Chapter 4.40 CABLE COMMUNICATION FRANCHISE

A. General Findings: The city of Gonzales finds that cable communication systems have the potential of benefiting its residents if properly regulated. The city further finds that the public convenience, safety, and general welfare are served through a franchising process that specifies certain conditions for review but allows for future flexibility to meet cable related needs and interests.

B. Purpose: It is the city’s purpose to promote the public health, safety, and general welfare by granting one or more franchises for the construction, upgrade, operation, and repair of cable communication systems within the city; to regulate (to the extent not expressly prohibited by law) each cable communication system within the city; to require each grantee to pay a franchise fee to the city for the use of streets and public rights of way; to promote availability of quality cable service to city residents, businesses, the city, and other public institutions; to encourage the development of and to improve local programming including public, educational, and governmental access programming; to promote competitive cable rates and services; to provide safe and efficient use of streets and rights of way; to optimize the use of public property; to provide a diversity of information to the community; to provide a wide range of programming services which individually may not be desired by all subscribers, but collectively improve the overall value of a cable communication system; to maximize channel capacity, facilities, and programming access for governmental and educational agencies, as well as other groups and individual members of the general public, so as to promote open government, educational opportunity, and a diversity of community information and opinion; and to allow flexibility to respond to changes in technology, subscriber interests, and competitive factors within the cable communication service market and the larger market for entertainment and information. (Ord. 2003-26, 10-6-2003)

4.40.020 DEFINITIONS:

A. List Of Defined Terms: The following terms, phrases, words, and their derivations shall have the meanings given herein:


ACCESS:	The availability of the cable system(s) (as it relates to PEG access) for use by various agencies, institutions, organizations, groups, and individuals in the community, including the city and its designees, to acquire, create, and distribute programming not under a grantee’s editorial control, including, but not limited to:


Educational Access:	Access where schools are the primary or designated programmers or users having editorial control over their programming.


Governmental Access:	Access where governmental institutions or their designees are the primary or designated programmers or users having editorial control over their programming.


PEG Access:	Public access, educational access, and governmental access, collectively.


Public Access:	Access where organizations, groups, or individual members of the general public, on a nondiscriminatory basis, are the primary or designated programmers or users having editorial control over their programming.


ACCESS CHANNEL:	Any channel or portion thereof, designated for access purposes or otherwise made available to facilitate or transmit access programming.


AFFILIATE:	When used in relation to any entity shall mean another person, firm, corporation, partnership, or other entity that owns or controls, is owned or controlled by, or is under common ownership or control with such entity.


APPLICANT:	Any person who files a written application for a franchise under this chapter.


BASIC SERVICE:	Any service tier regularly provided to all subscribers which includes the retransmission of local television broadcast signals or such other definition as may be adopted by federal law. It shall include all PEG access channels.


CABLE ACT:	The cable communications policy act of 1984, 47 USC section 521 et seq., as amended by the cable television consumer protection and competition act of 1992, and the telecommunications act of 1996, and as further amended.


CABLE SERVICE OR CABLE COMMUNICATION SERVICE:	1) The one-way transmission to subscribers of video programming or other programming services; and 2) subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service; and 3) cable internet access service.


CABLE SYSTEM OR CABLE COMMUNICATION SYSTEM:	A facility consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide cable television service which includes video programming and which is provided to multiple customers within the city, but such term does not include: 1) a facility that serves only to retransmit the television signals of one or more television broadcast stations; 2) a facility that serves subscribers without using any public right of way, including streets or easements; 3) a facility of a common carrier which is subject, in whole or in part, to the provisions of title II of the communications act of 1934, except that such facility shall be considered a cable system (other than for purposes of 47 USC 541(c)) if such facility is used in the transmission of video programming directly to subscribers, unless the extent of such use is solely to provide interactive on demand services; 4) an open video system that complies with 47 USC 573; or 5) any facilities of any electric utility used solely for operating its electric utility systems. Notwithstanding the above, the term cable system also includes any facility that is a community antenna television system under California law. A reference to a cable system refers to any part thereof, including, without limitation, converters.


CABLE TELEVISION COMMITTEE OR TELECOMMUNICATIONS COMMITTEE:	A committee whose membership and powers, if formed, shall be as designated in the city.


CONSTRUCTION:	Any new construction, reconstruction, rebuild, or upgrade of the system.


DESIGNATED ACCESS PROVIDER:	The entity or entities designated by the city under subsection 4.40.030G1 of this chapter.


DOCUMENT OR RECORD:	Those materials normally generated, used and retained in the operation and management of a cable system, in whatever form stored, including, but not limited to, computerized records and programs, paper records, and video or audio taped records.


DOWNSTREAM CHANNEL:	A channel capable of carrying a transmission from the headend to remote points on the cable system or to interconnection points on the cable system.


FIBER OPTIC:	The transmission medium of optical fiber, along with all associated electronics and equipment capable of carrying cable services by means of electric light wave impulses.


FRANCHISE:	The nonexclusive authorization granted pursuant to this chapter by the city to a grantee to construct, rebuild, maintain, and operate a cable system under, on, and over streets within all or specified areas of the city. The terms and conditions of this chapter and any franchise agreement between a grantee and the city collectively constitute the franchise. The term "franchise" does not include any other license, permit, or agreement that may be required for the privilege of transacting and carrying on a business within the city or for disturbing the surface of any street.


FRANCHISE AGREEMENT:	A contract between the city and a grantee entered into in accordance with the terms of this chapter, and which, together with this chapter, constitute the franchise.


FRANCHISE AREA:	The geographic area for which a franchise is issued. The franchise area may be specified to authorize provision of service not only in areas within the existing city limits, but also in other areas as those areas are annexed in the future.


GRANTEE:	Any person to whom a franchise is granted by the city council.


GROSS REVENUES:	All cash, credits, property, or other consideration of any kind or nature received directly or indirectly by a grantee, its affiliates, as to revenues from operation of the cable system, or by any other entity that operates a grantee’s cable system, from any source whatsoever arising from, attributable to, or in any way derived from the grantee’s operation of a cable system, including the studios and other facilities associated therewith, to provide cable services. Gross revenues include, but are not limited to, fees charged to subscribers for basic service; fees charged to subscribers for any optional, premium, per channel, or per program service; monthly fees charged to subscribers for any tier of service other than basic service; installation, disconnection, reconnection, and change in service fees; leased channel fees; fees, payments, or other payment received as consideration from programmers for carriage of programming on the cable system; converter rentals or sales; studio rental, production equipment, and personnel fees; advertising revenues, including a per capita share of advertising revenues for advertising carried on more than one cable system; revenues from home shopping channels; sales of programming guides; and such other revenue sources as may now exist or hereafter develop. The definition shall be interpreted in a manner which permits the city to collect the maximum franchise fee permitted by law, irrespective of the source of revenue. Gross revenues, however, shall not include any "bad debt" (defined as unpaid subscriber or advertiser accounts), any taxes on services furnished by a grantee which are imposed directly upon any subscriber or user by the state, city, or other governmental unit and which are collected by a grantee on behalf of said governmental unit. The franchise fee is not a tax.


