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FRANCHISE TO CONSTRUCT
OPERATE AND REPAIR
A CABLE SYSTEM TO PROVIDE CABLE SERVICE
FALCON CABLE COMMUNICATIONS, LLC, a wholly owned subsidiary of Falcon
Communications, L.P. (“Falcon”) filed an Application for a Franchise to construct,
operate and repair a Cable System in, over, along and under City roads and appropriate
rights-of-way in the City of Gilroy (“City”) for the purpose of providing Cable Service.
The Gilroy City Council held a public hearing on the Application on the 22nd day of
November, 1999.
Legal notice of the Application and of the hearing were given as required by law.
The Gilroy City Council having considered the interests proposed and advanced, has
found that the grant of the Franchise requested, subject to conditions, is in the public
interest. It hereby ORDERS, pursuant to Chapter 24 of the City Code, as amended by
Ordinance No. 97-1, adopted January 6, 1997, that a Cable System Franchise is
granted to Falcon, subject to the conditions set forth in the Franchise Agreement
attached as Exhibit A hereto, this Franchise and the Ordinance. This Franchise grants
the right, subject to conditions, to construct, operate and repair a Cable System in, over,
along and under City roads and appropriate rights-of-way within the City for the purpose
of providing Cable Service, and for providing an institutional network and other facilities
of services for public, educational and government use of the Cable System
commencing on the effective date of the Franchise through and including ten (10) years
thereafter, unless terminated prior to that date in accordance with the Franchise
Agreement or Applicable Law. No privilege or power of eminent domain is bestowed by
this grant. All rights and powers of the City now existing or hereafter obtained are
reserved except as expressly provided to the contrary in the Franchise Agreement; no
rights shall pass to the Franchisee by implication. The limitation on the scope of the
Franchise does not prohibit the Franchisee from providing any other service, but instead
makes it clear that Franchisee must comply with any applicable requirement to obtain
licenses, franchises, authorizations or permits, and other requirements of local law prior
to providing non-Cable Services. The Franchise shall become effective when the
Agreement is signed by the City and when the Franchisee has:
(a) Signed the Franchise Agreement attached as Exhibit A;
(b) Filed an unconditional acceptance of this Franchise set out in Exhibit B; and
(c) Made all payments, posted all securities and guarantees, and supplied all
information that it is required to supply prior to or upon the effective date of the
Franchise.
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Provided that the Franchise will become effective upon the closing of the proposed
Transaction between Charter Communications Holding Company, L.L.C. (Charter) and
Falcon Communications, L.P. (FCLP) referenced in the FCC Form 394 filed by FCLP
and Charter on or about June 23, 1999 and approved by the City by Resolution No. 99-
85. In the event that the proposed transaction does not close, or closes on terms
materially different from those disclosed by Charter and FCLP in the FCC Form 394,
and/or Charter fails to acquire control of the Franchisee (Falcon), this Franchise will be
null and void and of no effect.
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EXHIBIT A
FRANCHISE AGREEMENT
City of Gilroy, California
TABLE OF CONTENTS
SECTION 1. DEFINITIONS ............................................................................................. 3
1.1 Cable Act .................................................................................................... 3
1.2 Cable Ordinance......................................................................................... 3
1.3 Cable System ............................................................................................. 3
1.4 Franchise Agreement or Agreement ......................................................... 3
1.5 Franchisee .................................................................................................. 3
1.6 Institutional Network or I-Net ...................................................................... 3
1.7 Public, Educational or Governmental Use, or PEG Use ........................... 4
1.8 School ......................................................................................................... 4
1.9 Subscriber Network .................................................................................... 4
SECTION 2. SCOPE OF FRANCHISE; LIMITS AND RESERVATIONS ..................... 4
2.1 Relation to Other Provisions of Law .......................................................... 4
2.2 Term ............................................................................................................ 5
2.3 Affiliates Must Comply ................................................................................ 5
2.4 Construction................................................................................................ 5
2.5 Franchise Area ........................................................................................... 6
2.6 Effect of Franchise Acceptance ................................................................. 6
2.7 Relation to Prior Franchise ........................................................................ 6
2.8 Validity ........................................................................................................ 6
2.9 Franchisee Bears Its Own Costs ............................................................... 6
2.10 No Recourse ............................................................................................... 7
2.11 Severability ................................................................................................. 7
2.12 Effect of Change in Law ............................................................................. 7
SECTION 3. NON-EXCLUSIVE FRANCHISE AND COMPETITON ENCOURAGED . 7
3.1 Parity of Franchises.................................................................................... 7
SECTION 4. NO WAIVER ............................................................................................... 8
4.1 Course of Dealing ....................................................................................... 8
4.2 Breaches ..................................................................................................... 8
SECTION 5. AMENDMENT OF AGREEMENT ............................................................. 8
SECTION 6. FRANCHISE FEE....................................................................................... 8
6.1 Payment to City .......................................................................................... 8
6.2 Not in Lieu of Any Other Assessments, Tax or Fee .................................. 8
6.3 Payments .................................................................................................... 9
6.4 Franchise Fee Report................................................................................. 9
6.5 No Accord or Satisfaction........................................................................... 9
6.6 Ability to Draw on Security Fund ................................................................ 9
6.7 Payment Records ....................................................................................... 9
6.8 Holdover Term ............................................................................................ 9
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TABLE OF CONTENTS (CONTINUED)
SECTION 7. CONSTRUCTION PROVISIONS .............................................................. 9
7.1 Provision of Service.................................................................................... 9
7.2 System Construction Schedule ................................................................ 12
7.3 Construction Standards ............................................................................. 13
SECTION 8. CONTINUITY OF SERVICE .................................................................... 14
8.1 Rights of Subscribers to Service .............................................................. 14
8.2 Duty to Provide Uninterrupted Service .................................................... 14
8.3 Abandonment ........................................................................................... 14
8.4 What Is Abandonment .............................................................................. 14
8.5 Rights Upon Franchise Termination or Forfeiture ................................... 15
SECTION 9. LEASED USE ........................................................................................... 15
SECTION 10. SYSTEM, FACILITIES, EQUIPMENT, AND SERVICES ....................... 15
10.1 System Upgrade ....................................................................................... 15
10.2 PEG Access Center/Headend/Institutional Network Link ....................... 16
10.3 Institutional Network ................................................................................. 16
10.4 System Design: Equipment Used ............................................................ 19
10.5 System Design: Construction Testing Requirements ............................. 20
10.6 System Design: Proof of Performance Tests .......................................... 20
10.7 Inspection ................................................................................................. 20
10.8 System Design: Emergency Alert System ............................................... 20
10.9 Interconnections ....................................................................................... 20
SECTION 11. SUBSCRIBER NETWORK CHANNELS AND FACILITIES FOR PEG USE.. 21
11.1 PEG Channels .......................................................................................... 21
11.2 Subscriber Services ................................................................................. 26
11.3 No City Control ......................................................................................... 26
SECTION 12. OPERATION AND REPORTING ............................................................ 26
12.1 Open Books and Records ........................................................................ 26
12.2 Time for Production .................................................................................. 26
12.3 Reports Required ..................................................................................... 26
12.4 Retention of Records: Relation to Privacy Rights ................................... 27
SECTION 13. CUSTOMER SERVICE STANDARDS.................................................... 27
SECTION 14. RATE REGULATION ............................................................................... 27
14.1 City Authority ............................................................................................ 27
14.2 Rate Uniformity ......................................................................................... 27
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TABLE OF CONTENTS (CONTINUED)
SECTION 15. SURETY; INDEMNIFICATION ................................................................ 27
15.1 Indemnification ......................................................................................... 27
15.2 No Limit of Liability ................................................................................... 28
SECTION 16. PERFORMANCE GUARANTEES .......................................................... 28
16.1 Security Fund ........................................................................................... 28
16.2 Performance Bond ................................................................................... 29
16.3 Material Term ........................................................................................... 29
SECTION 17. REMEDIES ............................................................................................... 29
17.1 Remedies .................................................................................................. 29
17.2 Liquidated Damages ................................................................................ 30
17.3 Procedures Applicable to Liquidated Damages ...................................... 31
17.4 Revocation or Termination of Franchise ................................................. 31
17.5 Remedies Cumulative .............................................................................. 32
17.6 Relation to Insurance and Indemnity Requirements ............................... 32
SECTION 18. PERFORMANCE MONITORING ............................................................ 32
18.1 Triennial Review ....................................................................................... 32
18.2 Franchise Cooperation ............................................................................. 32
18.3 Exercise of Authority ................................................................................ 32
SECTION 19. RIGHTS OF INDIVIDUALS PROTECTED .............................................. 33
19.1 General Obligations.................................................................................. 33
19.2 Respect for Property ................................................................................ 33
19.3 Fair Employment ...................................................................................... 33
SECTION 20. MISCELLANEOUS PROVISIONS .......................................................... 33
20.1 Compliance With Laws ............................................................................. 33
20.2 Governing Law ......................................................................................... 33
20.3 No Pledging of City’s Credit ..................................................................... 33
20.4 Use of City Name or Logo ........................................................................ 33
20.5 Venue........................................................................................................ 33
20.6 Conflict of Interest .................................................................................... 34
20.7 Force Majeure .......................................................................................... 34
20.8 Notices ...................................................................................................... 34
20.9 Calculation of Time ................................................................................... 34
20.10 Time of Essence: Maintenance of Records of Essence ......................... 35
20.11 Captions .................................................................................................... 35
20.12 Entire Agreement...................................................................................... 35
20.13 Counterparts ............................................................................................. 35
iii
FRANCHISE AGREEMENT
BETWEEN THE CITY OF GILROY, CALIFORNIA AND
FALCON CABLE SYSTEMS COMPANY II, L.P., A WHOLLY OWNED SUBSIDARY OF
CHARTER COMMUNICATIONS HOLDING COMPANY, L.L.C.
This Franchise Agreement (“Agreement”) dated _____________ for purposes of
identification, effective as set forth herein, is made and entered into by and among Falcon
Cable Systems Company II, L.P. and the City of Gilroy, a California municipal corporation
(“City”).
