HomeMy WebLinkAboutOrd 468 Authorizing a Verizon GTE Southwest Franchise AgreementTOWN OF WESTLAKE
ORDINANCE NO. 468
AN ORDINANCE OF THE TOWN OF WESTLAKE AUTHORIZING THE TOWN
MANAGER TO EXECUTE, ON BEHALF OF THE TOWN, A CABLE TELEVISION
FRANCHISE WITH GTE SOUTHWEST, INC. d/b/a VERIZON SOUTHWEST FOR
THE PURPOSE OF CONSTRUCTING, MAINTAINING, OPERATING AND USING A
CABLE SYSTEM IN THE PUBLIC STREETS, ALLEYS, AND PUBLIC RIGHTS-OF-
WAY IN THE TOWN OF WESTLAKE, TEXAS, IN ACCORDANCE WITH THE
AUTHORITY GRANTED IN THIS ORDINANCE.
WHEREAS, The following statements are true and correct and constitute the basis
upon which the Board of Aldermen of the Town of Westlake (referred to as either the "Town",
or "LFA", as the Local Franchising Authority pursuant to federal law) may pass, approve and
adopt this Ordinance; and
WHEREAS, GTE Southwest, Inc. d/b/a Verizon Southwest (the "Franchisee") wishes to
construct a cable television system and to provide Cable Service and services in the Town of
Westlake; and
WHEREAS, the Town Manger has reviewed the terms and conditions of the agreement
covering the Town's grant of the franchise to the Franchisee, as described with greater
specificity below; and
WHEREAS, the Town Manger has recommended to the Board of Aldermen that it adopt
an Ordinance authorizing the Town Manager to execute the Franchise on behalf of the Town;
and
WHEREAS, the Ordinance shall be published as may be required by State law; and
WHEREAS, upon passage, approval and adoption of this Ordinance, and after
publication, as may be required, and written acceptance by the Franchisee, the Town Manager
may execute the Franchise on behalf of the Town, which Franchise shall include the terms and
conditions as described herein; and
WHEREAS, as set forth herein, the terms and conditions of the Franchise are provided
for summary purposes only and are limited in their entirety by the actual terms and conditions of
the Franchise to be entered into by and between the Town and the Franchisee; capitalized terms
not otherwise defined herein shall have the same meaning as set forth in the Franchise.
NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF ALDERMEN OF THE
TOWN OF WESTLAKE, TEXAS:
SECTION 1: The Town Manger recommended that the Board of Aldermen adopt an
Ordinance authorizing the Town Manager to execute on behalf of the Town a Franchise with
Franchisee, which Franchise shall include the following terms and conditions:
(a) Franchisee shall provide Cable Service and services as described in the
Franchise;
(b) the Franchise shall govern the construction, expansion, use,
reconstruction, excavation, maintenance, operation, and removal of the
Cable System by Franchisee;
(e) the term of the Franchise shall be fifteen (15) years;
(d) Franchisee shall extend the Cable System and make Cable Service and
other services available in the Service Area within twelve (12) months
from the date of the Town's adoption of the Franchise, subject only to the
acceptance as provided in the franchise;
(e) Franchisee shall obtain and maintain in full force and effect for the term of
the Franchise insurance meeting certain minimum coverage standards;
(f) the Cable Service shall include three (3) Educational, and Governmental
Access Channels, one of which shall allow live cablecasting from Town
Hall upon request as provided for in the Franchise;
(g) subject to certain limitations as provided for in the Franchise, Franchisee
shall make Cable Service available for free to each fire station, school,
police station, public library, Town Hall and municipal office building
within the Service Area;
(h) Franchisee shall pay to the Town on a quarterly basis a franchise fee in the
amount of five percent (5%) of Franchisee's Gross Revenue for the
privileges conferred to Franchisee under the Franchise as provided for in
the Franchise;
(i) neither the Franchise may be sold, resold, assigned, transferred or
conveyed by Franchisee without the prior written consent of the Town, as
provided for in the Franchise;
0) Franchisee shall agree to abide by Customer Service Standards; and
(k) Franchisee shall provide the Town with written acceptance of the
Franchise in accordance with its terms.
SECTION 2: Upon publication of this Ordinance as may be required by State law, and
written acceptance of the Franchise by Franchisee, the Board of Aldermen hereby authorizes the
Town Manager to execute on behalf of the Town and with Franchisee a Franchise having the
terms and conditions as described generally herein and more specifically in the Franchise.
SECTION 3: This Ordinance shall be in full force and effect as provided for by State
law.
PASSED AND ADOPTED this the 10`x' day of January 2005.
ATTEST:
r
Ging i�rosswy, Town Sec y
APPROVED AS TO LEGAL FORM:
i�F4� "I
Z0144"Ad-e:�i
Scott Bradley, Mayor
Trent O. Petty, Town Manager
Cable Franchise Agreement
by and between
Town of Westlake, Texas
and
GTE Southwest, Inc. d/b/a/ Verizon Southwest
Dated:-3c—'t' , 2005
Table of Contents
LDEFINITIONS
................................................................................................................ —4
2.
GRANT OF AUTHORITY; LIMITS AND RESERVATIONS .......................................
8
3.
PROVISION OF CABLE SERVICE..............................................................................
10
4.
SYSTEM OPERATION..................................................................................................
12
- . 5.
CABLE. SYSTEM ............................................................................................................
12
6.
EG.SERVICES.........................................................................................................---..,..13
7.
FRANCHISE FEES.........................................................................................................
15
S. .
CUSTOMER SERVICE..................................................................................................
lb
9.
REPORTS AND RECORDS............................................................................................1f
10.
INSURANCE AND INDEMNIFICATION....................................................................
17
I.1, -
TRANSFER .OF. FRANCHISE ........................................................................................19
12.
RENEWAL OF FRANCHISE .................................
11
ENFORCEMENT AND TERMINATION OF FRANCHISE........................................19
.14....
MISCELLANEOUS PROVISIONS............................................................................ ...22
. 15.
PUC WAIVER.................................................................................................................
24
EXHIBITS
Exhibit A: Service Area
Exhibit B: LFA Initial Designation of Municipal Buildings to be Provided Free Cable Service
Exhibit C: Customer Service Standards
Exhibit D: Franchise Fee Schedule/Report
2
THIS CABLE FRANCHISE AGREEMENT (the "Franchise" or "Agreement") is entered into by
and between the Town of Westlake, a duly organized City under the applicable laws of the State
of Texas (the Local Franchising Authority or "LFA") and GTE Southwest, Inc. d/b/a Verizon
Southwest, a corporation duly organized under the applicable laws of the State of Texas (the
"Franchisee").
WHEREAS, LFA wishes to grant Franchisee a nonexclusive franchise to construct,
install, maintain, extend and operate a cable communications system in the Franchise Area as
designated in this Franchise;
WHEREAS, LFA is a "franchising authority" in accordance with Title VI of the
Communications Act {see .47 U.S.C. §522(10)) and is authorized to grant one or more
nonexclusive cable franchises;
-WHEREAS, Franchisee has installed a Fiber to the Premise Telecommunications
Network (`"FTTP Network" as further defined below) in the Franchise Area for the transmission
of Non -Cable Service;
WHEREAS ' -the-FTTP Network will occupy the Public Rights -of -Way within LFA, and
Franchisee desires to use portions of the FTTP Network optical spectrum or fixture technological
capacity once installed to provide Cable Service (as hereinafter defined) in the Franchise Area;
WHEREAS, LFA has considered the criteria for awarding an additional competitive
cable franchise under 47 U.S.C. §541 (a), which cable franchise is required by 47U.S.C. §541
(b)(1);
WHEREAS, LFA has found Franchisee to have provided adequate assurances as may be
required under 47 U.S.C. §541 (a)(4)(C);
WHEREAS, LFA has determined that the grant of a nonexclusive franchise to Franchisee
is consistent with the public interest; and
WHEREAS, LFA and Franchisee have reached agreement on the terms and conditions
set forth herein and the parties have agreed to be bound by those terms and conditions.
NOW, THEREFORE, in consideration of LEA's grant of a franchise to Franchisee,
Franchisee's promise to provide Cable Service to residents of the Franchise/Service Area of
LFA, pursuant to the terms and.conditions set forth herein, the promises and undertakings herein.,
and other good and valuable consideration, the receipt and the adequacy of which are hereby
acknowledged,
THE SIGNATORIES DO HEREBY AGREE AS FOLLOWS:
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DEFINITIONS
Except as otherwise provided herein, the definitions and word usages set forth below are
incorporated herein and shall apply in this Agreement.
1.1. Access Channel: Channel capacity, which Franchisee shall make available
to LFA without charge for educational or governmental use for the transmission of video
programming as directed by LFA to the extent authorized by 47 U.S.C. §531.
1.2. Affiliate: Shall be defined herein as it is defined in Section 602(2) of the
Communications Act, 47 U.S.C. §522(2).
1.3. . Basin Service: Any service tier, which includes the retransmission of local
television broadcast signals as well as the EG Channels required by this Franchise.
1.4. Cable Service: Shall be defined herein as it is defined under Section 602
of the Communications Act, 47 U.S.C. § 522(6).
1.5. Cable System or System: Shall be defined herein as it is defined under
..Section 602 of the Communications -Act, 47 U.S.C. § 522(7), which shall control, but which in
part states that a Cable . System means a Franchisee's facility, consisting of a set of closed
transmission paths and associated signal generation, reception, and control equipment that is
designed to provide Cable Service which includes video programming and which is provided to
multiple Subscribers within the Service Area. The Cable System shall consist solely of the
optical spectrum wavelength(s), bandwidth or future technological capacity used for the
transmission of video_ programming directly to Subscribers within the Franchise/Service Area.
1.6.. Channel: Shall be defined herein as it is defined under Section 602 of the
Communications Act, 47 U.S.C. §522(4).
L7. Communications Act: The Communications Act of 1934, as amended.
1.8. Control: The ability to exercise de facto or de jure control over day-to-day
policies and operations or the management of corporate affairs. Without limiting the generality
of the foregoing, for the purposes hereof, a change in Control shall be deemed to have occurred
at any point in time when there is: (i) a change in working or effective voting control, in
whatever manner effectuated, of Franchisee; (ii) an agreement of the holders of voting stock or
rights of Franchisee which effectively vests or assigns policy decision-making in any Person
other than Franchisee; or (iii) a sale, assignment or transfer of more than ten percent (10%) of the
shares or interest in Franchisee.
1.9. Educational Access Channel: An Access Channel available for the use
solely of local secondary and higher education schools in the Franchise Area as permitted by
LFA.
1.10. FCC: The United States Federal Communications Commission, or
successor governmental entity thereto.
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1. 11. Force Majeure: Means delays due to acts of God, war, civil disturbances,
fire, and incidences of terrorism, war or riots, labor strikes, floods, earthquakes, fire, explosions,
epidemics, hurricanes, tornadoes, construction delays due to severe weather, and governmental
actions and restrictions which may arise due to the foregoing conditions or for other similar
causes beyond the control of Franchisee.
. 1.12: Franchise Area: The incorporated area (entire existing territorial limits)
of LFA and such additional areas as may be included in the corporate (territorial) limits of LFA
during the term of this Franchise.
1.13. FTTP Network: Franchisee's communications network which utilizes
fiber optic technology to deliver a variety of nanometer frequencies for services originating or
terminating over fiber facilities placed to residential premises or locations using like network
facilities.
1.14. Franchisee: GTE Southwest, Inc. d/b/a. Verizon Southwest, and its
lawful and permitted successors, assigns and transferees as authorized by this Franchise.