HEADEND:	A grantee’s facility for signal reception and dissemination on the cable system, including cable, antennas, wires, satellite dishes, monitors, switchers, modulators, processors for television broadcast signals, equipment for the interconnection of the cable system with adjacent cable systems and interconnection of any separate networks which are part of the cable system, and all other related equipment and facilities.


INSTITUTIONAL NETWORK:	A communications system, whether physically integrated with a cable system or not, that is constructed, operated or maintained by a grantee whose transmissions are principally available to persons other than cable television subscribers (i.e., government agencies, educational institutions, and hospitals).


INTERCONNECT OR INTERCONNECTION:	The provision by a grantee of technical, engineering, physical, and all other necessary components to accomplish, complete, and adequately maintain a physical linking of a grantee’s cable system and cable services or any designated channel or signal pathway thereof, with any other designated cable system or programmer so that cable services of technically adequate quality may be sent to and received from such other systems.


ORDINANCE:	Shall refer to this cable communication franchise procedures, terms and enforcement measures ordinance.


PERSON:	Any individual, sole proprietorship, partnership, association, corporation, or other form of organization authorized to do business in the state of California, and includes any natural person.


PUBLIC PROPERTY:	Any real property owned by the city or any other governmental unit that is not otherwise defined herein as a street.


RESIDENTIAL SERVICES:	Cable services delivered to single or multiple dwelling units.


SCHOOL:	Any accredited primary school, secondary school, college, and university.


SERVICE TIER:	A category of cable service provided by a grantee and for which a separate charge is made by the grantee.


STREET:	The surface of and the space above and below any street, road, highway, freeway, bridge, lane, path, alley, court, sidewalk, parkway, drive, right of way, easement, or other public way, now or hereafter existing within the city which may be properly used for the purpose of installing, maintaining, and operating a cable system.


SUBSCRIBER:	Any person who is lawfully receiving, for any purpose or reason, any cable service or services provided by a grantee by means of or in connection with the cable system, whether or not a fee is paid for such service.


TRANSFER:	The sale, lease, assignment, mortgage, consolidation, merger, or any other disposition of a franchise, or any change in the ownership or control of a grantee or any person which owns, controls, or manages the grantee directly or through one or more intervening partnerships or corporations.


UPGRADE:	An improvement in channel capacity or other technical aspect of cable system capacity that may be accomplished without a rebuild of the cable system.


UPSTREAM CHANNEL:	A channel capable of carrying a transmission to the headend from remote points on the cable system or from interconnection points on the cable system.

B. Other Terms: Words not defined herein shall be given the meanings set forth in the cable communications policy act of 1984, 47 USC section 521 et seq., as amended. (Ord. 2003-26, 10-6-2003)

4.40.030 PROGRAMMING AND CHANNEL CAPACITY:

A. Grantee Compliance: A grantee shall meet or exceed the programming and channel capacity requirements set forth in this chapter.

B. Initial Channel Capacity:

1. A grantee, except a grantee operating a cable system that was constructed prior to the date this chapter was enacted, shall provide a cable system which uses at least 550 MHz equipment of high quality and reliability. At minimum, a grantee shall integrate optical fiber or other technology providing equivalent or greater functionality, performance, and capacity, into any cable system construction and design in a manner which permits it to take full advantage of the benefits of that technology, including increased reliability and improved system performance.

2. At minimum a grantee, except a grantee operating a cable system that was constructed prior to the date this chapter was enacted, shall install and activate the return portion of the cable system in the sublow frequency spectrum of 5 MHz to 30 MHz.

3. A grantee shall initially include a sufficient number of downstream and upstream channels with sufficient capability and technical quality to enable the implementation and performance of all the requirements of this chapter, including, but not limited to, remote access transmissions and transmissions to and from access center(s) and interconnection points, as set forth in, but not limited to, this chapter.

C. Broad Programming Categories: A grantee shall provide at least the following initial broad categories of programming:

Arts, culture, and performing arts;

Children/family oriented;

Educational programming;

Ethnic programming;

Foreign language;

General entertainment (including movies);

Minority programming;

National, state, and local government affairs;

News and information;

PEG access programming;

Science/documentary;

Sports;

Weather information.

D. Deletion Or Reduction Of Programming Categories: A grantee shall not delete or so limit as to effectively delete any broad category of programming identified in this section and within its control without the consent of the city or as otherwise authorized by law.

E. Leased Access Channels: A grantee shall meet the leased access channel requirements imposed by federal law.

F. Broadcast Channels: To the extent required by federal law, a grantee shall provide to all residential subscribers the signals of:

1. Local commercial television stations and qualified low power stations; and

2. Qualified local noncommercial educational television stations.

G. PEG Access:

1. Designated PEG Access Providers:

a. The city may designate PEG access providers, including itself for governmental access purposes, to control and manage the use of any or all access facilities provided by a grantee under this chapter. To the extent authorized by the city, the designated access provider shall have sole responsibility for operating and managing such access facilities.

b. A grantee shall cooperate with designated access providers in the use of the cable system and access facilities for the provision of PEG access as provided in this chapter and the franchise agreement. A grantee may enter into operating agreements with designated access providers under which the designated access providers will facilitate and coordinate the provision of PEG access services.

2. PEG Channel Capacity And Technical Capability:

a. A grantee shall provide a minimum of one downstream channel for PEG access.

b. A grantee shall install, maintain, and replace as necessary, a link between the primary access center and the headend.

3. Access Interconnections: A grantee shall ensure that technically adequate signal quality, routing systems, and switching and/or processing equipment are initially and continuously provided for all access interconnections required by its franchise agreement both within grantee’s cable system and with other cable systems throughout the duration of this chapter.

4. Change In Technology: In the event a grantee makes any change in the cable system and related equipment and facilities or in the grantee’s signal delivery technology which directly or indirectly substantially affects the signal quality or transmission of access programming, the grantee shall at its expense take necessary steps or provide necessary technical assistance, including the acquisition of all necessary equipment, to ensure that the capabilities of access programmers are not diminished or adversely affected by such change.

5. Technical Quality:

a. A grantee shall maintain all access channels (both upstream channels and downstream channels) and all interconnections of access channels at the same level of technical quality and reliability required by this chapter and all other applicable laws, rules, and regulations for residential subscriber channels.

b. A grantee shall have no responsibility for the production quality or program content of the access programming distributed on the access channel or channels. (Ord. 2003-26, 10-6-2003)

4.40.040 FRANCHISE REQUIRED:

A. Franchise Required: No person may use the streets of the city to construct, operate, or repair a cable system, and no person or entity may provide cable service within the city without a franchise. Any person or entity may apply for a franchise. An independent contractor does not need a franchise to install, service or repair a cable system for a grantee.

