84-009 ORD
ORDINANCE 84-9
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ORDINANCE SUMMARY
Final Franchise
Ci ty of Elk River
An ordinance, including addendum with exhibits, granting
a franchise to Rite Cable Company of Minnesota, Ltd., (here-
inafter "Rite Cable") to operate and maintain a cable com-
munications system in the Ci ty of Elk River setting forth
conditions accompanying the grant of franchise; providing
for regulation and use of the system; and prescribing
penalties for the violation of its provisions.
STATEMENT OF INTENT AND PURPOSE; FINDINGS.
The City of Elk River (hereinafter "City") adopts a
cable television franchise to bring .about the development of
a cable television system and the continued operation of
it. Such a development can contribute significantly to the
communication needs and desires of many. Further, the City
may achieve better utilization and improvement of public
services. The City Council found Rite Cable's technical
ability, financial condition, legal qualifications, and
character to be appropriate to construct and operate a cable
television system within City.
ARTICLE I. SHORT TITLE AND DEFINITIONS
The ordinance shall be known and cited as the Cable
Communications Ordinance. The definition section includes
24 terms which are defined for the purpose of the franchise.
ARTICLE II. GRANT OF AUTHORITY AND GENERAL PROVISIONS
SECTION 1. GRANT OF FRANCHISE AND ACCEPTANCE
The City grants to Rite Cable a non-exclusive franchise
to be properly executed and acknowledged by Rite Cable and
delivered to City. Rite Cable shall deposit with City a
non-refundable acceptance fee for the purpose of deferring
the costs and expenses of development of the franchise.
Security deposits, letters of credit, certificates of
insurance, bonds, and organizational and creation documents
of the company must be delivered to City.
SECTION 2. AUTHORITY GRANTED
The City grants to Rite Cable permission to use the
streets for erecting, constructing, operating and main-
taining the cable communications system.
SECTION 3. AGREEMENT
Rite Cable agrees to be bound by all terms of the
franchise and to provide all services set forth in its
proposal to City.
SECTION 4. FRANCHISE TERM
The franchise shall be for a IS-year term from the date
of acceptance.
SECTION S. AREA
The franchise is granted for the City as it exists from
time to time during the term of the Franchiae.
SECTION 6. POLICE AND EMINENT DOMAIN POWERS
Rite Cable's rights are subject to the rights of eminent
domain of the City and to the policy powers of the City.
SECTION 7. USE OF GRANTEE FACILITIES
The City has the right to install and maintain any
fixtures it desires upon the poles and within the under-
ground pipes and conduits and fixtures of Rite Cable.
SECTION 8. WRITTEN NOTICE
All notices shall be delivered in writing to the offices
of City and the St. Paul office of Rite Cable.
SECTION 9. RIGHTS OF INDIVIDUALS
No signals shall be transmitted from the subscriber
terminal except as required to provide service authorized by
the franchise and the subscriber. Information from sub-
scriber terminals may not be gathered or stored without the
express written permission of the subscriber. The terms and
conditions of the written authorization are included in this
section.
SECTION 10. CERTIFICATE OF CONFIRMATION
Rite Cable must obtain a regular certificate of con-
firmation from the Minnesota State Cable Board.
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ARTICLE III. DESIGN OF SYSTEM
SECTION 1. CHANNEL CAPACITY - SUBSCRIBER NETWORK
A system capable of providing at least 53 downstream
video channels and four fully activated upstream channels
shall be constructed pursuant to the conditions of the
proposal of Rite Cable.
SECTION 2. PICTURE QUALITY AND TECHNICAL REQUIREMENTS
Rite Cable will be required to transmit a signal to the
subscriber, and further to comply with all technical
standards of their proposal and Federal Communications Com-
mission requirements.
SECTION 3. TWO-WAY CAPACITY
Rite Cable shall. initially activate return channels at
the time of system activation as reqiired by this section.
SECTION 4. FACILITIES
Rite Cable shall construct its facilities as set forth
in its proposal to the City.
SECTION 5. SPECIAL CHANNEL AND ACCESS REQUIREMENTS
The System shall carry broadcast stations, an emergency
override system and 5 special access channels including
public, school, government, leased, and a community
education-library access. The franchise details specific
access rules which must be developed by Rite Cable.
SECTION 6. SERVICE TO PUBLIC BUILDINGS AND EDUCATIONAL
INSTITUTIONS
Rite Cable will provide service to the governmental and
non-governmental institutions listed in Section 6 of the
franchise.
SECTION 7. INTERCONNECTION
The System serving the cities of Big Lake, Buffalo,
Cokato, Dassel, Delano, Elk River, Maple Lake, Monticello,
Rockford, and Watertown, Minnesota, shall be completely
interconnected. The System shall also be constructed so
that other systems now or hereafter constructed in any area
adjacent to the System may be interconnected.
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SECTION 8. NARROWCASTING
The System shall be capable of sending programs to each
community separately so that the residents of one community
may view a given program-while at the same time, residents
of another community may watch different programming at the
same time on the same channel.
SECTION 9. REGIONAL CHANNEL
The standard VHF channel 6 is designated for uniform
regional channel usage.
ARTICLE IV. SERVICES AND PROGRAMMING, SUBSCRIBER
CONTRACTS, COMPLAINTS
SECTION 1. SERVICES AND PROGRAMMING
Programming shall be provided as specified in the
proposal of Rite Cable. Programming shall be added and
deleted pursuant to the procedures of Section 1.
SECTION 2. INTERRUPTION OF SERVICE AND COMPLAINTS
Service shall not be interrupted unless reasonably
necessary. If service is interrupted for more than 48 hours
in any 30 day period, subscriber shall be credited pro-rata
for such interruption. An office shall be maintained in the
area and shall be capable of receiving complaints and
requests for repairs or adjustments at any time seven days
per week. This section further details subscriber complaint
procedures.
ARTICLE V. CONSTRUCTION, INITIAL SERVICE AREA,
LINE EXTENSION AND CONSTRUCTION STANDARDS
SECTION 1. INITIAL SERVICE AREA
All areas containing dwelling units within the city
shall be constructed as the initial service area.
SECTION 2. LINE EXTENSION POLICY
Service shall be extended to those areas not in the
initial service area pursuant to the formula of Section 2.
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SECTION 3. CONSTRUCTION TIMETABLE
Rite Cable shall construct all areas of the initial
service area which contain dwelling units within fifteen
months of the granting of the State Certificate of Confirma-
tion. Delays in construc~ion shall result in penalties
provided by the franchis~.
SECTION 4. CONSTRUCTION STANDARDS'
Rite Cable shall comply with all construction standards
of the franchise as well as all applicable laws, ordinances,
rules, regulations and codes, federal, state and local.
SECTION 5. CONDITIONS ON USE
Rite Cable shall not, in its construction of the System,
interfere with any gas, electric or television fixture,
water hydrant or main, or sewer line. Section 5 also pro-
vides procedures for the raising and lowering of lines,
trimming of trees, and- the recognition of potential
liability for persons damaging Rite Cable capabilities.
ARTICLE VI. SYSTEM OPERATIONS
SECTION 1. INFORMATION AVAILABILITY
City shall have the right of reasohable access to Rite
Cable's records.
SECTION 2. SERVICE CONTRACT
If Rite Cable maintains a service contract with sub-
scribers, the form of said contract is detailed in Section
2.
SECTION 3. SUBSCRIBER PRACTICES
There shall be no charge for disconnection of any
installation, service, or outlet. Section 3 also details
Rite Cable's right to disconnect for failure to pay the
monthly subscriber fees.
SECTION 4. FRANCHISE FEES, RATES, CHARGES, CHANGES IN FEES
AND PROCEDURES
Throughout the term of the franchise, Rite Cable shall
pay to City an annual fee of 3% of all gross revenues. The
rates provided in the franchise shall be guaranteed for 2
years after the franchise is certified by the Board or until
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one year after completion of construction in the initial
service area, whichever is longer. Basic rates shall be
regulated pursuant to the terms and conditions of the
franchise. Rates for other than Basic Service shall be
regulated pursuant to the terms and conditions of the fran-
chise. The City retains the right to review the performance
and technological upgrading of the System. Rite Cable shall
exercise its best efforts: to maintain a modern, state-of-
the-art System which is comparable to other operating cable
television systems similarly situated.
SECTION 5. FRANCHISE RENEWAL
The franchise may be renewed at any time for a period of
up to fifteen years or on a year to year basis at the sole
discretion of the City.
ARTICLE VII. INDEMNIFICATION, INSURANCE,
LETTER OF CREDIT AND BOND
SECTION 1. GENERAL
The City retains all rights of indemnification,
insurance, letter of credit or bond as provided in the
franchise.
SECTION 2.' INDEMNIFICATION AND INSURANCE
Rite Cable shall fully indemnify, defend and hold harm-
less, City and all of its agents and employees from
liability and judgments for damages in connection with:
Damage to persons or property, any claim arising out of the
franchise, Rite Cable's failure to comply with provisions of
the franchise, or any Claim Rite Cable may have against
City.
SECTION 3. INSURANCE
Rite Cable shall maintain liability insurance for the
entire term of the franchise for amounts as specified in the
franchise and pursuant to the minimum requirements of this
section.
SECTION 4. LETTER OF CREDIT
Rite Cable shall mai~tain an irrevocable and uncondi-
tional Letter of Credit. The letter of Credit shall provide
that funds be paid to the City upon demand by the City pur-
suant to the procedures and minimum requirements of this
section. This section further provides minimum amounts for
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penalties such as failure to construct the system and
failure to comply with terms and conditions of the
franchise. Said penalties may be assessed against Rite
Cable by the City and collected directly from the Letter of
Credit. The Letter of Credit must be maintained pursuant to
the prcoedures and requirements of this section.
SECTION 5. BONDS
Rite Cable must maintain with the City a bond condi-
tioned upon the faithful performance by Rite Cable of the
franchise, and further conditioned upon the terms and
requirements of this section.
ARTICLE VIII. DEFAULT
SECTION 1. NO!ICE AND DEFAULT
City shall notify Rite Cable in writing of violations of
the franchise. Rite Cable shall have thirty days to cure
such default, or be subject to the procedures of this
section leading to termination of the franchise.
ARTICLE IX. FORECLOSURE, RECEIVERSHIP
AND ABANDONMENT
SECTION 1. FORECLOSURE
Upon the foreclosure of judicial sale of the System, the
provisions of the franchise governing consent to transfer or
change in ownership shall apply.
SECTION 2. RECEIVERSHIP
City shall have the right to cancel the franchise 120
days after the appointment of a receiver or trustee.
SECTION 3. ABANDONMENT
Rite Cable may not abandon any portion of the System
without having given not less than three months prior notice
to City and Board. Any such abandonment may be deemed a
cause for termination of the franchise.
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ARTICLE X. PURCHASE OF THE SYSTEM
SECTION 1. GENERAL
The Section provides for the City's right to purchase a
system, either pursuant to the terms andconditons of a bona
fide purchase offer which:Rite Cable is willing to accept
regarding the system, or in the event of forfeiture, revoca-
tion or termination of the franchise.
SECTION 2. PROCEDURES
The procedures for the City's election to exercise its
rights to purchase the System are contained in this sec-
tion. The procedure provides for City's right to accept the
terms of a pending purchase offer, or the appointment of an
arbitration panel to establish the terms and conditions of
the purchase of the system.
ARTICLE XI. MISCELLANEOUS
SECTION 1. TRANSFER OF OWNERSHIP OR CONTROL
Ownership in the system may not be transferred without
the prior written consent of the City. The procedures for
notifying the City of the transfer of ownership, and City
evaluation of said transfer, are provided for in this sec-
tion.
SECTION 2. REMOVAL AFTER TERMINATION OR REVOCATION
The City shall have the right to require Rite Cable to
remove, at Rite Cable's expense, all or any portion of the
System within City upon the revocation or termination of the
franchise pursuant to the terms and procedures of this sec-
tion.
SECTION 3. WORK PERFORMED BY OTHERS
Rite Cable must inform the City of the names and
addresses of any entity other than Rite Cable which shall
perform services pursuant to the franchise.
SECTION 4. GENERAL PROVISION ON RIGHTS AND REMEDIES
All remedies and rights given to City by the franchise
are in addition to any other rights which City might other-
wise have regarding the System or Rite Cable.
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SECTION 5. APPLICABLE LAWS AND COURT DECISIONS:
SEVERABILITY
The franchise must at all times be in compliance with
the rules of the Minnesota State Cable Board and all laws,
ordinances and regulations- of federal, state and city
government relating to the cable television system and the
franchise. If any provision of this franchise is declared
invalid or void, that section may be severed from the
franchise with the remaining sections in full force and
effect. If the City determines that a provision of the
franchise is affected by law, ordinance or regulation, City
shall have the right to amend, modify, alter or repeal any
provisions of the franchise to such reasonable extent as
necessary to carry out the intended purposes of the
franchise.
SECTION 6. GRANTEE ACKNOWLEDGEMENT OF VALIDITY OF FRANCHISE
Rite Cable acknowledges that it has reviewed the
franchise and that under current law Rite Cable believes
that the franchise is not unreasonable or arbitrary.
ARTICLE XII. ADMINISTRATION AND ADVISORY BODY
SECTION 1. ADMINISTRATOR
The Commission shall be responsible for the administra-
tion of the franchise.
SECTION 2. ADVISORY BODY
The City may appoint an advisory body to monitor per-
formance of Rite Cable in executing the provisions of the
franchise.
SECTION 3. DELEGATION OF AUTHORITY BY CITY
The City may delegate at any time its rights or obliga-
tions under the franchise to any body or organization.
ARTICLE XIII. ACCEPTANCE, INCORPORATION OF
OFFERING, EXHIBITS, PUBLICATION
SECTION 1. TIME OF ACCEPTANCE; GUARANTEE; INCORPORATION OF
OFFERING; EXHIBITS
Rite Cable shall accept the franchise pursuant to the
procedures included in this section. The proposal of Rite
Cable shall be incorporated by reference into the fran-
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chise. Summaries of the proposal shall be available in the
office of the City Clerk, the administrator, the Commission
attorney, the local office of Rite Cable, the office of any
school district in the City, and the State Cable Board. The
exhibits to the franchise are: Exhibit A - Schedule of
rates; Exhibit B The offering (Proposal) of Rite Cable.
The ordinance was passed and adopted the 5th
November , 1984.
day of
c;;;?/J~
Richard Hinkle
'Mayor
Attest:
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, ,Oam!'l'ANCESUMMARY
, r' ,:Final Franchise', }",
o,i City of Elk River' ,
,Il\:n'ordfnance,',.fnclUding 'addimdum wit,li
, · e~hibits,irilntinga' fr~nchjse f to RiCe. Cable
,Compiuiy of Minnesota,Ltd.,. (herem~fter
""JUteCable") tQ operate and mamtain a cab~e ,I
, ' c9mmunicattpns ilystem in, the City of Elk;
Il-fver setti!lgforth conditions accompanying
Ute grant ,of franchise; providing for re~~la-
tlon arid use of the system;,and pres<;nbmg
penalties for the violation of its ptovisions.
STA TEMENTOF' INTENT t\ND PUR-
POSE; FINDINGS. ' ' " "
The City of Elk River (hl1reinafter "Cit(')
adopt!' a' cable ,television ,franchise to' ~r~ng
about the development of' a cable televiSIOn
system and the' continued operation ?f it. .
Such a development can contnbute
sfgnifican~ly to thecommunicatio~needs
and desires of many. Further, the City may
achieve better utiliziItiqn ,and improvement
'of public services. The City Council found
Rite Cable's technical ability, financial condi-
tion, legal qualifications, and character to be
appropriate to construct; and operate a cable
television system within City.
, ; ARTICLEI.
SHORT TITLE AND DEFINITI9NS
The Ordinance shall be knowIi and cited as
We" c;~ble' Comml,loi~ations Ordinance. The
I , definition section includes 24 terms which
are definell for the pUfpose of the franchise.
. " ' ARTLE II. ;.
GRANT OF AUTHORITY
AND GENERAL PROVISIONS
SECTION I. GRANT OF. FRANCHISE
AND ACCEPTANCE' .
, The City grants to Rite Cable a non-
exclusive frimchise to be, properly executed
and acknowledged by' Rite Cable and
'delivered to City. Rite Cable shall deposit
with City a non-refundable acceptance fee for
the purpose of deferring the costs and .ex-
pense's of. development of the franchise.
Security deposits, letters of credit, cer-
tificates of insurance, bonds, and organiza-
tionaland creation documents of the com-
pany must be delivered to City.' .
. SECTION 2. AUTHORITY GRANTED
. The City grants to Rite Cable permission
to use the streets for eI:ecting, constructing,
operating and PIaintaining the cable C9m-
munications system.
SECTION 3. AGREEMENT
Rite Cable agrees to be bound by all terms
of the franchise and to provide all services
set forth in its prop9sal co City.
SECTION 4. FRANCHISE TERM
The franchise shall be for a 15-year term
from the date 'of acceptance.
