FRANCHISE AGREEMENT
BETWEEN
THE CITY OF WINSTON-SALEM, NORTH CAROLINA
AND
SUMMIT CABLE SERVICES OF FORSYTH COUNTY DOING BUSINESS AS:
TIME WARNER CABLE
[March 3, 2000]
Draft
1
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS...... 2
SECTION 2. GRANT OF FRANCHISE...... 2
2.1Grant...... 2
2.2Right of City to Issue and Renew Franchise...... 3
2.3Effective Date of Grant...... 3
2.4Term...... 3
2.5Written Notice...... 3
2.6Franchise Not Exclusive...... 4
2.7Conflict with Cable Ordinance and Reservation of Rights...... 4
2.8Compliance...... 4
2.9Binding Contract...... 4
2.10Customer Service Standards...... 54
SECTION 3. GENERAL REQUIREMENTS...... 5
3.1Annual Franchise Fee...... 5
A.Compensation...... 5
3.2Recovery of Processing Costs and Expenses...... 6
3.3Liability Insurance...... 76
3.4Indemnification...... 8
3.5Grantee’s Insurance...... 9
3.6Workers’ Compensation Insurance...... 9
3.7Security Fund and Performance Bond...... 9
3.8Procedure for Remedying Franchise Violations...... 10
3.9Compliance with Applicable Laws and Ordinances...... 11
SECTION 4. SYSTEM CAPABILITIES...... 11
4.1Cable System Build/Rebuild...... 11
4.2Performance Review: Performance Monitoring...... 13
4.3Franchise Modification...... 13
4.4State of the Art Review...... 1415
4.5Grantee Cooperation...... 1415
4.6Periodic Evaluation, Review and Modification...... 1415
4.7Emergency Alert Capability...... 1516
4.8Hearing and Sight Impaired Capabilities...... 1516
4.9Standby Power...... 1516
4.10Parental Control Lock...... 1516
4.11Status Monitoring...... 1516
4.12Technical Standards...... 1517
4.13HDTV/ATV Conversion...... 1517
4.14Right of Inspection...... 1617
SECTION 5. SERVICES AND PROGRAMMING...... 1617
5.1Programming...... 1617
A.Broad Programming Categories...... 1617
B.Deletion or Reduction of Programming Categories...... 1618
5.2Leased Commercial Access...... 1718
5.3Periodic Subscriber Survey...... 1718
SECTION 6. SUPPORT FOR LOCAL CABLE RELATED NEEDS...... 1718
6.1Institutional Network...... 1718
6.2Public, Educational and Governmental Access...... 1718
A.Access Channels...... Error! Bookmark not defined.19
B.Remote Origination...... Error! Bookmark not defined.19
C.Additional Access Channels...... Error! Bookmark not defined.19
D.Unused Channels...... Error! Bookmark not defined.19
E.Interconnection...... Error! Bookmark not defined.19
F.Community Access Corporation or...... Error! Bookmark not defined.19
G.Grantee Support for Local Programming...... Error! Bookmark not defined.20
H.Access Channel Designations...... Error! Bookmark not defined.21
I.Public, Educational and Governmental Access Rules and Procedures Error! Bookmark not defined.21
J.Assistance with Soliciting Contributions...... Error! Bookmark not defined.21
K.Ad Avail Grants...... Error! Bookmark not defined.21
L.Technical Quality...... Error! Bookmark not defined.21
M.Proof of Performance Testing...... Error! Bookmark not defined.21
N.Change in Technology...... Error! Bookmark not defined.21
6.3Drops To Public Buildings...... 21
6.4School and Library Cable Modems...... 1822
6.5NonDiscriminatory Access to Cable Model Platform...... 1822
6.6Use of Grantee's Facilities...... 1822
SECTION 7. REGULATION...... 1923
7.1Franchise Regulation...... 1923
7.2Force Majeure...... 1923
EXHIBIT A: Grantee Ownership Information
EXHIBIT B: Franchise Fee Payment Worksheet
EXHIBIT C: Service to Public Building
EXHIBIT D: Customer Service and Consumer Protection Standards
1
FRANCHISE AGREEMENT
SECTION 1. DEFINITIONS
For the purpose of this Franchise, the terms, phrases, words, abbreviations and their derivations shall have the meaning given in the Master Cable Services Regulatory Ordinance (hereinafter referred to as "Master Ordinance"), unless specifically stated otherwise in this Franchise Agreement the definitions in the Master Ordinance are made part of this Franchise as if fully set forth herein.
