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HomeMy WebLinkAbout15 - Cable Communications FranchisesCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 15 November 12, 2003 TO: MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Robin L. Clauson, Assistant City Attorney 949 - 644 -3131 rcla uson(a)city. newport- beach. ca. us Dave Kiff, Assistant City Manager 949 - 644 -3002 dkiff(a.city. newport -beach .ca. u s Marilee Jackson, Public Information Officer 949 - 644 -3031 mviackson (a)city.newport- beach.ca. us SUBJECT: Ordinance on Cable Communications Franchises (1st Reading) ISSUE: Should the City Council adopt a new ordinance relating to cable communications franchises? RECOMMENDATION: 1. Introduce Ordinance No. 2003 - relating to Cable Communications Franchises: and 2. Pass to second reading on November 25, 2003. DISCUSSION: In the 1960s, when the City of Newport Beach entered into two separate franchise agreements with companies that provide cable television service, cities across the nation had a significant amount of say in cable companies' operations, including: • Rates and rate increases • Customer service standards • Channel selections and placement Cable Communications Franchise Ordinance November 12, 2003 Page 2 Cities were able to dictate these aspects of cable companies' operations because the cable companies used the public right -of -way to lay the cable "plant" (plant includes coaxial cable, boxes in the rights -of -way, connections to homes, etc). Federal law has changed significantly since the City adopted its franchise agreements. The changes, in part, took away almost all of cities' regulatory abilities relating to cable and moved them to the Federal Communications Commission (FCC or www.fcc.gov). Today, several different laws, ordinances, and agreements direct our decisions about cable television. These include: • Three federal acts relating to Cable TV and Communications (1984 Cable Act, 1992 Cable Act, and 1996 Telecommunications Act); • The Newport Beach Municipal Code (Chapter 5.44) and City Charter (Article XIII); • Our Franchise Agreement with Adelphia Communications; and • Our Franchise Agreement with Cox Community Cablevision. Attachment A contains a summary of the federal Acts. The Effect of Changes in Law. It's important to remind the Council and Newport Beach residents that: • FCC regulates rates, not cities. The FCC alone has the power to regulate rates and channel selections, with the lone exception of rate regulation on the basic service tier of channels (typically Channels 2 -13 and PEG channels). Cities can only regulate basic tier rate increases if fully certified by the FCC to do so. Cable customers should note that cable companies rarely, if ever, raise the rates on this tier - much more frequent are rate increases on the larger (and unregulated) broadcast basic tier (Channels 14 -65 and up). • Other tiers are generally unregulated. In March 1999, the FCC (generally) deemed many cable systems subject to "effective competition" from satellite dish services and removed almost all rate regulation from cable TV. • Cable TV in Newport is not literally a monopoly. Cities like Newport Beach have non - exclusive franchise agreements. Any cable provider can come into the city limits, negotiate a franchise agreement, lay new cable, and compete directly with either Cox or Adelphia. Similarly, Cox can attempt to compete directly with Adelphia and vice - versa. But doing so requires significant investment in new cable infrastructure, because each cable company owns the cable in the ground (and on poles). Very few companies anywhere in the nation "overbuild" other systems. • Denial of renewal is extremely difficult and expensive. Cities cannot typically deny a cable provider an opportunity to renew an existing franchise agreement. • Internet services are unregulated. Courts have ruled that the provision of Internet service over cable is not a cable - related service and therefore not subject to municipal regulation. Newport Beach can do very little to help cable customers interact with their Internet Service Providers (ISPs). Cable Communications Franchise Ordinance November 12, 2003 Page 3 Our Current Franchise Agreements. As noted, Newport Beach has a Cable TV Ordinance and separate Franchise Agreements with Cox and Adelphia, respectively. The Agreements have been extended several times as follows: ADELPHIA FRANCHISE AGREEMENT • Agreement adopted December 1966 —15 -year term (to 1981). • Amended December 1970 — term reset again to 15 years (to 1986). • Amended April 1986 — term extended by five years (to 1991) • Amended October 1991 — term extended to January 27, 2002. • Amended December 11, 2001 -- term extended to January 27, 2003. • Amended January 27, 2003 -- term extended to January 27, 2004. Adelphia Service Area Old Corona Del Mar Linda Isle Westcliff Cameo Shores /Highlands Newport Shores Eastbluff Balboa Island West Newport The Bluffs Balboa Peninsula Newport Terrace Irvine Terrace Harbor Island Newport Heights Lido Isle Dover Shores COX FRANCHISE AGREEMENT • Agreement adopted December 1966 — 15 -year term (to 1981). • Amended November 1981 — term extended for 10 years (to 1991). • Amended October 1991 — term extended to January 27, 2002 • Amended December 11, 2001 -- term extended to January 27, 2003. • Amended January 27, 2003 -- term extended to January 27, 2004. Current Cox' Service Area Newport Center Harbor Ridge Harbor View Hills Jasmine Creek Spyglass Hill Newport Coast Big Canyon Belcourt Newport Ridge Bonita Canyon Bonita Creek ' There are several areas of the City where the "primary franchise area" overlaps between Adelphia and Cox. These areas include Newport Dunes, the Coast side of Bayside Drive, Promontory Point, the Hyatt Newperter, Harbor Cove, the Park Newport Apartments, Bayview Terrace and Court, and the John Wayne Airport Area. Cable Communications Franchise Ordinance November 12, 2003 Page 4 Formation of Telecom Committee. With the franchise agreements about to expire, in November 2000, the City Council formed the Telecommunications Ad Hoc Committee and directed it to address the following issues: 1. UPDATING THE CABLE TELEVISION ORDINANCE. We believed that the City's municipal code chapter that relates to cable television required significant amendments before the City can enter into any effective franchise agreements with Adelphia and Cox. 2. UPDATING THE MUNICIPAL CODE AND ENACTING A COUNCIL POLICY RELATING TO WIRELESS TELECOM. We believed that the City should add a new section to the municipal code relating to telecommunication to effectively address: • Where to site new wireless antennas; • Whether and where to use City -owned property or rights -of -way for antennas; • What design and structural standards the City should apply to antennas, whether placed on rights -of -way or public or private property; • What fee should be levied for the use of the public property for antennas; • How to effectively ensure that the City's emergency radio network is not adversely impacted by siting activity. The Wireless Telecom Ordinance is now Chapter 15.70 of the NBMC. Council Policy L -23 (The Siting of Wireless Telecommunications Equipment on City -Owned Land) governs City actions relating to the use of City property for wireless telecom. 3. FRANCHISE RENEWAL NEGOTIATIONS. Given the pending expiration of the two cable television franchise agreements, the Committee was tasked with performing a community needs assessment and bringing to Council a Statement of Minimum Goals. The latter was accomplished in April 2003. The Telecom Committee includes Council members John Heffernan (Chair) and Richard Nichols and community members Leslie Daigle and Don Boortz. About the Current Cable TV Ordinance and the Charter. The Municipal Code (Chapter 5.44 -- Community Antenna Television) relating to cable television is outdated. It was first adopted in 1966 and has had little change since then, even as: • Federal and state telecommunications and cable law dramatically changed; • Technology dramatically changed (digital TV, satellite TV, cable- carried Internet, pay - per -view, digital cable radio, fiber optic lines, telephony over cable, etc); • The city saw a series of providers transfer their Franchise Agreements from one to another via consolidations and sales; • Adelphia filed for reorganization. Cable Communications Franchise Ordinance November 12, 2003 Page 5 Currently, Chapter 5.44 of the NMBC and the City Charter speaks to the following issues -- but please be aware that many have been pre - empted by changes in federal law: • Defines "gross annual receipts" as compensation resulting from the operation of a cable TV system in Newport Beach, but not the franchise fee imposed by the City. In other words, a cable company's calculation of the 5% franchise fee cannot include the line item on the bill that charges the franchise fee itself. • Describes the process by which a cable company files a franchise application with the City (along with a $1,000 franchise application fee). • Directs the City to award a franchise with a term between 10 and 25 years. To terminate a franchise prior to end -of -term, the City must find that a cable company has "violated a material term or condition" of its franchise OR that any part of Chapter 5.44 has become unenforceable and has materially changed the franchise OR the City must acquire the cable TV system. • Allows the City to inspect the cable company's records at any time. • Empowers the City Manager to settle any controversy arising between the cable company and the City or subscribers "in the best interests of the public." • Directs the City Council to set a franchise fee that is a percentage of the cable company's gross annual receipts (paid to the City quarterly). Describes the proper operation of the "Newport Beach Community Channel' which must be cablecast on the same channel number on all cable systems in the City (NOTE: This does not occur today -- Cox uses Channel 3 for system- wide programming and places NB communitv programming on Channel 30. Adelphia uses Channel 3 for NB community programming). The channel number can be designated by mutual agreement between the franchisees. The Channel must include live broadcasts of all regular meetings of the City Council, at least one re- broadcast of the meetings, and up to 20 hours of community affairs programs per month as designated by the City Manager. When the Channel is not broadcasting local origination material, the cable company can run advertising that "promotes primarily persons maintaining an office within the city..." The company can collect a fee for ads on the Community Channel. • Requires the cable company to keep a toll -free phone number in the City as well as a service and billing office within the main franchise area. Any subscriber complaint must be addressed within 24 hours via correcting the problem or scheduling a service call within 48 hours. • Allows the City Council to review and approve all rates and charges for cable services "to the extent permitted by State or Federal statutes." • Allows the City Council to determine which franchisee serves a newly annexed area, unless the area contains a completed or commenced cable TV system. In the latter case, the area must be served by the company owning the system. Cable Communications Franchise Ordinance November 12, 2003 Page 6 The City Charter's section on franchises (Article XIII) requires the City Council to adopt franchises via ordinance and to hold a public hearing prior to granting a franchise. It limits all franchise terms to 25 years or less if a determinate term is stated. The Article allows indeterminate terms but specifies that the City may end the franchise and possess the franchisee's property if the franchisee is out of compliance with the franchise agreement (Section 1302). Preparing a New Ordinance. Since at least Fall 2000, the City has retained William Marticorena of Rutan and Tucker to assist us in our telecommunications work. Mr. Marticorena has extensive experience in all phases of franchise renewals and ordinance amendments. Additionally, upon recommendation of the Telecom Committee, we hired Sue Buske of the Buske Group to conduct a statistically valid Cable Needs Assessment (CNA) to determine the community's desires and concerns regarding cable N (for more information about the Assessment itself, see the Agenda Item from April 8, 2003 whereby the City Council formally accepted the Assessment). The Assessment and the Statement of Minimum Goals will be used to negotiate a new Franchise Agreement with each of the two cable providers. A Franchise Agreement is separate and distinct from a new Cable Communications Ordinance as follows: The Ordinance reflects the regulatory environment and practices that any cable provider must follow while doing business in the City. The Agreement(s) reflects specific permission to a specific company to use the public right -of -way to operate a cable system. Included in the permission are negotiated terms by the company and the city as to adequate compensation paid to the City and its residents for the use of the right -of -way. Adequate compensation may include the 5% franchise fee, dedication of equipment, dedication of specific channels for Public, Educational, and Government (PEG) services, and more. More about the Proposed Cable Communications Franchises Ordinance. The proposed ordinance addresses the following issues: • Definitions. Sets forth and updates definitions used in the Cable Communications industry. • Authorization. Authorizes the City to grant non - exclusive franchises for cable communications services. • Rights. Reserves certain rights to the City and the cable subscriber; reserves certain rights for the Franchisee; • Finances. Explains how payments to the City are made in exchange for a cable company's use of the public right -of -way; requires a performance bond • Services. Explains the services that can be required of a provider; • Construction. Describes the construction standards that a provider must meet; • Customer Service. Describes the customer service obligations of a provider. • Records Inspection, Audit. Allows for the City's inspection of certain records, allows for the conduct of a bi- annual audit; Cable Communications Franchise Ordinance November 12, 2003 Page 7 • Termination. Describes reasons for termination and process to terminate; and • More. Provider Review and Comment. The Telecom Committee itself has not been asked to review the proposed Ordinance, in part because it is a fairly standard ordinance that reflects what other cities -- including San Clemente, Lake Forest, Dana Point, San Juan Capistrano, Laguna Beach, Laguna Niguel, and Moreno Valley (all under the counsel of Mr. Marticorena and Rutan and Tucker) -- have adopted in recent months or are preparing to adopt. Since the Council's adoption of the Statement of Minimum Goals in April 2003, a staff team (Mr. Marticorena, Ms. Clauson, Ms. Jackson, and Mr. Kiff) have met at least two times each with representatives (including counsel) of Adelphia and Cox. We have provided both companies with an opportunity to review the draft Ordinance and to discuss the Ordinance with us. This Agenda Item asks the Council to review the proposed Cable Communications Franchise Ordinance, to read it for the first time, and to pass it to second reading and adoption (set tentatively for November 25, 2003). If the Council wishes, it may refer any comments made by the cable providers about the Ordinance to the Telecom Committee for review between now and November 25. Ordinances like this one take effect 30 days following adoption. What's Next. If the Council adopts this Ordinance, the staff team and the Telecom Committee would enter the final phase of their efforts -- the negotiation of new Franchise Agreements with Cox and Adelphia reflecting the Statement of Minimum Goals and the newly- adopted Cable Communications Ordinance. We anticipate bringing the negotiated Franchise Agreements to Council in Spring 2004. That timeline may require a short extension to the existing agreements, given that they expire in January 2004. Environmental Review: This Agenda Item does not require environmental review. Public Notice: This agenda item may be noticed according to the Ralph M. Brown Act (72 hours in advance of the public meeting at which the City Council considers the item). Funding Availability: Not applicable. Alternatives: Not applicable. Submitted by: Dave Clauson Assistant City Manager Assistant City Attorney Attachments: Attachment A -- FCC Authority Marilee Jackson._ Public Information Officer Cable Communications Franchise Ordinance November 12, 2003 Page 8 Attachment S -- Proposed Ordinance on Cable Communications Franchises Attachment C -- Letter from Adelphia Cable Communications Franchise Ordinance November 12, 2003 Page 9 Attachment A FEDERAL COMMUNICATIONS COMMISSION (FCC) AUTHORITY P 1984 Cable Act. The Federal Communications Commission (FCC) established new policies over cable TV via the Cable Communications Policy Act of 1984. Among other things, the 1984 Act began to define the boundaries between federal, state, and local governments. The 1984 Act requires cable companies to act under franchise agreements and prohibits local governments from offering exclusive franchise agreements. This Act also limited the cable franchise fee to 5% of the cable company's gross annual revenue. The 1984 Act also: • Allowed local agencies to require that cable companies set aside channels for public, educational, or governmental (PEG) use. • Established "leased commercial access" allowances so that parties other than the cable company could air video programming without cable company oversight. • Placed restrictions on telephone companies that wanted to provide television service. P 1992 Cable Act. In response to price hikes in the cable industry that far outpaced inflation, Congress passed the Cable Television Consumer Protection and Competition Act of 1992. The 1992 Act stated the FCC's hope that the market would begin to regulate cable TV activities while still protecting consumer interests. Under the 1992 Act, local governments could select a cable franchisee and regulate in any areas that the FCC did not pre -empt. Prior to 1992, local governments could regulate all rates — but with the 1992 Act in place, the FCC took over rate regulation of the cable programming tier (see below) and allowed cable companies to be completely exempt from rate regulation if they could show that the cable companies were subject to "effective competition" in a region. In the 1992 Act, the FCC defines three tiers of cable services: • the basic service tier (lower channels originating in the region which must be carried by the cable company). Local governments may regulate rates associated with this tier when certified by the FCC to do so. • the cable programming service tier ( "CPST ") — this includes all non -basic channels provided by a cable company but not sold on a pay - per -view basis. Effective March 31, 1999, the FCC has declared this tier of service subject to "effective competition" and NO LONGER regulates rate changes to this tier. • the per channel or per - program tier — provided as single channels for which the cable company charges a separate rate. This tier is unregulated. Per the 1992 Act, local governments must apply for certification with the Commission if they want to regulate rates in the basic service tier. We can do so by submitting a "Form 328" to the FCC. The City has not asked the FCC to certify the City as a basic tier Cable Communications Franchise Ordinance November 12, 2003 Page 10 regulator. This is in part because cable companies rarely, if ever, increase their rates on the basic tier since the development of the 1992 Act — in recent years, cable companies have reduced and /or maintained their basic tier rates while increasing their CPST rates. Another important aspect of the 1992 Act set customer service standards for cable companies — all of which must be enforced by local franchise authorities. Pursuant to the standards, cable companies must: Phone and Billing Services • Maintain a local phone line available 24 hours, seven days a week. • Not use voice mail during working hours — a real person must answer the phone. • Place its bill payment office in a convenient location. The office must be open at least one night a week and /or some weekend hours. • Answer all calls to the cable company office within 30 seconds of the time that a connection is made. Installations and Service Calls • Complete a standard installation within seven days of a service call. • Begin working on a service interruption call within 24 hours of notification. • Offer specific appointment times or four -hour blocks of time for all service calls. • Have installers call if they are running late to reschedule at the customer's convenience. Rate or Service Changes • Give 30 days advanced notice for all rate or service changes. • Respond to billing complaints within 30 days. P 1996 Telecom Act. Most recently, Congress amended the laws even further via the adoption of the Telecommunications Act of 1996. The 1996 Act was an attempt to accelerate private sector deployment of services to all residents by opening up all telecom markets to competition, including allowing cable companies to provide phone service and vice- versa. The 1996 Act provided that the CPST would be subject to FCC regulation until March 31, 1999. The Act also prohibited individuals from sending complaints directly to the FCC — instead, individuals must file complaints with the franchise authority (us) and we forward one or more complaints to the FCC for review via an FCC "Form 329." Before sending a complaint to the FCC, we must notify the cable company of the complaint and allow them 30 days to respond. We followed this process earlier this year in forwarding a rate complaint by a resident. The 1996 Act also: • Requires television manufacturers to equip their TVs with a V -Chip. • Requires broadcast and cable industry representative to develop voluntary rules that rate programs for sexual or violent content. Cable Communications Franchise Ordinance November 12, 2003 Page 11 • Requires cable companies to fully scramble audio and video channels not specifically subscribed by a household. • Allowed some telephone companies to provide video programming via open video systems (Pacific Bell Video Service [ "PBVS "] is an open video system that delivers both local programming and national channels via a small dish or antenna). The 1996 Act exempted these systems from city franchise requirements. • Limits local franchise authority fees to revenue derived from "cable services." Cable Communications Franchise Ordinance November 12, 2003 Page 12 Attachment B ORDINANCE NO. AN ORDINANCE OF THE CITY OF NEWPORT BEACH RELATING TO FRANCHISES FOR CABLE COMMUNICATIONS SYSTEMS. THE CITY COUNCIL OF NEWPORT BEACH DOES ORDAIN AS FOLLOWS: Section 1. Chapter 5.44 of the Newport Beach Municipal Code entitled "Cable Communications Franchises" is hereby added to read as follows: Chapter 5.44 CABLE COMMUNICATIONS FRANCHISES Sections: Section 5.44.010 Title. Section 5.44.020 Definitions. Section 5.44.030 Grant of Franchise. Section 5.44.040 Rights Reserved to the Grantor. Section 5.44.050 Rights of Subscribers. Section 5.44.060 Finance. Section 5.44.070 Services. Section 5.44.080 Design and Construction. Section 5.44.090 Operations And Maintenance. Section 5.44.100 Violations. Section 5.44.110 Termination and Related Rights. Section 5.44.120 Franchise Applications. Section 5.44.130 Records; Reports; Right to Inspect and Audit; Experts. Section 5.44.140 Miscellaneous Provisions. Title. This Ordinance is known and may be cited as the "Cable Communications Franchises Ordinance." Definitions. a. For the purposes of this Ordinance, the following words, terms, phrases, and their derivations have the meanings given herein. Terms defined in the Cable Act shall have the same meanings herein unless expressly defined otherwise. When not inconsistent with the Cable Communications Franchise Ordinance November 12, 2003 Page 13 context, words used in the present tense include the future tense, and words in the singular number include the plural number. "Administrative Officer" means the City Manager or the City Manager's designee. "Affiliated Person" or "Affiliates" means each Person who falls into one or more of the following categories: (i) each Person having, directly or indirectly, a Controlling Interest in Grantee; (ii) each Person in which Grantee has, directly or indirectly, a Controlling Interest; (iii) each officer, director, general partner, limited partner holding an interest of five percent (5 %) or more, joint venturer, or joint venture partner in Grantee's Cable System in the City; and (iv) each Person, directly or indirectly, controlling, controlled by, or under common Control with Grantee; provided that "Affiliated Person" excludes the Grantor, any limited partner holding an interest of less than five percent (5 %) in a Grantee, or any creditor of Grantee, solely by virtue of its status as a creditor, and which is not otherwise an Affiliated Person by reason of owning a Controlling Interest