WHEREAS, Falcons Cable Systems Company II, L.P. (“Falcon”), which is 99% owned
by Falcon Cable Communications, LLC (“FCCLLC”), which is 100% owned by Falcon
Communications, L. P. (“FCLP”) currently operates in the City under the terms of a cable
television franchise agreement ; and
WHEREAS, Falcon has asked the City to renew the nonexclusive Franchise it holds to
provide Cable Service in the City; and
WHEREAS, the City has conducted hearings to identify the future cable-related needs
and interests of the community; to consider the financial, technical, and legal qualifications of
Falcon; and to determine whether Falcon’s plans for constructing and operating its System
are adequate; and
WHEREAS, the City has relied on Falcon’s written representations and has
considered all information Falcon has presented to it; and
WHEREAS, the City has considered the past performance of Falcon under the prior
franchise; and
WHEREAS, Charter Communications Holding Company, LLC (“Charter”) which is held
by Charter Communications, Inc. (“CCI”) has agreed to purchase the holdings of Falcon’s
parent corporation Falcon Communications, L.P. (FCLP) by way of a Purchase and
Contribution Agreement dated May 26, 1999; and
WHEREAS, FCLP as Transferor and Charter as Transferee, jointly filed a Federal
Communications Commission Form 394 (the “Application”) with the City on June 23, 1999
which filing more fully describes the transaction, and which form contains certain promises,
representations and warranties by the Transferor and Transferee; and
WHEREAS, the City has relied on Falcon’s representation that the proposed
transaction resulting in the change of control of the Franchise to Charter will be completed by
December 31, 1999; and
WHEREAS, the City finds Falcon under the new ownership of Charter to be financially,
legally, and technically qualified to operate a cable communications system with the City; and
WHEREAS, Falcon, Charter, and the City have reached agreement on the terms and
conditions of a renewed Franchise; and
WHEREAS, based on Falcon’s representations and information, the City has
determined that, subject to the terms and conditions set forth herein and the provisions of
Chapter 24 of the City Code, as amended by Ordinance No. 97-1 granting Falcon a
nonexclusive Franchise is consistent with the public interest; and
WHEREAS, Notwithstanding anything to the contrary in the Transfer Agreement and
Resolution adopted by the City on November 1, 1999, except for an obligation to pay unpaid
or underpaid franchise fees (if any) (including applicable late fees and penalties), which the
City may determine are due, after conducting an audit, for the years of 1997, 1998, and 1999,
the City does hereby release Charter and Falcon (under Charter’s ownership) from any and
all known or unknown acts, errors, or omissions arising from Falcon’s operation of the cable
system serving the City under the prior franchise, prior to the effective date of the Renewal
Franchise Agreement; and
WHEREAS, following a public hearing, on November 22, 1999, with an effective date
being the date all of the following have occurred -- the City and Franchisee have signed the
Agreement, the Franchisee has filed an unconditional acceptance of the Franchise, made all
payments, posted all securities and guarantees, and supplied all information that it is required
to supply, all of which should occur no later than December 31, 1999, but in no event shall
the effective date of the Franchise Agreement be any earlier than the effective date of this
Ordinance -- the City determined to award said nonexclusive Franchise subject to the
provisions of Chapter 24 of the Gilroy City Code, as amended by Ordinance No. 97-1 and to
the execution by the City and Falcon of this Franchise Agreement; and
NOW, THEREFORE, in consideration of the City’s renewal of Falcon’s Franchise;
Falcon’s promise to provide Cable Service to residents of the City pursuant to Chapter 24 of
the City Code, as amended by Ordinance No. 97-1 and under the terms and conditions set
forth herein; the promises and undertakings herein; and other good and valuable
consideration, the receipt and the adequacy of which is hereby acknowledged,
THE SIGNATORIES DO HEREBY AGREE AS FOLLOWS:
SECTION 1. DEFINITIONS
All words appearing in this agreement which are identical to the words defined in this
Section 1 shall have the meanings stated in Section 1. When not inconsistent with the
context, words used in the present tense include the future, words in the plural number
include the singular number, and words in the singular number include the plural number.
The words “shall” and “will” are mandatory and “may” is permissive. Words not defined
herein shall be given the meaning set forth in City Ordinance No 97-1, or if not defined
therein, then the meaning set forth in the Cable Communications Policy Act of 1984, 47
U.S.C. Section 521 et seq., as amended, and if not defined therein, shall be given their
common and ordinary meaning. References to any City official or City office also refer to any
official or office that succeeds to any or all of the responsibilities of the named official,
whether by delegation, succession or otherwise. Reference to the City include the City, in its
present [incorporated] form or in any later recognized, consolidated, enlarged, [or
reincorporated] form. References to laws or “Applicable Laws” shall be interpreted broadly to
include federal, state and local laws and regulations adopted pursuant to those laws;
resolutions and other local government directions that have the force of law, however
nominated. Unless otherwise stated, references to Applicable Laws include laws now in
effect, as the same may be amended from time to time, and new laws. In addition, the
following definitions shall apply:
1.1. Cable Act. “Cable Act” means the Cable Communications Policy Act of 1984,
47 U.S.C. § 521 et seq., as amended by the Cable Television Consumer Protection and
Competition Act of 1992, and the Telecommunications Act of 1996, and as further amended
from time to time.
1.2. Cable Ordinance. “Cable Ordinance” means Chapter 24 of the City Code as
amended from time to time.
1.3. Cable System. “Cable System” is defined as in federal law and City Ordinance
No. 97-1, except that as used herein, it specifically refers to the Franchisee’s Cable System.
A reference to a Cable System includes pedestals, enclosures (such as equipment cabinets),
amplifiers, power guards, nodes, cables, fiber optics and other equipment necessary to
operate the Cable System.
1.4. Franchise Agreement or Agreement. “Franchise Agreement” or “Agreement”
means this contract entered into between the City and Franchisee, and any amendments,
exhibits, or appendices hereto, entered into in accordance with the terms of the Cable
Ordinance.
1.5. Franchisee. “Franchisee” means Falcon, and its lawful and permitted
successors, assigns, and transferees.
1.6. Institutional Network or I-Net. “Institutional Network” or “I-Net” means fibers,
coaxial cables and the electronic devices required to activate the same that are not primarily
intended for use in the transmission of video programming to residential Subscribers.
1.7 Public, Educational or Governmental Use, or PEG Use. “Public, Educational or
Governmental Use,” or “PEG Use,” and similar formulations of this term shall refer to
educational, governmental and public use of capacity on the Cable Sys tem.
1.8 School. “School” means any accredited primary school, secondary school,
college, and university.
1.9. Subscriber Network. “Subscriber Network” means fibers, coaxial cables and
the electronic devices required to activate the same that are primarily used in the
transmission of video programming to residential Subscribers.
SECTION 2. SCOPE OF FRANCHISE; LIMITS AND RESERVATIONS
2.1. Relation to Other Provisions of Law
2.1.A. Controlling Document. The Franchise and all rights and privileges
granted under it are subject to, and the Franchisee must exercise all rights granted to it in
accordance with Applicable Law. This Franchise is a contract, but it is subject to the City’s
exercise of its police and other regulatory powers. In the case of any conflict between the
express terms of this Franchise and the express terms of the Cable Ordinance, this
Franchise shall govern. The City reserves all of its rights to subsequently adopt an ordinance
pursuant to its police or other regulatory powers. The Franchisee reserves the right to
challenge such an ordinance. This Franchise does not confer rights or immunities upon the
Franchisee other than an expressly provided herein.
2.1.B General Operating Requirement. Subject to the foregoing, Franchisee
shall provide the cable Services required hereunder throughout the Franchise Term and any
holdover term, and shall make any Cable Service it provides over it’s Cable System available
to all entities within the City, subject to the line extension provisions herein. It shall be the
Franchisee’s duty to ensure that the City and the public are protected from all risks
associated with the construction, operation and maintenance of its Cable System, and in
carrying out this duty, Franchisee shall ensure that it at all times maintains in full force
adequate insurance, in accordance with the Cable Ordinance, and other required securities.
Further, it shall be Franchisee’s duty to construct, operate and maintain its system, and to
move it when requested to do so (at no cost to the City), at a time and in a manner prescribed
by the City (i) to avoid expense to the City; (ii) to ensure that the Rights-of-Way are fully
accessible to others; (iii) and to restore and replace property damaged as a result of the
construction, operation or maintenance of the Cable System, Franchisee shall perform its
obligations in accordance with the Cable Ordinance.
2.1.C. Agreement Subject to Police Powers. This Agreement and all rights
and privileges granted under the Franchise are subject to the City’s police and other powers.
2.1.D. Franchise Not a Telecommunications Franchise. Nothing in this
agreement shall be read to in any respect bar the imposition of similar, different or additional
conditions on telecommunications services by Franchisee, because this agreement does not
govern telecommunications services by Franchisee including charging fees for use of rights -
of-way to provide telecommunications services.
2.1.E Franchise Grants Only Limited Rights. The Franchise shall be
interpreted to convey limited rights and interests only as to those City rights-of-way in which
the City has an actual interest and only to the extent and for the purpose set out in the
Franchise. The grant of the Franchise is not a warranty of title or interest in any right-of-way;
it does not provide the Franchisee any interest in any particular location within the right-of-
way. The issuance of the Franchise does not deprive the City of any powers, rights or
privileges it now has or may later acquire in the future. Except as expressly provided to the
contrary in the Franchise Agreement the City may exercise any powers it has or may obtain
to regulate the Franchisee or its Cable System. No rights shall pass to the Franchisee by
implication. Further, the rights granted to Franchisee are personal in nature; no transfer may
occur without the prior consent of the City. Requests for consent shall be considered in
accordance with the Cable Ordinance.
2.1.F. Franchise Agreement Not in Lieu of Other Obligations. The Franchise
issued and the franchise fee paid hereunder are not in lieu of any other required permit,
authorization, fee, charge or tax, unless expressly stated herein. Without limiting, the
foregoing, the City, among other things, does not waive any requirement or the Franchisee’s
duty to obtain all applicable authorizations (however nominated) and permits, and to comply
with the conditions thereof; to comply with zoning laws; or to comply with other codes,
ordinances and regulations governing the construction of the Cable System.
2.2. Term. The term of this Franchise Agreement shall run from the date of this
Agreement and shall be ten (10) years, plus (at the City’s option) any holdover term during
which Franchisee continues to operate within the city streets after the expiration or other
termination or invalidation of its Franchise. Except that, the Franchisee’s obligations to
indemnify and insure shall survive the Agreement for a period sufficient to protect the City
against covered claims under applicable statutes of limitation.
2.3. Affiliates Must Comply. Any affiliate or joint venture or partner of the
Franchisee involved in the management or operation of the Cable System in the City that
would constitute a cable operator of the Cable System is subject to the limitations of, and
shall comply with the terms and conditions of the Franchise and this Agreement. The
Franchisee shall be fully liable for any act or omission of an affiliate that controls the
Franchisee or is responsible in any manner for the management of the Cable System that
results in a breach of this Agreement or a violation of the Cable Ordinance, as if the act or
omission was the Franchisee’s act or omission.
2.4. Construction. The provisions of this Agreement shall be liberally construed in
favor of the public interest in order to effectuate its purposes.
2.5. Franchise Area. The Franchise is issued for the entire present area of the City,
and any area annexed thereto during the term of the Franchise. However, the City may limit
the Franchise Area if, after being given an opportunity to extend service into a particular area,
the Franchisee does not extend service into a particular area. The Franchise may be re-
amended to include the restricted area upon a showing that the Franchisee has a timetable
for building out that area.
2.6. Effect of Franchise Acceptance. By accepting the Franchise, the Franchisee:
2.6.A. acknowledges and accepts the City’s legal right to issue and enforce
the Franchise;
2.6.B. accepts and agrees to comply with each and every provision of this
Agreement,
2.6.C. agrees that the Franchise was granted pursuant to processes and
procedures consistent with Applicable Law and that it will not raise any claims to the contrary;
2.6.D. affirms that it meets all the legal qualifications set forth in Section 4 of
the Cable Ordinance and in 47 U.S.C. § 533; and
2.6.E. agrees that it will not oppose intervention by the City in any proceeding
affecting the enforcement of its rights under this Franchise.
2.7. Relation to Prior Franchise. As of the effective date of this Franchise, the
Franchise previously held by the Franchisee is superseded and of no further force and effect.
Subject to any applicable statute of limitations, and except as such rights may be expressly
released now or in the future by a settlement agreement, nothing in this paragraph shall be
deemed to release the Franchisee from any liability arising under the prior Franchise during
the time it was in effect. Franchisee shall provide proof satisfactory to the City that it will
continue to provide the indemnity required under the prior Franchise, and that it has adequate
insurance for injuries to persons or property that may have occurred during the prior
Franchise term, subject to any limitations to which the City may have agreed in settlement of
claims arising under the prior Franchise.
