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Ordinance No. 4966 ORDINANCE NO. 496 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CYPRESS ESTABLISHING A PROCEDURE FOR THE GRANTING OF FRANCHISES FOR CABLE TELEVISION SYSTEMS. THE CITY COUNCIL OF THE CITY OF CYPRESS DOES ORDAIN AS FOLLOWS: SECTION 1 - Definitions For the purposes of this ordinance, 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) "City" shall mean the City of Cypress, a municipal corporation of the State of California, in its present incorporation form or in any later reorganized, consolidated, enlarged or re- incorporated form. (b) "City Engineer" shall mean the city engineer or any other person appointed to carry out any of the powers and duties assigned to the city engineer in this ordinance. (c) "City Manager" shall mean the city manager or any other person appointed to carry out any of the powers and duties assigned to the city manager in this ordinance. (d) "Council" shall mean the present governing body of the City of Cypress or any future board constituting the legislative body of the city. (e) "Franchise" shall mean and include any authorization granted hereunder in terms of a franchise, privilege, permit, license or otherwise to construct, operate and maintain a cable television system within all or a specified area in the city. Any such authorization, in whatever form granted, shall not mean and include any license or permit required for the privilege of transacting and carrying on a business within the city as required by other ordinances and and laws of this city. (f) "Person" shall mean any natural person and all domestic and foreign corporations, associations, syndicates, joint stock corporations, partnerships of every kind, clubs, business or common law trusts, and societies. (g) "Grantee" shall mean the person, firm or corporation granted a franchise by the council under this ordinance, and the lawful successor, transferee or assignee of said person, firm or cor- poration. (h) "Street" shall mean the surface, the air space above the surface and the area below the surface of any public street, other public right of way or public place, including public utility easements. (i) "Property of Grantee" shall mean all property owned, installed, or used within the city by a grantee in the conduct of a cable tele- vision system business under the authority of a franchise granted pursuant to this ordinance. (j) "Subscriber" or "User" shall mean any person or entity receiving for any purpose any service of the grantee's cable television system including, but not limited to, the conventional cable television system service of retransmission of television broadcast, radio signals, grantee's original cablecasting, and the local government, education and public access channels; and other services, such as leasing of channels, data and facsimile transmission, pay television, and police, fire and similar public service communication. (k) "Cable television system" and "CATV" for the purpose of this ordinance, 77 are terms describing a system employing antennae, micro -wave, wires, wave - guides, coaxial cables, or other conductors, equipment or facilities, designed, constructed or used for the purpose of: (1) collecting and amplifying local and distant broadcast television or radio signals and distributing and transmitting them; (2) transmitting original cablecast programming not received through television broadcast signals; (3) transmitting television pictures, film and video- tape programs, not received through broadcast television signals, whether or not encoded or processed to permit reception by only selected receivers; (4) transmitting and receiving all other signals: digital, voice and audio- visual: provided, however, that any of the services, permitted hereunder to be performed, as described above, shall be those performed by the grantee for subscribers, as herein defined, in the operation of a cable television or CATV system franchised by the city and not otherwise. (1) "Gross receipts," as used in the following categories, 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 or services furnished by the grantee imposed directly on any subscriber or user by a city, county, state or other governmental unit, and collected by the grantee for such entity. (m) "Gross Annual Basic Subscriber Receipts" shall mean any and all com- pensation and other consideration received directly or indirectly by the grantee from subscribers in payment of the regularly furnished service of the cable television system in the transmission of broad- cast television, radio signals and original cablecast programming of the grantee. (n) "Gross Annual Non -basic Service Receipts" shall mean any and all compensation and other consideration received directly or indirectly by the grantee from subscribers or users in payment for the receipt of signals other than broadcast television, radio, or original cable - cast programming of the grantee, whether for "pay television," "facsimile" transmission, "return" or "response" communication, and whether or not transmitted encoded or processed to permit reception by only selected subscribers. (o) "Gross Annual Advertising Receipts" shall mean any income, compen- sation and other consideration received by grantee derived from any form of advertising. (p) "Gross Annual Lease Receipts" shall mean any fees or income received by grantee for the lease or rental, and compensation for any service in connection therewith, such as studio and equipment rental and pro- duction costs, of any channel permitted or designated by the Federal Communications Commission to be so leased or rented. SECTION 2 - Franchise to install and operate. (a) A non - exclusive franchise to install, construct, operate, and maintain a cable television system on streets within all or a specific portion of the city may be granted by the council to any person, whether 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 ordinance. - 2 - No provision of this ordinance may be deemed or construed as to require the granting of a franchise when in the opinion of the council it is in the public interest to restrict the number of grantees to one or more. (b) When and in the event that the grantee of any franchise granted hereunder uses in his cable television 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 when- ever the term "grantee" is used herein it shall be deemed to mean and include "licensee." SECTION 3 - Cable television service. (a) Basic Service. The cable television system permitted to be installed and operated hereunder shall: (1) be operationally capable of relaying to subscriber terminals those television and radio broadcast signals for the carriage of which the grantee is now or hereafter authorized by the Federal Communications Commission; (2) be constructed with the potential of two -way digital signal transmission; (3) distribute color television signals which it receives in color; (4) provide at least one (1) channel, without charge, for exclusive use of the city; (5) provide at least one (1) channel each for those educational and public access uses as now or hereafter required by the Federal Communications Commission for systems operating in the top 100 markets; (6) have a minimum capacity of 20 channels; (7) include all necessary equipment and operational capacity for the emergency transmission of both audio and video signals from a location to be designated by the council or by the city engineer over all channels simultaneously. (b) Non -basic services. The cable television system permitted to be in- stalled and operated hereunder, may also engage in the business of: (1) transmitting original cablecast programming not received through television broadcast signals; (2) transmitting television pictures, film and video -tape programs, not received through broadcast television signals, whether or not encoded or processed to permit reception by only selected receivers or subscribers; (3) transmitting and receiving all other signals: digital, voice and audio - visual. - 3 - (c) Subscriber complaints. In addition to other service regulations adopted by the council, and excepting circumstances beyond grantee's control, such as natural disasters, riots and civil disturbances, and in providing the foregoing services, the grantee shall: (1) limit system failures to minimum time duration by locating and correcting malfunctioning promptly, but in no event longer than twenty -four (24) hours after occurrence, irrespective of holidays or other non- business hours; (2) upon complaint by a subscriber, make a demon- stration satisfactory to the city engineer that a signal is being delivered which is of sufficient strength and quality to meet the standards set forth in the regulations of the Federal Communications Commission, or in re- gulations hereafter adopted by the council; (3) render efficient service, making repairs promptly and interrupting service only for good cause and for the shortest time possible. Planned interruptions, insofar as possible, shall be preceded by notice given to subscribers twenty -four (24) hours in advance and shall occur during periods of minimum use of the system; (4) maintain an office in the city or in the general area, which office shall be open during all the usual business hours, with its telephone listed in directories of the telephone company serving the city, equipped with toll -free telephone service and be so operated that complaints and requests for repairs or adjustments may be received toll -free at any time, day or night, seven days a week. (5) maintain a written record, or "log," listing date of customer complaints, identifying the subscriber and describing the nature of the complaint, and when and what action was taken by grantee in response thereto; said record shall be kept at grantee's local office, for a period of five (5) years from the date when the system is first energized, and shall be available for inspection during regular business hours, without further notice or demand, by the city engineer. (d) Municipal service. (1) With respect to the local government channel, the grantee shall provide, at the request of the city engineer, and upon city reimbursement of grantee's actual cost, use of grantee's studio, equipment and technical services for production of live and video -tape municipal programs, subject to scheduling requirements of the grantee; (2) With respect to the basic television services, the grantee shall provide all subscriber services, and a tie -in connection, without cost, when the system passes such facilities and as designated by the council, to (1) public schools and community colleges within the city, and 4 80 (ii) buildings owned and controlled by the city, used for public purposes and not for resi- dential use (fire and police stations excepted). (e) Compatibility and connectibility. (1) It is the desire of the city that all cable television systems franchised hereunder shall, insofar as finan- cially and technically possible, be compatible one with another and with systems adjacent to the city. (2) Wherever it is financially and technically feasible, the grantee shall so construct, operate and modify the system so as to tie the same into all other systems within and adjacent to the city. (f) Uses permitted. Any franchise granted pursuant to the provisions of this ordinance shall authorize and permit the grantee to engage in the business of operating and providing a cable television system in the city, and for that purpose to install, construct, repair, replace, reconstruct, maintain and retain in, on, under, upon, across and along any street, such wires, cable, conductors, ducts, conduit, vaults, manholes, amplifiers, and appliances, attachments, and other property as may be necessary and appurtenant to the cable television 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 permitted to do business in the city. SECTION 4 - Franchise payments. (a) In consideration of the granting and exercise of a franchise to use the streets, as herein defined, for the operation of a cable television system, any grantee shall pay to the city, during the life of the franchise the following: (1) a percentage of its Gross Annual Basic Subscriber Receipts; (2) a percentage of its Gross Annual Non - basic Service Receipts; (3) a percentage of its Gross Annual Advertising Receipts; (4) a percentage of its Gross Annual Lease Receipts. (b) The percentage payments shall be made in the manner, amounts and at times directed in said franchise or in a council resolution fixing franchise fees and adopting rules for service and rate regulation. (c) The city shall have the right to inspect the grantee's revenue records under the franchise and the right of audit and recomputation of any and all amounts payable under this ordinance; the cost of said audit shall be borne by grantee when the same results in increasing, by more than 2 %, the grantee's annual payment to the city. (d) 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 or additional sums payable under this ordinance or for the performance of any other obligation hereunder. SECTION 5 - Franchise term: duration and termination. (a) The franchise granted by the council under this ordinance shall be for a term of fifteen (15) years from the date of its acceptance by the grantee. (b) The city may terminate any franchise granted pursuant to the provisions of this ordinance in the event of the willful failure, refusal or neglect by grantee to do or comply with any material requirement or limitation contained in this ordinance, or any material rule or regu- lation of the council or city engineer validly adopted pursuant to this ordinance. (c) The city engineer may make written demand that the grantee do or comply with any such requirement, limitation, term, condition, rule or regu- lation. If the failure, refusal or neglect of the grantee continues for a period of thirty (30) days following such written demand, the city engineer may place his request for termination of the franchise upon the next regular council meeting agenda. The city engineer shall cause to be served upon such grantee, at least ten (10) days prior to the date of such council meeting, a written notice of his intent, to request such termination, and the time and place of the meeting, notice of which shall be published by the city clerk at least once'.ten (10) days before such meeting in a newspaper of general circulation within the city. (d) The council shall consider the request of the city engineer and shall hear any persons interested therein, and shall determine, in its discretion, whether or not any failure, refusal or neglect by the grantee was with just cause. (e) If such failure, refusal or neglect by the grantee was with just cause, the council shall direct the grantee to comply within such time and manner and upon such terms and conditions as are reasonable. (f) If the council shall determine such failure, refusal or neglect by the grantee was without just cause, then the council may, by resolution, declare that the franchise of such grantee shall be terminated and forfeited unless there be compliance by the grantee within such period as the council may fix. (g) The termination and forfeiture of any franchise shall in no way effect any of the rights of the city under the franchise or any provision of law. (h) In the event of any holding over after expiration or other termination of any franchise granted hereunder, without the prior consent of the city, expressed by resolution, the grantee shall pay to the city reasonable compensation and damages, of not less than one hundred percent (100%) of its gross revenue during said period. SECTION 6 - Applications for franchise. (a) Each application for a franchise to construct, operate, or maintain any cable television systems in this city shall be filed with the city clerk and shall contain or be accompanied by the following: (1) The name, address, and telephone number of the applicant; (2) A detailed statement of the corporate or other