1.15. Government Access Channel: An Access Channel available for the use
solely of LFA.
1. 16, Gross Revenue: Gross Revenue means all consideration of any kind or
nature including .without limitation cash, credits, property and in-kind contributions (services or
goods) derived by Franchisee from the operation of Franchisee's Cable System to provide Cable
Service within the Franchise Area. Both Franchisee and LFA intend to include in the term Gross
Revenue all. consideration paid to Franchisee and its Affiliates (to the extent either is acting as a
provider of ma Cable Service authorized by this Franchise). Gross Revenue includes without
limitation (i) -all fees charged to Subscribers for any and all Cable Service provided by
Franchisee, (ii) any Franchise fee imposed on Franchisee by this Agreement that is passed
through and paid by Subscribers (including without limitation the Franchise fee set forth in
Article 7), and (iii) compensation received by Franchisee or its Affiliates that is derived from the
.operation of Franchisee's Cable System to provide Cable Service with respect to commissions
that are paid to Franchisee as compensation for promotion or exhibition of any products or
services on the Cable System, such as a "home shopping" or a similar channel, subject to
Subsection. 1.16.5, below. Gross Revenue includes a pro rata portion of all revenue derived by
Franchisee or its Affiliates pursuant to compensation arrangements for advertising derived from
the operation of Franchisee's Cable System to provide Cable Service within LFA, subject to
Subsection 1.16.2 below. The allocation shall be based on the number of Subscribers in LFA
divided by the total number of subscribers in relation to the relevant regional or national
compensation arrangement. Gross Revenue does not include any revenue not actually received,
even if billed, e.g., bad debt. Advertising commissions paid to third parties shall not be netted
against advertising revenue included in Gross Revenue. Revenue of an Affiliate derived from
the Affiliate's provision of Cable Service shall be Gross Revenue to the extent the treatment of
such revenue as revenue of the Affiliate and not of Franchisee has the effect (whether intentional
or unintentional) of evading the payment of Franchise fees which would otherwise be paid to
LFA. In no event shall revenue of an Affiliate be Gross Revenue to Franchisee if such revenue
is otherwise subject to Franchise fees to be paid to LFA. Gross Revenue shall not include:
E
1.16.1. Revenues received by any Affiliate or any other Person in
exchange for supplying goods or services used by Franchisee to provide Cable Service;
1.16.2. Refunds, rebates or discounts made to Subscribers, leased access
providers, advertisers, and/or LFA;
1.16.3. Any revenues from services classified as Non -Cable Service under
federal or state law including without limitation revenue received from Telecommunications
Services; revenue received from Information Services; and any other revenues attributed by
Franchisee to Non -Cable Service in accordance with FCC or Public Utility Commission of Texas
rules, regulations, standards or orders. LFA and Franchisee agree to abide by the law as it may
be determined by the courts, the. FCC or Congress or other state and/or federal governmental
bodies with jurisdiction, and neither party hereto waives any rights that they may otherwise
assert now or in the future as to whether these revenues may be part of the Franchise fee base
herein;
. . 1.16.4. Any revenue paid by Subscribers to home shopping programmers
directly from the sale of merchandise through any home shopping channel offered as part of the
Cable Service;
1.16.5. The sale of Cable Service for resale in which the purchaser is
required to collect cable franchise fees from purchaser's customer. Nothing under this
Subsection is intended to limit LEA's rights pursuant to 47 U.S.C. § 542(h);
1.16.6. The provision of Cable Service to customers at no charge, as
required or allowed by LFA including without limitation the provision of Cable Service to public
institutions as required or permitted herein including without limitation public schools or
governmental entities as required or permitted in Section 3.3 herein;
_1.16.7. Any tax of general applicability imposed upon Franchisee or upon
Subscribers by a city, state, federal or any other governmental entity and required to be collected
by Franchisee and remitted to the taxing entity (including, but not limited to, sales/use tax, gross
receipts tax, excise tax, utility users tax, public service tax, communication taxes and non -cable
franchise fees);
1.16.8. Any foregone revenue from Franchisee's provision of free or
reduced cost Cable Service to any Person including without limitation employees of Franchisee,
LFA and other public institutions or other institutions designated in Section 3.3 herein; provided,
however, that any foregone revenue which Franchisee chooses not to receive in exchange for
trades, barters, services or other items of value shall be included in Gross Revenue;
1.16.9. Sales of capital assets or sales of surplus equipment;
1.16.10. Reimbursement by programmers of marketing costs incurred by
Franchisee for the introduction of new programming;
1.16.11. Directory or Internet advertising revenue including, but not
limited to, yellow page, white page, banner advertisement and electronic publishing; and
C4i
1.16.12. Subject to Section 2.7, any fees or charges collected from
Subscribers or other third parties for an EG Grant or INET payments, except to the extent
included in the Gross Revenue franchise fee base of other cable providers in the LFA, which at
the time of the adoption of this Franchise it is so included.
1.17. Information Services: Shall be defined herein as it is defined under
Section 3 of the Communications Act, 47 U.S.C. § 153(20).
1.18. Internet Access: Dial-up or broadband access service provided by
Franchisee over the Cable System that enables Subscribers to access the Internet.
1.19. Local Franchise Authority (LFA): The Town of Westlake, Texas, or the
lawful successor, transferee, or assignee thereof
1.20. Non-Cable Service: Any service that does not constitute the provision of
Cable Service to multiple Subscribers in the Service Area over the Cable System.
1.21. Normal Business Hours: Those hours during which most similar
businesses in the community are open to serve customers. In all cases, "normal business hours"
must-include some evening hours at least one night per week and/or some weekend hours.
- 1.22. Normal Operating Conditions: Shall be defined herein as it is defined in
47 .C.F.R. 76.3.09 (c)(4)(11).. Notwithstanding the foregoing, those service conditions that are
within the control of Franchisee include without limitation special promotions, changes in rates,
regular or seasonal demand periods, changes in billing cycles, changes in channel lineups that are
within Franchisee's control, and the maintenance or upgrade of the Cable System.
1.23. Person: An individual, partnership, association, joint stock company,
trust, corporation, or governmental entity.
1.24. Public Rights -df --Way: The surface and the area across, in, over, along,
upon and below the surface of the public streets, roads, bridges, sidewalks, lanes, courts, ways,
alleys, .boulevards, .and .public lands dedicated as public utility easements, as the same now or
may thereafter exist, which are under the jurisdiction or control of LFA. Public Rights -of -Way
do not include LFA infrastructure such as water or sewer system facilities, conduits, poles or
bridges, or the airwaves above a right-of-way with regard to cellular or other nonwire
communications or broadcast services.
1.25. Service Area: All portions of the Franchise Area where Cable Service is
to be made available by Franchisee in the geographic area as depicted in the map set forth in
Exhibit A and made a part hereof, as well as any additional service areas as may be added by
Franchisee from time to time.
1.26. Service Interruption: The loss of picture or sound on one or more cable
channels or channel equivalents.
1.27. Subscriber: A Person who lawfully receives Cable Service with
Franchisee's express permission.
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1.28. Telecommunications Facilities: Franchisee's existing Telecommunications
Services facilities and Information Services facilities including the FTTP Network facilities to
the extent not used for the Cable System.
1.29. Telecommunication Services: Shall be defined herein as it is defined
under Section 3 of the Communications Act, 47 U.S.C. § 153(46).
1.30. Title II: Title II of the Communications Act.
1.31. Title VI: Title VI of the Communications Act.
1.32. Transfer of the Franchise:
1.32.1. Any transaction in which:
1.32.1.1. an ownership or other interest in Franchisee is
transferred, directly or indirectly, from one Person or group of Persons to another Person or
group of Persons, so that Control of Franchisee is transferred; or
1.32.1.2. the rights held by Franchisee under the Franchise
are transferred or assigned to another Person or group of Persons.
1.32.2. However, notwithstanding subsections 1.32.1.1 and 1.32.1.2
:above, -a Transfer of the Franchise shall not include (i) transfer of an ownership or other interest
in Franchisee to the Parent of Franchisee or to another Affiliate of Franchisee when such
Affiliate is Controlled by Franchisee or the Parent of Franchisee; (ii) transfer of an interest in the
-Franchise or the.rights held by Franchisee under the Franchise to the Parent of Franchisee or to
._another.Affiliate of Franchisee when such Affiliate is Controlled by Franchisee or the Parent of
Franchisee; (iii) any action which is the result of a merger of the Parent of Franchisee; or (iv) any
action which is the result of a merger of another Affiliate of Franchisee when such Affiliate is
Controlled by Franchisee or the Parent of Franchisee. For purposes of this subsection, "Parent"
shall mean any corporation that directly or indirectly owns or Controls Franchisee or Franchisee
and the Affiliate.
1.33. Video Programming: Shall be defined herein as it is defined under
Section 602 of the Communications Act, 47 U.S.C. § 522(20).
2. GRANT OF AUTHORITY; LIMITS AND RESERVATIONS
2J. Grant of Authority: Subject to the terms and conditions of this Agreement,
LFA hereby grants Franchisee the right to own, construct, operate and maintain the Cable
System along the Public Rights -of -Way within the Franchise Area, in order to provide Cable
Service. No privilege or power of eminent domain is bestowed by this grant; nor is such a
privilege or power bestowed by this Agreement.
2.2. Title H. The parties agree that no term in the Agreement shall prevent or
preempt LFA's right to bring a claim under Title II or Chapter 283 of the Texas Local
Government Code, and as otherwise as allowed by law. The parties further agree that this
Agreement does not create or expand any of LFA's rights under Title II.
2.3. LFA Does Not Regulate Telecommunications Facilities Under Title VT
2.3.1. LFA's regulatory authority under Title VI of the Communications
Act is not applicable to the construction, installation, maintenance or operation of Franchisee's
FTTP Network to the extent the FTTP Network is constructed, installed, maintained or operated
for the purpose of upgrading and/or extending Verizon's existing Telecommunications Facilities
for the provision of Non -Cable Service.
2.3.2. The parties recognize that Franchisee's FTTP Network is being
constructed and will be operated and maintained as an upgrade to and/or extension of its existing
Telecommunications Facilities. The jurisdiction of LFA over such Telecommunications
Facilities is restricted by federal and state law, and LFA does not assert jurisdiction over
Franchisee's. FTTP Network in contravention of those limitations. The Cable System shall not
include tangible network facilities of a common carrier subject in whole or in part to Title II of
the Communications Act or of an Information Services provider, except to the extent used to
provide Cable Service.
.2.4. Term: This Franchise shall become effective on the date of LFA's
governing authority's final approval of this Franchise (the "Effective Date"), subject only to
Acceptance by Franchisee in accordance with Section 14.12 herein. Franchisee shall have
twelve (12) months following the Effective Date within which to provide Cable Service on a
commercial basis directly to multiple Subscribers in the Franchise Area. The term of this
Franchise shall be fifteen (15) years from the Effective Date unless the Franchise is earlier
revoked as provided herein. -Franchisee shall memorialize the Effective Date by notifying LFA
in writing of.the same, which notification shall become a part of this Franchise.
-2.5. Grant Not Exclusive: The Franchise and the right it grants to use and
occupy the Public Rights -of -Vinay to provide Cable Service shall not be exclusive, and LFA
reserves the right to grant other franchises for similar uses or for other uses of the Public Rights -
of -Way, or any portions thereof, to any Person, or to make any such use themselves, at any time
during the term of this Franchise. Any such rights which are granted shall not adversely impact
the authority as granted under this Franchise and shall not interfere with existing facilities of the
Cable System or the FTTP Network.