B. Description Of Authorization: Any nonexclusive franchise granted pursuant to the provisions of this chapter shall authorize and permit a grantee to engage in the business of operating and providing a cable system in the city of Gonzales, and for that purpose to erect, install, construct, repair, replace, reconstruct, maintain, and retain in, on, over, under, upon, across, and along any street or highway, such poles, wires, cable, conductors, ducts, conduit, vaults, manholes, amplifiers, appliances, attachments, and other property as may be necessary and appurtenant to the cable system; and in addition, so to use, operate, and provide similar facilities or properties rented or leased from a public utility franchised or permitted to do business in the city of Gonzales, except that an encroachment permit shall be required for work or encroachment on public property or in the public rights of way. The construction, operation, and repair of the cable system shall be subject to all existing and future ordinances and regulations of the city, including zoning ordinances and ordinances establishing construction standards or procedures for use of the streets.

C. Duration: Unless a different term is specified in a grantee’s franchise agreement, a franchise shall be for eight (8) years. A franchise does not confer rights other than as provided by this chapter and the franchise agreement, or as mandated by federal or state law.

The term of an existing franchise may be extended by the city by resolution of the city council for a period not to exceed twelve (12) months.

D. Owner Consent Required: A franchise does not authorize a grantee to construct, operate, or repair any other type of system, or to provide service to, or install its cable system upon private property without owner consent, or to use publicly or privately owned conduits or poles without a separate agreement with the owners, except that nothing in this section limits any rights the grantee may have to use compatible or apportionable easements pursuant to section 621 of the cable act, 47 USC section 541(a)(2) and other applicable law.

E. Grantee’s Expense: Unless otherwise specifically stated in a franchise or required by law, all acts which a grantee is required to perform under the franchise or applicable law must be performed at the grantee’s expense. (Ord. 2003-26, 10-6-2003)

4.40.050 APPLICATION FOR FRANCHISE:

A. Filing: An application for a new franchise or for a renewal franchise must be filed with the city clerk. New franchises and renewal franchises that are not subject to the formal renewal provisions of the cable act, 47 USC section 546(a)–(g) shall be reviewed as provided in subsection 4.40.060A of this chapter. Applicants that submit proposals subject to the formal renewal provisions of the cable act shall be reviewed as provided in subsection 4.40.060B of this chapter.

B. Application Requirements: An application for a franchise shall contain the following information:

1. The name, address, and telephone number of the applicant.

2. A detailed statement of the form or business organization of the applicant including, but not limited to, the following:

a. The names, residence or business addresses of all officers, directors, and associates of the applicant;

b. The names, residence or business addresses of all officers, persons, and entities having, controlling, or being entitled to have or control five percent (5%) or more of the ownership of the applicant, and respective ownership share of each such person or entity;

c. The names and addresses of any affiliate of the applicant and a statement describing the nature of any such affiliate, including, but not limited to, the cable communication systems owned or controlled by the applicant and its affiliates, and the areas served thereby;

d. If the applicant is a partnership, the name, residence or business addresses of each general partner; if a general partner is a corporation or partnership, the name and address of such corporation or partnership, and provide the same information for that corporation or partnership that is required of an applicant under this subsection B2 (if the partnership is scheduled to dissolve at a particular time, the time for dissolution shall be stated); and

e. If the applicant is a corporation, the application shall show the names, residence or business addresses of its officers and directors; if the corporation is a subsidiary of another corporation or partnership, the application shall show the name and address of such other corporation or partnership and provide the same information for that corporation or partnership that is required of an applicant under this subsection B2.

3. A listing of all city employees, officials, or appointees that have any interest, direct or indirect, in the applicant or any affiliate.

4. A copy of each written agreement and a description of every oral agreement or understanding the applicant has with any other person relating to the proposed franchise, that gives such person the right to manage, control, or to obtain the right to manage or control a grantee or its particular cable system. If a franchise is granted to a person acting on behalf of or as the representative of another person, and such information is not disclosed in the original application, such franchise shall be deemed void and of no force and effect whatsoever.

5. A detailed description of all previous experience of the applicant in providing cable communication system service and in related or similar fields.

6. A detailed and complete financial statement of the applicant, prepared by an independent certified public accountant, for the fiscal year just prior to the date of the application hereunder; or a letter or other acceptable evidence in writing from a recognized lending institution or funding source, addressed to both the applicant and the council, setting forth the basis for a study performed by such lending institution or funding source, and a clear statement of its intent as a lending institution or funding source to provide whatever capital shall be required by the applicant to construct and operate the proposed cable system in the city; or a statement from a certified public accountant, certifying that the applicant has available sufficient free, net, and uncommitted cash resources to construct and operate the proposed cable system in the city.

7. A statement identifying, by place and date, any other cable franchise(s) awarded to the applicant or its affiliate; the status of said franchise(s) with respect to completion thereof; the total cost of completion of such cable system(s); and the amount of the applicant’s and its affiliate’s resources committed to the completion thereof.

8. A detailed description of the proposed plan of operation of the applicant which shall include, but not be limited to, the following:

a. A precise description of the franchise area for which a franchise is sought and a map specifically showing the proposed service area or areas within which the applicant proposes to provide cable service. A proposed time schedule for the installation of all equipment necessary to become operational or for the completion of upgrades or improvements in the cable plant throughout the entire area to be served.

b. A statement or schedule setting forth all proposed classifications of rates and charges to be made against subscribers and all rates and charges as to each of said classifications, including installation charges and service charges.

c. A detailed, informative, and referenced statement describing the actual equipment and operational standards proposed by the applicant and that such standards of operations are in compliance with those contained in title 47, subpart K (section 76.601 et seq.) of the rules and regulations of the federal communications commission.

d. A detailed, informative, and referenced statement describing the actual or minimum channels/spectrum, equipment, facilities, and services proposed by the applicant to provide for PEG access.

9. Any other details, statements, information, or references pertinent to the subject matter of such application which shall be required or requested by the council, or by any provision of any other ordinance of the city.

10. A declaration by the applicant that the application is true and complete, that no person not shown in the application has any interest in the application for a franchise, and that the applicant has read this chapter and will abide by its provisions.

C. Application Fee Required: At the time it applies for an initial franchise, an applicant shall submit an application fee in an amount to be set by the city council which shall be in the form of cash, certified or cashier’s check, or money order, to pay the costs of studying, investigating, and otherwise processing such application or any part thereof, and which shall be in consideration thereof, and not returnable or refundable in whole or in part.