in, being owned by, or being under common ownership, common management, or common Control with Grantee. "Basic Service" or "Basic Cable Service" or "Basic Service Tier" means the lowest Service Tier which includes the retransmission of local television Broadcast Signals and Public, Educational, and Governmental Access Channels. "Broadcast Signal" means a signal transmitted over the air to a geographically dispersed public audience and received by a Cable System. "1984 Cable Act" means the Cable Communications Policy Act of 1984. "1992 Cable Act" means the Cable Television Subscriber Protection and Competition Act of 1992. "Cable Act" means the Cable Communications Policy Act of 1984, as amended by the Cable Television Subscriber Protection and Competition Act of 1992 and by the Telecommunications Act of 1996. "Cable Operator" means any Person or group of Persons (i) who provides Cable Service over a Cable System in the City and, directly or through one or more Affiliates, owns a significant interest in that Cable System; or (ii) who otherwise controls or is responsible for, through any arrangement, the management and operation of a Cable System in the City. "Cable Service" or "Service" means (i) the one -way transmission to Subscribers of video programming or other programming service; and (ii) subscriber interaction which is required for the selection of or use of such video programming or such other programming service. "Cable System" or "Cable Communications System" or "System" means a facility, consisting of a set of closed transmission paths and associated signal generation reception, and Cable Communications Franchise Ordinance November 12, 2003 Page 14 control equipment that is designed to provide Cable Service, which includes video programming, and which is provided to multiple Subscribers within the City; but this term does not include: (i) a facility that serves only to retransmit the television signals of one or more television broadcast stations; (ii) a facility that serves Subscribers without using any public right -of -way; (iii) a facility of a common carrier which is subject, in whole or in part, to the provisions of Title H of the Communications Act of 1934 (47 U.S.C. § 201 et seq.), except that such facility shall be considered a Cable System (other than for purposes of section 621(c) of the Cable Act) to the extent such facility is used in the transmission of video programming directly to Subscribers, unless the extent of such use is solely to provide interactive on- demand services; (iv) an open video system that complies with section 653 of the Cable Act; or (v) any facilities of any electric utility used solely for operating its electric utility systems. "City" means the City of Newport Beach, California. "Channel" means a portion of the electromagnetic frequency spectrum which is used in a cable system and which is capable of delivering a television channel (as television channel is defined by the FCC by regulation). "Commercial Subscriber" means a Subscriber who receives a Cable Service in a place other than a Residential Dwelling Unit. "Complaint" means a dispute in which a Subscriber notifies Grantee of an outage or degradation in picture quality, billing or other issue pertaining to the Subscriber's Cable Service which is not corrected during the initial telephone or service call. "Control" or "Controlling Interest" means actual working control in whatever manner exercised, including, without limitation, working control through ownership, management, debt instruments, or negative control, as the case may be, of the Cable System or a Grantee. A rebuttable presumption of the existence of Control or a Controlling Interest shall arise from the beneficial ownership, directly or indirectly, by any Person or group of Persons acting in concert (other than underwriters during the period in which they are offering securities to the public) of twenty-five percent (25 %) or more of any Person (which Person or group of Persons is referred to as "Controlling Person "), or being a party to a management contract to manage the system, or any material portion thereof, in lieu of Grantee. "Converter" or "Terminal" means a device located at a Subscriber's premises that converts signals from one frequency to another or otherwise processes signals for use by Subscribers. "Drop" means the cable connecting the Cable System's plant to equipment at the Subscriber's premises. "Education Channel" means any channel capacity where non - commercial educational institutions are the primary designated Programmers. Cable Communications Franchise Ordinance November 12, 2003 Page 15 "Facilities" shall mean any equipment located, in whole or in part, in, above, or below Streets, Public Rights -of -Way, or other public property used by the Grantor in its System including without limitation, conduits, cables, cabinets, Nodes, structures, headend equipment, receive only earthstations, down link equipment and antennas, electronics, fiber cable, coaxial cable, drops and switching equipment. "FCC" means the Federal Communications Commission or its designated representatives. "Franchise" means a written legal undertaking or action of the Grantor which authorizes a specific Person to use the Grantor's streets and public ways for the purpose of installing, operating, maintaining, or reconstructing a Cable System to provide Cable Service. "Government Channel" means any channel capacity where local government agencies are the primary designated Programmers, and programming is non - commercial informational programming regarding government activities and programs. "Grantee" means the Person granted a Franchise to install, operate, maintain, or reconstruct a Cable System and the lawful successors, transferees, or assignees of that Person. "Grantee Manager" means an employee of the Grantor who is designed by Grantor in writing to Grantee to be the contact person for Grantee in accordance with the provisions of this Ordinance. "Grantor" means the City, acting by and through its elected governing body, or such representative as the governing body may designate to act on cable matters in its behalf. "Gross Annual Revenue" or "Gross Annual Receipts" or "Gross Receipts" means all revenue, as determined in accordance with Generally Accepted Accounting Principles, which is received, directly or indirectly, by Grantee and by each Affiliated Person from or in connection with the distribution of any Cable Service, and any other Service which may, under now or then applicable federal law, be included in the Cable Act definition for the purpose of calculating and collecting the maximum allowable franchise fee for operation of the System, whether or not authorized by any Franchise, including, without limitation, leased or access channel revenues and programming fees of any kind, received, directly or indirectly, from or in connection with the distribution of any Cable Service. It is intended that all revenue collected by the Grantee, and by each Affiliated Person, from the provision of Cable Service over the System, whether or not authorized by the Franchise, be included in this definition. Gross Annual Revenue also specifically includes: (i) the fair market value of any nonmonetary (i.e., barter) transactions between Grantee and any Person, other than an Affiliated Person, but not less than the customary prices paid in connection with equivalent transactions; (ii) the fair market value of any nonmonetary (i.e., barter) transaction between Grantee and any Affiliated Persons, but not less than the customary prices paid in connection with equivalent transactions conducted with Persons who are not Affiliated Persons; (iii) any revenues generated from the provision of Internet services and/or broadband services which Cable Communications Franchise Ordinance November 12, 2003 Page 16 utilize the Cable System for delivery and must not be excluded pursuant to applicable law; and (iv) any revenue received, as reasonably determined from time to time by the Grantor, through any means which is intended to have the effect of avoiding the payment of compensation that would otherwise be paid to the Grantor for the Franchise granted. Gross Annual Revenue also includes any bad debts recovered. Gross Annual Revenue also includes all (100 %) advertising revenue (without exclusions for any commissions, fees, or other costs incurred in securing said revenue) which is received directly or indirectly by Grantee, any Affiliated Person, or any other Person from or in connection with the distribution of any Service over the System or the provision of any Service - related activity in connection with the System, or allocable thereto based upon subscriber counts. Gross Annual Revenue does not include: (i) the revenue of any Person to the extent that said revenue is also included in the Gross Annual Revenue of Grantee; (ii) taxes imposed by law on Subscribers which Grantee is obligated to collect; and (iii) amounts which must be excluded pursuant to applicable law. "Nodes" shall mean the cabinet or housing and equipment, power supply, fans, gas generators, batteries and optical to electrical converters, which is the point where fiber facilities and coaxial facilities are connected. "Pay Cable," "Pay Service," "Premium- Service" or "Pay Television" means programming choices (such as movie channels, pay - per -view, video on demand) offered to Subscribers on a per - Channel, per - program or per -event basis. "Pedestal" shall mean an above - ground or below - ground enclosure which houses active and/or passive electronic equipment used to serve Subscribers. "PEG Channel" means collectively, the channel capacity dedicated to non - commercial Public, Education or Government access programming. "Person" means any corporation, partnership, proprietorship, individual, or organization authorized to do business in the State of California. "Plant" means the transmitting medium and related equipment which transmits signals between the Headend and Subscribers, including Drops. "Public Channel" or "Public Access Channel' means capacity where members of the public are the primary designated Programmers, and programming is non - commercial informational programming. "Public Right -of -Way" means any public street, public way, public place or rights -of- way, now laid out or dedicated, and the space on, above or below it, and all extensions thereof, and additions thereto, under the jurisdiction of Grantor. "Resident" means any person residing in the Franchise Service Area, or as otherwise defined by applicable law. Cable Communications Franchise Ordinance November 12, 2003 Page 17 "Residential Dwelling Unit" or "Dwelling Unit" means a home, mobile home, condominium, apartment, cooperative unit, and any other individual dwelling unit. "Residential Subscriber" means a Subscriber who receives a Service in a Dwelling Unit. "Service Area" or "Franchise Service Area" means the entirety of the City of Newport Beach, or as further defined in the Franchise. "Service Interruption" means the loss of picture or sound on one or more cable channels. "Service Tier" or "Tier" means a category of Cable Service or other Services provided by a Cable Operator and for which a separate rate is charged by the Cable Operator, other than per channel or per event programming or legitimate packages of per channel or per event programming. "Streets and Public Ways" means the surface of, and the space above and below, any public street, sidewalk, alley, or other public way or right -of -way of any type whatsoever. "Subscriber" means any Person that lawfully subscribes to and receives, a Cable Service provided by Grantee by means of or in connection with its Cable System. "Tap" means the point of interconnection between that portion of the Cable System located in the Public Rights -of -Way and a Drop. "Telecommunications Act" means the Telecommunications Act of 1996. "Unit" means a discrete place where System Services are used, such as a residence, apartment, office, store, etc. Terms Not Defined. Words, terms, or phrases not defined herein shall first have the meaning as defined in the Cable Act, and then the special meanings or connotations used in any industry, business, trade, or profession where they commonly carry such special meanings. If those special meanings are not common, they will have the standard definitions as set forth in commonly used and accepted dictionaries of the English language. Grant of Franchise. b. Authority to Grant Franchises. The Grantor may grant a Franchise to provide Cable Service to any Person who offers to provide a System pursuant to this Ordinance. c. Form. A Franchise may, at Grantor's sole option, take the form of an Ordinance, license, permit, contract, resolution, or any other form elected by Grantor. Cable Communications Franchise Ordinance November 12, 2003 Page 18 d. Grants Not Required. Consistent with applicable state and federal law, no provision of this Ordinance requires the granting of a Franchise when, in the opinion of the Grantor, it is in the public interest not to do so. e. Purpose. The purpose of a Franchise is to identify and authorize the operation of a Cable Communications System by a specific Grantee, and to identify and specify those terms, conditions, definitions, itemizations, specifications and other particulars of the agreement between the Grantor and a Grantee. In so doing, a Franchise may clarify, extend, and interpret the provisions of this Ordinance. Where a Franchise and this Ordinance conflict, both shall be liberally interpreted to achieve a common meaning or requirement. In the event this is not possible within reasonable limits, the Franchise shall prevail. f. Compliance with Law. Neither this Ordinance nor a Franchise granted under it relieves a Grantee of any requirement of Grantor, or of any Ordinance, rule, regulation, or specification of Grantor now or hereafter in effect pursuant to Grantor's police power, including, but not limited to, the obtaining of a business license, and the payment of all permit and inspection fees required from time to time by the Grantor. g. Franchise Non - Exclusive. Grantor may, at its option, grant one or more Franchises to construct, operate, maintain, and reconstruct a System. Said Franchises shall constitute both a privilege and an obligation to provide the System and Cable Services required by this Ordinance and the Franchise. h. Duration. The term of any Franchise, and all rights, privileges, obligations and restrictions pertaining thereto, shall be specified in the Franchise. The effective date of any Franchise shall be as specified in the Franchise. i. Use of Public Streets and Rights- of -Way. For the purposes of operating and maintaining a System in the franchised Service Area, a Grantee may place and maintain within the public rights -of -way such property and equipment as conforms to the standards of the City and as are necessary and appurtenant to the operation of the Cable Communications System. Prior to construction or alteration of the Plant in public rights -of -way, a Grantee shall apply for, pay all applicable fees, and receive all necessary permits as required by law. j. Use of Other Utilities. Any Person who provides a System or Services as defined herein shall be deemed a Grantee and must obtain a Franchise. If such Grantee uses distribution channels furnished by any telephone company, other public utility, or any other entity which are functionally equivalent to those used by a Cable Operator, said Grantee shall be required to comply with all of the provisions of this Ordinance. k. Restrictions Against Transfers. Neither the franchise nor any rights or obligations of the Grantee in or pursuant to the franchise, or the System shall be transferred in part or as a whole, by assignment, trust, mortgage, lease, sublease, pledge or other hypothecation, and shall not be sold, transferred, leased, assigned, or disposed of in part or as a whole, either by forced sale, merger, consolidation, or otherwise, nor shall title thereto, either legal or Cable Communications Franchise Ordinance November 12, 2003 Page 19 equitable, or any right or interest therein, pass to or vest in any Person, nor shall a transfer of Control of the Grantee or the System occur, either by act of the Grantee, by operation of law or otherwise, in each such case without the prior written consent of the Grantor, which consent shall not be unreasonably withheld, and which shall be expressed by Resolution and then only under such conditions as maybe therein prescribed. 1. Effect of Unauthorized Action. 1. The taking of any action described in the foregoing Section (a) hereof without the prior consent of the Grantor shall: (i) be deemed a material breach of Franchise; and (ii) among other remedies available to the Grantor, be subject to a liquidated damages assessment, which assessment shall be up to $5,000.00 a day until the taking of an action described in the foregoing Section 0) is approved, or if not approved, until the prior ownership, Control or other status quo ante is restored to a condition satisfactory to the Grantor. The amount of such assessment shall be determined by the Grantor. 2. If the Grantor denies its consent to any such action and such action has nevertheless been effected, the Council may revoke the Franchise unless the ownership of the Franchise and/or System or Control of the Grantee, the System or the Franchise is promptly restored to its status prior to such unauthorized action or to a status acceptable to the Grantor. 3. The grant or waiver of any one or more of such consents shall not render unnecessary any subsequent consent or consents, nor shall the grant of any such consent constitute a waiver of any other rights of the Grantor. m. Additional Restrictions. 1. The Grantee shall not enter into any management contract or other arrangement for the management of the System, or sell or otherwise transfer the System, or any material portion thereof, with or without the Franchise, without the prior written consent of the Grantor. 2. Any use by the Grantee of its own or an existing MATV, SMATV, MDS, DBS, or other system in any structure located in the Service Area for the distribution of any Service which would otherwise be distributed over the System, shall not relieve the Grantee of its obligation to construct, operate, and maintain the System in said structure pursuant to this Ordinance and applicable law. n. Approval Procedure. 1. The Grantee shall promptly notify the Grantor action or proposed action requiring consent of the Grantor pursuant to this Section. The Grantee shall submit to the Grantor an original and four copies, unless otherwise directed, of its petition on FCC Form 394, requesting such consent, which petition shall fully describe the action or proposed action and clearly state the basis on which the petition should be approved. The petition shall also Cable Communications Franchise Ordinance November 12, 2003 Page 20 contain all reasonably appropriate documentation. The 120 -day period to review a transfer request under Section 617 of the Cable Act shall not commence until all of the information required by FCC Form 394, any applicable State law, the Franchise and this Ordinance is submitted to the Grantor: 2. Name and address of the proposed transferee and identification of the ownership and control of the transferee, including: the names and addresses of the ten (10) largest holders of an ownership interest in the transferee and its cable affiliates and all persons with twenty (20) percent or more ownership interest in the transferee and its cable system; the Persons who Control the transferee; all officers and directors of the transferee and its cable affiliates; and any other Cable System ownership interest or each named Person; 3. A demonstration of the transferee's technical ability to construct, maintain, upgrade and operate the System, including identification of key personnel. 4. A demonstration of the transferee's legal qualifications to construct, maintain, upgrade and operate the System; S. The transferee must show that it, as well as any person which Controls the transferee, has not, at any time during the ten (10) years preceding the submission of the petition, been convicted of any act or omission of such character that the transferee cannot be relied upon to deal truthfully with the Grantor and the Subscribers of the System, or to substantially comply with its lawful obligations under applicable law; 6. The transferee must certify that no elected official of the Grantor holds an interest, other than shares in a publicly traded company, in the transferee or an Affiliated Person of the transferee; 7. Current financial statements showing the financial condition of the System as of the date of the petition. If Grantee does not maintain financial records at the System level, then the Grantee may provide such financial statements of the smallest reporting entity which includes the System; 8. A statement prepared by a certified public accountant or responsible official of the transferee regarding the transferee's or assignee's financial ability to Construct, upgrade, maintain and operate the System; 9. A description of the transferee's prior experience in Cable System ownership, construction and operation and identification of communities in which the transferee or assignee or entities under common Control with the transferee have a cable franchise or license. 10. A description of the transferee's plans for meeting any System obligations under the Franchise, including, but not limited to, any upgrade obligations, upgrade Cable Communications Franchise Ordinance November 12, 2003 Page 21 completion schedules, channel capacity requirements, technical design requirements, and performance characteristics; 11. An affidavit or declaration of the transferee or authorized officer certifying the truth and accuracy of the information in the petition or other written request, acknowledging the enforceability of the commitments of the petition or other written request, and certifying that the proposal meets all federal and state law requirements; and 12. A summary of the plans and commitments of the transferee to remedy specific and known defaults and violations, if any, in the operation of the System under the Franchise. 13. At any time during the review process, the Grantor reserves the right to require additional supporting documentation from the Grantee or any other Person involved in the action or proposed action. The Grantee shall provide all reasonably requested assistance to the Grantor in connection with any such inquiry and, as appropriate, shall use its best efforts to secure the cooperation and assistance of all other Persons involved in such action. o. Conditions. As a condition to the granting of any consent required by this Section 31 the Grantor may require that the transferee execute an agreement, in a form and containing such reasonable conditions as may be required by the Grantor, specifying that said transferee assumes and agrees to be bound by all applicable provisions of the Franchise. The execution of said agreement by the transferee shall in no way relieve the Grantee, or any other transferor involved in any such action, of its obligations pursuant to the Franchise during its tenure as the franchisee up to and including the date of execution of such Agreement without the consent of the Grantor. p. Reimbursement of Processing and Review Costs. To the extent not prohibited by applicable law, Grantee shall reimburse Grantor for Grantor's reasonable processing and review expenses in connection with a transfer of the Franchise or a change in Control of the Franchise, including without limitation, costs of administrative review, financial, legal, and technical evaluation of the proposed transferee, costs of consultants (including technical and legal experts), notice and publication costs, and document preparation expenses. A reasonable deposit in an amount determined by the City may be required by the City. In addition, prior to any transfer or change in Control, Grantee shall reimburse Grantor for all of Grantor's expenses in connection with evaluating or negotiating a renewal of Grantee's franchise, whether or not said renewal was ever finalized or granted. Grantor may send Grantee an itemized description of all such charges, and Grantee shall pay such amount within thirty (30) days after the receipt of such description. Rights Reserved to the Grantor. q. Reservation. The grant of the Franchise does not limit the rights of Grantor under state law with respect to its power of eminent domain. Cable Communications Franchise Ordinance November 12, 2003 Page 22 r. Non - waiver or Bar. Neither the granting of any Franchise, nor any provisions of this Ordinance, shall constitute or be construed as a waiver or bar to the exercise of any governmental right or power by Grantor. s. Delegation of Powers. Any right or power in, or duty retained by or imposed upon Grantor, or any commission, officer, employee, department, or board of Grantor, may be delegated by Grantor to any officer, employee, department or board of Grantor, or to such other person or entity as Grantor may designate to act on its behalf. t. Right of Inspection of Construction. The Grantor shall have the right to inspect and approve all construction, installation, or other physical work performed by Grantee in the Public Rights -of -Way and on private property consistent with its generally applicable building codes, so long as said inspection and testing does not unreasonably interfere with Grantee's operations. u. Right to Require Removal of Propert y. Consistent with applicable law, upon the lawful revocation, expiration, or termination of the Franchise, the Grantor shall have the right to require a Grantee to remove, at Grantee's expense, all portions of its System and any other property from all streets and public rights -of -way within the Franchise Service Area within a reasonable period of time. v. Right of Intervention. The Grantor shall have the right of intervention in any suit, proceeding or other judicial or administrative proceeding in which the Grantor has any material interest, and to which a Grantee is party. w. Place of Inspection. The Grantor shall have the right to inspect Grantee's local premises, and to request copies of all relevant information that is reasonably necessary for the exercise of Grantor's regulatory authority, upon reasonable notice at any time during normal business hours. Any Grantee records kept at another place shall, within twenty (20) days of Grantor's request, be made available at Grantee's local premises within the County of Orange for Grantor's inspection and copying. All reports and records required pursuant to this Ordinance shall be furnished at the sole expense of Grantee, except as otherwise provided in this Ordinance or the Franchise. Rights of Subscribers. X. Discriminatory Practices Prohibited. A Grantee shall not deny Cable Service or otherwise discriminate against Subscribers or others on the basis of race, color, religion, national origin, sex, age, handicap, or other protected classes. y. Tapping and Monitoring. A Grantee shall not tap or monitor, or permit any other person controlled by Grantee to tap or monitor, any cable, line, signal input device, or subscriber outlet or receiver, to collect personally identifiable information (as defined in Section 631 of the Cable Act) concerning any Subscriber whatsoever without the prior written consent of the Subscriber or a court order therefor; provided, however, that a Grantee may Cable Communications Franchise Ordinance November 12, 2003 Page 23 monitor customer service calls for quality control purposes and may conduct system -wide or individually addressed "sweeps" for the purpose of verifying system integrity, monitoring signal levels, or checking for unauthorized connections to the Cable System, service levels, or billing- for -pay services. z. Data Collection. 