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Ordinance No. 726ORDINANCE NO. 726 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CYPRESS ADDING CHAPTER 6 TO THE CYPRESS CITY CODE REGULATING COMMUNITY ANTENNA TELEVISION FRANCHISING AND OPERATION THE CITY COUNCIL OF THE CITY OF CYPRESS DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. CHAPTER 6 IS ADDED TO THE CYPRESS CITY CODE TO READ AS FOLLOWS: Chapter 6 COMMUNITY ANTENNA TELEVISION SYSTEMS 6 -1 Definitions. For the purposes of this chapter, the following terms, phrases, words, abbreviations, and their derivations shall have the meaning given herein. When not inconsistent with the context, words used in the present tense include the future tense; words in the plural number include the singular number; and words in the singular number include the plural number. (a) "CATV" means community antenna television system as hereinafter defined. (b) "City" means the City of Cypress, a municipal corporation of the State of California, in its present incorporated form or in later reorganized, consolidated, enlarged or reincorporated form. (c) "Community antenna television system (CATV)" means a system of antenna, satellite receiving and transmitting apparatus, coaxial cables, fiber optics, wires, wave guides, and /or other conductors, amplifiers, electronic processors, equipment and facilities designed, constructed or used for the purpose of providing over - the -air, satellite - delivered, and locally originated television or FM radio service by cable within the city. Such a definition does not include those services which are classified as MDS (Multiple Distribution Systems), DBS (Direct Broadcast Satelite), or STV (Subscription Television) services, all of which are delivered without wires from a central originating point directly to a subscriber without the use of wires. (d) "Council" means the present governing body of the city or any future board constituting the legislative body of the city. (e) "Franchise" means and includes any authorization granted hereunder in terms of a franchise, privilege, permit, license or otherwise to construct, operate and maintain a CATV system in the city. Any such authorization, in whatever term granted, shall not mean nor include any license or permit required for the privilege of transacting and carrying on a business within the city in accordance with any other provision of this code, or any amendment thereto, or any supplemental provisions, sections or articles. Any such authorization, in whatever term granted, shall not relieve grantee from any type of tax or fee now or hereafter imposed by the city; provided that franchise payments shall be determined pursuant to this chapter. (f) "Grantee" means a person, firm or corporation to whom or which a franchise is granted by the council under this chapter, and the lawful successor, transferee or assignee of said person, firm, or corporation; (g) "Annual gross receipts" shall mean any and all compensation, in whatever form, grant, subsidy, exchange, or otherwise, directly or indirectly received by a grantee, not including any taxes on services furnished by such grantee imposed directly on any subscriber or user by a city, county, state or other governmental unit, and collected by the grantee for such activity and shall specifically include gross annual receipts, basic service receipts, gross annual non -basic service receipts, gross annual advertising receipts and gross annual lease receipts. (h) "Property of grantee" means all property owned, installed or used by a grantee in the conduct of a CATV business in the city under the authority of a franchise granted pursuant to this chapter. (i) "Street" or "public street" means only a street, road, highway, freeway, lane, path, alley, court, sidewalk, parkway or drive which is owned by a public entity in fee or as to which a public entity has an easement for street purposes, and with respect to which, and to the extent that, the city has a right to grant the use of the surface of, and space above and below in connection with, a franchise for a CATV system. (j) "Subscriber" means any person or entity receiving for any purpose the CATV service of a grantee. (k) "City manager" shall mean the city manager of the city, or his designee. (1) "City engineer" shall mean city engineer of the city, or his designee. (m) "Day" shall mean a calendar day. (n) "City clerk" shall mean the city clerk of the city, or his designee. 6 -2 Franchise to Install. (a) A non - exclusive franchise to install, construct, operate, and maintain a CATV system on streets within all or a specific portion of the city may be granted by the council to any person, whether or not operating under an existing franchise, who or which offers to furnish and provide such system under and pursuant to the terms and provisions of this chapter. (b) When and in the event that the grantee of any franchise granted hereunder uses in its CATV system distribution channels furnished to the grantee by a telephone company pursuant to tariff or contract on file with a regulatory body having jurisdiction and said grantee makes no use of the streets independent of such telephone - company - furnished facilities, said grantee shall be required to comply with all of the provisions hereof as a "licensee," and in such event whenever the term "grantee" is used herein it means and includes "licensee." No provision of this chapter shall be deemed or construed as requiring the granting of a franchise hereunder to a telephone company furnishing such a channel service. 6 -3 Uses Permitted to Grantee. Any franchise granted pursuant to the provisions of this chapter shall authorize and permit the grantee to engage in the business of operating and providing a CATV system within all or a specific portion of the city, and for that purpose to erect, install, construct, repair, replace, reconstruct, maintain and retain in, on, under, upon, across, and along any public street, such wires, cable, conductors, ducts, conduits, vaults, manholes, amplifiers, appliances, attachments, and other property as may be necessary and appurtenant to the CATV system; and, in addition, so to use, operate, and provide similar facilities or properties rented or leased from other persons, firms or corporations, including but not limited to any public utility or other grantee franchised or permited to do business in the city. A grantee may make charges to subscribers for installation of or connection to its CATV system and fixed monthly charges as filed and approved as herein provided. No increase in the rates and charges to subscribers, as set forth in the franchise agreement, may be made without the prior approval of the council expressed by resolution as provided for in section 6 -26 of this chapter (except to the extent that applicable federal or state law prevents the city from enforcing such restriction). 6 -4 Limitations of Franchise. (a) Every franchise granted under this chapter shall be non - exclusive. Neither the granting of any franchise hereunder nor any of the provisions contained herein shall be construed to prevent the city from granting any identical or similar franchise to any other person, firm, or corporation, within all or any portion of the city. (b) No privilege or exemption shall be granted or conferred by any franchise granted under this chapter except those specifically prescribed herein. (c) Any privilege claimed under any such franchise by the grantee in any public street or other public property shall be subordinate to any prior or subsequent lawful occupancy or use thereof by the city or any other governmental entity and shall be subordinate to any easements therein, whether created prior or subsequent to the granting of any franchise hereunder. (d) Any such franchise shall be a privilege to be held in personal trust by the original grantee. It cannot in any event be sold, transferred, leased, assigned or disposed of, in whole or in part, either by forced or involuntary sale, or by voluntary sale, merger, consolidation or otherwise, without the prior consent of the council expressed by resolution, after receipt of any proposed contractual documents, including the consideration, and then only under such conditions as may in said resolution be prescribed. Any such transfer or assignment shall be made only by an instrument in writing, a duly executed copy of which shall be filed in the office of the city clerk within thirty (30) days after any such transfer or assignment. The said consent of the council, except as to assignment or transfers as specified in section 6 -9, may not be unreasonably withheld; provided, however, the proposed assignee must show financial responsibility and must agree to comply with all provisions of this chapter and of the franchise; and provided further, that no such consent shall be required for a transfer in trust, mortgage or other hypothecation to secure an indebtedness unless it shall have been made to avoid or evade the other provisions of this chapter affecting transfers. A request for council consent must be accompanied with a fee reasonably determined by the council to recover city expenses connected with processing the change. (e) Time shall be of the essence of any such franchise granted hereunder. The grantee shall not be relieved of his obligation to comply promptly with any of the provisions of this chapter or by any failure of the city to enforce prompt compliance. (f) Any right or power in, or duty impressed upon, any officer, employee, department or board of the city shall be subject to transfer by the city to any other officer, employee, department, or board of the city. (g) The grantee shall have no recourse whatsoever against the city for any loss, cost, expense, or damage arising out of any provision or requirement of this chapter or of any franchise issued hereunder or because of its enforcement. (h) The grantee shall be subject to all requirements of city ordinances, rules, regulations and specifications heretofore or hereafter enacted or established to protect the public safety and general welfare and /or which apply generally to persons or businesses in the community, and shall comply with all applicable state and federal laws and regulations heretofore or hereafter enacted or established. (i) Any such franchise shall not relieve the grantee of any obligation involved in obtaining pole space from any department of the city, utility company, or from others maintaining poles in the streets. (j) Any franchise granted hereunder shall be in lieu of any and all other rights, privileges, powers, immunities, and authorities owned, possessed, controlled or exercisable by the grantee, or any successor to any interest of the grantee, or pertaining to the construction, operation, or maintenance of any CATV system in the city; and the acceptance of any franchise hereunder shall operate, as between a grantee and the city as an abandonment of any and all of such rights, privileges, powers, immunities, and authorities within the city, to the effect that, as between grantee and the city, any and all construction, operation and maintenance by any grantee of any CATV system in the city shall be, and shall be deemed and construed in all instances and respects to be, under and pursuant to said franchise, and not under or pursuant to any other right, privilege, power, immunity, or authority whatsoever. 