SECTION 5. AREA
fhe franchise il;lgrant~d for tile City_as it
,.istll frollltill1e tQ timllq~rlng the,term\o,f
the franchise '.' "''', " ,'" ,",
, SECTION\6.:PO~I(::EANDJiJMINENT'DP'
MAIN llOWERS '\ "", ','
Rice Cable'U'ikhtf:l I;:\re subject;t9the rights
of eminent, dOmain of ch~ qty-anq'to,the
P'Olicypowei's9hheqty."",:. ", ",
SECTION 7,'lJSEOF GRAN1'EE
FACILITIES ' , .
,",'J.'~~gitr. J.l~~J~~.':~?~t. toi~lltall.an4,.~ain',
" taiu 'i\ny' fQl:~Ur~ll' 'It i:l!lllll'!lllupOn, the 'poles
and within the"UtidergrQund pipe!; and~on-
,duits and ff~tu'res of Rite Cable, ',. . I
, SECTION8.WRITTENNdTICE
All notic~lj shall be delivered in writing to
the ,offices' of City and the St. Paul office of
Rite Cable.;'" ',.
SECTION 9: RIGHTS OF INDIVIDUALS
No signal~ shall be transmitted from the
'.bscriber terminal except as required to
p,vide servi<<;elluthorized by the. franchise
",iid the. subscriber. 'Informatwn from
sub~criber terminals 'may .not be gathered or
stor'ed without the express written permis-
sion of the subscriber. The terms and condi-
, tions of the written authorization are includ-
ed in this section.
SECTION 10. CERTIFICATE OF CONFIR-
MATION
Rite Cable must obtain a regular certificate
of confirmation from the Minnesota State
Cable Board.
ARTICLE III.
DESIGN OF SYSTEM
SECTION 1. CHANNEL CAP AC.ITY
SUBSCRIBER NETWORK
A system <<;apable of providing at least 53
downstream video channels and four fully ac-
tivated upstream chllimels shall be con-
structed pursuant to the conditions of the
proposal of Rite Cable.
SECTION 2. PICTURE QUALITY AND
TECHNICAL REQUIREMENTS.
Rite' Cable will be required to transmit a
signal to the subscriber, and further to comp-
ly with all technical sti.andards of their pro-
posal and Federal Communications Commis- .
sion requirements.
SECTION 3. TWO-WAY CAPACITY
Rite Cable shall initially activate return
channels at the time of system activation as
required by this section.
SECTION 4. FACILITIES
Rite Cable shall construct its facilit~esas
,t forth in its proposal to the,City.
..IECTION5. S~ECIAL CHANNEL AND
ACCESS REQUIREMENTS ,
\The System shall carry broadcast stations,
an emergency override 'system and 5 special
access channels including public, school,
government, leased, and a community eduea,
tion library aCCeSS. The frllnchise details
specific ,access rules which must be
developed.by Rite Cable.
SECTION '.6. SERVICE TO PUBLIC
BUILDINGS AND EDUCATIONAL IN-
STITUTIONS ,
Rite Clj.ble wili' provide service, to the
, goyernIp!,lI,1t,\l\:I1-p,5l..non-governmental in-'
N!!~W~VV~NJ1;~TJ().N ,;,f \i,l'
" '. !l'Qitie!; of ,Bi~L.!I~er
i',PilI1l,fl9" Elk RiveIl"
9,,. Rp<:ldord,i;"lItid
IihllU.Qe,'~!ilJPpletely,
ml~jlll1l:ldspbe con"
llystemll \,i"ngw .,;Q~
.~~(l~,i,.Qq~,'~r~i ~QJll.Qent.t~
!'!.lQn,lcwcted. ,j i, "', '\,
OASTlNG~i ,i' .1'"
capable pf ,sendHltl
JiwtY'll!lpa~atelYI~Q
onll.c;g.mm\Ulity, ~/lyi
:h~.,!i,tlthe ,pame tiJPe;,
'IJimimity ,may i':Wlltc;~
. tlle slime tiJ:!!;e~n
.,< ;"!i
.~~;- ::.~\~;/M<;t)
SECTION 1. SERVICES {\ND PROGRAM-,
MING' ' '. '
. Programn'1ing' ,shall be provided as
speCified'in the ptbposalofItiteCable. Pro-
gra'mIriingshall be lI!ided .and' d'e~etedpur'
suantto the procedUres of Section L '
SECTION 2. 'If'JTERRUPTION OF SEH,.
VICE4Ni>'COMPLAIN~S ,'. ", .' .,..
Service sha,ll not be mte~rUpte~ UnleSll
-'reasonably necessary. If service is inter,
rupted fQr more than 48 hours in any 30 day
period, subscribell shall be credited pro-rata
for such interruption. An office shall be.main-
tained in the area and shall be capable of
receiying'complaints and requests for repairs
or adjustments at any time seven days l?er
week. This section further detaIls
subscriber compla~nt procedures.
ARTICLE V.
CONSTRUCTION,INITIAL SERVICE
AREA, LINE EXTEN~HON AND
CONSTRUCTION STANDARDS
\ SECTION 1. INITIAL SERVICE AREA
All&reas containing dwelling units within
the city shl,lll be constructeJi as the initial ser-
vice IIrea.. '
SECTION 2. LINE EXTENSION POLICY
Service shall be extended to those areas
not in the initial service area pl,1rsuant to the,
formula of Section 2. ' . '. .
SECTION 3. CONSTRUCTION'
TIMET AB'l.E i' ,
Rite Cap!e shall conlltruct all liTeas 9f t4~ '
initial seryicearea which contain dwelling
u~its withiIl'fifteen months of the granting of
the State Certificate of ConfirUlation. Delays
in construction, shall result in penaltiell pro-
vided by the franchise. . . .'
SECTION 4. CONSTRUCTION STAN-
DARDS . .
, Rite Cable shall comply with all con-
structionstandards of the franchise a!l well
as all applicable laws, . ordinan~es, rules,
'regulations and codes, federal, state and
local. ,
. SECTION 5. CONDITIONS ON USE
RiteCable shall not, in its construction of
the SystePI, interfere with any gas, electric or
television fixture, water hydrant or main, or
sewer line. Sel;tion 5' also provides pro-
cedures for the raising and lowering of lines,
trimming of trlles, and the recognition of
potential liability for persons damaging Rite
Cable capabilities.
ARTICLE VI.
SYSTEM OPERATIONS
SECTiON 1. INFORMATION
AVAILABILITY
City shall have the right of reasonable ac-
cess to Rite Cable's records.
SECTION 2. SERVICE CONTRACT
If Rite Cable maintains a service contract
with subscribers, the form of said contract is
detailed in SeCtion 2.
SECTION 3.SUBSCR1BER PRACXICE;$
,There sl\allbe nochar.gefor disc(>rinel.;tio~
qtllny installat~on, service, Of. ouUet. Se~tion "
3alsQ details Rite Cable's righttodi$C~nmec;t
fo,rfitihi.r~ to pay themol1thly,::sup~c~~I>~r
feea.' ..' ',' .' ",; '. .
SEC,1'I()N\ 4" FRf\NClIISE'FEES,R"" 1$S,
CJIf\RQES,. GIlANGES IN'F;li)ES AT'lP'
PROCEDURES . "." .
", 'Tl1rpugho~t the term of ,the: franp~ise, R~t~.'
: Cableshl1l1pay to City an annl,1aUee of 3%. of,
~U,gross revenUeS. The rates prc;>vided in the
franchise shall, be ,guaranteed for '2 years
after the' franchise'is certified by t.heBoard
or until one' year after COmpletion of coil"
struction in the initial service area,
jwhichever is . longer. Basic rates sh!iU be-,
'regulated pursuant t9 the terms arid condi-
tions of the franchise. Rates for other than
Basic Service shall be regulated pursuant to
, tne terms and conditions of, the frl1nchise. ,
The City retains the right to review the per-
formance,and technological upgradipg of the
System. Rite Cable shall exercise its best ef,
forts to maintain a modern, state-of-~he-art
System which is comparable to other
'operating cable television systems similarly
situated.
. SECTION 5. FRANCHISE RENEWAL
The 'franchise IIlay be renwed a.t any time
for a period of up to fifteen years or on a year
to y!lar basis at the sole discretion of the Ci-
ty,
ARTICLE VII.
INDEMNIFICATION,INSUltANCE,
LETTER OF CREDIT AND BOND
SECTION 1. GENERAL
The City retains all rights of indemnifica:
tion, insurance, letter of credit or bond as
provided in the franchise.
SECTION 2. INDEMNIFICATION AND
INSURANCE
Rite Cable shall fully indemnify, defend
and, hold harmless, City and all of its agents
and employees from liability and judgments
for damages in connection with: Damage to
nprQ{lnQ or nronprt.v An" ,..lAlrn AriQina out of
the franchise, Rite Cable's failure to com~ly
with provisions of the franchise, or any claim
Rite Cable may have against City.
SECTION 3. INSURANCE
Rite Cable shall maintain liability ~n-
surance for the entire term, of the fr~nchise
for' amouns as specified in the franchise and.
pursuant to the minimum requirements of
, this section. ,
SECTION 4.,LETTER OF CREDIT
Rite Cable shall maintain an irrevocable
a~d unconditional Letter of Credit. The l~tter
of Credit shall provide that funds be paid tp
the City upon demand by the C!t~ pursuant
to the procedures and ~mm~m re-
quirements of this section. ThiS sectIOn fur-
ther . provides minimum amounts for
penalties such as failure to ~onstruct the
system and failure to comply WIt~ terms a~d
conditions of the franchise. Said penalties
may be assessed against Rite Cable by the
City, and collected directl! f.rolll the Letter..of
Orooit:Tne r;ett~r'of Gre4J~must,b~,l.1lIUn-
tJined :P\1rs~ant to tlie'~pro~ed,Qrll!; ay-dire-
I quirllments, of tb,is sect~()~. '
SECTIOffli;'BON'DS,;J,. <" '.,
. '.' RiteCable.mu$t' maintain' witlY. theGlty; 'Ii
'.'bonq-' 'conditf!.iried...upon' .tl:ie':f~It'hful'Perf9r-
,,~~~c,~:Kd~ti~rl~a~~::Jh~;=~t:f~:;. :~~'; !
'quir~meJitsgf,~hif:l se~tion.'."'.: " ..,.....
"',;"J.. ARTHI1JiE'Vln,.,.,;.
.' '.. '.. .'DEFAUI,.'T"".;i"',c"
,'.SECTlbN'!l"'Ni)'J:'ICli}ANoPEF~UtT:'!.
'i')"'CitY~~~IlN)tit~r).H,jte'.S:~Ql~; i!i'" wri~ing 91
':~ioIijtiori~c'lr tlIefr~n'chis~,Rlte' C~bl~~hall.
havetl\wwMt~tfl~l.J.r,e ,f:lU9~ defa,~J~i l'll';qe
. .'. ct....,to..tb;~:'*i>p~!iQr~~!:gf::'W~~\SectlOn
~r~g :fQ'~~fJW!iationqfth~ ft~~~h,i~e.
"',,,,,,>,,,,,.,., 'J'I(J~E"'X.,,.:,:,:,: , .',
RE:R~O~lV'JJjJl;SfUr "',.
QNM "I'
iLk Ii.f!. .
SE.CTION 2. Jl,ECl!JI
, Citnhalln~y~ the '..' ,.
chise 120 dli:ysaf~el"t.,a~IlQtPt ....,. : ......
receiver-on t~st~~.j.__:p _,,'~(:) ~~,,~,;;:<:!-;;.'tt:J:l;_,;.i '. ;,:~-i:: ,,)j,,:I_~::: :A::',_:
SECTION3AIIANuQNMJiJN'rJ(i11'(':": '
.' .Ri ta cabJe ~ll)!IY.' ri9!) a bliridoPi~hy :PP'itinnpf:,
the '.$ysteJlli'witho\.Jl' hiJ\dng', givenl~~tiJeSS!
than,three months pl'iol'" nqtWetoClty'and
Board. Any suc~ abandQnment'nlay be~eem-
led a cause for termination of ~he franchise.
.., ARTICLEX.\!,,'....
. PURCHASE ORTHE SYSTEl\L,
SECTION L GENERAL .'1. , : .
'. TheS~ction provides for .the City's'right .'
p4rchase a system, either purs.uant to the-
terms and conditions of a bona fide purchllse
offer which Rite Cable is,' willing to accept
regarding the system, 'or in the 'event . of'
forfeiture, revocation6r.)termination of the
franchise~
SECTION 2. PROCEDURES . .i..
The procedures for the City's election to
exercise its rights to' purchase the System
are contained in this section. The procedure
provides for City's right to accept the te~ms
of a.pending purchase offer, or the a~poInt-
ment of an arbitration paneUo'establish the
terms and condition!; of the pu'rchase of the
system." I
ARTICLE XI.
. MISCELLANEOUS
SECTION t T,ftANSFJ):R" OF 'OWNER,
SHIP OR CONTROL '.'
Ownerhsip!in the, system may not be
transferred without the prior written C9Iisent '
of the City~ The procedures f()r notifying ~he
".City ,of the transfef,bf ownership,'a~dCity
evaluation of said transfer, are proVided . fQr
in this section; '. ".
SECTION 2, REMOVAL AFTER TER.
MINATIONOR REVOCATION, '
The. city shall have the right to require
Rite Cable to remove, at Rite Cable's ex-
pense, all or any portion of the Syst~m ~ithin
City upon the revocation or termmatlOn of
the franchise pur!luant to the terms and pro-
cedures of this section. .
SECTION 3: WORK PERFORMED BY
OTHERS ." . .
Rite Cable must inform the City of the
names and addresses of any entity other
than Rite Cable which shall perform services.
pursuant to the franchise. . ,
SECTION 4. GENERAL PROVISION ON
RIGHTS AND REMEDIES' i,
All remedies and rights given. to City' by
the frapchise are in addition to a~~ other
rights which City might otherWIse have
regarding the System or Rite Cable.
SECTION 5. APPLICABLE LAWS AND
COURT DECISIONS: SEVERABILITY
The franchise must at all times be in com-
.pljance with the rules of the Min~esota State
Cable Board and I all laws, ordmances and
regulatiotlsc'lf federal, statellnd. bity ;govern',.
ment relathigtu the cable television' sYStem
aIi!i ,.. the, franchise: If. any.! provision,rI-,this
franchjseis declared invalid' or void,tfilat s,~d..
tion may be' severed from the frapl;hise,wlth
the remaining sectionsin'fuU fOJl<;e'andef.!
fect. If tPe Gity,l determines that lJ;. provision,
bt"the frlinchise iihlffectedby law,ordipance
orr~l;rUlafi9n;;iCjty ,lIhaU h~ye t~eri~~~ to
I:I,w~nq.,!ri.bdify:;. .,!-l*~r, orrep~alal1r proYlslOIis
.' bf'~~f ftaucI1'i~~'ti? such. 're~sbnable' extentr!{s
Iieces!ial'Y to carry'out the mtended purposes
of the franchise.' , I .' .
SECTION 6. GRANTEE ACK.lIlPWLEDGE.
MENT OF VALIDITY OF FRAN,(:HISE
. Rite'Cable : acknowledges . tha"t, it has
reviewed the franchise and Fha t un4ercur.
rent law Rite Cable believes ~hat thtl/ran-
chiSEl is not unreasonable or arbitrary. .
\",-1'-; -,-':rl";
ARTICLE XU.
ADMINISTRATION AND
. ADVISORY BODY'
SECTION1. ADMIli./]STRA TOR:
. The Commission shall be respotisiJ)le for
t\Jeadministration of, the franchise;
SECTION 2; ADVISORYBODY
The City may appoint an ~dvisory b~dy to
monitor performance of Rite Ca~le m ex.
ecuting the provisions of the franchise. .
SECTION' 3; DELEGATI-ON OF
AUTHORITY BY CITY .' ,.
The City may delegate at, any ti~e its
rights or obligations. under the francW!;!e to
any body or organization. .' .
ARTICLE XIII.
ACCEPTANCE, INCORPORATION
OF OFFERING,
EXHIBITS, PUBLICATION"
SECTION 1. TIME OF ACC.f:PT ANCE;
GUARANTEE; INCORPORATION OF OF-
FERING; EXHIBITS
Rite Cable shall accept the franchise pur-
suant to the procedures included in this s~c-
tion. The proposal of Rite Cable shall be. m-
corporated by reference into the fran~hise.
Summaries of the proposal shall be available
in the office Of the City Clerk, the ad-
ministrator the Commission attorney, the
local office' of Rite Cable, the office of any
school district in the, City, and the St~te
Cable Board. The exhibits to the fra~c~l1se
are: Exhibit A . Schedule of rates; ExhibIt B
The offering (Proposal) of Rite Cable. .
The ordinance was passed and adopted the
5th day of November, 1984.
'Richard Hinkle
MaYQ~
Attest:
Phyllis Boedigheimer
City Clerk
(Nl'S)
FINAL
CABLE TELEVISION FRANCHISE ORDINANCE
Elk River, Minnesota
~
-'
Prepared by:
Thomas D. Creighton
O'Connor & Hannan
3800 IDS Tower
Minneapolis, Minnesota 55402
Telephone: (612) 343-1298
. TABLE OF CONTENTS
Page
STATEMENT OF INTENT AND PURPOSE............................l
FIND INGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I. SHORT TITLE AND DEFINITIONS
Section 1.
Section 2.