business entity organization of the applicant, including but not limited to, the following and to whatever extent required by the city: (i) The names, residence and business addresses of all officers, directors, and associates of the applicant. (ii) The names, residence and business addresses of all officers, persons and entities having, controlling, or being entitled to have or control of 5% or more of the ownership of the applicant and the respective ownership share of each such person or entity. (iii) The names and addresses of any parent or subsidiary of the applicant, namely, any other business entity owning or controlling applicant in whole or in part or owned or controlled in whole or in part of the applicant, and a statement describing the nature of any such parent or subsidiary business entity, including but not limited to cable television systems owned or controlled by the applicant, its parent and subsidiary and the areas served thereby. (iv) A detailed description of all previous experience of the applicant in providing cable television system service and in related or similar fields. (v) A detailed and complete financial statement of the applicant, prepared by a certified public accountant, for the fiscal year next preceding the date of the application hereunder, or a letter or other acceptable evidence in writing from a recognized lending institution or funding source, addressed to both the applicant and the council, setting forth the basis for a study per- formed by such lending institution or funding source, and a clear statement of its intent as a lending institu- tion or funding source to provide whatever capital shall be required by the applicant to construct and operate the proposed system in the city, or a statement from a certified public accountant, certifying that the applicant has available sufficient free, net and uncommitted cash resources to construct and operate the proposed system in this city. (vi) A statement identifying, by place and date, any other cable television franchise(s) awarded to the applicant, its parent or subsidiary; the status of said franchise(s) with respect to completion thereof; the total cost of completion of such system(s); and the amount of applicant's and its parent's or subsidiary's resources committed to the completion thereof. (3) A detailed description of the proposed plan of operation of the applicant which shall include, but not be limited to, the following: (i) A detailed map indicating all areas proposed to be served, and a proposed time schedule for the instal- lation of all equipment necessary to become operational throughout the entire area to be served. (ii) A statement or schedule setting forth all proposed classifications of rates and charges to be made against subscribers and all rates and charges as to each of said classifications, including installation charges and service charges. (iii) A detailed, informative, and referenced statement describing the actual equipment and operational standards proposed by the applicant. In no event shall said operational and per- formance standards be less than those contained in Title 47, Subpart K (Sections 76.601 et seq.), Rules and Regu- lations, Federal Communications Commission, adopted Feb- ruary 2, 1972, and as amended. (iv) A copy of the form of any agreement, undertaking, or other instrument proposed to be entered into between the applicant and any subscriber. (v) A detailed statement setting forth in its entirety any and all agreements and undertakings, whether formal or informal, written, oral, or implied, existing or proposed to exist between the applicant and any person, firm, or corporation which materially relate or pertain to or depend upon the application and the granting of the franchise. (4) A copy of any agreement covering the franchise area, if existing between the applicant and any public utility subject to regulation by the California Public Utilities Commission providing for the use of any facilities of the public utility, including but not limited to lines or conduits. (5) Any other details, statements, information or references pertinent to the subject matter of such application which shall be required or requested by the council, or by any provision of any other ordinance or resolution of the city. (6) An application fee in the sum of One Thousand Five Hundred Dollars ($1,500), which shall be in the form of cash, certified or cashier's check, or money order, to pay the costs of studying, investigating, and otherwise processing such application, and which shall be in consideration thereof and not returnable or refundable in whole or in part, except to the extent that such fee exceeds the actual costs incurred by the city in studying, investigating and otherwise processing the application; provided, that any applicant who shall deliver to the city clerk a written withdrawal of or cancellation of any application hereunder, not later than the seventh (7th) day next following the day such application is received by the city clerk, shall be entitled to have returned and refunded the sum of One Thousand Dollars ($1,000), less any actual costs or expenses incurred by the city by reason of such application. (b) The council may, by advertisement or any other means, solicit and call for applications for cable television system franchises, and may determine and fix any date upon or after which the same shall be re- ceived by the city, or the date before which the same must be received, or the date after which the same shall not be received, and may make any other determinations and specify any other times, terms, conditions, or limitations respecting the soliciting, calling for, making and receiving of such applications. The grantee shall pay to the city a sum of money sufficient to reimburse it for all publication expenses incurred by it in con- nection with the granting of a franchise pursuant to the provisions of this ordinance. Such payment shall be made within thirty (30) days after the city furnishes the grantee with a written statement of such expenses. (c) Upon receipt of any application for refer the same to the city engineer make his recommendations respecting same to be completed and filed with days. franchise, the council shall who shall prepare a report and such application, and cause the the council within thirty (30) (d) In making any determination hereunder as to any application the council may give due consideration to the quality of the service proposed, rates to subscribers, income to the city, experience, character, background, and financial responsibility of any applicant, and its management and owners, technical and performance quality of equipment, willingness and ability to meet construction and physical requirements, and to 8.1 abide by policy conditions, franchise limitations and requirements, and any other considerations deemed pertinent by the council for safeguarding the interests of the city and the public. The council, in its discretion, shall determine the award of any franchise on the basis of such considerations and without competitive bidding. If the council shall determine to reject such application, such determination shall be final and conclusive, and the same shall be deemed rejected. (e) If the council shall determine to further consider the application, the following shall be done: (1) The council shall decide and specify the terms and conditions of any franchise to be granted hereunder and as herein provided. (2) The council shall pass its resolution of intention to consider the granting of such a franchise, giving notice of receipt of the application, and describing the character of the franchise desired, stating the name of the proposed grantee, the character of the franchise, the terms and conditions upon which such franchise is proposed to be granted, that copies of the pro- posed franchise may be obtained at the office of the city clerk, fixing and setting forth a day, hour and place certain when and . where any persons having any interest therein