1. Except for its own use, or in connection with the provision of Cable Services or for release of data to the Grantor, the Grantee shall not permit its system to be used for data collection purposes, nor shall it otherwise collect data which would reveal the commercial product or other preferences or opinions of an individual Subscriber, members of their families, or their guests, licensees or employees, unless the Grantee shall have received the prior written consent of such Subscriber. 2. In any event, the Grantee shall not disclose or permit the release or sale of data on individual Subscribers or groups thereof, but may disclose or permit the release or sale of aggregate data only. 3. Disclosure of Subscriber Lists. The Grantee shall not disclose, or sell, or permit the disclosure or sale of its subscriber list without the prior written consent of each Subscriber on such list; provided that Grantee may use its subscriber list as necessary for the construction, marketing, and maintenance of the Grantee's services and facilities authorized by a Franchise, and the billing of Subscribers for Cable Services; and provided further, that consistent with applicable law, Grantor may use Grantee's subscriber list for the purpose of communication with Subscribers in connection with matters relating to the operation, management, and maintenance of the Cable System and for the audit of financial and other obligations pursuant to this ordinance, any franchise, or other applicable law. 4. Grantee shall not disclose individual Subscriber preferences, viewing habits, beliefs, philosophy, creeds, or religious beliefs to any third person, firm, agency, governmental unit, or investigating agency without court authority or the prior written consent of the Subscriber. aa. Terms of Subscriber Consent. 1. Any written consent, if given, shall be limited to a period of time not to exceed one year, or a term agreed upon by the Grantee and the Subscriber. 2. The Grantee shall not condition the delivery or receipt of Cable Services to any Subscriber on any such consent 3. A Subscriber may at any time revoke, without penalty or cost, any consent previously given by delivering to the Grantee in writing a statement of the Subscriber's intent to so revoke. Cable Communications Franchise Ordinance November 12, 2003 Page 24 bb. Other Persons Affected. The prohibitions contained in paragraphs (a) through (d), inclusive, of this Section 5.44.050 apply to Grantee, as well as to all of the following: 1. Officers, directors, employees, agents, and general and limited partners of the Grantee; 2. Any person or combination of persons owning, holding, or controlling any corporate stock or other ownership interests in the Grantee; 3. Any affiliated or subsidiary entity owned or controlled by Grantee, or in which any officer, director, stockholder, general, or limited partner, or person or group of persons owning, holding or controlling any ownership interest in the Grantee, shall own, hold or control any corporate stock or other ownership interests; and 4. Any person, firm, or corporation acting or serving in the capacity of a holding or controlling company of the Grantee. cc. Subscriber Bill of Rights. Grantee shall provide to all Subscribers, at the time of initial connection and annually thereafter, a notice in a form previously approved by Grantor (which approval shall not be unreasonably withheld) describing, in understandable language, the Subscriber's rights and obligations that are generally provided under the Franchise and federal law, including a description of how to contact the Grantee and, if necessary, the Grantor, in the event of an unresolved Subscriber complaint. dd. Notice to New Subscribers. Before providing Cable Service to any Subscriber, Grantee shall provide a written notice to the Subscriber containing substantially the following information: "Subscriber understands that Company uses public rights -of -way and other facilities of the City of Newport Beach in providing service and that this continued use cannot be guaranteed. Subscriber agrees not to make any claims against the City of Newport Beach or its officers or employees in the event that such use is denied for any reason, and Company is unable, in its discretion, to provide service over alternate routes." Finance. cc. Payments to the Grantor. 1. As compensation for any Franchise to be granted, and in consideration of permission to use the Grantor's streets and public rights -of -way for the construction, operation, maintenance, and reconstruction of a System, the Grantee shall pay to the Grantor the amounts specified in the Franchise. Cable Communications Franchise Ordinance November 12, 2003 Page 25 2. Payments due the Grantor shall be computed quarterly, and shall be paid within forty -five (45) days after the close of each calendar quarter. The payment shall be accompanied by a report showing the basis for the computation and such other relevant facts as may be required by the Grantor to determine the accuracy of the payment. A final annual reconciliation, and payment if any, shall be delivered to Grantor by Grantee within ninety (90) days after the end of each calendar year. 3. If any franchise payment or recomputed amount is not made on or before the dates specified above in subsection 2, Grantee shall pay as additional compensation the greater of the following: (a) An interest charge, computed from the applicable due date, at an annual rate equal to the prevailing commercial prime interest rate in effect upon the due date, plus one percent (1 %). (b) A sum of money equal to $5,000 for each month, or part thereof, of delay, which sum shall also bear interest from the due date at an annual rate equal to the prevailing commercial prime interest rate in effect upon the due date, plus one percent (1 %). 4. In addition to any late payment made pursuant to subsection 3 above, if a payment is late by sixty (60) days or more, Grantee shall pay a sum of money equal to five percent (5 %) of the amount due in order to defray additional expenses and costs incurred by Grantor as a result of such delinquent payment 5. No acceptance of any payment shall be construed as a release of, or an accord, or satisfaction of, any claim that the Grantor might have for further or additional sums payable under the terms of this Ordinance, or for any other performance by Grantee of an obligation hereunder. 6. Payments of compensation made by a Grantee to the Grantor pursuant to the provisions of this Ordinance are in addition to, and exclusive of, any and all authorized taxes, business license fees, and other fees, levies, or assessments now in effect, or subsequently adopted in accordance with state and federal law. ff. Security Fund. 1. Except as provided in the Franchise, within thirty (30) days after the effective date of the Franchise, a Grantee shall deposit into a bank account established by a Grantee, for the benefit of Grantor, and shall maintain on deposit through the term of the Franchise, a sum specified in the Franchise as security for the faithful performance by Grantee of all of the provisions of the Franchise, and compliance with this Ordinance and with all orders, permits and directions of the Grantor, or any designated representative of the Grantor having jurisdiction over Grantee's acts or defaults under the Franchise or this Ordinance, and as security for the payment by a Grantee of any claims, fees, liens, or taxes due the Grantor which arise by reason of the construction, operation, maintenance or reconstruction of the Cable Communications Franchise Ordinance November 12, 2003 Page 26 System pursuant to the Franchise or this Ordinance, and to satisfy any actual or liquidated damages arising out of a Franchise breach. 2. Except as otherwise provided in the Franchise, if a Grantee fails, after twenty (20) days written notice, to pay to the Grantor any fees that are due and unpaid, or fails to repay within such twenty (20) days, any damages, costs or expenses which the Grantor is compelled to pay by reason of any act or default of grantee in connection with its Franchise; or if Grantee fails to comply with any provision of the Franchise or this Ordinance and the Grantor determines that such failure was without just cause and, in a manner consistent with the procedures specified in this Ordinance, Grantor reasonably determines it can be remedied by a withdrawal from the security fund or is nevertheless subject to liquidated damages, then, in any such event, the Grantor may immediately withdraw the amount thereof from the security fund, with interest and any liquidated damages. Upon such withdrawal, the Grantor shall notify a Grantee of the amount and the date of withdrawal. 3. Within thirty (30) days after notice to Grantee that any amount has been withdrawn by Grantor from the security fund, a Grantee shall deposit a sum of money sufficient to restore such security fund to the original amount. 4. Grantee shall be entitled to the return of the security fund, or portion thereof, with interest, that remains on deposit at the expiration or termination of the Franchise, once all amounts due to the Grantor have been paid. Grantee shall also retain its right to challenge any withdrawal from such security fund. 5. The rights reserved to the Grantor with respect to the security fund are in addition to all other rights of the Grantor, and no action, proceeding or exercise of a right with respect to such security fund shall affect any other right the Grantor may have. gg. Faithful Performance Bond. Except as provided in the Franchise, within thirty (30) days after the effective date of the Franchise, a Grantee shall furnish proof of the posting of a faithful performance bond in favor of the Grantor, with corporate surety approved by the Grantor in the sum specified in the Franchise and conditioned that a Grantee shall well and truly observe, fulfill, and perform each term and condition of the Franchise; provided, however, that such bond shall not be required after certification by Grantor of the completion of construction of Grantee's Cable System. The corporate surety must be authorized to issue such bonds in the State of California, and the bond must be obtained and secured through an authorized agent in the County of Orange. During the course of construction, the amount of the bond may from time to time be reduced, as provided in the Franchise. Written evidence of payment of premiums shall be filed with the Grantor. hh. Letter of Credit. 1. As required by the Franchise, a Grantee shall post an irrevocable letter of credit, issued by a bank approved by the Grantor, in the amount specified in the Franchise. Said letter of credit shall incorporate wording approved by the Grantor enabling it to draw Cable Communications Franchise Ordinance November 12, 2003 Page 27 from time to time such funds as the Grantor may determine to be necessary to satisfy any material defaults of Grantee or to make any payments due Grantor under or in connection with this Ordinance or Grantee's Franchise, upon not more than ten (10) days written notice to the issuer of the letter of credit with a copy by certified mail to the Grantee. Said letter of credit shall further provide for sixty (60) days written notice by certified mail from its issuer to Grantor of any pending expiration or cancellation, and said notice shall without further cause constitute reason for the Grantor to draw the full sum to be held in its own accounts until such letter of credit is reestablished in a form satisfactory to Grantor. 2. If Grantor requires such a letter of credit, Grantee shall pay all fees or other charges required to keep it in force and shall, within thirty (30) days of any draw by Grantor, restore its face value to the original amount. 3. All provisions herein applicable to bonds or security funds shall also apply to letters of credit. Services. ii. Services to be Provided. A Cable System shall provide, as a minimum, the broad programming categories specified in the Franchise. J. Changes in Services. Grantee shall inform Grantor and its Subscribers at least thirty (30) days in advance of making any changes in rates, programming services or channel position in the System. kk. Non - discrimination. Grantee shall not discriminate between or among Subscribers within one type or class in the availability of services, at either standard or differential rates according to published rate schedules, except as otherwise authorized by law. No charges may be made for services except as listed in published schedules which are available for inspection by anyone at Grantee's office, quoted by Grantee on the telephone, and displayed or communicated to all potential Subscribers. 11. Prepayment. Grantee may not charge Subscribers for services more than one (1) month in advance unless an individual Subscriber requests a longer period. Bills may be due and payable upon mailing but shall not be delinquent, and no late charge penalties shall be assessed, except as provided in state law. All bills and billing statements shall clearly indicate the billing period, and the actual due date. mm. Disconnect for Cause. Grantee may disconnect a Subscriber only for cause, which shall include, without limitation, the following: 1. Payment delinquency in excess of forty -five (45) days. 2. Willful or negligent damage to or misappropriation of Grantee's property. service. Cable Communications Franchise Ordinance November I Z 2003 Page 28 3. Monitoring, tapping, or tampering with Grantee's system, signals, or 4. Threats of violence to Grantee's employees or property. nn. Reconnection. Grantee shall, upon Subscriber's written request, reconnect service that has been disconnected for payment delinquency when payment has removed the delinquency. If authorized by applicable law, a published standard charge may be made for reconnection. Grantee shall not be required to make more than three (3) reconnections for the same subscriber if the disconnections involved were caused by payment delinquency within any previous twenty -four (24) month period. Reconnection for disconnects covered by Section 5.44.070(e)(2), (3), and (4) shall be at Grantee's sole discretion. oo. Installations. 1. Grantee shall promptly provide and maintain service as specified in the Franchise to the residential, commercial, and industrial structures in the Franchise Service Area, as defined in the Franchise, upon request of the lawful occupant or owner. 2. Where a new Drop is required to provide service, Grantee shall advise each Subscriber that the Subscriber has the right to require that installation be done over any route on the Subscriber's property, and in any manner the Subscriber may elect which is technically feasible and consistent with proper construction practices. If the Subscriber requests installation other than a standard installation, then the Subscriber may be required to pay the fee required in subparagraph (h) below related to Non - standard Installations. 3. For purposes of this paragraph, a standard installation shall include installation of drop cable with fittings up to one hundred and fifty feet (150) feet from the CATV distribution system measured along the cable from the center line of the street or utility easement through the house wall or, at the Subscriber's option, through the floor from a house vent or crawl space directly to the Subscriber's television set with five feet of cable from the wall or floor entry to the TV set. Also included as part of a standard installation is the grounding cable, fine tuning of the television set in order to insure the reception of Cable Service, and the provision by the Grantee of the appropriate literature and information. 4. After Cable Service has been established by activating trunk or distribution cables for any area, Grantee shall provide Cable Service to any person requesting Cable Service in that area within nine (9) calendar days from the date of request, provided that the Grantee is able to secure all access rights necessary to extend service to that potential Subscriber within that nine (9) day period on reasonable terms and conditions. pp. Non - Standard Installations. For each non - standard installation, a Grantee may charge the Subscriber for the cost of material and labor in excess of that required for a Standard Installation. Grantee shall provide each Subscriber a written estimate of all charges Cable Communications Franchise Ordinance November 12, 2003 Page 29 for a non - standard installation prior to installation and obtain Subscriber's written authorization in advance for all nonstandard installation charges. qq. Converters /Terminals. At such time as a converter or terminal is required for Subscribers to have access to all services on its System, Grantee shall make them available to Subscribers for a fee. Grantee may require each Subscriber who elects to install a converter or terminal to furnish a security deposit therefor. 1. Each converter or terminal device shall be and remain the property of the Grantee. Grantee shall be responsible for maintenance and repair of all equipment owned by Grantee and may replace it as Grantee may from time -to -time elect, except that Subscriber shall be responsible for loss of or damage to any such device while in the Subscriber's possession. 2. Upon termination or cancellation of Subscriber's service, Subscriber shall promptly return Grantee's property to Grantee in the same condition as received, reasonable wear and tear excepted. 3. Grantee may apply the security deposit against any sum due from Subscriber for loss of or damage to such converter or terminal exceeding reasonable wear and tear. In the event that no security deposit has been required, the Grantee may charge the Subscriber for any such damage exceeding reasonable wear and tear. 4. If Grantee has no claim against the Subscriber's security deposit, Grantee shall return it, or the balance, to the Subscriber within thirty (30) days of return of the converter or terminal. Design and Construction. rr. System Construction. The System shall be constructed in accordance with the provisions of the Franchise. ss. Construction Components and Techniques. Construction components and techniques shall be in accordance with the Franchise and all applicable law. tt. Construction Notice. Grantee shall give at least forty -eight (48) hours advance written notice to all property owners and to the Grantor prior to installing any above - ground or underground structures upon easements located on private property. Grantee shall be a member of Underground Service Alert ( "USA ") and comply with its requirements and procedures. uu. System Construction. 1. The Grantee shall begin to offer Cable Service and any other service authorized by the Franchise no later than the date specified in the Franchise. Cable Communications Franchise Ordinance November 12, 2003 Page 30 2. A Grantee shall provide a detailed construction plan including an estimated progress schedule, area construction or reconstruction maps, a System Testing Plan, and projected dates for offering service to Subscribers. 3. A Grantee shall remove or relocate, at the request of the Grantor and without expense to the Grantor, any facilities installed, used and maintained under any franchise if and when made necessary by any lawful change of grade, alignment or width of any public street, way, alley or place, including the construction of any subway or viaduct by the Grantor. 4. The City Engineer shall be authorized to direct a Grantee to locate any conduits and appurtenances as may be reasonably necessary to avoid sewers, waterpipes, conduits or other structures lawfully in or under the streets; and before the work of constructing any pipes and appurtenances is commenced, the Grantee shall file with said Engineer plans showing the location thereof, which shall be subject to the approval of said Engineer; and all such construction shall be subject to the inspection of said Engineer and done to his reasonable satisfaction. All street coverings or openings of traps, vaults, and manholes shall at all times be kept flush with the surface of the streets; provided, however, that vents for underground traps, vaults and manholes may extend above the surface of the streets when said vents are located in parkways, between the curb and property lines. All above - ground facilities including, but not limited to, pedestals, nodes, and boxes shall only be placed in those locations as reasonably specified by the City Engineer. Installations shall not interfere with pedestrian and traffic flow and shall be consistent with ADA requirements. 5. If any portion of any street shall be damaged by reason of defects in any of the conduits and appurtenances maintained or constructed pursuant to a franchise, or by reason of any other cause arising from the operation or existence of any pipes and appurtenances constructed or maintained under any other grant, said Grantee shall, at its own cost and expense, immediately repair any such damage and restore such street, or portion of street, to as good condition as existed before such defect or other cause of damage occurred, such work to be done under the direction of the City Engineer, and to his or her satisfaction. 