6 -5 Rights Reserved to the City. (a) Nothing herein shall be deemed or construed to impair or affect, in any way, to any extent, the right of the city to acquire the property of a grantee, either by a mutually agreed purchase or through the exercise of the right of eminent domain, at a fair and just value, and nothing herein contained shall be construed to contract away or to modify or abridge, either for a term or in perpetuity, the city's right of eminent domain. (b) In the event the city desires to acquire all or part of the CATV system (acquisition of part of the CATV system is restricted to those portions of the system which, it owned by the city, would not substantially undermine the economic viability of the remainder of the system), fair market value shall include consideration of the cable television system as a going concern, except that, in the event of cancellation or revocation or non - renewal of the franchise due to significant non - compliance with this chapter pursuant to section 6 -9(b) or section 6 -9(c) hereof or the franchise agreement, or significant or on -going violations of this and /or other city and /or state or federal rules and regulations, no value shall be given the non - physical asset of goodwill or the franchise itself. (c) In the event of purchase by the city, or a change of grantee, the current grantee shall cooperate with the city, or with a representative appointed by the city, to operate the system for a temporary period in maintaining continuity of service. (d) There is reserved to the city every right and power which is required to be herein reserved or provided by any ordinance of the city; and a grantee, by its acceptance of any franchise, agrees to be bound thereby and to comply with any action or requirements of the city in its exercise of such rights or power, heretofore or hereafter enacted or established. (e) Neither the granting of any franchise hereunder nor any of the provisions contained herein shall be construed to prevent the city from granting any identical, or similar franchise to any other person, firm or corporation, within all or any portion of the city. (f) There is reserved to the city the power to amend any section or part of this chapter so as to require additional or greater standards of construction, operation or maintenance or otherwise, on the part of a grantee. Such additional or greater standards shall apply only to additions to existing systems of a grantee unless mutually agreed to by the city and a grantee or as dictated by the public safety and welfare. (g) Neither the granting of any franchise nor any provision hereof shall constitute a waiver or bar to the exercise of any governmental right or power of the city, now existing or hereafter granted. (h) The council may do all things which are necessary and convenient in the exercise of its jurisdiction under this chapter and may determine any question of fact which may arise during the existence of any franchise granted hereunder. The city manager is authorized and empowered to adjust, settle, or compromise any controversy or charge arising from the operatons of any grantee under this chapter, either on behalf of the city, the grantee, or any subscriber, in the best interest of the public. Either the grantee or any member of the public who may be dissatisfied with the decision of the city manager may appeal the matter to the council for hearing and determination. The council may accept, reject or modify the decision of the city manager, and the council may adjust, settle or compromise any controversy or cancel any charge arising from the operations of any grantee or from any provision of the chapter. All actions by the council under this paragraph shall be after hearing, upon ten days' advance written notice to grantee at its address on file with the city. Such actions may be by either resolution or minute order, except that revocation of franchise pursuant to section 6 -9 shall be by ordinance. (i) The city reserves the right, in special circumstances, to construct such portions of a grantee's proposed facilities and equipment as public safety and convenience may dictate, at the grantee's sole expense. (j) The city reserves the right to remove any portion of a grantee's equipment and facilities as may be required in any emergency as determined by the city without liability for interruption of service, and the city shall not be obligated to restore service or to pay the costs of expenses of restoring service. 6 -6 Application for franchise. (a) Application for a franchise hereunder shall be in writing, shall be filed with the city clerk, and shall contain: (1) All information required in a cable television franchise request for proposals approved by the council; and (2) Such supplementary, additional or other information as the council may deem reasonably necessary to determine whether the requested franchise should be granted. (b) An application fee, the amount as established by council resolution or as indicated in a cable television franchise request for proposal approved by the council, shall be submitted concurrently with each application for franchise. (c) The council reserves the right to accept or reject franchise applications which propose a cost - effective initial community facilities and equipment package with guarantees of future improvements during the term of the franchise to meet or exceed the minimum standards and which base the future improvements upon predetermined increases in subscriber penetration rates and local programming production activities. 6 -7 Incorporation by Reference. This chapter shall be incorporated by reference in any franchise award(s), and any and every provision hereof shall be incorporated as though the same were set out in full, except to those provisions of the award which expressly alter - 4 - or modify this chapter, and all provisions shall be binding upon grantee. 6 -8 Minimum Standards. (a) Any and all CATV systems for the city shall be designed and installed to meet all of the standards set forth in the franchise agreement. (b) The CATV system shall be designed as a "switchable" network, between the subscriber network and an institutional network with full, two -way capability (upstream and downstream transmission and reception) of both audio and video signals. Pursuant to the terms of the franchise agreement, and in no event later than by the end of the third year of the term of the franchise, the grantee shall submit to the city manager, for his approval, a plan for implementation of the institutional network. Such a plan shall include, as a minimum, all subscriber services to be offered, dates for implementation and marketing of those services, and the fees to be charged subscribers for each and every service and /or level of service proposed. Following council approval, the grantee shall implement those services pursuant to the terms of the franchise agreement or no later than the end of the fifth year of the term of the franchise. Failure to meet any of the provisions of this section shall subject the grantee to a liquidated damages of $1,000 per day, or such greater amount as may be specified in the franchise agreement, for each and every day's delay beyond the deadline(s) referenced herein. (c) As part of its proposal to the city, the franchise applicant shall indicate a proposed construction schedule for the completion of the installation of the cable television system throughout the entire city or the portion thereof for which a franchise is being requested. Service to the areas prescribed in that proposal or as modified in the franchise agreement shall be provided within the periods stated and failure on the part of the grantee to complete each of the matters set forth therein shall be grounds for termination of the franchise, as well as invocation of the penalties prescribed in sections 6 -11 and 6 -22 and any other penalties specified herein or in the franchise agreement. The proposed construction schedule shall not, in any event, exceed two (2) years, except that, by resolution, the council, in its discretion, may extend the time for the commencement and completion of installation and construction for additional periods in the event the grantee, acting in good faith, experiences delays by reason of circumstances beyond his control. 6 -9 Duration of Franchise. (a) No franchise granted by the council under this chapter shall be for a term longer than fifteen years following the date of acceptance of such franchise, or the renewal thereof, by the grantee. Any such franchise shall terminate in whole if the city acquires the CATV system or proportionately if the city acquires a portion thereof. (b) Any such franchise granted hereunder may be terminated prior to its date of expiration by the council in the event that the city acquires the CATV system property of the grantee or if the council shall have found, after thirty days' notice of any proposed termination and public hearing, that: (1) The grantee has failed to comply with any material provision of this chapter or has by act or omission violated any material term or condition of any franchise or permit issued hereunder; or (2) The application of the grantee, including accompanying reports or data, contains a material misrepresentation, whether intentional or not. (c) A franchise granted hereunder shall, at the option of the council, cease and terminate one hundred twenty (120) days after the appointment of a receiver or receivers or trustee or trustees to take over and conduct the business of the grantee whether in a receivership, reoganization, bankruptcy or other action or proceding unless such receivership or trusteeship shall have been vacated prior to the expiration of said one hundred twenty (120) days, or unless: (1) Such receivers or trustees shall have, within one hundred twenty (120) days after their election or appointment, fully complied with all the terms and provisions of this chapter and the franchise granted pursuant hereto, and the receivers or trustees within said one hundred twenty (120) days shall have remedied all defaults under the franchise; and (2) Such receivers or trustees shall, within said one hundred twenty (120) days, execute