SECTION 2. GRANT OF FRANCHISEOF FRANCHISE
2.1Grant.
The Cable Television Franchise with Falcon Video Communications, LP, d.b.a. Charter Communications (“Charter” or “Grantee”), is hereby granted, subject to the terms and conditions of Ordinance 01-01-003 Cable Services Regulatory Ordinance (hereinafter also referred to as the “Master Ordinance”), and this Franchise (hereinafter also referred to as the “Franchise”). The grant provides Grantee authority, right and privilege, to construct, reconstruct, operate and maintain a cable television System within the Streets and public Right-Of-Ways in the incorporated areas of the Town of Nags Head, North Carolina, as it is now or may in the future be constituted.
2.2Right of Town to Issue and Renew Franchise.
Grantee acknowledges and accepts the right of Town to issue and/or renew a Franchise and Grantee agrees that it shall not now or at any time hereafter challenge any lawful exercise of this right in any local, State or federal court.
2.3Effective Date of Grant.
The grant shall be effective upon adoption of an Ordinance by the Board. The grant is further contingent upon the filing by Grantee with the Town Clerk of the executed Franchise and the required performance bond and insurance certificates, and the payment of all sums owed to the Town, except that if the filing of the performance bond or any such insurance certificate does not occur within thirty (30) days after the effective date of the Ordinance approving this Franchise and any extension of time hereunder, the Town may declare this grant nullgrant null and void.
2.4Franchise Term and .Renewal.
(a)This Franchise shall take effect and be in full force from and after the final passage hereof, subject to acceptance by the Grantee as provided by the Master Ordinance and the same shall continue in full force and effect for a period of fifteen (15) years beginning with the date of adoption of this Franchise.
(b)Subject to the provisions of this Section, the parties may amend this Franchise so as to require the Grantee to upgrade the Cable System to incorporate the State of the Art (the "State of the Art Option"). For the purposes of this Franchise the term "State of the Art" means equipment that is readily available with reasonable delivery schedules from two or more sources of supply; has the capability to perform the intended functions demonstrated within communities with similar characteristics (including, but not necessarily limited to population, density, customer penetration, etc.) under actual operating conditions for purposes other than test or experimentation; and can be implemented by the Grantee in an economically feasible manner taking into account economic waste (i.e., early retirement of assets) with the likelihood of generating a reasonable return on the Grantee's investment when measured over the then remaining term of the franchise. The term "State of the Art" does not include equipment or facilities associated with governmental access.
(1)The Town may not initiate the State of the Art Option at any time when the Grantee is subject to effective competition as defined from time to time by federal law
(2)In order to initiate the State Of the Art Option, the Town shall first commence a review of the Cable System. A review may not commence prior to the seventh (7th) or after the twelfth (12th) anniversary of the acceptance date.
a. The review described in the above paragraph (2) shall, at a minimum, take into account the following:
1. Characteristics of the existing Cable System.
2.The State of the Art.
3The additional benefits provided to customers by the State of the Art.
4.The marketplace demand for the State of the Art taking into account any associated rate increase.
5.Extension of the term of the existing Franchise to provide cost recovery for any capital improvements associated with upgrade required by a state-of-the-art decision.
6.Cost associated with the review.
- Any additional factors deemed relevant by the Town or the
Grantee.
b.If, after conducting such a review, the Town determines that the exercise of the State of the Art option may be warranted, the Town shall hold a public hearing to enable the general public and the Grantee to comment and present additional evidence.
(3)If, following such hearing, the Town determines that the exercise of the State of the Art Option is warranted the parties may amend this Franchise accordingly. If, however, the Grantee is not willing to agree to an amendment of this Franchise, the Grantee may, within sixty (60) days after the Town's decision, use all available means to appeal the Town’s decision.
(4) Should Federal Law change, causing significant and necessary modifications of this Franchise, the Town and the Grantee agree to negotiate necessary changes as an amendment to this Franchise.
(5)Any renewal of this Franchise shall be done in accordance with applicablestate and federal law.
2.5Written Notice.