2,6. Level Playing Field: As to LFA, in the event LFA enters into a franchise,
permit, license, authorization or other agreement of any kind with any other person or entity
other than Franchisee for the purpose of constructing or operating the Cable System or providing
Cable Service to any part of the Service Area, the provisions thereof shall not be less
burdensome or more favorable than those contained herein when viewed in the full context of the
such franchise, permit, license, authorization or other agreement, in order that one Franchisee not
be granted an unfair competitive advantage over another. To the extent that such provisions are
_ less burdensome or more favorable than the terms herein, LFA shall, upon the request of
Franchisee, enter into good faith negotiations with Franchisee and modify the terms of this
0
Agreement in a manner and to the extent necessary to ensure that the additional agreement does
not provide a competitive advantage over this Franchise.
2.7. Franchise Subject to Federal Law: Notwithstanding any provision to the
contrary herein, this Franchise is subject to and shall be governed by all applicable provisions of
federal law as it may be amended, including but not limited to the Communications Act.
2.8. No Waiver:
2.8.1. The failure of LFA on one or more occasions to exercise a right or
to require compliance or performance under this Franchise or any other applicable law shall not
be deemed to constitute a waiver of such right or a waiver of compliance or performance by
LFA, nor to ..excuse Franchisee from complying or performing, unless such right or such
compliance or performance has been specifically waived in writing.
2.8.2. The failure of Franchisee on one or more occasions to exercise a
right under this Franchise or applicable law, or to require performance under this Franchise, shall
not be deemed to constitute a waiver of such right or of performance of this Agreement, nor shall
it excuse LFA from performance, unless such right or performance has been specifically waived
in writing.
2.9. Construction offranchise:
2.9.1 The provisions of this Franchise shall be liberally construed to
effectuate their objectives.
2.9.2 ...Nothing herein shall be construed to limit the scope or applicability
of Section 625 Communications Act, 47 U.S.C. § 545
2.9.3 Should any change to state law have the lawful effect of materially
altering the terms and conditions of this Franchise, then the parties shall modify this Franchise to
the mutual satisfaction of both parties to ameliorate the negative effects on the Franchisee of the
material alteration. If the parties cannot reach agreement on the above -referenced modification
to the Franchise, then Franchisee may terminate this Agreement without further obligation to the
LFA or, at Franchisee's option, the parties agree to submit the matter to binding arbitration in
accordance with the commercial arbitration rules of the American Arbitration Association.
2,10 Police Powers: Nothing in this Franchise shall be construed to prohibit
the reasonable, necessary and lawful exercise of LFA's police powers.
3. PROVISION OF CABLE SERVICE
3.1. Service Area:
3.1.1. Service Area: Franchisee shall make available Cable Service to all
residential dwelling units in the Service Area and may make available Cable Service to
businesses in the Service Area within twelve (12) months of the Effective Date of this Franchise,
except: (A) for periods of Force Majeure; (B) in areas where developments or buildings are
10
subject to claimed exclusive arrangements with other providers; (C) in developments or
buildings that Franchisee cannot access under reasonable terms and conditions after good faith
negotiation, as determined by Franchisee; (D) in developments or buildings that Franchisee is
unable to provide Cable Service for demonstrable technical reasons or which require non-
standard facilities which are not available on a commercially reasonable basis; and (E) in areas
where the occupied residential household density does not meet the density requirement set forth
in Sub -subsection 3.1.1.1.
3.1.1.1. Density Requirement: Franchisee shall make Cable
Service available in the Service Area where the average density is equal to or greater than thirty
(30) occupied residential dwelling units per mile as measured in strand footage from the nearest
technically feasible point on the active FTTF Network trunk or feeder line. Should, through new
construction, an area within the Franchise Area meet the density requirements after the time
stated for providing Cable Service as set forth in Subsections 3. 1.1 and 3.1.2 respectively,
Franchisee may provide Cable Service to such area within six (6) months of receiving notice that
the density requirements have been met.
3.1.2. Additional Service Areas: Franchisee shall not be required to
extend the Cable System or to. provide Cable Service to any other areas within the Franchise
Area during the term of this Franchise or any renewals thereof. If Franchisee desires to add
additional Service Areas within the Franchise Area, Franchisee shall notify LFA in writing of
such additional service area at least ten (10) days prior to providing Cable Service in such areas.
3.2. Availability of Cable Service: Franchisee shall make Cable Service
available within the Service Area to all residential dwelling units and may make available Cable
Service to businesses in the Service Area in conformance with Section 3.1 and Franchisee shall
-not discriminate -between or among any individual in the availability of Cable Service. In the
areas in which Franchisee shall make available Cable Service, Franchisee shall be required to
connect, at _Franchisee's expense, all residential Subscribers (whose premises have an exterior
wall) that are within five hundred (500) feet of trunk or feeder lines not otherwise already served
by Franchisee's FTTF Network. Franchisee shall be allowed to recover, from a Subscriber that
requests such connection, actual costs incurred for residential dwelling unit connections that
exceed five hundred (500) feet and actual costs incurred to connect any non-residential dwelling
unit Subscriber.
3.3. Cable Service to Public Buildings: Franchisee shall provide, within one
year from the Effective Date of this Franchise or within thirty (30) days of a written request
thereafter without charge within the Service Area, one service outlet and any required equipment
for such service outlet activated for the most subscribed service tier level excluding pay-per-view
programming to each fire station, school, police station, public library, City Hall and municipal
office building as may be designated by LFA as provided in Exhibit B; provided, however, that
additional locations for Cable. Service to public buildings located in the Service Area may be
added by LFA during the term of this Franchise by written notice to Franchisee (with each
location being entitled to one free service outlet and required equipment thereto); provided
— further, however, that if it is necessary to extend Franchisee's trunk or feeder lines more than
five hundred (500) feet solely to provide service to any such school or public building, LFA shall
have the option either of paying Franchisee's direct costs for such extension in excess of five
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hundred (500) feet, or of releasing Franchisee from the obligation to provide service to such
building. Furthermore, Franchisee shall be permitted to recover, from any public building owner
entitled to free service, the direct cost of installing, when requested to do so, more than one
outlet, or concealed inside wiring, or a service outlet requiring more than five hundred (500) feet
of drop cable; provided, however, that Franchisee shall not charge for the provision of Basic
Service to the additional service outlets once installed. Franchisee agrees to provide LFA with
one service outlet and required equipment for the purpose of monitoring Cable Service excluding
pay-per-view programming offered by Franchisee. The distribution (beyond the one service
outlet provided by Franchisee) of Cable Service within LFA buildings and facilities shall at
LFA's sole discretion. Where LFA distributes Cable Service beyond the one service outlet
provided by Franchisee, LFA agrees that Franchisee shall not be responsible for the degradation
of Cable Service caused by such further distribution.
4. SYSTEM OPERATION
Franchisee shall provide Cable Service in full compliance with this Franchise.
S. CABLE SYSTEM
5.1. Cable System Characteristics: Franchisee's Cable System shall meet or
exceed the following requirements:
5.1.1 The Cable System shall be designed with an initial analog
passband of 860 MHz.
5.1.2 Franchisee shall retransmit all closed -captioned signals received
with programming to facilitate viewing by handicapped persons. Franchisee shall maintain all
necessary equipment to make second audio programming features available to Subscribers,
except equipment required on a Subscriber's premises.
5.1.3 The Cable System shall be designed to be an active two-way plant
utilizing the return bandwidth to permit. such services as impulse pay-per-view and other
interactive services.
5.2. Emergency Alert System:
5.2.1. Franchisee shall comply with the Emergency .Alert System
("EAS") requirements of the FCC as such regulations are set forth in Title 47, part 11 of the
Code of Federal Regulations (47 C.F.R. § 11.1 et seq., and in particular as set forth in 47 C.F.R.
§11.21 regarding Local Area Plans. Consistent with the above-mentioned FCC regulations and
Local Area Plan, LFA may override and interrupt the Cable System due to local emergencies for
a brief audio and/or visual announcement, as is generally technically feasible at the time, in
which LFA will refer Subscribers within LFA for more details as to emergency operations and
preparedness to either an Access Channel or other designated cable or broadcast channels or
radio frequencies in order that emergency messages may be distributed via the Cable System
offered in LFA. If override at a physical location is required, Franchisee shall provide LFA with
the ability to activate the EAS from at least two (2) locations in LFA in order to override both
audio and video of all programming service simultaneously during a period of emergency or
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disaster. Such emergency alert capability shall be operational throughout the Term of this
Agreement. Franchisee shall provide the appropriate training to designated LFA personnel as
may be necessary to operate the equipment and facilities necessary to satisfy the provisions of
this Section of the Agreement. Franchisee shall provide LFA with a 24-hour contact telephone
number, and promptly advise LFA of any changes in the number during the Tenm of this
Agreement.
5.2.2. LFA shall permit only appropriately trained and authorized
Persons to operate the EAS equipment and shall take reasonable precautions to prevent any use
of the Cable System in any manner that results in inappropriate use thereof, or any loss or
damage to the Cable System. Except to the extent expressly prohibited by law, LFA shall hold
Franchisee, its employees, officers and assigns harmless from any claims arising out of use of the
EAS, including, but not limited to, reasonable attorneys' fees and costs.
6. EG SERVICES
6.1. EG Set Aside
6.1.1. Jri order to ensure universal availability of educational and
government programming, Franchisee shall reserve for LEA's future use on the Basic Service
Tier one (1) dedicated Educational Access Channel and one (1) dedicated Government Access
Channel (collectively, "EG Channels").
6.1.2. Within ninety (90) days after LEA's written request, Franchisee
shall assign the EG Channels on its channel line-up as set forth in such notice, to the extent such
channel assignments do not interfere with any pre-existing channels. EG Channels shall be
activated by the Franchisee contemporaneously with the assignment of such EG Channels.
Concurrent with such activation, Franchisee shall provide on its Cable System the capability for
the LFA to transmit signals from City Hall to enable transmission of such signals to Subscribers
on the Government Access Channel. Franchisee shall have no rights to any EG Channel
programming by virtue of cablecasting or distributing such programming via the Cable System
offered in LFA, except that nothing herein restricts Franchisee's right from cablecasting to
Subscribers and, simultaneously, at its discretion, to subscribers in surrounding communities.
Rights to programming content and intellectual property transmitted by Franchisee shall remain
the property of the owner, regardless of the Person requesting transmission. No intellectual
property transmitted over EG Channels or bandwidth shall be retransmitted by Franchisee or any
Affiliate in violation of law or the rights of any person. if an EG Channel reserved under this
Article is not being utilized by the LFA, Franchisee may utilize such EG Channel, in its sole
discretion, until such time as LFA elects to utilize the EG Channel for its intended purpose.
