic build,rigs 12 Interconnection The grantee may be required to inter- connect its system w~th all other broadband communications facilities Such ~nterconnectlon shall be made within the time l~m~t established by the City The lnterconnectlon shall, at the City's discretion, be accomplished according to the method and technical standards determined by the C~ty, ~n a manner consistent w~th applicable FCC standards 13 At the expiration of the franchise term, or upon its ter- mination as provlded for here~n, the Czty shall have the right to require the grantee to remove at ~ts own expense all portions of the cable televlsmon system from all streets within the C~ty -28- ARTICLE VIII APPLICANT SELECTION PROCESS SECTION 27-60 WRITTEN APPLICATION REQUIRED No license, franchmse, or renewal thereof shall be issued ex- cept upon wrmtten applmcation to the City Council on an application form prescribed by the City Council Such form shall contain such Information as the Cmty Councml may prescribe as to the cmtlzenshmp and character of the applmcant, and the fmnanc~al technical and other qualificatmon of the applmcant to operate the system, complete mnformatmon as to its principals and ultmmate benefmcmal owners, ~ncluding, in the case of corporatmons, all stockholders, both nominal and beneficial, owning one (1%) percent or more of the · ssued and outstandmng stock, and, in the case of incorporated associations, all members and ultmmate benefmcmal owners, however designated, complete mnformatmon on the extent and the qualmty of service, number of channels, hours of operatmon, varmety of pro- grams, local coverage, safety measures, mnstallation and subscrlp- tmon fees, and such other mnformatlon as the Cmty Councml may deem approprmate or necessary Such applmcatmon shall be s~gned by the applicant or by a duly authormzed representatmve, evmdence of whose authority shall be submitted wmth the appllcatmon Each applicant shall make full dmsclosure of the true ownership of the applmcant and of the equipment to be employed and rendermng service and of the source of funds for the purchase, lease, rental and lnstallatmon of such equipment Each applmcant shall set forth as completely as possible the equzpment to be employed, the routes of the wzres and cables, the area or areas to be served, the approxzmate start- lng and completion dates of construction of the system and the dates service will actually be available to the areas named SECTION 27-61 PUBLICATION OF APPLICANTS FOR FRANCHISE The Czty Council shall after the last date f~xed for recezpt o£ the appllcatmons caused to be published ~n the local newspapers of general cmrculatmon a notice of public hearing, gmvzng the time, date, places of said hearings, and lzstlng the names of the appli- cants and invitzng public examznatmon of the applicant and the -29- applications, and inviting testimony on the qualifications of sa~d applicants SECTION 2?-62 PUBLIC HEARINGS Public hearings shall be conducted ~n accordance with standards of due process in fairness to applicants and the public, and in accordance with the FCC rules and regulations and orders and pol~czes pertinent to such hearing Each applicant w~ll be notified of the time and location o£ his application to be considered ARTICLE IX PROVISION FOR ARBITRATION OF DISPUTES SECTION 27-63 BOARD OF ARBITRATION Any controversy or claim or d~sputes as to facts arising out of or relating to th~s franchise agreement, or to a breach or alleged breach thereof, and expressly made the subject of arbitra- tion by this ordinance, shall be referred to a Board of Arbitrat~on one member to be appointed by the £ranch~see and the second member to be appointed by the City Council, and the third member to be a disinterested party appointed by agreement of the other two members SECTION 27-64 DEMAND FOR ARBITRATION Demand for arbitration may be made by e~ther party on the other by written notice sent by Certified Mai1, Return Receipt Requested Not~ce of demand to the City of Denton shall be served on the City Secretary Not,ce of demand to the franchisee shall be served upon the President of the franchisee corporation The demand shall state the controversy or claim and the d~sputes as to facts SECTION 27-65 JUDICIAL RELIEF FOR PARTIES On failure of e~ther party to appoint an arbitrator within f~fteen (15) days of not,ce to h~m of demand for arbitration, or on the failure of arbitrators selected by the parties w~thln f~fteen (15) days after appointment of both arbitrators to select a third arbitrator, either party may apply to the District Court of Denton County, Texas for the appointment of an arbitrator or arbitrators hereunder by giving notice