She r t Tit 1 e . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 2
Definitions. . . . . . . . . . . . . . . .. . . . . .. . .. .. . . . .. . . .2
ARTICLE II. GRANT OF AUTHORITY AND GENERAL PROVISIONS
Section 1.
Section 2.
Section 3.
Section 4.
Section 5.
Section 6.
Section 7.
~ Section 8.
,- Section 9.
"
Section 10.
..
Grant of Franchise and Acceptance.........8
Authorit~ Granted.........................9
Agreement.. . . .. . . . . .. . . .. .. .. . . . . .. .. . . . . . .. . .. . . .. ... 9
Franchise Term...........................10
Ar ea. . . .. .. . . .. . .. . .. .. . . . .. .. . .. .. e. . . . . . . . . . . .. . .. .. . 10
Police and Eminent Domain Powers.........lO
Use of Grantee Facilities................ll
Written Notice...........................ll
Rights of Individuals....................12
Certificate of Confirmation..............13
ARTICLE III DESIGN OF SYSTEM
Section 1.
Section 2.
Section 3.
Section 4.
Section 5.
Section 6.
Section 7.
Section 8.
Section 9.
Channel Capacity-Subscriber Network......14
Picture Quality and Technical
Requirements. . . . . . . . . . . . . . . . . . . ; . . . . . . .15
Two-Way Capaci ty. . . . . . . . . . . . . . . . . . . . . . . . .17
Facilities...............................l7
Special Channel and Access
Requirements................................. .17
Services to Public Buildings
and Educational Institutions...........2l
Interconnection..........................22
Narrowcasting.................................. .23
Regional Channel.........................23
ARTICLE IV. SERVICES AND PROGRAMMING, SUBSCRIBER
CONTRACTS, COMPLAINTS
Section 1.
Section 2.
Services and Programming................. 23
Interruption of Service and
Complaints.................................... .24
( i)
ARTICLE V.' CONSTRUCTION, "INITIAL SERVICE AREA,
LINE EXTENSION AND CONSTRUCTION STANDARDS
Section 1.
Section 2.
Section 3.
Section 4.
Section 5.
Ini tial Service Area..................... 27
Line Extension Policy.......... '. . . . . . . . . .28
Construction Tirnetable...................29
Construction Standards... .'. . . . . . . . . . . . . . .30
Conditions on Use........ ................34
ARTICLE VI. SYSTEMS OPERATIONS
Section 1.
Section 2.
Section 3.
Section 4.
~
.'
",
~
Section 5.
Information Availability.................35
Service Contract.........................37
Subscr iber Practices..................... 39
Franchise Fees, Rates, Charges,
Changes in Fees and Procedures.........41
A. Rate Change Procedures...............41
B. Franchise Fee........................42
C. Rates and Other Charges..............42
D. Ra t e Changes......................... 44
E. periodic Reviews, Renegotiations
and Technological Update of
System. . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
Franchise Renewal........................ 57
ARTICLE VII. INDEMNIFICATION, INSURANCE, LETTER OF
CREDIT AND BOND
Section 1. General..................................sa
Section 2. Indemnification and Insurance............59
Section 3. Insurance................................61
Section 4. Letter of Credit.........................62
Section s. Bonds....................................67
ARTICLE VIII. "DEFAULT
Section 1.
Notice and Default.......................68
ARTICLE IX. FORECLOSURE, RECEIVERSHIP AND ABANDONMENT
Section 1.
Section 2.
Section 3.
Foreclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71
Receivership.............................72
Abandonment..............................72
ARTICLE X. PURCHASE OF SYSTEM
Section 1.
Section 2.
Ge n era 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 3
Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74
(ii)
ARTICLE XI. MISCELLANEOUS
Section 1.
Section 2.
Section 3.
Section 4.
Section 5.
Section 6.
ARTICLE XII.
Section 1.
Section 2.
Section 3.
ARTICLE XIII.
~
-'
Section 1.
.
..
Transfer of Ownership or Control.........77
Removal After Termination of
Revocation.............................81
Work Performed by Others.................82
General Provision on Rights
and Remedies.......................... .83
Applicable Laws and Court
Decisions: Severability...............84
Grantee Acknowledgement of
Validity of Franchise..................85
ADMINISTRATION AND ADVISORY BODY
Administrator. . . . . . . . . . . . . . . . . . . . . . . . . . . .86
Advisory Body........ _.. . . . . . . . . . . . . .. . . . .86
Delegation of Authority by City..........86
ACCEPTANCE, INCORPORATION OF
OFFERING, EXHIBITS, PUBLICATION
Time of Acceptance; Guarantee;
Inco~poration..........................87.
(iii)
ORDINANCE NO. 84-9
AN ORDINANCE, INCLUDING ADDENDUM WITH EXHIBITS, GRANTING A
FRANCHISE TO RITE CABLE COMPANY OF MINNESOTA, LTD. TO,OPER-
ATE AND MAINTAIN A CABLE COMMUNICATION SYSTEM IN THE CITY;
SETTING FORTH CONDITIONS ACCOMPANYING THE GRANT OF-FRAN-
CHISE; PROVIDING FOR REGULATION, AND USE OF THE SY~TEM; AND
PRESCRIBING PENALTIES FOR THE VIOLATION OF ITS PROVISIONS
The City Council of the City of Elk River ordains:
STATEMENT OF INTENT AND PURPOSE
The City intends, by the adoption of this Franchise, to
bring about the development of a Cable Communications Sys-
tem, and the continued operation of it. Such a development
can contribute significantly to the communication needs and
desires of many. Further, the City,may achiev~ better uti-
-,
lization and improvement of public services wit~ the devel-
opment and operation of a Cable Communications System.
Past studies, participated in by City, have led the way
for organizing a means of procuring and securing a Cable
Communications System which, in the judgement of the
Council, is best suited to the City. This has resulted in
the preparation and adoption of this Franchise. '
FINDINGS
I~ the review of the proposal and application of Rite
Cable Company of Minnesota, Ltd. ("Grantee"), and as a re-
suIt of the public hearings, the City Council makes the
following findings:
reasonably inferred that a meaning particular to the cable
communications industry should be utilized, in which case
meanings or definitions shall be determined in the sole
opinion of City or the Sherburne/Wright County Cable Com-
munications Commission.
A. "Basic Service" means the delivery by Grantee to
subscribers of satellite delivered special interest pro-
gramming, automated programming, broadcast stations and
access programming, and local origination channels as cov-
ered by regular monthly charges paid by subscribers, which
service is initially described in Offering as the twentyfive
video channel Basic Service tier. This defihition excludes
.'
",
optional services for which a separate charg~ is made.
..
B. "Board" means the Minnesota Cable Communications
Board.
C. "City" means City of Elk River, a municipal
corporation, in the State of Minnesota, acting by and
through its City Council.
D. "Class IV Channel" means a signaling ~ath provided
by the Cable Communications System to transmit signals of
any type from a subscriber terminal to another point in the
Cable Communications System.
E. "Commission" shall be the Sherburne/Wright County
Cable Communications Commission, a duly constituted joint
powers Commission of which city may at any time be a member
city.
- 3 -
F. "Conve~terU-means- an electronic device, which con-
verts signals to a frequency acceptable to a television
receiver of a subscriber, and by an appropriate channel
selector permits a subscriber to view all subscriber signals
included in the service.
G. "Council" means the governing body of the City.
H. "Drop" means the coaxial cable that connects the
subscriber terminal to the nearest feeder cable of the sys-
tem.
I. "FCC" means the Federal Communications Commission
and any legally appointed, designated or elected agent or
successor.
.'
",
J. "Grantee" means Rite Cable Company of Minnesota,
..
Ltd., its agents or employees.
K. "Gross Revenues" means all revenue derived directly
or indirectly by Grantee, its affiliates, 'subsidiaries,
parent, and any person in which Grantee has a financial
interest of five percent (5%) or more from or in connection
with the operation of the System, includirrgbut not limited
to, basic subscriber service monthly fees, pay cable fees,
installation and reconnect ion fees, leased channel fees,
converter rentals, income earned from deposits (excluding
deposits themselves), studio rental, production equipment
and personnel fees, and advertising revenues. The term does
not include any taxes on services furnished by Grantee and
imposed directly upon any subscriber or user by the State,
- 4 -
'Ci ty. o-r;other' gover-nmental -uni t. Gr:oss Revenues shall not
include revenues for signals originating in or passing
through the franchise area for transmission to a cable sys-
tem or subscriber without the franchise area unless Grantee
receives revenue from other than subscribers from without
the territory served by System delineated in the Offering
for such signal which has not already otherwise been
directly or indirectly subject to a franchise fee or similar
tax, in which case said revenues will be considered Gross
Revenues for the purpose of this franchise.
L. "Installation" means the connection of the System
from feeder cable to the point of con~ection at a sub-
-,
scriber's facility.
..
...
M. "Lockout Device" means an optional mechanical or
electrical accessory to a subscriber's terminal which inhi-
bits the viewing of a certain program, certain channel or
. .
certain channels provided by way of the cable communications
system.
N. "Metropolitan Area" means the seven-county/Minneap-
olis/St. Paul, Minnesota major metropolitan area.
O. "Offering of Grantee" or " Offering" means that
certain document dated February 24, 1984, entitled "Applica-
tion for Cable Communication System Franchise For Member
Cities Of The Sherburne/Wright County Cable Communications
Commission" and signed by Grantee, as amended from time to
time by mutual written agreement between Grantee and City or
- 5 -
i tsde-iegatee, and--.that--certain ..document dated July 11, 1984
entitled. "Sherburne/Wright County Cable Communications Com-
mission," along with any other written documentation sup-
plied by Grantee to City or the Commission in conjunction
with any public meeting of City or Commission, which docu-
ments are on file with the City Clerk.
P. "Pay Cable", "Service other than Basic Service" or
"Premium Service" means the delivery over the System of per
channel or per program audio-visual signals in intelligible
form to subscribers for a fee or charge, in addition to the
charge for Basic Service.
Q.
"Prime Rate" means the int:erest charged from time
.'
to time by the First National Bank Qf Minneapolis for 90 day
..
unsecured loans to commercial borrowers of the highest
credit rating.
R. "Public Property" means any real property own~d by
city other than a Street.
S. "Scrambler/Descrambler" refers respectively to the
equipment installed in the cable communications system's
headend equipment and subscriber terminal used to isolate
pay cable and other ancillary service channels from basic
service which is accomplished by electronically distorting
the signal prior to its transmission through the cable com-
munications system and reconstituting the signal at each
authorized location for subsequent display.
- 6 -
- 7 -
ARTICLE II.
-
GRANT-OF AUTHORITY AND GENERAL PROVISIONS
SECTION 1. GRANT OF FRANCHISE AND ACCEPTANCE. City
hereby grants to Grantee, to be effective upon certification
by Board, a nonexclusive franchise subject to all of the
terms and conditions as herein provided:
A. Grantee shall accept this Franchise in the fol-
lowing manner, and not later than the time set out in Arti-
cle XIII, Section 1:
(1) This franchise will be properly executed and
acknowledged by Grantee and delivered to City.
( 2)
At the same tim~ as delivery of the executed
.'
Franchise, Grantee shall d~posit with City its nonre-
fundable acceptance fee in a sum to be determined by
City for the purpose of defraying the costs and expenses
of developing this ,Franchise and for the enforcement and
administration costs to be incurred until Franchise fees
may be realized. After the initial payment of the
acceptance fees, should costs .in excess of the accep-
tance fee be incurred by City, City may charge such
excess costs to Grantee and Grantee shall pay them on
demand by City, as an advance on the payment of Fran-
chise fees.
(3) All security deposits, Letters of Credit,
certificates of insurance, acceptances, bonds, attor-
neys' opinions, organizational and creation documents
- 8 -
and guarantees required of Grantee by- this Franchise,
shall be delivered with the executed Franchise and in
accordance therewith.
SECTION 2. AUTHORITY GRANTED.
A. City grants to Grantee permission to use Streets
for erecting, constructing, operating and maintaining the
System. Other rights necessary for the System on other
public or private property must be obtained by Grantee, but
City shall have no obligation to give or grant or assist in
obtaining the same.
B. Grantee shall construct and maintain the System so
, as not to interfere with other uses of Streets. Grantee
shall make use of existing poles and other facilities avail-
able to Grantee, where economically feasible. Grantee shall
not erect additional poles without prior approval of City,
which approval shall not be unreasonably withheld or de-
layed.
C. Notwithstanding the above grant to use Streets, no
Street shall be used by Grantee if City in its sole opinion
determines that such use is inconsistent with the terms,
conditioris or provisions by which such Street was created or
dedicated, or with the present use of the Street.
SECTION 3. AGREEMENT.
A. Grantee agrees to be bound by all the terms and
conditions of this Franchise.
B. Grantee also agrees to provide all services specif-
ically set forth in, and to comply with all provisions of,
- 9 -
its Offering to provide a System-within the boundaries of
City. Failure of Grantee as determined solely by Commission
to provide a System and services or their equivalents as
described in its Offering, shall be a violation of the pro-
visions of this Franchise and grounds for termination of
this Franchise with no penalty and at no cost to City. In
the event of conflicts or discrepancies between the Offering
of Grantee and the p~ovisions of this Franchise, the provi-
sions which provide the greatest benefit of City, in the
opinion of the Council, shall prevail.
SECTION 4. FRANCHISE TERM. This Franchise shall com-
mence upon the effective~date of the regular certificate of
-
confirmation issued by Board and shall expire fifteen (15)
,
years from date of acceptance.
SECTION 5. AREA. This Franchise is granted for City as
it exists from time to time during the term of this Fran-
chise.
SECTION 6. POLICE AND EMINENT DOMAIN POWERS.
A. Grantee's rights are subject to the rights of emi-
.
nent domain of the City and to the, police power of City to
adopt and enforce ordinances necessary to the health; safety
and welfare of the public.
B. Any conflict between the provisions of this Fran-
chise and any other present or future lawful exercise of the
right of eminent domain and the police powers of City shall
be resolved in favor of City.
- 10 -
SECTION 7. USE OF GRANTEE FACILITIES. City shall have
the right to install and maintain, free of charge, upon the
poles and within the underground pipes and conduits of
Grantee any wires and fixtures desired by City. Grantee
waives any claim against City arising from City's exercise
of these rights. City shall fully indemnify, defend, and
hold harmless, Grantee, its officers, partners, employees,
and agents against any and all costs, damage, expense,
claims, suits, actions, liability, and judgments for damages
with respect to third parties in connection with City's use
of said poles, underground pipes, conduits, wires and
fixtures.
}.
....
SECTION 8. WRITTEN NOTICE. All notices, reports or
,
demands required to be given in writing under this Franchise
shall be deemed to be given when delivered personally to any
officer of Grantee or City's Administrator of this Franchise
or 48 hours after it is deposited in the United States mail
in a sealed envelope, with registered or certified mail
postage prepaid thereon, addressed to the party to which
notice is being given, as follows:
If to City:
City Administrator
City of Elk River
505 U.P.A. Drive
Elk River, MN 55330
With Copy to:
The Sherburne/Wright County Cable
Communications Commission
Attention: Thomas D. Creighton
3800 IDS Tower
Minneapolis, MN 55402-2254
- 11 -
If to Grantee:
~~---Ri te-CableCompany of Minnesota, Ltd.
800 Norwest Center, Suite 800
55 E. Fifth Street
St. Paul, MN 55101
Such addresses may be changed by either party upon written
notice to the other patty given as provided in this Section.
SECTION 9. RIGHTS OF INDIVIDUALS.
A. No signals, including signals of a Class IV Chan-
nel, shall be transmitted from a subscriber terminal except
as required to provide a service authorized by this Fran-
chise and the subscriber. Grantee and anyoth~r person
shall neither initiate nor use any procedure or device for
monitoring individual viewing patterns or practices or oth-
~
erwise procuring or-:-storing or selling information or data
from a subscriber's 'terminal(s) by any other means, without
the prior authorization of the affected subscriber which
shall not have been obtained from .the subscriber as a condi-
tion of providing service. The request for such authoriza-
tion shall be contained in a separate document which promi~
nently states that the subscriber is authorizing with full
knowledge of the authorization provisions and which identi-
fies the purpose for which the data or information is being
gathered or stored. Such authorization shall be for a
limited period of time not to exceed one year. The authori-
zation shall be revocable at any time by the subscriber
without penalty of any kind whatsoever. A separate authori-
zation shall be required for each type or classification of
data or information sought from a subscriber terminal.
- 12 -
B. .. Granteehshal-l..not, without .the written authoriza-
tion of the affected subscriber, provide to anyone data
identifying or designating any subscriber. Any data, the
collection of which is authorized, shall be made available
upon request by and without charge to the authorizing sub-
scriber in understandable fashion, including specification
of the purpose for which the information is being gathered
and to whom and for what fee the information is to be sold.
C. Grantee shall not tap or monitor, arrange for the
tapping or monitoring, or permit any other person to tap or
monitor, any cable, line, signal input device, or subscriber
outlet or receiver for any purpose whatsoever, without the
prior written authorization of the affected subscriber as
required by paragraph A of this ~ection. This requirement
shall not apply to the tapping or monitoring of any cable,
line, signal input device, or subscriber outlet or receiver
by Grantee for the purpose of routine or emergency mainte-
nance checks.