6. A Grantee shall guarantee the integrity, durability and structural integrity of any street cut repairs necessary for the installation or repair of grantee's facilities for the life of the street. Grantee shall repair or replace, at no expense to the City, any failed street cut completed by Grantee or Grantee's subcontractor, as determined by the City Engineer. vv. Geographical Coverage. A Grantee shall construct the Cable System so that it is capable of providing Cable Service to every Residential Dwelling Unit and other structures specified in the Franchise within the Franchise Service Area. A Grantee shall take reasonable steps to accommodate future annexations to the Franchise Service Area (as defined and provided by the Franchise), with any exceptions requiring specific Grantor approval. Cable Service shall be provided to Subscribers in accordance with the schedules specified in the Franchise. Cable Communications Franchise Ordinance November 12, 2003 Page 31 ww. Construction Default. Upon the failure, refusal or neglect of Grantee to cause any construction, repair, or the terms of any construction permit, or other necessary work to comply with the terms of the Franchise, thereby creating an adverse impact upon public safety, Grantor may (but shall not be required to) cause such work to be completed in whole or in part, and upon so doing shall submit to Grantee an itemized statement of costs. Grantee shall be given reasonable advance notice of Grantor's intent to exercise this power, and fifteen (15) days to cure the default. Grantee shall, within thirty (30) days of billing, pay to Grantor the actual costs incurred. xx. Vacation or Abandonment. In the event any street, alley, public highway, or portion thereof used by a Grantee shall be vacated by the Grantor, or the use thereof discontinued by a Grantee, upon written notice a Grantee shall forthwith remove its facilities therefrom unless specifically permitted to continue the same. On the removal thereof, Grantee shall restore, repair or reconstruct the area where such removal has occurred, to such condition as may be required by the Grantor. In the event of any failure, neglect or refusal of a Grantee, after thirty (30) days' notice by the Grantor, to do such work, Grantor may cause it to be done, and Grantee shall, within thirty (30) days of billing, pay to Grantor the actual costs incurred. yy. Abandonment in Place. Grantor may, upon written application by Grantee, approve the abandonment of any property in place by Grantee, under such terms and conditions as Grantor may approve. Upon Grantor - approved abandonment of any property in place, Grantee shall cause to be executed, acknowledged, and delivered to Grantor such instruments as Grantor shall prescribe and approve, transferring and conveying the ownership of such property to Grantor. zz. Removal of System Facilities. In the event that Grantee's Plant is deactivated for a continuous period of thirty (30) days, without prior written notice to and approval by Grantor, then Grantee shall, at Grantor's option and demand, and at the sole expense of Grantee, promptly remove from any streets or other areas all property of Grantee. Grantee shall promptly restore the streets or other areas from which such property has been removed to its condition existing prior to Grantee's use thereof; provided that Grantee shall not be required to remove conduit from underground, where Grantor has determined that no damage to the surface of any structures will result from such nonremoval. aaa. Movement of Facilities. In the event it is necessary, at Grantor's discretion, to temporarily move or remove any of a Grantee's property for a public purpose, Grantee, upon reasonable notice, shall move, at the expense of Grantee, its property as may be required to facilitate such public purpose. No such movement shall be deemed a taking of Grantee's property. Nothing herein shall limit the right of Grantee to seek reimbursement from any party other than Grantor. bbb. Underaounding of Cable. Cables shall be installed underground at Grantee's cost in areas where other like facilities are installed underground. Previously installed aerial cable shall be installed underground at Grantee's pro rata cost in concert with other utilities, when those other utilities convert from aerial to underground construction provided that Cable Communications Franchise Ordinance November 12, 2003 Page 32 Grantee is given reasonable notice and access to the underground facilities of such other utilities or other users of the poles at the time such utilities are placed underground. ccc. Facility Agreements. No Franchise shall relieve Grantee of any obligations involved in obtaining pole or conduit space from any department of Grantor, any utility company, or from others maintaining utilities in Grantor's streets. ddd. Repair of Streets and Public Ways. Grantee shall not cut, trench, or excavate any street which has been constructed or overlaid for five (5) years or slurry- sealed for two (2) years from said construction, overlay, or slurry -seal, as the case may be, without the advance written permission of the City Engineer. The City Engineer's consent may be conditioned, among other things, upon a requirement that Grantee overlay or slurry -seal, as determined by the City Engineer, the entire width of the affected street for the entire length of the project. Any and all streets and public ways, and improvements located within such streets and public ways, disturbed or damaged by a Grantee or its contractors during the construction, operation, maintenance, or reconstruction of the System, shall be restored at Grantee's expense, and within the reasonable time frame and limits specified by Grantor, to their original condition unless otherwise authorized in writing by Grantor. Grantee may be required subsequent to completion of construction, from time to time as determined by the City Engineer, to overlay or slurry -seal the affected street in order to maintain the structural integrity and/or aesthetics of the street. All decorative sidewalks (pavers, tiles, etc.) shall be replaced in like kind pursuant to the written direction of the City Engineer. eee. Erection of Poles Prohibited. Grantee shall not erect any pole on or along any street or public way. If additional poles in an existing aerial route are required, Grantee shall negotiate with the public utility for their installation. Any such installation shall require the advance written approval of the Grantor. Subject to applicable federal and state law, a Grantee shall negotiate the lease of pole space and facilities from the existing pole owners for all aerial construction, under mutually acceptable terms and conditions. fff. Reservation of Street Rights. Nothing in a Franchise shall prevent the Grantor from constructing, repairing, or altering any public work. All such work shall be done, insofar as practicable, in such manner as not to unnecessarily obstruct, injure or prevent the free use and operation of any Property of Grantee. However, if any Property of Grantee shall interfere with the construction, maintenance, or repair of any public improvement, that property shall be removed or replaced in such manner as directed by Grantor so that the same shall not interfere with the public work, and such removal or replacement shall be at the expense of a Grantee. ggg. No Interference. Grantee shall not place equipment where it will interfere with existing and future uses of the streets, public right -of -way, or public property, with the rights of private property owners, with gas, electric, or telephone fixtures, with water hydrants or mains, with Cable Communications Franchise Ordinance November 12, 2003 Page 33 wastewater stations, with any traffic control system, or any other service or facility that benefits the Grantor's or its residents' health, safety or welfare. hhh. Protection of Streets. Grantee, at its own expense and in a manner as directed by the City Engineer, shall protect streets and public rights -of -ways, easements, and support or temporarily disconnect or relocate at its sole cost in the same street or other street or public right -of -way, any property of such Grantee when necessitated by reason of: 1. Traffic conditions; 2. Public safety; 3. Temporary or permanent street closing; 4. Street construction or resurfacing; 5. A change or establishment of street grade; or 6. Installation of sewers, drains, water pipes, storm drains, lift stations, force mains, power or signal lines, and any traffic control system. iii. Marking of Facilities. It shall be the responsibility of a Grantee to locate and mark or otherwise visibly indicate and alert others to the location of its underground cable before employees, agents, of independent contractors of any entity perform work in the marked -off area. A Grantee shall participate in and adhere to the practices of Underground Services Alert ( "USA ") and provide at least forty -eight (48) hours prior notice to USA prior to any excavation. jjj. Construction Standards. 1. All construction, installation, maintenance and repair shall not substantially affect the appearance or the integrity of the structure, and shall not be installed on private property without the property owner's permission subject to Section 621 of the Cable Act. 2. All underground drops shall follow (to the greatest extent possible) property lines, and cross property only at right angles unless otherwise permitted by the property owner, or required due to the physical characteristics of the subsurface, or required under applicable law. The Grantor may, either by way of a generally applicable resolution or through the imposition of routing conditions in any Franchise determine the routing or placement of cable, conduit, Nodes, pedestals, power supplies, vaults, and other equipment relating to the System. Cable Communications Franchise Ordinance November 12, 2003 Page 34 3. All construction shall be accomplished between the hours specified by the Grantor in the approved permit or ordinances. kkk. Payment of Fees. 1. Grantee and any and all subcontractors thereof shall obtain, at its own expense, all permits and licenses required by local law, rule, regulation or applicable ordinance. 2. As a condition of obtaining all necessary permits and licenses, the Grantee shall pay all applicable permit fees and, in addition, all of the Grantor's direct labor and supervisory costs, including customary and reasonable overhead (the "Labor Payment "). The City Council may, from time to time by resolution, establish the amount of said permit fees. To the extent not inconsistent with applicable law, the permit fees shall be sufficient to reimburse the Grantor for its costs, including the costs of staff, independent consultants, and related overhead, to review the proposed project, processing permits, plan check, inspecting the project including the costs of an outside inspector and, where applicable, the costs of an outside soils engineer or compaction testing expert, and the costs of any required testing to ensure that the construction adheres to standards of this Ordinance, any Franchise, any permit, and any other requirement of the Grantor. 3. Grantor may hire contractors, at Grantee's sole expense, to carry out any required work under this Ordinance. Grantee shall make payment within thirty (30) days of billing from the Grantor. Grantee shall be responsible for any damage caused by the construction including, but not limited to, damage to the public right -of -way, private property, streets, existing utilities, curbs, gutters and sidewalks. Grantee shall pay the Grantor any costs incurred as a result of such damages including repairs made by the Grantor except for costs incurred as a result of the Grantor's sole negligence or its employees' and agents' sole negligence. Grantee shall complete restoration of or repairs to any damage caused by its construction within thirty (30) days from the date of written notice from the Grantor. 4. In lieu of the inspection portion of the Labor Payment or permit fees described above, at the Grantor's sole option, the Grantor may require Grantee at Grantee's sole expense, to hire a consultant, who is acceptable to and under the supervision of the Grantor ( "Consultant "), to inspect the installation of the facilities on behalf of the Grantor, or provide other services as mutually agreed to by the parties. 111. Progress of the Construction. Prior to the underground construction of any of the facilities or the installation of any of the above - ground facilities, unless otherwise agreed to, Grantee shall furnish detailed plans of the proposed construction and changes thereto to the Grantor. The proposed above - ground sites must be approved by the Grantor prior to construction of the underground plant. Depending on health and safety issues, and input from residents, the Grantor, at its sole Cable Communications Franchise Ordinance November 12, 2003 Page 35 discretion, may require proposed above - ground sites to be relocated by Grantee. Grantee shall comply with the Grantor's standard construction requirements as they exist from time to time. mmm. Construction Notification. 1. Construction Plan. Unless otherwise governed by Grantor's construction regulations and Ordinances, at least ninety (90) days prior to any construction, and from time to time thereafter, Grantee shall file with the City Manager or other designated employees of the City, a general construction plan describing in detail the Facilities construction plans, areas to be served, and an estimated time schedule for such construction ( "Construction Plan "). Grantee reserves the right to modify or change its Construction Plans at any time in its sole discretion, provided Grantee provides written notice to the Grantor. Any modifications to construction plans must be reviewed and approved by the Grantor before modifications can be implemented by Grantee. 2. Notice to the Grantor. The Grantor shall have thirty (30) days following receipt of the Construction Plan, or changes thereto, to approve or disapprove the Construction Plan. 3. Notice to Other Providers. Grantee shall provide the Grantor with general engineering base maps identifying existing underground and aerial utility routes, streets, parcels, poles, and construction needs including points of connections for existing residences, potential trench routes, and potential locations for facilities at least ninety (90) days in advance of any underground construction, unless otherwise agreed to, which may be reviewed in advance by any interested party for the purpose of reducing the impact on the Grantor's infrastructure and for the public's convenience and shall be approved or disapproved by the Grantor within sixty (60) days of receipt. 4. Traffic Control Plans. Grantee shall furnish detailed traffic control plans, which shall include site - specific hours of construction, to the City Engineer no later than thirty (30) days prior to the commencement of any construction activities which may affect or impact traffic (the "Traffic Control Plan"). The City Engineer shall provide (if any) comments to Grantee within ten (10) business days of receipt. The City Engineer may specify and limit hours of construction in order to avoid traffic congestion during peak periods. No construction related activities may be conducted in the Public Right -of -Way without an approved traffic control plan. 5. Telephone Contact. During construction, Grantee shall provide the Grantor a telephone contact number, and staff it during regular business hours, to enable the Grantor to report any concerns regarding construction of the Facilities. After business hours such calls will be routed to an on -call supervisor. In the event that the Grantor reports any concerns to Grantee, Grantee shall respond in a timely manner. Grantee shall correct within two (2) business days any adverse impact to the Grantor's use or operations or the use or operations of a third party caused by Grantee's construction activities in the Public Right -of -Way at no cost to the Grantor. Cable Communications Franchise Ordinance November 12, 2003 Page 36 6. Daily Notice. Every working day during construction, Grantee shall notify the designated Grantor staff member of the location of that next day's construction activities. The number of concurrent construction locations may be limited by the Grantor. 7. Proiect Overview. No later than one hundred and ninety (90) days prior to commencement of construction, Grantee shall file with the City Manager or other designated employee of the Grantor a Project Overview which shall contain an assessment of the operation of the facilities, including without limitation, a noise study prepared by a licensed engineer approved by the Grantor documenting noise generated from the Facilities. Once the project has been satisfactorily defined by Grantee as determined by the Grantor, the Grantor will conduct an initial study to determine the appropriate level of environmental review. Grantee will submit the final engineering plans to the Grantor for review and approval prior to the issuance of any permits. 8. Public Communication Plans. (a) Grantee agrees to develop a public communication plan ( "Communication Plan ") and submit it to the Grantor for the Grantor's review at least ninety (90) days prior to commencement of construction. The Grantor shall approve or disapprove the Communication Plan within thirty (30) business days of its receipt. The Communication Plan shall include the following: (1) A written mailed or hand delivered notification of property owners adjacent to all Facilities not less than thirty (30) days prior to the installation indicating the proposed location, a photograph of all above - ground visible equipment from which their size must be apparent, and a detailed description of the equipment included within the node including: the electronic components, natural gas generator, electrical fans, and the anticipated noise levels during winter and summer months and emergency backup operations. Grantee will provide its non -toll telephone number and a telephone number of the Grantor that may be called if the property owner is concerned about the installation. (2) The hanging of door hangers on all residences in the construction area at least seven (7) days prior to immediate construction activity. (b) Grantee agrees to participate in any public hearings or meetings scheduled by the Grantor and will be prepared to answer questions concerning Grantee's proposed construction of the above- ground visible equipment. Grantee shall have available at such meetings visual aids as appropriate such as slides, maps and diagrams. All above - ground equipment locations in the City must be approved by the Grantor prior to construction of the underground cable plant. Depending upon health and safety issues, and input from residents, the Grantor, at its sole discretion, may require proposed above -ground visible equipment sites be relocated by Grantee. Cable Communications Franchise Ordinance November 12, 2003 Page 37 9. Maps and Plans. Grantee shall maintain accurate maps and improvement plans of the Facilities, in a manner consistent with telecommunications industry standards and which can be integrated into the Grantor's Geographic Information System ( "GIS "). Grantee shall furnish to the Grantor two complete sets of as -built construction drawings within sixty (60) days of completion of the construction of the Facilities. Maps and improvement drawings shall be furnished to the Grantor and other parties interested in performing work within the Public Right -of -Way, upon request, at no cost to the Grantor. Grantee shall pothole its Facilities, at its expense, within fifteen (15) days of receipt of a written request from the Grantor unless Grantee can certify, with an associated indemnity approved by the City Attorney, the exact location and depth of the Facilities at the location where potholing is requested. 10. Certification of Completed Facilities. Grantor shall provide Grantee written notice of any street improvement project within Grantor's Service Area. Upon receipt of said written notice unless, Grantee shall certify in writing to Grantor that its Facilities located in the street improvement project are complete and require no further construction for a period of three (3) years, other than maintenance , Grantee shall apply for all necessary permits and authorizations so that any necessary facilities will be installed and completed prior to completion of the street improvement project. Operations And Maintenance. mm. Customer Service. 1. A Grantee shall maintain an office in the Service Area, or at such other location as is approved by the Grantor in writing. That office must be open during all usual business hours, but in no case less than forty eight (48) hours per week, including during at least one weekend day per week. Grantor shall have a publicly listed, non- long - distance- charge telephone number that is in operation to receive Subscriber Complaints and requests on a 24 -hour basis. Current information shall be maintained of all Complaints and their disposition, and a summary thereof shall be submitted to Grantor. 2. The Grantee shall respond to requests as follows: (i) within eight (8) hours after receipt of a request for repairs relating to a Cable Service Interruption affecting at least ten (10) percent of the Subscribers of the System; (ii) within twenty-four (24) hours after receipt of requests for service related to all other Cable Service Interruptions; (iii) and within forty -eight (48) hours for all other complaints and requests for repair. All Cable System related problems shall be resolved within five (5) business days unless technically infeasible. No charge shall be made to a Subscriber for such service or repairs, except that Grantee may charge for service calls not related to its Cable System, or that are caused by the Subscriber or members of its household, or the Subscriber's agents or guests. Cable Communications Franchise Ordinance November 12, 2003 Page 38 3. The Grantee shall provide a telephone service system to receive all construction and service complaints. A sufficient number of customer service representatives shall be provided so that callers are not required to wait more than thirty (30) seconds before being connected to a customer service representative ninety percent (90 %) of the time, measured quarterly, or to receive busy signals more than three (3) percent of the time, measured quarterly. The telephone number of the local office shall be listed in the telephone directory serving the City of Newport Beach. The telephone service system shall accept complaints twenty-four (24) hours a day, seven (7) days a week. The telephone service system shall be capable of generating reports relating to answer times, response times, hold times, and abandoned calls. 4. Customer service personnel shall identify themselves immediately. 5. Customers shall have the right to speak with a supervisor, and if none is available, a supervisor shall return the customer's call within one working day. 6. All officers, agents, or employees of the Grantee, including its contractors or subcontractors, who come into contact with members of the public shall wear on their outer clothing a photo - identification card in a form reasonably acceptable to Grantor. Grantee shall account for all identification cards at all times. Every vehicle of Grantee, or its major subcontractors, shall be clearly identifiable as working for Grantee. 000. Biennial Audit of Performance. 1. Grantor may require that performance audits of the System be conducted every two (2) years by an independent technical consultant selected by Grantor to verify that the System complies with all technical standards and other specifications of the Franchise. 2. Upon completion of a performance audit, the Grantor and Grantee shall meet to review the performance of the Cable System. The reports required by this Ordinance regarding Subscriber complaints, the records of performance audits and tests, and the opinion survey report shall be utilized as the basis for review. In addition, any Subscriber may submit complaints prior to or during the review meetings, either orally or in writing, and these shall also be considered. 3. Within thirty (30) days after the conclusion of the System performance review meetings, Grantor shall issue findings with respect to the adequacy of System performance and quality of service. If areas of non - compliance are found, Grantor may direct Grantee to correct the non - compliance within such period of time as Grantor determines is reasonable. 4. Participation by the Grantor and the Grantee in this process shall not waive any rights they may possess under applicable federal or state law. Cable Communications Franchise Ordinance November 12, 2003 Page 39 5. In addition to the Biennial Audit described above, Grantor may conduct an annual audit of the same or lesser magnitude, at its sole expense, when and if determined necessary or appropriate by Grantor. ppp. System Technical Data. Grantee shall provide Grantor with a computer disk or other data storage device requested by Grantor, in format approved by Grantor, which details and documents all of Grantee's equipment and facilities and their geographic location in the City. Such computer disk or other device shall be updated at least annually and whenever there have been significant changes in the location of Grantee's equipment and facilities. In addition, Grantee shall maintain in its local office a complete and up -to -date set of as -built system maps upon completion of construction or reconstruction, equipment specification and maintenance publications, and signal level diagrams for each active piece of electronic equipment in the system. As -built drawings shall show all lines and installed equipment, and tap values and spigots. The scale of maps and drawings shall be sufficient to show the required details in easily readable form and size. Technical data at the local office shall also include approved pole applications, details and documentation of satellite and microwave equipment, mobile radio units, heavy construction vehicles and equipment, and video and audio equipment normally used in the operation of the system. If Grantor requires use of technical data in its own offices, it may make copies of any items. qqq. Availability of Technical Data. All technical data reasonably necessary to demonstrate a Grantee's compliance with FCC regulations, this Ordinance, and the Franchise shall be available for Grantor's inspection during normal business hours upon two (2) business days notice. In the event of System failure or other operating emergency, the technical data will be made available at any time, so long as the provision of said data does not unreasonably interfere with Grantee's operations. rrr. Emergency Repair Capability. It shall be Grantee's responsibility to assure that its personnel, qualified to make repairs, are available at all reasonable times and that they are supplied with keys, equipment location instructions, and technical information necessary to begin repairs upon notification of the need to maintain or restore continuous service to the System. sss. Refund. When a Subscriber voluntarily discontinues service, Grantee shall refund, within thirty (30) days of the discontinuance of service, the unused portion of any advance payments after deducting any charges currently due through the date of such discontinuance. Unused payment portions shall be the percentage of time for which Subscriber has paid for service and will not receive it because of the Subscriber's discontinuation of service. ttt. Disabled Access. 