to the other party, as provided in the Texas Rules of C~vil Procedure, as amended, governing c~v~l actions generally -30- SECTION 27-66 BOARD OF ARBITRATION HEARINGS The Board of Arbitrators shall hold a hearing on the contro- versy, claim or disputes of facts stated in the demand for arbi- tration, which hearing shall be within thirty (30) days after appointment of all the arbitrators, and after fifteen (15) days' notice thereof to both parties given by the arbitrators by Certi- fied Mail, Return Receipt Requested The hearing may be adjourned from t~me to time The board shall consider evidence offered by the parties relevant to the controversy, claim or disputed facts, and may swear witnesses Testimony shall be taken and transcribed by a reporter The record of the hearings, the decision of the Board of Arbitrators, and the dissent of any one of them shall be f~led with the C~ty Council The dec~slon of the Board of Arbitra- tors may be rendered by any two of them, and any one of them may render a d~ssent The decision and d~ssent must be limited to the controversy or claim and based on f~ndlngs of fact The decision of any two of the arbitrators shall be the decision of the board and shall be final and conclusive on both parties SECTION 27-67 EXPENSES OF ARBITRATION TAXED Expenses of arbitration, ~ncludlng, without limitation, costs of notices and service thereof, fees of arbitrators and of w~t- nesses, but not of legal counsel, and the cost of taking and tran- scribing testimony shall be charged against the party at fault or proportionately between the part~es as the board may deem equitable and just ARTICLE IX MISCELLANEOUS If any section, sentence, clause or phrase of this ordinance is held unconstitutional or void, such unconstitutionality or voidness shall not affect the validity of the remainder of the ordinance, and any portions ~n conflict are hereby repealed Pro- vided, however, that in the event that the Federal Communications Commission declares any section znval~d, that such section or -31- sections will be reneEotlated by the City Council and the grantee SECTION II That this ordinance shall become effective fourteen (14) days from the date of its passage, and the City Secretary of the City of Denton, Texas, is hereby directed to cause the caption of th~s ordin- ance to be published twice in the Denton Record-Chronicle, the off~- czal newspaper of the City of Denton, Texas, w~thin ten (10) days of the date of its passage PASSED AND APPROVED this the ~"~ //~ day of ! 1978 ATTEST ~~ARY CITY OF DENTON, TEXAS APPROVED AS TO LEGAL FORM PAUL C ISHAM, CITY ATTORNEY CITY OF DENTON, TEXAS -32- AN ORDINANCE OF THE CITY OF DENTON, TEXAS, G~ANTING TO GOLDEN TRIANGLE COMMUNICATIONS, A PARTNERSHIp OF SUBSIDIARIES OF DENTON PUBLISHING COMPANY AND COX CABLE COMMUNICATIONS, INC OF ATLANTA, GEORGIA, THEIR SUCCESSORS AND ASSIGNS, A P~ANCHISE TO ERECT, MAINTAIN AND OPERATE A CABLE T~LEVISION SYST~, ITS STRUCTURES AND APPURTENANCES THERETO, IN, OVER, UNDER, ALONG AND ACROSS THE PUBLIC STREETS, HIGHWAYS, ALLEYS, BRIDGES AND OTHER PUBLIC WAYS AND PLACES IN THE CITY OF DENTON, ESTAB- LISHING RATES TO SUBSCRIBERS AND PAYMENT TO THE CITY, ESTABLISHING CONDITIONS FOR THE USE OF THE STREETS AND OTHER PUBLIC PROPERTY, PRO- VIDING RULES GOVERNING TItE OPERATION OF THE SYSTEM, PROVIDING FOR A SEVERABILITY CLAUSE; AND DECLARING AN EFFECTIVE DATE WHEREA~, the City of Denton, Texas enacted Ordinance No 78-21 "Cable Television" on May 2, 1978, which sets out definlt~ons, pro- visions governlng the length, renewal and transfer of a certifIcate of f~anchlse, franchise territory; technical standards and specifi- cations; local regulatory framework and regulations, provIsIon for arb~tratzon of disputes, and other matters; and WHEREAS, the City of Denton, Texa~ prepared a "Request for Cable Television Proposals" and an "Application for Cable TelevIsion System Franchise" for the awardlng of a franchise, and WHEREAS, two proposals were received by the City of Denton, and WHEREAS, the Clty adminlstratlve staff, the CATV advisory board, and the City Council, wlth the help of the Cable Televlslon Information Center, evaluated the two appllcations and held several public hearings affording due process to all involved, and WHEREAS, Golden Trlangle Communications submltted a proposal for such franchise and the Clty of Denton desires to award the franchise to them, and W~EREAS, sald franchlse shall be in accordance with Federal Com- munIcations Commlss~on rules and regulatIons and City Ordinance No 78-21, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON, TEXAS, HEREBY ORDAINS PART I. Section 1 subject to the terms and conditions mentioned