D. Nothing herein contained shall prohibit Grantee
from verifying System operation and the transmission of
signals to an affected subscriber or from monitoring for the
purpose of billing. The information obtained pursuant to
this subsection shall be subject to the provisions of this
section relating to confidentiality.
SECTION 10. CERTIFICATE OF CONFIRMATION. Grantee shall
abide by the then current rules and regulations of Board
- 13 -
regardi~g the application, approval, and renewal of a Cer-
tificate of Confirmation. Failure of Grantee to obtain a
Certificate of Confirmation or a renewal thereof shall re-
suIt in automatic termination of this Franchise, and this
Franchise shall cease to be of any force or effect. How-
ever, Grantee may operate the System while the Board is
considering an appltcation for renewal of the Certificate of
Confirmation.
ARTICLE III.
DESIGN OF SYSTEM
SECTION 1. CHANNEL CAPACITY - SUBSCRIBER NETWORK.
A. The System shall be capable of providi~ at least
53 downstream video channels and four fully activated up-
,
stream channels. The System shall provide access to infor-
mation data bases with the capacity as detailed in the
Offering.
B. The System shall provide two tiers of subscriber
service. Tier 1 shall be a minimum 25 video channel Basic
Service Tier. Tier 2 shall be the Basic Service Tier with
access to the Satellite Service Package with a minimum of 13
video channels. Tier 1 and Tier 2 subscribers shall have a
choice of 6 premium services.
- 14 -
SECTION 2. PICTURE QUALITY AND-_TECHNICAL REQUIREMENTS.
A. The System shall transmit a- signal upon each sub-
scriber's television screen in black and white or color,
depending upon_whether color is being telecast and provided
the subscriber's television set is capable of producing a
color picture, that is of quality consistent with the
Offering. The System shall produce a sound that is not
materially distorted on any receiver of a subscriber.
Grantee shall use its best efforts to install and maintain
the System so as not to interfere with any subscriber's
ability to receive local broadcast stations.
B. Th~ System shall transmit or distribute signals to
any televisipn and radio receivers of any subscribers with-
out causing unreasonable crossmodulation in the cables or
unreasonably: interfering, in compliance with FCC require-
ments with other electrical or electronic systems or the
reception of other television or radio receivers.
C. Grantee shall construct and maintain a System that
at least mee~s minimum technical standards now or hereafter
promulgated by the FCC relating to cable communication sys-
tems; provided, however, that in no event shall the techni-
cal standards required to be met by Grantee be less strin-
gent than the FCC standards in effect at the time of the
adoption of the Ordinance, nor shall Grantee be required to
meet minimum FCC technical standards which apply solely to
cable communications systems for which franchises are
- IS -
granted subsequent to the..acceptance of this Franchise. The
Fl:C.technical standards relat\ng to cable communications
systems contained in subpart K of part 76 of the FCC rules
are hereby i~corporated by reference and made a part
hereof. In any event, Grantee shall, at a minimum, comply
with the technical standards of the Offering.
D. The System shall be designed for and operated on a
24 hours a day continuous operation basis.
E. Grantee shall initially and subsequently test the
technical capacity of the System according to the procedures
delineated in the Offering. Additionally, Grantee agrees to
allow Ci~ to select a consultant if City deems it is neces-
sary to r-eview and perform such testing procedure. The
,
results of any tests required by the FCC shall be filed
within ten days of the conduct of such tests with the City
and the Board. Representatives of City may be present dur-
ing testing. Tests may be done annually at such times as is
determined by City, with notice to Grantee. The expenses of
any tests required by the FCC shall be paid by Grantee. The
expenses of test required by City in addition to FCC re-
quired tests shall be paid by City from the Franchise fee.
Should the City-required tests show System to be not in
reasonable compliance with this Franchise, Grantee shall pay
upon demand of City all expenses associated with City -
required tests.
- 16 -
'"
S.ECTION 3 .TWO~WAY CAPACITY.- Grantee shall ini tially
activate return channels at the time of system activation
consisting of four return channels on each super trunk cable
and one return channel on each microwave path. Addition-
ally, return channels will be activated to connect the high
school and City Hall with the headend or hub.
SECTION 4. FACILITIES. The Grantee shall construct,
maintain and continue to provide all facilities and equip-
ment or their equivalents as set forth in the Offering xn-
eluding, but not limited to, the headend, hubs, micro-wave
and hard-wire distribution systems, studios, equipment and
other ~acilities. Grantee's plan, as set forth in the
",
Offering, for implementing the construction, utilization,
,
System performance, and maintenance of these facilities,
including its plans for accommodating future growth and
changing needs and desires, shall be fully and timely per-
formed.
SECTION 5. SPECIAL CHANNEL AND ACCESS REQUIREMENTS.
A. Grantee will carry broadcast stations in accordance
with FCC rules as from time to time revised.
B. The Government Access channel shall be dedicated as
~n emergency override channel operated by City.
C. Grantee will provide an audio emergency alert over-
ride system that will permit the interruption by designated
City officials of all audio (including FM) programming,
instructing citizens to switch to the Government Access
channel for emergency announcements.
- 17 -
D.- -Grantee shall provide at least five (5) channels
for"access use for the following uses: a public access, a
government access, a school access, a community education-
library access and a leased access. All residential sub-
scribers who receive all or any part of the total services
offered on the System shall also receive all of said five
(5) access channels at no additional charge. All channels
shall be activated upon System activation and thereafter
maintained. Grantee shall establish rules and regulations
prior to System activation for the use of access channels
which shall be approved by City before implementation and
thereafter shall not be altered or amended without approval
~
of G~ty. In preparing such rules:
(1) Grantee shall provide an equal opportunity for
use of access services.
(2) Grantee will consider and use its best effort
to implement needs assessments prepared by City.
(3) The hours of operation of the access studio
. .
shall be determined by mutual agreement of City and
Grantee. If no such agreement can be reached, the hours
of operation shall be, at a minimum: Monday through
Friday 9:00 a.m. until 8:00 p.m.; Saturday 9:00 a.m.
until 4:00 p.m., with studio time reserved at least 24
hours in advance, unless modified, subject to the prior
written approval of City.
- 18 -
-(4) Grantee will comply,-at a minimum, with the -
requirements of City and Board now or hereafter adopted
or determined by City or Board regarding access channels
but in no event shall the requirements be less than
those delineated in the Offering. Such requirements of
Board are hereby made a part of this ordinance and "in-
clude the following:
(a) Grantee shall, to the extent of the Sys-
tem's available channel capacity, provide to each
of its subscribers who receive all or any part of
the total services offered on the System, reception
~
.'
on at least one specially designated noncommercial
.
...
public access channel available for use by the
general public on a first come, nondiscriminatory
basis; at least one specially designated access
channel for use by local educational authorities;
at least one specially designated access channel
for local government use; and at least one spe-
cially designated access channel available for
lease on a first come, nondiscriminatory basis by
commercial and noncommercial users (the preceding
hereinafter referred to as the "access chan-
nels"). Subscribers receiving only alarm system
services or only data transmission services for
computer operated functions shall be exempt from
this requirement. The VHF spectrum shall be used
- 19 -
for- at least-one of the..specially designated non-
commercial..publicaccess channels required. No
charges shall be made for channel time or playback
of prerecorded programming on at least one of the
specially designated noncommercial public access
channels. Any fees for use of public access chan-
nels shall be consistent with the goal of affording
the public a low cost means of television access.
Access facilities, equipment and/or channel time
~
-'
will be made available to the general public, any
group or individual resident in City for the pro-
duction and/or cablecasting of noncommercial pro-
.
..
gramming free of charge on a first come, non-dis-
criminatory basis.
(b) Whenever any of the access channels is in
use during 80 percent of the weekdays (Monday-
Friday), for 80 percent of the time during any
consecutive three hour period for six weeks run-
ning, and there is demand for use of an additional
channel for the same purpose, Grantee shall then
have six months in which to prov~de a new specially
designated access channel for the same purpose.
(c) The rules and regulations established by
the Grantee and approved by City governing the
access channels shall be filed with Board within 90
days after any such channels are put into use.
- 20 -
(5) --The cG-rantee shall comply, at a mi.nimum, wi th
the requirements of City and Board, now or hereafter
adopted by City or Board regarding public use of its
equipment, including but not limited to the following:
(a) Grantee shall make readily available for
public use at least minimal equipment as stated in
Offering necessary for the production of programm-
ing and playback of prerecorded programs for the
specially designated non-commercial public access
channel. Grantee shall also make readily available
upon need being shown, the minimum equipment as
~
stated in Offering necessary to make it possible to
.'
-,
.
..
record programs at remote locations with battery
operated portable equipment.
(b) Need within the meaning of this paragraph
shall be determined by subscribers petition. Said
petitions must contain the signatures of at least
10 percent of the subscribers of System, but in no
case more than 500 nor fewer than 100 signatures.
SECTION 6. SERVICE TO PUBLIC BUILDINGS AND EDUCATIONAL
INSTITUTIONS. Grantee shall provide, at a minimum, one free
installation, one non-addressable converter, and free Basic
service to public and non-p~blic schools within the initial
service area, to libraries, and to City office buildings and
any other primary governmental facility located within 300
feet of the existing distribution system, and such other
- 21 -
public institutions as City may from time to time designate
in substitution thereof or in addition thereto.
SECTION 7. INTERCONNECTION. The System servicing the
Cities of Big L~ke, Buffalo, Cokato, Dassel, .pelano, Elk
. ~
River, Maple Lake, Monticello, Rockford, and Watertown,
Minnesota, shall be completely interconnected with two-way,
return capability. Grantee will comply with all present and
future rules, regulations and orders of Board regarding
interconnection of systems, and will cooperate with any
agencies or utilities involved with interconnection. At
such times as interconnection is required by Board, Grantee
shall accomplish this if economically feasible without addi-
tional charge to subscribers. System shall be initially
constructed so that other systems now or hereafter con-
structed in any area adjacent to System or within the metro-
politan area (if technologically and economically feasible)
may be interconnected with System upon request of City and
agreement with other System's Grantor and Cable Company. If
Grantee owns geographically contiguous systems, they shall
be interconnected with System upon request of Commission and
to such extent such interconnection is technically and eco-
nomically feasible. Grantee shall interconnect channels
with channels of other systems in all cases in which other
system(s) indicate in writing a desire to provide an ade-
quate share of facilities and budget for such interconnec-
tion in the sole opinion of Grantee. In any event, both
parties to this agreement desire interconnection of the
- 22 -
system to the greatest extent of technical and economic
feasibility.
SECTION 8. NARROWCASTING. System shall be capable of
"narrowcasting" of programs to each Ci ty of C.ommission sepa-
rately as provided in Offering so that the residents of one
City may view a given program while, at the same time, resi-
dents of another City may watch different programming at the
same time on the same channel.
SECTION 9. REGIONAL CHANNEL. The standard VHF Channel
6 is hereby designated for uniform regional channel usage.
However, until the regional channel becomes operational,
Grantee may utilize the standard VHF Channel 6 as it deems
appropriate. Use of time on the regional channel shall be
made available without charge.
ARTICLE IV.
SERVICES AND PROGRAMMING,
SUBSCRIBER CONTRACTS, COMPLAINTS
SECTION 1. SERVICE AND PROGRAMMING.
A. Grantee shall provide those services and programm-
ing as specified in its Offering.
B. City recognizes that services and programming in
cable communications is rapidly changing. Therefore, to
insure the providing of services and programming in the best
interest of the citizens of City, Grantee may add or delete
services and programming from the System only with the ex-
press written permission of Commission. While such addition
or deletion of programming or services will not require the
amendment of this Franchise, any addition or deletion of
- 23 -
programming will be subject to all terms and conditions of
this Franchise.
C. City and Grantee recognize that certain programming
I
was propos~d by Grantee in its Offering and that Grantee was
. ~
selected at least in part on the programming that it
offered. Therefore,.although City agrees not to unreason-
ably withhold or delay approval of the deletion or addition
of programming, Grantee agrees:
1. Programming shall not be deleted unless it is
unavailable or can be replaced by programming of similar
type and quality which is acceptable to City, such
acceptance not being unreasonably withheld or delayed;
and
2. Programming shall not be added to the System
which City determines violates Grantee's pledge in its
Offering regarding the type and quality of programming
offered on System. In any event, City shall not unrea-
sonably withhold its consent to the addition of program-
ming 'which is consistent with the type and quality of
programming which was originally offered on the System.
D. Grantee reserves right to petition any court or
regulatory agency of competent jurisdiction regarding the
enforceability of this Section under then applicable law.
SECTION 2. INTERRUPTION OF SERVICE AND COMPLAINTS.
A. Whenever it is necessary to shut off or interrupt
service, Grantee shall do so during periods of minimum use
of System. Unless such interruption is unforeseen and imme-
- 24 -
diately necessary,. Grantee shall gi~e reasonable notice
thereof to subscribers. All costs incurred in repairing
System and handling complaints shall be paid by Grantee, and
if service is interrupted or discontinued for a total period
of more than 48 hours in any 30 days period, subscribers
shall be credited pro rata for such interruption upon sub-
mission to Grantee of documented request by subscriber. The
cause of any such interruption shall be removed and service
restored as promptly as reasonably possible.
B. Grantee shall maintain an office in the City of
Buffalo, Minnesota which shall be open during all usual
business hours, have a listed toll-free telephone which
shall not require any long distance telephone rate from any
City in the geographic area served by System, and be so
operated that complaints and requests for repairs or adjust-
ments may be received at any time, seven days per week,
consistent with the procedures for same in the Offering.
1. Notice of this information shall be provided
to all new subscribers at time of subscription and to
existing subscribers annually.
2. Grantee shall not engage in the sale of tele-
vision sets or provide other television repair service,
but in the event such service is required, shall
promptly notify subscriber of that need for service.
3. All complaints by City, subscribers, or other
persons regarding the quality of service, equipment
- 25 -
malfunctiorr, : bIlling disputes, and any other. matters
relative to System, shall be investigated and responded
to by a service representative at the location of the
complaint by Grantee within 24 hours. If reasonably
possible, Grantee shall rectify the ~ause of all valid
complaints. If a complaint is not rectified within
seven days, the complainant may then file the complaint
with City.
4. City and Grantee shall prepare and maintain a
written record of all complaints made to them and the
resolution of such complaints, including the date of
such resolution. If at any time after the filing of a
complaint with City, Commission determines, in its sole
discretion, that the complaint represents a violation of
this Franchise, any law, ordinance or regulation, or
represents a failure in the performance of Grantee pur-
suant to this Franchise, Commission may, in addition to
any other remedy available to it, issue written notice
specifying the nature of the complaint and ordering
Grantee to appear at the next regularly scheduled Coun-
cil meeting or at a special meeting of the Council
called for this purpose. At said Council meeting,
Grantee shall explain its failure to rectify the com-
plaint and show cause why the Council should not insti-
tute default proceedings. Willful failure by Grantee to
appear may result, in the sole discretion of Commission,
in the termination of this Franchise.
- 26 -
-,- ART'ICI;E V.
CONSTRUCTION, INITIAL SERVICE AREA
LINE EXTENSION AND CONSTRUCTION STANDARDS
SECTION 1. INITIAL SERVICE AREA.
Grantee shall construct as the initial service area all
areas containing dwelling units within City, as designated
in the Offering on the map appended to Form H, so that every
dwelling unit within City constructed, as determined by
Commission, prior to the completion of construction of the
System in the initial service area, shall be able to receive
service from the System at the same rates and charges which
are set forth in Exhibit A of this Franchise. Grantee shall
extend service to any area contiguous to the initial service
area within the corporate boundaries of City which was not
constructed as a part of the initial service area, which
subsequently reaches or exceeds a density of 40 dwelling
units per street mile, as well as to any areas along the hub
interconnect supertrunk routes which reach or exceed 40
dwelling units. per street mile (the 40 dwelling unit stan-
dard shall be read also as 20 dwelling units per one half
street mile,- 10 dwelling units per quarter street mile,
etc.), at the same rates and charges which are set forth in
Exhibit A of this Franchise. Trunk lines will be extended
to pass the largest number of dwelling units, to the extent
feasible, so that service can be provided to as many dwell-
ing units as possible outside of the initial service area.
- 27 -
SECTION 2. "LINE". EXTENSION POLTCY. Grantee's extension
of servic~ to those areas not constructed as a part of the
initial service area shall comply with the following re-
quirements:
A. In those portions of the line extension area which
do not exceed 40 dwelling units per street mile, Grantee
shall provide cable television on a Contribution-in-Aid
basis as outlined in the Offering. If any potential sub-
scriber requests that the line be extended, Grantee shall
determine the number of dwelling units in the area, and
mileage shall be measured from the nearest trunk or super-
trunk line to determine the average dwelling units per
street mile for the area. Grantee shall calculate the cost
of line extension on a time and materials basis. Grantee
shall contribute an amount equal to the construction cost to
serve the area multiplied by the sum of the average density
of the area divided by forty (40) dwelling units per street
mile. The subscriber shall contribute an amount equal to
the sum of the construction cost to serve the area less
Grantee contribution divided by the sum of the number of
homes in the area multiplied by fifty percent (50%).