an agreement duly approved by the court having jurisdiction in the premises, whereby such receivers or trustees assume and agree to be bound by each and every term, provision and limitation of the franchise herein granted. (d) In the case of a foreclosure or other judicial sale of the plant, property and equipment of a grantee, or any part thereof, including or excluding its franchise, the council may serve notice of termination upon the grantee and the successful bidder at such sale, in which event the franchise and all rights and privileges of the grantee thereunder shall cease and terminate thirty (30) days after service of such notice, unless: (1) The council shall have approved the transfer of the franchise, as and in the manner in this chapter provided, and (2) Such successful bidder shall have covenanted and agreed with the city to assume and be bound by all the terms and conditions of the franchise. (e) In the event a grantee wishes to renew a franchise prior to its expiration, the following shall apply. No later than two (2) years prior to the expiration date of this franchise, the grantee shall file notice of request for renewal of the franchise. Such request shall, at the minimum, specify the following: (1) Justification, based on prior experience, for the extension, (2) Number of years of the requested franchise extension, (3) Changes, modifications, improvements, such as an increase in channel capacity, services provided, or other additions /deletions which the grantee is proposing to provide during the term of the requested extension, (4) Proposed rate schedules for all services and level of services proposed, and (5) Any and all other information the grantee shall deem relevant to the request. Within ninety (90) days of receipt of the grantee's application for franchise renewal, the city shall schedule public hearings on the request with the grantee. A final decision and agreement between the grantee and the city shall be resolved at the earliest possible date, but in no event later than eighteen (18) months prior to the expiration of the existing franchise. In the event agreement is not concluded prior to that time, notice shall be extended to the grantee of the city's intent to reopen the franchise to interested applicants. 6 -10 Franchise Fee. (a) Any grantee granted a franchise under this chapter shall pay to the city, during the life of such franchise, a sum equal to five percent (5 %) of the annual gross receipts and, in addition thereto, such other sums as may be provided for by the franchise, other agreements, or ordinance. If, during any part of the franchise term, there is in effect a federal or state limit regulating the franchise fee percentage to a different amount, the maximum rate allowed thereby shall apply, but only to the extent required by law and only for that time period such limit is legally operational. Franchise fee payment by the grantee to the city shall be made quarterly by delivery of the same to the city clerk not later than April 15, July 15, October 15, and January 15 for the preceding quarter. (b) The grantee shall file with the city clerk, within ninety (90) days after the expiration of the grantee's fiscal year or portion thereof during which such franchise is in force, a balance sheet and statement of profit and loss certified to by a certified public accountant, or persons otherwise satisfactory to the city manager, showing in detail the annual gross receipts, as defined herein, of the grantee during the preceding fiscal year, or portion thereof. It shall be the duty of the grantee to pay to the city, within fifteen (15) days after the time for filing such statement, any unpaid balance thereof for the fiscal year or portion thereof covered by such statements. (c) The city shall have the right to inspect and audit a grantee's fiscal records. If an independent audit of a grantee's records directed by the city shows a franchise fee error in excess of two percent (2 %) in the city's favor, the grantee shall assume all reasonable costs for said audit. No acceptance of any payment shall be construed as a release or as an accord and satisfaction of any claim the city may have for further additional sums payable under this section or for the performance of any other obligation hereunder. 6 -11 Permits, Installation and Service. (a) Within sixty (60) days after acceptance of franchise the grantee shall apply for and proceed with due diligence to obtain all necessary permits and authorizations which are required in the conduct of its business, including but not limited to, any utility joint use - 6 - attachment agreements, microwave carrier licenses, and any other permits, licenses and authorizations to be granted by duly constituted regulatory agencies having jurisdiction over the operation of CATV systems, or their associated microwave transmission facilities. (b) Within one hundred eighty (180) days after obtaining all necessary permits, licenses and authorizations, the grantee shall commence construction and installation of the CATV system. (c) Within ninety (90) days after the commencement of construction and installation of the system, the grantee shall proceed to render service to subscribers; and the completion of the construction and installation shall be pursued with reasonable diligence thereafter, so that service to all areas designated on the map accompanying the application for franchise or as modified in the franchise agreement shall be provided within one year from the date on which service was first provided. (d) For failure either to apply for all necessary permits and approvals or to commence construction in accordance with this section, unless the council approves the delay because of reasons beyond the control of the grantee, the franchise term shall be reduced four (4) clays for each day of delay. (e) For failure to begin service to subscribers or complete construction and installation of the system as provided for in this section, or as provided for in the grantee's proposal to the city and adopted or amended in the franchise agreement, unless the council approves the delay because of reasons beyond the control of the grantee, the franchise term shall be reduced four (4) days for each day of delay. (f) By acceptance of the franchise granted hereunder, the grantee agrees that, in the event of its failure to comply with any time requirements referred to in subsections (a) through (e), of this section, or as may be extended by the council, in addition to the liquidated damages provisions specified elsewhere in this chapter, the grantee will pay to the city the sum of one thousand dollars ($1,000) or such other amount as set forth in the franchise agreement per day for each and every day's delay beyond the time prescribed, plus authorized extensions therefor, for completion of any of the acts required to be done by this section. (g) Any requests for extensions of the proposed construction deadlines proposed by a grantee, due to acts of God, acts of the public enemy, fires, floods, epidemics, quarantine restrictions, strikes, lockouts, freight embargoes, unusually severe weather, or from any other cause beyond the reasonable control of the grantee and /or its employees, agents, or contractors, must be submitted to the city manager in writing within fourteen (14) days after the cause for such delay first occurs. Such request must specify the exact reason for the delay and the total number of extension days requested. Whenever and wherever possible, such requests for extensions of the proposed or required construction deadlines should be supported with written justification of the cause for such delay, such as newspaper articles, letters from vendors, agents, contractors, etc. Within fourteen (14) days of receipt of such a request, the city manager will reply in writing, approving, partially approving, or denying the request. 6 -12 Location of Property of Grantee. (a) Any wires, cable lines, conduits or other properties of a grantee to be constructed or installed in streets, shall be so constructed or installed only at such locations and in such manner as shall be approved by the city engineer acting in the exercise of his reasonable discretion within the general guidelines of CATV construction standards approved by the council. (b) A grantee shall utilize existing poles, conduits and other facilities whenever possible and shall not install or erect any facilities or apparatus in or on other public property, places or rights -of -way, or within any privately owned area within the city which has not yet become a public street but is designated or delineated as a proposed public street on any tentative subdivision map approved by the city, except those installed or erected upon public utility facilities then existing, without obtaining the prior written approval of the city engineer. (c) Notwithstanding any other provision in this chapter or any franchise granted pursuant thereto, all facilities of a grantee in any public street or in any public or private easement, and services lines to subscribers off the main lines, shall be located underground at such depths and locations as required by the city engineer, except where a grantee uses existing poles, with permission from the owner, and as to such service lines where and so long as electric and telephone lines to the subscribers are overhead. Upon the undergrounding of - ? - the utility lines of the owner using said poles, the grantee shall concurrently (or earlier) place its facilities underground at depths and locations approved by the city engineer at no expense to the city or to the customer. All underground wires or cables of a grantee shall be placed in conduits. (d) Amplifiers in a grantee's underground transmission and distribution lines shall be in appropriate low profile housing, and at locations as approved by the city engineer. (e) All transmission lines, equipment and structures shall be so installed and located as to cause minimum interference with the rights and reasonable convenience of property owners and at all times shall be kept and maintained in a safe, adequate and substantial condition and in good order and repair. A grantee shall, at all times, employ ordinary care and shall install and maintain in use, commonly accepted methods and devices for preventing failures and accidents which are likely to cause damage, injuries or nuisances to the public. Suitable barricades, flags, lights, flares or other devices shall be used at such times and places as are reasonably required for the safety of all members of the public. Any poles or other fixtures placed in the public right of way by a grantee shall be placed in such a manner so as not to interfere with the usual travel on such public right of way. (f) The grantee shall use boring