6.1.3. Interconnection: Franchisee shall design the Cable System so that
it may be interconnected with other cable systems in the Franchise Area for the purpose of
distributing LFA EGG Channel programming as set forth in Section 6.1 herein. interconnection of
systems may be made by direct cable connection, microwave link, satellite, or other appropriate
methods. Franchisee shall use reasonable efforts to interconnect its Cable System with existing
cable operator(s). Within twelve (12) months of the Effective Date, Franchisee shall initiate
interconnection negotiations with the existing cable operator(s) to cablecast, on a live basis,
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educational and governmental access programming consistent with this Franchise. Franchisee
shall negotiate in good faith with existing cable operators respecting reasonable, mutually
convenient, cost-effective, and technically viable interconnection points, methods, terms and
conditions. To the extent allowed by law, LFA shall require the existing cable operator(s) to
provide such interconnection to Franchisee on reasonable terms and conditions. The construction
costs and ongoing expenses of interconnection shall be fairly shared between Franchisee and
existing cable operator(s). Franchisee and the existing cable operator(s) shall negotiate the
precise terms and conditions of an interconnection agreement. LFA shall use its best efforts to
facilitate these negotiations. If Franchisee is unable to reach such an agreement within thirty
(30) days after requesting in writing to interconnect with other local cable operator(s), LFA shall
assist in mediating such dispute. If no agreement is reached within an additional thirty (30) days,
Franchisee agrees that LFA shall designate the point of interconnection to the extent allowed by
law. If the cost of interconnection would be unreasonable, interconnection is not technically
feasible or would cause an unacceptable increase in Subscriber rates, or if an existing cable
operator will not agree to reasonable terms and conditions of interconnection, Franchisee will be
under no obligation to carry EG programming initiated on the cable system of the existing cable
operator or to interconnect its Cable System with other cable systems 'n the Franchise Area.
6.1.4. Franchisee Contribution for Access. Pursuant to 47 U.S.C. § 531,
541(a)(4)(B), Franchisee shall provide to LFA capital contributions for EG Channel
programming. LFA accepts such capital contributions in lieu of capital facilities. Franchisee's
financial assistance to LFA for capital facilities for EG Channels shall be limited to a payment of
up to (but not to exceed) .$.50 per Subscriber per month to be paid on a quarterly basis
simultaneous with the Franchisee Fee. Franchisee's obligation to provide capital contributions
under this Section 6.1.4 shall not begin until all other cable operator begins similar payments.
LFA shall give Franchisee sixty (60) days prior written notice before requiring payments under
this section.
6.2. All local producers and users of any of the EG facilities or Channels shall
agree in writing to hold harmless Franchisee, LFA, from any and all liability or other injury,
including the reasonable cost of defending claims or litigation, arising from or in connection with
claims for failure to comply with applicable federal laws, rules, regulations or other requirements
of local, state or federal authorities; for claims of libel, slander, invasion of privacy, or the
infringement of common law or statutory copyright; for unauthorized use of any trademark, trade
name or service mark; for breach of contractual or other obligations owing to third parties by the
producer or user; and for any other injury or damage in law or equity, which result from the use
of a EG facility or Channel. Franchisee shall submit a reasonable form for such hold harmless
agreement to LFA's City Attorney for approval, which approval shall not be unreasonably
withheld. Franchisee has no editorial authority over the content of EG Channel :programming.
6.3. To the extent permitted by federal law, Franchisee may, but is not required,
to recover the costs of any payments made pursuant to this Article or any other costs arising from
the provision of EG services from Subscribers and to include such costs as a separately billed
line item on each Subscriber's bill. Without limiting the foregoing, if allowed under state and
- federal laws, Franchisee may externalize, line -item, or otherwise pass-through interconnection
costs to Subscribers.
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6.4. Franchisee agrees that the funds and contributions provided in accordance
with 6.1.3 above are not "payments -in-kind" or involuntary payments chargeable against the
compensation due to LFA under Article 7, but are for the benefit of all Subscribers and the public
in accordance with 47 U.S.C. §§ 531, 541 (a) (4) (B).
7. FRANCHISE FEES
7.1. - Payment to LFA: Franchisee shall pay to LFA a Franchise fee of five
percent (5%) of annual Gross Revenue. In accordance with Title VI of the Communications Act,
the twelve (12) month period applicable under the Franchise for the computation of the Franchise
fee shall be a calendar year. Such payments shall be made no later than forty five (45) days
following the end of each calendar quarter. Franchisee shall be allowed to submit or correct any
payments that were . incorrectly omitted, and shall be refunded any payments that were
incorrectly submitted, in connection with the quarterly Franchise fee remittances within 90 days
following the close of the calendar year for which such payments were applicable.
7.2. Supporting Information: Each Franchise fee payment shall be
accompanied by a brief report prepared by a representative of Franchisee detailing the basis for
the computation in a format as set forth in Exhibit D.
7.3. Limitation on Franchise Fee Actions: The period of limitation for recovery
of any Franchise fee or -other fees payable hereunder shall be four (4) years from the date on
which payment by Franchisee is due. During any such four (4) year period, the period of
limitations for recovery of any Franchise fee shall be tolled on the date that LFA provides written
notice to Franchisee that a Franchise fee compliance review, by whatever name, has been
commenced and the actual review of records is initiated within ninety (90) days of such notice
and completed by LFA asserting a claim as to any unpaid fees due hereunder within twelve (12)
months from the date of the production of all the records reasonably and in good faith requested;
provided, however, that the completion date of the review may be extended by mutual agreement
of LFA and Franchisee. The parties intend that tolling of the four (4) year period of limitations
is to allow LFA to complete its review in a timely and efficient manner. The parties do not
intend to provide LFA with the ability to unreasonably toll the period of limitations for recovery
of any Franchise fee or other fees payable hereunder.
7..4. Bundled Services: If Franchisee bundles Cable Service with Non -Cable
Service, Franchisee agrees that it will not intentionally or unlawfully allocate such revenue for
the purpose of evading Franchise fee payments under this Franchise. The parties agree that
tariffed telecommunication services that cannot be discounted by state or federal law or
regulation are to be excluded from the bundled discount allocation basis. After one (1) year
following the initiation of customer service under this Franchise, Franchisee will review the
allocation methodology being used with the LFA. The LFA has the right to request additional
reviews once every three (3) years thereafter. If a dispute arises between LFA and Franchisee as
to the proper allocation of bundled services revenue, such records pertaining to the allocation
shall be maintained by Franchisee until the dispute is resolved.
7.5. Late Payments. If any payments due under this Franchise remain unpaid
after the due date ("Past Due Amounts"), Franchisee shall pay LFA interest on such Past Due
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Amounts in addition to the Past Due Amounts. The interest shall accrue on the Past Due
Amounts from the due date until paid in full ("Period of Delinquency"). Franchisee shall pay
LFA interest at a rate per annum equal to the highest Bank Prime Rate during the Period of
Delinquency plus 1%. The "Bank Prime Rate" shall mean the prime lending rate as it appears in
the Wall Street Journal during the Period of Delinquency. LEA's acceptance of payment shall
not be construed as an agreement that the amount paid was correct, nor shall acceptance be
construed as a release of any claim, which LFA may have for additional sums payable under
provisions of this Article.
8. CUSTOMER SERVICE
Franchisee and LFA agree to and hereby incorporate the customer service standards set
forth in Exhibit C that shall be binding unless amended upon written consent of the parties.
9. REPORTS AND RECORDS
9.1. Open Books and Records: Upon reasonable written notice to Franchisee and
with no less than ten (10) business days' written notice to Franchisee, LFA shall have the right to
inspect Franchisee's books and records pertaining to Franchisee's provision of Cable Service in
the Franchise Area at any time during Normal Business Hours and on a nondisruptive basis, as
are reasonably necessary to ensure compliance with the terms of this Franchise. Such notice
shall specifically reference the article section or subsection of the Franchise that is under review
so that Franchisee -may organize the necessary books and records for appropriate access by LFA.
Franchisee shall not be required to maintain any books and records for Franchise compliance
purposes longer than four (4) years. Notwithstanding anything to the contrary set forth herein,
Franchisee shall not be required to disclose information that it reasonably deems to be
proprietary or confidential in nature, nor disclose any of its or an Affiliate's books and records
not relating to the provision . of Cable Service in the Service Area, LFA agrees to treat any
information disclosed by Franchisee as confidential and only to disclose it to employees,
representatives, and agents thereof that have a need to know, or in order to enforce the provisions
hereof and as may be required by the Texas open records or freedom of information laws, with
notice to Franchisee if any request for such information is made, as may be provided under the
circumstances. Franchisee shall not be required to provide Subscriber information in violation of
Section 631 of the Communications Act, 47 U.S.C. §551.
9.2 Records Required: Franchisee shall at all times maintain:
9.2.1 Records of all written complaints for a period of four (4) years
after receipt by Franchisee. The term "complaint" as used herein refers to complaints about any
aspect of the Cable System or the Cable Service, including without limitation complaints about
employee courtesy. Complaints recorded will not be limited to complaints requiring an
employee service call;
9.2.2 Records of outages for a period of four (4) years after occurrence,
indicating date, duration, area, and the number of Subscribers affected, type of outage, and
cause;
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9.2.3 Records of service calls for repair and maintenance for a period of
four (4) years after resolution by Franchisee, indicating the date and time service was required,
the date of acknowledgment and date and time service was scheduled (if it was scheduled), and
the date and time service was provided, and (if different) the date and time the problem was
resolved;
9.2.4 Records of installation/reconnection and requests for service
extension for a period of four (4) years after the request was fulfilled by Franchisee, indicating
the date of request, date of acknowledgment, and the date and time service was extended; and
9.2.5 A public file showing the area of coverage for the provisioning of
Cable Service and estimated timetable to commence providing Cable Service.
14. INSURANCE AND INDEMNIFICATION
10.1 Insurance:
10.1.1 Franchisee shall maintain in full force and effect, at its own cost
and expense, during the Franchise Term, the following insurance coverage:
10.1.1.1 Commercial General Liability Insurance in the amount
of three million dollars ($3,000,000) combined single limit for property damage and bodily
-injury. Such insurance shall cover the construction, operation and maintenance of the Cable
System, land the conduct of Franchisee's Cable Service business in LFA .
10.1.1.2 Automobile Liability Insurance in the amount of three
million dollars - ($3,000,000) combined single limit for bodily injury and property damage
coverage.
10:1.1.3 Workers' Compensation Insurance meeting all legal
.requirements of the State of Texas.
10.1.1.4 Employers' Liability Insurance m the following
amounts: (A) Bodily Injury by Accident: $100,000; and (B) Bodily Injury by Disease:
$100,000 employee limit; $500,000 policy limit.
10.1.2 LFA shall be designated as additional insured[s] under each of the
insurance policies required in this Article 10 except Worker's Compensation Insurance..
10.1.3 Each of the required insurance policies shall be norxcanceliable
except upon thirty (30) days prior written notice to LFA. Franchisee shall not cancel or reduce
the coverage amount of any required insurance policy without submitting documentation to LFA
verifying that Franchisee has obtained alternative insurance in conformance with this Agreement.
10.1.4 Each of the required insurance policies shall be with sureties
qualified to do business in the State of Texas, with an A+9 or better rating for financial condition
and financial performance by Best's Ivey Rating Guide, Property/Casualty Edition.
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10. I. S In addition to providing LFA with Franchisee's Certificates of
Insurance showing evidence of the required coverage contemporaneously with acceptance of this
Agreement, in accordance with Section 14.13, within ten (10) business days of a written request
by LFA, Franchisee shall deliver to LFA Certificates of Insurance showing evidence of the
required coverage during the term of this Agreement.
10.1.6 The provisions of this subsection 10.1 on insurance shall survive
the termination of this Franchise for such time as required for Franchisee to fully comply with its
obligations set forth herein.
10.2 Indemnification:
10.2.1 Franchisee agrees to indemnify, save and hold harmless, and
defend LFA, its officers, agents, boards and employees, from and against any liability for
damages and for any liability or claims resulting from tangible property damage or bodily injury
(including accidental death), to the extent proximately caused by Franchisee's negligent
construction, operation, or maintenance of its Cable System, provided that LFA shall give
Franchisee written notice of its obligation to indemnify LFA within fourteen (14) days of receipt
of a claim or action pursuant to this subsection; provided, however, that LFA may provide
written notice after such fourteen (14) day period so long as Franchisee is not prejudiced by such
late -notice. Notwithstanding the foregoing, Franchisee shall not indemnify LFA, for any
damages, liability or claims resulting from the willful misconduct or negligence of LFA, its
officers, agents, employees, attorneys, consultants, independent contractors or third parties or for
any activity or function conducted by any Person other than Franchisee in connection with EG
Access, use of INET, EAS, or the distribution of any Cable Service over the Cable System.