B. If the line extension has been built and exceeds a
density of forty (40) dwelling units per street mile,
Grantee shall rebate all monies paid by those subscribers
who have assumed line extension costs.
- 28 -
C. For installation of service drops--longerthan 200
feet, as well as special or unusual installations, the resi-
dent shall be charged Grantee's cost of time and materials
(above the standard drop costs) plus ten percent (10%).
SECTION 3. CONSTRUCTION TIMETABLE
A. Within 90 days after the effective date of the
Board Certification of Franchise, Grantee shall apply for
all necessary permits, licenses, certificates and authoriza-
tions which are required in the conduct of its business,
including, but not limited to, any joint use attachment
agreements, microwave carrier licenses, or any other per-
mits, licenses and authorizations to be granted by duly
constituted regulatory agencies having jurisdiction over the
operation of cable communication systems, or their asso-
ciated microwave transmission facilities. If after one year
from the commencement of Franchise term, Grantee has not
received the permits, licenses, certificates and authoriza-
tions described in this paragraph, City may terminate this
Franchise. Delay in obtaining such permits, licenses, cer-
tificates and authorizations must be beyond the reasonable
control of Grantee.
B. Within 90 days after obtaining all necessary per-
mits, licenses, certificates and authorizations, Grantee
shall give written notice thereof to City and commence con-
struction and installation of System. Grantee shall con-
struct all areas of the initial service area which contain
- 29 -
- 30 -
completion of" any;"work requiring the 'opening of- any Streets,
Public, or private Property, restore the same, including the
pavement and its grounds to as good a condition as formerly
and in a manner and quality approved by City, and shall
exercise reasonable care to maintain the same thereafter in
good condition. Such work shall be performed with diligence
and due care, and if Grantee shall fail to perform the work
promptly, to remove all dirt and rubbish and to put the
Street, Public or private Property back into the condition
required hereby, City shall have the right after seven busi-
ness days notice to Grantee to put the Streets, Public or
private Property back into good condition at the expense of
Grantee. Grantee shall, upon demand, pay to City the rea-
sonable cost of such work done or performed.
B. All wires, conduits, cable and other property and
facilities of Grantee shall be so ~ocated, constructed,
installed and maintained as not to endanger or unnecessarily
interfere with the usual and customary trade, traffic and
travel upon, or other use of, the streets and public prop-
erty of City. Grantee shall keep and maintain all of its
property in good condition, order and repair so that the
same shall not menace or endanger the life or property of
any person. City shall have the right to inspect and exam-
ine at all reasonable times and upon reasonable notice the
property owned or used, in part or in whole, by Grantee.
Grantee shall keep accurate maps and records of all of its
- 31 -
.. wires, condui t's, cables'~:and ~other .property and facilities
located, constructed and maintained in City. Purther,
Grantee shall, without charge, furnish copies of such maps
and records from time to time as requested by City.
C. All wires, conduits, cables and other property and
facilities of Grantee shall be constructed and installed in
an orderly and workmanlike manner. All wires, conduits and
cables shall be installed, where possible, parallel with
electric and telephone lines. Multiple cable configurations
shall be arranged in parallel and bundled with due respect
for engineering considerations.
D. Grantee shall at all times comply with all.appli-
cable laws, ordinances, rules, regulations and codes, fed-
eral, state and local. In any event, the installation,
operation or maintenance of System shall not endanger or
interfere with the safety of persons or property in City.
E. Whenever City shall undertake any public improve-
ment which affects Grantee's equipment or facilities, City
shall, w~th due regard to reasonable working conditions and
with reasonable notice, direct Grantee to remove its wires,
conduits, cables and other property located in Streets,
Public or private Property. Grantee shall relocate or pro-
tect its wires, conduits, cables and other property at its
own expense.
F. Grantee's plans for constructing its System, and
the construction of System, shall be in accordance with its
- 32 -
...., Offering.-. . Howev-er; HGrantee-shall comply- with the following
minimum requirements:
(1) Grantee shall construct System underground in
any location where all other utility lines are con-
structed underground.
(2) Grantee shall change from aerial to under-
ground, at its own expense, in any area where (i) all
other lines are hereafter changed from aerial to under-
ground or (ii) any aerial line is changed to underground
by the open trench method and City requests Grantee to
share the trench.
(3) To enable Grantee reasonable opportunity to
;-
.-
change its wiring from aerial to underground, and also
to allow it to prewire all new multiple dwelling units,
subdivisions or new development areas, City shall pro-
vide Grantee with at least 15 d~ys prior written notice
of the following, but in no event shall City have any
liability for failure to provide notice of the follow-
ing:
(a) Any changes of which City has knowledge,
or which City may order, regarding a change from
aerial to underground of any line (telephone or
electrical) within its boundaries.
(b) Any underground trenching that may be
pending.
- 33 -
(c) All subdividers or developers of new
subdivisions and developments shall be notified of
the Franchise and the System.
(d) All Franchise changes affecting the wir-
ing of the System.
SECTION 5. CONDITIONS OF OSEe
A. Grantee shall not place poles or other fixtures
where the same will interfere with any gas, electric or
t~lephone fixture, water hydrant or main, or sewer line.
B. Grantee, at the request of any person holding a
building moving permit and with not less than five days
advance notice, shall temporarily remove, raise or lower its
~
~
wires, conduits and cables. The expense of such temporary
,
removal, raising or lowering of wires, conduits and cables
shall be paid by person(s) requesting the same, and Grantee
shall have the authority to require such payment in advance.
C. Grantee shall have the authority, upon written
consent by City and to the extent City has authority to
grant the same, to trim trees upon or overhanging any Street
or Public Property only to the extent reasonably necessary
to prevent the branches of such trees from coming in contact
with the wires, conduits and cables of Grantee. All trim-
ming for the benefit of Grantee shall be done under the
supervision and direction of City and at the expense of
Grantee. Any activities of Grantee which are undertaken
pursuant to authority granted under this paragraph are
- 34 -
specifically made '.subject to the indemnification and in-
surance provisions of Article VII, Section 2 of this fran-
chise.
D. Nothing contained in this Franchise shall relieve
any person, other than City, from liability arising out of
the failure to exercise reasonable care to avoid injuring
Grantee's facilities while performing any work connected
with grading, regrading or changing the line of any street
or public place or with the construction or reconstruction
of any sewer or water system.
ARTICLE VI.
SYSTEMS OPERATIONS
,
.~
SECTION 1. INFORMATION AVAILABILITY
A. Throughout the term of th~s Franchise, Grantee
shall maintain books and records in accordance with normal
and accepted bookkeeping and accounting practices for the
cable communications industry, and allow for inspection and
copying of them by City at reasonable times at Grantee's
designated office. The. books and records to be maintained
by Grantee shall include the following:
(1) A record of all requests for service except
those requests subsequently withdrawn (retain for two
years)i
(2) A record of all subscriber or other com-
plaints, the action taken, and the date of the complaint
and action taken (retained for twoyears)i
- 35 -
(3) A' file~hofall--'subscriber contracts;
(4) Grantee policies, procedures and company
rules; and
(5) Financial records.
B. City shall give Grantee at least 24 hours notice
before making inspections of any books or records of
Grantee.
C. Grantee shall file with City, at the time of its
annual payment of the franchise fee, as described in this
Franchise, the following (although City may make written
waiver of receipt of any of the following):
(1) A financial statement certified by an officer ~
of Grantee showing, in such reasonable detail as accept- ~
able to City, the gross revenues of Grantee for the
preceding fiscal year.
(2) Current list of names and addresses of each
officer and director and other management personnel, and
if a corporation, each shareholder having stock owner-
ship of three (3%) percent or more, and if a partner-
ship, all general partners, and if.a general partner is
a corporation, the foregoing information shall be given
as to the corporate general partner.
(3) A copy of each document filed with all fed-
eral, state and local ~gencies not previously filed with
City with respect to the ownership and operation of
System (each of these filings shall be provided at the
time the filing is made).
- 36 -
._.."...~...-;..
": (4)Astatement of -its current..billing practices.
(5) A current copy of its rules and policies.
(6) A current copy of its subscriber service con-
tract, if any.
D. City, its agents and representatives shall have
authority to arrange for and conduct an audit of and copy
the books and records of Grantee. The City and Grantee
shall establish reasonable procedures to protect the confi-
dentiality of information. Grantee shall first be given
five days notice of the audit request, the desc~iption of
and purpose for the audit, and description, to the best of
City's ability, of the books, records and documents it wants
.'
"
to review. Grantee shall receive at least 24 hours notice -.
..
before an actual inspection of such books, records and docu-
ments.
SECTION 2. SERVICE CONTRACT
A. Grantee shall receive approval from City of the
form and content of any service cont~act to be used by
Grantee prior to entering into any such service contracts
with subscribers, and the Grantee shall make no changes in
the approved service contract without prior written approval
of City, which permission shall not be unreasonably withheld
or delayed. Any service contract shall include, at a mini-
mum, a schedule of all applicable rates and charges, de-
scription of services, instructions on the use of the sys-
tern, billing and collection practices.
- 37 -
B. "Any service"contract.-shall further contain a state-
ment as follows:
Grantee shall not, as to rates, charges, ser-
vice facilities, rules, regulations or in any
other respect, make or grant any preference or
advantage to any person, nor subject any per-
son to any prejudice or disadvantage, pro-
vided, however, that nothing in this Franchise
shall be deemed to prohibit the establishment
of special contracts or reduced rates for
promotional purposes, nor to prohibit negoti-
.
,
ated commercial rates and bulk billing.
Grantee shall have authority to promulgate such
~
C.
rules, regulations, terms and conditions governing the con-
duct of its business as shall be reasonably necessary to
enable Grantee to exercise its rights and perform its obli-
gations under this Franchise and to assure uninterrupted
service to each and all of its subscribers; provided, how-
ever, that such rulest regulations, terms and conditions
shall not be in conflict with the provisions of this Fran-
chiset ordinances of City, and laws of the State of Minne-
sota or the United States.
D. Each subscriber shall be provided with instructions
on filing complaints or otherwise obtaining information or
assistance from Grantee.
- 38 -
E.- A~l-items described_in this section shall-be pro-
vided to each new subscriber at the time a contract is
entered into or service begun, and to all existing sub-
scribers not less than once each year.
F. The term of a subscriber contract shall not be for
more than 12 months duration, with automatic renewal upon
agreement of subscriber. The contract may be terminated by
the subscriber at the subscriber's option at any time, with
no penalty to subscriber.
SECTION 3. SUBSCRIBER PRACTICES
A. There shall be no charge for disconnection of any
installation, service or outlet. There shall be a one month
minimum non-refundable cparge for premium services
ordered. If any subscriber fails to pay a properly due
monthly subscriber fee, or any other properly due fee or
charge, Grantee may disconnect the subscriber's service
outlet, provided, however, that such disconnection shall not
be effected until after the later of (i) 45 days after the
due date of said delinquent fee or charge or (ii) ten days
after delivery to subscriber of written notice of the intent
to disconnect. If a subscriber pays before expiration of
the later of (i) or (il), Grantee shall not disconnect.
After disconnection, upon payment in full of the delinquent
fee or charge and the payment of a reconnection charge,
Grantee shall promptly reinstate the subscriber's cable
service.
- 39 -
B. .Refunds to subscribers. shall be made or determined
in the following manner:
(I) If Grantee fails, upon request by a sub-
scriber, to provide any service then being offered,
Grantee shall within 60 days of subscriber request re-
fund all deposits or advance charges paid for the ser-
vice in question by said subscriber. This provision
does not alter Grantee's responsibility to subscribers
under any separate contractual agreement or relieve
Grantee of any other liability.
(2) If any subscriber terminates any monthly ser-
vice because of failure of Grantee to render the service
in accordance with Franchise, Grantee shall refund to
such subscriber the proportionate share of the charges
paid by the subscriber for the services not received.
This provision does not relieve Grantee of liability
established in other provisions of this Franchise.
C. If any subscriber terminates any monthly service
prior to the end of a prepaid period, a proportionate amount
of any prepaid subscriber service fee, using tpe number of
days as a basis, shall be refunded to the subscriber by
Grantee; however, there shall be a minimum one-month non-
refundable charge for premium service terminated.
D. Continued failure by Grantee to provide services
required by this Franchise may, in the discretion of City,
be cause for imposition of a penalty or termination or this
Franchise.
- 40 -
SECT tON 4.' FRANCHISE FEES, RATES, CHARGES,o CHANGES IN
FEES AND PROCEDURES
A. Rate Change Procedure.
(1) To the extent permitted by law, all increases
in subscriber rates and charges shall be charged by
Grantee in a manner provided for herein. Grantee, as a
condition precedent to its acceptance of this Franchise
hereby knowingly and voluntarily consents to these pro-
cedures for the term of this Franchise of all rates and
charges.
(2) City hereby reserves the right to approve or
adopt regulations governing Grantee's collection of
advance charges and deposits; installation and reconnec-
tion charges, policies and procedu~es; disconnection
charges, policies and procedures; and policies regarding
the availability of refunds. Approval of City shall "not
be unreasonably withheld or delayed.
(3) Cost for installing any part of System will be
a factor in the rate only if such cost was incurred
within the rate territory served by the System as pro-
posed in the Offering.
(4) The territory for rates applicable to System
shall be City and all Cities which have granted a Fran-
chise to Grantee relative to the System delineated in
the Offering.
- 41 -
B. Franchise Fee.
(1) Throughout the term of this Franchise, Grantee
shall pay to City, within 60 days after the end of each
fiscal year of Grantee, an annual Franchise fee of three
percent (3%) of all Gross Revenues. No payment will be
allowed of any franchise fee that is different from
three percent, other than the filing fee and payment
required of the successful applicant as established by
City to recover the costs of franchising and any other
additional payments which are required by the terms of
this Franchise. Grantee agrees to support any waiver
required by the FCC for the established franchise fee.
Should the federal government permit the collection of a
franchise fee greater than three percent without justi-
fication to the federal government as to the expenditure
of such fee, the annual fee shall be subject to renego-
tiation, but in no event shall the renegotiated fee be
less than three percent (3%). The franchise fee shall
not be subject to renegotiation until the rate freeze
has elapsed or is terminated.
(2) PaYment will be. made to City with an itemiza-
tion of the Gross Revenues.
C. Rates and Other Charges:
(1) Rates and charges charged by Grantee for
monthly service and installation and other charges here-
under shall be uniform, fair and reasonable and designed
- 42 -
to meet all-necessary costs of service, including a fair
rate of return on the original cost, less depreciation,
of the properties devoted to such service (without re-
gard to any subsequent sale or transfer price or cost of
such properties).
(2) For two (2) years after this Franchise is
certified by Board or until one year after completion of
construction, as certified in the" sole discretion of
Commission, in the initial service area, whichever is
longer, the maximum rates shall be the specified rates
of Grantee as included in Exhibit A, attached hereto and
made a part of this Franchise and known as Grantee
Schedule of Rates.
(3) Service requests for maintenance or repair of
Grantee's property shall be performed at no charge to a
subscriber. If such maintenance or repair is required
as a result of damage caused by subscriber, Grantee may
charge to the subscriber as a maximum its direct costs
for material and labor for service calls to subscriber's
home.
(4) Grantee shall give City and Commission written
notice of rates for new or additional services not ini-
tially included in Offering of Grantee and therefore not
listed in Exhibit A. Each new or additional service
rate shall be deemed approved unless expressly dis-
approved by resolution of Council of City according to
- 43 -
the terms of this Franchise.within ninety (90) days
after the notice has been given as provided in this
Franchise.
D. Rate Changes
(1) No rate change shall be approved that would
result in different rates or charges for service to
subscribers in the rate territory receiving similar
service, other than those specified in Article V, Sec-
tion 2.
(2) The standards for reviewing a proposed rate
change will include at least the following:
(a) The ability of Grantee to render System
services and to derive a reasonable profit there-
from under the existing rate schedule and proposed
rate schedule;
(b). All revenues and profits or actual losses
derived from System;
(c) Tax benefits and tax costs received by
Grantee, its partners or shareholders, as the re-
sult of their investment in System (if and to the
extent requested by Commission);
(d) Cash flow generated by System;
(e) The efficiency of Grantee;
(f) The quality of the service offered by
Grantee;
- 44 -
. ..(g)-" The original cost of the system, less
depreciation.
(h) A fair rate of return with respect to
investments having similar risks to that of provid-
ing cable communication services;
(i) The extent to which Grantee has adhered
to the terms of this Franchise;
(j) Fairness to residents and subscribers;
(k) Capital expenditures (actual and, if the
situation so warrants, projected) by Grantee in
providing updated technology and service to sub-
scribers;
(1) The extent to which Grantee has then
provided service to schools, hospitals, libraries,
1
publicly owned or leased buildings and similar
institutions within City;
(m) The extent to which Grantee has tech-
nOlogically upgraded the System;
(n) Increased or decreased expenses incurred
by Grantee in the purchase of services;
(0) Grantee's financial goals and the method-
ology to arrive at such goa~s;
(p) Grantee's operating margins, both pctual
for preceding years and projected operating mar-
gins; and
- 45 -
"-- .....---.........