D. Grantee’s Application Incorporated: The grantee shall provide all services specifically set forth in its application and by its acceptance of the franchise, the grantee specifically agrees that its application, as modified by any negotiation between the city and grantee as expressed in the franchise agreement, is thereby incorporated by reference and made a part of the franchise agreement. In the event of a conflict between such proposals and the provisions of the franchise, that provision which provides the greatest benefit to the community, in the opinion of the city, shall prevail. (Ord. 2003-26, 10-6-2003)

4.40.060 REVIEW OF APPLICATION:

A. Initial Franchise Or Nonformal Renewal: In the case of an application for an initial franchise or for a renewal franchise that is not governed by the formal renewal provisions of the cable act:

1. The city may advertise for additional applicants and issue a request for proposals (hereinafter "RFP").

2. The city may give public notice when it receives a properly completed franchise proposal. After receiving a proposal that contains the required information, the city may schedule a meeting or meetings to determine whether a franchise should be granted. In making this determination, the city may consider:

a. The extent to which an applicant for renewal has substantially complied with the applicable law and the material terms of any existing cable franchise;

b. Whether the applicant for renewal’s quality of service under its existing franchise, including signal quality, response to customer complaints, billing practices, and the like has been reasonable in light of the needs of the community;

c. Where the applicant has not previously held a franchise, whether the applicant’s record in other communities indicates that it can be relied upon to provide high quality service throughout any franchise term;

d. Whether the applicant has the financial, legal, and technical ability to provide the services, facilities, and equipment set forth in a proposal satisfying any minimum requirements established by the city;

e. Whether the applicant’s application is reasonable to meet the future cable related needs and interests of the city, taking into account the cost of meeting such needs and in light of the requirements established by the city; and

f. Whether issuance of a franchise is warranted in the public interest considering the immediate and future effect on streets, public property, and private property that will be used by the applicant’s cable system, including the extent to which installation or maintenance as planned would require replacement of property, involve disruption of property or public services, or interfere with the use of streets or public property; the effect of granting the franchise on the ability of the proposed cable service to meet the cable related needs and interests of the community, including PEG access channel capacity, facilities, and financial support; and whether the applicant has the financial, technical, and legal qualifications to provide the proposed cable service.

3. The city shall return any proposal that does not include all the information required by this chapter.

B. Formal Renewal Applications: Applications for renewal governed by the formal renewal provisions of the cable act shall be submitted in accordance with this section and shall be considered in accordance with the provisions of the cable act. A grantee which intends to exercise rights under 47 USC section 546(a)–(g) shall submit a notice in writing to the city clearly stating that it is activating the formal renewal procedures of the cable act. At the same time it submits this notice, it shall also submit the required application fee. A grantee which has applied for renewal under the formal renewal provision of the cable act shall submit all information requested by the city within the time frame delineated by the city.

C. Standing Not Granted: This chapter is not intended and shall not be interpreted to grant any applicant or grantee standing to challenge the issuance of a franchise to another applicant or grantee. Nothing in this section prohibits the city from relying on studies or proceedings previously conducted in drafting an RFP, if the city attorney concludes that those studies or proceedings continue to reflect community needs and interests. Nothing in this section prohibits an applicant for renewal from submitting a proposal under 47 USC section 546(h).

D. Final Franchise Agreement Required: If, considering the factors set forth above and applicable law, the city determines that a franchise should issue to an applicant, the city may promptly prepare a final franchise agreement for approval and signature by the applicant and the city. In addition to other matters that may or must be addressed therein consistent with the cable act, the franchise agreement shall specify, subject to applicable law: 1) the franchise area for which the franchise is awarded, and the terms and conditions under which the grantee must extend service to persons within that franchise area; 2) the term of the franchise; 3) requirements for cable system design and performance; 4) equipment and facilities requirements; and 5) requirements related to channels, facilities, and equipment for PEG access and community use (including institutional uses). The franchise area may be larger, smaller, or the same as the franchise area identified by the grantee. No franchise shall be effective or shall issue until the applicant has entered into a franchise agreement with the city, the franchise agreement has been approved by the city, and the grantee has filed an unconditional acceptance of the franchise in a form acceptable to the city attorney. (Ord. 2003-26, 10-6-2003)

4.40.070 CONTENTS OF PROPOSAL AND REVIEW:

A. Requirements: Every city RFP, including a request for a renewal proposal issued pursuant to 47 USC section 546(b), shall specify minimum requirements that an applicant must satisfy for facilities and equipment, including access facilities and equipment; channel capacity for PEG access use; and such other requirements as the city may establish in an RFP under the cable act. The RFP shall attach a draft franchise agreement and shall invite comments on that draft franchise agreement. In addition, the RFP shall require each applicant to provide at least the information necessary to determine the degree to which granting the franchise is likely to result in damage to streets, public property, or private property or disrupt use of or require replacement of streets, public property, or private property; and information required to permit the city to determine whether the applicant has the financial, legal, and technical qualifications to operate a cable system in Gonzales. The RFP shall require each applicant to provide information required to assess its proposal. It may also contain or refer to other information that may assist an applicant in preparing a proposal. The information sought shall include at least the following:

1. Changes to the information submitted with the application.

2. The names and addresses of the ten (10) largest holders of an ownership interest in the applicant, and all persons with five percent (5%) or more ownership interest, including the names and addresses of affiliates holding such ownership interests directly or indirectly; the persons who control the applicant; all officers and directors of the applicant; and any other business affiliation and cable system ownership interest of each named person; and a statement describing the applicant, its officers and directors, and its partners or major shareholders, indicating business experience and other pertinent information, including experience and performance in the cable communication system and service field showing any interest in other franchises, the date such franchises were granted, and the status of installation and operation thereof, and the value, size, and character of the operations under the other franchises.

3. Information showing that the applicant, any person controlling the applicant, and any other entity which will constitute a cable operator of the cable system under the cable act are legally qualified to hold the franchise, applying the standards set forth in section 4.40.080 of this chapter.

4. A demonstration of the applicant’s technical and financial ability to construct and/or operate the proposed cable system, including identification of key personnel.

5. A statement prepared by a certified public accountant or certified by the applicant’s chief financial officer regarding the applicant’s financial ability to perform as proposed.

6. A detailed description of the physical facilities proposed, including channel capacity, technical design, performance characteristics, headend, and access facilities, especially PEG access facilities; such description should specify the model and make of the system components the applicant intends to use or, if the applicant has not selected a particular brand of equipment, the minimum manufacturer’s specifications which the components used must meet.

7. A detailed description of the procedures the applicant intends to follow in constructing, operating, and maintaining the cable system. If the applicant plans to upgrade or rebuild an existing cable system, the description should explain the steps which will be taken to upgrade the cable system, the cable service disruptions which are expected to result, the steps the applicant intends to take in order to minimize such service disruptions, and how the applicant intends to compensate affected subscribers for such service disruptions.

8. An estimate of plant mileage that will be installed and its location, the proposed construction schedule, and information on the availability of space in conduits and on poles in the areas to be served, including an estimate of the cost of any necessary rearrangement of existing facilities.

9. A schedule of the maximum initial rates and charges to subscribers (including late fees, disconnect fees, and fees for each cable service the applicant intends to provide) and a description of the service that will be provided for those rates.

10. A narrative description of the future cable related needs and interests of Gonzales; a showing that the proposal will adequately meet those needs and interests, including, particularly, how the proposed cable system will provide for public access and how it will be upgraded or rebuilt to take advantage of changes in technology during the franchise term; and a copy of any community needs assessment conducted or relied upon by the applicant.

