HomeMy WebLinkAbout18 FRANCHISE COX 06-05-00~,,;0. i8
6-5-00
TO' WILLIAM A. HUSTON, CITY MANAGER
FROM'. PUBLIC WORKS DEPARTMENT
SUBJECT: APPROVAL OF A CABLE TELEVISION FRANCHISE WITH COX
COMMUNICATIONS INC.
:!anCe
RECOMMENDATION'
Staff is recommending that the City Council approve the renewal of the cable television
franchise of Cox Communications, Inc., introduce and conduct the first reading of
ordinance number 1228 by title only.
FISCAL IMPACT:
Cox subscribers pay a 5% franchise fee, which amounts to approximately $200,000 in
annual revenue to the City.
BACKGROUND:
Media One and Cox are the only,CATV service providers in the City. Both franchises
are non-exclusive agreements whereby the City has granted each provider the right to
use the public right of way to provide cable television services. Cox service area is
generally east of Browning Avenue. Cox Communications' current franchise began July
2, 1986 and was for a term of fifteen years. That franchise was the renewal of an
agreement with Community Cablevision Systems (wholly owned by The Irvine
Company) dated August, 1973. Prior to that date, the franchise was awarded to
Community Cablevision Systems by the County of Orange to the then unincorporated
area now known as East Tustin.
In December of 1998, Cox Communications ("Cox") requested that the City commence
formal franchise renewal proceedings prior to franchise expiration on July 1, 2001. This
request triggered a three step proceSs that is required by the Federal Communications
Act of 1934 (the "Act") as amended by the Telecommunications Act of 1996.
The three steps of the cable television franchise process are:
1. Ascertainment- Performance review and identification of community needs.
2. Franchise proposal submission and review.
3. Approval and renewal of the franchise agreement.
On June 21, 1999, the City Council adopted Resolution No. 99-49 setting the specific
procedures to utilize while processing the franchise renewal. The resolution directed
staff to set a public hearing to discuss issues related to the renewal of this franchise
agreement. On August 16, 1999, the City Council conducted a public hearing to solicit
public comments and to identify issues related to the renewal of Cox Communication's
franchise. Based on staff's observations, citizen input and City Council comments, staff
requested Cox to address the following issues in its franchise renewal proposal:
o
,
o
.
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Provide live coverage of City Council meetings and a regularly scheduled
rebroadcast at least 2 times, including 1 broadcast during a weekday
prime time and 1 broadcast during the weekend.
Provide a full time local access channel dedicated to the City of Tustin
with coordinated or joint programming provided by Media One and Cox.
Modify the Agreement to permit Cox to provide service in the entire City.
Provide assurances in the agreement for payment of franchise fees for.
data/internet services
Explicitly agree to utilize current Federal Communications Commission
requirements for customer service.
6. Subject the agreement to future City ordinances and City Code
amendments.
.
o
Provide free Internet access to City facilities, libraries, and schools in the
Cox service area.
Agree to provide open Internet access in Tustin should it become
available to any municipality in the State of California.
In December 1999, Cox submitted its franchise renewal proposal to the City. Staff and
the City Attorney have reviewed the proposal and suggested to Cox a number of minor
modifications to the document. Each of the issues identified above has been addressed
by Cox Communications in the proposed franchise agreement. The table below
identifies theses issues and the portion of the renewal ordinance where the issue is
addressed.
ISSUE PAGE, SECTION OF ORDINANCE
1.
Provide live coverage of City
Council meetings
Pages 6-7, Section 9. Cox will provide
dedicated channels and production
studio equipment to be programmed and
control exclusively by the City. This will
ensure City/Governmental programming
to the satisfaction of the City.
2. Provide a full time local access Page 6, Section 9(a).
channel
3. Provide service in the entire City Page 2, Section 2.
4. 'Provide.franchise fee assurancesPages 2-3, Section 4.
5. Utilize FCC requirements for Page 9, Section 11.
customer service
6. Agreement is subject to future Page 1, Section l(b).
City ordinances
7. Page 7, Section 9(0.
Provide free Internet access to
City facilities, libraries, and
schools
8. Provide open Internet access
Cox declines to agree to provide open
internet access in Tustin if it becomes
available in any other municipality.
Furthermore, the 9th Circuit is currently
reviewing a City's authority to require a
cable company to provide open access
to its cable system. The 9th Circuit
decision is not expected soon and it may
still take years before the issue is
resolved should the 9th Circuit decision
be appealed to the U.S. Supreme Court.
Also, the FCC has not taken a position
on the issue. The City may revisit this
issue in the future once the Courts sort
the issues out, if the FCC or the Federal
Government does not act first.
The current franchise does not expire until June 30, 2001. However, staff recommends
that the term of this franchise commence on July 1, 2000 in order to implement the new
requirements as soon as possible. The term of the agreement is fifteen years and will
expire on June 30, 2016.
Staff is recommending that the City Council approve the proposed ordinance and
introduce the ordinance by title only. The second reading of the ordinance will occur at
the June 19 City Council Meeting. This step will conclude the renewal process for Cox
Communications cable television franchise.
Tim D. Serlet
Public Works Director
,~e ~eyers
Sr.'"rvlanagement Analyst
Public Works Department
Attachments:
Exhibit A
Exhibit B
Exhibit C
Letter to Cox from the City of Tustin
Cox Proposal
Ordinance
EXHIBIT A
Public Works / Engineering
September 7, 1999
Dick Waterman,
V~ce President, Governmental Relations
Cox Communications, Inc.
29947 Avenida De Las Banderas
Rancho Santa Margarita, Ca 92688
Subject: Cox Communications Franchise Renewal
Ci
ty of Tustin
300 Centennial Way
Tustin, CA 92780
(714) 573-3150
FAX (714) 734-8991
Dear ~Mr. Wate,.m. ,an,
On August 16, 1999, the City of Tustin CiD' Council conducted a public heating pursuant
to City Council Resolution 9949 and acted on Cox Communications request to begin the
process to renew the Cox cable television franchise A~eement.