2.8 Validity. Except as provided below, both parties waive any claim or defense
that any provision of the Cable Ordinance, Franchise or the Franchise Agreement is
unenforceable or otherwise invalid or void. Franchisee agrees to be bound by the terms and
conditions of the Franchise or Franchise Agreement and the Cable Ordinance, provided, that
nothing in this section shall preclude the Franchisee from challenging the lawfulness of, or
the enforcement of the following provisions of the Cable Ordinance: Sections 4.4., 4.6.,
13.1.A., and 13.2.A.
2.9. Franchisee Bears Its Own Costs. Unless otherwise expressly provided in this
Agreement, all acts that the Franchisee is required to perform under this Agreement or the
Cable Ordinance must be performed at its own expense.
2.10. No Recourse. Without limiting such immunities as the City or other Persons
may have under Applicable Law, Franchisee shall have no monetary recourse whatsoever
against the City or its officials, boards, commissions, agents or employees for any loss, costs,
expense or damage arising out of any provision or requirement of the Cable Ordinance or
because of the enforcement of the Cable Ordinance or the City’s exercise of its authority
pursuant to that Ordinance, a Franchise Agreement, or other Applicable Law, unless the
same shall be caused by criminal acts or by willful or gross negligence.
2.11. Severability. In the event that a court or agency or legislature of competent
jurisdiction acts or declares any non-material provision of this Agreement is unenforceable
according to its terms, or otherwise void, said provision shall be considered a separate,
distinct, and independent part of this Agreement, and such holding shall not affect the validity
and enforceability of all other provisions hereof. In the event that a court or agency or
legislature of competent and controlling jurisdiction acts or declares any material provision of
this Agreement is unenforceable according to its terms, or is otherwise void, the parties agree
to immediately enter into negotiations in good faith to restore the relative burdens and
benefits of this Agreement, consistent with Applicable Law. If the parties are unable to agree
to a modification to this Agreement within sixty days of the date the decree becomes final, the
injured party may at any time hereafter request mediation. If the parties cannot agree on a
mediator, they shall petition a state court of competent jurisdiction to appoint a mediator.
Each party agrees to participate in up to sixteen (16) hours of non-binding mediation before
resorting to litigation in a state court of competent jurisdiction.
2.12. Effect of Change in Law. Subject to the non-severability provisions of Section
2.11, the event that state or federal laws, rules, or regulations preempt a provision or limit the
enforceability of a provision of this Agreement, then the provision shall be read to be
preempted to the extent and for the time, but only to the extent and for the time, required by
law. In the event such state or federal law, rule, or regulation is subsequently repealed,
rescinded, amended, or otherwise changed, so that the provision hereof that had been
preempted is no longer preempted, such provision shall thereupon return to full force and
effect and shall thereafter be binding on the parties hereto, without the requirement of further
action on the part of the City.
SECTION 3. NON-EXCLUSIVE FRANCHISE AND COMPETITON ENCOURAGED
3.1 Parity of Franchises
3.1.A. This Franchise and the right it grants to use and occupy the Public
Rights-of-Way shall not be exclusive and do not explicitly or implicitly preclude the issuance
of other franchises to operate Cable Systems or other communications systems within the
City, affect the City’s right to authorize use of Public Rights-of-Way by other persons to
operate Cable Systems or other communications systems or for other purposes as it
determines appropriate, or affect the City’s right to itself construct, operate or maintain a
Cable System or other communications system, with or without a Franchise, subject to the
Cable Ordinance.
3.1.B. In the event that, after the effective date of this Franchise, the City
grants a franchise to another person or persons to use and occupy the public right of way for
the purpose of operating a Cable System or other communications system whose service
area is comparable in scope to this Franchise, the material terms and conditions of such
additional franchise or franchises shall be reasonably comparable to the materials terms and
conditions of the Franchise, taking into consideration all of the circumstances in existence at
the time such additional franchise or franchise are granted, including without limitation any
applicable legal limitations on the City’s regulatory authority.
SECTION 4. NO WAIVER
4.1. Course of Dealing. No course of dealing between a Franchisee and the City, or
any delay on the part of the City or Franchisee in exercising any rights shall operate as a
waiver of any such rights, except to the extent expressly waived.
4.2. Breaches. Waiver of a breach of this Agreement is not a waiver of any other
breach, whether similar or different from that waived. Neither the granting of the Franchise
nor any provision herein shall constitute a waiver or bar to the exercise of any governmental
right or power of the City, including without limitation the right of eminent domain.
SECTION 5. AMENDMENT OF AGREEMENT
The City shall liberally amend this Agreement: (A) upon the application of the
Franchisee, when necessary to enable the Franchisee to take advantage of developments in
the field of cable communications that, in the City’s opinion, will afford the Franchisee an
opportunity to serve its customers more efficiently, effectively, and economically; or (B) to
reflect any expansion of the scope of the Franchise by mutual agreement. Such
amendments shall be subject to such conditions as the City determines are appr opriate to
protect the public interest.
SECTION 6. FRANCHISE FEE
6.1. Payment to City. The Franchisee shall pay the City a franchise fee in an
amount equal to five percent (5%) of Gross Revenues; or if the Council so authorizes the
maximum fee permitted by federal law, up to a maximum of seven percent (7%).
6.2. Not in Lieu of Any Other Assessments, Tax or Fee. The franchise fee is in
addition to all other fees, assessments, taxes or payments that the Franchisee may be
required to pay under any federal, state, or local law, subject to any limitations set forth in 47
U.S.C. § 542. Payments, if any, in support of PEG Access shall be deducted from gross
revenues prior to the computation of franchise fees.
6.3. Payments. Franchise fees shall be paid in accordance with the schedule set
forth in the Cable Ordinance, and late payments shall be subject to the additional charges set
forth in the Cable Ordinance. The reasonable cost of any audit shall be borne by Franchisee
if an audit reveals that, in any payment period audited, underpayment exceeded four percent
(4%) of the amount owed.
6.4. Franchise Fee Report. The Franchisee shall file, on a quarterly basis, when
franchise fee payments are made to the city, a Franchise fee report showing revenue
received by category. The Franchise fee report shall be in a form acceptable to the City.
6.5. No Accord or Satisfaction. No acceptance of any payment by the City shall be
construed as a release or an accord and satisfaction of any claim the City may have for
further or additional sums payable as a franchise fee under the Cable Ordinance or for the
performance of any other obligation of the Franchisee.
6.6. Ability to Draw on Security Fund. The City may draw from the security fund
established pursuant to Section 16 of this Agreement, an amount equal to the franchise fees
paid by the Franchisee in the previous quarter, should the Franchisee not submit a franchise
fee payment by the end of the fifth day after the due dates set forth in Section 10.3. of the
Cable Ordinance.
6.7. Payment Records. In accordance with Section 10.7 of the Cable Ordinance as
it existed on the date of this Agreement, the City may, from time to time, and upon
reasonable advance written notice, inspect and audit any and all books and records
reasonably necessary to the determination of whether Gross Revenues and franchise fees
have been accurately computed.
6.8. Holdover Term. During any holding over after the schedule date for expiration
or other termination of the Franchise, without the consent of the City, the Franchisee shall
pay to the City the maximum franchise fee consistent with Section 6.1.
SECTION 7. CONSTRUCTION PROVISIONS
7.1. Provision of Service. The Franchisee must build the Cable System so that it
can extend service to Persons in the City in accordance with this Section 7.1. Franchisee
shall, with all due diligence, construct its Cable System to serve previously unserved areas
within the City. Construction of the Cable System in those previously unserved areas shall
be completed as soon as possible but in no case later than 18 months after the effective date
of the franchise.
7.1.A. Line Extension Requirements
(1) Existing Service Area. Within the City boundaries as they
existed on January 1, 1999, the Franchisee must upon request
provide service to any Person whose residence or place of
business is passed by the cable system, for no charge other
than the then-prevailing normal installation charge and/or the
long drop charge, unless the Franchisee demonstrates to the
City’s satisfaction that extraordinary circumstances justify a
waiver of this requirement.
7.1.B. Annexed and New Service Areas
(1) For areas within the City boundaries as they existed on January
1, 1999, which are not currently served by Franchisee and for
any areas annexed after January 1, 1999, the Franchisee will
extend its trunk and distribution system to serve subscribers
requesting service after the date hereof at the then-prevailing
normal installation charge and/or the long drop charge unless
the Franchisee demonstrates to the City’s satisfaction that
extraordinary circumstances justify a waiver, where:
(a) the subscriber requesting service is located a distance
greater than five hundred (500) feet from the nearest
existing cable system plant; or
(b) the number of residences to be passes is less than the
equivalent of twenty (20) residences per mile measured
from the nearest existing cable system plant.
(2) Cost sharing. In the event that the new subscriber requesting
service is not located within five hundred (500) feet or within the
equivalent of twenty (20) residences per mile of the nearest
existing cable system plant, the Franchisee will extend its cable
system on request based upon the following cost-sharing
formula:
(a) Total Cost to Construct Extension* = Cost Per Mile
Miles of Extension of Extension
(b) Total Cost Per Mile of Extension = Franchisee’s Share
20 of Cost Per
() Residential Unit
(c) Franchisee’s Share of Cost Per = Franchisee’s Share
Residential Unit Times Number of Total Cost of
of Residential Units Passed Extension
(d) Total Cost to Construct Extension = Total Subscriber’s
Minus Franchisee’s Share of Total Share
Cost of Extension
(e) Total Subscriber Share = Cost Per
Number of Subscribers Subscriber
Requesting Service
* Total Cost to Construct Extension is defined as the actual turnkey cost to construct the entire extension
including electronic, pole make-ready charges, and labor, but not the cost of the Subscriber drop.
7.1.C. Subscriber Drops. The Franchisee shall not assess any additional cost
for service drops one hundred fifty (150) feet or less unless the Franchisee demonstrates to
the City’s satisfaction that extraordinary circumstances justify a higher charge. Where a drop
exceeds one hundred fifty (150) feet in length, the Franchisee may charge the subscriber for
the difference between the Franchisee’s actual costs associated with installing a one hundred
fifty (150) foot drop and the Franchisee’s actual cost of installing the longer drop.
7.1.D. Underground Option. In any area where the Franchisee would be
entitled to install a drop above-ground, the Franchisee will provide the subscriber the option
to have the drop installed underground, but may charge the subscriber the difference
between the actual cost of the above-ground installation and the actual cost of the
underground installation.
7.1.E. Time for Extension. The Franchisee must extend service to any
Person who requests it; (a) within seven (7) days of the request, where service can be
provided by activating or installing a drop; (b) within thirty (30) days of the request within the
existing City limits as of January 1, 1999, where an extension is required or in any case
where an extension of one-half mile or less is required (weather and ground conditions
permitting); or (c) within six (6) months for annexed areas where an extension of one-half
mile or more is required.
7.1.F. Requested School and Public Building Drops. Upon receipt of a written
request from the City, the Franchisee shall provide one drop and Basic Cable Service at no
charge to a location designated by the appropriate School or Local government official within
each school or public building within the City limits. Notwithstanding its location, the
Franchisee agrees to provide a free drop and basic service to Gavilan College. In the case of
any locations which shall be newly served after the effective date of this agreement, where a
required drop exceeds one hundred fifty (150) feet in length, the Franchisee may charge for
the difference between the Franchisee’s actual costs associated with installing a one hundred
fifty (150) foot drop the Franchisee’s actual costs of installing the longer drop. The requested
connection shall be made by the Franchisee within the timeframes set forth in Section 7.1.E.