All notices, reports or demands required to be given in writing under this Franchise shall be deemed to be given when delivered personally to the Person designated below, or when five (5) days have elapsed after it is deposited in United States mail in a sealed envelope, with registered or certified mail, postage prepaid thereon, or on the next business day if sent by express mail or overnight courier addressed to the party to which notice is being given, as follows:
If to Town:Town Manager
PO Box 99
5401 Croatan Highway
Nags Head, NC 27959
If to Grantee:General Manager
Charter Communications
2400 S. Virginia Nags Head Trail
Nags Head, NC 27959
Vice President Government Relations
Charter Communications
12444 Powerscourt Drive
St. Louis, MO 63131
Either party may change such addresses upon notice to the other party.
2.6Frase nonexclusive.Franchise Non Exclusive
This Franchise shall not be construed as any limitation upon the right of City, through its proper offices, and in accordance with applicable law, to grant to other Persons or corporations rights, privileges or authority similar to or different from the rights, privileges and authority herein set forth, in the same or other Streets and public ways or public places or other places the Grantee is entitled to occupy by this Franchise Agreement, permit or otherwise. This Franchise Agreement shall not be construed as any limitation upon the right of the City to grant to other persons, rights, privileges, or authorities equivalent to the rights, privileges, and authorities herein set forth, in the same or other streets, alleys, or other Public Ways or Public Places. The City specifically reserves the right to grant at any time during the term of the Franchise Agreement or renewal thereof, if any, such additional franchises for a cable television system as it deems appropriate, provided, however, that such additional franchise(s), so granted, shall be on a non-discriminatory and competitively neutral basis, to the extent allowed by lawThe Franchise granted herein is non-exclusive. The Grantor specifically reserves the right to grant, at any time, one or more additional franchises for a System in accordance with State and federal law; provided, however, no such future franchise shall be granted on terms or conditions more favorable or less burdensome than those contained herein. In the event a future franchise is granted on terms or conditions more favorable or less burdensome than those contained herein, then this Franchise shall be deemed amended as of the effective date of the future franchise to incorporate the more favorable or less burdensome term(s) or condition(s) herein.
The Franchise granted herein is non-exclusive. The Town specifically reserves the right to grant, at any time, one or more additional franchises for a Cable Television System in accordance with state and federal law and the Master Ordinance.
2.7Conflict with Cable Ordinance and Reservation of Rights.
The provisions of the Master Ordinance, are hereby incorporated herein by reference as if set out in full, and form part of the terms and conditions of this Franchise Agreement. In the event of any conflict between the terms and conditions of this Franchise Agreement and the provisions of the Master Ordinance, and other generally applicable regulatory ordinances of the City, such ordinances shall control, except as may be specifically provided in this Franchise Agreement or where such ordinances materially alter Grantee’s rights or obligations hereunder. City and Grantee reserve all rights that they may possess under the law unless expressly waived herein.
2.8Compliance.
(a)Grantee has examined all of the provisions of the Master Ordinance and accepts and agrees to all of the provisions of that Ordinance, as it exists as of the effective date of the Grantee’s Franchise Agreement and any supplementary specifications as to construction, operation, or maintenance of the System which the Town may include in the Franchise Agreement. Grantee recognizes the right of the Town to adopt such additional regulations of general applicability, as it shall find necessary in the exercise of its police power.
2.10Customer Service Standards.
Grantee will comply with the customer service and consumer protection provisions set forth in the Master Ordinance and Exhibit D to this Franchise, including the requirement that the Grantee maintain a customer service office within the City, which shall include a place where Subscribers may pay their bills, pick-up and return converter boxes and comparable items and receive information on the Grantee and its services.
(b)In addition to any rights specifically reserved to Grantor by the Master Ordinance or this Agreement, Grantor reserves to itself every right and power that is required to be reserved by a provision of any other ordinance or under any other Franchise.
(c)In accordance with Section 10.3.35, the Grantee shall notify the Town of its business hours.
SECTION 3. GENERAL REQUIREMENTS
3.1Annual Franchise Fee.
A.Compensation.
The Town has opted to not require the payment of a franchise fee for the term of the Franchise.