1. The Grantee shall provide maximum practicable availability of the Services and facilities of the System to disabled persons. At a minimum, the Grantee shall provide a Cable Communications Franchise Ordinance November 12, 2003 Page 40 single remote control device for each television set connected to the Service to those Subscribers who are paraplegic or quadriplegic. 2. Upon initiation of Service in the Grantee, the Grantee shall submit to the Grantee a plan and/or report describing the equipment, facilities, and ongoing services the Grantee intends to or does make available to disabled persons. Such information regarding the facilities, equipment, and ongoing services for disabled persons shall be kept updated and the Grantee shall promptly submit to the Grantee Manager notification of any deletions or additions to such information. 3. The Grantee shall provide within forty-five (45) days of a request from a Subscriber, for rental or purchase, equipment which facilitates the reception of all cable channels by hearing- impaired Subscribers in accordance with the FCC's regulations regarding Closed Captioning. The Grantee shall also provide TDD (or equivalent) equipment at the Grantee office that will allow such Subscribers to contact the Grantee for any reason related to the System. uuu. Employee Identification. All personnel of the Grantee contacting Subscribers or potential Subscribers outside the office of the Grantee must be clearly identified as associated with the Grantee. vvv. Installations. 1. All installations will include appropriate grounding, adjustment of the television set in order to receive Service, and the provision of required Subscriber information and literature to instruct the Subscriber in the utilization of the Services. 2. The Grantee shall offer Subscribers the option to receive an AB switch at the time of initial Service installation for no additional installation cost, and shall provide Subscribers with written information on how to use such a switch. 3. Upon Subscriber request, the Grantee shall provide an AB switch after the initial installation of Service. If the Subscriber requests installation of such a switch, the Grantee may charge reasonable fees for such installation which fee shall not exceed the maximum rate permitted by applicable law. 4. When applicable, if the Grantee cannot perform standard installations within nine (9) calendar days of request by a Subscriber (provided that the schedule or preferences of the person requesting installation have not been responsible for the delay), the Subscriber may request and is entitled to receive a credit equal to one month of Basic Service. If the Grantee fails to provide this credit and the request was made by the Subscriber within sixty (60) days of the installation request, the Grantee may direct the Grantee to issue the credit. Repeated failure to perform standard installations within the nine (9) calendar days or to provide the credit for late installations shall be grounds for Franchise revocation or other enforcement actions. Cable Communications Franchise Ordinance November 12, 2003 Page 41 Service Interruptions And Other Service Problems 1. The Grantee shall render efficient service, make repairs promptly, and interrupt Service only if unavoidably necessary and for the shortest period possible. Such interruptions, insofar as possible, shall be preceded by reasonable notice to each affected person and shall occur during periods of minimum System use. 2. The Grantee shall promptly notify the Grantor of any significant "Service Interruption" in the operation of the System. For the purposes of this Section, a "significant Service Interruption in the operation of the System" shall mean any interruption of Cable Services of a duration of at least four (4) continuous hours to at least ten percent (10 %) of the Subscribers in the area or areas of the Grantee served by the Grantee. 3. The Grantee shall exercise its best efforts to limit any Service Interruption for the purpose of maintaining, repairing, or reconstruction of the System to periods of minimum use. Except in an emergency or other situation necessitating a more expedited or alternative notification procedure, the Grantee may schedule a Service Interruption for a period of more than four (4) hours during any twenty -four (24) hour period only after the Grantee and each affected Subscriber in the Grantee have been given twenty -four (24) hours prior notice of the proposed interruption. 4. Technicians employed by the Grantee and capable of performing Service - related emergency repairs and maintenance must be available twenty -four (24) hours a day, every day, including weekends and holidays. 5. The Grantee must acknowledge complaints from Subscribers within twenty - four (24) hours (excluding weekends and holidays except in the case of Service Interruptions). 6. Excluding conditions beyond the control of the Grantee, the Grantee will begin working on Service Interruptions promptly and in no event later than twenty -four (24) hours after the interruption becomes known (including weekends and holidays). "Working on" constitutes taking positive steps toward rectifying the problem not merely acknowledging the problem. 7. The Grantee must begin actions to correct Cable Service problems other than Service Interruptions the next business day after notification of the Cable Service problem. 8. Verification of Subscriber complaints, including but not limited to billing complaints, and resolution must occur within forty -eight (48) hours (provided that the schedule or preferences of the person requesting installation have not been responsible for the delay); and in any event, resolution must occur within one (1) week. Those matters requiring additional maintenance, repair, or technical adjustments that are documentable as necessitating in excess of one (1) week to reasonably complete, must be finally resolved within thirty (30) days of the initial complaint. The Grantee Manager's office may require Cable Communications Franchise Ordinance November 12, 2003 Page 42 reasonable documentation to be provided by the Grantee to substantiate the request for additional time to resolve a complaint. 9. The Grantee shall provide an automatic credit to all Subscribers when there is an Outage of all channels for a period of twenty-four (24) consecutive hours or more which affects an entire service area, franchise area served by the Grantee, regardless of the cause of the Outage. The credit for such an Outage shall equal, at a minimum, the value of one - thirtieth (1/30) of each Subscriber's monthly bill for the first twenty-four (24) consecutive hour period and prorated for each additional four (4) hour period or portion thereof that the Outage continues. 10. The Grantee shall provide an automatic credit to all affected Subscribers when there is an Outage of any Premium Service for a period of twenty-four (24) consecutive hours or more which affects an entire franchise area, or other discrete area of the Grantee served by the Grantee, regardless of the cause of the Outage. The credit shall equal, at a minimum, the value of one - thirtieth (1/30) of each Subscriber's monthly bill for that Premium Service for the first twenty-four (24) hour consecutive hour period and prorated for each additional four (4) hour period or portion thereof that the Outage continues. 11. Upon request of the Subscriber, the Grantee shall provide a credit to a Subscriber whenever an Outage or Outages of four or more hours in a twenty-four (24) hour period has affected any of the non - premium channels received by a Subscriber as part of their Service. The credit shall equal the value of one - thirtieth (1/30) of each Subscriber's monthly bill for Outages of four (4) hours or greater duration occurring in a twenty-four (24) hour period. In the event that a premium channel is affected by the Outage, the credit shall equal the value of one - thirtieth (1/30) the Subscriber's monthly premium rate for each Outage of four (4) hours or greater duration occurring in a twenty-four (24) hour period. 12. Repeated failure to provide the proper credit for Outages shall be grounds for Franchise revocation or other enforcement actions. xxx. Service Aonointments. 1. The "appointment window" alternatives for installations, service calls for Cable Service, and other installation activities will be either a specific time or, at maximum, a four -hour time block during normal business hours. (The Grantee may schedule services calls for Cable Service and other installation activities outside or normal business hours for the express convenience of the Subscriber). 2. If the Grantee does not arrive for appointments for installations or service calls within a designated 4 -hour time frame agreed to by the Subscriber, the Subscriber may request and is entitled to receive a credit equal to one month of Basic Service. If the Grantee fails to provide such credit, and the request was made by the Subscriber within 60 days of the missed appointment, the Grantee may direct the Grantee to issue the credit. Repeated failure to provide the credit shall be grounds for Franchise revocation. Cable Communications Franchise Ordinance November 12, 2003 Page 43 3. The Grantee may not cancel an appointment with a Subscriber after the close of business on the business day prior to the scheduled appointment. 4. If the Grantee's representative is running late for an appointment with a Subscriber and will not be able to keep the appointment as scheduled, the Grantee will document a diligent effort to contact the Subscriber directly. If, however, the Subscriber is unavailable at the time the contact attempt is made, the Grantee will attempt a second documented contact at least one more time during the previously agreed upon appointment window. The appointment will be rescheduled, as necessary, at a time which is convenient to the Subscriber. Contacting the Subscriber will not necessarily excuse a missed appointment. In the event that it is necessary for Grantee to contact the Subscriber regarding the scheduled appointment and Subscriber is not available, Grantee will use its best efforts to provide the Subscriber with a phone number to contact Grantee. yyy. Notices & Customer Communications. 1. The company shall send annually, written notice to all Subscribers informing them that any complaints or inquiries not satisfactorily handled by the Grantee may be referred to the Grantee Manager. Such notification shall be either: (a) A separate document that may be included with a billing statement or as part of the Grantee's annual notice; or (b) Included on the portion of the monthly bill that is to be retained by the Subscriber. The Grantee's telephone number for Service and the telephone number for the Grantee shall be contained in the notice. This notice shall also fully describe the Grantee's telephone hours and, when applicable, the lobby hours and shall include the telephone number(s) available to Subscribers after the Grantee's normal business hours through which Subscribers can obtain, at a minimum, emergency referral information. No promotional material may be included on the separate document or the portion of the bill containing this notice. 2. For informational purposes and for the Grantee to ensure nondiscrimination, the Grantee shall provide the Grantor and Subscribers a complete schedule of all current programming services, excluding pay - per -view, rates and charges and promotional offers. 3. The Grantee shall notify Subscribers of any pricing changes or additional charges and/or any changes in programming services as soon as possible through announcements on the System and in writing. Notice must be given to Subscribers a minimum of thirty (30) days in advance of such changes if the change is within the control of the Grantee. Cable Communications Franchise Ordinance November 12, 2003 Page 44 4. The Grantee shall notify all Subscribers prior to making available any channel(s) full or part-time without charge if programming rated NC -17, R, X, or the equivalents thereof will be available for viewing. This notification shall include the rating(s) of the programming to be made available for viewing and the right of the Subscriber to have the Grantee block the programming. The Grantee shall provide, by sale or lease, a device for blocking this programming. 5. The Grantee shall provide written information to Subscribers on each of the following areas at the time of installation of Cable Service, at least annually to all Subscribers, at any time upon request, and at least thirty (30) days prior to making significant changes in the information required by this Section: (a) products and services offered; (b) prices and options for programming services and conditions of subscription to programming and other services and facilities; (c) installation and maintenance policies including, when applicable, information regarding the Subscriber's home wiring rights and information describing ownership of internal wiring during the period Service is provided; (d) of programming carried on the System; (e) billing and complaint procedures, including the name, address and telephone number of the Grantee Manager's cable television division; (f) the availability of the signal control device required by Section 624(d)(2) of the Cable Act and AB switches; (g) the procedures by which the Subscriber will be notified of changes in fees, charges, deposits, or associated terms and conditions for any Service; (h) the Grantee's practices and procedures for protecting against invasions of privacy as required by Section 631 of the Cable Act, and Section 637.5 of the California Penal Code; (i) the address and telephone number of the Grantee's office to which complaints may be reported; and 0) when applicable, the Grantee's Community Unit Identifier as specified by the FCC. 6. Notices of changes in rates shall indicate the new rate inclusive of all fees and/or other fees and the amount the rate has increased or decreased from the current rate. Specific words such as "increase" or "decrease" must be used to describe the changes (as opposed to less specific terms, such as "adjustment"). Cable Communications Franchise Ordinance November 12, 2003 Page 45 7. Notices of changes of programming services and/or channel locations shall include a description of the new programming service, the specific Dial Location, and the hours of operation of that programming service. In addition, should the Dial Location, hours of operation, or existence of other programming services be affected by the introduction of a new service, such information must also be included in the notice. 8. In order that Subscribers are fully apprised of the charges they may incur, the Grantee shall advertise rates that include all costs and fees. 9. Every notice of termination of Service shall include all of the following information: (a) the name and address of the Subscriber whose account is delinquent. (b) the amount of the delinquency. (c) the date by which payment is required in order to avoid termination of Service. (d) the telephone number of a representative of the Grantee who can provide additional information and handle complaints or initiate an investigation concerning the Service and charges in question. 10. For informational purposes only, a listing of the Grantee closings or holidays (e.g. "no business" days) will be provided to the Grantee Manager annually, by no later than July 1 and by no later than every anniversary thereafter. zzz. Disconnections/Denial Of Service. 1. The Grantee shall not terminate residential Service for nonpayment of a delinquent account unless the Grantee furnishes a notice of the delinquency and impending termination at least fifteen (15) day prior to the proposed termination. The notice shall be mailed, postage prepaid, to the Subscriber to whom the Service is billed. This notice shall not be mailed until the sixteenth (16th) day after the date the bill for Services was mailed to the Subscriber. The notice of delinquency and impending termination may be part of a billing statement. 2. The Grantee shall not assess a late fee any earlier than the twenty- second (22nd) day after the bill for Services has been mailed. 3. The Grantee shall only terminate Cable Service on days when the Subscriber can reach a representative of the Grantee either in person or by telephone. Cable Service terminated without good cause must be restored without charge for the Cable Service restoration. Good cause includes, but is not limited to, failure to pay, payment by check for Cable Communications Franchise Ordinance November 12, 2003 Page 46 which there are insufficient funds, theft of Service, abuse of equipment or System personnel, or other similar Subscriber actions. 4. The Grantee shall furnish and maintain Cable Services to each person who makes a bona fide request to receive any programming service. Nothing in this Ordinance shall limit the right of the Grantee to deny Cable Service to any household or individual which has a negative credit or service history with the Grantee, which may include non - payment of bills or theft or damage to the Grantee's equipment, or who has threatened or assaulted employees of the Grantee in the course of their employment. aaaa. Deposits, Refunds, And Credits. 1. The Grantee may require refundable deposits in circumstances where such deposits are necessary to protect equipment or to ensure payment where there is reasonable evidence of a risk of nonpayment, provided that the Grantee shall be required to pay simple interest at a rate of one -half percent (1/2 %) per month (6% per year). Such interest shall be accrued and payable upon termination of Service. Upon termination of Service for any reason, Subscribers will be entitled to receive a refund or credit against amounts owed the Grantee equal to the deposit plus accumulated interest. 2. Refund checks will be issued promptly following the resolution of the event giving rise to the refund; and by the earlier of either: (a) the Subscriber's next billing cycle; or (b) forty -five (45) days. 3. If the Grantee does not mail a check for a refund (including applicable interest) to any Subscriber disconnecting Service with an outstanding credit within 45 days of the date Cable Service is ended, and the Subscriber has returned all Grantee owned equipment, the Subscriber may request and is entitled to receive a $4.75 payment, in addition to the total refund (and applicable interest) due. If the Grantee fails to provide the $4.75 payment and the request was made by the Subscriber within 60 days after failure to receive the refund, the Grantor may direct the Grantee to provide the $4.75 payment as well as any outstanding refund (and applicable interest) due. Repeated failure to provide the $4.75 payment shall be grounds for Franchise revocation and/or other enforcement actions. 4. Credits for Cable Service will be issued no later than the Subscriber's next billing cycle following the determination that a credit is warranted. bbbb. Rates, Fees, And Charges. 1. The Grantee shall not except to the extent expressly permitted by law, impose any fee or charge on any Subscriber for: (A) any service call to said Subscriber's premises to perform any repair or maintenance work related to Grantee, installed equipment Cable Communications Franchise Ordinance November 12, 2003 Page 47 necessary to receive Service, except any such work which was necessitated by a negligent or wrongful act of said Subscriber; or (B) the disconnection of any Services to a Subscriber, provided that the Grantee may impose appropriate charges if, at the time of disconnection, some or all of the Grantee's equipment is not returned to the Grantee or the Subscriber has not paid all outstanding fees and charges due to the Grantee; or there is damage to the equipment of the Grantee, excluding normal wear and tear and the circumstances described in the next paragraph. 2. Where the actions of the Grantee, its agent(s) or subcontractor(s) can be shown upon a reasonable demonstration of evidence to have contributed to the theft, loss or damage of a converter or other equipment lawfully used by a Subscriber, the Subscriber's liability with respect to said converter or other equipment shall be reduced to the extent of such contributing actions. 3. All charges for Services must be applied on a nondiscriminatory basis recognizing that the Cable Act allows for reasonable discounts to senior citizens and/or the economically disadvantaged and that the Grantee may, upon reasonable notice to Subscribers, conduct promotional campaigns in which rates are discounted or waived, and may offer bulk rate discounts for multiple dwelling units, hotels, motels, and similar institutions. 4. The Grantee shall assess late fees in accordance with applicable state law. cccc. Enforcement. 1. Repeated failure to comply with any or all of the provisions delineated above shall be grounds for Franchise revocation in accordance with the Franchise revocation procedures and/or other enforcement actions. 2. The Grantor may seek injunctive relief or any other judicial remedy available pursuant to state or federal law in order to enforce compliance with these standards. dddd. Rights Reserved By The Grantor. 1. The Grantor reserves the right to establish additional, reasonable Subscriber Cable Service standards from time to time, as may be necessary, after making a finding of need and after notice to and opportunity to be heard from the Grantee has been afforded. 2. The Grantor reserves the right to regulate rates for Cable Service to the fullest extent permitted by law. Notwithstanding anything in these standards to the contrary, in the event that the Cable Act is amended or repealed, or restrictions on the authority of the Grantor to regulate rates are otherwise removed or lessened, or the FCC or any court permits the Grantor to regulate such rates, the Grantor may, at its discretion, establish additional procedures and standards for rates and regulate such rates to the fullest extent of its regulatory authority under federal, State, and local laws. Cable Communications Franchise Ordinance November 12, 2003 Page 48 eeee. Performance Meetings. Upon request of the Grantor, the Grantee will meet with the Grantor to review the requirements set forth in this Appendix C. The Grantee's operational and technical personnel shall review with the Grantor such items as trouble calls and outage reports, installation records, system performance standards, new product rollout progress reports and other items required by the Grantor. Violations. ffff. Use of Public Streets. From and after the effective date of this Ordinance, it shall be unlawful for any person to construct, install, or maintain in any public place within Grantor's territory, or upon any easement owned or controlled by a public utility, or within any other public property of Grantor, or within any privately -owned area within Grantor's jurisdiction which is not yet, but is designated as, a proposed public place on a tentative subdivision map approved by Grantor, any equipment, Facilities, or System for distributing signals or services through a cable television system, unless a Franchise has first been obtained hereunder, and is in full force and effect. gggg. Unauthorized Connections. It shall be unlawful for any person to make or use any unauthorized connection to, or to monitor, Tap, receive or send any signal or service via a franchised System, or to enable any Person to receive or use any service, television or radio signal, picture, program, or sound, or any other signal without payment to the owner of said System. hhhh. Tampering with Facilities. It shall be unlawful, without the consent of the owner, to willfully attach to, tamper with, modify, remove or injure any physical part of or signals on a franchised System. Termination and Related Rights. iiii. Material Breach. 