The City or school may install facilities and equipment to transmit the signal to all rooms
within the building, provided that the City or school (as applicable) shall be responsible for
any internal wiring that it installs. Such wiring shall be installed in full compliance with all
applicable federal, state, and local technical and safety rules. If the City or school (as
applicable) fails to maintain the internal wiring and as a result signal leakage standards under
FCC rules are violated, the Franchisee may disconnect its System from the building until the
wiring has been repaired.
7.2. System Construction Schedule
7.2.A. Time for Rebuild. Subject to extension for undue hardship and causes
beyond the control of the Franchisee, the Franchisee shall complete the rebuild required by
this Agreement (including any customer equipment change-outs) no later than twenty-four
(24) months after the effective date of the Franchise. The City agrees not to impose
liquidated damages pursuant to Section 17.2 of this Franchise until 30 months after the
effective date of the Franchise. The City shall grant reasonable extensions of the time to
complete rebuild in particular areas of the City if, prior to the scheduled time for completion,
the Grantee shows that, notwithstanding its due diligence, it has been unable to extend
service to a specified areas because the acts or omissions of a third party (not including the
Grantee’s subcontractors, agents, or Affiliates) have caused a delay in construction beyond
delays reasonably expected during the course of an upgrade or rebuild, and the Grantee
proposes a reasonable alternative deadline for extension of service to the area. For
purposes of this section, a reasonable delay includes inclement weather that impedes
construction or threatens the safety of those involved in the construction, a delay arising from
the utility ”make-ready” work or pole attachment permit process, a delay in the granting or
processing of required permits and licenses by permitting agencies (so long as Franchisee
utilizes due diligence to timely make application for said permits or licenses), a delay arising
from a private property owner’s denial of access to a right-of-way necessary for construction
of the cable system, or any act or event the occurrence of which would constitute a force
majeure under Section 20.7 herein. No reasonable delay shall be deemed to exist unless the
utility owning the pole(s) is out of compliance with PUC rules and the Franchisee has timely
filed a complaint with the PUC and obtained a ruling in the Franchisee’s favor.
7.2.B. Design Review: Information to be Provided. Unless the City and
Franchisee agree otherwise, not less than sixty (60) days prior to the date construction is
scheduled to commence, Franchisee shall provide a system design and construction plan
with detailed information regarding the scheduled phase, available for review by the City at
the local office of the Franchisee, which shall include at least the following:
7.2.B.(1) design type, trunk and feeder design, and number and
location of hubs or nodes;
7.2.B.(2) distribution system-cable, fiber, and equipment to be used;
7.2.B.(3) if applicable to the construction phase, or at time of rebuild,
headend design and reception facilities including make and model number of antennae,
signal processors, modulators, demodulators, and other equipment to be used;
7.2.B.(4) plans for standby power at headend, and throughout the
system;
7.2.B.(5) longest amplifier cascade in system (number of amplifiers,
number of miles, type of cable/fiber); and
7.2.B.(6) design maps and tree trunk maps for the system. The
system design will be shown on maps of industry standard
scale using standard symbology, and shall depict all
electronic and physical features of the cable plant.
7.2.C. Design Review: City Examination. The City may review the plan and,
within sixty (60) days of the date the plan is made available for City review, submit comments
to the Franchisee. Prior to beginning construction, the Franchisee shall meet the City to
discuss its final system design plan and construction schedule and explain in detail how it has
planned construction to make service available to all Subscribers under the requirements of
this Agreement. Following the commencement of construction, the Franchisee shall meet
with the City upon the City’s request to provide detailed reports on the Franchisee’s progress
in meeting the System upgrade requirements of this Agreement. The City’s review does not
excuse any non-compliance under this Agreement, the Cable Ordinance, FCC regulations or
other Applicable Law, or prevent the City from taking any other action it is entitled to take
under the same. Should the City direct the Franchisee to take an action or refrain from
taking an action relative to system design or otherwise delay the Franchisee’s construction
operation (where the modification or delay was not required or caused by the failure of
Franchisee to comply with this Agreement or Applicable Law, or to act timely to obtain
necessary approvals and permits), the delay caused by the City will be added to the time for
completion of the project.
7.3. Construction Standards. Without limiting Section 2, Franchisee agrees that:
7.3.A. Construction in Accordance with Law and High Industry Standards. The
construction, operation, and repair of the Cable System shall be governed by the Cable
Ordinance, and in all events shall be performed in a manner consistent with the high industry
standards and all Applicable Laws. In order to comply with “high industry standards,”
Franchisee shall comply with the State of California Public Utilities Commission General
Orders 95 and 128; and applicant’s Construction Procedures Manual. In the event of a
conflict among construction standards, the most stringent standard shall apply (except insofar
as that standard, if followed, would result in a system that could not meet requirements of
Applicable Law).
7.3.B. Use of Property Installed in Rights-of-Way. The City shall have the
right to install and maintain free of charge upon the poles owned by the Franchisee and in
Franchisee’s conduit such wires and other fixtures that do not unreasonably interfere with the
Cable System operations of the Franchisee or its future plans for use of conduit.
7.3.C. Responsibility for Contractors and Subcontractors. Franchisee shall
ensure that any contractor or subcontractor used for work and construction, operation, or
repair of Cable System equipment must be properly licensed under laws of the State and all
applicable local ordinances, and each contractor or subcontractor shall have the same
obligations with respect to its work as Franchisee would have under this Agreement and
Applicable Law if the work were performed by Franchisee. The Franchisee shall be
responsible for ensuring that the work of contractors and subcontractors is performed
consistent with this Franchise Agreement and Applicable Law, shall be responsible for all
acts or omissions of contractors or subcontractors, shall be responsible for promptly
correcting acts or omissions by any contractor or subcontractor, and shall implement a quality
control program to ensure that the work is properly performed. This section is not meant to
alter tort liability of Franchisee to third parties. Franchisee shall institute a quality control
program adequate to ensure that the work performed by its subcontractors complies with the
requirements of this Agreement and Applicable Law.
SECTION 8. CONTINUITY OF SERVICE
8.1. Rights of Subscribers to Service. It is the right of each Subscriber in the
Franchisee’s Franchise area to receive all available Cable Services from the Franchisee as
long as the Subscriber’s financial and other obligations to the Franchisee are satisfied.
8.2. Duty to Provide Uninterrupted Service. The Franchisee shall ensure that all
Subscribers receive continuous uninterrupted Cable Service except for necessary periods
during which service must be temporarily interrupted for purposes of system construction or
repair. At the City’s request, the Franchisee shall operate its System for a temporary period
(the “transition period”) following the termination of its Franchise or any transfer as necessary
to maintain Cable Service to Subscribers, and shall cooperate with the City to assure an
orderly transition from it to another entity. The transition period shall be no longer than the
reasonable period required to select another entity and to build a replacement System, and
shall not be longer than thirty-six (36) months, unless extended by the City for good cause.
During the transition period the Franchisee will continue to be obligated to comply with the
terms and conditions of this Agreement and Applicable Laws and regulations.
8.3. Abandonment. If the Franchisee abandons its System during the Franchise
term or any transition period, or fails to operate its System in accordance with the terms set
forth in Section 8.4. below, the City, at its option, may: (i) declare Franchise forfeited; or (ii)
operate the System or designate another entity to operate the System temporarily until the
Franchisee agrees to restore and restores continuous Cable Service in compliance with the
Franchise and the Cable Ordinance.
8.4. What Is Abandonment. The City shall be entitled to exercise its right under
Section 8.5 if:
8.4.A. The Franchisee fails to provide Cable Service due to an outage
affecting a substantial number of channels on the cable system over a substantial portion of
the Franchise Area for ninety-six (96) consecutive hours, unless the City authorizes a longer
interruption of service or Franchisee fails to take the steps necessary to provide service to
subscribers; or
8.4.B. The Franchisee, for any period, willfully and without cause refuses to
provide Cable Service in accordance with its Franchise over a substantial portion of the
Franchise Area.
8.5. Rights Upon Franchise Termination or Forfeiture. If the City revokes the
Franchise, or the Franchise otherwise terminates, the City shall have the following rights, in
addition to the rights specified in this Agreement or under Applicable Law:
8.5.A. Removal. The City may require the Franchisee to remove its facilities
and equipment at the Franchisee’s expense. If the Franchisee fails to do so within a
reasonable period of time, the City may have the removal done at the Franchisee’s and/or
surety’s expense.
8.5.B. Purchase. In the event of termination or forfeiture for cause, the City,
by resolution, may acquire ownership of the Cable System at an equitable price.
8.5.C. Purchase on Other Termination. In the case of any other termination of
the Franchise the City may, as lawfully permitted, by resolution, acquire ownership of the
Cable System, at fair market value, with no value assigned to the Franchise itself, under such
terms and conditions as are reasonably and customary in the industry.
8.5.D. Nothing in this Agreement shall be construed to grant the City a right of
first refusal to acquire ownership of the system.
SECTION 9. LEASED USE
Franchisee shall provide leased access channels as required under the Cable Act.
SECTION 10. SYSTEM, FACILITIES, EQUIPMENT, AND SERVICES
10.1 System Upgrade. The Franchisee’s Cable System shall be rebuilt within the
time specified in this Franchise Agreement so that, at all times thereafter, the System meets
or exceeds the following requirements:
10.1.A. System Capacity. The System shall have a rating of at least 750 MHz
on all active components and at least 1 GHz for all passive components (with the exception
of signal splitters which are located within individual residences). The system shall be
activated for and carry at least sixty-eight (68) 6-MHz channels downstream to all
Subscribers within 30 days of completion of construction, and shall be designed with fiber to
the neighborhood node. The City shall allow the Franchisee to build its Cable System to a
different design so long as the City determines that system design is functionally equivalent in
all respects (including expandability) with the system described above, and otherwise
satisfies this Section.
10.1.B. High Industry Standards. At the time Franchisee finalizes its design
plans, the System shall be designed in accordance with high industry standards in terms of
flexibility to provide new services, reliability, expandability, and upgradeability. This provision
shall be read to require the Franchisee to include in the design, among other things, status
monitoring equipment to be located, at minimum, at all equipment locations serving more
than 1200 subscribers. The master headend must be designed with adequate space and
ventilation to satisfy all the requirements of this agreement.
10.1.C. Two-Way Activated. The Franchisee shall install and activate the
return portion of the Cable System between 5 MHz and 40 MHz.
10.1.D. Closed Captioning. All closed-caption programming retransmitted by
the System shall include the closed-caption signal. For hearing impaired customers, the
Franchisee shall provide information concerning the cost and availability of equipment to
facilitate the reception of all basic services for the hearing impaired.
10.2. PEG Access Center/Headend/Institutional Network Link. The Franchisee shall
install, replace as necessary, and maintain a dedicated bi-directional link between the access
center which shall be located at Gavilan College (or other location which will require no
greater construction costs to install) and the headend. It shall also provide upstream
bandwidth for PEG use upon demand from all locations housing facilities of the City, County,
school, and educational institutions. The dedicated bi-directional link between the PEG
access center and the System headend shall be completed within eighteen (18) months of
the effective date of the Franchise, or the date the PEG access center is completed,
whichever is later. The dedicated connection shall be designed so that the PEG access
center can: (a) send signal to the headend on multiple channels simultaneously; (b) rec eive
signals from other locations on multiple channels simultaneously; (c) remotely route signals
originated at the access center or at other locations onto any Access or institutional use
channels on the cable system; and (d) otherwise control the signals to allow for smooth
breaks, transitions, and insertion of station Ids and other material. The Franchisee may
provide the cable system capacity and functionality described in this Section 10.2. through
use of the Institutional Network. The Franchisee shall provide plant, headend, and PEG
access center equipment necessary to accomplish these functions for PEG access video
purposes, including but not limited to laser transmitters, modulators, processors, and
switchers. The obligation to provide the equipment and functionality described in this section
shall be in addition to all other obligations to provide PEG access or I-Net equipment and
facilities contained in this Franchise.