During the public hearin~ the City Council concurred Mth the staff recommendation and
diremed sta~-_-, to request that Cox Corm'nunications address the following issues in its
~mnc~ise as~reement renewal proposal:
.
Provide live coverage of City Council meetings and a regularly scheduled
rebroadcast at least 2 times, including 1 broadcast during a weekday prime
time and 1 broadcast durin~ the weekend.
Provide a full time local access channel dedicated to the City of Tustin
with coordinated or joint progamming provided by Media One and Cox.
.
Modi~ the A~eement to permit Cox to provide sen-ice in the entire City
and include prox4sions to construct facilities to provide services at the
Tustin Legacy site (formerly MCAS Tustin). The provider shall constrUct
the wench and install conduit at their expense. Any provider who is the
first to do this has the fiDht to require other cable tv providers or
·
teie~mmunicafion proriders who use the conduit to .re±m~urse
-ahem.
.
Provide assurances in the agr~ ~ment for payment of franchise fees for
damfinternet services
.
Explicitly a.~_ee to utilize current Federal Communications Commission
requirements for customer ser~4ce.
.
Subject the agreement to future City ordinances and City
amendments.
Code
.
Provide free Intemet access to City facilities, libraries, and schools in the
Cox service area.
.
A~ee to provide open Intemet access in Tustin should it become available
to any municipality in the State of California.
The City Council also requested that Cox provide a summary, report of customer service
complaints, wkich details the number of complaint calls received and the type or nature
of the calls.
Resolution No. 9949 states that Cox communications proposal shall be due no late~: than
90 days after receiving notice from the Public Works Dire~or informing you of the issues
identified at this public hearing. However, the City concurs with your verbal request to
ex-tend this period to 120 days. Accordin~y, The City expects to receive your'proposal
no later than January 5~h, 2000.
S~Cere!y,
Se.flor Management )malyst, Public Wor 'ks
EXHIBIT B
SEE COX COMMUNICATIONS
PROPOSAL IN WHITE BINDER
EXHIBIT C
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ORDINANCE NO. 1228
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY ·
OF TUSTIN, CALIFORNIA, RENEWING A FRANCHISE
FOR A CABLE COMMUNICATIONS SYSTEM GRANTED
TO COXCOM, INC., DBA COX COMMUNICATIONS
ORANGE COUNTY.
WHEREAS, the City is authorized to grant, renew and deny franchises for the
installation, operation and maintenance of Cable Systems and otherwise regulate cable
television within the City's boundaries by virtue of federal and state statutes and court rulings,
by the City's police powers, by its authority over its public rights of way and by other City
powers and authority; and
WHEREAS, CoxCom, Inc., doing business as, Cox Communications Orange County
(hereinafter, "Grantee"), is currently maintaining and operating a Cable System in the City of
Tustin pursuant to a franchise granted by the City; ~nd
WHEREAS Grantee agrees to comply with the applicable provisions of Tustin City
Code, Sec. 7410 et seq.,, as amended; and
WHEREAS, the City finds that Grantee has substantially complied with the material
terms of its existing Franchise and with applicable law; and
WHEREAS, the quality of Grantee's Cable Service, including signal .quality, response
to consumer complaints and billing practices, has been reasonable in light of community
needs; and
WHEREAS, Grantee has the financial, legal and technical ability to provide the
services, facilities and equipment as set forth in this Ordinance granting a Franchise renewal;
and
WHEREAS, the terms and conditions of this ordinance granting a franchise renewal
are reasonable to meet the future cable related needs and interests of the community, taking
into account the cost of meeting such needs and interests.
NOW THEREFORE, the City Council of the City of Tustin, California, does hereby
ordain as follows:
1. Grant of Franchise Renewal.
a. The City hereby grants a cable television Franchise renewal to Grantee
pursuant to the terms and conditions of this Franchise. This renewal of a non-exclusive
Franchise for a Cable System (hereinafter the "Franchise") is issued pursuant to the authority
provided in Tustin City Code, § 7410 et seq., (hereinafter the "Enabling Ordinance"). All of
the provisions of the Enabling Ordinance are incorporated herein by this reference, as if set
forth in full. The Enabling Ordinance and this Franchise contain the terms and conditions of
the Franchise and shall supersede all prior Franchises granted to Grantee on the effective
date of this Franchise. To the extent the provisions of the Enabling Ordinance are
inconsistent with those of this Franchise, the provisions of this Franchise shall prevail.
b. Grantee shall be subject to future City ordinances and City code amendments
relative to its operations in the city.
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c. Assignment or Transfer of Franchise. The Franchise granted herein shall be
a privilege to be held in personal trust by Grantee. It cannot, in any event, be sold,
transferred, leased, assigned or disposed of in whole or in part, either by forced or
involuntary sale, or by voluntary sale, merger, consolidation or otherwise, without prior
consent of the City Council of the City of Tustin expressed by Resolution, and then only
under such conditions as may therein be prescribed, consistent with applicable law. Any
such transfer or assignment shall be made only by an instrument in writing, such as a bill of
sale, or similar document, duly executed copy of which shall be filed in the Office of the City
Clerk within thirty (30) days after any such transfer or assignment. Any proposed assignee
must show responsibility and capability as determined by the City Council, consistent with
applicable law, and must agree to comply with all provisions of the Franchise and Tustin City
Code. However, no such consent shall be required for transfer in trust, mortgage, or other
hypothecation, in whole or in part, to secure indebtedness. Provided, further, that Grantee
may transfer the System and any related assets, including this Franchise, to an entity which
controls, is controlled by, or is under common control with Grantee, provided Grantee shall
give at least thirty (30) days prior written notice of any such transfer to the City. The consent
required herein shall not be withheld unreasonably.