augur techniques in lieu of transverse cuts for crossing arterial streets and driveways. Exceptions may be authorized by the city engineer when conditions such as street contours, utilities or other factors make boring techniques impractical. If any paved surface is disturbed during the construction or installation of CATV facilities, said surface shall be replaced by the grantee in conformance with city's specifications. (g) The grantee shall not place any transmission lines or fixtures where the same will interfere with any gas, electric or telephone fixtures, water hydrant or main and all such transmission lines or fixtures placed in any street shall be placed within the areas specified by the city engineer and those placed in alleys shall be placed close to the line of the lot abutting on said alley, and then in such manner as not to interfere with the usual travel on said streets, alleys, and public ways. (h) The grantee shall make every reasonable effort during the course of construction to maintain all streets, driveways, sidewalks and other paved surfaces in a usable condition. (i) The grantee shall perform all backfilling and return property to original condition within twenty -four hours except by specified written approval of the city engineer. (j) All landscaped public and private areas shall be returned to a condition as existed prior to the construction work, and the grantee shall maintain such area until, in the opinion of the city engineer, the plant materials are reestablished. (k) The grantee shall not remove any tree or trim any portion, either above, at or below ground level, of any tree within any public place without the prior consent of the city. The city shall have the right to do the work with the actual cost thereof to be paid by the grantee. If such trimming is not performed by city, the grantee shall be responsible for any and all damages to any tree as a result of trimming, or to the land surrounding any tree, whether such tree is trimmed or removed. (1) Any grantee awarded a franchise within the city agrees to the city's acceptance and approval of any and all subcontracting firms employed by the grantee within the city. Such acceptance and approval by the city shall not be unreasonably withheld. In the event the city determines that any subcontractor employed by the grantee is performing unsatisfactory or inferior work, as determined by the city engineer, or is the cause of numerous citizen complaints, the city manager shall notify the grantee in writing of such determination, and the grantee shall within thirty (30) days of such notice employ another subcontractor that meets the provisions of this subsection. If the city invokes its right hereunder regarding any subcontractor employed by the grantee, then the grantee shall be given an extension on any construction deadlines for thirty (30) additional days from the date of receipt of written notification of any such action by the city. (m) The grantee shall notify the city at least ten (10) days prior to the intention of the grantee to commence any construction in any streets. The city shall cooperate with the grantee in issuing any permits required, provided such grant and subsequent construction by the grantee shall not unduly interfere with the use of such streets and that proposed construction shall be done in accordance with the pertinent provisions of the ordinances of the city. 6 -13 Removal and abandonment of property of grantee. (a) In the event that the use of any part of the CATV system is discontinued for any reason for a continuous period of twelve months, or in the event such system or property has been installed in any street or public place without complying with the requirements of the grantee's franchise or this chapter or the franchise has been terminated, cancelled or has expired, the grantee shall promptly, upon being given thirty days' written notice, initiate removal from the streets or public places all such property of such system other than any which the city engineer may permit to be abandoned in place. In the event of such removal, the grantee shall promptly restore the street or other area from which such property has been removed to a condition satisfactory to the city engineer. (b) Any such property of the grantee on public property or in the public rights of way remaining in place one hundred and eighty (180) days after the termination or expiration of the franchise shall be considered permanently abandoned. The city engineer may extend such time not to exceed an additional sixty (60) days. (c) Any such property of the grantee to be abandoned in place shall be abandoned in such manner as the city engineer shall prescribe. Upon permanent abandonment of the property of the grantee in place, the property shall become that of the city, and the grantee shall submit to the city engineer an instrument in writing, to be approved by the city attorney, transferring to the city the ownership of such property, except as may be included within the provisions of any utility joint -use attachment agreements. 6 -14 Changes required by public improvements. The grantee shall from time to time protect, support, dislocate, temporarily or permanently as may be required, remove or relocate, without expense to the city or any other government entity any facilities installed, used, and maintained under the franchise if and when made necessary by any lawful change of grade, alignment, or width of any public street, including the construction of any storm drain, sewer, subway or viaduct, by the city or any other government entity, or made necessary by any other governmental entity, or made necessary by any other public improvement or alteration in, under, on, upon or about any public street or other public property, whether such public improvements or alteration be at the instance of the city or another governmental entity, and whether such improvement or alteration is for a governmental or proprietary function, or made necessary by traffic conditions, public safety, street vacation or any other public project or purpose of city or any other governmental entity. The decision of the city engineer under this section shall be final and binding on the grantee. 6 -15 Failure to perform street work. Upon failure of the grantee to commence, pursue, or complete any work required by law or by the provisions of this chapter or by its franchise to be done in any street or other public place, within the time prescribed, and to the satisfaction of the city engineer, the city may, at its option, cause such work to be done and the grantee shall pay to the city the cost thereof in the itemized amounts reported by the city engineer, to the grantee within ten days after receipt of such itemized report. In the alternative, at the city's option, the city may demand of grantee the estimated cost of such work as estimated by the city engineer, and such shall be paid by grantee to the city within ten days of such demand. Upon award of any contract or contracts therefor, the grantee shall pay to the city within ten days of demand any additional amount necessary to provide for cost of such work. Upon completion of such work, the grantee shall pay to city or city shall refund to the grantee such sums so that the total received and retained by city shall equal the cost of such work. "Cost" as used herein includes fifteen percent of other costs for the city's overhead. 6 -16 Security for Performance. (a) In order to secure the faithful performance of each and all of its obligations under and pursuant to the provisions of this chapter and the applicable franchise agreement, concurrently with the filing and acceptance of award of a franchise granted hereunder, the grantee shall deposit with the city clerk cash, a negotiable certificate of deposit payable to the city, and /or a letter of credit in an aggregate amount equal to one million dollars ($1,000,000), or such other amount as may be specified in the franchise agreement. Any such certificate of deposit or letter of credit shall be in a form acceptable to the city attorney and shall be issued by a bank or savings and loan association whose most recently issued unsecured long -term debt securities are rated not less than AA or its equivalent by Standard & Poor's Corporation or Moody's Investors Service, Inc.; provided, however, that a certificate of deposit may be issued by any bank which is a member of the Federal Deposit Insurance Corporation ( "FDIC ") or by any savings and loan association which is a member of the Federal Savings and Loan Insurance Corporation ( "FSLIC ") if the principal amount of such certificate does not exceed the limits of the deposit insurance provided by FDIC or FSLIC, as the case may be. Unless otherwise specified in the franchise agreement, said amount shall be 9 maintained on deposit with the city clerk throughout the period of construction of the system; and in the event said amount is reduced by reason of any drawing thereof by the city, the grantee shall restore the deposit to the original princpal amount thereof within 30 days after such drawing. (b) Subsequent to the completion of construction of the system to the satisfaction of the city, the aggregate amount so deposited with the city clerk may be reduced to one hundred thousand dollars ($100,000) or such other amount as may be specified in the franchise agreement. Said amount shall be maintained on deposit with the city clerk throughout the remainder of the term of the franchise and any renewal thereof and thereafter until the grantee shall have liquidated all of its obligations arising from its acceptance of the franchise or the renewal thereof or from its exercise of any privilege therein granted. In the event said amount is reduced by reason of any drawing thereof by the city, the grantee shall restore the deposit to the original principal amount thereof within 30 days after such drawing. (c) In the event that the grantee fails to comply with any one or more of the provisions of this chapter or of the franchise agreement, the city shall be entitled, after five days written notice to the grantee prior to a withdrawal, to recover from the grantee, and may draw from the amount deposited by the grantee pursuant hereto, the following: (1) Any amounts payable to (pursuant to the provisions of this chapter or otherwise) or expended by the city by reason of such failure of grantee; (2) Any damages or loss suffered by the city as a result of any such failure; (3) Interest at ten percent (10 %) per year, or such other rates as may be established by resolution of the council, from the date due as to the amount finally determined, whether liquidated or not in amount when due; and (4) In the event of litigation, the reasonable attorney's fees, court costs and other expenses of the city, in the event the city is the prevailing party. 