in th~s ordinance and the Droviszons of Ordinance No 78-21 "Cable Television" and aT amendments thereto, which is incorporated herein and made a part of this franchise ordinance as if set out fully herein, the City of Denton, Texas, hereinafter called "City" hereby grants to Golden Triangle Communications, a partnership of subsidiaries of Denton Publishing Company and Cox Cable Communlcat~ons, Inc of Atlanta, Georgia, hereinafter calle~ "Golden Triangle", its successors, lessees and assigns, consent to use the present and future streets, alleys, highways, bridges, public places, public thoroughfares and grounds of the City for the purpose of erecting, laying, maintaining, and operating therein and thereon poles, towers, anchors, wires, cables, electronic conductors, conduits, manholes, and all other pertinent equipment needed and necessary for the maintenance and operation of a cable television system for the ~nterception, sale, transmission and d~stribution of television programs and other audio-visual electrical signals and the right to transmit the same to the inhabitants of the City for a term of ten (10) years from the effective date of this ordinance SECTION 2. Company agrees to pay and City agrees to accept, on or before the 31st day of March, 1980, and on or before the same day of each succeeding year during the life of th~s franchise, up to and ~n- cluding the year 1990, a s~m of money to be known as a street and public way rental charge which shall be equivalent to three (3%) percent of the gross annual revenues from ail sources attributable to the operations of the grantee within the City and the Service Area, which annual payment shall be for the rights and privileges herein granted to Golden Triangle, ~ncludlng expressly, w~thout limitatzon, the rights to use the streets, alleys and public ways of said City. It is also understood and agreed that during the life of this franchise the above charge, measured in the manner hereinabove provided, shall be the entire and maximum charge which the City shall be entitled to make for the use of the streets, alleys and public ways. In order to determine the gross receipts received by Golden Tr~- angle, Golden Triangle agrees that on the same date that payments~' are made as provided in this section, it will file with the City --2-- Secretary a sworn report qhow%ng the gross annual revenues from all sources attributable to the operations within said City limits for the calendar year preceding the date of payments City may, if it sees fit, have the books and records of Golden Triangle examined by a representative of said City or independent publzc auditor employed by the City to audit the same to ascertain the correctness of the sworn reports agreed to be filed herein That the City agrees that the consideration set forth in the preceding section hereof shall be paid and received in lieu of any tax, license, charge, fee, street or alley rental or any other character of charge for use and occupancy of the streets, alleys, and public places of the City; in lieu of any pole tax or inspection fee tax; in lieu of any easement or franchise tax, whether levied as an ad valorem, special, or other character of tax; and in lieu of any imposition other than the usual general or special ad valorem taxes now or hereafter levied. Should the City not have the legal power tO agree that the payment of the foregoing cash consideration shall be in lieu of the taxes, licenses, charges, fees, rentals, and easement or franchise taxes aforesaid, then the City agrees that it will apply so much of said payment as may be necessary to the satis- faction of Golden Triangle's obligations, if any, to pay any such taxes, licenses, charges, fees, rentals, and easement or franchise taxes SECTION 3. USE OF PUBLIC PROPERTY AND CONDITIONS OF USE. Golden Triangle shall use the public streets and property of the City in order to build, construct, renew or maintain zts cable television system in accordance with the provisions and requirements of Sectzon 27-59 of Ordinance No. 78-21. SECTION 4. NO EXCLUSIVE PRIVILEGES CONFERRED BY THIS ORDINANCE. That nothing herein contaIned shall be construed as glvzng to Golden Triangle any exclusive przvileges. --3-- SUCCESSORS AND ASSIGNS. That the rights, powers, limitations, duties and restrictions herein provided for shall inure to and be binding upon the parties hereto and upon their respective successors and assigns. SECTION 6. LIABILITY OF CITY That during the period this ordinance Ks existenoe and enjoyed by Golden Triangle, Golden Triangle shall dem~ify and hold harmless the City from any and all claims for losses, damages and lnJurles occasioned