1. In the event that the Grantee fails to comply with a material provision of any franchise, then, in accordance with the procedures provided herein, the Grantor may revoke the franchise granted herein and terminate any franchise in accordance with the procedure set forth below. 2. A failure to comply with a material provision of any Franchise shall include, without limitation, any of the following acts or failures to act by the Grantee, an Affiliated Person or the Guarantor of any of the following events, unless excused by the Grantor. (a) Substantial failure to provide required financial information; (b) Substantial failure to satisfy the requirements regarding System characteristics or repeated failure to meet the technical performance standards, as provided in any franchise; Cable Communications Franchise Ordinance November 12, 2003 Page 49 (c) Substantial or repeated failure to provide any Cable Service to any Person as required by any franchise; (d) Substantial failure to maintain the mix, level, and quality of Services within the broad categories of video programming and other services as set forth in any franchise; (e) Abandonment of the System, in whole or in material part, without the prior written consent of the Grantor; (f) Substantial failure to supply the PEG Channels and related facilities and equipment after the date by which said items must be supplied, as provided in any franchise; (g) Substantial failure to comply with the interconnection requirements, as provided in any franchise; (h) Substantial and repeated imposition of any nonstandard Installation and other charges for Basic Service which are discriminatory, (i) Substantial and repeated failure to comply with consumer service standards and 0) Substantial failure to comply with the privacy rights of Subscribers as provided in this Ordinance, any franchise, or Section 631 of the Cable Act or Section 637.5 of the California Penal Code; (k) Substantial failure to make any of the Franchise Fee compensation payments as provided herein, or any other payments required by this Ordinance or any franchise, or to maintain the bond or other instrument in the amount required herein; (1) Substantial failure to comply with any rules, laws, regulations, orders or other directives of the Grantor issued pursuant to the police powers or pursuant to this Ordinance or any franchise; (m) The taking of any material action which requires the approval or consent of the Council without having first obtained said approval or consent, as provided in Section 5.44.0300) of this Ordinance; (n) Substantial failure to furnish and maintain throughout the term of any franchise the liability and indemnification insurance coverage; (o) To engage in a course of conduct intentionally designed to practice any fraud or deceit upon the Grantor, any Subscriber, or any other use of the System; Cable Communications Franchise Ordinance November 12, 2003 Page 50 (p) Failure to cooperate fully and faithfully with any lawful investigation, audit or inquiry conducted by a governmental agency; (q) Any material written misrepresentation, intentionally made by or on behalf of the Grantee in its proposal for the franchise granted pursuant to any franchise, or in connection with the negotiation or renegotiation of, or any amendment or other modification to any franchise, to the extent that any such misrepresentation was relied upon by the Grantor; (r) The conviction or determination of factual guilt, of the Grantee, any Affiliated Person, any director or executive officer of the Grantee or of an Affiliated Person, any Person holding Control of or a Controlling Interest in the Grantee, or any employee or agent of the Grantee or of any Affiliated Person acting under the express direction or with the actual consent of the Grantee, its directors or officers, of any criminal offense, including, without limitation, bribery, fraud or misrepresentation arising out of or in connection with the award, transfer, application for rate increase, or other regulation of any franchise, provided that the right to terminate any franchise in the event of said convictions shall arise only with respect to any of the foregoing convictions of the Grantee itself and, in the event of the conviction of any other Persons specified in this subsection, if the Grantee fails to disassociate itself from, or terminate the employment of, such other Persons with respect to activities in the Franchise Area or any other activities affecting the System, within thirty (30) days after the time in which appeals from such conviction may be taken, or within thirty (30) days following the final determination of all appeals which are in fact taken; (s) The conviction of any Grantor officer, Grantor employee, or Grantor agent of the offense of bribery or fraud which arises out of or in connection with any intentional action by the Grantee, any Affiliated Person, any director or executive officer of the Grantee or of any Affiliated Person, any Person holding Control of or a Controlling Interest in the Grantee, or of any employee or agent of the Grantee or of any Affiliated Person acting under the express direction or actual consent of the Grantee or any of the foregoing, which act was undertaken for the benefit of the Grantee; (t) Any material false entry knowingly made in the books or accounts or records of the Grantee, or any substantial false statements knowingly made in any report or filing to the Grantor or any governmental agency or otherwise by the Grantee, any director, officer, or other Person holding a Controlling Interest in the Grantee, any Affiliated Person, or any employee or agent of the Grantee acting under the express direction or with the actual consent of the Grantee; (u) Failure to comply with a duly constituted lawful order or ruling of any Grantor regulatory body having jurisdiction over the Grantee; or (v) Substantial failure to comply with the access origination point requirements as set forth in any franchise. Cable Communications Franchise Ordinance November 12, 2003 Page 51 (w) Substantial failure to comply with the construction requirements set forth in any franchise. Notwithstanding the foregoing, if, as a result of a failure or alleged failure to comply with a material provision of any franchise as delineated in the foregoing subsections, the Grantee is unable to comply with any other material provision(s) which necessarily and directly arise(s) out of said failure or alleged failure as delineated in said subsections, such inability to comply with such other provision(s) shall not be deemed to be an independent failure to comply with a material provision of any franchise. 3. The Council may exercise its right to revoke and terminate the franchise for a failure by the Grantee to comply with a material provision of this Ordinance and/or any franchise in accordance with the following procedures: (a) The Grantor shall noti fy the Grantee, in writing, of an alleged failure to comply with a material provision of any franchise which notice shall specify the alleged failure with reasonable particularity. The Grantee shall, within forty -five (45) days after receipt of said notice or in the event such failure cannot be reasonably cured within said forty -five (45) days, within a reasonable time, provided the Grantee commences to cure within said forty -five (45) days and diligently pursues such cure to completion, either cure such alleged failure or, in a written response to the Grantor, either present facts and arguments in refutation or excuse of such alleged failure or state that such alleged failure will be cured and set forth the method and time schedule for accomplishing said cure. (b) The Grantor shall investigate: (i) whether a failure to comply with a material provision has occurred; (ii) whether said failure is excusable; and (iii) whether said failure has been cured or will be cured by the Grantee. (c) If the Grantor determines that a failure to comply with a material provision has occurred and that either said failure is not excusable or has not been or will not be cured by the Grantee, then the Grantor shall so notify the Grantee. (d) At the conclusion of or in the event that the investigation is not concluded, as provided- above, the Grantor shall, within thirty (30) days, provide notice of a public hearing at which the Grantee shall have the opportunity to respond to the claim that a material breach has occurred and to present facts and arguments in refutation or excuse of such alleged breach, or to demonstrate that such failure shall be cured as provided in any franchise. (e) All final Grantor determinations with respect to revocation or termination must be made by the City Council. Notwithstanding any final determination by the City Council, the Grantee maintains its rights of appeal, if any, under applicable law. 4. Circumstances Beyond Control of the Grantee. The Grantee shall not be subject to sanction when its performance is prevented for reasons beyond its control, unless Cable Communications Franchise Ordinance November 12, 2003 Page 52 such occurrences or conditions are intentionally caused or created by the Grantee, or by an Affiliated Person at the Grantee's express direction. 5. Except when enjoined by a court of law, litigation pending against the Grantee shall not excuse the Grantee from the performance of its obligations under this Agreement. The Grantee may petition the Grantor to be excused from the performance of its obligation under this Ordinance because of pending litigation which the Grantor may grant or deny in the exercise of its discretion. jjjj. Termination and Related Rights. 1. The termination of any franchise and the Grantee's rights therein shall become effective upon the earliest to occur of (i) the revocation of the franchise by action of the Council; (ii) the abandonment of the System, in whole or material part, by the Grantee without the express prior approval of the Grantor; or (iii) the expiration of the term of the franchise, if not renewed or extended. In the event of any termination, the Grantor shall have all rights as provided in any franchise, including, without limitation, the right to order the Grantee to continue to operate the System or to then or thereafter remove the System, or to acquire or effect a transfer of the System. In any event, the Grantee maintains its rights of appeal, if any, under applicable law. 2. In the event of any termination of any franchise, the City Council may direct the Grantee to operate the System on behalf of the Grantor pursuant to the provisions of this Ordinance and such additional terms and conditions as are equitable and mutually agreeable to the Grantor and the Grantee or a third party, for a period of up to twelve (12) months, in which event the Grantee or third party, as applicable, shall be entitled to all revenues generated by the System during such period of continued operation. In the case of operation of the System by a third party, the Grantee shall be entitled to a fair rental for use of the System. 3. Upon the termination of any franchise due to the expiration of the term of the franchise granted herein, if not renewed or extended, the Grantee shall be entitled to cancel the performance bond or letter of credit, after account is taken for all offsets necessary to compensate the Grantor for any uncured failure to comply with any provision of any franchise as herein provided. If the Grantee continues to operate the System following the termination of any franchise, the Grantee shall not be entitled to cancel such bond or letter of credit until the end of such continued operation. In the event of a termination of any franchise for cause due to a material breach by the Grantee or otherwise, said bond or letter of credit shall become the property of the Grantor to the extent necessary to cover any costs, loss, or damage incurred by the Grantor as a result of said termination or material breach, provided that any amounts in excess of said costs, loss or damage shall be refunded to the Grantee or surety, as applicable. 4. In the event of any termination, the Grantor may purchase the Cable System in accordance with the procedures of this paragraph. In such event, the price to be paid for the Cable System to Grantee shall be the price the Cable Act requires. Cable Communications Franchise Ordinance November 12, 2003 Page 53 5. Upon any such acquisition or transfer, and, if applicable, receipt of payment by the Grantee from the Grantor, the Grantee shall: (a) Cooperate with the Grantor in maintaining the distribution of all Services over the System during such acquisition transfer of ownership; (b) Promptly execute all appropriate documents to transfer to the Grantor or third party, free of any and all encumbrances, title to the System, as well as all contracts, leases, licenses, and rights necessary to maintain the System and the distribution of Services over the System; and (c) Promptly supply the Grantor with all necessary records to operate the System, including, without limitation, all Subscriber records and plant equipment layout documents. 6. Upon any termination of any franchise, if so directed by the Council, the Grantee shall, at its own cost and expense, promptly remove that part of the System located in the Streets and Public Ways and shall replace or repair and restore to serviceable condition each affected Street, Public Way, and governmental structure therein, in such manner as set forth in this Ordinance. 7. In the event of any acquisition of the System by the Grantor pursuant to this Section 13, and subject to the requirements of applicable law: (i) the Grantor shall not be required to assume any of the obligations of any collective bargaining agreements or any other employment contract held by the Grantee or any other obligations of the Grantee to any of its officers, employees, or agents, including, without limitation, any pension or other retirement, or any insurance obligations; and (ii) the Grantor may lease, sell, operate, or otherwise dispose of all or any part of the System in any manner, provided that the Grantee may seek the award of any franchise to construct, operate, or maintain the System in connection with any such sale. Franchise Applications. Applicants for an initial Franchise shall submit to the Grantor, or to its designated representative, written application in a format provided by the Grantor, at the time and place specified by the Grantor for accepting applications, and accompanied by the designated application fee. A nonrefundable application fee, established by resolution of the Grantor, shall accompany the application for an initial Franchise to cover all costs associated with processing the application, including without limitation, costs of administrative review, financial, legal and technical evaluation of the applicant, the costs of consultants (including technical and legal experts), notice and publication requirements, and document preparation expenses. In the event such costs exceed the application fee, the applicant shall pay the difference to Grantor within twenty (20) days following receipt of an itemized statement of such costs. This provision is procedural and shall not constitute the grant of any right to a Cable Communications Franchise Ordinance November 12, 2003 Page 54 Grantee to renewal or otherwise. This provision does not apply to any renewal of an existing Franchise. Records; Reports; Right to Inspect and Audit; Experts. kkkk. Grantee to Provide Records. All reports and records required under this Section shall be furnished at the sole expense of Grantee. 1111. Records. Grantor must maintain in its local office in the franchise area, and make available for inspection during normal business hours, a separate and complete set of business records for the Franchise. The Grantee shall provide that information in such form as may be required by the Grantor, as well as copies of any records of Grantee upon Grantor's request, so long as said information is related to the scope of Grantor's rights under this Ordinance, the Franchise, or Grantor's proper regulatory functions. mmmm. Maintenance and Inspection of Records. Grantee shall keep true and accurate books and records in conformity with generally accepted accounting principles, consistently applied, located in the Franchise Area that reasonably demonstrate a Grantee's compliance with the obligations set forth in its Franchise. Grantor shall, upon two (2) business days notice, have the right to inspect said records and receive copies thereof to the extent said information is reasonably related to the scope of the Grantor's rights under this Ordinance, the Franchise, or the Grantor's regulatory functions. Any Grantee records kept at another place shall, within thirty (30) days of Grantor's request, be made available at Grantee's local premises within the County of Orange. nnnn. Reports of Financial and Operating Activit 1. No later than ninety (90) days after the close of Grantee's fiscal year, Grantee shall submit an audited written report to the Grantor which shall include: (a) A financial report, audited and certified by a financial officer of Grantee, for all Cable System activity in the City during the previous fiscal year, including Gross Annual Receipts from all sources and gross subscriber revenues from each service. The report must set out separately all gross receipts from all sources in the City and gross subscriber revenues from each Cable Service in the City, and all payments, deductions, and computations of franchise fees. (b) A summary of the previous year's activities, including, but not limited to, subscriber totals and new services offered and System construction activity. (c) A current list of Grantee's officers, directors, and other principals if there has been any change in the previous year. Cable Communications Franchise Ordinance November 12, 2003 Page 55 (d) A list of stockholders or other equity investors holding five percent (5 1/6) or more of the voting interests in Grantee if there has been any change in the previous year. (e) A summary of complaints received and remedial actions taken. 2. Performance Tests and Compliance Reports. Upon written requests of Grantor, the Grantee shall provide a written report of any FCC or other performance tests required or conducted. In addition, the Grantee shall provide reports of the test and compliance procedures required by its Franchise, or by this Ordinance, no later than thirty (30) days after the completion of those tests and compliance procedures. 3. Additional Reports. The Grantee shall prepare and furnish to the Grantor in writing, at the times and in the form prescribed by Grantor, such additional reports or information as Grantor may reasonably require to confirm and verify Grantee's compliance with the provisions of its Franchise and this Ordinance. 0000. Examination of Facilities. Upon two (2) business days notice, and during normal business hours, Grantee shall permit examination, by any duly authorized representative of Grantor, of all Franchise property and facilities, together with any appurtenant property and facilities of Grantee situated within the Public Rights -of -Way which are related to the Cable System. pppp. Right to Audit. 1. In addition to any other inspection rights under this Ordinance or the Franchise, upon thirty (30) days prior written notice, Grantor shall have the right to inspect, examine, or audit, during normal business hours, all documents pertaining to a Grantee or any Affiliated Person which are reasonably necessary to ascertain a Grantee's compliance with its Franchise or this Ordinance. Grantor may not exercise said right more frequently than once in any twelve (12) month period. All such documents shall be made available at the local office of a Grantee. All such documents pertaining to financial matters which may be the subject of an audit by the Grantor as set forth herein shall be retained by a Grantee for a minimum of five (5) years during the term of and following the termination of a Franchise. Access by the Grantor to any of the documents covered by this paragraph f shall not be denied by the Grantee on grounds that such documents are alleged by the Grantee to contain proprietary information. 2. Grantor may require written certification by a Grantee's directors, officers, or other employees with respect to all documents referred to in this paragraph f. 3. Any audit conducted by the Grantor pursuant to this paragraph g shall be conducted at the sole expense of the Grantor, and the Grantor shall prepare a written report containing its findings, a copy of which shall be mailed to a Grantee; provided, however, that a Grantee shall reimburse the Grantor for the expense of any such audit if, as the result of said Cable Communications Franchise Ordinance November 12, 2003 Page 56 audit, it is determined that there is a shortfall of more than two percent (2 %) in the amount of franchise fees or other payments which have been made or will be made by a Grantee to the Grantor pursuant to the terms of the Franchise. qqqq. Retention of Experts. In the exercise of its rights under this Ordinance, the Grantor shall have the further right to retain technical experts and other consultants on a periodic basis for the purpose of monitoring, testing, and inspecting any construction, operation, maintenance or reconstruction of the System, and all parts thereof, or to ensure compliance with and enforcement of the provisions of this Ordinance and the Franchise. The Grantor shall bear the cost of retaining such experts, provided that, unless prohibited by applicable law, the Grantee shall reimburse the Grantor for all expenses related to the retention of said experts where this Ordinance or the Franchise so provide, or under either of the following circumstances: 1. The Grantee has initiated proceedings which would normally require the Grantor to retain such experts, such as the filing of a request for approval of a transfer or change in Control, renewal to the extent allowed by law, expansion of the Franchise Service Area, or the modification or amendment of the Franchise; or 2. The reports of such experts submitted to the Grantor reveal that the Grantee has failed to substantially comply with the terms and conditions of this Ordinance or of the Franchise. If Grantee is required to reimburse Grantor pursuant to this paragraph g, Grantor shall send Grantee an itemized description of such charges, and Grantee shall pay such amount within twenty (20) days after the receipt of such description. Miscellaneous Provisions. rrrr. Captions. The section, subsection, paragraph, and subparagraph numbers and letters, and the captions throughout this Ordinance, are intended to facilitate reading and reference. Such numbers, letters, and captions shall not affect the meaning or interpretation of any part of this Ordinance. ssss. Franchise References. A Franchise which cites, refers to, or otherwise incorporates this Ordinance, or portions thereof, shall be deemed to be a Franchise issued under and subject to this Ordinance. tttt. Filing. When not otherwise specified in this Ordinance, all documents required to be filed with Grantor shall be filed with the Grantor's representative as designated by Grantor. uuuu. Non - enforcement by the Grantor. A Grantee shall not be relieved of its obligation to comply with all provisions of this Ordinance, and of its Franchise, and all laws and regulations, by reason of any failure of the Grantor to demand prompt compliance. Cable Communications Franchise Ordinance November 12, 2003 Page 57 vvvv. Continuity of Service. It is the right of all Subscribers to receive Cable Services so long as their financial and other obligations to a Grantee are honored. In the event that a Grantee elects to rebuild, modify, or sell the System, a Grantee shall use due diligence and reasonable care to ensure that all Subscribers receive continuous, uninterrupted service. In the event of a transfer of the System by Grantee, the current Grantee shall cooperate with the Grantor or new Grantee to operate the System for a temporary period, in order to maintain continuity of service to all Subscribers. In the event that Grantee, through its own fault, discontinues system -wide service for seventy-two (72) continuous hours, and Grantee is in material default of its Franchise, or if the Franchise is revoked by Grantor (but not if Grantor fails to renew the Franchise), Grantor may, by resolution, when it deems reasonable cause to exist, assume operation of the System for the purpose of maintaining continuity of service. Grantor's operation of the System may continue until the circumstances which, in the judgment of the Grantor, threaten the continuity of service are resolved to Grantor's satisfaction. Grantor shall be entitled to the revenues for any period during which it operates the System. wwww. Operation By Grantor. During any period when the System is being operated by Grantor pursuant to paragraph a above, Grantor shall, as it may deem necessary, make any changes in any aspect of operations that, in Grantor's sole judgment, are required for the preservation of quality of service and its continuity. xxxx. Management By Grantor. Grantor may, upon assuming operation of a System franchised hereunder, appoint a manager to