(q) -- Such other factors as Ci ty or Grantee may
deem relevant.
(3) The procedures to be followed in changing a
Basic Service rate or charge shall include at least the
following:
(a) Grantee shall give City and Commission
written notice of any proposed rate increase for
Basic Service at least ninety (90) days prior to
the proposed effective date of the rate increase.
Each rate increase for Basic Service shall be
deemed approved unless expressly disapproved by
resolution of Council of City according to the
terms of this Franchise within ninety (90) days
after the notice has been received as provided in
this Franchise.
(b) The notice shall be supported by statis-
tical and other proof indicating that the existing
rate or charge is inadequate and unreasonable and
that the proposed increases are required to enable
Grantee to render service to fulfill its obliga-
tions under this Franchise and to derive a reason-
able profit therefrom.
(c) Opon written request of City or Com-
mission, the notice shall include current financial
and other information with at least the following:
1. Balance Sheet;
- 46 -
2. Income Statement;
3. Statement of sources and applica-
tions of funds;
4. Detailed supporting schedules of \
expenses, income, assets and other items as
may be required by City;
5. Statement of current and projected
subscribers;
6. A current list of rates and charges
of Grantee applicable to systems owned or
operated by its parent corporation or general
and limited partners or other subsidiaries or
affiliates of its parent corporation at other
locations or other cable systems in which the
general or limited partners have an ownership
interest;
7. A current list of rates and charges
for other systems in the seven county Metro-
politan area;
8. Cash flow derived from System ser-
vices since the commencement of this Fran-
chise;
9. Statement of tax benefits received
by Grantee, its general and limited partners
or shareholders, as a result of their invest-
ment in System (if and to the extent requested
by Commission);
- 47 -
, 10. '.' Statement of financial goals of
Grantee and 'the methodology utilized to arrive
at such goals; and
11. Grantee's operating margins for
preceding years as well as projected margins.
(d) City shall notify Grantee and Board and
shall schedule a public hearing on the requested
increase in Basic Service rates within two weeks
from the date of, receipt of the request. Grantee
will notify the public through providing notice for
one week, each day between 7:00 p.m. and 9:00 p.m.
on two lowest tier channels of the date, place and
time of the hearing. City will publish notice ten
days prioF to hearing in its official newspaper.
(e) If City fails to disapprove the change of
rates or charges within ninety (90) days after
~
,-
-
.
receipt of notice as required above, the rate shall
become effective upon the date specified in the
notice of Grantee. Said effective date shall be
after the ninety (90) day period.
(E) City may utilize a rate consultant to
advise it on proposed rate changes and to assist it
in maintaining uniform rates within the rate terri-
tory. A rate consultant may be any person who has
sufficient background and experience, in the sole
opinion of City, properly to evaluate and analyze
rates and charges.
- 48 -
(g) All costs for the review of a request for
a Basic Service rate or charge change shall be paid
by City from the Franchise fee.
(h) Any time limit may be waived only if City
and Grantee consent.
(i) If City disapproves the change of Basic
Service rates, Grantee may appeal said determina-
tion to Board.
(4) In the event the law should provide for the
regulation of other than Basic Service, the procedures
to be followed in changing any rate or charge other than
Basic Service rate shall include the following:
(a) Grantee shall give City written notice of
any rate increase at least ninety (90) days prior
to the effective date of the rate increase.
}
-'
-
,
(b) In the event the percentage of the rate
increase does not (in any respect) exceed the per-
centage of the increase from the CPI for the Minne-
apolis/St. Paul metropolitan area in existence on
the date of the certification of this Franchise by
Board or specified in the last rate increase notice
of Grantee (whichever event is most recent), the
noticed rate shall become effective upon its
noticed effective date. In the event the CPI is
substantially modified in the opinion of City and
Grantee or is discontinued, City and Grantee may
- 49 -
. select .a mutually,acceptable.successor index to
control the provisions of this subparagraph.
(c) Except as provided in Article VI, Section
4., 0.(3), in the event the percentage of the rate
increase (in any respect) exceeds the percentage of
increase from the CPI for the Minneapolis/St. Paul
metropolitan area in existence on the date of the
certification of this Franchise by Board or speci-
fied in the last rate increase notice of the
Grantee (whichever event is most recent), the
notice rate shall become effective upon its noticed
effective date but the notice shall also include }
.'
"-
fied in Article VI, Section 4., D.(3)(c)(1.-11).
(i) Opon review by City of the informa-
tion provided in the notice by Grantee, City
may schedule a public hearing on the proposed
rate increase within two (2) weeks from the
date of receipt of the notice. Grantee will
notify the public as specified in Article VI,
Section 4., D.(3)(d). The City will publish
notice ten (10) days prior to the hearing in
its official newspaper.
(ii) After closing the public hearing,
City will have thirty-one (31) days within
which to make any determination regarding the
- 50 -
noticed rate-increa.se: however; any proposed
change in rates or charges shall become effec-
tive upon the date specified in the notice of
Grantee regardless of the determination of
City.
(iii) The City may utilize a rate consul-
tant to advise it on proposed rate changes and
to assist it in maintaining uniform rates
within the territory. A rate consultant may
be any person who has sufficient background
and experience, in the sole opinion of City,
to properly evaluate and analyze rates and
charges.
(iv) All costs for the review of a notice
~
.~
"
.,
,
for rate or charge change should be paid by'
City from the Franchise fee.
(5) Subsequent to the public hearing, should the
City fail to approve the change of any rates other than
Basic Serv~ce, either City or Grantee may initiate
binding arbitration pursuant to Minnesota statutes
except as delineated in the following procedures.
(a) The parties shall, within 15 days of
City's failure to approve the rate increase,
appoint one arbitrator each who is experienced and
knowledgeable in the evaluation and analysis of
cable rate and charge changes. Arbitrators shall
- 51 -
each agree upon the selec.t=ion of a third arbitrator
similarly qualified, within IS days-after appoint-
ment of the second arbitrator.
(b) Within IS days after appointment of all
arbitrators and upon ten days written notice to
parties, the arbitrators shall commence a hearing
on the rate change proposed by Grantee.
(c) The hearing shall be recorded and may be
transcribed at the request and expense .of either
party. All hearing proceedings, debates and delib-
erations shall be open to the public, City, and
Grantee and at such times and places as contained~
".
in the notice or as thereafter publicly stated in~"
..
the order to adjourn.
(d) The arbitration panel shall be required
to approve, reject or ~odify the rate change pro-
posed by Grantee according to the standards estab-
lished in this Franchise.
(e) At the close of the hearings and within
30 days, the arbitrators shall prepare written
findings and make a written decision agreed upon by
a majority of the arbitrators which shall be served
by mail upon City and Grantee.
(f) The decision of a majority of the arbi-
trators shall be binding upon both parties, pro-
vided that either party may pursue any judicial
remedies otherwise available to either party.
- 52 -
(g) 'iShould the: rate change be rejected or
modified by a majority of the arbitrators, the
Grantee shall within ninety (90) days and pursuant
to procedures established by Grantee refund the
rate overage to affected subscribers.
(h) Either party may also seek judicial re-
lief to the extent authorized under Minnesota Stat-
utes, 5572.09 and 5572.19 as the same may be
amended, and in addition, under the following cir-
cumstances:
( i)
A party fails to select an arbitra-
tori
~
.'
-.
(ii)
The arbitrators fail to select ~.
..
third arbitrator;
(iii) One or more arbitrators is unquali-.
fied;
(iv) Designated time limits have been
exceeded;
(v) The arbitrators have not proceeded
expeditiously; or
(vi) Based upon the record the arbitra-
tors abused their discretion.
(i) In the event a Court of competent juris-
diction determines the arbitrators have abused
their discretion, or that the regulation of a given
rate is beyond the authority of City, it may order
- 53 -
thearbitration.procedure repea.ted and issue find-
ings, orders and directions, with costs of suit to
be awarded to the prevailing party.
(j) Cost of arbitration shall be borne
equally. Reasonable attorneys fees shall be borne
by the party who retains an attorney.
E. periodic Reviews, Renegotiations and Technological
Update of System.
The field of cable communications is a relatively new
and rapidly changing one which shall no doubt see many regu-
latory, technical, financial, marketing and legal changes
during the term of the Franchise. Therefore, in order to
provide for a maximum degree of flexibility in this Fran-
chise, and to help achieve a continued advanced and modern
system, the following renegotiation provisions will apply:
(1) City reserves the right to adopt rules.and
regulations controlling the procedures and subjects for
periodic reviews and renegotiation. In the absence of
any City action taken to exercise these rights, Grantee
shall be subject to at least the procedures and require-
ments described in this section.
(2) City may require, in its sole discretion,
System performance evaluation sessions at any time dur-
ing the term of this Franchise or as required by federal
or state law. In addition to these discretionary eval-
uation sessions, regular evaluation sessions shall be
conducted by City or its designee within 30 days of the
- 54 -
third, fi-:f-th and- eighth-,anniversary dates of the date of
acceptance of this Franchise by Grantee.
(3) All evaluation sessions shall be open to the
public and notice of sessions published in the same way
as a legal notice. Grantee shall notify its subscribers
of all evaluation sessions by announcement on at least
two lowest tier channels of the system between the hours
of 7:00 p.m. and 9:00 p.m. for five consecutive- days
preceding each session.
(4) Topics which may be discussed at any evalua-
tion session may include, but not be limited to, service
rate structures; franchise fee; penalties; fre~ or dis-
counted services; application of new technologi~s; sys-
tem performance; services provided; programming offered;
community access; local origination; customer com-
plaints; privacy; amendments to this F"ranchise; judi-
cial, Board and FCC rulings; line extension policies;
and Grantee or City Rules.
(5) buring a review and evaluation by City,
Grantee shall fully cooperate with City and shall pro-
vide without cost such information and documents as City
may request to reasonably perform the evaluation.
(6) If at any time during its review, City deter-
mines that reasonable evidence exists of inadequate
System performance, it may require Grantee to perform
tests and analysis directed toward such suspected inade-
- 55 -
quacies. If as- a result of-: the testing. reasonable
evidence in fact exists of inadequate System perfor-
mance, then said testing shall be at Grantee's
expense. Otherwise, City shall pay for such te~ting out
of the franchise fee collected from Grantee. Grantee
shall fully cooperate with City in performing such
testing and shall prepare results and a report, if re-
quested, within 30 days after notice. The report pre-
pared by Grantee shall include at least:
(a) A description of the problem in System
performance which precipitated the special tests.
(b) What System component was te~ed.
(c) The equipment used and proced~res
,
employed in testing.
(d) The method, if any, by which such System
performance problem was resolved.
(e) Any other information pertinent to said
tests and analyses which may be required by City,
or determined when the test is performed:
City may require that tests be supervised at Grantee's
expense by a consultant designated by City. The consul-
tant shall sign all records of special tests and forward
to City such records with a report interpreting the
results of the tests and recommending actions to be
taken.
- 56 -
(7) . Grantee-shall exercise- its best efforts to
maintain-. a modern state-of-the-art System which is com-
parable to other operating cable television systems
similarly situated. As a result of the periqdic review
sessions, City may request Grantee to modify or to up-
grade the System, or to provide additional services, and
authorize rate increases sufficient to. insure the
economic feasibility of these changes. Grantee shall
implement such changes unless: (a) technology does not
permit the suggested changes; (b) the proposed changes
and rate increases taken in combination are not econom-
ically feasible; or (c) insufficient time~has been
-'
-,
allowed for implementation. In the event~~f a disagree-
..
ment between City and Grantee with respect to the items
above, City may retain a consultant to advise and assist
both parties in continued negotiations with respect to
the changes which City desires. Either party may initi-
ate binding arbitration pursuant to Minnesota Statutes
and Article X, Section 2B, of this Franchise. Costs of
arbitration shall be shared equally by Grantee and City.
SECTION 5. FRANCHISE RENEWAL.
A. Grantee may apply for renewal of this Franchise at
any time prior to the expiration of this Franchise on forms
provided by City. In any event renegotiation shall commence
at least 12 months before the expiration of the Franchise
term, unless City determines not to reissue the Franchise to
- 57 -
Grantee. or .. desires ta- consider additional-.applicants for a
franchise.
B. Grantee may be approved, and this Franchise or
modification to it may be renewed, by City in accordance
with then existing rules of the FCC, the Board, the City and
all other applicable laws, ordinances, rules or regulations.
C. Nothing in this Franchise shall be construed to
require renewal of this Franchise.
D. City shall conduct an investigation and evaluation
of the Grantee and the System and the renewal application.
This investigation and evaluation shall be completed by City
within six months after receipt of the app!ication and
determination by City of its completeness. -.
..
E. Renewal of this Franchise may be for any length of
time but hot more than fifteen years, unless otherwise per-
mitted by federal or state law, and may be on a year-to-year
basis in the sole discretion of City.
ARTICLE VII.
INDEMNIFICATION, INSURANCE, LETTER OF CREDIT AND BOND
SECTION 1. GENERAL.
A. All rights of City pursuant to indemnification,
insurance, Letter of Credit or Bond, as provided for by this
Franchise, are in addition to all other rights the City may
have under this Franchise or any other ordinance, rule,
regulation or law.
- 58 -
. B~ The exercise-or failur~to exercise b~City of any
rights pursuant to any section of this Franchise shall not
affect in any way the right of City to subsequently exercise
any such rights or any other right of City ~nder this Fran-
chise or any other ordinance, rule, regulation or law.
SECTION 2. INDEMNIFICATION AND INSURANCE.
A. Grantee shall fully indemnify, defend and hold
harmless, City, its officers, boards, commissions, elected
officials, agents and employees against any and all costs,
damage, expense, claims, suits, actions, liability and judg-
ments for damages, including but not limited to, expenses
for legal fees, whether suit be brought ~r not, and dis-
bursements and liabilities incurred by C~ty related to this
Franchise or the System in connection with:
(1) Damage to persons or property, in any way
arising out of or through the acts or omissions of
Grantee, their respective servants, officials, agents,
or employees or to which Grantee's negligence or that of
their respective servants, agents, officials or employ-
ees shall in any way contribute;
(2) Any claim for invasion of the right of pri-
vacy, for defamation of any person, firm or corporation,
or the violation or infringement of any copyright,
trademark, trade name, service mark or patent, or of any
other right of any person, firm or corporation, except
claims because of City's own programming; or
- 59 -
.( 3 r Grantee I s failure to. . comply wi th the provi-
sions of this Franchise, any federal, state or local
law, ordinance or regulation applicable to Grantee or
the system.
B. Grantee shall release, discharge, acquit, or
absolve City in connection with any and all claims which
Grantee may now or hereafter have or claim to have against
City, its servants, agents, employees or officials, due to
or arising out of damage to any of Grantee's property or
equipment, including, without limitation, resulting or con-
sequential loss of income, injury to reputation, or any
other resulting or consequential damases of any kind, caused
by or resulting from acts or omission~ of City or any of its
servants, agents employees or officials.
C. If suit be brought or threatened against City,
either independently or jointly with Grantee, or with any
person or municipality, Grantee, upon notice given by City,
shall defend City at the cost of Grantee, and if final judg-
ment is obtained against City, either i'ndependently or
jointly with Grantee, or any other defendants, Grantee shall
indemnify City and pay such judgment with all costs and
satisfy and discharge the same.
D. City reserves the right to cooperate with Grantee
and participate in the defense of any litigation either
through intervention or otherwise. Grantee shall pay upon
receipt of written demand from City, all expenses incurred
- 60 -
by City in defending itself with regard to any matters in
this section. Thesa expenses shall include, but not be
limited to, attorney's fees, and the reasonable value of
services (as determined by City) rendered by City or any
employees, agents or representatives of City.
SECTION 3. INSURANCE.
A. Grantee shall maintain liability insurance covering
its obligations of indemnification provided for in or as a
result of the exercise of this Franchise covering both City
and Grantee and shall maintain said insurance during the
entire term of this Franchise in the minimum amount of:
(1 )
$500,000 for propertt damage to anyone per-
son;
.
"
( 2 )
$2,000,000 for property damage in anyone act
or occurrence;
(3) $l,OOD,OOO for personal injury to anyone
person; and
(4) $2,000,000 for personal injury in anyone act
or occurrence.
B. Such insurance shall be with a company acceptable
to City and shall otherwise be in form and substance accept-
able to City. Such insurance policy with written evidence
of payment of required premiums shall be filed and main-
tained with City during the term of the Franchise. The
above minimum amounts shall be changed from time to time by
Grantee as requested by City. Grantee shall immediately
- 61 -
give notice to City of any threatened or pending litigation
affecting this insurance.
C. Neither the provisions of this section nor any
damages recovered by City or any individual shall be.con-
strued to, or shall limit the liability of Grantee.
D. No recovery by City of any sum by reason of the
Letter of Credit or Bond required in this Franchise shall be
any limitation upon the liability of Grantee to City under
the terms of this section, except that the sum so received
by City from such Letter of Credit or Bond shall be deducted
from a recovery by City under this section, if for the same
act or occurrence.
E. All insurance policies maintained pursuant to this
Franchise shall contain the following endorsement:
It is hereby understood and agreed that this
insurance policy may not be cancelled nor may
a refusal to renew become effective until 60
days after receipt by City, by registered
mail, of written notice of such intention to
cancel or not to renew.