Such Franchise Fee shall be considered separate and distinct from any non-discriminatory Right-of-Way Fees assessed against a Grantee or its affiliates for its use of the City's Rights-of-Way for the provision of telecommunications services pursuant to the terms of the federal Telecommunications Act of 1996, or other applicable law.
(2)Payments due the City under this Section shall be computed quarterly, for the preceding quarter of each year during the term of this Franchise. Each quarterly payment shall be due and payable no later than forty-five (45) days after the end of the preceding month. Each payment shall be accompanied by a brief report showing the basis for the computation and other relevant facts and information, and a "Franchise Fee Payment Worksheet," attached as Exhibit B, which shall accurately reflect the sources of all cable service revenues derived from the operation of the system within the City. Such statement shall be signed by an officer of the Grantee.
(3)Grantee will deliver to the City Manager, not later than 45 days after the last day of each City Grantee’s fiscal year during the term of this Franchise (or portion thereof in the event of any prior termination for any reason), a statement signed by a duly authorized officer of Grantee with respect to the entire prior fiscal year, setting forth the same information as is required to be submitted by Grantee in accordance with the Payment Worksheet, ExhibitB. Upon the City Manager’s request, such annual statements shall be certified by a certified public accountant, at no additional cost to the City.
B.No acceptance of any payment shall be construed as an accord that the amount paid is in fact the correct amount, nor shall such acceptance of payment be construed as a release of any claim Grantor may have for further sums payable under the provisions of this Ordinance or a Franchise Agreement. All amounts paid shall be subject to audit and recomputation by Grantor or its designee at any time during any calendar year (but no more than once per calendar year) upon twenty (20) calendar days notice, including information on the specific documents requested to be reviewed. Grantor’s audit rights shall expire 3 years after any payments are made in accordance with this agreement. Audits shall be at the expense of the Grantee if the additional amount due is greater than two percent ten percent (2%) (10%)of the amount paid. Any additional undisputed amount due to the City as a result of the audit shall be paid within sixty (60) days following written notice to the Grantee by the City which notice shall include a copy of the audit report.
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 an interest charge, computed from such due date, at the annual rate equal to the commercial prime interest rate of the City’s primary depository bank plus 3% during the period that such unpaid amount is owed.
D.In the event that the maximum allowable Franchise Fee under applicable law is increased or decreased from 5% of Gross Revenues, the City reserves the right to increase the applicable Franchise Fee under this Agreement pursuant to an Ordinance establishing the new rate and allowing reasonable notice to the Grantee for administration of the change. Similarly, the Grantee may within 60 days notice decrease the franchise fee to the amount permitted.
3.2Recovery of Processing Costs and Expenses.
A.During the term of this Franchise, if the Grantee initiates a request for approval regarding the transfer of this Franchise or change in control of the Grantee, the Grantee shall reimburse the City for all reasonable out-of-pocket costs, including attorneys’ and consultants’ fees and costs, incurred by the City as part of City’s review and processing of Grantee’s request. Payments of such costs and expenses shall not be deemed to be “Franchise Fees” within the meaning of Section 622 of the Cable Act (47 U.S.C. § 542), and such payments shall not be deemed to be: (i) “payments in kind” or any involuntary payments chargeable against the compensation to be paid to the City by Grantee pursuant to Section 3.1 hereof.
B.To aid in the analysis and resolution of any future disputed matters relative to this Franchise Agreement or Master Ordinance, the City and Grantee may, by mutual agreement (both as to whether to hire and whom to hire), employ the services of technical, financial or legal consultants, as mediators. All reasonable fees of the consultants incurred by the City and/or the Grantee in this regard shall be born by the Grantee shall be borne by both parties.
3.2Liability Insurance.
A.Upon the effective date of this Franchise, the Grantee shall, at its sole expense, take out and maintain during the life of this Franchise, including any extensions or renewals, public liability insurance with a company licensed to do business in the State of North Carolina with a rating by Best of not less than “A” that shall protect the Grantee, the Town, and the Town’s officials, officers, employees and agents from claims which may arise from operations under this Franchise, whether such operations are by the Grantee, its officials, officers, directors, employees and agents, or any subcontractors of Grantee. This liability insurance shall include, but shall not be limited to, protection against claims arising from bodily and personal injury and damage to property, resulting from all Grantee operations, products, services or use of automobiles, or construction equipment. The Town shall be named as an additional insured on all policies.