act for it in conducting the System's affairs. Such manager shall have such authority as may be delegated by Grantor and shall be solely responsible to Grantor for management of the System. Grantee shall reimburse Grantor for all its reasonable costs, in excess of System revenues, incurred during Grantor's operation if the Franchise is in full force and effect during the period of Grantor's operation. yyyy. Notices. All notices and other communications to Grantee shall be addressed to it at the local address at which Grantee conducts its business or as otherwise set forth in the Franchise. All notices and other communications to Grantor shall be addressed to Newport Beach City Hall, or such other address as maybe designated by Grantor. zzzz. Force Maieu= Grantee's Inability to Perform. In the event Grantee's performance of any of the terms, conditions, obligations, or requirements of this Ordinance, or any Franchise granted hereunder, is prevented or impaired due to any cause beyond its reasonable control and not reasonably foreseeable, such inability to perform shall be deemed to be excused, and no penalties or sanctions shall be imposed as a result thereof. Such causes beyond Grantee's reasonable control and not reasonably foreseeable shall include, but not be limited to, any acts of God, civil emergencies, labor unrest, strikes, utility interruptions, inability to obtain access to an individual's property on reasonable terms, and any inability of a Grantee to secure all required authorizations or permits to utilize necessary poles or conduits, so long as Grantee uses due diligence to timely obtain said authorization or permits. Cable Communications Franchise Ordinance November 12, 2003 Page 58 aaaaa. Application. All of the provisions of this Ordinance shall be applicable to all Cable Operators, Cable Systems, OVS Operators and OVS Systems to the greatest extent permissible under applicable law. bbbbb. Severability. If any provision of this Ordinance is determined to be void or invalid by any administrative or judicial tribunal, said provision shall be deemed severable and such invalidation shall not invalidate the entirety of this Ordinance or any other provision thereof. Section 2. The City Clerk is directed to certify to the passage and adoption of this Ordinance and to cause it to be published or posted as required by law. PASSED, APPROVED and ADOPTED this day of 2003. Mayor ATTEST: City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF NEWPORT BEACH ) I, , City Clerk of the City of Newport Beach, do hereby certify that the foregoing Ordinance No. was introduced at a regular meeting of the City Council of the City of Newport Beach held on the day of 2003, and was thereafter duly and regularly passed and adopted by the Council of the City of Newport Beach at its regular meeting held on the day of 2003, by the following vote: AYES: NOES: ABSENT: ABSTAIN: Cable Communications Franchise Ordinance November 12, 2003 Page 59 Said Ordinance has been published or posted pursuant to law. Witness my hand and official seal of the City of Newport Beach this day of , 2003. City Clerk Nov -07 -03 12:58pm From- Razional EnaineerinQ deiphia Honorable Mayor and Council Members City of Newport Beach 3300 Newport Blvd. Newport Beach, CA 92658- 818 867 8031 T-039 P.001 F -022 ATTACHMENT "C" — AGENDA ITEM 15 November 7, 2003 Via U.S.Mail and Facsimile: 949 - 644 -3020 Re: Proposed Newport Beach Cable Ordinance Dear Mayor Bromberg: Newport Beach Communications, LLC, locally known as Adelphia Cable Communications ( "Adelphia'l appreciates the opportunity to present the City with the following comments regarding the City's proposed amendment to Chapter 5.44 of the Newport Beach Municipal code entitled "Cable Communications Franchises" (the "Ordinance"). As you know, we previously provided a copy of the proposed Ordinance, marked to show those provisions to which Adelphia objected. Although some of our concerns were addressed in the latest draft Ordinance that we received, there are many areas where our concern were not addressed. If the City chooses not to make further changes to address our concerns, please be advised that Adelphia will be raising these issues and expect to resolve them in the context of negotiation of a renewal franchise. Furthermore, in previous conversations with the City, we have clearly stated our position that the proposed ordinance cannot apply to Adelphia's current operations, but would only be applicable upon the conclusions of a franchise renewal on terms and conditions that are acceptable to both parties. Application of the proposed ordinance to Adelphia's current operations, absent a franchise renewal, would constitute a fimdamental unilateral amendment of Adelphia's franchise, and as such would violate state and federal constitutional protections against impairment of contracts and taking of property without due process and just compensation. As a threshold matter, Adelphia is disappointed at the unnecessarily regulatory nature of the proposed Ordinance. The proposed Ordinance is over 40 single- spaced pages long. Many of the provisions have added cumbersome procedures for construction, maintenance and upgrading that will make it nearly impossible to accomplish any expedient work on our cable system. Adelphia questions whether these procedures also apply to other users of the public rights -of -way in the City. Because these procedures are in a cable television ordinance instead of an ordinance of general applicability, we believe such procedures are unduly discriminatory against cable operators. To the extent these procedures impose additional costs on Adelphia, which most of them do, that are not imposed on other users of the rights -of -way, Adelphia believes such assessments would be deemed franchise fees, causing the City to violate the federal cap on franchise fees set forth in Section 622 of the Cable Act. 5720 FI Cemino Rezl Csnmed, CA 92006 -7201 9usineSS Office (760) 438 -7741 custome Service (760) 631 -7000 Fe (760) 436 -8461 1 NOV -0? -2003 14:19 81996 ?9031 9e% P.01 Nov -07 -03 12:58pm From-Revanal Enureerina 818 B67 8031 T -039 P 002 Letter to Mayor Steve Bromberg November 7, 2003 Furthermore, certain provisions are entirely impracticable and would cause Adelphia to incur extraordinary costs that appear unrelated to an actual problem. For example, Section 5.44.080 (v)(8) of the Ordinance requires Adelphia to provide a communication plan that includes the following: -A written mailed or hand delivered notification of property owners adjacent to all Facilities not less than thirty (30) days prior to the installation indicating the proposed location, a photograph of all above - ground visible equipment from which their size must be apparent, and a detailed description of the equipment included within the node including: the electronic components, natural gas generator, electrical fans, and the anticipated noise levels during winter and summer months and emergency backup operations" Compliance with this requirement would mean that anytime Adelphia constructed any facilities that involved above ground visible equipment, it would have to send a written letter 30 days prior to construction to each adjacent property owner, including a photograph of the cable or other equipment to be installed, a detailed description of such equipment and anticipated noise levels. To prepare a letter with attachments as required by the proposed Ordinance and mail it to an unidentified number of property owners would be unduly burdensome and extraordinarily expensive without any measurable benefit. Additionally, the provision raises a number of questions. Who are the property owners who must receive this letter and photograph? If such property owners decided that they did not want such equipment in their neighborhood, how would the City make such determinations on a neighborhood-by-neighborhood basis? The placement of above ground visible equipment is appropriate for the City's generally applicable permitting process, not a public forum. In addition to our previous comments about unduly discriminatory procedures, compliance with many of the requirements in the Ordinance, as discussed herein, will impose substantial additional costs that may have to be recovered through increased subscriber rates. Adelphia is additionally concerned because some of the proposed provisions are inconsistent with the federal Cable Act. For example, in many cases the Ordinance seeks to impose requirements in cable franchises that should be a matter for negotiations during the franchise renewal negotiations under Section 626. As such, the provisions seek to unilaterally set the terms of Adelphia's renewal without compliance with the standards and processes of Section 626. City staff has informed us that they do not expect the franchise renewal negotiations to include any matters already covered in the proposed Ordinance, except to the extent the proposed Ordinance refers to the franchise agreement. This further reinforces our concern that the -City is trying to unilaterally set the terms of the franchise renewal in violation with existing law. Efforts by local franchise authorities to unilaterally dictate the terms of renewal franchises have been stuck down as illegal in federal court. For example, in Time Warner Enrertainmenr Co., L.P. v. Briggs, the federal district court evaluated an ordinance which sought to dictate the terms of a franchise renewal in advance of the renewal process. The Court held the ordinance to be preempted by the renewal standards of the federal Cable F -022 NOU -0? -2003 14: le E1 i eeG?EI031 99, P.02 Nov -07 -03 12:59pm From-Regional Ensineerin¢ 918 867 8031 T -039 P.003/012 Letter to Mayor Steve Bromberg November 7, 2003 Act. The following comments outline, on a section -by- section basis, Adelphia's specific concerns and the various legal and practical problems raised by the proposed provisions of the Ordinance: Section 5.44.020 Definition of Affiliate. This provision is inconsistent with the definition of "Affiliate" as it appears in Section 602 (2) of the Cable Act. Section 5.44.020 Definition of Gross Revenues The amount of a franchise fee, including the definition of gross revenues, is part of a cable operator's overall renewal proposal under Section 626 and as such cannot be unilaterally dictated by the City. In addition, the City's definition is inconsistent with and exceeds the parameters of a permissible franchise fee under Section 622 of the Cable Act. Section 5.44.030 (e) Purpose Under applicable federal law, the franchise agreement should cover all significant areas of cable operations and will most accurately reflect the meeting of the mind of Adelphia and the City with respect to renewal. Adelphia believes that any conflict between the two should be resolved by specifying that the Franchise should control in all instances, especially as the City is unilaterally adopting the proposed Ordinance and may again unilaterally adopt amendments to such that would create conflicts with the negotiated franchise agreement. Section 5.44.030 (k) Restrictions Against Transfers This provision attempts to restrict the subleasing of a portion of the Cable System in violation of Section 621 (b)(3)(B) of the Cable Act. Adelphia has the right under federal and state law to sublease capacity on its system as a telecommunication or information service and the City may not impose any requirement in a cable franchise that has the effect of prohibiting, limiting, restricting or conditioning the provision of a telecommunication service by a cable operator. In addition, the City has reserved the right to impose any conditions on the transfer without limiting such conditions to those that are necessary to insure compliance with the franchise by the transferee. This would allow the City to unilaterally amend the franchise, in violation of Adelphia's contractual rights. Franchise agreements are binding contracts between the City and the cable operator. Through this provision, and others like it, the City is attempting to preserve for itself the ability to unilaterally dictate and amend the material terms on which the operator must do business. Such power to unilaterally dictate or amend the material terms of the agreement between the parties would render the franchise agreement illusory, and would violate the cable operator's constirutional rights against impairment of contracts and taking of property. Accordingly, the provisions, and other like it, are unlawful and must be removed. F -022 NOU -07 -2003 14:18 8186678031 99% P.03 Nov -07 -03 12:59pm From-Regional Engineering 818 867 8031 T -039 P.004/012 F -022 Letter to Mayor Steve Bromberg November 7, 2003 Lastly, Adelphia requested two very reasonable provisions that were not included in the proposed Ordinance. One would have permitted Adelphia to provide a security interest in the system for the purpose of seeking financing and the other would have permitted a transfer of the system or franchise to an entity controlling, controlled by or under common control with Adelphia. Both of these exceptions from the transfer restrictions are often included in franchises and enabling Ordinances. Adelphia's request that the Ordinance be modified so that the restrictions in this section apply to the transfer of the franchise itself and not to the system, that the conditions the City could impose in the event of a transfer are related to compliance with the franchise and that the two exceptions requested by Adelphia be inserted in the proposed Ordinance. Section 5.44.030 (1) Effect of Unauthorized Action This provision allows the City to impose liquidated damages of up to $5,000 a day for any unauthorized transfer. The City cannot unilaterally require the imposition or payment of liquidated damages. Liquidated damages are matters agreed upon by the parties as a good faith measure of an estimate of the actual harm incurred in the event of a breach of contract when the actual harm cannot be determined. Indeed, to the extent that the City seeks to impose "liquidated damages" as a penalty for an alleged failure of compliance without regard to the actual damage, if any, incurred by the City, those may constitute unlawful penalties. Resrat. 2d of Contracts, § 356, ("A term fixing . unreasonably large liquidated damages is unenforceable on grounds of public policy as a penalty.'). Adelphia does not agree that $5,000 a day is a measure of the actual harm the City will incur as a result of a breach of the transfer provisions, especially considered the unwillingness of the City to consider any of the reasonable modifications proposed by Adelphia, and thus constitutes an unlawfiil penalty. Section 5.44.030 (n) Approval Process Federal law permits the local franchise authority and the operator to negotiate in a franchise the additional information that may be required in a Form 394 related to transfers and changes of control. The City may not unilaterally dictate the specific additional information that an operator may be obligated to provide through the adoption of an Ordinance or modifications to an existing Ordinance. Some of the specific additional information required by this section, such as the name of each community in which the transferee or any affiliate owns a franchise, is unduly burdensome and exceeds the scope of information reasonably necessary to establish the legal, financial and technical qualifications of the transferee. Furthermore, the City has reserved the right to delay the start of the federally mandated transfer process until Adelphia has provided all of the information required by the Ordinance in violation of federal law. if the City is unwilling to make the changes requested by Adelphia, revisions to this section will be the subject of franchise renewal negotiations. Section 5.44.030 (o) Conditions W NOU -07 -2003 14:19 219RF,7RR71 qqi o M^ Nov -07 -03 01:00PM From - Rational Engineering 818 867 8031 T -039 P 005/012 Letter to Mayor Steve Bromberg November 7, 2003 This provision again allows the City to impose conditions in the event of a transfer. See comments to Section 5.44.030 (k) above. In addition, Adelphia has requested that the requirement that the transferee sign a document agreeing to assume all the terms of the franchise be modified in the case of a change of control. In a change of control transaction, the franchise entity does not change, only its controlling parent. changes. In such a case, it is unreasonable to expect the parent company to directly assume all the conditions of a franchise that it will not directly own. Section 5.44.030 (p) Reimbursement of Processing and Review Costs The City cannot unilaterally require the operator to reimburse it for expenses incurred in transfer or renewal, as such payment would constitute a franchise fee in violation of Section 622 of the Cable Act and applicable law. The tote inclusion of introductory phrases, such as "to the extent not prohibited by applicable law ", does not alter the fact that the requirements of this section are prohibited by applicable law and may not be adopted, since that would essentially require the operator to either challenge the Ordinance or risk a claim of violation for failure to pay the City's costs under the terms of this section. See Time Warner Entertainment Co. v. Briggs, C.A. No. 92- 40117-GN, 1993 U.S. Dist. LEXIS 1196 (D. Mass. Jan. 14,1993); Robin Cable Systems v. The City of Sierra rista, 842 F.Supp. 380 (D.Ariz. 1993); Birmingham Cable Communications v. City of Birmingham, CV 87- L- 0755 -S, 1989 U.S. Dist. LEXIS 7475 (N.D. Ala. May 5, 1989); Application of Garden State Cablevision, L.P. for Renewal of a Certificate of Approval for the Borough of Hadden Heights, OAL Docket No. CTV- 022115 -93S; BRC Docket No. CE 92090108 (N.J. Office of Admn. Law, Feb. 22, 1994. Section 5.44.040 Place of Inspection This provision gives the City the right to demand access to Adelphia's book and records "reasonably necessary for the exercise of Grantor's regulatory authority" Adelphia is willing to provide access to books and records that are necessary to "monitor compliance with the terms of the franchise and Ordinance" and objects to the broad standard for access mandated by this provision. At a minimum, this provision should be modified so that it applies to Grantor's regulatory authority "pursuant to this Ordinance and the franchise." Section 5.44.050 Rights of Subscribers Cable companies are subject to comprehensive federal regulation concerning consumer privacy that requires any local regulation to be consistent with the federal scheme. In particular, Section 631 of the Cable Act allows local franchise authorities to enact laws "consistent with this section for the protection of subscriber privacy." This section violates federal law as it contains provisions that are inconsistent with such federal law. Furthermore, this provision applies to persons and entities that are not the cable operator in the City, including any director or stockholder who may "own, hold or control any corporate stock." There is no rational basis for making this provision F -022 NOU -07 -2003 14:19 8188678031 99i o ac Nov -07 -03 01:00Pm From - Regional EnVaserins BIB 867 8031 T -039 P.006 /012 Letter to Mayor Steve Bromberg November 7, 2003 binding upon third parties whose only relationship with AdeIphia is through ownership of stock. Section 5.44.050 (f) Subscriber Bill of Rights Federal law requires that the operator provide an annual privacy notice to subscribers. Adelphia provides this notice in accordance with such law. This provision requires Adelphia to obtain the approval of the City to the contents of its federal privacy notice, which imposes additional operational costs and burdens on Adelphia without any measurable benefit to subscribers from this micromanagement by the City. Section 5.44.060 Finance This provision allows the City to charge the greater of an interest rate of the prime rate plus 1% or $5,000 per month, or any portion of a month, for any late payment of franchise fees, plus an additional 5% if such payments are more than 60 days late. If a franchise fee payment was one day late under this provision, the City could charge Adelphia $15,000 for the three months that each quarterly franchise fee payment includes. As Adelphia's quarterly payments are approximately $170,000 per quarter, this would amount to a quarterly interest rate of approximately 8% (or an annual rate of 32 %) in violation of state law. Adelphia does not agree that this is a reasonable measure of the City's damages for late payment of franchise fees and, accordingly, such requirement is an unlawful penalty in violation of applicable law. See comments on Section 5.44.030 (1) above_ Section 5.44.070 (g)(2) and (3) Installations These provisions require Adelphia to advise each subscriber that such subscriber has the right to require that installation be done over any route on the subscriber's property and in any manner, which is technically feasible and consistent with proper construction practices. Adelphia has objected to this provision as unduly burdensome and unnecessary. Asa practical matter, we discuss the proposed route with the subscriber in advance and if the subscriber has a concern -with the route, we work with the subscriber to work out an acceptable solution_ If the subscriber chooses a route that is different from a standard installation route, the subscriber is informed of the additional costs and can choose such route or the original route proposed by the Company. Furthermore, subsection (3) sets forth the terms of a standard installation that are contrary to federal law and constitute impermissible rate regulation. Section 5.44.080 (d)(6) System Construction This provision unreasonably requires the operator to guarantee the integrity, durability and structural integrity of any street cuts for the life of the street. Adelphia questions whether this is a requirement for all users of the public rights -of -way and believes that is a discriminatory requirement that is being applied to Adelphia in the proposed Ordinance. There are many factors, other than street cuts made by Adelphia, F -022 NCU -0? -2003 14:20 8188678031 98% P.06 Nov -07 -03 01:00Pm From - Regional Engineering 618 867 8031 T -039 P 007/012 F -022 Letter to Mayor Steve Bromberg November 7, 2003 that affect the life of a particular street and Adelphia should not be obligated to guarantee something over which it has no control. Section 5.44.080 (m) Repair of Streets and Public Ways This provision is another discriminatory requirement imposed on Adelphia in the proposed Ordinance. This section allows the City Engineer to require Adelphia to "overlay or slurry-seal" the entire width of a street in which it has made a street cut, trench or excavation for the entire length of the project, or, after completion of such work, to subsequently overlay or slurry-seal to streets to maintain the "aesthetics or structural integrity" of the streets. Thus, if Adelphia cut a 6-inch trench right next to a curb, the City Engineer could require the company to overlay or slurry -seal the entire street at the time of construction and again subsequent to such construction_ This could add enormous costs to Adelphia's construction. Furthermore, these costs can be passed on to subscribers as franchise related external costs. While Adelphia objects to these and other unduly discriminatory provisions in the Ordinance regarding use of the rights -of- way, we would suggest to the City that these provisions be removed from the cable Ordinance and put into an ordinance that would be generally applicable to all users of the public rights -of -way., Section 5.44.080 (t)(2) Payment of Fees This provision requires Adelphia to pay the City's permit fees and additional costs to cover the City's labor, supervisory and overhead costs. Adelphia objects to these payments and questions whether the City isn't recovering its costs twice, once through the permit fees and once Through these so -called "Labor Payments." Cable operators pay franchise fees of 5% of gross revenue as compensation for use of the rights -of -way. To the extent this assessment is applied to cable operators and not other utilities, it would be deemed a franchise fee under Section 622 of the Cable Act and violate the 5% limitation set forth therein. Section 5.44.080 (t)(3) Payment of Fees This provision allows the City to hire contractors to carry out any required work under the Ordinance and obtain reimbursement from Adelphia for these costs. If this provision is intended to give the City this right, after it has given Adelphia written notice of its obligation to make necessary repairs and Adelphia has failed to make such repairs on a timely basis, the provision should be redrafted accordingly. Otherwise, this provision gives the City the right to hire contractors at any time, at Adelphia's sole expense, to perform work that Adelphia would otherwise be capable of performing. Section 5.44.080 (t)(4) Payment of costs NOU -07 -2003 14:20 8188678031 9e% P.07 Nov -07 -03 01:01pm From—Regional Engineering 818 867 8031 T -039 P 008/012 F -022 Letter to Mayor Steve Bromberg November 7, 2003 This provision allows the City to hire an independent contractor, at Adelphia's expense, in lieu of making the Labor Payments to which Adelphia has previously objected. See our objections to Section 5.44.080 (t)(2) above. Section 5.44.080 (v) Construction Notification Adelphia objects to many provisions of this section of the proposed Ordinance. In general, Adelphia believes that the requirements of this section are unduly discriminatory, as they appear to apply only to cable operators and not other users of the rights -of -way. See comments to Section 5.44.080 (t). In addition, the provisions of this section create unduly burdensome procedures for construction which we believe are unnecessary, will delay any construction and add excessive costs without any real corresponding benefit to our customers, whose rates may rise due to these requirements. Specific objections include subsection 3, which requires Adelphia to provide maps 90 days in advance of underground construction, which the City can share with other parties. Adelphia is concerned that this provision duplicates other mapping requirements in subsection 9 and may require it to provide proprietary information that the City can share with other parties, including competitors. Adelphia also objects to subsections 4 and 7, which require that traffic control plans and noise studies be submitted, sometimes up to 190 days in advance of construction and subsection 10 which requires Adelphia to certify that its facilities located within any street improvement project undertaken by the City require no further construction for a period of three years. Subsection 8 is the most troubling of these provisions, as described in the beginning of this letter and represents unnecessary micromanagement of our business by the City. This subsection requires the operator to mail or hand deliver notification to property owners adjacent to all "Facilities" — defined in the proposed Ordinance as any equipment, including conduits, cable, cabinets, nodes, structures, headed equipment, receive only earth stations, down link equipment and antennas, electronics, fiber cable, coaxial cable, drops and switching equipment— whenever it proposes to install any above ground equipment. The notification must include the proposed location, and a photograph of all above ground visible equipment, together with a detailed description of the equipment and anticipated noise levels during winter and summer and emergency backup operations. First, who are the property owners adjacent to all such "Facilities? Does Adelphia have to provide photographs of all above ground visible electronics, such as amplifiers, that may be placed on poles? How will the City respond to objections from such notified property owners? Does the City require all other users of the rights -of -way to notify adjacent property owners when such users install any above - ground equipment? Adelphia does not believe that it will be able to comply with this overly burdensome and unnecessary regulation and, if forced to, will pass onto its cable customers the additional costs that it incurs in attempting to comply. Lastly, Adelphia objects to subsection 9 regarding maps and plans. This requires Adelphia to furnish as -built construction drawing, which can be integrated in the City's GIS system. while we do maintain as -built maps at our. system, which the City can come and inspect, we consider such maps to be proprietary as they contain information about the location of our electronics, which competitors could use to their advantage in building a NOU -07 -2003 14:20 ei e967e031 99% p . 