SECTION 4. LETTER OF CREDIT.
A. At the time of acceptance of this Franchise,
Grantee shall deliver to City an irrevocable and uncondi-
tional Letter of Credit, in form and substance acceptable to
City, from a National or State bank approved by City, in the
amount of Ten Thousand Dollars ($10,000.00).
- 62 -
B. The Letter of Credit shall provide that funds will
be paid to City, upon written demand of City, and in an
amount solely determined by City-in payment for penalties
charged pursuant to this section, in payment for a~y monies
owed by Grantee pursuant to its obligations under this Fran-
chise, or in paYment for any damage incurred as a result of
any acts or omissions by Grantee pursuant to this Franchise.
C. In addition to recovery of any monies owed by
Grantee to City or damages to City as a result of any acts
or omissions by Grantee pursuant to the Franchise, City in
its sole discretion may charge to and collect from the Let-
ter of Credit the following penalties:
(1) For failure beyond the reasonable control of
Grantee to complete System construction in accordance
with Grantee's initial service area plan, unless City
approved the delay, the penalty shall be Two Hundred
Fifty Dollars ($250.00) per day for each day, or part
-thereof, such failure occurs or continues.
(2) For failure to provide data, documents, re-
ports or information after adequate notice or to co-
operate with City during an application process or
System review, the penalty shall be One Hundred Dollars
($100.00) per day for each day, or part thereof, such
failure occurs or continues.
(3) For failure to reasonably comply with any of
the provisions of this Franchise for which a penalty is
not qtherwise specifically provided pursuant to this
- 63 -
Paragraph C, the penalty shall be One Hundred Doll~rs
($100.00) per day for each day, or part thereof, such
failure occurs or continues.
(4) For failure to test, analyze and ~eport on the
performance of the System within sixty days following a
request by City, the penalty shall be One Hundred
Dollars {$100.00) per day for each day, or part thereof,
such failure occurs or continues.
(5) For failure beyond the reasonable control of
Grantee to modify the System or to provide additional
services within sixty days after required by binding
arbitration the penalty shall be Two Hundred Fifty
Dollars ($250.00) per day for each day, or part thereof,
such failure occurs or continues.
(6) Forty-five days following notice from City of
a failure beyond Grantee's reasonable control of Grantee
to comply with operation or maintenance standards and
sixty days following notice from City of a failure
beyond Grantee's reasonable control of Grantee to comply
with construction standards, the penalty shall be Two
Hundred Fifty Dollars ($250.00) per day for each day, or
part thereof, such failure occurs or continues.
(7) For failure beyond the reasonable control of
Grantee to provide the services Grantee has proposed or
their equivalent, including but not limited to the
implementation and the utilization of the access chan-
nels:and the making available for use of the equipment
and other facilities, the penalty shall be Two Hundred
- 'FIfty Dollars ($ 25'0.00) per day for each day, or part
'thereof, such failure occurs or continues.
(8) Each violation of any provision of this Fran-
chise shall be considered a separate violation for which
a separate penalty can be imposed, but in no event shall
the City's maximum daily penalty exceed One Thousand
Dollars ($1,000.00) per day.
D. Whenever City finds that Grantee has violated one
or more terms, conditions or provisions this Franchise, a
written notice shall be given to Grantee informing it of
such violation. At any time after twenty days following
local receipt of notice,~provided Grantee remains in viola-
tion of one or more term~, conditions or provisions of this
Franchise, in the sole opinion of City, City may draw from
the Letter of Credit all penalties and other monies due
City.
E. Whenever a penalty has been assessed, Grantee may,
within thirty days of local receipt of notice, notify City
that there is a dispute as to whether a violation or failure
has, in fact, occurred. Such notice by Grantee to City
shall specify with particularity the matters disputed by
Grantee.
(1) City shall hear Grantee's dispute at the next
regularly scheduled Council meeting. City shall supple-
ment the Council decision with written findings of fact.
- 65 -
-'( 2) Upon determination by City -that no violation
- has taken place, City shall refund to Grantee without
interest all monies drawn from the Letter of Credit by
reason of the alleged violation.
F. If said Letter of Credit or any subsequent Letter
of Credit delivered pursuant hereto expires prior to 15
months after the expiration of the term of this Franchise,
it shall be renewed or replaced during the term of this
Franchise to _provide that it will not expire earlier than 15
months after the expiration of this Franchise. The renewed
or replaced Letter of Credit shall be on the same form and
with a bank authorized herein and for the full amount stated
.'
",
in paragraph A of thi~section. Failure to renew or replace
the Letter of Credit shall be grounds for termination of
this Franchise.
G. If City draws upon the Letter of Credit or any
subsequent Letter of Credit delivered pursuant hereto, in
whole or in part, Grantee shall replace the same within
fifteen days and shall deliver to City a like replacement
Letter of Credit for the full amount stated in paragraph A
of this section as a substitution of the previous Letter of
Credit.
H. If any Letter of Credit is not so replaced, City
may draw on said Letter of Credit for the whole amount
thereof and hold the proceeds, without interest, and use the
proceeds to pay costs incurred by City in performing and
- 66 -
paying for any- or all of the obligations, duties and re-
sponsibilities of Grantee under this Franchise that are not
performed or paid for by Grantee pursuant hereto, including
attorneys' fees incurred by City in so performing and
paying. The failure to replace any Letter of Credit may
also, at the option of the City, be deemed a default by
Grantee under this Franchise. The drawing on the Letter of
Credit by City, and use of the money so obtained for payment
or performance of the obligations, duties and responsibili-
ties of Grantee which are in default, shall not be a waiver
or release of such default.
I. The colle~ion by City of any damages, monies or
penalties from the ~etter of Credit shall not affect any
..
other right or remedy available to City, nor shall any act,
. .
or failure to-act, by City pursuant to the Letter of Credit,
be deemed a waiver of any right of ~ity pursuant to this
Franchise or otherwise.
SECTION 5. BONDS.
A. At the commencement of this Franchise, and at all
times thereafter until Grantee has liquidated all of its
obligations with City, Grantee shall maintain with City in
combination with all cities who are a part of System serving
City as proposed in the Offering a bond in the total sum of
One Hundred Fifty Thousand Dollars ($150,000.00) in such
form and with such sureties as shall be acceptable to' City,
conditioned upon the faithful performance by Grantee of this
- 67 -
"."Fraifchise . and the- acceptance hereof given by. Grantee and
upon the further condition that in the event Grantee shall
fail to comply with any law, ordinance or regulation, there
shall be recoverable jointly and severally from the princi-
pal and surety of the bond, any damages or losses suffered
by City as a result, including the full amount of any com-
pensation, indemnification or cost of removal of any prop-
erty of Grantee, including a reasonable allowance for attor-
neys' fees and costs (with interest at two percent (2%) in
excess of the then Prime Rate), up to the full amount of the
bond, and which bond shall further guarantee paYment by
Grantee of all c}aims and liens against City or any public
property, and ta~es due to City, which arise by reason of
the construction, operation, maintenance or use of System.
B. The rights reserved by City with respect to the
bond are in addition to all other rights City may have under
this Franchise or any other law.
C. Commission may, in its sole discretion, reduce the
amount of the bond.
ARTICLE VIII.
DEFAULT
SECTION 1. NOTICE AND DEFAULT.
A. City shall give written notice of default to
Grantee if City, in its sole discretion, determines that
Grantee has:
- 68 -
,
~(l) Violated any material provision.o~ this Fran-
chise or the acceptance hereof, or any rule, order,
regulation or determination of the City, state or fed-
eral government, not in conflict with this Franchise;
(2) Attempted to evade any provision of this Fran-
chise or the acceptance hereof;
(3) Practiced any fraud or deceit upon City or
subscribers;
(4) Made a material misrepresentation of fact in
the application for or negotiation of the Franchise; or
(5) Incurred a four (4) month or more delay beyond
the reaso~able control of Grantee in the construction
schedule. -.
...
B. If Grantee fails to cure such default within thirty
(30) days after the giving of such notice (or if such de-
fault is of such a character as to require more than thirty
(30) days within which to cure the same, and Grantee fails
to commence to cure the same, within said thirty (30) day
period and thereafter fails to use reasonable diligence to
cure such default as soon as possible), then and in any
event, such default shall be a substantial breach of this
Franchise and City, at its option may elect to either cure
the default or terminate and cancel this Franchise and all
rights and privileges of this Franchise as follows:
(1) City may cure any default and all sums
expended by City, including attorney's fees incurred in
- 69 -
curing sudh default, whether suit be brought or not,
with interest thereon at the then Prime Rate, at the
First National Bank of Minneapolis, shall be paid by
Grantee to,City, upon demand, and failure to so pay upon
demand likewise may be deemed by City to be a default
under this Franchise.
(2) City may place the issue of revocation and
termination of the Franchise before the Council at a
regular or special meeting of the City Council. If City
decides there is cause or reason to terminate, the fol-
lowing procedure shall be followed:
}
(a) City shall provide Grantee with a written
notice of City's intention to terminate the Fran-
..
chise and the reason or cause for proposed termina-
tion. City shall allow Grantee a minimum of thirty
(30) days subsequent to receipt of the notice in
which to correct the default.
(b) Grantee shall be provided with an oppor-
tunity to be heard at a public hearing prior to any
decision to terminate this Franchise.
(c) In the event that City determines to
terminate this Franchise, Grantee shall have a
period of thirty (30) days, beginning the day next
following written notice to Grantee of such deci-
sion, within which to file an appeal with Board,
pursuant to the then applicable statutes and pro-
- 70 -
cedures of Board. Any such appeal to Board shall
be a contested case to which Board shall not be a
party. During such thirty (30) day period and
until Board determines the appeal, if an appeal is
taken, the Franchise shall remain in full force and
effect, unless the term thereof sooner expi~es.
Grantee shall pay all costs of any unsuccessful
appeal, including reasonable attorney's fees in-
curred by City.
(d) If Board approves of the action of City,
the Franchise shall terminate immediately. If
Board disapproves of the action of City, the Fran-
chise shall remain in full force and effect for the
full term hereof unless sooner terminated in accor-
dance with the provisions hereof, or applicable law
or rules of Board.
(e) In the event the Board or its legal
successor is no longer in existence, an appeal may
be filed at the discretion of Grantee pursuant to
the arbitration clause found in Article X, Section
2, of this Franchise, or with a court of competent
jurisdiction.
- 71 -
Grantee has taken place, and the provisions of this Fran-
chise governing the consent to transfer or change in owner-
ship occurred.
SECTION 2. RECEIVERSHIP. City shall have the right to
cancel this Franchise 120 days after the appointment of a
receiver or trustee to take over and conduct the business of
Grantee, whether in receivership, reorganization, bankruptcy
or other action or proceeding, unless such receivership or
trusteeship shall have been vacated prior .to the expiration
of said 120 days, or unless:
(a) Within 120 days after such receiver or
trustee's election or appointment, such receiver or
trustee shall have fully complied with all the provi-
sions of this Franchise and remedied all defaults here-
under; and
(b) Such receiver or trustee, within said 120
days, shall have executed an agreement with City duly
approved by the Court having jurisdiction in the prem-
ises, whereby such receiver or trustee assumes and
agrees to be bound by each and every provision of this
Franchise.
(c) In the event the Board is no longer in
existence, the appeal shall be filed at the discretion
of Grantee pursuant to the Arbitration clause found in
Article X, Section 2 of this Franchise, or with a court
of competent jurisdiction.
SECTION 3. ABANDONMENT. Grantee may not abandon any
portion of System without having given not less than three
- 7? -
months prior notice to City and Board. Further, Grantee may
not abandon any portion of System without compensating City
for damages resulting from the abandonment. The amount of
damages resulting from abandonment and due City shall be
determined in the sole discretion of City. An abandonment
of any portion of System as determined in the sole discre-
tion of City shall be a cause for termination of this Fran-
chise by City.
ARTICLE x.
PURCHASE OF SYSTE..."!
SECTION 1. GENERAL.
A. If at any time Grantee offers System or all of its
ownership or control in said System for sale, City shall
have the right to purchase System. If at any time Grantee
receives a bona fide purchase offer for System which Grantee
is willing to.accept, a complete copy of such offer shall
promptly be given to City and City shall have the right to
purchase System according to the terms of that offer. In no
event, however, shall City make public the terms of the
offer. City shall exercise such right by submitting to
Grantee, within 60 days after City's actual receipt of the
bona fide offer, notice that City desires to purchase System
pursuant to said offer. If City does not exercise such
right System may be sold, but only on the terms submitted to
City. If any changes are made in the purchase offer given
to City, such purchase offer, as so changed, shall again be
given to City and City shall have 60 days from actual re-
- ~~ -
ceipt by City of the Offer,--as changed, within which to
exercise its right-to purchase System pursuant to the offer,
as changed, all as above provided. If City does not exer-
cise its right to purchase System pursuant to any offer
given to City pursuant to this paragraph, and System is not
sold to the buyer and on the terms set out in the offer
given to City, then the right of City to purchase System
shall continue, and all subsequent purchase offers shall be
given to City pursuant to this paragraph. Also, the City's
right to purchase pursuant to this paragraph shall survive
every sale to a buyer and shall continue to be binding upon
every buyer of System.
~
~
.
,
B.
Opon forfeiture, revocation or termination of this
Franchise, or at the normal expiration of the Franchise
term, City shall have the right to purchase System. Such
ri~ht shall be exercised upon written notice to Grantee
within six months after the occurrence of any such event.
SECTION 2. PROCEDURES. In the event City elects to
e~ercise its ~ight to purchase System as provided in Section
lB of this Article, the following shall then apply:
A. City and Grantee shall negotiate all terms and
conditions of the purchase of System.
B. If City and Grantee cannot agree upon the terms and
conditions of the purchase, City and Grantee shall have the
right to proceed to arbitration. Arbitration shall commence
and proceed in Minneapolis, Minnesota, according to the
- 74 -
Commercial" rules of--Hthe~'Ame-r"icanArbi tration Association and
applicable Minnesota law-except as. follows:
(1) The parties shall, within 15 days of City's
decision to proceed to arbitration, appoint one arbitra-
tor each who is experienced and knowledgeable in the
purchase and valuation of business property. Arbitra-
tors shall each agree upon the selection of a third
arbitrator, similarly qualified, within 15 days after
appointment of the second arbitrator.
(2) Within 30 days after appointment of all arbi-
~
-'
trators and upon ten days written notice to parties, the
arbitrators shall commence a hearing on the terms and
.
..
conditions of the purchase in dispute.
(3) The hearing shall be recorded and may be tran-
scribed at the request and expense of either party. All
hearing proceedings, debates and deliberations shall be
open to the public and at such times and places as con-
tained in the notice or as thereafter publicly stated in
the order to adjourn.
(4) The arbitration panel shall be required to
determine the purchase price of the System according to
the standards established in paragraph C below.
(5) At the close of the hearings and within 30
days, the arbitrators shall prepare written findings and
make a written decision agreed upon by a majority of the
arbitrators which shall be served by mail upon City and
Grantee.
- 75 -
'(6'V'The -decision of a majority of the arbitrators
'~hall'be binding upon both parties except that City may,
in its sole discretion and without any penalty or cost
to City of any kind, withdraw its offer to purchase
within 90 days of receipt of the final decision of a
majority of the arbitrators.
(7) Either party may seek judicial relief to the
extent authorized under Minnesota Statutes, 5572.09 and
5572.19 as the same may be amended, and in addition,
under the following circumstances:
~
(a) A party fails to select an arbitrator;
(b) The arbitrators fail to select a third
-'
".
arbitrator:
(c) One or more arbitrators is unqualified:
(d) Designated time limits have been
exceeded:
(e) The arbitrators have not proceeded expe-
ditiously: or
"(f) Based upon the record the arbitrators
abused their discretion.
(8) In the event a Court of competent jurisdiction
determines the arbitrators have abused their discretion,
it may order the arbitration procedure repeated and
issue findings, orders and directions, with costs of
suit to be awarded to the prevailing party.
- 76 -
:." (9 F'" Cost of.. ar_bitration" shall be borne equally.
Reasoh~bl~ attorney's fees shall be borne by the party
who retains an attorney.
C. In the event of forfeiture, revocation or termina-
tion, the purchase price of System shall be the fair market
value of material and equipment in place. Good will shall
not be included in the purchase price of System.
D. In the event City is purchasing upon normal expira-
tion of the Franchise, the purchase price shall be the value
of an ongoing business.
E. Grantee expressly waives its rights, if any, to
}
relocation costs that might otherwise be provided by law.
F. The date of valuation shall be the date City makes
a written offer for System.
ARTICLE" XI.
MISCELLANEOUS
SECTION 1. TRANSFER OF OWNERSHIP OR CONTROL.
A. This Franchise shall not be assigned or trans-
ferred, either. in whole or in part, or leased, sublet or
mortgaged in any manner, nor shall title thereto, either
legal or equitable or any right, interest or property
therein, pass to or vest in any person without the prior
written consent of City, which consent shall not be unrea-
sonably withheld. Further, Grantee shall not sell or trans-
fer any stock or ownership interest so as to create a new
controlling interest except with the consent of City, which
- 77 -
cons'ent- shal.l not be ,unreasonably withheld. The transfers
described in this paragraph shall, -in the sole discretion of
City, be considered a sale or transfer of Franchise within
the meaning and intent of the following paragraph.