6 -17 Indemnification of city. (a) The grantee shall, concurrently with the filing of an acceptance of award of any franchise granted under this chapter, furnish to the city and file with the city clerk, and at all times during the existence of any franchise granted hereunder, maintain in full force and effect, at its own cost and expense, a liability insurance policy in the amount and in a company approved by the city manager, and in a form satisfactory to the city attorney, indemnifying and saving harmless the city, its officers and employees from and against any and all claims, demands, actions, suits, and proceedings by others, against all liability to others, including but not limited to any liability for damages by reason of or arising out of any failure by the grantee to secure consents from owners, authorized distributors or licensees of progams to be delivered by grantee's CATV system, and against any loss, cost, expense and damages resulting therefrom, including reasonable attorney's fees exercise or enjoyment of its franchise, irrespective of the amount of the comprehensive liability insurance policy required hereunder. (b) The grantee shall, concurrently with the filing of an acceptance of award of any franchise granted under this chapter, furnish to the city and file with the city clerk, and at all times during the existence of any franchise granted hereunder, maintain in full force and effect, at its own cost and expense, a general comprehensive liability insurance policy, in protection of the city, its officers, boards, commissions, agents and employees, in a company approved by the city manager, and a form satisfactory to the city attorney, protecting the city and all persons against liability for loss or damage for personal injury, death and property damage, occasioned by the operations of grantee under such franchise, with minimum liability limits for personal injury or death and for damage to property acceptable to the city manager and approved by the city attorney. (c) The policies mentioned in (2), above, shall be endorsed to name the city, its officers, hoards, commissions, agents and employees, as additional insureds and to act as primary and non - contributory with any other insurance available to the city and shall contain a provision that a written notice of cancellation or reduction in coverage of said policy shall be delivered to the city thirty (30) days in advance of the effective date thereof. If such insurance is provided by a policy which also covers grantee or any other entity or person other than those above named, then such policy shall contain the standard cross - liability endorsement. 6 -18 Acceptance and effective date of franchise. (a) No franchise granted pursuant to the provisions of this chapter shall become effective for any purpose unless and until written acceptance thereof shall have been filed with the city clerk; and unless and until all things required in this section and section 6 -17 are done and completed in the time and manner required, the council may declare the franchise null and void. (b) Within twenty (20) days after the effective date of the ordinance awarding a franchise, or within such extended period of time as the council in its discretion may authorize, the grantee shall file with the city clerk his written acceptance, in form satisfactory to the city attorney, of the franchise, together with the security and insurance policies specified in this chapter and his agreement to be bound by and to comply with and to do all things required of him by the provisions of this chapter and the franchise. Such acceptance and agreement shall be acknowledged by the grantee before a notary public, and shall in form and content be satisfactory to and approved by the city attorney. 6 -19 Effect on Existing Franchise — System Installed. In the event any territory located outside the boundaries of the city which is covered by an existing cable system franchise or license granted by the governmental entity having jurisdiction over such territory is annexed to the city after the franchise thereof has commenced or completed construction and installation of a cable system within said territory, the rights reserved under such franchise or license to said governmental entity or to any officer thereof shall inure to the benefit of the city; and all regulatory provisions of this chapter and any rules and regulations applicable to CATV systems operating within the city, whether then in effect or subsequently adopted, shall be applicable to and binding upon said grantee. In addition, the grantee shall be obligated to pay annually to the city the percentage of gross receipts established by the governmental entity in said franchise or license which are derived from its operations within the annexed territory for three (3) years (or until termination of the franchise if the franchise is terminated, by expiration thereof or otherwise, prior to the expiration of said period), at which time the same percentage of gross receipts required by franchises granted pursuant to this chapter will apply. 6 -20 Costs to be borne by grantee. The grantee shall assume the following costs associated with a franchise: (a) Costs of publication of any and all notices and ordinances relating to the franchise as such publication is required by law. Proof of such publication shall be promptly filed with the city clerk by the grantee. (b) Reasonable and customary costs associated with the city employing an independent consultant to assist with the development of the franchise ordinance and any negotiations required to grant or amend (at the request of the grantee) the franchise. (c) Reasonable and customary costs of an independent engineering firm to witness the initial design, installation and proof of performance testing of the system as a vertification of the grantee's adherence to the terms and conditions of the franchise. (d) All fees related to construction of the CATV facilities, including, but not limited to, city excavation permit fees, construction inspection fees, and other city costs related to CATV installation and construction. (e) City costs of advertising and noticing for any public hearings related to rate increases or changes in this franchise. (f) All city administrative costs associated with the granting of the franchise, including but not limited to the public hearings established for community needs assessments, costs associated with the performance of a cable television advisory committee, attorney fees, and city staff time committed to the franchising process and award and negotiaton of the franchise. 6 -21 Services. Services shall be offered to all city residents in accordance with the provisions of the franchise agreement. 6 -22 Technical Performance Standards. (a) The CATV system shall be designed, installed, maintained and tested in! accordance with the best CATV industry practice and, as a minimum, shall conform with the technical performance standards as contained in the franchise agreement or in a request for proposal subsequently authorized by the council. In addition, should the Federal Communications Commission (FCC), or other state or federal authority having jurisdiction, impose CATV system technical performance standards either outside the scope of the technical performance standards referenced herein, or requiring a higher level of CATV system performance, those standards are hereby incorporated herein by reference. (b) Thirty (30) days prior to the last regular working day of each of the first three (3) operating quarters of each year, the city manager may request the grantee to submit system performance data taken within the previous seven (7) days. Measurements for said data shall be taken at the same test points selected to satisfy subsection (c), below, during the last annual system performance test that the data has been submitted to the city. Quarterly test data shall be limited to: (1) Visual signal level for all channels carried, (2) Visual signal -to -noise measuements on one active lowband and one active highband VHF channel, and (3) Visual hum modulation on one channel or pilot carrier. Quarterly tests shall be performed on a requested basis. A representative of the city shall be permitted to accompany the grantee during quarterly measurement activities. The grantee shall not be permitted to make any system adjustments during quarterly measurement activities without noting such adjustments on the test data form. (c) The grantee shall, during the last month of the fourth operating quarter of each year, perform annual CATV system performance tests. Such tests shall be in full compliance with FCC regulations and such tests shall be independently witnessed and the resultant data analyzed by a representative of the city if directed by the city manager. All necessary test instrumentation shall be supplied by the grantee. A current certificate of calibration by an independent calibration laboratory shall be supplied for each test instrument upon request of the city manager. All costs for instrumentation and calibration shall be borne by grantee. Measurement locations for system compliance with subsection (b), above, except those requirements regarding twenty -four (24) hour visual signal amplitude and channel amplitude characteristics, shall include: (1) end of each system major trunk, and, (2) end of each system trunk branch four (4) or more trunk amplifiers deep. Actual test locations shall be selected to measure performance of the system in the franchise area and shall he (or as closely as possible to simulate) actual subscriber locations. Measurements regarding twenty -four (24) hour visual signal level and channel amplitude characteristics shall be made as required by the FCC. Measurement for system compliance with Subsection (b), above, shall be made where practical on all origination equipment employed in the system. Measurement techniques shall be either (1) those suggested by the FCC, or, (ii) those developed and mutually agreed to in writing by the city and the grantee prior to system testing. If such agreement is not reached prior to testing, the city shall prescribe acceptable methods of measurement. Concurrent with annual performance tests, the city representative may inspect all system headend facilities and outside plant for adherence to best industry installation, workmanship and safety practice. (d) The grantee shall maintain the system so it consistently operates within the substantial compliance of the technical standards herein; substantial compliance being defined as ninety -five percent (95 %) of the channels received shall meet all applicable technical standards. Simultaneously, at the time of measurement, one- hundred percent (100 %) of the local origination equipment in current operation shall meet all applicable technical standards specified herein. Equipment not in current operation, or not meeting the technical standards, will be repaired to meet the applicable technical standards within thirty (30) days. (e) In the event that service to any subscriber is interrupted for twenty -four (24) consecutive hours, the grantee shall provide a prorata rebate of the monthly fees for each such period of twenty -four (24) consecutive hours during which the interruption occurs, to all affected subscribers. (f) In the event that the system fails to meet any technical performance standards specified in the franchise agreement for a full three (3) month period, the grantee shall reduce all subscribers' fees by twenty -five percent (25 %) until all performance standards are met. The city manager shall notify the grantee in writing during the first month of the three (3) month period that the system has failed to meet performance standards. 