2. Franchise Area. The Franchise Area for this Franchise shall be all property
within the boundaries of the City of Tustin as of the effective date of the Franchise, and as
the boundaries may change during the Franchise period through annexation, subject to the
following conditions:
a. Grantee shall not be required to overbuild areas already served by another
multi-channel video provider.
b. ' In the event Grantee elects to overbuild areas already served by another multi-
channel video provider, Grantee shall be subject to the procedures established under
Section 53066.3 of the California Government Code, as applicable at the time Grantee
submits its application, plans and specifications required under the Enabling Ordinance and
this Franchise.
c. In the event of annexation of new territory to the City, the City Council may
determine at a public hearing the grantee or grantees, if any, that will serve such new
territory.
3. Term of Franchise. The term of this Franchise shall be for a period of Fifteen
(15) years, commencing on July 1, 2000, and expiring June 30, 2015, subject to termination
as hereinafter provided.
4. Franchise Fees.
a. Fee. As of the effective date of this Franchise, the franchise fee shall be in an
amount not to exceed five Percent (5%) of Grantee's Gross Receipts.
b. Internet Services.
(1) Grantee shall pay franchise fees on gross revenues that Grantee
receives from subscribers in the City to its Internet services. To the extent Grantee
accounts separately for its revenues from Internet services, Grantee shall account
separately for the franchise fees from its Internet services from its cable television
franchise fees.
(2) Should Congress, the FCC, or a court of competent jurisdiction
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determine that Internet services offered over a cable system is not a cable service,
Grantee shall have the right to cease paying franchise fees on such service under this
Franchise.
(3) In the event that Grantee ceases to pay franchise fees for Internet
services under this Franchise, to the extent legally permissible, and in accordance
with applicable federal and state law, the City reserves the right to require Grantee to
enter into a separate franchise agreement with the City for the provision of Internet
services in accordance with the Tustin City Code.
c. For purposes of this section, "Gross Receipts" is any and all compensation, in
whatever form, grant, subsidy, exchange, or otherwise, directly or indirectly received by
Grantee, not including any taxes or services furnished by the grantee imposed directly on
any subscriber or user by a city, county, state or other governmental unit, and collected by
the Grantee for such entity. However, "Gross Receipts" shall not include bad debt, any
revenues other than from the provision of Cable Service from the operation of the System, or
amounts that may be exCluded pursuant to applicable law.
d. Time of Payment. The franchise fee shall be payable forty-five (45) days after
the close of each quarter of Grantee's fiscal year ("billing cycle").
e. Grantee acknowledges that franchise fees are necessary to defray the City's
costs associated with Grantee's use of City streets and for the purposes of providing revenue
with which to defray the cost of regulation arising out of issuance of the Franchise. The
streets and other public rights-of-way to be used by Grantee in the operation of its system
within the boundaries of the City are valuable public properties acquired and maintained by
the City at great expense to its taxpayers, and the grant to the Grantee of consent to use
such streets and other public rights-of-way is a valuable property right without which Grantee
would be required to invest substantial additional capital. Furthermore, the City will incur
costs in administering the FranChise in the public interest. Thus, in consideration of the
granting and exercising of a Franchise to use the streets and other public rights-of-way as
herein defined, for the operation of a cable television system, and to reimburse City for costs
incurred in administering this Franchise granted pursuant to this Ordinance, Grantee shall
pay the City the fees provided in this Ordinance.
f. No acceptance of any payment shall be construed as an accord that the
amount paid is, in fact, the correct amount, nor shall such acceptance of payment be
construed as a release of any claim which the City may have for further additional sums
payable under the provisions of the Franchise.
5. Reimbursement of City Expenses. Grantee shall pay to City an amount
equal to the legal expenses incurred by the City in preparing, revising, negotiating and
enacting this Ordinance and matters directly related thereto. The City shall prepare a
statement aggregating such cost and send such statement to the Grantee. In no event,
however, shall such aggregate amount exceed One Thousand Five Hundred Dollars
($1,500.00). The Grantee shall pay the amount of such statement to the City within thirty
(30) days thereafter. The purpose of this Section is to reimburse City for the exPenses
incurred by City in preparing and enacting this Ordinance.
6. Establishment and Extension of Service. Grantee shall not be required to
extend or offer Cable Service to any Unit in excess of 150 feet when overhead and 50 feet
when underground from Grantee's existing Cable System facilities or if the extension, of
Cable Service to a Subscriber would result in System construction in an area less than 20
homes per mile of Cable System Plant without additional cost recovery based on the time
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and materials required from the Person(s) requesting the line extension. Upon receipt of a
request by said Person(s) Grantee shall provide a written estimate of costs to extend Cable
Service to the property in question within thirty (30) days.
7. Rates. Grantee shall impose rates consistent with the provisions of the
Cable Communications Policy Act of 1984 as amended by the Cable Television Consumer
Protection and Competition Act of 1992 and by the Telecommunication Act of 1996, 47
U.S.C. § 521 et seq. (the Cable Act), and pertinent provisions of the California Government
Code, any supplements or amendments thereto, any successor legislation, and the
regulations which are or will be promulgated under such legislation. Grantee shall advise
City of its rates and of any changes thereto as soon as such rates or changes are
established.
8. System Desiqn and performance Requirements.
a. System Capacity. Grantee shall provide a minimum carriage capacity of 750
MHz.' Each Channel delivered to the Subscriber shall meet all Federal Communication
Commission (FCC) standards and rules. Grantee shall use its best efforts to maintain,
operate, and, where, in Grantee's opinion, is technically and economically feasible, modify
the System towards the goal that its performance will be in accordance with the highest and
best accepted standards of the industry.
b. Minimum Services. Grantee shall make available a minimum of seventy-five
(75) channels, provided that Grantee may utilize alternative technologies (including
compression or servers) to deliver such channels.
c. Permits, Plans and Specifications Required.