or objection to the granting thereof may file written protests and appear before the council and be heard, and directing the city clerk to publish said resolution at least once within ten (10) days of the passage thereof in a newspaper of general circulation within the city. (f) At the time set for the hearing, or at any adjournment thereof, the council shall proceed to hear all written protests. Thereafter, the council shall make one of the following determinations: (1) That such franchise be denied; or (2) That such franchise be granted upon the terms and conditions as specified in the resolution of intention to grant the same; or (3) That such franchise be granted, but upon the terms and condi- tions different from those specified in the resolution of intention to grant the same. (g) If the council shall determine that a franchise be denied such deter- mination shall be expressed by resolution and shall be final and conclusive. If the council shall determine that a franchise be granted upon the terms and conditions as specified in the resolution of intention to consider granting the same, such determination shall be expressed by ordinance granting a franchise to the applicant. If the council shall determine upon granting a franchise upon terms and conditions different from those specified in the resolution of intention to consider granting the same, then such determination shall be expressed by resolution adopted prior to granting a franchise by ordinance SECTION 7 - Bonds: Indemnifications; Insurance. (a) Performance Bond to City. Upon being granted a franchise, and upon the filing of the acceptance required under Section 8 hereof, the grantee shall file with the city clerk and shall thereafter, annually, during the entire term of such franchise, maintain in full force and effect a corporate surety bond or other adequate surety agreement in such amount and kind as shall have been approved by the council. The bond or agreement shall be so conditioned that in the event that grantee shall fail to comply with any one or more of the provisions of this ordinance or of such franchise, then there shall be recoverable jointly and severally from the principal and surety any damages or loss, or costs suffered or incurred by the city as a result thereof, including attorneys' fees and costs of any action or proceeding, and including the full amount of any compensation, indemnification, cost of removal or abandonment of any property or other costs which may be in default, up to the full principal amount of such bond. Said condition shall be a continuing obligation during the entire term of such franchise and thereafter until grantee shall have satisfied in full any and all obligations to the city which arise out of or pertain to said franchises Neither the provisions of this Section, nor any bond accepted by the city pursuant hereto, nor any damages, recovered by the city thereunder shall be construed to excuse faithful performance by the grantee, or limit the liability of the grantee under any franchise issued pursuant to this ordinance or for damages either to the full amount of the bond, or otherwise. (b) Performance Bond for Subscribers, Upon being granted a franchise, and upon filing of the acceptance required under Section 8 hereof, the grantee shall file, annually, with the city clerk and shall thereafter during the entire term of such franchise maintain in full force and effect a corporate surety bond, or other adequate surety agreement, in the amount as shall have been approved by the council, The bond or agree- ment shall be so conditioned that in the event such grantee shall fail to comply with any one or more of the provisions of any agreement or undertaking made between grantee and any subscriber, then there shall be recoverable jointly and severally from the principal and surety any damages or costs ,suffered or incurred by any subscriber as a result thereof, including reasonable attorneys' fees and costs of any action or proceeding, Said condition shall be a continuing obligation during the entire term; of such franchise and thereafter until grantee shall have satisfied in Mull any and all obligations to any subscriber which arise out of or pertain to any such agree- ment or undertaking, (c) Hold Harmless Agreement, Grantee shall indemnify and hold harmless the city, its officers, boards, commissions, agents, and employees, against and from any and all claims, demands, causes of actions, actions, suits, proceedings, damages (including but not limited to damages to city property and damages arising out of copyright infringements, and damages arising out of any failure by grantee to secure consents from the owners, authorized distributors or licensees of programs to be delivered by grantee's cable television system), costs or liabilities (including costs or liabilities of the city with respect to its employees), of every kind and nature whatsoever, including but not limited to damages for injury or death or damage to person or property, and regardless of the merit of any of the same, and against all liability to others, and against any loss, cost, and expense resulting or arising out of any of the same, including any attorney fees, accountant fees, expert witness or consultant fees, court costs, per diem expense, traveling and transportation expense, or other costs or expense arising out of or pertaining to the exercise or the enjoyment of any franchise hereunder by grantee, or the granting thereof by the city, (d) Defense of Litigation. Grantee shall at the sole risk and expense of grantee, upon demand of the city, made by and through the city attorney, appear in and defend any and all suits, actions, or other legal proceedings, whether judicial, quasi - judicial, administrative, legislative, or otherwise, brought or instituted or had by third persons or duly constituted authorities, against or affecting the city, its officers, boards, commissions, agents, or employees, and arising out of or pertaining to the exercise or the enjoyment of such franchise, or the granting thereof by the city. - 10 - 86 Grantee shall pay and satisfy or cause to be paid and satisfied any judgment, decree, order, .directive, or demand rendered,made or issued against grantee, the city, its officers, boards, com missions, agents, or employees arising out . of or pertaining t� the granting or exercise of such franchise; and such payment or satis- faction shall exist and continue without reference to or limitation by the amount of any bond, policy of insurance, deposit, undertaking or other assurance required hereunder, or otherwise; provided, that neither grantee nor city shall make'or enter into any compromise or settlement of any claim, demand, cause of action, action, or other proceeding arising out of or pertaining to the granting or exercise of such franchise, without first obtaining the written consent.of the other . (e) Insurance Required. Upon being granted a franchise, and upon the filing of the acceptance required under Section 8 hereof, the grantee shall file with the city clerk and shall thereafter during the entire term of-such franchise maintain in full force and effect at its own, cost, and expense each of the following policies of-insurance: (1) General Comprehensive Liability Insurance in the amount of One Million Dollars ($1,000,000), together with Bodily Injury Liability Insurance in an amount not less than Five Hundred Thousand Dollars ($500,000) for injuries including accidental death, to any one person, and subject to the same limit for each person in an amount not less than One Million Dollars ($1,000,000) on account of any one occurrence, and Property Damage Liability Insurance in an amount not less than One Million Dollars ($1,000,000) resulting from any one occurrence; provided, however, as follows: (i) The city shall be named as an additional insured in any of said insurance policies; and. (ii) Where such insurance is provided by a policy which also covers grantee or any other entity or person, it shall contain