11. Pro forma financial projections for the proposed cable system for the term of the proposed franchise, including a statement of projected income and a schedule of planned capital additions, with all significant assumptions explained in notes or supporting schedules.

12. An affidavit or declaration of the applicant or authorized officer certifying the truth and accuracy of the information in the application, acknowledging the enforceability of application commitments, and certifying that the proposal meets all federal and state requirements.

13. If an applicant proposes to provide cable service to an area already served in whole or in part by an existing cable grantee, the identification of the area where the overbuild would occur and the potential subscriber density in the area which would encompass the overbuild.

14. The effect construction of the cable system is likely to have on streets, public property, and private property that will be used by the applicant’s cable system; the extent to which construction, installation, or maintenance as planned would require replacement of property or involve disruption of property or public services (including cable service) or use of streets; and the expected effect of granting the franchise on the ability of the proposed cable service to meet the cable related needs and interests of the community.

15. A declaration by the applicant that the application is true and complete, and that no person not shown in the application has any interest in the application for a franchise.

B. Authorization: The city council may authorize the issuance of any RFP by resolution.

C. Instructions: The city may prepare instructions and furnish the same to all interested persons stating how a proposal shall be submitted.

D. Cable Related Needs To Be Met: It is the obligation of an applicant to submit a proposal that shows that, if granted a franchise, the applicant will meet the reasonable cable related needs and interests of the community. An applicant shall submit additional information it deems appropriate to the consideration of its proposal, whether the information is required or not.

E. Bid Bond And Deadline: The city manager may establish a deadline for the receipt of proposals from any interested applicants. Each applicant shall submit fifteen (15) copies of its proposal. Each proposal shall be accompanied by a bid bond in the amount of twenty thousand dollars ($20,000.00). If the franchise is not awarded to an applicant, the applicant’s bid bond will be returned. If the franchise is awarded, the bond will be used to pay all reasonable costs incurred by the city in evaluating the applicant’s proposal that are chargeable by law to grantee, and the remainder shall be returned.

F. Additional Information: The city may request additional information from any applicant as required to understand or evaluate the applicant’s proposal. (Ord. 2003-26, 10-6-2003)

4.40.080 LEGAL QUALIFICATIONS:

A. Legal Ability To Perform: In determining whether an applicant has the necessary legal ability to perform as promised and to assist the city in evaluating the past performance of the applicant under 47 USC section 546 or section 4.40.070 of this chapter, the city shall evaluate the applicant’s proposal in light of this section.

1. The city shall not grant a franchise to any applicant which submitted a request for a franchise or for renewal of a franchise pursuant to subsections 4.40.060A and B of this chapter where the request was denied, or any challenges to the franchising decision were finally resolved on a date three (3) years or less preceding the submission of the new request where the previous denial was on grounds that the applicant failed to propose a cable system which met the needs and interests of the community; or that the applicant did not meet the requirements of this subsection A; or, in the case of a renewal request, that the applicant had failed to comply with the requirements of its franchise, or failed to provide adequate service to subscribers.

2. Every applicant must have the necessary authority under California law to operate a cable communication system. An applicant shall show that it is qualified to obtain the necessary federal licenses or waivers required to operate the cable system proposed.

3. An applicant shall not be issued a franchise if, at any time during the five (5) years prior to the issuance of the RFP to which the applicant responds, the applicant has been convicted of acts or omissions of such character that the applicant cannot be relied upon to deal truthfully with the city and the subscribers of the cable system, or to substantially comply with lawful obligations under the franchise or obligations under applicable law, including obligations under consumer protection laws and laws prohibiting anticompetitive acts, fraud, racketeering, or other similar conduct.

4. An applicant shall not be issued a franchise if it files materially misleading information in response to an RFP issued by the city, or intentionally withholds information which the applicant lawfully is required to provide.

5. For purposes of subsections A1, A3 and A4 of this section, the term applicant includes any affiliate.

B. Opportunity To Explain: The city may provide an opportunity to any applicant which has engaged in acts or omissions which may provide the basis for denying a request for a franchise under subsection A4 of this section to show that it would be inappropriate to base a decision on the act or omission, by virtue of: the particular circumstances surrounding the act or omission and given the steps taken by the applicant to cure all harms flowing from the act or omission and to prevent its recurrence; the involvement of applicant’s principals, owners, or managers; or the remoteness of the act or omission from the operation of cable communication systems.

C. Cable Act Renewal Provisions Prevail: This section shall not be interpreted to require the city to take any action that would be inconsistent with 47 USC section 546. (Ord. 2003-26, 10-6-2003)

4.40.090 LIMITATIONS OF FRANCHISE:

A. No Implied Rights: No privilege or exemption shall be granted or conferred by a franchise except those specifically prescribed therein.

B. Reservation Of Rights: The city reserves every right and power which is reserved to it by this chapter or by any ordinance or resolution of the city, and a grantee, by its acceptance of a franchise, agrees to be bound thereby and to comply with any action or requirements of the city in its exercise of any of its rights or powers. (Ord. 2003-26, 10-6-2003)

4.40.100 NONEXCLUSIVE FRANCHISE AND COMPETITION ENCOURAGED:

A. Nonexclusive Franchises Only: Franchises granted under this chapter shall be nonexclusive.

B. Reservation By City: The city reserves the right to grant a franchise to another person at any time, or to construct, operate, and/or repair a cable system itself. Competition among cable companies is encouraged.

C. Exclusive Contracts For Cable Service Prohibited: No person who holds a franchise may enter into an exclusive contract for the provision of cable service to any person or building, or demand the exclusive right to serve a person or building as a condition of extending service, unless otherwise authorized by law.

D. Parity Of Franchises: A franchise and the right it grants to use and occupy the public right of way shall not be exclusive and do not explicitly or implicitly preclude the issuance of other franchises to operate cable systems or other communications systems within the city, affect the city’s right to authorize use of the public right of way by other persons to operate cable systems or other communications systems or for other purposes as the city determines appropriate, or affect the city’s right itself to construct, operate or maintain a cable system or other communications system, with or without a franchise.

In the event that, after the effective date of a franchise, the city grants a franchise to another person or persons to use and occupy the public right of way for the purpose of operating a cable system or other communications system that is comparable in scope to a franchise, the material terms and conditions of such additional franchise or franchises shall be reasonably comparable to the material terms and conditions of the franchise, taking into consideration all of the circumstances in existence at the time such additional franchise or franchises are granted, including, without limitation, any applicable legal limitations on the city’s regulatory authority. (Ord. 2003-26, 10-6-2003)

4.40.110 OTHER LIMITATIONS OF FRANCHISE:

A. No Expectancy Of Renewal: Nothing in this chapter shall be interpreted to create an expectancy of renewal or to in any respect entitle any grantee to renewal or extension of a franchise, except as may be expressly required by applicable law.