6-23 Complaint Procedure, Remedies for Inadequate Service, and Notices. (a) Pursuant to FCC Rules, the following procedure shall be adhered to in the event of subscriber complaints by city residents: (1) Each grantee shall establish procedures for receiving, acting upon and resolving subscriber complaints to the satisfaction of the city manager. The grantee shall furnish a notice of such procedure to each subscriber at the time of initial subscription to the system. (2) Each grantee shall maintain a written record, or "log ", listing date and time of customer complaints, identifying the subscriber and determining the nature of the complaints and when and what action was taken by the grantee in response thereto; such record shall be kept at grantee's local office, reflecting the operations to date for a period of at least three (3) years, and shall be available for inspection during regular business hours without further notice or demand by the city manager. (3) In the event that a customer complaint is not resolved to the mutual satisfaction of the customer or the grantee, either customer or the grantee may request that the matter be presented to the city manager for a hearing and resolution. (4) When there have been similar complaints made or where there exists other evidence which, in the judgment of the city manager casts doubt on the reliability or quality of cable service, or the grantee's ability to meet the technical standards herein adopted, the city manager shall have the right and authority to compel the grantee to test, analyze, and report on the performance of that part of the system involved in the problem. Such test or tests shall be made and the reports of such test or tests shall be delivered to the city no later than fourteen (14) days after the city formally notifies the grantee. Such report shall include the following information: (i) the nature of the complaint which precipitated the special test, (ii) what system component was tested, (iii) the equipment used and procedures employed in such testing, (iv) the names of the individuals performing and witnessing the testing, (v) the date, time, and location of testing, (vi) the results of such test, and (vii) the method in which such complaints were resolved. (5) Any other information pertinent to the special test shall also be recorded. The resultant report shall be submitted to the city manager and will form the basis for resolution. In the event either the subscriber or grantee determines that the resolution was unsatisfactory, either may appeal the issue to the council for a final and binding resolution. (6) If, in the judgment of the city manager and /or council, the resultant tests indicate the service problem(s) are preventable and within the grantee's control, the city manager shall file such a written notice to the grantee to remedy the problem within a reasonable period agreed to by both the city and the grantee. (b) Prior to construction of the cable system, the grantee shall notify in writing each resident in the area in which construction is to commence, and shall deliver to each resident, notice of such construction either in person, by a representative of the grantee, or by mail, at least forty -eight (48) hours in advance of such construction work. (c) Each grantee will provide a method of employee /subcontractor identification, acceptable to the city, for all such individuals who may make personal contact with Cypress residents of the city for the purposes of construction, marketing, or other services of the cable television system. r. (d) Unless otherwise specified in the franchise agreement, each grantee will provide services to the entire residential area of the city, including future annexations, herein referred to as the "SUBSCRIBER NETWORK." Any limitations on system extensions, or exclusions, shall be approved by the council and referenced as part of the grantee's proposal, or adopted by resolution of the council and attached hereto as additional exhibits. (e) A grantee shall furnish the city with as -built drawings of the entire cable television system. Within thirty (30) days of completion of construction of five (5) miles of city streets, and for each five (5) miles thereafter until the system is completed, the grantee shall file as -built drawings and all equipment operational manuals with the city manager. In the event any changes or modifications are made to the cable system that would alter the city's as -built plans, grantee shall, after seeking city approval of such changes, file revised plans to reflect the changes within thirty (30) days of completion of the changes. (f) After the grantee's CATV system is operative, the grantee shall give notice of any interruption for repairs, adjustments or installation, in the same manner as subsection (b) of this section. (g) All notices which the city may give to a grantee or which grantee may give to the city shall be given in writing and may be given by first class mail, postage prepaid, addressed to the grantee's most recent address on file with the city, and addressed to city at the official city hall address. Such notices, so sent by mail shall be deemed given one business day after deposit in the United States mail if so deposited in Orange County or Los Angeles County, otherwise they will be deemed given upon receipt. 6 -24 Inspection of property and records. (a) At all reasonable times, the grantee shall permit any duly authorized representative of the city to examine all property of the grantee together with any appurtenant property of the grantee situated within or without the city, and to examine and transcribe any and all maps and other records kept or maintained by the grantee or under its control which deal with the operations, affairs, transactions, or property of the grantee with respect to its franchise. If any such maps or records are not kept in the city, or upon reasonable request not made available in the city, and if the council determines that an examination thereof is necessary or appropriate, then all travel and mainenance expense necesarily incurred in making such examination shall be paid by the grantee. (b) The grantee shall prepare and furnish to the city manager and the director of finance at the time and in the form prescribed by either of said officers, such reports with respect to its operations, affairs, transactions or property, as may be reasonably necessary or appropriate to the performance of any of the rights, functions, or duties of the city or any of its officers in connection with the franchise. (c) The grantee shall at all times make and keep in the city full and complete plans and records showing the exact location of all CATV system equipment installed or in use in streets and other public places in the city. 6 -25 Use of utility poles and facilities -- Agreement. When any portion of the CATV system is to he installed on public utility poles and facilities, copies of the agreements for such joint use of poles and facilities shall be filed with the city clerk. 6 -26 Rates, charges and rate increases. (a) The service rates and installation and connection charges for CATV system use, as contained in the franchise agreement as adopted or amended by the council, may be reduced at the sole discretion of the grantee (notice thereof to he filed with the city clerk at least ten (10) days prior to the effective date of any such reduction) and may be increased from time to time by resolution of the city council pursuant to this section. (b) All such rates and charges shall remain in effect with no increase for the period of time indicated in the franchise agreement or such time as is adopted or amended by the council. In no event shall that term be less than three (3) years from award of franchise. All rate and charge increase requests submitted or proposed by the grantee after said time period shall be based upon the following criteria, which shall be considered and evaluated by the council. The initial rates as hereinabove set may be adjusted after the initial period described above and at such time thereafter as hereunder specified, based upon the Consumer Price Index (CPI), All Urban Consumers Scale, prepared by the Bureau of Labor Statistics of the United States Department of Labor, relating to all items, Series A, for the Los Angeles /Long Beach /Anaheim area (1967 =100, or as may be hereafter revised) in accordance with the following formula: (1) For the initial rate increase request, the grantee shall submit to the city a report of the most recent CPI information for the twelve (12) month period preceding the report. (2) For subsequent rate increase requests, the grantee shall submit to the city a report of the most recent CPI information for the period since the effective date of the last previous rate increase. (3) CPI information shall include computations of percentage changes, to the nearest one -tenth of one percent, that have occurred since the rates were last established or adjusted. (c) The grantee may request and the city may thereon grant a rate increase subject to the provisions herein, provided that: 1. The amount of such rate adjustment divided by the current subscriber rates shall not exceed the percentage increase in the CPI during the period covered by the grantee's report. 2. The grantee submits an itemization of capital assets, both tangible and intangible, with the accounting basis for depreciation and the depreciation schedule. If intangible assets such as goodwill are being amortized, the amortization period shall be stated. 3. The grantee submits a detailed breakdown of operating, marketing and general and administrative costs by category for each of the three (3) preceding years. 4. The grantee reports the number of subscribers for "basic cable service "and "non - basic cable service" for each of the three (3) preceding years. 