(1) Prior to performing any work in, upon, above, beneath, or across any
public right-of-way, Grantee shall first obtain all necessary or required permits,
agreements, or approvals from the City and all other governmental entities with
jurisdiction over the work or public right-of-way, including by way of example but not
limitation, any or all of the following:
(a)
Encroachment permits for street work, street excavation, use, removal
and relocation of property within a street, and other street work,
(b)
(c)
Design review of above ground cabinets pursuant to Ordinance No.
1213, codified at Part 6 of Chapter 2 of Article 7 of the Tustin City Code,
Permits or agreer~ents for occupying any other property of the City to
which. access is not specifically granted by the Franchise, including,
without limitation, permits and licenses for placing devices on or in poles,
conduits, or other structures or facilities owned by the City or other
governmental entity.
(2) For any construction or reconstruction program, including System
upgrades or rebuilds, and related activity,' Grantee shall make available to the City for
inspection at Grantee's office such plans at least thirty (30) days before the start of
construction, unless such thirty (30) day time period shall be reasonably shortened by
City. The plans shall be engineered to scale and include the proposed location of the
project, Grantee's existing facility locations, construction timetables, equipment
specifications, and design, performance criteria. Grantee shall make reasonable
efforts to avoid negative aesthetic impacts. Since such plans may be proprietary and
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confidential, copies will not be provided to the City.
(3) Grantee shall maintain in its business office, and make available to the
City for its review, upon request, maps, using standard industry designations, that at a
minimum disclose (a) cable routes, (b)locations and identifications of aerial and
aboVe and below ground appurtenances (such as risers, vaults, pedestals and power
supplies) and (c) physical locations and identifications of System components,
including but not limited to cables and active and passive electronics and the electrical
values of its taps, splitters or directional couplers. Since such maps may be
proprietary and confidential, copies will not be provided.to the City. Where such plans
and specifications are not in compliance with zoning ordinances, traffic safety
standards, and other applicable ordinances, codes, regulations, determinations and
ratings, Grantee shall modify or revise such plans and specifications so as to achieve
such compliance. At the request of the City, Grantee shall reasonably relocate
facilities within technical design constraints where such relocation will not result in
additional cost to Grantee.
d. Two-Way Capability. Any Cable System that Grantee shall choose to
design for two-way capability shall be designed so as to permit the future implementation of
upstream signal carriage without requiring modifications to its design. The Cable System
shall also be capable of ensuring that noncommercial, educational and governmental ("EG")
Programming can be distributed on the subscriber network.
(1) Two-way Cable Services for Subscribers shall be offered to Subscribers
following satisfaction of each of the following conditions: (i) the offering of such
two-way Cable Services is permissible under applicable federal and state laws,
ordinances, rules and regulations, (ii) Grantee has secured all certificates, licenses,
authorizations and approvals from federal and state agencies necessary for the
offering of such Cable Services, provided, however, that Grantee shall seek to obtain
such approvals in a diligent and timely manner (iii) Cable System Subscribers and/or
potential Cable System Subscribers have a demonstrable interest in subscribing to
such two-way Cable Services, together with a demonstrable willingness to pay a
reasonable rate for such Cable Services, in each case as evidenced by at least one
statistically significant survey, provided, however, that upon the reasonable written
request of the City it shall be Grantee's burden to demonstrate to the City's
reasonable satisfaction that such Subscriber interest is insufficient and (iv) the
investment necessary to implement such two-way capability can be reasonably
expected to be recovered from the incremental revenue anticipated from the provision
of such Cable Services, together with a reasonable rate of return, over a period of
time which is reasonable and customary in the cable television industry for such
investments.
e. Home Subscriber Terminal Equipment -- Addressable, User Friendly. Pay-Per-
View Capability. Grantee shall offer some form of addressable or alternative technology
which is commercially available, in use by other comparable Cable Systems operated by
Grantee or an affiliate of Grantee, and easy to use. Said equipment and Cable System shall
be designed to eliminate Subscriber confusion in their attempts to utilize cable-ready
television sets, VCR's Cable System Converters and remote control units. Addressable
Subscriber Terminal equipment shall (i) permit Grantee to change the level of those Cable
Services secured by such addressable technology promptly at the Subscriber's request, and
(ii) permit a Subscriber to order single events (such as first run movies, sporting events, etc.).
Grantee may use alternative technology to secure Premium Services and/or the delivery of
individual events from time to time over the term of the Franchise.
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f. Parental Control. Grantee shall provide a parental control option, trap or
other device to Subscribers requesting the capability of removing objectionable video
Programming from any Cable Service or any Premium or Pay-Per-View Channel that is
scrambled or otherwise withheld from any Subscriber. Grantee may charge for any such
devices.
g. Stereo Availability. Grantee shall offer and make available stereo audio as part
of the video and audio signals delivered to Subscribers, provided that those signals are
available for reception as stereo audio signals at Grantee's Headend or other signal
processing point.
h. Emergency Override System. Grantee shall provide, install, activate, and
maintain an emergency override System which includes audio override on all Channels of
Grantee's System where such override is legally permissible, and character generated
message capabilities on a designated Channel. City shall be able to activate, provide audio
programming, and terminate such emergency audio override on City designated Channels
via dial-up or dedicated telephone control upon System upgrade. City shall use the audio
override and character generated System only in emergency situations, as declared by the
City Council or City Manager, when there is a threat to the public welfare, health, or safety.
i. Standby Power. Grantee shall provide standby power generating capacity
during utility power outages at its Cable System control center and at all Headends. Upon
activation of each phase of a rebuilt System, Grantee shall maintain standby power System
supplies at each fiber optic node.
9. Grantee Support for EG Access and Local Oriqination.
a. Grantee shall designate Channel capacity on the Basic Cable Service tier for
educational and governmental ("EG") programming and for Local Origination programming.