B. Prior Lawful Occupancy Prevails: Any privilege claimed under any franchise by a grantee in any street or other public property shall be subordinate to any prior lawful occupancy and to the city’s regulation of the street or other public property, subject to section 4.40.140 of this chapter.

C. Delegation Of Authority: The city may transfer or delegate any right, power, or duty from any officer, employee, department, or body of the city to any other officer, employee, department, or body of the city.

D. Nonrecourse Against City: A grantee shall have no recourse against the city for any loss, cost, expense, or damage arising out of any provision or requirement of this chapter or of any franchise issued hereunder or because of its enforcement or nonenforcement.

E. Grantee Subject To City Police Powers: A grantee shall at all times be subject to the exercise of the police power of the city, including, but not limited to, the power of the city to adopt consumer protection laws regarding cable communication.

F. Public Interest Promoted: The provisions of any franchise shall be liberally construed in favor of the city in order to promote the public interest. (Ord. 2003-26, 10-6-2003)

4.40.120 NO WAIVER:

A. Failure Not Waiver: The failure of the city, upon one or more occasions, to exercise a right or to require compliance or performance under a franchise or any other applicable law shall not be deemed to constitute a waiver of such right or a waiver of compliance or performance, unless such right has been specifically waived in writing.

B. Waivers Are Specific: Waiver of a breach of a franchise agreement or this chapter is not a waiver of any similar or different breach. Neither the granting of a franchise nor any provision herein shall constitute a waiver or bar to the exercise of any governmental right or power of the city, including, without limitation, the right of eminent domain. (Ord. 2003-26, 10-6-2003)

4.40.130 AMENDMENTS TO CHAPTER AND FRANCHISE AGREEMENT:

A. Chapter Not A Contract: This chapter shall not constitute a contract between a grantee and the city. The city may amend any provision of this chapter and may adopt regulations consistent with this chapter. This includes, without limitation, the right to alter the insurance and security fund requirements herein, to account for inflation or changes in the risk to the city.

B. Amendment Of Franchises: A franchise agreement may authorize a grantee to provide services in addition to those authorized by section 4.40.030 of this chapter, subject to appropriate additional conditions to protect the public interest. The city may amend any franchise agreement upon the application of a grantee when necessary to enable the grantee to take advantage of developments in the field of telecommunication that, in the opinion of the city, will afford the grantee an opportunity to serve its customers more efficiently, effectively, and economically. Such amendments shall be subject to such conditions as the city determines are appropriate to protect the public interest. (Ord. 2003-26, 10-6-2003)

4.40.140 CONDITIONS OF STREET OCCUPANCY:

A. Installation; Location: A cable system shall be installed only on the property of a grantee, on existing pole or conduit facilities that the grantee may use under a valid pole or conduit attachment agreement or order of the city, on the property of a subscriber, in compatible easements that the grantee is entitled to use, or under the streets of the city. Installation of new poles on the streets is forbidden without the prior written consent of the city. A grantee’s placement of its cable system pursuant to its franchise shall not be deemed to give the grantee a property interest in any particular location on the streets or upon public property. The city reserves the right to designate where a cable system is to be placed on the streets and upon public property including any public utility easements controlled by the city. The cable system shall be placed in public utility easements unless otherwise designated by the city.

B. Installation; Timing: A grantee shall begin the installation, upgrade, or rebuild of its cable system within a reasonable length of time after the effective date of its franchise, which date shall be specified in the franchise agreement. A grantee shall be obligated to complete the construction of its cable system promptly and within a time specified in the franchise agreement, which time shall be reasonable in light of the nature of the construction required to build the cable system proposed by the grantee. A grantee is obligated to obtain all permits, licenses, approvals, and contracts, and pay all fees, required in order for it to begin and complete its cable system in accordance with its franchise agreement.

C. General Construction And Operational Practices:

1. The construction, operation, and repair of every cable system in the city and all parts thereof shall be performed in an orderly and workmanlike manner. To this end, each person who constructs, operates, or repairs a cable system shall do so in accordance with all applicable federal, state, local, and industry codes now or hereafter in effect. Without limiting the foregoing, the installation of any cable system shall be in accordance with the requirements of the national electrical safety code (or any superseding code) of the American Insurance Association (or successor organization) and all applicable laws affecting electrical installations and buildings, now or hereafter in effect. A franchise agreement may identify specific construction codes that a grantee must satisfy in addition to this general requirement. In the event of a conflict among codes and standards, the most stringent code requirement or standard shall apply. The city may adopt reasonable additional standards as required to ensure that work continues to be performed in an orderly and workmanlike manner, or to reflect changes in standards which may occur over the term of a franchise, after consultation with each affected grantee.

2. The construction, operation, and repair of the cable system shall be performed by experienced personnel who shall keep the cable system in a safe and suitable condition and in good order and repair. All installations shall be durable and use equipment of good quality.

3. Each grantee shall construct, operate, and repair its cable system so as not to endanger or unduly interfere with the property of the city; any gas, electric, or telephone fixture or other public utility property, including any water or sewer lines or fixtures; or the lives or property of persons; or to unnecessarily hinder or obstruct the use of streets. A grantee shall protect (at its expense) public property and private property from damage caused by the construction, operation, and repair of its cable system, and promptly repair damage the grantee causes or compensate the owner of the property for damage the grantee causes. It shall repair damaged property or pay compensation within no later than ten (10) days of the date of the damage. Each grantee shall construct, operate, and maintain its cable system with due care for the safety and integrity of persons and property, and shall use appropriate safety devices, warning signs, barricades, and lights to prevent harm to persons or property.

4. A grantee shall notify any person whose property is damaged by that grantee within four (4) hours of the time the damage is discovered. At a minimum, this section requires a grantee to place a prominent notice in a prominent place on the damaged property, and to make diligent efforts to contact the property owner or resident directly.

5. All excavation shall be performed so as to create the least inconvenience to the public, and in accordance with permits issued by the city. The city shall have the right to supervise all excavation. The grantee shall restore excavations to the then current standard specifications of the city.

6. If a grantee disturbs any street, public property, or private property during the course of constructing, operating, or repairing its cable system, that grantee shall, at its expense, replace and restore the street or property to as good a condition as before said work was commenced as is possible to the reasonable satisfaction of the city (in the case of streets or public property) or the owner (in the case of private property). Each grantee shall at all times comply with the requirements of 47 USC section 541(a)(2)(A)–(C). If any utility property is affected, including gas, electric, telephone, water, sewer, or storm drain, the owner shall be notified immediately and repairs shall immediately be made under the direction of the affected utility. The streets, public property, or private property affected shall be replaced or restored promptly, no later than within ten (10) days of the date of the disturbance.

7. In any area where any electric or telephone systems are underground, a grantee shall install its cable system underground. If, after a grantee installs its cable system, electric or telephone systems are relocated so that any electric or telephone systems in an area are underground, the grantee shall place its cable system in that area underground. Between a street and a subscriber’s residence, if both electric and telephone utility wiring is aerial, a grantee may install aerial cable except where a property owner or resident requests underground installation and agrees to bear the additional cost of such installation over and above the cost of aerial installation.