10.2..2 With respect to Franchisee's indemnification obligations set forth
in subsection 1.0.2.1, Franchisee shall provide the defense of any claims brought against LFA
under this Section 10.2 of the Franchise by selecting counsel of Franchisee's choice to defend the
claim, subject to the consent of LFA, which shall not unreasonably be withheld. Nothing herein
shall be deemed to prevent LFA ' from cooperating with Franchisee and participating in the
defense of any litigation by its own counsel at its own cost and expense, provided however, that
after consultation with LFA, Franchisee shall have the right to defend, settle or compromise any
claim or action arising hereunder, and Franchisee shall have the authority to decide the
appropriateness and the amount of any such settlement as to both LFA and Franchisee, with full
releases as to LFA and Franchisee included in such settlement, only in the event that the amount
of such settlement is within Franchisee's insurance policy limits or if Franchisee agrees to pay all
excess amounts above insurance policy limits.
10.2.3 The provisions of this section on indemnity shall survive the
termination of this Franchise for such time as required for Franchisee to fully comply with its
obligations set forth herein.
10.2.4 LFA shall be responsible for its own acts of willful misconduct or
negligence, or breach of obligation committed by LFA for which LFA is legally responsible,
subject to any and all defenses and limitations of liability provided by law. Franchisee shall not
be required to indemnify LFA for acts of LFA which constitute willful misconduct or
In
negligence, on the part of LFA, its officers, employees, agents, attorneys, consultants,
independent contractors or third parties.
16.2.5 In any administrative or judicial proceeding involving a third party
claim against LFA arising from LFA's grant of this Franchise or the operation hereof, Franchisee
at its option and own cost and expense may intervene in such proceeding and LFA consents to
such intervention. In any such proceeding, LFA agrees to assert its limitation from liability to
the full extent permitted by .Section 635A of the Communications Act, 47 U.S.C. §555a, or
similar applicable law.
11. TRANSFER OF FRANCHISE
Subject to Section 617 of the Communications Act, 47 U.S.C. § 537, no Transfer of
the Franchise shall occur without the prior consent of LFA, provided that such consent shall not
be unreasonably withheld, delayed or conditioned. No such consent shall be required, however,
for a transfer in trust, by mortgage, by other hypothecation, by assignment of any rights, title, or
interest of Franchisee in the Franchise or the Cable System in order to secure indebtedness, or
otherwise -excluded under Section -1.32 above. To the extent that LFA's consent to a Transfer of
Franchise is required, Franchisee (or transferee) shall reimburse LFA for reasonable expenses
incurred in reviewing that the transferee has the technical, legal, financial and operational ability
to operate the Cable System to provide Cable Service. In no case shall Franchisee reimburse
LFA for expenses exceeding $5,000. Failure of Franchisee (or transferee) to promptly reimburse
LFA after written request is made shall be a material breach of the Franchise that may give rise
to termination of the Franchise under Article 13.
12. RENEWAL OF FRANCHISE
12.1. LFA and Franchisee agree that any proceedings undertaken by LFA that
relate to. the renewal of. this Franchise shall be governed by and comply with the provisions of
Section 626 of the Communications Act, 47 U.S.C. § 546.
12.2. In addition to the procedures set forth in said Section 626 of the
Communications Act, upon request, LFA agrees to notify Franchisee of all of its assessments
regarding the identity of future cable -related community needs and interests, as well as the past
performance of Franchisee under the then current Franchise term. LFA further agrees that such
assessments shall be provided to Franchisee promptly so that Franchisee has adequate time to
submit a proposal under Section 626 and complete renewal of the Franchise prior to expiration of
its term.
12.3. Notwithstanding anything to the contrary set forth herein, Franchisee and
LFA agree that at any time during the term of the then current Franchise, while affording the
public appropriate notice and opportunity to comment, LFA and Franchisee may agree to
undertake and finalize informal negotiations regarding renewal of the then current Franchise and
LFA may grant a renewal thereof.
13. ENFORCEMENT AND TERMINATION OF FRANCHISE
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13.1 Notice of Violation: In the event that LFA believes that Franchisee has not
complied with the terms of the Franchise, LFA shall informally discuss the matter with
Franchisee. If these discussions do not lead to resolution of the problem, LFA shall notify
Franchisee in writing of the exact nature of the alleged noncompliance.
13.2 Franchisee's Right to Cure or Respond: Franchisee shall have thirty (30)
days from receipt of the written notice described in section 13.1 to: (i) respond to LFA, if
Franchisee contests (in whole or in part) the assertion of noncompliance; (ii) cure such default;
or (iii) in the event that, by the nature of default, such default cannot be cured within thirty (30)
days (the "cure period"), Franchise may with good cause request a one-time extension of the cure
period (the "First Extension Period") for up to thirty (30) additional days from the expiration of
the cure period within which to cure such default. If good cause exists, as reasonably determined
by LFA, such request for the First Extension Period may not be unreasonably denied. If, in the
event that, by the nature of default, such default cannot be cured within the First Extension
Period period, Franchise shall (i) notify LFA of the steps being taken to remedy the default and
the projected date that the default will be cured and (ii) request from LFA a final extension to
cure such default, which request for a final extension shall not be unreasonably denied by LFA.
13.3 Public Hearing: In the event that Franchisee fails to respond to the
written notice described in section 13.1 pursuant to the procedures set forth in section 13.2, or in
the event that the alleged default is not remedied within the cure period, the First Extension
Period or a final extension period granted by LFA pursuant to section 13.2(iii) above, if it intends
to continue its investigation into the default, then LFA shall schedule a public hearing. LFA
shall provide Franchisee at least twenty one (21) business days prior written notice of such
hearing, which.will specify the time, place and purpose of such hearing, and provide Franchisee
the opportunity to be heard.
-13.4 Enforcement: Subject to applicable federal and state law, in the event
LFA, after.the hearing set forth in section 13.3, determines that Franchisee is in default of any
provision of the Franchise, LFA may pursue any or all of the below options:
13.4.1 Seek specific performance of any provision, which reasonably
lends itself to such remedy, as an alternative to damages; or
13.4.2 Commence an action at law for monetary damages or seek other
equitable relief; or
13.4.3 In the case of a substantial material default of a material provision
of the Franchise, seek to revoke the Franchise in accordance with section 13.5.
13.5 Revocation: Should LFA seek to revoke the Franchise after following the
procedures set forth in sections 13.1 through 13.4 above, LFA shall give written notice to
Franchisee of its intent. The notice shall set forth the exact nature of the noncompliance.
Franchisee shall have thirty (30) days from such notice to object in writing and to state its
reasons for such objection. In the event LFA has not received a satisfactory response from,
Franchisee, it may then seek termination of the Franchise at a public hearing. LFA shall cause to
be served upon Franchisee, at least fourteen (14) days prior to such public hearing, a written
20
notice specifying the time and place of such hearing and stating its intent to revoke the
Franchise.
.13.5.1. At the designated hearing, Franchisee shall be provided a fair
opportunity for full participation, including the right to be represented by legal counsel, to
introduce relevant evidence, to require the production of evidence. A complete verbatim record
and transcript shall be made of such hearing at Franchisee's cost.
13.5.2. Following the public hearing, Franchisee shall be provided up to
thirty (30) days to submit its proposed findings and conclusions in writing and thereafter, LFA
shall determine (i) whether an Event of Default has occurred; (ii) whether such Event of Default
is excusable; and (iii) whether such Event of Default has been cured or will be cured by
Franchisee. LFA shall also detennine whether to revoke the Franchise based on the information
presented, or, where applicable, grant additional time to Franchisee to effect any cure. If LFA
determines that the Franchise shall be revoked, LFA shall promptly provide Franchisee with a
written decision setting forth its reasoning. LFA may set the effective date of the revocation of
the Franchise in such notice, which will be no less than forty five (45) days from the date of the
notice of Revocation. Franchisee may appeal such determination of LFA to an appropriate court
which shall have the power to review the decision of LFA de novo as may be permitted by law.
Franchisee shall be entitled to such relief as the court finds appropriate. LFA may, at its sole
discretion, take any lawful action that it deems appropriate to enforce LEA's rights under the
Franchise in lieu of revocation of the Franchise.
13.6. Franchisee Termination:
.13.6.1. Franchisee shall have the right to terminate this Franchise and all
obligations hereunder within ninety (90) days after the end of three (3) years from the Effective
Date of this Franchise, if at the end of such three (3) year period Franchisee does not then in
good faith believe it has achieved a commercially reasonable level of Subscriber penetration
within LFA. Franchisee may consider Subscriber penetration levels outside Franchise Area in
making this determination. Notice to terminate under this Section 13.6 shall be given to LFA in
writing, with such termination to take effect no sooner than one hundred and twenty (120) days
after giving such notice. Franchisee shall also be required to give its then current Subscribers not
less than ninety (90) days prior written notice of its termination of Cable Service within
Franchise Area.
13.6.2. Franchisee shall have the right to terminate this Franchise if LFA
adopts any ordinance or takes any action that results in any material alteration of the terms and
conditions of this Franchise, which material alteration has a material negative financial effect on
Franchisee's provision of Cable Service within the LFA. Prior to such termination, the parties
agree to enter into good faith negotiations to modify this Franchise to the mutual satisfaction of
both parties to ameliorate the negative effects on Franchisee of the material alteration. If the
parties cannot reach agreement on the above -referenced modification to this Franchise, the
parties agree to submit to mediation. if the parties cannot reach agreement on the above -
referenced modification to this Franchise within sixty (60) days following the commencement of
mediation, then Franchisee may terminate this Agreement without further obligation to LFA or,
at Franchisee's option, the parties agree to submit the matter to binding arbitration in accordance
with the commercial arbitration rules of the American Arbitration Association.
21
14. MISCELLANEOUS PROVISIONS
14.1. Actions of Parties: In any action by LFA or Franchisee that is mandated
or permitted under the terms hereof, such party shall act in a reasonable, expeditious, and timely
manner. Furthermore, in any instance where approval or consent is required under the terms
hereof, such approval or consent shall not be unreasonably withheld, delayed or conditioned.
14.2. Binding Acceptance: This Agreement shall bind and benefit the parties
hereto and their respective heirs, beneficiaries, administrators, executors, receivers, trustees,
successors and assigns, and the promises and obligations herein shall survive the expiration date
hereof.
14.3. Preemption: In the event that federal or state law, rules, or regulations
preempt a provision or limit the enforceability of a provision of this Agreement, the provision
shall be read to be preempted to the extent, and for the time, but only to the extent and for the
time, required by law. In the event such federal or state law, rule or regulation is subsequently
repealed, rescinded, amended or otherwise changed so that the provision hereof that had been
preempted is no longer preempted, such provision shall thereupon return to full force and effect,
and shall thereafter be binding on the parties hereto, without the requirement of further action on
the part of LFA.
- 14.4. Force Majeure: Franchisee shall not be held in default under, or in
noncompliance with, the provisions of the Franchise, nor suffer any enforcement or penalty
relating to noncompliance or default, where such noncompliance or alleged defaults occurred or
were caused by a Force Majeure.