Grantee shall initially designate three (3) Channels; one (1) Education Channel; one (1)
Government Channel, and one (1) Local Origination Channel.
b. In the' event Grantee is required by federal law or regulations to change the
Channel number of an EG Channel, Grantee shall provide thirty (30) days advance notice to
the City and its customers. Should Grantee desire to change the Channel number for any
other reason, Grantee shall notify the City of such change and the reason for the change at
least sixty (60) days before the proposed change.
c. Whenever programming, whether of performances, notices or any other
broadcast content, of any EG Channel occupies less than ten (10) hours of programming per
day for six (6) days per week for a continuous period of not less than twelve (12) consecutive
weeks, the City shall permit Grantee to utilize unused Channel capacity of that Channel
under the following conditions:
(1) Any request from Grantee to use any fallow capacity designated for a
EG Channel must be submitted in writing to the City.
(2) The City shall approve the request from Grantee to use fallow Channel
capacity if it finds that: (i) the utilization of the Channel is as represented; (ii) Grantee
has not acted in violation of any of the provisions of the Franchise regarding utilization
of the Channel; and (iii) there are no special circumstances which would justify the
denial or delay of implementation of the use of the Channel. If the City fails to act on
Grantee's request within thirty (30) days, it shall be deemed approved. After approval,
Grantee may continue to utilize the Channel for any other purpose it so chooses,
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consistent with the Franchise, until the City reasonably determines that all or a .part of
such Channel is needed for EG Programming.
(3) Should the City reasonably determine that all or part of such Channel is
needed for EG Programming, the City may require Grantee to fully or partially
relinquish Grantee's use of said Channel provided that Grantee shall be given not less
than sixty (60) days notice to relinquish same.
d. The EG Channels shall be under the exclusive management and editorial
control of the City. The City shall have sole responsibility for the Programming of the EG
Channel(s) provided by Grantee, including without limitation, the carriage of Programming on
the Channel(s) and the establishment and administration of all rules, regulations and
procedures pertaining to the use and scheduling of the Programming presented over the
Channel(s). The Channel(s) shall be used solely for non-commercial, governmental or
educational Programming. The City may designate a representative, such as an access
corporation, to use and administer said Channels, with all of the attendant rights and
obligations provided to the City hereunder.
e. Grantee shall provide an adequate Local Origination access production studio
equipped with sufficient portable and stationary equipment so as to allow production of
videotaped and live Programming. The Local Origination studio shall be located and
operated within thirty (30) miles of the City. Grantee shall operate and manage the Local
Origination Channel, and shall have editorial control over all Programming on the Local
Origination Channel.
f. Grantee shall provide, at the request of the City and without charge, Drops to
existing educational and governmental buildings, institutions and facilities located within
Grantee's service area. A Drop shall be provided within six (6) months after the effective date
of this Franchise for existing public educational, libraries and governmental facilities and to
all existing and future public educational and governmental facilities when Grantee's Cable
System Plant passes the public facility. Interior wiring of said buildings shall be the
responsibility of the building owner, provided that if Grantee is requested to install such
wiring, it will do so within a reasonable time at its actual cost of labor and materials and shall
invoice the requesting agency. Grantee shall also provide to institutions and facilities so
serviced free access to the Basic Service Tier and, if requested by the City, one free
connection and free monthly charges for Internet access service for the term of the
Franchise. Exact placement and request for installation of Drops shall be determined by the
institutions involved and shall be designed, to the extent practicable, to minimize construction
costs to Grantee. The implementation of the Drop policy shall not require or allow an offset
against the franchise fee.
g. Grantee shall provide equipment to the City to enable the insertion of live or
taped programming at City Hall onto the EG channels provided by Grantee. Such equipment
shall be owned and maintained by the City. Grantee shall be obligated to replace said
equipment during the term of the franchise should it become obsolete or inoperable.
10. Bonds and Insurance Coverage.
a. Performance Bond to City. During the term of this Franchise, Grantee
shall file with the City Clerk and maintain in full force and effect a corporate surety bond or
other adequate surety agreement approved by the City Attorney in the amount of Fifty
Thousand Dollars ($50,000.0'0). The bond or agreement shall be so conditioned that in the
event Grantee shall fail to comply with any one or more of the provisions of the Tustin City
Code or of the Franchise granted to Grantee, then there shall be recoverable jointly and
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severally from the principal and surety, any damages or loss, or costs suffered or incurred by
the City as a result thereof, including reasonable attorneys' fees and costs of any action or
proceeding, and including the full amount of any compensation, indemnification, costs of
removal or abandonment of any property or other costs which may be in default, up to the full
principal amount of such bond. Said condition shall be a continuing, obligation during the
entire term of the Franchise and thereafter until Grantee shall have satisfied in full any and all
obligations to City, which shall arise out of or pertain to, said Grantee. The surety shall be
licensed in California and maintain a Best's Financial Size category of IX and shall have a
rating of not less than "A."
b. Performance Bond to Subscribers. During the term of this Franchise,
Grantee shall file with the City Clerk and maintain in full force and effect a corporate surety
bond or other adequate surety agreement approved by the City Attorney in the amount of
Fifty Thousand Dollars' ($50,000.00). The bond or agreement shall be so conditioned that in
the event Grantee shall fail to comply with any one or more of the provisions of any
agreement or undertaking made between Grantee and any Subscriber, then there shall be
recoverable jointly and severally from the principal and surety, any damages or loss, or costs
suffered or incurred by the subscriber as a result thereof, including reasonable attorneys'
fees and costs of any action or proceeding. Said condition shall be a continuing obligation
during the entire term of the Franchise and thereafter until Grantee shall have satisfied in full
any and all obligations to any Subscriber which shall arise out of or pertain to any such
agreement or undertaking. The surety shall be licensed in California and maintain a Best's
Financial Size category of IX and shall have a rating of not less than "A."
c. Insurance. Grantee, at its sole cost and expense, for the full term of the
Franchise (and any extension thereof), shall obtain and maintain at minimum all of the
following insurance coverage:
(1) Types of Insurance and Minimum Limits. The coverage required herein
may be satisfied by any combination of specific liability and excess liability policies.