5. The grantee reports the number of cable plant -miles and dwelling units passed by the cable plant for each of the three (3) preceding years. 6. The grantee submits a statement as to any allocation of funds to parent company overhead or operating costs, and the basis for such allocation. 7. The grantee provides verification that it has notified all subscribers of rate increase request in a manner and form acceptable to the council. (d) Upon receipt of a rate increase request, accompanied by all of the supporting information of (b) above, it shall be the obligation of the council to act upon such request within a period of sixty (60) days from the date upon which all supporting materials have been submitted in adequate form. Prior to taking action on the request, at least one (1) public hearing shall be held upon the rate increase. The council shall approve, partially approve, or disapprove, any increase of rates or rates for additional services on the basis of the following consideration: (1) Performance of the grantee in abiding by the terms and conditions of this chapter and the franchise; (2) Whether the grantee has adequately served or serviced the subscribers in the city and the community in general; (3) Rates for comparable CATV service(s) in surrounding communities; (4) Revenue and profits from services offered; (5) Operating and construction expenses of the system; (6) Completeness of the information submitted by grantee in support of the request for increases; and (7) Other such evidence or testimony as may arise during the public hearing. (e) The decision by the council approving, partially approving, or disapproving the request for increase shall not be unreasonably withheld and such decision shall be in resolution form, which shall contain finding(s) indicating the basis for the decision and any new rates thereby approved and adopted. Any increase in rates or charges thereby approved shall not become effective prior to thirty (30) days after approval of the resolution. o (f) In the event a rate increase is granted as requested, the grantee shall refrain from applying for further increases for a period of fifteen (15) months from the effective date of the prior increase. If the rate request is denied, or a lesser increase than requested is approved, the grantee shall refrain from applying for further increases for a period of six (6) months from the date of the resolution denying the request or approving the lesser request. (g) A grantee shall maintain and file with the city a complete schedule of subscriber rates, including all fees and charges for services not subject to approval by the city. (h) There shall be no charge for disconnection from the network. However, if a subscriber has failed to pay properly due monthly fees or if a subscriber disconnects for seasonal periods, a grantee may require, in addition to full payment of any delinquent fees, a reasonable fee for reconnection. (i) A grantee shall receive no consideration whatsoever for or in connection with its provision of service to its subscribers other than as set forth in this section or as filed with and /or approved by the council. (j) If a grantee fails to provide any service request by a subscriber or programmer, the grantee shall, after adequate notification and being afforded the opportunity to provide the service, promptly refund all deposits or advance charges paid for the service in question by said subscriber or programmer. (k) In the event that any subscriber has made an annual payment in advance, a prorata portion of the monthly payments shall be refunded by the grantee, where said subscriber terminates service because of a failure of the grantee to render the service in accordance with the standards set forth in the permit. (1) Loss of or damage to the property of the grantee in the possession of or located on the property of any subscriber is the responsibility of said subscriber but only in amounts approved by the council and clearly stated in the grantee - subscriber agreement. Subscribers suffering a loss or damage to the property of the grantee due to acts or events which are beyond the control of the subscriber will be exempt from any loss, damage or replacement charges. 6 -27 Interconnection. (a) The grantee shall make all reasonable efforts to electrically interconnect the city CATV system with CATV systems in adjacent communities for the purposes of sharing noncommercial locally originated public and educational programming. Such an interconnect shall be effected by coaxial cable, fiber optic cable, microwave, or other bi- directional signal transportation means as appropriate to permit programming interchange in compliance with the technical provisions hereof. Within two (2) years of the effective date of a franchise, the grantee shall contact all franchised operators in the communities adjacent to the city for the purposes of exploring and securing a mutually acceptable system interconnect agreement and report the results of said activity to the city manager. Said report shall state each contacted operator's name, city, and response, list all programming activity available to city residents via such an interconnect agreement as well as list programming to similarly be transmitted from the city to the adjacent community and explain the substance of the governing business agreement reached with the other operators. (b) If an adjacent operator(s) "IS" responsive to the grantee's inquiry for noncommercial interconnect, the council must first approve all details, plans and other agreements before implementation of the interconnect. The council may approve such an agreement by resolution. (c) If an adjacent operator(s) "IS NOT" responsive to the grantee's inquiry, a letter report, stating that all reasonable attempts to gain an interconnect agreement were made but unsuccessfully, shall similarly be filed with the city. (d) In the case of adjacent new CATV systems constructed in surrounding communities after the city's system, a grantee shall have six (6) months after the new system becomes operational to make the required inquiries and attempt at an interconnect agreement. (e) In the case of adjacent CATV systems operated by the grantee, the grantee shall have two (2) years from acceptance of this franchise in which to provide a plan to - 16 - interconnect with the city's system, the implementation of which shall be mutually accepted and agreed to by the cities, except such other city's approval is waived where grantee certifies that it is not required in order to execute implementation of the plan, where such franchises operated by the grantee exist. (f) Revenue realized by the grantee, including any affiliate corporation indirect revenues from interconnection activity involving the city's CATV system shall be reported as gross receipts and will be subject to the current franchise fees. All affiliate corporation interconnect service agreement(s) revenue which includes the city's CATV system will be reported and the city's interconnect indirect system revenue will be calculated from the total affiliate corporation revenue based on the pro -rata share of grantee's subscribers to all interconnected systems subscribers or other amounts as approved by the council. 6 -28 System and Services Review. (a) On or about the third anniversary date of the franchise agreement and each three (3) years thereafter, the city and the grantee shall hold a system and services review session. The purposes of the review session shall be to study technological, economic and regulatory changes in cable communications; to assess cable system performance; to facilitate renewal procedures; to promote the maximum degree of flexibility in the cable system; and to maintain an advanced, modern, economically viable cable system. (b) Topics for discussion and review at the system and services review sessions may include, but are not limited to, new developments in technology; condition and operation of equipment and facilities; compliance with this ordinance and the franchise agreement; services provided to subscribers, institutions and community groups; programming; rate structure; market conditions; the financial condition of the grantee; subscriber complaints; user complaints; possible amendments to the franchise agreement; and developments in the law and regulation. Either the city or the grantee may select additional topics for discussion at any system and services review session. (c) Sixty (60) days prior to the scheduled system and services review, the grantee shall provide to the city the following reports: (1) All cable system services that are being provided on an operational basis, excluding tests and demonstrations, to cities in the United States with populations above ten thousand (10,000), or other such levels of population or numbers of subscribers as the city may establish from time to time, that are not provided to the city. (2) A plan for provision of such services, or a justification indicating why such services are not feasible for the franchise area. (3) The results of an opinion survey report which identify satisfaction or dissatisfaction among subscribers with cable communication services offered by the grantee. These surveys required to make said report shall be in a format mutually approved by the city and grantee. (4) Other reports documenting the grantee's compliance with the provisions of this ordinance and /or the franchise agreement as requested by the city in writing one hundred and twenty (120) days prior to the scheduled review. (d) The city and the grantee shall discuss new developments in technology and the desirability and feasibility of incorporating such new technological developments into the cable system. Technical factors, market conditions and economical viability shall be considered. The city and the grantee shall equally share the costs of any independent studies conducted by the mutual agreement of the parties. Either the city or the grantee may conduct its own studies at its own expense. (e) At the conclusion of such system and services review session, the city shall issue a report summarizing the discussions and setting forth its findings. The grantee shall submit to the city a plan and schedule for the implementation of any improvements mutually agreed by the city and the grantee. After mutual agreement to such plan and schedule by the city and the grantee, the franchise agreement shall be amended to incorporate the plan and schedule for improvement. 