14.4.1. Furthermore, the parties hereby agree that it is not LEA's intention
to subject Franchisee to penalties, fines, forfeitures or revocation of the Franchise for violations
of the Franchise where the violation was a good faith error that resulted in no or minimal
negative impact on Subscribers, or where strict performance would result in practical .difficulties
and hardship being placed upon Franchisee which outweigh the benefit to be derived by LFA
and/or Subscribers.
14.5. Notices: Unless otherwise expressly stated herein, notices required under
the Franchise shall be transmitted via certified mail to the addresses below. Mailed notices are
assumed received three (3) business days after mailing. The address below is the address for
receipt of such notice, unless a party changes its contract information by providing written notice
to the other party.
14.5.1. Notices to Franchisee shall be mailed via certified mail to:
Steve Banta
Verizon — Group President, NAV and SW
600 Hidden Ridge
HQE04G0
Irving, TX 75038
With a copy to:
22
Randal Milch
Senior VP and Deputy General Counsel
1095 Avenue of Americas
New York, NY 92223
14.5.3. Notices to LFA shall be mailed via certified mail to:
Trent O. Petty, Town Manager
Town of Westlake
2650 J.T. Dttinger Road
Westlake, TX 76262
14.6. Entire Agreement: This Franchise and the Exhibits hereto constitute the
entire agreement between Franchisee and LFA. Amendments to this Franchise shall be mutually
agreed to in writing by the parties.
14.7. Captions: The captions and headings of articles and sections throughout
this Agreement are intended solely to facilitate reading and reference to the sections and
provisions of this Agreement. Such captions shall not affect the meaning or interpretation of this
Agreement.
14.8. Severability: If any article, section, subsection, sentence, paragraph, term,
or provision hereof is determined to be illegal, invalid, or unconstitutional, by any court of
competent jurisdiction or by any state or federal regulatory authority having jurisdiction thereof,
such determination shall have no effect on the validity of any other articles, sections,
subsections, sentences, paragraphs, terms or provisions hereof, all of which will remain in full
force and effect for the term of the Franchise.
14.9. Recitals The recitals set forth in this Agreement are incorporated into the
body of this Agreement as if they had been originally set forth herein.
14.10. Modification. This Franchise shall not be modified except by written
instrument executed by both parties.
14.11. Acknowledgment. Franchisee hereby acknowledges that it has carefully
read the terms and conditions of this Franchise and accepts and agrees to perforin the duties and
obligations set forth in this Franchise.
14.12. Acceptance. Franchisee shall, within thirty (30) days after LEA's final
approval of this Franchise, file in the office of the City Secretary a written instrument accepting
this Franchise and all terms and conditions, signed and acknowledged by its proper officers in a
form acceptable to the City Attorney. At the time of such acceptance, Franchisee shall also
provide the City Attorney with Franchisee's address for notice purposes as set forth in Article 14,
if not previously provided, as well as insurance certificates required in Section 10.1.5.
14.13. Publication Costs. Franchisee shall bear reasonable costs of publication
related to this Franchise, which publication may be required by law or action of LFA's City
23
Council. Any payments made by LFA under this provision are to be reimbursed by Franchisee
within thirty (30) days of Franchisee's receipt of the invoice.
1414. Rate Regulation. If, during the term of this Franchise, Franchisee is not
subject to effective competition and federal law permits LFA to regulate Franchisee's Basic
Service tier rates under such circumstances, LFA reserves the right to regulate such rates
consistent with law.
14.15. FTTP Network Transfer Prohibition. Under no circumstance including,
without limitation, upon expiration, revocation, termination, denial of renewal of the Franchise
or any other action to forbid or disallow Franchisee from providing Cable Services, shall
Franchisee or its assignees be required to sell any right, title, interest, use or control of any
portion of Franchisee's FTTP Network including, without limitation, any spectrum capacity used
for cable service or otherwise, to the LFA or any third party. Franchisee shall not be required to
remove the FTTP Network(s) or to relocate the FTTP Network(s) as a result of revocation,
expiration, termination, denial of renewal or any other action to forbid or disallow Franchisee
from providing Cable Services. This provision is not intended to contravene leased access
requirements under Title VI or EG requirements set out in this Agreement.
14.16. Institutional Network. If, during the term of the Franchise, another cable
operator provides LFA with an institutional network, as defined in Section 6110 of the
Communications Act ("INET"), Franchisee agrees that it will provide LFA a pro rata, per
Subscriber grant in cash (in relation to other cable operators) of the incremental, verifiable cost
to the cable operator of such an INET; provided, however, that LFA agrees that it will require all
cable operators within the Franchise Area to make equitable pro rata contributions toward the
construction of any such INET. LFA further agrees to reimburse such cable operator for any pro
rata, per Subscriber payments made by Franchisee. The parties agree that Franchisee's grant in
cash be subject to good faith negotiation between the parties.
14.17. Payment For Franchise Costs. Franchisee shall pay LFA $5,000 for costs
associated with the grant of this Franchise within thirty (30) days following the Effective Date.
15. PUC WAIVER
This Agreement shall be void and Verizon shall not be obligated to provide Cable Service
in the Town of Westlake, Texas pursuant to the terms hereunder in the event that a court reverses
the effect of Verizon's October 13, 2004 Waiver (Docket No. 29879) of §62.072 of The Public
Utility Regulatory Act ("PURA"), Tex. Util. Code. Ann. §§ 11.001-64.158 (Vernon 1998 &
Supp. 2004) granted by the Public Utility Commission of Texas.
[Signature Page follows]
24
AGREED TO THIS -�) DAY OF i 2005.
TOWN OF WESTLAKE, TEXAS
By. r
[Title]p--
Acknowledgments:
State of Texas §
County of Tarrant §
This instrument was ckno led ed before me on the 3 day of;�`
- --
2005 by �c� ti2 MC -- e�-�_of the
TOWN OF WES W -,A -KF, on behalf of sai orporation.
I
b l�
E3IMGER R AWTR C7)
110T VIMMSTMOrTUAS
e
COMMIS3I09 EXPIRES: Notary Public n d for the
SEPTEMMR 18, 2M
State of Texa
GTE SO UTHWEST, INC. d/bla/ VERIZON SOUTHWEST
By:
[Title] �f e 5 l Q end"
Acknowledgments:
State of Texas §
County of Tarrant §
This instrument was acknowledged before me on the 3 (Adayof f,b r" t 3
2005 by SjeVe T)agn a f re.5ident of TE
SOUTHWEST, INC. d/b/a VERIZON SOUTHWEST, on behalf of said corporation.
\�PE!APPROVED
Attorney
Date
P,&�ddjuq - ft
Notary ublic in Und for the
State of Texas
�Q ELIZABETH J. CHILDRESS
MY COMMISSION EXPIRES
25+`= Mamh 15, 2005
�„,,o .
EXHIBIT A
SERVICE AREA MAP
The franchised service area is shown in the map set forth below.
26
Westlake, Texas
Showing Verizon Franchise
Service Area
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EXHIBIT B
INITIAL LFA DESIGNATION OF MUNICIPAL BUILDINGS TO BE
PROVIDED FREE CABLE SERVICE
Fire Station
2900 Dove Road
Westlake, Texas 76262
27
EXHIBIT C
CUSTOMER SERVICE STANDARDS
These standards shall, starting six (6) months after Franchisee's initial provision of
service pursuant to Section 3. l.1, apply to Franchisee to the extent it is providing Cable Services
over the Cable System in the Franchise area.
1. DEFINITIONS
A. Respond: Franchisee's investigation of a Service Interruption by receiving a
Subscriber call and opening a trouble ticket, if required
B. Significant Outage: A significant outage of the Cable Service shall mean any
Service Interruption lasting at least three (3) continuous hours that affects the lesser of either 225
.Subscribers in the Service Area or ten percent (10%) of the Subscribers in the Service Area.
. - _ C. Service Call: The action taken by Franchisee to correct a Service Interruption the
effect of which is limited to an individual Subscriber.
D. Standard Installation: Installations where the subscriber is within five hundred
(500) feet of trunk or feeder lines.
2. TELEPHONE AVAILABILITY
A. Franchisee shall maintain a toll-free number to receive all calls and inquiries from
Subscribers in the Franchise Area and/or residents regarding Cable Service. Franchisee
representatives trained and qualified to answer questions related to Cable Service in the Service
Area must be available to receive reports of Service Interruptions twenty-four (24) hours a day,
seven (i) days a week, and other inquiries at least forty-five (45) hours per week. Franchisee
representatives shall identify themselves by name when answering this number.
B. Franchisee's telephone numbers shall be listed, with appropriate description (e.g.
administration, customer service, billing, repair, etc.), in the directory published by the local
telephone company or companies serving the Service Area, beginning with the next publication
cycle after acceptance of this Franchise by Franchisee.
C. Franchisee may use an Automated Response Unit ("ARU") or a Voice Response
Unit ("VRU"). to distribute calls. If a foreign language routing option is provided, and the
Subscriber does not enter an option, the menu will default to the first tier menu of English
options.
After the first tier menu (not including a foreign language rollout) has run through three
times, if customers do not select any option, the ARU or VRU will forward the call to a queue
for a live representative. Franchisee may reasonably substitute this requirement with another
method of handling calls from customers who do not have touch-tone telephones.
D. Under Normal Operating Conditions, calls received by Franchisee shall be
answered within thirty (30) seconds. Franchisee shall meet this standard for ninety percent
(90%) of the calls it receives at all call centers receiving calls from Subscribers, as measured on a
cumulative quarterly calendar basis. Measurement of this standard shall include all calls
received by Franchisee at all call centers receiving calls from Subscribers, whether they are
ansv r -,red by a live representative, by an automated attendant, or abandoned after 30 seconds of
call waiting. If the Grantee does not meet the ninety percent (90%) standard described in this
paragraph _ D, during any calendar quarter, liquidated damages may be assessed by the City
against the Grantee as follows:
(1) Any quarter where the Grantee performs equal to or greater than eighty five percent
(85%) and less than ninety percent (90%), the Grantee shall pay the Grantor one
hundred dollars ($100).
(2) Any quarter where the Grantee performs equal to or greater than seventy five percent
(75%) and less than eighty five percent (85%), the Grantee shall pay the Grantor three
hundred dollars ($300).
(3) Any quarter where the Grantee performs equal to or greater than sixty five percent
(65%) and less than seventy five percent (75%), the Grantee shall pay the Grantor one
thousand dollars ($1,000),
(4) Any quarter where the Grantee performs less than sixty five percent (65%o), the
Grantee shall pay the Grantor two thousand dollars ($2,000).
If the Grantee fails to meet the standards for consecutive quarters, the payment will be the
total of the any previous quarter(s) damage payment, plus the current quarter payment. For
example, if the Grantee performs at eighty five percent (85%) for one quarter and pays liquidated
damages of one hundred dollars ($100) and for the next quarter performs at eighty percent
(80%), the second quarter payment would be four hundred ($400) [one hundred ($100) for the
first quarter plus three hundred ($300) for the second quarter]. If the Franchisee continues to
have an eighty percent (80%) performance in the third quarter, the payment shall be seven
hundred dollars ($700) [$300 for the most recent quarter and $400 for the prior quarter].
E, Under Normal Operating Conditions, callers to Franchisee shall receive a busy
signal no more than three (3%) percent of the time during any calendar quarter.
F. At Franchisee's option, the measurements and reporting above may be changed
from calendar quarters to billing or accounting quarters. Franchisee shall notify LFA of such a
change at least thirty (30) days in advance of any implementation.