(i) Workers Compensation and Employee. Liability Insurance in
conformance with the laws of the State of California for the statutory limits.
(ii) Grantee's vehicles, including owned, non-owned (e.g. owned by
Grantee's employees 'and used in the course and scope of employment),
leased or hired vehicles, shall each be covered with Automobile Liability
Insurance in the minimum amount of One Million Dollars ($1,000,000.00)
combined single limit per accident for bodily injury and property damage.
(iii) Grantee shall obtain and maintain comprehensive or commercial
General Liability Insurance coverage and shall include, but not be limited to,
coverage for premises operation, explosion and collapse hazard, underground
hazards, contractual insurance, broad form property damage, independent
contractors, and personal injury liability. The limit of such insurance shall be at
least One Million Dollars ($1,000,000.00) combined single limit liability for
personal injury and property damage.
(iv) Grantee shall obtain and maintain Broadcaster's Errors and
Omissions Liability Insurance in the aggregate annual amount of. Five Hundred
Thousand Dollars ($500,000.00).
(2) The City and its officers and employees shall be named as additionally
insured by endorsement (except for broadcaster's liability coverage and workers
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compensation) at no cost to the City.
(3) Within forty-five (45) days from the effective date of this Franchise,
Grantee shall furnish proof to the City that a satisfactory insurance policy of General
Comprehensive, Bodily Injury Liability, Property Damage and Broadcasters Errors and
Omissions Liability Insurance is in place, Insurance policies for vehicles shall be in
effect prior to usage of any vehicle by Grantee. City may, by resolution, from time to
time, reasonably increase said insurance to the amounts which other contractors
operating within the public right-of-way in a manner similar to Grantee and operating
in the jurisdiction of City are required to provide so long as said increased coverage is
reasonably available.
(4) All insurance policies shall provide that in the event of material change,
reduction, cancellation, or non-renewal by the insurance carrier for any reason, not
less than thirty (30) days notice will be given to the City by registered mail of one (1)
copy of a written notice of such intent to cancel or not to renew the coverage. An
authorized agent of such insurance carrier shall provide to the City, on such schedule
as is reasonably requested by the City, a certification that all insurance premiums
have been paid and all coverage are in force. If for any reason Grantee fails to obtain
or keep my of such insurance in force, the City may, but shall not be required to,
obtain such insurance, in which event Grantee shall promptly reimburse the City
premium cost therefor plus one and one-half percent (1 1/2%) monthly interest
thereon until paid.
11. Customer Service.
a. Grantee shall meet the customer service standards adopted by the Federal
Communications Commission (FCC), the State of California, and any additional standard
mutually agreed upon between Grantee and the City.
bo
provide,
In addition, to the extent that FCC or State regulations do not already so
(1) Grantee shall maintain sufficient service personnel and equipment for
Grantee to be able to take action upon customer service calls in the manner specified
herein. Grantee's service office shall be open to receive inquiries or complaints for
Subscribers during normal business hours, and in no case less than 9:00 a.m. to 5:00
p.m., Monday to Friday, excluding legal holidays, and shall have local, non-toll
telephone service for subscribers in the Franchise area during such times; provided,
however, that such hours may be lessened upon the prior written consent of the City
Manager provided that local, non-toll telephone service continues to be available
during such times; and
(2) Grantee shall maintain a service repair force sufficient to respond within
a reasonable time to any individual interruption of service and also a sufficient
installation force to minimize the delay for service installation. Any service complaint
from subscribers will be investigated and acted upon as soon as possible; and
(3) Grantee shall provide a telephone answering system to receive all
construction and service complaints. The telephone number of the local office shall
be listed in the telephone directories serving Tustin. The telephone service shall be
operable and shall possess sufficient capacity to accept complaints twenty-four (24)
hours a day, seven (7) days a week; and
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(4) Grantee shall keep a maintenance service log running a three (3) year
period, which will indicate the nature of each service complaint, its location, the date
and time it was received, the disposition of said complaint, and the time and date
thereof. This log shall be made available for periodic inspection by the City. Grantee
shall provide a copy of this log within ten (10) days of the written request of the City.
12. Indemnification.
a. Grantee shall indemnify and hold harmless City from all damages, penalties,
judgments and liability of any kind, and defend all claims, actions or causes of action arising
as a result of Grantee's operation of the Cable System, regardless whether any act or
omission complained of is authorized, allowed, or prohibited by the Franchise, to the extent
such damages, penalties, judgments, claims, actions or causes of action arise out of or are
caused by the act or omission of Grantee, its officers, employees, or agents. Upon demand
of City, made by and through the City Manager, Grantee shall appear in 'and defend City, its
officers, employees and agents in any legal action, whether judicial, administrative or
otherwise, with respect to which City is entitled to indemnification hereunder.
b. City agrees to indemnify, and hold harmless Grantee, its affiliates and their
respective officers, directors, employees and shareholders from and against any and all
damages penalties, judgments and liability of any kind, and defend all claims, actions or
cause of action arising as a result of the use of the EG access Channels. This indemnity
shall not apply with respect to any Programming provided by Grantee and which is carried on
the EG Channels.
13. Periodic Review of Performance and Quality of Service.
a. At City's sole option, City may hold a public hearing at which Grantee shall be
present and shall participate, to review the performance and quality of Cable Service of the
Cable Communications System. The reports required herein regarding Subscriber
Complaints, the records of performance tests and the opinion survey report shall be utilized
as the basis for review, in addition, any Subscriber may submit comments or Complaints
during the review meetings, either orally or in writing, and these shall be considered.
b. Within thirty (30) days after the conclusion of the public hearing, City may issue
a report with respect to System performance and quality of Cable Service. If any
noncompliance with the Franchise is found, City may direct Grantee to correct the
noncompliance within a reasonable period of time in accordance with the provisions of the
Enabling Ordinance.
c. Failure of Grantee, after due notice and opportunity to cure, as set forth in the
Enabling Ordinance, to correct the noncompliance shall be considered a breach of the
Franchise, and City may, at its sole discretion, exercise any remedy within the scope of this
Franchise considered appropriate.