B. Any sale or transfer of Franchise, including a sale
or transfer by means of a fundamental corporate change,
requires the written approval of City. Any sale or transfer
of Franchise shall be subject to the provisions of Board
rules prohibiting certain ownership. The parties to the
sale or transfer of Franchise shall make a written request
to City of its consent. City shall reply in writing within
30 days of actual receipt of the request and shall indicate
its approval of the request or its determination that a
public hearing is necessary. City shall conduct a public
hearing on the request within 30 days of such determination
if it determines that a sale or 'transfer of Franchise may
adversely affect Grantee's subscribers.
C. Unless otherwise already provided for by local law,
notice of any such hearing shall be given 14 days prior to
the hearing by publishing notice thereof once in a newspap~r
of general circulation in City.. The notice shall contain
the date, time and place of the hearing and shall briefly
state the substance of the action to be considered by City.
D. Within 30 days after the public hearing, City shall
approve or deny in writing the sale or transfer request.
- 78 -
. E~'Anysale or.t.ransferof .Franchise ".:.including a sale
or transfer by means of a fundamental corporate change,
requires notification to the Board .by City. The notifica-
tion shall be accompanied by the written certification of
the transferee that it meets all of the requirements estab-
lished by City for original Grantee including but not
limited to technical ability and financial stability. City
shall cause to be sent to Board at Grantee's expense a copy
of all. public documents related to sale or transfer of the
Franchise.
F. The parties to the sale or transfer of only this
Franchise, without the inclusion of the System in which at
least substantial construction has commenced, shall be re-
quired to establish to the sole satisfaction of City that
the sale or transfer of only this Franchise is in the public
interest.
G. For purposes of this section, a fundamental corpo-
rate change means any sale or transfer of the stock of a
corporation or" partnership interest which results in a
change of controlling interest or the sale or transfer of
all or a majority of a corporation's or partnership's
assets, merger (including a parent and its subsidiary corpo-
ration), consolidation or creation of a subsidiary corpora-
tion.
H. The word "control", or the phrase "controlling
interest", as used herein, is not limited to major stock-
- 79 -
holders or general or limited partners with a majority in-
terest, but includes actual working control in whatever
manner exercised. As a minimum, "control", as used herein,
means a legal or beneficial interest (even t~ough actual
working control does not exist) of at least ten percent
(10%). Every change, transfer or acquisition of control of
Grantee with the exception of transfers to or among a
limited partner's immediate family shall make the Franchise
subject to cancellation unless and until City shall have
consented in writing thereto, which consent shall not be
unreasonably withheld~ For the purpose of determining
whether it shall consent to such change, transfer or
acquisition of control, City may inquire into the qualifi-
cations of the prospective controlling party, and Grantee
shall assist City in any such inquiry and pay all costs
incurred by City in. so inquiring, including City staff time
at a value determined by City.
I. In the absence of extraordinary circumstances, City
will not approve any transfer or assignment' of the Franchise
prior to substantial completion of construction of System,
as determined solely by City.
J. In no event shall a transfer or assignment of own-
ership or control be approved without transferee becoming a
signator to this Franchise.
K. Any transferee shall be subordinate to any right,
title or interest of City.
- 80 -
-SEETION -2. -"'REMOVAIiA"FT_ER TERMINATIQNOR REVOCATION.
A. At the expiration of the term for which this Fran-
chise is granted, or upon its revocation or termination, as
provided for herein, City shall have the right to require
Grantee to remove, at Grantee's expense, all or any portion
of System from all Streets, Public or private Property
within City. In so removing System, Grantee shall refill
and compact at its own expense any excavation that shall be
made by it and shall leave all Streets, Public and private
Property in as good a condition as that prevailing prior to
Grantee's removal of System, and without affecting, altering
or disturbing in any way electric, telephone or other
utility cables, wires or attachments. City shall have the
right to irispect and approve the condition of such Streets,
public and private Property after removal. The Letter of
Credit, Bonds, Insurance, Indemnity and Penalty provisions
of this Franchise shall remain in full force and effect
during the entire term of removal.
B. If, in the sole discretion of City~ Grantee has
failed to commence removal of system, or such part thereof
as was designated by City, within 30 days after written
notice City's demand for removal is given, or if Grantee
has failed to complete such removal within one year after
written notice of City's demand for removal is given, City
shall have the right to exercise one of the following
options:
- 81 -
. (1) -.Decla're"'all..right ti tle-andh interest to System
to be in City with all. rights of ownership including,
but not limited to, the right to operate the System or
transfer the System to another for operation by it.
Insurance, Letter of Credit or Performance Bond proceeds
may be used to remove any encumbrance on System.
(2) Declare System abandoned and cause System, or
such part thereof as City shall designate, to be removed
at no cost to City. The cost of said removal shall be
recoverable from the Letter of Credit, Bonds, Insurance,
Indemnification and Penalties provided for in this Fran-
chise, or from Grantee directly as a liquidated damage.
C. Any portion of System not designated by City for
removal shall belong to and become the property of City
without paYment to Grantee and Grantee shall execute and
deliver such documents, as City shall request, in form and
substance acceptable to City, to evidence such ownership by
City.
SECTION 3.. WORK PERFORMED BY OTHERS.
A. Grantee shall give notice to City specifying the
names and addresses of any other entity, other than Grantee,
which performs services pursuant to this Franchise, pro-
vided, however, that all provisions of this Franchise remain
the responsibility of Grantee.
B. All provisions of this Franchise shall apply to any
subcontractor or others performing any work or services
- 82 -
---pursuant to the provisions of this Franchis~provided that
Grantee shall retain all legal rights as to any subcon-
tractors.
SECTION 4. GENERAL PROVISION ON RIGHTS AND REMEDIES.
A. All rights and remedies given to City by this Fran-
chise shall be in addition to and cumulative with any and
all other rights or remedies, existing or implied, now or
hereafter available to City at law or in equity, and such
rights and remedies shall not be exclusive, but each and
every right and remedy specifically given by this Franchise
or otherwise existing or given may be exercised from time to
time and as often and in such order as may be deemed expe-
dient by City, and the exercise of one or more rights or
remedies shall not be deemed a waiver of the right to exer-
cise at the same time or thereafter any other right or rem-
edy. No delay or omission of City in the exercise of any
right or remedy shall impair any such right or remedy, nor
shall any such delay or omission be construed to be a waiver
of or acquiescence to any default. The exercise of any such
right or remedy by City shall not release Grantee from its
obligations, or any liability, under this Franchise.
B. In addition to all other remedies granted or avail-
able to City, City shall be entitled to the restraint by
injunction of the violation, or attempted or threatened
violation, by Grantee of any terms or provisions of this
Franchise, or to a decree compelling performance by G-rantee
of any term or provision of this Franchise.
- 83 -
- 84 -
",amend t"hisFra'nchise--t-o inc'l:"ude";such~ provision.. effecti ve as
of the date of commencemencof the Franchise term or any
such rule effective as of the date of commencement of the
Franchise term or adoption of the rule, which is later.
Grantee, by acceptance of this Franchise, consents to and
agrees to be bound by any such amendments.
F. If any term, condition or provision of this Fran-
chise or the application thereof to any person or circum-
stance shall, to any extent, be held to be invalid or unen-
forceable, the remainder hereof and the application of such
term, condition and provision to persons and circumstances
other than those as to whom it shall be held invalid or
unenforceable shall not be affected thereby, and this Fran-
chise and all the terms, provisions and conditions hereof
shall, in all other respects, continue to be effective and
to be complied with, subject to the rights of City as delin-
eated in paragraph 0 of this Section.
SECTION 6. GRANTEE ACKNOWLEDGMENT OF VALIDITY OF FRAN-
CHISE. Grantee acknowledges that it has had an opportunity
to review the terms and conditions this Franchise and that
under current law Grantee believes that said terms and con-
ditions are not unreasonable or arbitrary, and that Grantee
believes City has the power to make the terms and conditions
contained in this Franchise.
- 85 -
ARTICLE XII.
ADMINISTRATION AND ADVISORY BODY
SECTION 1. ADMINISTRATOR. The Commission shall be
responsible for the continuing administration of this Fran-
chise. The administrator may be changed by City from time
to time by written notice given to Grantee.
SECTION 2. ADVISORY BODY. City may appoint an advisory
body to monitor the performance of Grantee in executing the
provisions of this Franchise. The advisory body shall per-
form all functions required of it by the Council and appli-
cable laws, ordinances, rules and regulations.
SECTION 3. DELEGATION OF AUTHORITY BY CITY.
A. City reserves the right to delegate and redelegate
from time to time any of its rights or obligations under
this Franchise to any body or organization.
B. Any delegatiorr by City shall be effective upon
written notice by City to Grantee of such delegation.
C. Upon receipt of notice by Grantee of City's delega-
tion, Grantee shall be bound by all terms and conditions of
this delegation not in conflict with this Franchise.
D. Any such delegation, revocation or redelegation, no
matter how often made, shall not be deemed an amendment to
this Franchise or require any consent of Grantee.
- 86 -
---ARTICLE XIII.
ACCEPTANCE,
INCORPORATION OF OFFERING, EXHIBITS, PUBLICATION
SECTION 1. TIME OF ACCEPTANCE; GUARANTEE; INCORPORATION
OF OFFERING; EXHIBITS.
A. Grantee shall have 30 days from the date of adop-
tion of the Franchise to accept this Franchise in form and
substance acceptable to City. However, in no event will
acceptance occur later than 90 days after the effective date
of this Franchise, unless the time for acceptance is
extended by City. Such acceptance by Grantee shall be
deemed the grant of this Franchise for all purposes.
~
B.
Upon acceptance of this Franchise, Grantee shall be
bound by all the terms and conditions contained herein.
Grantee shall provide all services and offerings specifi-
cally set forth in Offering to provide cable communication
service within City and, by its acceptance of this Fran-
chise, Grantee specifically agrees that Offering of Grantee,
including all promises, offers, representations and induce-
ments contained therein, is specifically incorporated by
. reference and made part. of this Franchise. The failure to
refer to Offering in any specific provisions of this Fran-
chise shall not be a limitation on the obligation of Grantee
to comply fully with Offering. Grantee further acknowledges
that all promises, offers, representations and inducements
contained in Offering of Grantee were freely and voluntarily
made to City by Grantee.
- 87 -
C. --.The Offering shall be permanently kept and filed in
the Of.fice of the Ci t.:y--Clerk and the originals or reproduc-
tions thereof shall be available for inspection by the pub-
lie during normal business hours. Also, Grantee may sum-
marize Offering in a manner acceptable to City or reproduce
the entire Offering, and shall have either at the ~ollowing
locations in the following quantities:
(1) Office of the City Clerk - 1 copy;
(2) Administrator designated in this Franchise - 1
copy;
(3) Office of the Commission Attorney - 1 copy;
(4) Local office of Grantee - 1 copy;
(5) Office of any School District in City - 1
}
,~
.
..
copy; and
(6) Minnesota Cable Communications Board - 1 copy.
D. In the event of conflicts or discrepancies between
any part of Offering and the provisions of this Franchise or
between any part of the summary made by Grantee and
Offering, those provisions which provide the greatest bene-
fit to City, in the opinion of the Council, shall prevail.
E. Grantee shall have continuing responsibility for
this Franchise, and if Grantee be a partnership, performance
of this Franchise shall be secured by guarantees of all gen-
eral partners, jointly and severaly, in form and substance
acceptable to City, which shall be delivered at time of, and
as part of, acceptance of this Franchise.
- 88 -
F. With its acceptance, Grantee also shall deliver to
City an opinion from its legal counsel, acceptable to City,
stating that this Franchise has been duly accepted by
Grantee, that the guarantees have been duly executed and
delivered, that this Franchise and the guarantees are en-
. forceable against Grantee and the guarantors in accordance
with their respective terms, and which opi~ion shall other-
wise be in form and substance acceptable to City.
G. With its acceptance, Grantee also shall deliver to
City true and correct copies of documents creating Grantee
and evidencing the power and authority referred to in the
opinion of Grantee's counsel, certified as of a then current
date by public office holders to the extent possible and
otherwise by an officer of Grantee.
H. Each exhibit is part of this Franchise and each is
specifically incorporated herein by reference. The exhibits
are as follows:
Exhibit A
Exhibit B
Passed and adopted this
Grantee Schedule of Rates
- Offering of Grantee
44:h day of ~j+- , , 1984.
ATTEST:
CITY OF E~~ RIVER
B~~
B.q?~"'Ia~?/A
- 89 -
This Franchise is accepted, and we agree to be bound by all its
terms and con~itions.
DATED: September 13, 1984
RITE CABLE COMPANY OF
MINNESOTA, LTD.
By ~ 1---
Its Managing General Partner
By
fa: -r;~ Ii. (llLiLLi
Y-l J'RJ
Its
INCUMBENCY AND SIGNATURE CERTIFICATE
I, Christine L. Meuers, do hereby certify that I a duly qualified and acting
Assistant Secretary of Rite Cable Company of Minnesota, Ltd., a Minnesota limited
partnership; that James Riegler is the duly elected, qualified and acting Managing
General Partner of the partnership; that Patrick H. Q'Neill is the duly elected, qualified
.,.
and acting Secretary of the partnership; that each of said persons named above has
held his respective position with the partnership at all times since at least February
21, 1984, to the date of this Certificate.
I do hereby further certify that the above signatures of James Riegler and
Patrick H. Q'N eill are genuine signatures.
Witness my signature this 13th day of September, 1984.
;t'
fl. '-!--,., '7'
:/ "--,--,.c'~__( / / /l..-~. ;,/'"","-_ /
'-""----"'-"'L-J'
Christine L. Meuers
Cinemax $9.50 No Charge
Showtime $9.50 No Charge
The Movie Channel $9.50 No Charge
BRAVO $9.50 No-Charge
The Di sney Channel $9.50 No Charge
Remote Control*** $2.50 $2.50
FM with Cable $2.50 $2.50
SERVICE
Basic Service - 25
Channels
Rental of 36-Channel
Converter
Rental of Addressable
Converter**
Satellite Package -
13 Channels
Premium Services
HBO
FM without Cable
Disconnect Charge
Reconnect Charge
EXHIBIT A
CITY OF ELK RIVER
MONTHLY RATES INSTALLATION RATES
1st Set Add'l. Outlet 1st Set Add'1. Outlet
$6.00 $2.00 $25.00 Aerial/ $10.00
$40.00 Underground*
none none none none
$2.00 $2.00 $10.00 $10.00
$2.50 $2.00 $10.00 none
$9.50
No Charge
$10.00 Transaction
Charge for Ordering
One or More Premium
Services at any One
Time .
No Charge
No Charge
No Charge; $10.00
if added later
No Charge;
$10.00 if
added later
$5.00
$5.00
$25.00 Aerial/
$40.00 Underground*
$10.00
none
none
none
none
none
$25.00
none
none
. SERVICE
MON.THLY RATES
1st Set ~dd'l. Outlet
INSTALLATION RATES
1st Set Add' 1. Outlet
Relocation Charge
none
none
none provided
customer is in
good standing and
there is an exist-
ing drop and no
additional wiring
is necessary
none
Multi-Unit Dwellings -
Bulk Rate
Negotiable;
discount up
to 20% for
central
billing
Cost of time and
materials plus 10%
Commercial - Bulk Rate
Negotiable;
discount up
to 20% for
central
billing
Cost of time and
materials plus 10%
~
-'
'.
Parental Control Device
None.
Included in
64-channel
addressable converter
None - 36-channel.
converter. Included'
in 64-channel
addressable converter
***
* Provided utilities are underground.
** An "addressable converter is required for premium
channels and the satellite package.
Remote Control available only with addressable con-
verter. No installation charge if installed initially
or picked up by subscribers at the cable office. Other-
wise, a $10.00 installation charge will apply.
CONDITIONS OF RESIDENTIAL SERVICE
1. Installation charges will be waived for a period of 60
days in each new section where cable service is initi-
ated.
2. Maximum charge for any combination of installation work
is $25.00 per visit aerial and $40.00 underground,
except for non-standard installations or installations
with more than two outlets. Additional outlets will
cost $5.00 each if installed at time of initial visit.
Non-standard installation involves extensive fishing
- 2 -
through walls, drops in excess of 200 ft. and/or under-
grounding where utilities are aerial. Special under-
grounding and long drops will be charged for the cost of
time and materials (above the standard drop costs) plus
10%.
3.
There will be a $10.00 transaction charge for the
ordering of one or more premium services at anyone
time, subject to waiver indicated above. Subscribers
will be billed for a minimum of one full month for each
premium service ordered. Discounts may be offered for
purchasing multiple premium services in accordance with
marketing plans.
4.
There will be no charge for deletion of any service.
s.
Reconnection charge will be $25.00. Relocation charge
for customers in good standing will be made at no
charge, provided that there is an existing drop to the
house and no additional wiring is needed. Otherwise,
normal installation charges will apply. In the case of
reconnection for non-payment, subscribers must pay
$25.00 plus all delinquent charges.
.'
",
- 3 -