the standard cross- liability endorsement. SECTION 8 - Acceptance of the Franchise. (a) No.franchise granted under this ordinance shall become effective for any purpose unless and until written acceptance thereof shall have been filed with the city clerk. Written acceptance, which shall be in the form and substance approved by the city attorney, shall also be and operate as an acceptance of each and every term and condition and limitation contained in this ordinance, or in such franchise, or otherwise specified as herein provided. (b) The written acceptance shall be filed by the grantee not later than 12:01 o'clock P.M. of the fortieth (40th) day next following the effective date of the ordinance granting such franchise. (c) In default of the filing of such written acceptance as herein, re- quired, the grantee shall be deemed to have rejected and repudiated the franchise. Thereafter, the acceptance of the grantee shall not be received nor filed by the city clerk. The grantee shall have no rights, remedies, or redress in the premises, unless and until the council, by resolution, shall determine that such acceptance be received or filed, and then upon such terms and conditions as the council may impose. (d) In any case, and in any instance, all rights, remedies and redress in these premises which may or shall be available to the city, shall at all times be available to the city, and shall be preserved and maintained and shall continuously exist in and to the city, and shall not be in any manner or means modified, abridged, altered, restricted, or impaired by reason of any of these premises, or otherwise. 8% (e) Any franchise granted and accepted under this ordinance shall be in lieu of any and all other rights, privileges, powers, immunities and authorities owned, possessed, controlled, or exercisable by the grantee, of or pertaining to the construction, operation, or main- tenance of any cable television systems in the city. SECTION 9 - Limitations of Franchise. (a) Every franchise granted under this ordinance shall be non - exclusive. (b) No privilege or exemption shall be granted or conferred by any franchise granted under this ordinance except those specifically prescribed herein. (c) Any privilege claimed under any such franchise by the grantee in any street or other public property shall be subordinate to any prior lawful occupancy of the streets or other public property. (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 prior consent of the council expressed by resolution, and then only under such conditions as may therein be prescribed. Any such transfer or assignment shall be made only by an instrument in writing, such as a bill of sale, or similar document, a duly exe- cuted copy of which shall be filed in the office of the city clerk within thirty (30) days after any such tranfer or assignment. The said consent of the council may not be unreasonably refused; provided, however, the proposed assignee must show financial responsibility as determined by the council and must agree to comply with all provisions of this ordinance, and provided, further, that no such consent shall be required for a transfer in trust, mortgage, or other hypothecation, in whole or in part, to secure an indebtedness except that when such hypothecation shall exceed 50% of the market value of the property used by the franchisee in the conduct of the cable television system, prior consent of the council shall be required for such a transfer. Such consent shall not be withheld unreasonably. In the event the grantee is a corporation, prior approval of the city council, expressed by ordinance, shall be required where there is an actual change in control or where ownership of more than 50% of the voting stock of grantee is acquired by a person or group of persons acting in concert, none of whom already own 50% or more of the voting stock, singly or collectively. Any such acqui- sition occurring without prior approval of the city council shall constitute a failure to comply with a provision of this ordinance within the meaning of Section 5 of this ordinance. (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 ordinance 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 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 ordinance or of any franchise issued here- under or because of its enforcement. (h) The grantee shall be subject to all requirements of city laws, rules, regulations, and specifications heretofore or hereafter enacted or established. - 12 - LI 88 (i) Any such franchise granted shall not relieve the grantee of any obligations involved in obtaining conduit space from any department of the city, or from any utility company, or from others maintaining utilities in streets. (j) Any franchise granted hereunder, shall be in lieu of any and all other rights, privileges, powers, immunities, and authorities owned, posses- sed, controlled, or exercisable by grantee, or any successor to any interest of grantee, of or pertaining to the construction, operation, or maintenance of any cable television system in the city; and the acceptance of any franchise hereunder shall operate, as between grantee and the city, as an abandonment by grantee of any and all of such rights, privileges, powers, immunities, and authorities within the city; and all construction, operation and maintenance by any grantee of any cable television 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 right, privilege, power, immunity, or authority whatsoever. SECTION 10 - 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 the grantee, either by purchase or through the exercise of the right of eminent domain, at a fair and just value, which shall not include any amount for the franchise itself or for any of the rights or pri- vileges granted, and nothing herein contained shall be construed to contract away or to modify or abridge, whether for a term or in per- petuity, the city's right of eminent domain. (b) There is hereby reserved to the city every right and power which is required to be herein reserved or provided by any law, and the grantee, by its acceptance of the 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 estab- lished. (c) There is hereby reserved to the city the power to amend any section of this ordinance so as to require additional or greater standards of construction, operation, maintenance or otherwise, on the part of the grantee to reflect technical and economic changes occuring during the franchise term, and to enable the city and the grantee to take advantage of new developments in the cable television industry so as to more effectively, efficiently and economically serve the public. (d) 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. (e) The council may do all things which are necessary and convenient in the exercise of its jurisdiction under this ordinance and may determine any question of fact which may arise during the existence of any franchise granted hereunder. The city manager, with the approval of the city attorney, is hereby authorized and empowered to adjust, settle, or compromise any controversy or charge arising from the operations of any grantee under this ordinance, either on behalf of the city, the grantee, or any subscriber, in the best in- terest 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 con- troversy or cancel any charge arising from the operations of the grantee or from any provision of this ordinance. - 13 - SECTION 11 - Council to adopt rules and regulations, (a) Standards of Operation (1) Prior to receiving any applications for franchises, the council may adopt rules, regulations and standards governing the operation of cable television systems in the city. Such rules, regulations and standards shall apply to and shall govern the operations of the grantee of any franchise hereunder, and are expressly declared a part of any franchise hereunder. (2) Rules, regulations and standards not adopted prior to receiving any application for a franchise shall be adopted by the council at the