6 -29 Right to privacy of subscribers. (a) Each grantee shall strictly observe and protect the rights of privacy and of property of subscribers and users at all times. Information on individual subscribers, - 17 - individual subscriber preferences of any kind, viewing habits, political, social or economic philosophies, beliefs, creeds, religions or names, addresses or telephone numbers shall not be revealed to any person, governmental unit, police department, investigating agency, company, other agency or entity, unless upon the authority of a court of law, or upon prior written permissions of the subscriber. The request for permission must be contained in a separate document with a prominent statement that the subscriber is authorizing the permission in full knowledge of its provision. Such authorization shall not in any event be required as a condition of receiving service, and no such authorization shall be valid for more than one year. (b) A franchisee may release the number of its subscribers but only as a total number and as a percentage of the potential subscribers throughout the city. When indicating the number of subscribers viewing a particular channel at a particular time, franchisee shall indicate only the total number of subscribers viewing during the relevant time and the percentage of all subscribers which they represent, but never the identity of a particular subscriber. (c) A franchisee may maintain such information as is necessary to hill subscribers for the purchase of any system service. (d) Neither a franchisee nor any other person shall initiate in any form, the discovery of any information on or about a subscribers' premises without prior valid authorization from the subscriber potentially affected. (e) A subscriber may, at any time, revoke any authorization previously made, by delivering to franchisee in writing, by mail or otherwise, his /her decision to so revoke. Any such revocation shall be effective upon receipt by franchisee. (f) No monitoring of any subscriber terminal shall take place without specific prior valid authorization by the user of the terminal in question, provided, however, the franchisee may conduct systemwide or individually addressed "sweeps" for the purpose of verifying system integrity, security monitoring, and /or other addressable premium service implementation or verification which the subscriber has contracted. for. In no event shall residential aural or visual monitoring of any kind take place without a clear indication to the subscriber that such monitoring is taking place. (g) A grantee may, without prior subscriber approval, monitor those subscriber terminals which are connected to utility monitoring devices which measure utility usage and which have been first approved by the council. (h) Prior to implementation of any interactive subscriber response mechanism, the grantee must first demonstrate to the city manager that such a system can operate effectively and provide reasonable protection against any invasion of privacy. (i) A grantee shall not tabulate any test results, nor permit the use of the system for such tabulation, which would reveal the commercial product preferences or opinions of subscribers, members of their families or their invitees, licensees or employees, without prior valid authorization of the subscriber. (j) Each compilation, publication, tabulation or other dissemination of each piece of information made or permitted to be made in violation of this section shall be considered a misdemeanor. 6 -30 Miscellaneous provisions. (a) When not other prescribed herein, all matters herein required to be filed with the city shall be filed with the city clerk. (b) A grantee shall have no financial interest, directly or indirectly, in any TV or radio sales or repair business, nor shall a grantee or any of such persons accept or receive referral fees or gratuities from any such sales or repair business. Any violation of this paragraph, unknown to grantee, by an employee of a grantee who is not an officer shall not constitute a breach of this paragraph unless the grantee fails to discharge any such person upon discovery thereof. (c) Within one hundred and eighty (180) days following award of franchise or prior to the start of system construction, the grantee will establish and maintain a local business office within the city for the purposes of conducting its local activities. The grantee will also maintain a 24 -hour toll -free answering service for service - related problem calls, as well as separate toll -free telephone numbers for the system manager, the - 18 - 3`. sales /marketing department, and service department. A minimum of three (3) lines shall be maintained for service and, in the event the city determines through subscriber complaints that those are insufficient to meet current demands, grantee agrees to add such additional lines as may be deemed necessary by the city manager to provide prompt, efficient response to subscriber inquiries. All such telephone numbers indicated in this subsection shall be listed in directories of the telephone company serving the city, and be so operated that complaints and requests for repairs or adjustments may be received at anytime, day or night, seven (7) days a week. All complaints shall be acknowledged within twenty -four (24) hours of receipt. (d) In the event that: (1) a court of competent jurisdiction for any reason holds invalid or unenforceable any provision of this chapter, or any provision of a franchise granted pursuant hereto, which pertains to: (i) the fees and charges which are payable to the city in connection with a franchise, (ii) public access channels, (iii) use by the city, other governmental agencies or the public of CATV facilities to be supplied by a grantee, (iv) the institutional network and noncommercial services to be provided by a grantee, or (v) a grantee's commitment to provide support for local origination facilities and programming; and (2) the council reasonably determines that said provision was a material consideration to the granting of a franchise; and (3) a grantee cannot or will not voluntarily waive such invalidity or unenforceability and agree to continue to comply with the provisions hereof and of such franchise without regard to such holding, then the city and the grantee shall negotiate in good faith to so amend the applicable franchise agreement as to provide the city with alternate arrangements which are the substantial equivalent of those held invalid or unenforceable. If the parties have not reached agreement with respect thereto within sixty (60) days after the city requests such negotiations (or such longer period as the city may permit), at the option of the city, either: (1) the dispute will be submitted to an arbitrator pursuant to rules of the American Arbitration Association, who will determine what modifications of the franchise agreement are appropriate and whose decision shall be binding on the parties; or (2) the grantee shall immediately pay to a nonprofit organization designated by the council to promote and develop public- benefit use of the CATV system an amount reasonably determined by the council to represent the approximate equivalent monetary value to the city of the provision held invalid or unenforceable. 6 -31 Violations. (a) From and after the effective date of this chapter, it is unlawful for any person to establish, operate or to carry on the business of distributing to any persons in this city any television signals or radio signals by means of a CATV system unless a franchise thereafter has first been obtained pursuant to the provisions of this chapter, and unless such franchise is in full force and effect. (b) From and after the effective date of this chapter, it is unlawful for any person to construct, install or maintain within any public street in the city, or within any other public property of the city, or within any privately owned area within the city which has not yet become a public street but is designated or delineated as a proposed public street on an adopted general plan of arterial highways or on any tentative subdivision map approved by the city, and equipment or facilities for distributing any television signals or radio signals through a CATV system, unless a franchise authorizing such use of such street or property or area has first been obtained pursuant to the provisions of this chapter, and unless such franchise is in full force and effect. (c) It is unlawful for any person, firm or corporation to make any unauthorized connection, whether physically, electrically, acoustically, inductively or otherwise, with any part of a franchised CATV system within this city for the purpose of taking or receiving television signals, radio signals, pictures, programs, or sound. (d) It is unlawful for any person, firm or corporation to make any unauthorized connection, whether physically, electrically, acoustically, inductively or otherwise, with any part of a franchised CATV system within this city for the purpose of enabling himself or others to receive any television signal, radio signal, picture, program or sound, without payment to the owner of said system. (e) It is unlawful for any person, without the consent of the owner, to wilfully tamper with, remove or injure any cables, wires or equipment used for distribution of television signals, radio signals, pictures, programs or sound. re SECTION 2. Severability. Except as otherwise provided in Section 6 -36 (d)'"" as added to the Cypress City Code by Section 1 hereof, if any section, subsection, subdivision, sentence, clause, phrase or portion of this ordinance, or the application thereof to any person or place, is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance or its application to other persons or places. The City Council hereby declares that, with the aforesaid exception, it would have adopted this ordinance, and each section, subsection, subidivion, sentence, clause, phrase or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions, or the application thereof to any person or place, be declared invalid or unconstitutional. SECTION 3. The City Clerk is hereby authorized and directed to certify as to the passage of this ordinance and to give notice thereof by causing copies of this ordinance to be posted in three public places throughout the City. FIRST READ at a regular meeting of the City Council of the City of Cypress at a regular meeting held on the 14th day of May 1984, and finally adopted and ordered posted at a regular meeting of said Council on the 29th day of May 1984. ATTEST: CITY CL OF TH ITY CYPRESS • /e;1°t/14/11 MAYOR OF THE CITY OF CYPRESS I, Darrell Essex, City Clerk of the City of Cypress, do hereby certify that the foregoing ordinance was duly adopted at a regular meeting of the City Council of the City of Cypress held on the 29th day of May , 1984, by the following roll call vote: AYES: 5 COUNCILMEMBERS: Coronado, Kanel, Lacayo, Mullen and Partin NOES: 0 COUNCILMEMBERS: None ABSENT: 0 COUNCILMEMBERS: None CITY CLERK OF THF✓CITY OF CYPRESS