8. A grantee shall maintain records of the location of its cable system for both underground and aerial cables. A grantee shall provide information regarding the location of its cable system upon request of the city or any authorized governmental body for engineering design purposes. Location information shall be provided within thirty (30) days of request.

9. Notwithstanding any requirements of underground service alert, grantee shall pothole underground facilities at its expense upon request of the city or any authorized governmental body for engineering design purposes to ascertain the vertical and horizontal location of said facilities. Potholes shall be provided within thirty (30) days of request. Requester shall be notified forty eight (48) hours in advance of the potholing operation, and when the underground facility is exposed for measurement. After requester obtains measurements, grantee shall fill, compact, and pave pothole to the satisfaction of the city. Grantee shall perform all tasks of an "operator" under California Government Code 4216 (underground service alert) and shall be a member of underground service alert of northern California and Nevada.

10. A grantee shall initially provide to the city a map of the grantee’s cable system within the public right of way. This map shall be updated semiannually, and shall at all times be provided at no cost to the city.

D. Relocation Of Facilities:

1. For Governmental Bodies: A grantee is required to remove, relay, and relocate its cable system at its expense whenever the city (on its own behalf or on behalf of an assessment district) or any authorized governmental body requires it to do so for reasons of traffic conditions; public health and safety, and protection of property; or because the city or authorized governmental body elects to change or alter the grade, align or widen a street, or sell or vacate any street or public property, to move any building or structure, or to construct, operate, or repair any water pipes, lines, or mains, sanitary and storm sewers, watercourses, drainage ditches, conduits, playgrounds, power lines, tracks, traffic control devices, or other public improvement, public utility, public structure or facility, which change, alteration, sale, vacation, movement, construction, operation, or repair will be aided by removal, relaying, or relocation of a grantee’s cable system. An affected grantee shall be given written notice requesting the removal, relaying, or relocation of its cable system at least fifteen (15) days in advance of the date removal, relaying, or relocation of the cable system must be completed.

2. For Other Authorized Entities: If any removal, relaying, or relocation is required to accommodate the construction, operation, or repair of the facilities of another person which is authorized to use the streets or public property, a grantee shall, after at least fifteen (15) days’ advanced written notice, take action to implement the necessary changes requested by the responsible entity. The city may resolve disputes as to responsibility for costs associated with removal, relaying, or relocation of facilities among entities authorized to install facilities in the streets or on public property if such entities are unable to do so themselves.

3. For Third Persons: A grantee shall, upon the request of any person holding a building moving permit issued by the city, temporarily raise, lower, relay, relocate, or remove its wires, cables, and other facilities to accommodate the moving of the building, as the grantee shall determine. The expense of such temporary raising or lowering, relaying, relocation, or removal of a grantee’s facilities shall be paid by the person requesting the same, and the grantee shall have the authority to establish the reasonable cost of such changes and require such payment in advance. A grantee shall temporarily move its cable system as required under this section if required payments are made and the grantee is given at least forty eight (48) hours’ advance written notice to arrange for such temporary changes.

E. Failure To Remove, Replace, Or Restore: If a grantee fails to remove, relay or relocate its cable system as required or within the time period specified in this section; or if a grantee fails to restore, repair, or replace streets or public property as required and within the time period specified in subsection C of this section; the city may perform the work itself or hire someone to perform the work, and the grantee shall compensate the city for all reasonable expenses it incurs. In the event a grantee fails to restore, replace, or repair private property as required and within the time period specified by subsection C of this section, the owner may perform the work itself or hire someone to perform the work, and the grantee shall compensate the owner for all reasonable expenses incurred. If a grantee fails to protect streets or public property as required by its franchise, the city may do so, and the grantee shall compensate the city for all reasonable expenses incurred thereby. The grantee shall pay expenses incurred by the city or property owner within ten (10) days of receipt of an itemized account of such expenses.

F. Removal Or Relocation In Event Of Emergency: In event of emergency, or where a cable system creates or is contributing to an imminent danger to health, safety, or property, the city may remove, relocate, or relay that cable system without prior notice at grantee’s expense.

G. Authority To Trim Trees: A grantee shall comply with the city tree ordinance if and when it trims trees and shrubbery upon and overhanging streets and other public property. If the city requests it, trimming shall be done under the supervision and direction of the city.

H. No Guarantee Of Accuracy Of Maps: The city does not guarantee the accuracy of any maps showing the horizontal or vertical location of existing structures. In streets, where necessary, the location shall be verified by excavation by grantee at its expense.

I. Contractors: All contractors or subcontractors shall be properly licensed, and each contractor or subcontractor shall have the same obligations with respect to its work as a grantee would have under its franchise and applicable laws if the work were performed by the grantee. Each grantee shall be responsible for ensuring that the work of its contractors and subcontractors is performed consistent with the franchise and applicable law, shall be fully responsible for all acts or omissions of its contractors or subcontractors, and shall be responsible for promptly correcting acts or omissions by any of its contractors or subcontractors. (Ord. 2003-26, 10-6-2003)

4.40.150 CONSUMER PROTECTION; GENERAL:

A. Customer Protection Requirements: A grantee shall meet or exceed requirements for customer protection established by the city of Gonzales, whether adopted before or after its franchise was issued. The city manager may from time to time propose amendments to the rules as necessary to ensure that high quality customer service is provided by each grantee. The city manager shall provide a copy of amendments to the standards to every person holding such a franchise and to every person which has a pending application for a cable franchise at the time the draft standards are developed. The city manager shall provide each such person the opportunity to submit written comments on the amendments to the standards. After reviewing the comments, the city manager shall submit the standards to the city council for approval.

B. Enforcement In Franchise Agreement: In the case of any franchise issued after the effective date hereof, the franchise agreement shall provide for enforcement of specified customer service standards of a grantee, which standards must meet or exceed the standards established by the city under subsection A of this section.

C. Uniform Standards: The standards developed under subsection A of this section shall require a uniform level of service quality to all subscribers within the city at a reasonable cost. The standards may recognize the fact that different standards may apply to smaller systems or systems serving areas of low density which may not be required to meet standards reasonably applied to larger systems, because such smaller systems and systems serving areas of low density may not be able to satisfy certain obligations without substantially increasing costs to subscribers. Moreover, the standards may recognize that a cable system serving fewer subscribers may have fewer calls or demands for service from subscribers, which difference may justify certain differences in standards.

D. Failure To Meet Standards: Any grantee which fails to satisfy the standards adopted by the city under subsection A of this section shall be given notice that it may be found to have failed to provide adequate service within the meaning of 47 USC section 546(c)(1)(A) or (B), as appropriate.