14. Privacy. As of the effective date of this Franchise, Grantee shall not
market mailing lists with names and addresses of subscribers unless Grantee has provided
Subscribers with notice and an opportunity to delete his or her name from the mailing list.
15. No Recourse Aqainst City. Grantee acknowledges that City would not
have granted this Franchise if it were to be liable for monetary damages for any act
performed in granting it. In general, City and Grantee may pursue any remedy at law or
equity available, including but not limited to specific performance, for the breach of any
provision of this Franchise, except that City, its officials, boards, commissions, agents and
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employees, shall not be liable in monetary damages to Grantee, or to any successor in
interest of Grantee, or to any other Person, and Grantee 'covenants not to sue for monetary
damages or claim any monetary damages based upon any act or omission by the City, its
officials, boards, commissions, agents and employees, in the course of reviewing and
approving this Franchise or in the process of granting this Franchise.
16. Undergroundinq. In all areas of the City where all electric utility and
communications facilities are-underground, the Grantee shall place its cables and distribution
equipment underground. When all existing aerial utilities in any City area are converted to
underground construction, such that both electric and communications utilities are
underground, the Grantee shall replace aerial facilities with underground facilities
concurrently and in cooperation with similar programs of the telephone and power utilities,
provided that Grantee is given reasonable' notice and access to the telephone and power
utilities' facilities at the time such are placed underground. All underground wires or cable of
Grantee shall be placed in conduits or other materials approved by the Director of Public
Works. Amplifiers in Grantee's transmission and distribution lines may be placed in
appropriate pedestals provided that approval has been obtained from the Director of Public
Works before excavation.
17. Acceptance. Within thirty (30) days after the effective date of this
Ordinance, Grantee shall file with City its written, unconditional, non-contingent acceptance
of the Franchise granted by this Ordinance and its agreement to be bound by and comply
with all the requirements hereof. The acceptance shall be signed by a person duly
authorized to act on behalf of Grantee, shall be notarized, and shall have attached thereto a
certified copy of an order by the Board of Directors of Grantee authorizing and directing
execution and filing of the acceptance. An acceptance that constitutes a qualified
acceptance or places other limits o.r conditions therein shall be deemed to be a nullity. Upon
the failure of Grantee to file its unconditional, non-contingent acceptance of the Franchise
subject to all its terms and conditions within the time period specified above, the Franchise
shall be of no further force or effect and there will not be issued an outstanding cable
television franchise in City to any of the companies or entities named in this Ordinance.
Grantee shall furnish and maintain all bonds and insurance policies required to be furnished
pursuant to the Tustin City Code and this Franchise.
18. Severability. If any Section or provision of this Franchise or any
ordinance, law, or document incorporated herein by reference is held by a court of competent
jurisdiction to be invalid, unconstitutional or unenforceable, such holding shall be confined in
its operation to the Section or provision directly involved in the controversy in which such
holding shall have been rendered and shall not in any way affect the validity of any other
Section or provision hereof. Under such a circumstance, Grantee shall, upon the City's
request, meet and confer with the City to consider amendments to the Franchise to meet the
original intent of the parties, as the circumstances warrant and unless prohibited by law;
provided, however, that Grantee, in its sole and exclusive discretion, is not required to enter.
an agreement with the City concerning such an amendment. Both the City and Grantee
agree to be bound by all terms and conditions of this Franchise except as may be finally
determined to be unenforceable by a Court of competent and appropriate jurisdiction with
proper venue over this Franchise, provided that the City or Grantee. need not comPly with
any term or condition of this Franchise or the Enabling 'Ordinance which it is contesting in
good faith by appropriate proceedings.
19. More Favorable Conditions. In the event City grants another Franchise for
Cable Service, subsequent to the effective date of this Franchise, which, in the opinion of
Grantee, contains material terms or conditions more favorable or less burdensome than
those contained in this Franchise, Grantee shall have the right to require that this Franchise
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be amended to incorporate such more favorable or less burdensome terms or conditions in
this Franchise. Upon written request of Grantee, the City and Grantee shall discuss in good
faith such amendments as may be required to this Franchise. For purposes of this Section,
the phrase "material terms or conditions" includes, but is not limited to: term of Franchise;
area covered by the Franchise; Franchise Fees; System capacity measured in MHz; number
of EG Channels; grants or equipment provided by Grantee to City and public schools, Drops
provided by Grantee at City public buildings and public schools; liquidated damages,
insurance, and performance bonds. This provision shall not apply to any common carrier
communications System authorized pursuant to Title 11 of the Communications Act of 1934,
as amended by the Telecommunications Act.
20. Future Laws. City does not have or expect in the foreseeable future to
receive sufficient funds with which to defray the costs of administering and regulating the
cable television franchise within the City. The ability to finance such costs through franchise
fees, pursuant to the provisions of this Franchise, constitutes a material inducement to
initiate a cable television program within Tustin and to extend the existing Franchise,
because City would not be willing to reduce or eliminate other public programs in order to
make public funds available with which to defray the cost of administering and regulating the
cable television program. Therefore, should any future law or regulation limit or prevent City
from imposing a franchise fee in the amount provided for herein, Grantee shall make a good
faith effort to obtain any possible waiver or permission to pay the full amounts provided for
herein, and to the extent such future law or regulation permits Grantee ~discretion to make the
limitation or prohibition applicable or inapplicable, Grantee shall elect to make the limitation
or prohibition inapplicable. If, as a result of any acts of the Federal Communications
Commission, the United States Congress, any state or federal court, or any other entity
lawfully asserting jurisdiction for the regulation of cable communication systems, any
provision or provisions of this Franchise is modified, amended, revoked, redeemed, or
changed to result in what constitutes, in the view of City or Grantee, material changes in the
provisions and circumstances of the Franchise, the parties shall diligently pursue, in good
faith, a reasonable means to preserve the intentions of the parties as expressed in this
Franchise.