10.3. Institutional Network
10.3.A. I-Net Overview. In conjunction with the system upgrade set forth in
Section 10 of this Franchise, the Franchisee shall install, activate and maintain certain
capacity on its upgraded Cable System which shall be referred to as the Institutional Network
(I-Net). The I-Net shall utilize the fiber portion of the cable system and whatever additional
equipment and fiber or coaxial cable is necessary to provide for the Upstream and
Downstream I-Net capacity requirements of this Franchise. The Institutional Network shall
include installed equipment to fully provide for the switching and routing of video signals
between the various locations on the institutional network as well as between the I -Net the
PEG access channels on the subscriber network. (Those costs associated with the provision
of the equipment necessary to provide for the switching between the I-Net and the PEG
access channels on the subscriber network shall be provided as part of the fulfillment of the
obligation described in Section 10.2 and shall not be considered a part of the I-Net costs or
PEG access equipment grant referenced in Section 11.1.E-F). The I-Net shall be designed
so as to interconnect all user locations with a central processing point at the PEG access
center or other location mutually agreed upon between the City and Franchisee. The
Franchisee shall cooperate with the City regarding the design of the I-Net to ensure that all
I-Net users maybe effectively served. Furthermore, the Franchisee’s cable system serving
the Cities of Gilroy, Hollister, and San Juan Bautista are served from a common headend and
function as a single cable system. The I-Net to be provided by the Franchisee shall be
designed and fully function in such a way as to permit information to flow to, from, and
between any designated I-Net location and any other designated I-Net location in any of the
three Cities. An I-Net Node/Hub location shall be located at the City Hall in each City. The I-
Net locations in each City shall be connected to the I-Net Node/Hub location in each City.
Each of the three I-Net Node/Hub’s will be connected to the I-Net Headend described below
in Section 10.3.D. below.
10.3.B. Technical Capability and Functionality. The I-Net shall include a
minimum of six (6) optical fibers from the I-Net Node/Hub to each I-Net location listed in
Attachment A and a minimum of eight (8) optical fibers between the I-Net headend (described
in Section 10.3.D. of this Agreement) and each of the three I-Net Node/Hubs (one each in
Gilroy, Hollister, and San Juan Bautista) during the term of the Franchise, including any
extension of that term.
10.3.C. I-Net Equipment and Functionality. The Institutional Network shall
include all plant and headend equipment required so that the public buildings, educational
institutions, and designated locations listed in Attachment A of this I-Net Agreement
(collectively called “Public Agencies”) will be able to transmit and receive video, data, and
voice communications between two (2) or more public buildings (including the PEG access
facility referenced in Section 10.2) within all of the areas served by Franchisee’s cable
system which serves Gilroy, Hollister, and San Juan Bautista either directly or via a Headend.
All cable plant and equipment provided or purchased by Franchisee shall remain the property
of the Franchisee. The I-Net shall be reserved for the sole use of the City and its designated
Public Agencies. Upon request, Franchisee shall extend the I-Net to any Public Agency
building located within the Franchise area which is constructed or acquired during the term of
the Franchise. Franchisee shall install, operate and maintain I-Net, Headend, and network
components to the point of “demarcation” at the Public Agency buildings necessary to provide
the activated path between the transmitting and receiving locations. The Franchisee shall
provide the interface devices which are necessary for the transmission and reception of video
at each I-Net location at no charge to the City or Public Agency. Interface and switching
devices necessary for data or voice will be provided by the Public Agency. The Public
Agency users of the Institutional Network shall be responsible for the installation, operation
and maintenance of terminal and interface equipment within the public buildings, except as
otherwise provided in this Franchise Section 10.3.C.-10.3.D.
10.3.D. I-Net Headend. The I-Net shall be constructed so as to interconnect all
user locations with a central processing point at the PEG access center or other location
mutually agreed upon between the City and the Franchisee. The Franchisee shall provide
equipment racks for the installation of I-Net related equipment and shall make provision for
24-hour back-up power to its equipment located at the PEG access center which is provided
pursuant to Franchise Section 10.2. The Franchisee shall provide and maintain all necessary
equipment for processing and switching all uses of the I-Net for video communications
whether those uses are in analog or digital form which is expandable and capable of
switching transmissions within and between subscriber and institutional networks.
10.3.E. Additional Equipment Available at Franchisee Costs. Franchisee shall
make available to the City and the designated I-Net users for purchase, at Franchisee’s cost
(plus any applicable taxes and shipping charges), modulators, fiber transmitters/receivers
and other similar I-Net user equipment.
10.3.F. Proof of I-Net Completion. Upon completion of I-Net construction,
Franchisee shall provide the City with proof of performance measurements consisting of
video and audio measurements which verify that the I-Net is performing according to the
requirements of this Franchise at each I-Net site. After acceptance of the proof of
performance by the City, the Franchisee shall provide I-Net users with the highest level of
service, reliability, repair and maintenance which the Franchisee makes available to any
commercial or residential user of the Cable System.
10.3.G. No Cost for Use of I-Net. The use of the I-Net shall be free of charge to
all public agencies (e.g., the City, County, educational institutions, the PEG access
management entity) located within the City for all video, voice, and data usage. The City will
determine which public agencies may utilize the I-Net.
10.3.H. Future I-Net Expansion. If in the future the City or any Public Agency
wishes to have the I-Net extended beyond that which is anticipated herein, Franchisee
agrees to charge for time and material plus ten percent (10%) of such time and materials for
the construction of such additional I-Net plant. Should the City issue a Request for Proposals
(RFP) or Request for Qualifications (RFQ) related to I-Net, cable or telecommunications
related projects, the City shall, concurrent with the issuance of the RFP or RFQ, send a copy
of such RFP or RFQ to the Franchisee and provide the Franchisee with the full opportunity to
participate in the bidding process consistent with its rules and regulations on public
contracting.
10.3.I. Franchise to Cooperate with City. Franchisee agrees to cooperate with
the City regarding design of the I-Net to ensure that all I-Net users may be effectively reached
and so that the benefits of the I-Net may be realized by the City and its other designated
users. The Franchisee shall give the City thirty (30) days notice prior to finishing the
preliminary overall system infrastructure design and the design of each phase of the cable
system, in order to have City’s I-Net requirements incorporated in Franchisee’s construction
design, and shall give the City the opportunity for a final review and submission of any
suggested modifications prior to finalizing system design.
10.3.J. I-Net for Noncommercial Uses. The I-Net may be used by the City and
such other public agency users as it designates. The parties agree that the I-Net will not be
used for commercial purposes nor may excess capacity on the I-Net be leased for private
purposes. The I-Net may be linked to any communication network used by the City including
but not limited to the public switched network or the Internet. However, the City (or other
entity under the City’s control) may not use the I-Net provided by the Franchisee to act as the
Internet Service Provider for the general public or any commercial establishment. However,
this limitation shall not prevent the use of the I-Net for any bona fide public purpose even if
such use generates revenues to reimburse the City, or other users designated by the City, for
the provision of services. For the purposes of example, but not limitation, a bona fide public
purpose which would generate revenues and which would be permitted under this section
would include the transmission of educational programming for a fee or the sale of GIS data
maintained by the City.
10.3.K. City Holds Franchisee Harmless. The City and any Public Agency user
of the I-Net agree to indemnify and hold harmless the Franchisee from and against any and
all claims, damages, liabilities, costs and expenses, including reasonable attorney’s fees and
court costs, directly related to the material under the City or a Public Agency user control
carried on the I- Net, including but not limited to, copyright infringement, libel, slander,
defamation, patent, trademark, or invasion of privacy claims.
10.3.L. The Franchisee agrees that any costs associated with the I-Net which
may be provided by the Franchisee do not represent an "in-kind payment" by Franchisee or a
franchise fee of any kind under FCC rules and regulations.
10.4 System Design: Equipment Used. The Franchisee shall use equipment
generally used in high-quality, reliable, modern systems of similar design. This obligation
shall include the obligation to install equipment to retransmit selected channels in stereo. No
later than upon completion of the rebuild, this obligation shall be read to include, but not
limited to, providing back-up power supplies capable of providing power to the System in the
event of an electrical outage, so that an electrical outage affecting the Cable System will not
result in a user being unable to receive signals where that user could have received had the
power supplies been available. To comply with this requirement, Franchisee shall provide (A)
continuous back-up power supplies at the headend; and (B) at least four-hour back-up power
supplies at the fiber nodes. Franchisee shall also provide modulators, antennae, amplifiers,
and other electronics that permit and are capable of passing through the signal received at
the headend with minimal alteration or deterioration. The obligation to provide back-up power
supplies also requires the Franchisee to install equipment that will (A) cut in automatically on
failure of commercial utility AC power, (B) revert automatically to commercial power when it is
restored, and (C) prevent the standby power source from powering a “dead” utility line. The
signal quality on PEG channels from origination point through to Subscribers shall comply
with all FCC technical standards which apply to cable systems.
10.5. System Design: Construction Testing Requirements. The Franchisee shall
perform acceptance tests on each construction area segment prior to subscriber connection.
The tests should demonstrate that the System components are operating as expected. The
Franchisee shall have the obligation, without further notice from City, to take corrective action
if any segment is not operating as expected. The results of the tests shall be made available
to the City Upon request.
10.6. System Design: Proof of Performance Tests. Every six (6) months or if FCC
rules establish a testing period, at the time required by the FCC rules, the Franchisee shall
perform proof of performance tests designed to demonstrate compliance with the Cable
Ordinance, this Agreement, and FCC requirements. The Franchisee shall provide the proof
of performance test results promptly to the City upon request. The Franchisee shall provide
the City at least ten (10) days’ advance written notice when a proof of performance test is
scheduled so that the City may have an observer present.
10.7. Inspection. The City shall have the right to inspect the Cable System during
and after its construction to ensure compliance with the Cable Ordinance, this Agreement,
and applicable provisions of local, state and federal law, and may require the Franchisee to
perform additional tests based on the City’s investigation of Cable System performance or on
Subscriber complaints. This provision is subject to any federal law limitations on the City’s
authority.
10.8. System Design: Emergency Alert System. In conjunction with upgrading the
Cable System, Franchisee shall include in the Cable System an emergency alert system
(“EAS”) that complies with the requirements of federal law. To the extent not preempted by
Federal Law, the provision of an EAS that would serve the Franchise Area under which the
Franchisee shall for analog channels provide to the City the capability to block video and
audio and provide a message that directs subscribers in the City to tune to an emergency
video and audio channel for instructions. If the Franchisee utilizes mappable analog or video
converters, it shall permit the City to utilize any emergency alert capability provided by the
converter design. The Franchisee agrees to make available, at cost, audio and/or visual
emergency alert accessories for hearing and sight impaired subscribers.