3. INSTALLATIONS AND SERVICE APPOINTMENTS
A. All installations will be in accordance with FCC rules, including but not limited
to, appropriate grounding, connection of equipment to ensure reception of Cable Service, and the
29
provision of required consumer information and literature to adequately inform the Subscriber in
the utilization of Franchisee -supplied equipment and Cable Service.
B. The Standard Installation shall be performed within seven (7) days after the
placement of the Optical Network Terminal ("ONT") on the customer's premises. Franchisee
shall meet this standard for ninety.five percent (95%) of the Standard Installations it performs, as
measured on a calendar quarter basis, excluding customer requests for connection later than
_seven (7) days after ONT placement. If the Grantee does not meet the ninety five percent (95%)
standard described in this paragraph B, during any calendar quarter, liquidated damages may be
assessed by the City against the Grantee as follows:
(1) Any quarter where the Grantee performs equal to or greater than eighty five percent
(85%) and less than ninety five percent (95%), the Grantee shall pay the Grantor one
hundred dollars ($100).
(2) Any quarter where the Grantee performs equal to or greater than seventy five percent
(75%) and less than eighty five percent (85%), the Grantee shall pay the Grantor three
hundred dollars ($300).
(3) -Any quarter where the Grantee performs equal to or greater than sixty five percent
(65%) and less than seventy five percent (75%), the Grantee shall pay the Grantor one
thousand dollars ($1,000),
(4) Any quarter where the Grantee performs less than sixty five percent (65%), the
Grantee shall pay the Grantor two thousand dollars ($2,000).
If the Grantee fails to meet the standards for consecutive quarters, the payment will be the
total of the any previous quarter(s) damage payment, plus the current quarter payment. For
example, if the Grantee performs at eighty seven percent (87%) for one quarter and pays
liquidated damages of one hundred dollars ($100) and for the next quarter performs at eighty
percent (80%), the second quarter payment would be four hundred ($400) [one hundred ($100)
for the first quarter plus three hundred ($300) for the second quarter]. If the Franchisee
continues to have an eighty percent (80%) performance in the third quarter, the payment shall be
seven hundred -dollars ($700) [$300 for the most recent quarter and $400 for the prior quarter].
C. Franchisee will offer Subscribers "appointment window" alternatives for arrival
to perform.. installations, Service Calls and other activities of a maximum four (4) hours
scheduled time block during appropriate daylight available hours, usually beginning at 8:00 AM
unless it is deemed appropriate to begin earlier by location exception. At Franchisee's
discretion, Franchisee may offer Subscribers appointment arrival times other than these four (4)
hour time blocks, if agreeable to the Subscriber. These hour restrictions do not apply to
weekends.
4. SERVICE INTERRUPTIONS AND OUTAGES
30
A. Franchisee shall promptly notify LFA of any Significant Outage of the Cable
Service.
B. Franchisee shall exercise commercially reasonable efforts to limit any Service
Interruption for the purpose of maintaining, repairing, or constructing the Cable System. Except
in an emergency or other situation necessitating a more expedited or alternative notification
procedure, Franchisee may schedule a Significant Outage for a period of more than four (4)
hours during any twenty-four (24) hour period only after LFA and each affected Subscriber in
the Service Area have been given fifteen (15) days prior notice of the proposed Service
Interruption.
C. Franchisee representatives who are capable of responding to Service Interruptions
must be available to Respond twenty-four (24) hours a day, seven (7) days a week.
D. Under Normal Operating Conditions, Franchisee must Respond to a call from a
Subscriber regarding a Service Interruption or other service problems within the following time
frames:
(1) - Under -Normal Operating Conditions, Company shall diligently begin
working on a Service Interruption promptly and in no event later than twenty-four (24)
hours after the interruption becomes known to Company. "Service Interruption" shall
mean the loss of picture or sound on one or more cable channels that affects one or more
subscribers.
:(2) _ _ Under Normal Operating Conditions, Company shall diligently begin
working on Subscriber Complaints involving impairment or degradation of signal quality
(other than a Service Interruption) promptly and in no event later than the next business
day after.the problem becomes known to Company.
E. Franchisee shall meet the standard in Subsection D. of this Section for ninety five
percent (95%) of the Service Interruption or other service problem calls it receives, as measured
on a quarterly basis. If the Grantee does not meet the ninety five percent (95%) standard
described in this paragraph E, during any calendar quarter, liquidated damages may be assessed
by the City against the Grantee as follows:
(1) Any quarter where the Grantee performs equal to or greater than eighty five
percent (85%) and less than ninety five percent (95%), the Grantee shall pay
the Grantor one hundred dollars ($100).
(2) Any quarter where the Grantee performs equal to or greater than seventy five
percent (75%) and less than eighty five percent (85%), the Grantee shall pay
the Grantor three hundred dollars ($300).
(3) Any quarter where the Grantee performs equal to or greater than sixty five
percent (65%) and less than seventy five percent (75%), the Grantee shall pay
the Grantor one thousand dollars ($1,000).
31
(4) Any quarter where the Grantee performs less than sixty five percent (65%),
the Grantee shall pay the Grantor two thousand dollars ($2,000).
If the Grantee fails to meet the standards for consecutive quarters, the payment will be the
total of the any previous quarter(s) damage payment, plus the current quarter payment. For
example, if the Grantee performs at eighty seven percent (87%) for one quarter and pays
liquidated damages of one hundred dollars ($100) and for the next quarter performs at eighty
percent (80%), the second quarter payment would be four hundred ($400) [one hundred ($100)
for the first quarter plus three hundred ($300) for the second quarter]. If the Franchisee
continues to have an eighty percent (80%) performance in the third quarter, the payment shall be
seven hundred dollars ($700) [$300 for the most recent quarter and $400 for the prior quarter].
F. Under Normal Operating Conditions, Franchisee shall provide a credit upon
Subscriber request when all Channels received by that Subscriber are out of service for a period
of four (4) consecutive hours or more. The credit shall equal, at a minimum, a proportionate
amount of the affected Subscriber(s) current monthly bill. In order to qualify for the credit, the
Subscriber must promptly report the problem and allow Franchisee to verify the problem if
requested by Franchisee. If Subscriber availability is required for repair, a credit will not be
provided for such time, if any, that the Subscriber is not reasonably available.
G. Under Normal Operating Conditions, if a Significant Outage affects all Video
Programming Cable Services for more than twenty-four (24) consecutive hours, Franchisee shall
issue an automatic credit to the affected Subscribers in the amount equal to their monthly
recurring charges for the proportionate time the Cable Service was out, or a credit to the affected
subscribers in the amount equal to the charge for the basic plus enhanced basic level of service
for the proportionate time the Cable Service was out, whichever is technically feasible or, if both
are technically feasible, as determined by Franchisee provided such determination is non-
discriminatory. Such .credit shall be reflected on Subscriber billing statements within the next
available billing cycle following the outage.
H. With respect to service issues concerning cable services provided to LFA
facilities, Franchisee shall Respond to all inquiries from LFA within four (4) hours and shall
commence necessary repairs within twenty-four (24) hours under Normal Operating Conditions.
If such repairs cannot be completed within twenty-four (24) hours, Franchisee shall notify LFA
in writing as to the reason(s) for the delay and provide an estimated time of repair.
5. CUSTOMER COMPLAINTS
Under Normal Operating Conditions, Franchisee shall investigate Subscriber complaints
referred by LFA within seventy-two (72) hours. Franchisee shall notify LFA of those matters
that necessitate an excess of seventy-two (72) hours to resolve, but those matters must be
resolved within fifteen (15) days of the initial complaint. LFA may require reasonable
documentation to be provided by Franchisee to substantiate the request for additional time to
resolve the problem. For purposes of this Section, "resolve" means that Franchisee shall perform
those actions, which, in the normal course of business, are necessary to investigate the
Customer's complaint and advise the Customer of the results of that investigation. If the Grantee
32
fails to resolve a complaint within the required seventy two (72) hours (or extended period), the
Franchisee shall pay to the LFA one hundred ($100) dollars per day for each day the complaint is
not resolved within the specified time frame.
For purposes of this subsection, "resolve" means that the Grantee shall perform those actions
that, in the normal course of business, are necessary to respond to the Subscriber's problem.
6. BILLING
A. Subscriber bills must be itemized to describe Cable Services purchased by
Subscribers and related equipment charges. Bills shall clearly delineate activity during the
billing period, including optional charges, rebates, credits, and aggregate late charges. Franchisee
shall, without limitation as to additional line items, be allowed to itemize as separate line items,
Franchise fees, taxes and/or other governmentally imposed fees. Franchisee shall maintain
records of the date and place of mailing of bills.
B. ....Every Subscriber with a current account balance sending payment directly to
Franchisee shall be given at least twenty (20) days from the date statements are mailed t6 the
Subscriber until the payment due date.
C. A specific due date shall be listed on the bill of every Subscriber whose account is
current. Delinquent accounts may receive a bill which lists the due date as upon receipt;
however, the current portion of that bill shall' not be considered past due except in accordance
with B above.
D. Any Subscriber who, in good faith, disputes all or part of any bill shall have the
option of withholding the disputed amount without disconnect or late fee being assessed until the
dispute is resolved provided that:
(1) The Subscriber pays all undisputed charges,
(2) The Subscriber provides notification of the dispute to .Franchisee within five
(5) days prior to the due date; and
(3) The Subscriber cooperates in determining the accuracy and//or appropriateness
of the charges in dispute.
It shall be within Franchisee's sole discretion to determine when the dispute has been
resolved.
E. Under Normal Operating Conditions, Franchisee shall initiate investigation and
resolution of all billing complaints received from Subscribers within five (5) business days of
receipt of the complaint. Final resolution shall not be unreasonably delayed.
F. Franchisee shall provide a telephone number and address on the bill for
Subscribers to contact Franchisee.
33
G. Franchisee shall forward a copy of any Cable Service related billing inserts or
other mailing sent to Subscribers to LFA upon request.
H. Franchisee shall provide all Subscribers with the option of paying for Cable
Service by check -.or an automatic payment option where the amount of the bill is automatically
deducted from a checking account designated by the Subscriber. Franchisee may in the future, at
its discretion, permit payment by using a major credit card on a preauthorized basis. Based on
credit history, at the option of Franchisee, the payment alternative may be limited..
7. DEPOSITS, REFUNDS AND CREDITS_
A. Franchisee may require refundable deposits from Subscribers with (1) a poor
credit or poor payment history, (2) who refuse to provide credit history information to
Franchisee, or (3) who rent Subscriber equipment from Franchisee, so long as such deposits are
applied on a non-discriminatory basis. The deposit Franchisee may charge Subscribers with poor
credit or poor payment history or -who refuse to provide credit information may not exceed an
amount equal to an average Subscriber's monthly charge multiplied by six (6). The maximum
deposit_ Franchisee may charge for Subscriber equipment is the cost of the equipment which
Franchisee would need to purchase to replace the equipment rented to the Subscriber.
B. Franchisee shall refund or credit the Subscriber for the amount of the deposit
collected for equipment, which is unrelated to poor credit or poor payment history, after one year
and provided the Subscriber has demonstrated good payment history during this period.
Franchisee shall pay interest on other deposits if required law.
C. - Under Normal Operating Conditions, refund checks will be issued within next
available billing cycle following the resolution of the event giving rise to the refund, (e.g.
equipment return and final bill payment).
D. Credits for Cable Service will be issued no later than the Subscriber's next
available billing cycle, following the determination that a credit is warranted, and the credit is
approved and processed. Such approval and processing shall not be unreasonably delayed.