0E3 Nov -07 -03 01:01Pm From- Revanal Eagineerinir BIB 867 8031 Letter to Mayor Steve Bromberg November 7, 2003 T -039 P- 009/012 F-022 competing system. These maps, if publicly available, also raise issues of the security of our cable system from vandalism. Furthermore, Adelphia can provide maps in a Focus format and has provided such maps in this format for many years to the City, but not in a GI.S format. Lastly, this subsection requires Adelphia to "pothole its Facilities." Given the extraordinary broad definition of "Facilities ", as discussed above, we are unsure what this requirement means. Section 5.44.090 (a) Customer Service There are several issues raised in this section that are matters for determination during renewal under the standards of Section 626 of the Cable Act and thus cannot be unilaterally imposed by the City. For example, the requirement in (a)(1) for an office located in the City is an issue for evaluation under Section 626, as it is effected by the community need and impacts the level of investment necessary and the cost to the operator. In addition, the customer service standards exceed the FCC customer service standards. For example, the standards proposed in the Ordinance do not measure these standards under "normal operating conditions ", as do the FCC regulations, thus exposing Adelpbia to liability for issues outside of its control. Under FCC regulations, Adelphia may pass through to subscribers any costs incurred in order to meet customer service standards in excess of the federal standards.(C.F.R.76.925) Section 5.44.090 (c) System Technical Data This provision requires Adelphia to provide the City data, in a form approved by the City, which details all of the company's equipment and facilities and their geographic location in the City. Adelphia objects to this provision, as it requires it to provide proprietary information and is duplicative of other requirements in the proposed Ordinance. -See comments to Section 5.44.080 (v)(9) above_ Section 5.44.090 (i) Installations The requirements of this section, which obligates Adelphia to provide a credit of one month of basic cable service if it is unable to perform an installation within 9 days of a request by a subscriber, imposes an unlawful penalty and may have the City unlawfully exercising regulation of Adelphia's rates. A free month of basic cable service is not necessarily related to the actual halm incurred by a subscriber for an installation that is not performed within 9 days. Adelphia previously proposed a $20.00 credit for installations that are scheduled more than 9 days after a subscriber's request and suggests that the City substitute this proposed credit for the penalty provision of this section. Section 5.44.0900)(10) Automatic Credits This provision obligates Adelphia to provide an automatic credit to subscribers who experience an outage of any premium service for 24 hours or more that affects the entire franchise area or "other discrete areas ". Adelphia is able to provide an automatic credit for such outages when they occur in the entire franchise area, but is not able to provide NOU -0? -2003 14:21 elee676031 99% P.09 Nov -07 -03 01:02pm From-Regional Engineering 818 867 8031 T-039 P.010/012 F -022 Letter to.Mayor Steve Bromberg November 7, 2003 automatic credits on a neighborhood basis, which this section would require. Adelphia is willingo to accept this provision, and is able to comply.with it, if it refers to outages that affect the entire franchise area. Section 5.44.090 (6)(11) Credits This requires Adelphia to provide credits upon the request of subscribers for outages of four or more hours. Adelphia requested a slight modification to this provision so that if it has provide an automatic credit to a subscriber under the preceding subsections 9 or 10, it would not be obligated to provide an additional credit under subsection 11. We are puzzled as to why the City has refused to add this reasonable additional sentence to this provision_ Section 5.44.090 (k) Service Appointments Adelphia objects to the requirement that it provide a credit equal to one free month of basic cable service for missed appointments instead of the $20 credit that it has voluntarily provided. See comments to Section 5.44.090 (i) above. Section 5.44.090 0) Notices and Customer Communications Federal law requires Adelphia to send out an annual notice to subscribers containing information about a variety of system practices. This section repeats many of the requirements of the federal notice, but adds additional provisions in subsections b., c.; g., i. and j, which are not part of the annual notice but are otherwise provided to subsoribers'as part of their installation packets (subsection b.), monthly bills (subsections i. and j.) or rate notifications (subsection g.) or are inapplicable (maintenance policies in subsection c.). To the extent Adelphia has to create a customized annual notice for subscribers in Newport Beach, it will pass the costs of such customization on to its subscribers. We recommend that the City conform this provision to federal law or refer to the federal law requirement in lieu of this provision_ Section 5.44.090 (m) Disconnection of Service This provision sets forth limitations on assessment of late fees. Late fees are a matter of California state law, which may change from time to time during the life of this Ordinance, and specific requirements with respect to late fees should not be part of this proposed Ordinance. Section 5.44.090 (o) Rate, Fees and Charges This section restricts Adelphia from charging fees for service calls to subscribers in certain instances and, as such, involves unlawful rate regulation. The inclusion of the phrase "except to the extent expressly permitted by law" does not alter the fact that this section is prohibited by Section 623 of the Cable Act and may not be adopted, as it would require the operator to prove that such fees are expressly permitted by law. 10 NOU -07 -2003 14:21 8188678031 991 P.12 Nov -07 -03 01:02pm From—Regional Engineering BIB 867 8031 T -039 P.011 /012 F -022 Letter to Mayor Steve Bromberg November 7, 2003 Section 5.44.090 (r) Pursuant to our meeting of several weeks ago, the reference to "Appendix C" was to have been replaced with "Ordinance" as there are no Appendices to this Ordinance. Section 5.44.110 Termination and Related Rights Adelphia objects to this entire section and has suggested reasonable modifications that would permit the City to assess liquidated damages in amounts to be negotiated in the franchise for violations of material provisions of the franchise. Revocation provisions would be limited to breaches of the most essential provisions of the franchise. This Section, however, would permit the City to seek revocation for any number of issues under the franchise or proposed Ordinance, which we believe is a violation of due process as it allows arbitrary revocation for Ordinance provisions unilaterally adopted by the City. We urge the City to review our proposed changes, as provided previously. Section 5.44.110 (bx2) Termination and Related Rights The City may not unilaterally dictate that an operator continue to provide service after terminating of the franchise and certainly may not dictate the terms and conditions under which the operator provides such service if it agrees to continue operating. While Adelpbia may agree to do so, it is a matter for negotiation between Adelphia and the City, not for unilateral imposition. Section 5.44.110 (b) (7) We do not understand the reference to Section 13 in this subsection. Furthermore, the City may not unilaterally dictate its ability to acquire ownership of the system in the event of termination and may not dictate the terms of such acquisition, such as the requirement that the City not be obligated to assume any "collective bargaining agreements." While Section 627(b) of the Cable Act addresses what price would be paid if the City did acquire the system in the event of termination, it is not an affirmative grant of authority to acquire the system under such circumstances. The ability of the City to purchase the assets of the system would be a matter for negotiation. Section 5.44.130 Records, Reports, Right to Inspect, etc. Adelphia objects to provisions of this section that give the City broad authority to inspect and copy its books and records, specifically prohibits any exceptions for confidential and proprietary information, requires certifications of books and records from officers, directors and employees of Adelphia, obligates Adelphia to pay the costs of auditing consultants in violation of the franchise fee limitations of Section 622 of the Cable Act, allows the City to employ consultants at Adelphia's expense (also in violation of Section 622) and requires Adelphia to provide certified financial statements. The provisions are 11 NOU -07 -2003 14:22 BieeS78031 99, P i? Nov -07 -03 01:02pm From-Regional Engineering 818 967 8031 T -039 P 012/012 P -022 Letter to Mayor Steve Bromberg November 7, 2003 overly burdensome, unnecessary and violate the franchise fee limitations of Section 622 of the Cable Act See also comments to Section 5.44.030 (p). Section 5.44.140 (e-g) Continuity of Service and Operation by Grantor The City may not unilaterally dictate that an operator provide continuity of service after revocation and may not dictate the terms and conditions of such service, nor give the City the right to manage and make changes in the System, if the system is down for 72 hours through the fault of the operator. See comments to Section 5.44.110 (b)(2). As indicated, Adelphia objects to the City's approach to seek to govern cable television through unilateral actions in an Ordinance. In the Cable Act, Congress recognized that franchise agreements, which are by definition bilateral documents reached at the agreement of both parties, were to be the mechanisms for local regulation of cable television. The City's desire to unilaterally control many of the terms and conditions by which cable operators do business is inconsistent with Congress' intention that bilateral franchise agreements be the mechanism for local involvement and the fundamental goal of assuring stability and certainty to cable operator's operations. We appreciate the opportunity to comment on the proposed Ordinance. As we hope these comments make clear, however, there are problematic provisions in the current draft We appreciate the changes that the City did make from the first draft of the proposed Ordinance and urge the City to table the Ordinance and allow for further communication regarding appropriate resolution of these issues. If you have any questions regarding this matter, please contact me at 760-438-7741, extension 241. Cc: Mayor City Council William Marticorena, Esq. 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Laguna Beach. Cable TV Franchise Coordinator, City Hall, 505 Forest Ave., Laguna, Beach, CA 92651. (949) 497 -0731. 6. Laguna Hills: City Clerk, City Hall, 25201 Paseo de Alicia, #150, Laguna Hills, CA 92653. 7. Laguna Niguel: Director of Recreation and Administrative Services, City Hall, 27801 La Paz Road, Laguna Niguel, CA 92677. (949) 3624300. 8. Lake Forest: Director of Administrative Services, City Hall, 23161 Lake Center Dr., Lake Forest , CA 92630. (949) 461 -3400. 9. Mission Viejo: Assistant to the City Manager, City Hall, 200 Civic Center Dr., Mission Viejo, CA 92691 (949) 470 -3000. 10. Newport Beach: Assistant to the City Manager, City Hall, 3300 Newport Blvd., Newport Beach, CA 92663. (949) 644 -3309. 11. Orange: Assistant to the City Manager, City Hall, 300 E. Chapman Ave., Orange, CA 92666 (714) 744 -2222. 12. Orange County unincorporated areas, including Coto De Caza, Dove Canyon, El Morro, Emerald Bay, Ladera Ranch, Silverado Canyon, Trabuco Canyon, and Tustin Ranch: CAN Franchise Coordinator, 300 N. Flower St., Santa Ana, CA 92702. (714) 834 -2115. 13. Rancho Santa Margarita: City Clerk, City Hall, 30211 Avenida De Las Banderas, Rancho Santa Margarita, CA 92688. (949) 635 -7950. 14. San Clemente. City Clerk, City Hall, 100 Avenida Presidia, San Clemente, CA 92672. (949) 361 -8200. 15. San Juan Capistrano. Administrative Services, City Hall, 32400 Paseo Adelanto, San Juan Capistrano, CA 92675. (949) 443 -6359. 16. Tustin: Public Works Depl., 300 Cenlennial Way, Tustin, CA 92780. (714) 573 -3160. The franchise authority in each area is authorized to provide a schedule of penalties for fail- ure to comply with provisions in this notice. II. SERVICE LEVELS: The goal of Cox Communications is to provide a level of cable television customer service that meets the needs of its customers. The following summarizes some of the customer service standards that we have set for ourselves and the actual performance for the 12 months of August 2002 through July 2003: A. Customer telephone calls are to be answered with an average speed of 30 seconds or less During the past 12 months, Cox Communicalions'average speed of answer was 29 sec- onds. B. Customers will receive a busy signal less than 3% of the time when they call the Cox customer service phone numbers. Cox Communications customers received busy signals 0% of the lime during the past 12 months. C. New customers requesting cable television service will have an average wait of less than 7 business days for installation. During the past 12 months, the average wait for installation of cable service was 3.1 days. III. EOUIPMENT In the event the equipment is not returned to Cox in good condition, Customer agrees to pay to Cox as liquidated damages, the sum of $18.00 for each analog converter, $258.00 for each digital converter, $419.00 for each HDTV converter and $73.00 for each modem. IV, INDECENT LEASED ACCESS Indecent programming carried on leased access channels, if any, will be scrambled and available to subscribers, upon request, al no charge. If you wish to receive such program- ming (when available), please call our customer service numbers, (949) 720 -2020 for Central Orange County and (949) 240 -1212 for South Orange County. N IME 2 U) , ow i. 4' 01ce COMMUNICATIONS 29947 Avenida De Las Banderas Rancho Santa Margarita, CA 92688 P78480 6400 -0350 2003 CABLE TELEVISION CUSTOMER RIGHTS I. CUSTOMER SERVICE STANDARDS FOR CABLE TELEVISION SERVICE 1. The service will operate in an accurate, efficient manner and will meet or exceed FCC specifications and current local and state requirements. 2. Except in circumstances beyond our control, repairs to or replacement of our equipment will be made: (A) within 24 hours of receiving a customer's notification of a service disrup- tion, or (B) within 36 hours of a customer's notification of all other system malfunctions. 3. Cox Customer Service personnel shall identify themselves by first name upon respond- ing to any service inquiry. Customers shall have the right to speak with a supervisor or if none is available, a supervisor will return the call within one working day. 4. All customer inquires will be investigated as soon as possible but not later than 24 hours from the time of receipt. Planned interruptions of service other than interruptions between the hours of midnight and 8:00 a.m., will be preceded 48 hours by detailed announcements appearing on your local cable channel or in writing where possible. For planned interruptions exceeding twelve hours, written notice will be provided and will include information regarding any applicable billing adjustments. 5. Except in circumstances beyond our control, or that have prior franchisor approval, inter- ruptions of service shall not exceed three (3) hours of the total of service available in any one week, calculated from 6:00 a.m, until 12:00 midnight daily. Service interruptions are defined as the loss of picture and sound on one or more channels. 6. All customer requests for new service shall receive a response within five working days. 7. Cox Communications maintains compliance with all of the requirements listed above. 8. These procedures were developed in accordance with the requirements of franchises with the following franchise authorities: Aliso Viejo.. Camp Pendleton, County of Orange, Dana Point, Irvine, Laguna Beach, Laguna Hills, Laguna Niguel, Lake Forest, Mission Viejo, Newport Beach, Orange. Rancho Santa Margarita, San Clemente, San Juan Capistrano, Tustin. These procedures are also in accordance with California Legislation AB 2388 and SB 1010. Each customer will receive these procedures upon installation of service and on request thereafter, and at anytime upon request, 9. In addition, at the time of installation and on request, we will provide a written descrip- tion of our service that instructs you in its use. 10. When appropriate. the following billing adjustments will be available: A) A 10% credit of the monthly fee may apply if requested, in the event that one third or more channels of your service is interrupted for four (4) consecutive hours or a total of twenty -four (24) hours with- in a thirty day period: B) a 20% credit of the monthly fee may apply, if requested, in the event the service is interrupted for forty -eight (48) or more consecutive hours in any seven (7) day Period , Cl a 251/ credit or the monthly fee will appN i` Coa fails to meet franchise perform- ance standards for any period of three consecutive months. 11. Refunds will be issued no later than thirty (30) days following the resolution of a billing dispute or the next billing cycle, whichever is less. Bills are issued once each month for the upcoming thirty (30) day period. 12. Unpaid bills are considered past due on the thirtieth (30th) day after billing and may be assessed a late fee of $4.75 on the 45th day after billing. Termination of service may occur 22 days after the bill becomes delinquent and proper notification has been given. Proper notification consists of a notice delivered by the U.S. Postal Service or by hand at least fif- teen (15) calendar days prior to the stated date of disconnection, with the word "Termination Nofire" or similar language prominently displayed on the notice. The notice shall include the name of the customer, amount of delinquency, date the payment is required, the number of days until termination and the hours, address and telephone number where payment may be made. Once service has been involuntarily terminated, service can be restored after pay - mers (cash, cashier check or money order), plus a reconnection fee, have been received at a Cox business office. Lobby hours at our Cox business offices, located at 29947 Avenida De Las Banderas, Rancho Santa Margarita, are from 9:00 a.m. until 6:00 p.m. Monday through Friday and 9:00 a.m. until 1:00 p.m. Saturday. Requests for more than three (3) reconnections because of payment delinquency within twenty -four (24) months may not be rowed. 13. All customers will receive a thirty (30) day notice of deletion or addition of programming service, change of channel assignments, or price increase except in circumstances beyond Durcontrol. 14. Cox makes available to all customers a parental control channel blocking device that can block viewing of a particular cable channel during periods selected by that customer. 15. Discounted Senior Citizen IDisabled Persons prices may be available depending on indi- vidual circumstance. 16. When the presence of the customer is required for service work, a four (4) hourtime peri- od wdl be offered at the time the customer calls for service connection or repair. Cox may notcancel appointments after the close of business on the business day prior to the sched- uled appointment. 17. k the time of installation and annually thereafter, Cox will notify all customers of its prac- ticesregarding the protection of customer privacy. 18. M field personnel and contractors will carry or wear photo identification tags. 19. If requested, Cox will provide descrambling equipment that will allow simultaneous reception of dual scrambled or encrypted signals while tuned to alternative channels on a pre - programmed schedule. Direct reception of all other signals that do not need to be processed through decryption circuitry will be provided. In accordance with our franchise agreements, we are required to Portly you that, by providing television service, we are making use of the public rights -of -way which use is in no way guar- anteed. In the event continued use of such rights -of -way is denied us for any reason, we will make every reasonable effort to provide service over alternate routes. By accepting Cox Communications television service, the customer agrees that he/she will make no claim, or undertake any action, against the franchisor, its officers, or its employees if the services to be provded are interrupted or discontinued. For additional services, billing inquiries or service problems, please call our customer service numbers: (949) 240 -1212 for South Orange County and (949) 720 -2020 in Central Orange County. If callers to our customer service are required to wait, they will receive a recorded message explaining that lines are busy and requesting that the caller wait for the next available representative. If the concern you report- ed is not resolved to your satisfaction. please call (949) 546 -2000. ShoWd your reported concern require further attention, you have the right to send written notice to the appropriate franchisor. They are 1. Mso Viejo. City Clerk, City Hall, 12 Journey, Aliso Viejo, CA 92656. (949) 425 -3800. 2, Camp Pendleton. Franchise Administrator, PO Box 1609, Oceanside, CA 92501. gi 725 -3233. 3. Dana Point: City Clerk, City Hall, 33282 Golden Lantern, Dana Point, CA 92629. (949) 248 -9890. 4, Irvine: City Clerk, City Hall, 1 Civic Center Dr., Irvine, CA 92714. (949) 724 -6040.