10.9 Interconnections.
10.9.A. Interconnection with Franchisee’s Systems. The Franchisee’s cable
systems serving the Cities of Gilroy, Hollister, San Juan Bautista, and San Benito County an d
all of the Franchisee’s systems contiguous to those systems are served from a common
headend and therefore function as a single cable system. The Franchisee shall take all
necessary technical and construction steps to ensure that the communities which are served
by that common headend are 100% interconnected throughout the life of this Agreement.
The Franchisee shall not be obligated to interconnect the “Aromas” area of unincorporated
San Benito County until such time that the Franchisee no longer delivers cable service to that
area of the County using microwave technology.
10.9.B. Interconnection with Other Systems Serving the City. The Franchisee
shall take all necessary technical and construction steps to ensure that the City’s cable
system is interconnected with all other cable facilities servicing the City. At minimum, the
interconnection shall provide interconnection bandwidth for all PEG Access Channels. This
bandwidth shall provide the capability to transmit upstream channels and downstream
channels in each direction, together with data, telemetry, audio, and other non-video signals.
The interconnection shall be capable of receiving and delivering, among other things, PEG
Access and Institutional Network programming. The Franchisee shall cooperate with the City
in utilizing available interconnect capacity to assist with potential video and data
communication applications by local and state public and non-profit organizations, including
forward and reverse applications.
10.9.C. Cooperation and Cost Sharing. The City understands that
interconnection requires cooperation and cost sharing from other cable system operators.
The City shall make every reasonable effort to assist the Franchisee in achieving the
cooperation and cost sharing necessary from other affected cable operators to realize
interconnection. Interconnection with other cable operators is subject to and contingent upon
an agreement for equal cost sharing of associated costs by each of the cable systems
operators being interconnected. Franchisee shall only be required to interconnect with
another cable operator providing cable service within the City, or a portion of the City, if that
operator’s franchise was granted in accordance with and otherwise satisfies Section 53066.3
of the California Government Code. During the pendency of a dispute in a court of
competent jurisdiction over whether the other operator’s franchise was granted in accordance
with Section 53066.3 of the Government Code, Franchisee’s obligation to interconnect shall
not be discharged. Franchisee may account for its costs and may charge an allocable
portion of those costs to the other operator to the extent that the court determines that the
other operator’s franchise was not granted consistent with Section 53066.3 of the
Government Code.
10.9.D. Timeframe for Completion of Interconnects. The interconnect(s) linking
the Falcon systems delineated above shall be activated within 18 months of the effective date
of the Franchise. All other interconnects shall be completed within one hundred and twenty
(120) days written notice by the City to the Franchisee or other date which maybe agreed to
between the City, Franchisee, and any other involved cable operator
SECTION 11. SUBSCRIBER NETWORK CHANNELS AND FACILITIES FOR PEG USE
11.1. PEG Channels
11.1.A. PEG Access Channels Capacity. On the effective date of the
Franchise, the franchisee shall provide one (1) downstream channel for PEG Access.
Subject to Section 7.2 of this Agreement, no later than twenty four (24) months after the
effective date of the Franchise a minimum of four (4) downstream channels for PEG Access
shall be provided. In addition, after the construction of the cable system is completed or
within twenty four (24) months of the effective date of this Franchise, whichever is shorter,
additional downstream channels for PEG Access shall be provided when the channel usage
trigger in Section 11.1.B has been achieved. The City shall give the Franchisee at least one
hundred twenty (120) days prior notice of required activation of additional Access
Channel/spectrum.
11.1.B. PEG Access Channel Trigger. The Franchisee shall, upon request,
provide up to three (3) additional PEG Access Channel(s) [beyond the minimum of four (4)
channels] when the channel usage trigger described below has been achieved. An additional
public or educational or governmental access channel may be requested if the level of
programming on the existing public or educational or governmental access channel(s) meets
or exceeds the following:
(1) Whenever any of the PEG channels as set forth above are in
use during sixty percent (60%) of the time between the hours of
9:00 a.m. and 6:00 p.m. and eighty percent (80%) of the time
between the hours of 6:00 p.m. and 10:00 p.m. on weekdays
(Monday through Friday) for thirteen (13) consecutive weeks,
the Franchisee shall make an additional channel available for
the same purpose up to the channel capacity of the Cable
System. In calculating the usage percentage to trigger provision
of additional PEG Access Channel(s), a repeated program may
only be counted four (4) times after the first run and non-local
programming shall not be counted for purposes of trigger the
provision of additional PEG Access Channels.
(2) For purposes of Section B.(1) above, local programming is
defined as:
a. Programming produced in the cities of Gilroy, Hollister, San
Juan Bautista or San Benito and Santa Clara County; or
b. Programming produced or provided by any resident of the
cities of Gilroy, Hollister, San Juan Bautista or San Benito and
Santa Clara County (or any public or private agency which
provides services to residents located in the cities of Gilroy,
Hollister, or San Juan Bautista) regardless of where the
programming was physically produced.
(3) In the event that a channel previously activated under this
Section 11.1.B remains unused for more than 180 days, the
Franchisee, upon written notice to the City, shall have the right
to utilize the unoccupied channel until the City or its designated
access management corporation requests use of the channel.
11.1.C. Requirements Regarding Rules and Procedures for use of PEG Access
Channels.
(1) The City shall designate an access management organization
(hereafter “Access Management Organization”), which shall
initially be the “Community Media Access Partnership of South
Santa Clara and San Benito County (CMAP)” to manage the use
of the PEG Access Channels under the Franchise.
(2) The Access Management Organization shall establish and
enforce rules for use of the PEG Access Channels (a) to ensure
non-discriminatory access to the channels to similarly situated
users; and (b) to promote use and viewership of the channels,
consistent with the obligation to provide non-discriminatory
access to similarly situated users. The City shall be responsible
for establishing and enforcing rules for use of the PEG Access
Channels during any period such Access Management
Organization does not exist.
(3) The Franchisee may not exercise any editorial control over the
content of programming on the designated PEG Access
Channels (except for such programming the Franchisee may
produce and cablecast on the same basis as other PEG Access
Channel users).
(4) The PEG Access Channels shall be available at no charge to
users and to the Access Management Organization.
(5) When PEG Access Channels are not being used to carry
programming provided by other PEG Access users, the Access
Management Organization at its sole cost and expense shall
have the right to back up Access Programming with other
noncommercial PEG programming, consistent with its mission to
promote public, educational, and governmental use of the
channels. This paragraph shall not limit the Franchisee’s rights
under 47 U.S.C § 531(d).
(6) PEG Access Channels may not be used for the cablecast of a
program whose primary purpose is commercial and for profit
without the express written permission of the Franchisee.
11.1.D. Support for Access.
(1) The City and the Franchisee agree that support of PEG Access
is a partnership.
(2) It is the intent of the City to utilize a portion of the franchise fees
as necessary to support the development of the PEG Access
Center and Channels. The City also commits to identifying a
facility space for a PEG Access Center.
11.1.E. PEG Access Capital Grants for Equipment and Facilities. The
Franchisee shall pay to the City, or the Access Management Organization designated by the
City, for PEG Access equipment ,and facilities the following amounts:
(1) for initial capital equipment and facilities -- $700,000 to be
provided to the City or PEG Access Management Organization
designated by the City in two payments, the first of which shall
be for $500,000 and shall be deposited on the effective date of
the Franchise and the second shall be for $200,000 and shall be
deposited on the first anniversary of the effective date of the
Franchise.
(2) for ongoing and replacement PEG capital support – an amount
equal to $209,782 per year or 3% of gross revenues per year
whichever is less. Such amount to be provided to the City or its
designated Access Management Organization through quarterly
payments to be made thirty days after the end of each calendar
quarter in an amount equal to 25% of the total amount to be
provided by Franchisee on an annual basis. Pursuant to Section
11.1.J, the Franchisee may recover costs associated with the
provision of PEG access in accordance with applicable FCC
rules. Should a subscriber not include in any payment to the
Franchisee the portion of such payment which is listed on the
billing statement as “community access” the Franchisee will not
be required to discontinue service or make the payment on
behalf of such subscriber.
(3) The City and Franchisee recognize that the PEG support
requirements being provided pursuant to this section are
provided to satisfy the cable related needs and interests of
Gilroy, Hollister, and San Juan Bautista (the “Franchising
Authorities”) each of which intends to provide for PEG through
Community Media Access Corporation of Southern Santa Clara
and San Benito Counties. The PEG support obligations
provided for in this Section 11.1.E. represents the ongoing
support that Franchisee is required to provide to all three
communities, cumulatively.
11.1.F. Access Services. The Franchisee shall have a continuing obligation to
provide adequate playback, training, outreach, administrative support, and production
assistance to PEG Access users, in accordance with community needs as reasonably
ascertained by the City in light of the costs thereof. If the Franchisee maintains a valid and
binding contract with the Access Management Organization designated by the City to
manage the access channels, the City agrees that the Franchisee may offset any amount it
pays under such contract against the payments required under Section 11.1.E.(2). Nothing in
this section requires or shall be deemed to require the Franchisee to make any payment
which constitutes a Franchise fee under 47 U.S.C. § 542.
11.1.G. Cable In The Classroom. The Franchisee shall during the term of the
Franchise have a continuing obligation to provide free annual subscription to Cable In the
Classroom to any accredited primary or secondary school district serving the City.
11.1.H. Promotion. In order to help develop and maintain (a) awareness of the
PEG access resources and services, and (b) viewership of the PEG access channels by City
cable subscribers, the Franchisee shall, throughout the term of this Agreement, provide the
following promotional services to the Access Management Organization, free of any charges:
(1) Program schedule information for each PEG access channel
shall be listed in all print and electronic program guides provided
by the Franchisee to subscribers, in the same manner as the
program schedule information for other cable channels is listed.
The Franchisee shall provide the Access Management
Organization access to third party providers to include PEG
access channel listings in their print and electronic program
guides provided by Grantee to its subscribers. The Access
Management Organization shall be responsible for the timely
updating of these listings. Any fees associated with special
placement or handling beyond the standard manner of
presenting program schedule listings shall be the responsibility
of the Access Management Organization.
(2) On an annual basis, the Franchisee shall allow the Access
Management Organization to submit a billstuffer, created at the
Access Management Organization’s expense, to be inserted into
all customer statements within the Franchisee’s cable system in
City. All costs for insertion and postage shall be provided by the
Franchisee. The Franchisee shall provide access to its vendors
so as to afford the Access Management Organization the most
affordable printing price for the billstuffers. In consideration of
regulatory notification requirements, the Franchisee has final
approval on the dates for insertion.
11.1.I General. The parties agree that any cost to the Franchisee associated
with providing Access support pursuant to this Section 11 and any other section of the
Franchise, including without limitation the amounts set forth in 11.1.E.-F. and payments
made outside this Franchise, if any, are not part of the Franchise fee, and fall within one or
more of the exceptions to 47 U.S.C. § 542.
11.1.J. Recovery in Rates. Franchisee may recover costs associated with the
provision of PEG access in accordance with applicable FCC rules, including without limitation
the amounts set forth in Section 11.1.E.-F. Franchisee may identify the amount that it
charges subscribers to recover PEG costs as a line item on the bill identified as “community
access costs.”
11.2. Subscriber Services
For the period beginning thirty (30) days after completion of the c able system
construction required by Section 10, through the end of the Franchise (subject to future
agreements developed pursuant to Section 18 of this Franchise in light of changes in cable
system capacity) Franchisee shall provide a minimum of sixty-eight (68) channels.