21. Remedies. At the time of issuance of this Franchise, it is impractical to
reasonably ascertain the total extent of monetary damages that may be incurred as a result
of the breach by Grantee of its obligations under the Franchise. Without the proviSions of
this section, the actual monetary damages for which the Grantee would be liable, could
greatly exceed the specified amount of liquidated damages. Therefore, the parties have
agreed, after good faith negotiations, to fix the amount of liquidated damages, in lieu of any
other monetary damages recoverable by City, as provided herein. If Grantee is in material
default under the terms of the Franchise, City shall give written notice of such default to
Grantee. Grantee shall have thirty (30) days from receipt of such notice to cure the material
default or to agree in writing with City upon a method and time that such default shall be
cured. If the material default is not cured within thirty (30) days from the receipt of the notice,
or, if such material default is of a nature that reasonably requires longer than thirty (30) days
to cure, within such other reasonable time as is reasonably agreed to between the parties,
the City Council of City may assess Grantee and Grantee shall be liable for liquidated
damages in the sum of Two Hundred Dollars ($200.00) for each calendar day on which the
Grantee is in such material default, from and after the date Grantee fails to cure the material
default. Said liquidated damage sum shall be severally applicable to each calendar day of
delay in compliance with the provisions of construction and separately applicable for each
calendar day of delay complying with any other provisions of the Franchise. Notwithstanding
anything to the contrary herein provided, suCh liquidated damages shall in no event exceed
the sum of One Hundred Thousand Dollars ($100,000.00) in the aggregate.
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22. Alternative Remedies. Neither the termination of the Franchise nor
liquidated damages shall be deemed to be the exclusive remedy for breach of the Franchise.
Neither the right to assess liquidated damages nor the assessment of liquidated damages
shall be deemed to bar or otherwise limit the. right of City to obtain judicial enforcement of
Grantee's obligations by means at law or in equity.
23. Termination of Franchise for Cause. The following material breaches of the
obligations of Grantee under the Franchise shall constitute grounds for termination of the
Franchise by the City Council.
a. The willful failure to make any payments required under the Franchise and/or to
provide City with required information in a timely manner as provided in the Franchise from
and after thirty (30) days' written notice from the City of Tustin.
b. Any other act or omission by Grantee which materially violates the terms,
conditions or requirements of the Franchise or any order, directive, rule or regulation issued
thereunder, and which is not cured within thirty (30) calendar days following mailing to the
Grantee written notice of the violation or within such period beyond the thirty (30) calendar
days as is reasonable.
c. Should the Franchise be terminated as provided herein, any resulting transfer
of ownership shall be conditional upon payment of an equitable price for the Franchise to the
Grantee for the Franchise, as set forth in the Cable Act, 47 U.S.C. § 537.
24. Termination for Non-Renewal. If renewal of the Franchise is denied, or if
termination results from the operation of Section 23 hereof, and City acquires ownership of
the cable system or effects a transfer of ownership to another party, any such acquisition or
transfer of ownership shall be conditional upon payment of the fair market value of the
Franchise, as set forth in the Cable Act, 47 U.S.C. § 537.
25. Non-Enforcement. Grantee shall not be relieved of any obligation to comply
with any of the provisions of the Franchise or any rule, regulation, requirement or directive
promulgated thereunder by reason of any failure of City or its officers, agents or employees
to enforce prompt compliance.
26. Franchise as Contract. The Franchise shall be deemed to constitute a
contract between Grantee and City. Grantee shall be deemed to have contractually
committed itself to comply with the terms, conditions and provisions of the Franchise, and
with all rules, orders, regulations and determinations applicable to the Franchise which are
issued, promulgated or made pursuant to the provisions of this Franchise. The Franchise
shall not be construed to constitute a contract of adhesion.
27. Utility Pole. This Franchise shall not be deemed to expressly or impliedly
authorize Grantee to utilize poles owned by the Southern California Edison Company, Pacific
Bell or any other public or private utility which are located within the streets, without the
express consent of such utility.
28. Renewal. This Franchise may be renewed for an additional period not to
exceed fifteen (15) years if the Grantee has substantially complied with its obligation under
this Franchise and upon the mutual agreement of the parties. Upon the request of either
party, the r~newal process outlined in the Cable Act, 47 U.S.C. § 546, shall be invoked.
29. Force Maieure. Any time limits provided for either party's performance
hereunder shall be extended for and throughout such additional period of time as such
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performance is prevented or delayed due to strikes, lockouts, acts of government beyond the
party's reasonable control, acts of God, wars, riots, insurrection or abnormal force of
elements or other causes beyond the party's reasonable control; provided, however, that in
no event shall any such extension be deemed to have occurred unless (a) the party whose
performance is delayed shall have given prompt notice to the other party of the occurrence of
the event of delay; and (b) the applicable period or periods of time within which such other
party may exercise its rights hereunder shall be commensurately extended.
30. Effective Date of Ordinance.
(30) days after its passage.
This Ordinance shall become effective thirty
PASSED AND ADOPTED at a regular meeting of the City Council of the City of
Tustin, California, held on the~ day of June, 2000.
ATTEST:
Mayor
City Clerk
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) §§
CITY OF TUSTIN )
PAMELA STOKER, City Clerk of the City of Tustin, California, does hereby certify that the
whole number of the members of the City Council of the City of Tustin is five; that the above
and foregoing Ordinance No. 1228 was duly and regularly introduced and read at a regular
meeting of the City Council held on the 5t~ day of June, 2000, and was given its second
reading and duly passed and adopted at a regular meeting held on the ~ day of June,
2000, by the following vote:
AYES:
NOES:
ABSENT:
COUNCILPERSONS:
COUNCILPERSONS:
COUNCILPERSONS:
PAMELA STOKER
City Clerk
City of Tustin, California
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