first regular meeting of the council next following the effective date of this ordinance, by resolution which shall become effective upon adoption and shall be applicable to any application for a franchise previously received. (3) The standards adopted shall govern the engineering, construction, installation, service, and maintenance of all cable television systems in the city, including but not limited to standards governing carrier levels, signal -to -noise ratios, hum modulation, distortion levels, channel interactions and inter - reactions. (4) The council may at any time adopt new rules or regulations or standards, or may amend, modify, delete, or otherwise change its respective rules or regulations or standards previously adopted, in the following manner, provided the same do not materially alter the content of the franchise without consent of the grantee. The council shall pass its resolution of intention stating or describing the rules or regulations or standards to be adopted, amended, modified, deleted, or otherwise changed, and fixing and setting forth a day, hour, and place certain when and where any persons having any interest therein or objection thereto may appear before the council and be heard. Such resolution shall direct the city clerk to publish the same at least once within ten (10) days of the passage thereof in a newspaper of general circu- lation within the city, and to mail a copy of the same to any grantee or applicant for a franchise, not more than thirty (30) days nor less than fifteen (15) days prior to the time fixed for hearing thereon. At the time set for such hearing, or at any adjournment thereof, the council shall proceed to hear and pass upon such comments as may be presented. Thereafter, the council, by its resolution, may adopt, amend, modify, delete, or other- wise change its respective rules, regulations and standards. Such determination by the council shall be final and conclusive. Any rule or regulation or standard as adopted, amended, modi- fied, deleted, or otherwise changed by the council shall become effective upon the tenth (10th) day following the adoption of such resolution, unless a longer period shall be otherwise provided in such resolution. (b) Rates (1) Prior to granting any franchise hereunder the council, by resolution, shall establish and fix all rates and charges for the Basic Service, herein defined, allowable to grantee, such as: (i) charges for installation; - 14 - a (ii) subscriber rates; (iii) service charges for separate classifications of service (e.g., additional connections, etc.) Once established, such rates or charges shall not be changed at any time after granting of a franchise, except after due notice and hearing as provided herein. (2) Rates and charges for services, other than the Basic Service, shall also be approved by the council by resolution, after due notice and hearing as provided herein. (3) In connection with any proposed change of any rates or charges of grantee to subscribers initiated by grantee, or the approval of rates for additional services, at any time after the granting of a franchise, the council may direct the city manager of the city to conduct a preliminary hearing into the matter. If so directed by the council, the city manager shall issue his written notice fixing and setting forth the day, hour, and place certain when and where any persons having any interest therein may appear and be heard. The city clerk shall cause such notice to be published in a newspaper of general circulation within the city. The city clerk also shall cause a copy of such notice to be mailed to any grantee at least ten (10) days prior to the date specified for the hearing. At the time set for such hearing, or at any adjournment thereof, the city manager shall proceed to hear the matter. Following the close of such hearing, the city manager shall prepare and file with the city council his report of the hearing, his findings and an opinion con- taining his recommendations and the reasons therefore. After the expiration of ten (10) days following receipt of the city manager's report and opinion, and if no objection has been filed thereto, the council shall determine whether to adopt the opinion or to hold a further hearing, and shall pass its resolution of intention to do so, describing and stating any rates or charges to be changed, the reasons of the council therefor, fixing and setting forth a day, hour, and place certain when and where any persons having any interest therein may appear before the council and be heard. Such resolution shall direct the city clerk to publish the same resolution at least once within ten (10) days after the passage thereof in a newspaper of general circulation within the city. The city clerk also shall cause a copy of such resolution to be mailed to the grantee at least ten (10) days prior to the date specified for hearing thereon. At the time set for further hearing, or at any adjournment thereof, the council shall proceed to hear the matter. If upon recipt of the city manager's report and opinion, and the expiration of said ten (10) days without objection, or following the holding of a further hearing, if the council determines to do so, the council shall find that the changing of any rates or charges of grantee to subscribers will be fair to the system operator and not detrimental or injurious to the best interests and welfare of the subscribers and users, and of the city, then the council, by resolution, shall authorize the change of rates or charges of grantee to subscribers and users as determined. Such resolution shall thereupon become and shall be a part of any franchise granted hereunder and affected thereby. - 15 - LI (4) Neither the council nor the grantee shall, as to rates, charges, service, service facilities, rules, regulations, or in any other respect, make or grant any preference or advantage to any person, nor subject any person to prejudice or disadvantage. SECTION 12 - Permits and construction. (a) Within thirty (30) days after acceptance of any franchise, the grantee shall 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 attachment agree- ments, microwave carrier licenses, and any other permits, licenses and authorizations to be granted by duly constituted regulatory agencies having jurisdiction over the operation of cable television systems, or associated micro -wave transmission facilities. In connection therewith, copies of all petitions, applications and communications submitted by the grantee to the Federal Communications Commission, Securities and Exchange Commission, or any other federal or state regulatory commission or agency having jurisdiction in respect to any matters affecting grantee's cable television operations, shall also be submitted simultaneously to the city manager. (b) Within ninety (90) days after obtaining all necessary permits, licenses and authorizations, including right of access to conduits, grantee shall commence construction and installation of the cable television system. (c) Within one hundred eighty (180) days after the commencement of construction and installation of the system, grantee shall proceed to render service to subscribers, and the completion of the installation and construction shall be pursued with reasonable diligence thereafter, so that service to all of the areas designated and scheduled on the map and plan of construction made part of the franchise shall be provided as set forth therein. (d) Failure on the part of the grantee to commence and diligently pursue each of the foregoing requirements and to complete each of the matters set forth herein, shall be grounds for termination of such franchise. By resolution, the council, in its discretion, may extend the time for the commencement and completion of instal - lation and construction for additional periods in the event the grantee, acting in good faith, experiences delays by reason of circumstances beyond his control. By acceptance of the franchise granted hereunder, grantee agrees that