11.3 No City Control
During the term of this Franchise, the City may not prohibit the Franchisee from
providing any cable service, or otherwise censor any cable service over the cable system;
except that, nothing in this section shall be read to authorize the Franchisee to engage in
communications which are prohibited by law.
SECTION 12. OPERATION AND REPORTING
12.1. Open Books and Records. Without limiting its obligations under Section 2,
Franchisee agrees that it will collect and make available books and records for inspection and
copying by the City in accordance with the Cable Ordinance. Franchisee shall be responsible
for collecting the information and producing it.
12.2. Time for Production. Books and records shall be produced to the City at City
Hall, or such other location as the parties may agree. Notwithstanding any provision of the
Cable Ordinance, if Documents are too voluminous or for security reasons cannot be
produced at the City Hall or mutually agreeable location within the City, then the Franchisee
may produce the material at another central location, provided it also agrees to pay the
additional reasonable costs incurred by the City in reviewing the materials. The parties agree
that any amounts paid are not a franchise fee within the meaning of 47 U.S.C. § 542 and fall
within one of the exceptions thereto.
12.3. Reports Required. The Franchisee shall file reports and maintain records in
accordance with the Cable Ordinance. Copies of existing agreements for use of conduits or
other facilities shall be filed with the City upon the effective date of this Agreement, and
additional agreements and amendments to agreements shall be filed with the City within sixty
(60) days of their execution. The City Manager/Administrator may waive any reporting
obligations, if circumstances merit such a waiver.
12.4. Retention of Records: Relation to Privacy Rights. Franchisee shall take all
steps required, if any, to ensure that it is able to provide the City all information which must
be provided or may be requested under the Cable Ordinance or this Franchise Agreement,
including by providing appropriate Subscriber privacy notices. Nothing in this Section shall
be read to require a Franchisee to violate 47 U.S.C. § 551. Franchisee shall be responsible
for redacting any data that federal law prevents it from providing to the City. Records shall be
kept for at least five (5) years, except that service call logs may be retained for three (3)
years, so long as the information contained therein is reflected in other Documents. The City
Manager/Administrator may waiver record retention obligations, if circumstances merit such a
waiver.
SECTION 13. CUSTOMER SERVICE STANDARDS
Franchisee shall meet or exceed the customer service standards of the Cable
Ordinance, the City’s Customer Service Standards Resolutions, and Applicable Law.
SECTION 14. RATE REGULATION
14.1. City Authority. The City may, consistent with Applicable Law, regulate
Franchisee’s rates and charges as provided in the Cable Ordinance and Applicable Law.
14.2. Rate Uniformity. Pursuant to Cable Ordinance Section 15.1.D, for rates subject
to rate regulations by the City, all charges to subscribers and users shall be uniform
throughout the franchise area. A written schedule of fees for all services shall be available
upon request. The Franchisee hereby agrees to provide each new subscriber with prices and
options for programming services and conditions of subscription to programming and other
services.
SECTION 15. SURETY; INDEMNIFICATION
15.1. Indemnification
15.1.A. Franchisee shall, at its sole cost and expense, fully indemnify, hold
harmless, and faithfully defend the City, its officials, boards, commissions, commissioners,
agents, and employees, against any and all claims, suits, causes of action, proceedings, and
judgements for damages or equitable relief arising out of the construction, maintenance, or
operation of its Cable System; copyright infringements or a failure by the Franchisee to
secure consents from the owners, authorized distributors, or franchisees of programs to be
delivered by the Cable System; the conduct of the Franchisee’s business in the City; or in any
way arising out of the Franchisee’s enjoyment or exercise of a Franchise granted hereunder,
regardless of whether the act or omission complained of is authorized, allowed, or prohibited
by Applicable Law or a Franchise Agreement.
15.1.B. Without limiting the foregoing, the Franchisee shall, at its sole cost and
expense, fully indemnify, hold harmless and faithfully defend the City, its officials, boards,
commissions, commissioners, agents, and employees, against any and all claims, suits,
causes of action, proceedings, and judgements for damages or equitable relief arising out of
the construction, maintenance, or operation of its Cable System, including but not limited to
any claim against the Franchisee for invasion of the right of privacy, defamation of any
Person, firm or corporation, or the violation or infringement of any copyright, trade mark, trade
name, service mark, or patent, or of any other right of any Person, firm, or corporation.
15.2. No Limit of Liability. The provisions of this Section 15 shall not be construed to
limit the liability of Franchisee for damages.
SECTION 16. PERFORMANCE GUARANTEES
16.1. Security Fund.
16.1.A. In satisfaction of the security fund requirements of the Cable
Ordinance, section 12.1.A., as the same existed on the effective date of this Agreement, the
Franchisee shall provide a letter of credit in the amount of twenty-five thousand dollars
($25,000). The letter of credit may be drawn upon in accordance with the Cable Ordinance
as it existed on the effective date of this Agreement. The City may require the Franchisee to
increase the amount of the letter of credit once every three years to reflect increases in the
U.S. Average of the Consumer Price Index, if inflation from the date of this Agreement has
exceeded twenty percent (20%). Thus, treating 1996 as the base year, indexed as one
hundred (100), the letter of credit could be increased in the first year where the index reached
one hundred and twenty (120), and once every three (3) years after that year.
16.1.B. Franchisee shall provide proof that the letter of credit complies with this
Agreement and with all other requirements of the Cable Ordinance.
16.1.C. Franchisee’s recourse, in the event Franchisee believes any taking of
security funds is improper, shall be through legal action after the security has been drawn
upon. If the City’s action or taking is found to be improper by any court or agency of
competent jurisdiction, Franchisee shall be entitled to a refund of the funds plus interest
and/or any other specific performance which such court or agency shall order.
16.1.D. Upon termination of the Franchise, the City shall authorize the
Franchisee to terminate the letter of credit within ninety (90) days of Franchise termination,
provided that there is then no outstanding obligations secured by the letter of credit; provided
that the letter of credit shall be deemed forfeited if the Franchise is revoked or the Cable
System is abandoned.
16.1.E. The following procedures shall apply to drawing on the security fund
and letter of credit.
16.1.E.(1) If the Franchisee fails to make timely payment to the City of
any amount due as a result of a Franchise, fails to make timely payment to the City of any
amounts due under a Franchise Agreement or Applicable Law, fails to make timely payment
to the city of any taxes dues, or fails to compensate the City within ten (10) days of written
notification that such compensation is due, for any damages, costs, or expenses the City
suffers or incurs by reason of any act or omission of the Franchisee in connection with its
Franchise Agreement or the enforcement of its Franchise Agreement after ten (10) days’
notice to comply with any provision of the Franchise or Franchise Agreement that the City
determines can be remedied by an expenditure of the security, the City may withdraw the
amount thereof, with interest and any penalties, from the security fund or from funds available
under the letter of credit.
16.1.E.(2) Within three (3) days of a withdrawal from the security fund
or under the letter of credit, the City shall mail, by certified mail, return receipt requested,
written notification of the amount, date, and purpose of such withdrawal to the Franchisee.
16.1.E.(3) If at the time of a withdrawal from the security fund or under
the letter of credit by the City, the amounts available are insufficient to provide the total
payment towards which the withdrawal is directed, the balance of such payment shall
continue as the obligation of the Franchisee to the City until it is paid.
16.1.E.(4) No later than thirty (30) days after mailing of notification to
the Franchisee by certified mail, return receipt requested, of a withdrawal from the security
fund or under the letter of credit, the Franchisee shall deliver to the City for deposit in the
security fund an amount equal to the amount so withdrawn and shall restore the letter of
credit. Failure to make timely delivery of such amount to the City or to restore the letter of
credit shall constitute a material violation of the Franchise.
16.1.E.(5) Upon termination of the Franchise, the balance then
remaining in the Security Fund shall be withdrawn by the City and paid to the Franchisee
within ninety (90) days of such termination, provided that there is then no outstanding default
on the part of the Franchisee, in which case the amount paid may be reduced by the amount
of the outstanding default; provided that, the Security Fund shall be deemed forfeited if the
Franchise is revoked or the Cable System is abandoned.
16.2. Performance Bond. Franchisee shall obtain and maintain the performance
bonds required under Applicable Law.
16.3. Material Term. The required performance bond and letter of credit are material
terms of this Agreement.
SECTION 17. REMEDIES
17.1. Remedies. In addition to any other remedies available at law or equity, the City
may apply any one or a combination of the following remedies in the event a Franchisee
violates this Franchise Agreement or Applicable Law:
17.1.A. Revoke the Franchise pursuant to the procedures specified in the
Cable Ordinance and Section 17.4 herein. Provided that, any amendments to the Cable
Ordinance must provide the same level of due process as is provided under the procedures
provided for under the Cable Ordinance as the same existed on the effective date of this
Agreement.
17.1.B. In addition to or instead of any other remedy, seek legal or equitable
relief for any court of competent jurisdiction.
17.1.C. Obtain liquidated damages as provided herein.
17.2. Liquidated Damages
17.2.A. Because the Franchisee’s failure to comply with provisions of its
Franchise will result in injury to the City, and because it will be difficult to estimate the extent
of such injury, the City and the Franchisee agree to the following liquidated damages for the
following violations, which represent both parties’ best estimate of the damages resulting
from the specified injury. To maintain that estimate, the parties agree that the liquidated
damage amounts are in 1995 dollars and shall be increased each year by the increase in the
U.S. City Average of the Consumer Price Index, once inflation from the date of this
Agreement has exceeded twenty percent (20%). Thus, treating 1996 as the base year,
indexed as one hundred (100), the letter of credit could be increased in the first year where
the index reached one hundred and twenty (120), and once every year after that year.
17.2.A.(1) For failure to substantially complete construction in
accordance with the Franchise: $500/day for each day the violation continues;
17.2.A.(2) For transferring the Franchise without approval: $500/day
for each violation for each day the violation continues;
17.2.A.(3) For failure to comply with requirements for public,
educational, and government use of the System: $500/day for each violation for each day
the violation continues;
17.2.A.(4) For violation of customer service standards: $500 per
violation except that, for violations of applicable customer service standards for which the
operator’s compliance is not measured in terms of its response to individual customers,
$1,250 a month for any period during which it fails to meet applicable performance standards;
and
17.2.A.(5) For all other material violations of the Franchise Agreement
for which actual damages may not be ascertainable: $500/day for each violation for each day
the violation continues.
17.3. Procedures Applicable to Liquidated Damages. Before exercising any right of
redress available to it under Section 17.2. of this Franchise Agreement, the City shall follow
the procedures set forth in this Section 17.3..
17.3.A. The City shall notify Franchisee in writing of any alleged violation
(Violation Notice) of this Franchise or the Enabling Ordinance. The Violation Notice shall: (1)
describe the alleged violation; (2) direct the Franchise to cure the alleged violation or show
cause why the alleged violation should not be or cannot be cured; and (3) state the time for
response.
17.3.B. Within the time period designated for response, the Franchisee shall
respond in writing to the City indicating that: (1) the Franchisee intends to contest the
Violation Notice, describing all facts relevant to its claim; or (2) the Franchisee has completely
cured the violation and providing documentation to the City demonstrating that the violation
has been cured; or (3) the Franchisee has begun to correct the violation, but that with all due
diligence the violation cannot be cured immediately, and describe in detail steps already
taken and the Franchisee’s plan and schedule for curing the violation. If the Franchisee has
completely cured the violation and provides proof of such cure to the City’s satisfaction
pursuant to Section 17.2.B.(2) then no liquidated damages shall be assessed so long as the
period of violation has been six months or less.