to or sustained by any persons, farms, or corporations, or their property by reason of the existence, main- tenance, operation or continuance of this ordinance and the exercise of all rights herein contracted for, except as herein otherwise pro- vlded. SECTION 7. DELEGATION OF AUTHORITY That the City may delegate to a desig- nated official or offlclals the exercise of any and all of the powers conferred upon the City hereby or by applicable State statutes and law whlch relate to the supervision and regulation of a cable tele- vision company in its exercise of the rights and franchises herein conferred, but the governing body of the City shall reserve to itself exclusively and to the full extent possessed, all powers, if any, to fix and regulate charges and rates of Golden Triangle given the City by law and this franchise. Ail lawful powers not delegated by the governing body of the City are reserved to, and shall be exercised by, said governing body exclusively. That at all reasonable times, during the continuance of the rights herein granted, the general offices of Golden Triangle shall be open to the said governing body or its designated official for an- spection of original contracts, books of account and cost operating records pertaining to its operations covered by this franchise. Any method of accounting heretofore or hereafter adopted or authorized by any law of the United States or of the State of Texas or under or pursuant to the authority of any such law shall be deemed proper and sufficient accounting as to all matters covered thereby. -4- S CTION 8. RATE REGULATION. That it is mutually understood and agreed that the regulation of rates to be charged by Golden Triangle to the habitants of the City is pursuant to Section 27-52 of Ordinance No. 78-21 of the City of Denton. The initial rates to be charged by Golden Triangle are attached to this ordinance as Exhibit "A" and are incorporated herein and made a part of this ordinance Such rates shall remain in effect and not be changed for a m~nlmum per~od of two (2) years after the award of the franchise It is also mutually understood and agreed that the City of Denton may, when considering a revised rate schedule submitted by Golden Tr~- angle, consider the fair return on invested capital by usln~ calcu- lations for the cost of capital for Cox Communications, Inc of Atlanta, Georgia rather than the cost of capital for Golden Triangle Communi- cations0 SECTION 9. CONSTRUCTION TIMETABLe. Although Section 27-44 of Ordinance No 78-21 sets out the construction timetables for servicing the City of Denton with cable television service, it is mutually understood and agreed that Golden Triangle will make the service available to the en- tire City within fourteen (14) months from the date of th~s ordinance SECTION 10 CONDITIONS The terms of this franchise shall be as set forth · n the Charter of the City of Denton, in Ordinance No 78-21 passed by the City Council May 21, 1978; applicable Federal law and regula- tions, and the franchise application submitted by Golden Triangle on September 29, 1978, a copy of which is on file in the City Secretary's Off~ce and is available for inspection during normal business hours, provided, however, that if any part of sa~d application is found by the Federal Communications Commission to be inconsistent with their rules and regulations, such rules and regulations shall prevail SECTION 11. S=VERAEILITY. Each section of this ordinance and each part ~f each section hereof is hereby declared to be an independent section -5- or part of section, and the holding of any section or part there- of to be unconstitutional, void, illegal, ineffective or contrary to law for any reason, s~ll not effect any other section or part of section of this ordinance. S T ON 12. ACCEPTANCE OF AGRE~ENT. That Golden Triangle Comun~catlons shall have thirty (30) days from and after the passage and approval of thzs ordinance to f~le its mitten acceptance thereof with the City Secretly, a~ to pay to the C~ty of Denton a ibp sum fee of $10,000 to p~tially cover expenses that the City has incurred in preparing, revlewlng and a~rding this franchise. Once the accept- ance Ns been filed and the fee pa~d, this ordinance shall take effect and be in force from and after the date of its pas~ge, and shall effectuate and ~ke b~nd~g the agreement by the terms hereof PA$S~ AND APPROVED on first reading th~s 19~ day of Dece~er, A. D. 1978. PASS~ AND ~PROVED on second reading this ~day of January, A. D. 1979 ~TY OF DFNTON, TEXAS ATTEST $ ~BROOKS IHOLT, CITY SECRETARY CITY OF DENTON, TEX~S APPROVED AS TO LEGAL FORM: PAq3L C . ISHAM , CITY ATTORNEY CITY OF DENTON, TEXAS