failure to comply with any time requirements referred to in subsections (a), (b) and (c) of this section will result in damage to the city, and that it is and will be impracticable to determine the actual amount of such damage in the event of delay; and grantee therefore agrees that, in addition to any other damage suffered by the city, he will pay to the city the sum of One Hundred Dollars ($100) per day for each and every day's delay beyond the time prescribed, plus authorized extensions thereof, for completion of any of the acts required to be done by this section. (e) Grantee shall utilize existing conduits and other facilities whenever possible, and shall not construct or install any new, different, or additional conduits, or other facilities whether on public property or on privately -owned property unless and until first securing the . written approval of the city engineer. Whenever grantee shall not utilize existing conduits and other facilities, or whenever existing conduits and other facilities shall be located beneath the surface of the streets, or whenever the city shall undertake a program designed to cause all conduits and other facilities to be located beneath the surface of the streets in an area or throughout the city, in the exercise of its police power or pursuant to the terms hereof, upon reasonable notice to grantee, any such conduits - 16 - 9" ti (f) or other facilities of grantee shall be constructed, installed, placed, or replaced beneath the surface of the streets, any construction, installation, placement, replacement,, or changes which may be so required shall be made at the expense of grantee, whose costs shall be determined as in the case of public utilities. Prior to the commencement of any construction or installation re- lating to any franchise granted under this ordinance, the grantee shall file plans drawn to a suitable scale showing the location and details of such proposed construction or installation for the approval of the city engineer, who shall approve such plans prior to the commencement of such construction or installation. Such construction or installation shall be subject to the inspection of the city engineer at all reasonable times and shall be performed to his reasonable satisfaction. Such construction or installation shall be performed so as to avoid sewers, water pipes, conduits and other structures lawfully in or under the city streets, and the city engineer shall give the grantee directions reasonably necessary for the avoidance of such sewers, water pipes, conduits and other struc- tures. Such construction or installation shall also be performed so that all vaults, manhole covers and other coverings in the streets shall be flush with the street surfaces, provided, however, that certain of the grantee's facilities may extend above the street level if they are not located in the sidewalks or in that part of the street designed for motor vehicle travel and the prior written approval of the city engineer is obtained. (g) The city shall have the right, free of charge, to make additional use, for any public or municipal purpose, whether governmental or proprietary, of any conduits or other similar facilities controlled or maintained exclusively by or for grantee in any street, provided such use by city does not interfere with the use by grantee. (h) In those areas of the city where the transmission or distribution facilities of the respective public utilities providing telephone, communication and electric services are underground, or hereafter are placed underground, the grantee likewise shall construct, operate and maintain all of his transmission and distribution facilities underground. The term "underground" shall include a partial under- ground system; provided, that upon obtaining the written approval of the city engineer, amplifiers in the grantee's transmission and distribution lines may be placed in appropriate housing upon the surface of the ground. (i) (j) The grantee at his expense shall protect, support, temporarily disconnect, relocate, or remove any property of grantee when, in the opinion of the city engineer the same is required by reason of traffic conditions, public safety, street vacation, freeway or street construction, change or establishment of street grade, installation of sewers, drains, waterpipes, power line, signal line, transportation facilities, tracks, or any other types of structure or improvements by governmental agencies whether acting in a governmental or a pro- prietary capacity, or any other structure or public improvement, in- cluding but not limited to movement of buildings, urban renewal and redevelopment, and any general program under which the city shall undertake to cause all such properties to be located beneath the surface of the ground. The grantee shall in all cases have the privilege, subject to the corresponding obligations, to abandon any property of grantee in place, as herein provided. Nothing hereunder shall be deemed a taking of the property of grantee, and grantee shall be entitled to no surcharge by reason of anything hereunder. Upon the failure, refusal, or neglect of grantee to cause any work or other act required by law or hereunder to be properly completed in, on, or under any street within any time prescribed therefor, or upon notice given, where no time is prescribed, the city engineer may cause such work or other act to be completed in whole or in part, and upon so doing shall submit to grantee an itemized statement of the costs thereof. The grantee shall, within thirty (30) days after receipt of such statement, pay to the city the entire amount thereof. - 17 - (k) In the event that, (1) The use of any part of the system of grantee is dis- continued for any reason for a continuous period of thirty (30) days, without prior written notice to and approval by the city; or (2) Any part of such system has been installed in any street or other area without complying with the requirements hereof; or (3) Any franchise shall be terminated, cancelled, or shall expire, then the grantee shall, at the option of the city, and at the expense of grantee and at no expense to the city, and upon demand of the city, promptly remove from any streets or other area all property of grantee, and grantee shall promptly restore the street or other area from which such property has been removed to such condition as the city engineer shall approve. The council may, upon written application therefor by grantee, approve the abandonment of any of such property in place by grantee and under such terms and conditions as the council may prescribe. Upon abandonment of any such property in place, grantee shall cause to be executed, acknowledged, and deli- vered to the city such instruments as the city attorney shall prescribe and approve, transferring and conveying the ownership of such property to the city. SECTION 13 - Miscellaneous provisions. (a) A franchise granted to provide service within the city shall authorize and permit the grantee to solicit, sell, distribute, and make a charge to subscribers within the city for connection to the cable television system of grantee, and shall also authorize and permit the grantee to traverse any portion of the city in order to provide service outside the city. (b) A franchise, easement, license or other permit granted to anyone other than the grantee to traverse any portion of the city in order to provide service outside the city shall not authorize nor permit said person to solicit, sell, distribute, or make any charge to subscribers within the city, nor to render any service or connect any subscriber within the city to the cable television service system of grantee. (c) No franchise granted under this ordinance shall ever be given any value by any Court or other authority, public or private, in any proceeding of any nature or character, wherein or whereby the city shall be a party or affected therein or thereby. (d) Grantee shall be subject to all provisions of the other ordinances, rules, regulations, and