E. Bills shall be considered paid when appropriate payment is received by
Franchisee or its' authorized agent. Appropriate time considerations shall be included in
Franchisee's collection procedures to assure that payments due have been received before late
notices or termination notices are sent.
S. RATES, FEES AND CHARGES
A. Franchisee shall not, except to the extent expressly permitted by law, impose any
fee or charge for Service Calls to a Subscriber's premises to perform any repair or maintenance
work related to Franchisee equipment necessary to receive Cable Service, except where such
problem is caused by a negligent or wrongful act of the Subscriber (including, but not limited to
34
a situation in which the Subscriber reconnects Franchisee equipment incorrectly) or by the
failure of the Subscriber to take reasonable precautions to protect Franchisee's equipment (for
example, a dog chew).
& Franchisee shall provide reasonable notice to Subscribers of the possible
assessment of a late fee on bills or by separate notice.
9. DISCONNECTION /DENIAL OF SERVICE
A. Franchisee shall not terminate Cable Service for nonpayment of a delinquent
account unless Franchisee provides a notice of the delinquency and impending termination at
least ten (10) days prior to service suspension and twenty days prior to the proposed final
termination. The notice shall be mailed to the Subscriber to whom the Cable Service is billed.
The notice of delinquency and impending termination may be part of a billing statement.
B. Cable Service terminated in error must be restored without charge within twenty-
four. (24) hours of notice. If a Subscriber was billed for the period during which Cable Service
was terminated in error, a credit shall be issued to the Subscriber if the Service Interruption was
reported by the Subscriber.
C. -Nothing in these standards shall limit the right of Franchisee to deny Cable
Service for non-payment of previously provided Cable Services, refusal to pay any required
deposit, theft of Cable Service, damage to Franchisee's equipment, abusive and/or threatening
behavior toward Franchisee's employees or representatives, or refusal to provide credit history
information or refusal to allow Franchisee to validate the identity, credit history and credit
worthiness via an external credit agency.
D. Charges- for cable service will be discontinued at the time of the requested
termination of service by the subscriber, except equipment charges may by applied until
equipment has been returned. No period of notice prior to requested termination of service can
be required of Subscribers by Franchisee. No charge shall be imposed upon the Subscriber for or
related to total disconnection of Cable Service or for any Cable Service delivered after the
effective date of the disconnect request, unless there is a delay in returning Franchisee equipment
or early termination charges apply pursuant to the Subscriber's service contract. If the
Subscriber fails to specify an effective date for disconnection, the Subscriber shall not be
responsible for Cable Services received after the day following the date the disconnect request is
received by Franchisee.. For purposes of this subsection, the term "disconnect" shall include
Subscribers who elect to cease receiving Cable Service from Franchisee and to receive Cable
Service or other multi -channel video service from another Person or entity.
10. COMMUNICATIONS WITH SUBSCRIBERS
A. All Franchisee personnel, contractors and subcontractors contacting Subscribers
or potential Subscribers outside the office of Franchisee shall wear a clearly visible identification
card bearing their name and photograph. Franchisee shall make reasonable effort to account for
all identification cards at all times. In addition, all Franchisee representatives shall wear
M
appropriate clothing while working at a Subscriber's premises. Every service vehicle of
Franchisee and its contractors or subcontractors shall be clearly identified as such to the public.
Specifically, Franchisee vehicles shall have Franchisee's logo plainly visible. The vehicles of
those contractors and subcontractors working for Franchisee shall have the contractor's 1
subcontractor's name plus markings (such as a magnetic door sign) indicating they are under
contract to Franchisee.
B. All contact with a Subscriber or potential Subscriber by a Person representing
Franchisee shall be conducted in a courteous manner.
C. Franchisee shall send annual notices to all Subscriber informing them that any
complaints or inquiries not satisfactorily handled by Franchisee may be referred to LFA.
D, All notices identified in this Section shall be by either:
(1) A separate document included with a billing statement or included on the
portion of the monthly bill that is to be retained by the Subscriber; or
(2) A separate electronic notification
E, Franchisee shall provide reasonable notice to Subscribers of any pricing changes
(excluding sales discounts, new products or offers) and, subject to the forgoing, any changes in
Cable Services, including channel line-ups. Such notice must be given to Subscribers a
minimum of thirty (30) days in advance of such changes if within the control of Franchisee, and
Franchisee shall provide a copy of the notice to LFA including how and where the notice was
given to Subscribers.
F. Franchisee shall provide information to all Subscribers about each of the
following items at the time of installation of Cable Services, annually to all Subscribers, at any
time upon request, and, subject to Subsection 10.E., at least thirty (30) days prior to making
significant changes in the information required by this Section if within the control of
Franchisee:
(1) Products and Cable Service offered;
(2) Prices and options for Cable Services and condition of subscription to
Cable Services. Prices shall include those for Cable Service options, equipment
rentals; program guides, installation, downgrades, late fees and other fees charged by
Franchisee related to Cable Service;
(3) Installation and maintenance policies including, when applicable,
information regarding the Subscriber's in-home wiring rights during the period Cable
Service is being provided;
(4) Channel positions of Cable Services offered on the Cable System;
gel
(5) Complaint procedures, including the name, address and telephone number
of LFA, but with a notice advising the Subscriber to initially contact Franchisee about
all complaints and questions;
(6) Procedures for requesting Cable Service credit;
(7) The availability of a parental control device;
(8) Franchisee practices and procedures for protecting against invasion of
privacy; and
(9) The address and telephone number of Franchisee's office to which
complaints may be reported.
A copy of notices required in this Subsection 10.F., will be given to LFA at least fifteen
(15) days prior to distribution to subscribers if the reason for notice is due to a change that is
within the control of Franchisee and as soon as possible if not with the control of Franchisee.
G. Notices of changes in rates shall indicate the Cable Service new rates and old
rates, if applicable.
H. - - Notices of changes of Cable Services and/or Channel locations shall include a
description of the new Cable Service, the specific channel location, and the hours of operation of
the Cable Service if the Cable Service is only offered on a part-time basis. In addition, should
the channel location, hours of operation, or existence of other Cable Services be affected by the
introduction of a new Cable Service, such information roust be included in the notice.
1. Every- notice of termination of Cable Service shall include all of the following
information:
(1) The name and address of the Subscriber whose account is delinquent
(2) The amount of the delinquency
(3) The date by which payment is required in order to avoid termination of Cable
Service
(4) The telephone number for Franchisee where the Subscriber can receive additional
information about their account and discuss the pending termination.
11. LIQUIDATED DAMAGES
Notwithstanding any other provision in these Customer Service Standards, the liquidated
damages set forth above will not be assessed by LFA for eighteen (18) months following the
date that Cable Service is first provided to LFA as set forth in Section 3.1.1 of the Franchise
Agreement or twenty-four (24) months from the Effective Date, whichever is earlier.
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12. REPORTS TO CITY.
A. Service -Related Reports
Franchisee shall provide Customer Service reports to the City no later than 45 days following
the end of each calendar quarter starting six (6) months after Franchisee's initial provision of
service, showing Franchisee's compliance with these Customer Service Standards:
i. Telephone Availability Performance;
ii. Installation and Service Appointment Performance; and
iii. Monthly Service Interruption and Outage Summary.
The City may require Franchisee to provide the following additional reports by the later of:
(1) the Franchisee obtaining one thousand (1000) Subscribers located in the Franchise Area
or (2) in conjunction with the above reporting requirements:
iv. Cable System Statistics;
V. Monthly Service Call Availability Analysis and Installation Call
Availability Analysis (including Report of Service Calls by Reason); and
vi. Monthly Compliant Report, showing the results of a random sampling of
Complaints.
If competitively sensitive subscriber information cannot be protected from disclosure to third
parities, including without limitation, disclosure pursuant to an open records request, the
competitively sensitive information will be available for review by the City at a location in
Dallas or Tarrant Counties, Texas.
B. Format of Reports
Report formats for the above described reporting will be provided to the City ninety (90)
days prior the implementation of customer service reporting requirements. Franchisee's
service -related reports to the City shall show Franchisee's performance for the respective
time period, excluding periods that were not Normal Operating Conditions ("Abnormal
Operating. Conditions") and, if Franchisee contends any Abnormal Operating Conditions
occurred during the period in question, it shall describe the nature and extent of such
Abnormal Operating Conditions and show Franchisee's performance both including and
excluding the time periods Franchisee contends such conditions were in effect. At the City's
request based on reasonable need, Franchisee will develop for the City additional information
reports at a location in Dallas or Tarrant Counties, Texas reasonably related to the
measurement and evaluation of Franchisee's compliance with these Customer Service
Standards.
C. Reviews Pertaining to Service -Related Reports
The City, by itself or in combination with other municipalities with whom Franchisee has a
franchise or other agreement to use public rights-of-way for the provision of Cable Service,
reserves the right to review the underlying records supporting the reports of Franchisee or
any Affiliate of Franchisee to verify the accuracy of the service -related reports required
hereunder. In the event of any such a review, Franchisee shall make available at a location in
Dallas or Tarrant Counties, Texas, that is convenient to the City all records of Franchisee or
any and all Affiliates of Franchisee reasonably necessary to conduct such a review in the
same manner as allowed in Section 9 of the Franchise. If the review discloses performance
that is three (3) percentage points worse than any of the standards of the referenced sections
(such as compliance 92% of the time verses 95% of the time), Company shall pay the City's
costs in connection with the audit within thirty (30) days of submission of an invoice, not to
exceed $3000. Otherwise, the City shall pay the costs of such audit.
Examples of Service Related Report Items
Service Calls by Reason
Product Education
Outside Problem
Inside Problem
Set Top Boxes/Remotes
Headend Fix
Disconnected in Error
_ Outage
Customer Equipment
_ Not Home
No Trouble Found (NTF)
Other
Subscriber Information
Homes Passed
Customers
Penetration (%)
Installations
Disconnects
Net Gain
Technical Performance
Total Dispatched Trouble Calls
Trouble Dispatched Percentage
Service Interruption Response < 24 hours (%)
Next Day Trouble Resolution Initiation (%)
Installations Performed, 7 days of ONT (%)
-Service Appointments Met (%}
System Reliability (%) _
X1
Telephone Availability Performance -- 90% standard
Calls Received
Calls Handled (%)
Trunk Busy (%) 1 Busy Signal (%)
Trained Company Representatives available to handle telephone repair calls 24 hrslday, 7
days/week (% of time)
24 hrslday, 7 days/week (% of time)
Calls Answered in < 30 seconds (unadjusted) (%)
Percentage answered < 30 seconds (adjusted)
Reasons for adjustment for non -normal operating conditions (list reason and date of
occurrence e.g. city-wide power outage 01101/05)
Calls to the City Referred to Company during Quarter
On -Time Performance (95% of standard)
Service Calls - 95%° within 24 hours
installations - 95% within 7 business days of ONT
Service Interruption — 95% within 24 hours
Installation Appointments Met (%)
Total Service Interruptions reported
.N
EXHIBIT D
FRANCHISE FEE SCHEDULE/REPORT
For the Month of
1. Monthly Recurring Cable Service Charges $
(e.g., Basic, Enhanced Basic, Premium and Equipment Rental)
2. Usage Based Charges
(e.g, Pay Per View, Installation)
3. Other Misc.
Revenue
(e.g., Late Charges, Advertising, Leased Access)
4. Franchise Fees _Collected
Less:
1. Sales Tax Collected $
2. Uncollectibles _
Total Receipts Subject to Franchise Fee Calculation.
Franchise Fee Rate (S%)
Franchise Fee Due - _ _ $
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