17.3.C. If the Franchisee intends to contest the Violation Notice, or the City
finds that the Franchisee may have failed to cure or submit an acceptable plan for curing the
default in performance, the City may schedule an administrative hearing where the
Franchisee will be asked to show cause why it should not be found in violation of the
Franchise. The Franchisee shall be given at least ten (10) days written notice of such a
hearing. The notice shall indicate the City’s intent to review and the time and place of the
hearing. The City shall: (1) provide public notice of the hearing in compliance with state law
notice requirements; (2) hear any person interested therein; and (3) provide the Franchisee
an opportunity to be heard.
17.3.D. The City shall issue its findings in writing, stating the basis for its
findings which shall include the proposed cure plan and timeline for curing the default (if the
default can be cured) and penalties or damages, if any, owed. If the City finds that the
Franchisee is in violation of the Franchise and has failed to cure the default in performance
(or the default cannot be cured), the City may exercise any right it has under this Franchise or
Applicable law. Correction is not complete until all damages, if any owed, are paid.
17.3.E. Except where precluded by court order, pending litigation or any appeal
to any regulatory body or court having jurisdiction over the Franchisee, the Franchisee shall
not be excused from the performance of its obligations under the Franchise or the Ordinance.
17.4. Revocation or Termination of Franchise
17.4.A. In addition to all other rights of the City under this Agreement, the City
shall have the right to revoke the Franchise: for the reasons specified in the Cable Ordinance;
for defrauding or attempting to defraud the City or Subscribers; if the Franchisee abandons
the Cable System, or refuses to provide service to the City or any part of the City in
accordance with this Franchise; and as otherwise provided herein.
17.4.B. Failure to complete the System upgrade required by Section 10.1. and
10.2. of this Agreement by the required date shall subject the Franchisee to the revocation
provision of Cable Ordinance Section 13.2.
17.5. Remedies Cumulative. All remedies under the Cable Ordinance and this
Agreement are cumulative unless otherwise expressly stated. The exercise of one remedy
shall not foreclose use of another nor shall the exercise of a remedy or the payment of liquid
damages or penalties relieve the Franchisee of its obligations to comply with its Fr anchise.
Remedies may be used singly or in combination; in addition, the City may exercise any rights
it has at law or equity. Except that, the City is not entitled to recover damages for the same
injury under two separate sections where doing so would result in double recovery.
17.6. Relation to Insurance and Indemnity Requirements. Recovery by the City of
any amounts under insurance, the construction/performance bond, the letter of credit, or
otherwise does not limit the Franchisee’s duty to indemnif y the City in any way; nor shall such
recovery relieve the Franchisee of its obligations under the Franchise, limit the amounts owed
to the city, or in any respect prevent the City from exercising any right or remedy it may have.
SECTION 18. PERFORMANCE MONITORING
18.1 Triennial Review
18.1.A. During the years which commence on the third and/or sixth
anniversaries of the effective date of the Franchise, and every third year thereafter If the
Franchise is renewed or extended, the City may commence a review of the Grantee's
performance under the Franchise. As part of this review, the City may consider: (1) whether
the Franchisee has complied with its obligations under the Franchise and applicable law; (2)
whether customer service standards, technical standards, or bond or security fund
requirements are adequate or excessive; and (3) other issues as may be raised by the
Franchisee, the City, or the public.
18.1.B. The City shall conduct at least one public hearing at a lawfully noticed
City Council meeting to provide the Franchisee and the public the opportunity to comment on
the Franchisee’s performance and other issues considered as part of this review.
18.2. Franchise Cooperation. The Franchisee shall cooperate in the triennial reviews
described in this section.
18.3. Exercise of Authority. The City may exercise appropriate regulatory authority
under the provisions of this Franchise and Applicable Law, as amended from time to time.
SECTION 19. RIGHTS OF INDIVIDUALS PROTECTED
19.1. General Obligations. In addition to complying with all provisions of the Cable
Ordinance regarding non-discrimination, privacy, and protection from exposure to indecent or
obscene programming, Franchisee agrees that it shall protect against possible abuses of the
right of privacy or other human rights of any Subscriber, programmer, or general citizen
resulting from any device or signal associated with the Cable System.
19.2. Respect for Property. No cable, line, wire, amplifier, converter, or other piece of
equipment owned or controlled by the Franchisee shall be installed by the Franchisee inside
a dwelling or other occupied structure without first securing the written permission of the
owner of the property involved (except in those cases where the Franchisee is permitted by
federal or state law to install such facilities and equipment inside the structure without
permission).
19.3. Fair Employment. Franchisee shall comply with all equal employment
opportunity provisions contained in the Cable Ordinance and Applicable law. Franchisee
shall not discriminate against any employee or applicant for employment because of race,
color, creed, national origin, sex, age, condition of physical handicap, religion, ethnic
background, or marital status in violation of state or federal law.
SECTION 20. MISCELLANEOUS PROVISIONS
20.1. Compliance With Laws. The Franchisee shall comply with all applicable
federal, state, and local laws and regulations as they become effective, unless otherwise
stated herein.
20.2. Governing Law. This Franchise Agreement shall be governed and construed in
accordance with the statutes and laws of the State of California.
20.3. No Pledging of City’s Credit. Under no circumstances shall Franchisee have
the authority or power to pledge the credit of City or incur any obligation in the name of City.
Franchisee shall save and hold harmless the City, it’s City Council, its officers, employees,
boards, and commissions for expenses arising out of any unauthorized pledges of City’s
credit by Franchisee under this Agreement.
20.4. Use of City Name or Logo. Franchisee shall not use City’s name or insignia or
distribute exploitative publicity pertaining to the services rendered under this Agreement in
any magazine, trade paper, newspaper or other medium without the express written consent
of City.
20.5. Venue. In the event that suit shall be brought by either Party, the Parties agree
that venue shall be exclusively vested in the state courts of Santa Clara County, or if the
Franchise is enforced pursuant to a joint powers agreement to which the City is a party, in
any County where any member of the joint powers authority is located, or where otherwise
appropriate, exclusively in the United States [District Court, Northern District of California,
San Jose, California].
20.6. Conflict of Interest. Franchisee certifies that to the best of its knowledge, no
City employee or officer of any public agency has any pecuniary interest in the business of
Franchisee and that no person associated with Franchisee has any interest that would
conflict in any manner or degree with the performance of this Agreement. Franchisee
represents that it presently has no interest and shall not acquire an interest, direct or indirect,
which could conflict in any manner or degree with the provisions of California Government
Code Section 87100 and following, and certifies that it does not know of any facts which
constitute a violation of said provisions. Franchisee will advice City if a conflict arises.
20.7. Force Majeure. The Franchisee shall not be deemed in default with provisions
of its Franchise where performance was rendered impossible by war or riots, civil
disturbances, floods, or other natural catastrophes beyond the Franchisee’s control; the
unforeseeable unavailability of labor or materials; or power outages exceeding back-up
power supplies; or the acts of third parties over which the Franchisee has no control (not
including the Franchisee’s subcontractors, agents, or Affiliates). The acts or omissions of
Affiliates are not beyond the Franchisee’s control, and the knowledge of Affiliates shall be
imputed to Franchisee. The Franchise shall not be revoked or the Franchisee penalized for
such noncompliance, provided that the Franchisee takes immediate and diligent steps to
bring itself back into compliance and to comply as soon as possible under the circumstances
with its Franchise without unduly endangering the health, safety, and integrity of the
Franchisee’s employees or property, or the health, safety, and integrity of the public, Public
Rights-of-Way, public property, or private property.
20.8. Notices. Unless otherwise expressly stated herein, notices required under this
Agreement shall be mailed first class, postage prepaid, to the addressees below. Each party
may change its designee by providing written notice to the other party, but each party may
only designate one entity to receive notice.
20.8.A. Notices to the Franchisee shall be mailed to:
Falcon Cable Systems Company II, L.P.
Attention: General Manager
7640 Eigleberry Street
Gilroy, CA 95020
Charter Communications, Inc.
Attention: Trudi Foushee, Esq.
12444 Powers Court Drive, Suite 100
St. Louis, MO 63131-3660
20.8.B. Jay Baksa, City Administrator
City of Gilroy
7351 Rosanna Street
Gilroy, CA 95020
20.9. Calculation of Time. Unless otherwise indicated, when the performance or
doing of any act, duty, matter, or payment is required hereunder, and a period of time or
duration for the completion thereof is prescribed and is fixed herein, the time shall be
computed so as to exclude the first and include the last day of the prescribed or fixed period
of duration/time.
20.10. Time of Essence: Maintenance of Records of Essence. In determining whether
the Franchisee has substantially complied with its Franchise, the parties agree that time is of
the essence to this Agreement. The maintenance of records and provisions of reports in
accordance with the Franchise is also of the essence to this Agreement.
20.11. Captions. The captions and headings of this Agreement are for convenience
and reference purposes only and shall not affect in any way the meaning and interpretation of
any provisions of this Agreement.
20.12. Entire Agreement. This Agreement represents the entire agreement between
the parties.
20.13 .Counterparts. This Agreement may be executed in counterparts.
FALCON CABLE SYSTEMS COMPANY II, L.P.
By: ________________________________
A person authorized by the
corporation to execute this Agreement
Dated: _____________________________
CHARTER COMMUNICATIONS HOLDING
COMPANY, LLC
By: ________________________________
A person authorized by the
corporation to execute this Agreement
Dated: _____________________________
CITY OF GILROY, CALIFORNIA,
a municipal corporation
By: ________________________________
City Administrator
Dated: _____________________________
ATTEST:
_________________________________
City Clerk
APPROVED AS TO FORM Effective Date:
_________________________________ ___________________________________
City Attorney
ACCEPTANCE
Charter Communications, Inc., 12444 Powers Court Drive, Suite 100, St. Louis,
MO 63131-3660, hereby accepts unconditionally and agrees to be bound by all the terms
and conditions of the Falcon Cable Communications, LLC Franchise dated _____________
for purposes of identification, as granted by the Gilroy City Council.
[Signatures]
[Notarization]
ATTACHMENT A
CITY OF GILROY
INSTITUTIONAL NETWORK (I-NET) LOCATIONS
I-NET LOCATIONS
Location/Building Name Address
City Hall 7351 Rosanna Street
Police Station 7370 Rosanna Street
Wheeler Community Center 202 W. Sixth Street
Gilroy Library 7387 Rosanna Street
Senior Center 7371 Hanna Street
Historical Museum 195 Fifth Street
Willey Cultural Center 140 Fifth Street
Old City Hall 7400 Monterey
Gilroy Youth Center Sixth/Old Railroad
City Yard 613 Old Gilroy Street
Chestnut Fire 7070 Chestnut Street
Las Animas Fire 8383 Wren Avenue
Christmas Hill Park - Amphitheater Miller Avenue
TEEC Building Miller Avenue
GUSD Office 7810 Arroyo Circle
Gilroy High School 750 W. Tenth Street
Glen View Elementary Eighth/Princevalle
Mt. Madonna High School 8595 Culp Drive
Rod Kelley School 8595 Culp Drive
South Valley Junior High Jordan School 7810 Carmel Street
Luigi Aprea School 9225 Calle del Rey
Eliot School 470 E 7th Street
Las Animas School 8450 Wren Avenue
Del Buono School (Future School) Corner of Wren
South Valley Junior High School 385 IOOF Avenue
Gavilan College 5055 Santa Teresa Blvd.
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