specifications of the city heretofore or hereafter adopted, including but not limited to those pertaining to works and activities in, on, over, under and about streets. Any privilege claimed under any franchise granted pursuant to this ordinance in any street or other public property shall be subordinate to any prior lawful occupancy of the streets or other public property. Grantee also shall be subject to the provisions of general laws of the State of California, or as hereafter amended, when applicable to the exercise of any privilege contained in any franchise granted under this ordinance, including but not limited to those pertaining to works and activities in and about state highways. - 18 - 94 (e) Grantee shall be prohibited from directly or indirectly doing any of the. following: (f) (1) engaging in the business of selling at retail, leasing, renting, repairing or servicing of television sets or radios; (2) imposing a fee or charge for any service or repair to sub- scriber -owned receiving devices except for the connection of its service or for the determination by grantee of the quality of its signal to the recipients thereof;. soliciting, referring, or causing or permitting the solicitation or referral of any subscriber to persons engaged in any business herein prohibited to be engaged in by grantee; (3) (4) providing information concerning the viewing patterns of iden- tifiable individual subscribers to any person, group or organi- zation for any purpose. If the Federal Communications Commission or the Public Utilities Commission of the State of California or any other federal or state body or agency shall now or hereafter exercise any paramount juris- diction over the subject matter of any franchise granted under this ordinance, then to the extent such jurisdiction shall preempt or preclude the exercise of like jurisdiction by the city the jurisdiction of the city shall cease and no longer exist. The preemption or preclusion of the exercise by the city of any of its police power shall not diminish, impair, alter, or affect any contractual benefit to the city or grantee or any contractual obli- gation of the grantee under any franchise issued hereunder. Any and all minimum standards governing the operation of grantee and any and all maximum rates, ratios, and charges specified herein or in any franchise issued hereunder, existing now and at any time in the future, including such time as any paramount jurisdiction shall preempt or preclude that of the city, and any and all rights, powers, privileges, and authorities of the city to determine, establish, or fix any of the same, are each and all hereby declared by the city and by any grantee accepting any franchise hereunder to be contractual in nature and to be for the benefit of the city. (g) When not otherwise prescribed herein, all matters herein required to be filed with the city shall be filed with the city clerk. (h) No person, firm or corporation within the service area of the grantee, and where trunk lines are in place, shall be refused service; provided, however, that the grantee shall not be required to provide service to any subscriber who does not pay the applicable connection fee or service charge. (i) Before providing cable television service to any subscriber, the grantee shall provide a written notice to the subscriber substan- tially as follows: "Subscriber is hereby notified that in providing cable television service the grantee is making use of public rights -of -way within the City of Cypress and that the continued use of such rights - of -way is in no way guaranteed. In the event the . continued use of such rights -of -way is denied to grantee for any reason, grantee will make every reasonable effort to provide service over alternate routes. By accepting cable television service, subscriber agrees he will make no claim nor undertake any action against the City of Cypress, its officers, or its employees if the service to be provided hereunder is interrupted or dis- continued." - 19 - (j) The form of the grantee's contract with the subscriber shall also be subject to approval of the city. SECTION 14 - Equal opportunity employment and affirmative action plan. In the carrying out of the construction, maintenance and operation of the cable television system, the grantee shall not discriminate against any employee or. applicant for employment because of race, creed, color, sex, or national origin. Grantee shall take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, creed, color, sex, or national origin. Such action shall include, but not be limited to, the following: employment, upgrading, demotion or transfer, recruitment or recruitment advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. The grantee shall post in conspicuous places, available to employees and applicants for employment, notices setting forth the provisions of this non - discrimination clause. The grantee shall, in all solicitations or advertisements for employees placed by or on behalf of the grantee, state that all qualified applicants will receive consideration for employment without regard to race, creed, color, sex, or national origin. The grantee shall incorporate the foregoing requirements in all of its contracts for work relative to construction, maintenance and operation of the cable television system, other than contracts for standard commercial supplies or raw materials, and shall require all of its contractors for such work to incorporate such requirements in all subcontracts for such work. SECTION 15 - Violations (a) From and after the effective date of this ordinance, it shall be 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 any tentative subdivision map approved by the city, any equipment or facilities for distri- buting any television signals or radio signals through a cable television system, unless a franchise authorizing such use of such street or property or area has first been obtained pursuant to the provisions of this ordinance, and unless such franchise is in full force and effect. (b) It shall be unlawful for any person, firm or corporation to make or use any unauthorized connection whether physically, electrically, acoustically, inductively or otherwise, with any part of a franchised cable television system within this city for the purpose of enabling himself or others to receive or use any television signal, radio signal, picture, program or sound, without payment to the owner of said system. (c) It shall be unlawful for any person, without the consent of the owner, to wilfully tamper with, remove or injure any cables, wires or equip- ment used for distribution of television signals, radio signals, pictures, programs or sound. SECTION 16 - Severability. If any section, subsection, sentence, clause or phrase of this ordinance is for any reason held illegal, invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions hereof. The council hereby declares that it.would have passed this ordinance and each section, subsection, sentence, clause, and phrase hereof, irrespective of the fact that any - 20 - 96 one or more sections, subsections, sentences, clauses, or phrases be declared illegal., invalid or unconstitutional. The invalidity of any portion of this ordinance shall not abate, reduce or otherwise affect any consideration or other obligation required of the grantee of any franchise granted hereunder. SECTION 17 - Effective Date. This ordinance shall become effective thirty (30) days from and after its passage. PASSED AND ADOPTED by the City Council of the City of Cypress at a regular meeting held on the 27th day of November, 1972. ATTEST: CITY Cf ERK OF THE CITY O CYPRESS STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS 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 said City Council held on the 27th day of November, 1972, by the following roll call vote: AYES: 5 COUNCILMEN: Frankiewich, Harvey, Kanel, Roberts and Lacayo NOES: 0 COUNCILMEN: None ABSENT:0 COUNCILMEN: None rf%./ CITY CLERK OF THE 0 CI C OF CYPRESS