E. Right Of Privacy: A grantee shall maintain the right of privacy of any subscriber, programmer, or any other person resulting from any device or signal associated with the cable system. A grantee shall not place in the building, structure, or any facility of any subscriber any equipment capable of two-way communications without the written consent of the subscriber, revocable at the discretion of the subscriber, and shall not use the two-way communications capability of the cable system for unauthorized or illegal subscriber surveillance of any kind. For purposes of this subsection, tenants who occupy premises shall be deemed to be subscribers, regardless of who actually pays for the service. Written consent, as required herein, shall not be required of any subscriber by a grantee as a condition of receiving cable services.

F. City’s Rights Not Limited: Nothing in this section shall be read to limit the city’s right to adopt other consumer protection laws. (Ord. 2003-26, 10-6-2003)

4.40.160 RATE REGULATION:

A. Uniform Charges: All charges to subscribers and users shall be uniform throughout the franchise area with a written schedule of fees for all services offered available upon request. A grantee shall be required to inform in writing each new subscriber of all applicable fees and charges for providing cable related services.

B. Nondiscrimination Of Fees: A grantee shall not, with regard to fees, discriminate or grant any preference or advantage to any person; provided, however, that a grantee may establish different rates for different classes or types of subscribers based upon cost of service differentials or economic disadvantage provided that a grantee not discriminate among subscribers of the same class.

C. Review Of Initial Rates: All materials pertaining to the review of initial rates or any proposed rate increase, subject the city’s regulatory authority, shall be submitted to the city for review and approval. Final determinations will be made by the city council and will take into consideration public comment as required by the cable act.

D. Rate Regulation Consistent With Law: The city may regulate rates except to the extent it is prohibited from doing so by state or federal law. Any regulated rate shall be adopted by resolution and shall be processed in accordance with the provisions of city council resolution. (Ord. 2003-26, 10-6-2003)

4.40.170 FRANCHISE FEES:

A. Franchise Fee Rate: A grantee shall pay to the city an amount equal to five percent (5%) of the gross revenues derived from the operation of its cable system in the city, or the maximum fee permitted by federal law, if larger.

B. Payment Of Franchise Fee: Unless otherwise specified in a franchise agreement, a grantee shall pay the franchise fee due to the city on a quarterly basis. Payment for each quarter shall be made to the city not later than thirty (30) days after the end of each calendar quarter.

C. Quarterly Statement Of Gross Revenues: Unless a franchise agreement provides otherwise, a grantee or other entity subject to a fee under this provision shall file with the city within thirty (30) days of the end of each calendar quarter a financial statement showing the grantee’s or such entity’s gross revenues during the preceding quarter and the number of subscribers served.

D. Late Payment Fee: In the event that a franchise fee payment is not received by the city on or before the due date set forth in subsection B of this section, or is underpaid, the grantee will be charged interest from the due date at an annual interest rate equal to three percent (3%) above the rate for three (3) month federal treasury bills at the most recent United States treasury department sale of such treasury bills occurring prior to the due date of the franchise fee payment. In addition, the grantee subject to the fee will pay a late charge of five percent (5%) of the amount of the unpaid or underpaid franchise fee payment.

E. Franchise Fee Is Separate Fee: The franchise fee shall be paid in addition to fees, charges, or assessments required by the city (including, but not limited to, business license fees), unless such fee, charge, or assessment must be treated as a franchise fee under the cable act. The franchise fee does not constitute rent to compensate the city for the grantee’s occupancy of the right of way nor does the franchise fee compensate the city for the impacts on the city of the grantee’s use of the public right of way.

F. Audit: The city may arrange for and conduct an audit of the financial records of a grantee, its contractors, subcontractors, or affiliates for the purpose of verifying franchise fee payments. The city shall notify the grantee in writing at least seven (7) days prior to the date of the audit, and the grantee shall make available for inspection and copying its books and records, and those of any affiliate it controls as may be relevant to the determination of gross revenues and franchise fees due. Grantee shall make the records available to the city at the grantee’s expense at the Gonzales city hall or at another location agreed to by the grantee and the city. Grantee’s failure to make available its books and records shall be sufficient cause to support revocation of the franchise. (Ord. 2003-26, 10-6-2003)

4.40.180 LIABILITY INSURANCE:

Unless otherwise provided in the franchise, the following will prevail:

A. Public Liability And Property Damage Insurance: A grantee shall, during the continuance of this chapter and at no expense to the city, maintain public liability and property damage insurance, including products liability and completed operations, and contractual liability coverage, in the amount of one million dollars ($1,000,000.00) per occurrence on account of bodily or personal injuries, including death, or on account of property damage, arising from, or caused, directly or indirectly, by the performance under this chapter. This insurance shall be a per occurrence policy.

B. Business Automobile Insurance: A grantee shall during the continuance of this chapter and at no expense to the city, maintain business automobile insurance, in the amount of one million dollars ($1,000,000.00) per occurrence on account of bodily or personal injuries, including death, or on account of property damage arising from or cause, directly or indirectly, by the performance under this chapter. This insurance shall be a per occurrence policy.

C. Additional Insured: Under the public liability, property damage and automobile liability insurance required in subsections A and B of this section, the city, its officers, agents and employees shall be named as additional insured by endorsement and as to such additional insured, the insurance herein required shall be primary and the policies shall contain by endorsement (signed by an authorized representative of the insurance provider) a cross liability clause.

D. Workers’ Compensation Insurance: A grantee shall during the continuance of this chapter and at no expense to the city, maintain workers’ compensation insurance, as required by law, for all grantee’s officers and employees.

E. Certificates Of Insurance:

1. The insurance required by this section shall be evidenced by certificate or certificates submitted to the city which shall be executed by the insurance company or companies involved and which shall state that the insurance evidenced thereby may not be terminated without thirty (30) days’ prior written notice thereof being received by the city. The certificate(s) shall be submitted to the city before or at the time a grantee executes a franchise agreement and shall be resubmitted annually to the city on the anniversary of the initial filing.

2. A grantee shall file certificates of insurance which shall certify the total limits of coverage in effect. If such limits are higher than the limits required by the city herein, the higher limits shall be certified and shall apply to the coverage afforded to the city.

F. Additional Insurance: A grantee, in addition to all other insurance requirements herein, shall maintain insurance in the type and amount as may be required in any license, permit or agreement obtained in connection with the construction, operation, or repair of its cable system and which is necessary to complete any construction, operation, or repair (e.g., highway permit, railroad crossing agreement, corps of engineers permit), regardless of who secured the license, permit, or agreement. (Ord. 2003-26, 10-6-2003)

4.40.190 PERFORMANCE BOND:

A. Required: Within ninety (90) days of the effective date of a franchise or at a time specified in a franchise, a grantee shall establish in the city’s favor a performance bond in an amount not less than five percent (5%) of the estimated cost of constructing, upgrading, or rebuilding the cable system required by the franchise agreement or one hundred fifty thousand dollars ($150,000.00) whichever is greater. The city may also consider submission of a letter of credit in lieu of a performance bond.

B. Recovery: In the event a grantee subject to such a performance bond fails to complete the cable system construction, upgrade, or other work in the public rights of way in a safe, timely, and competent manner in accord with the provisions of a franchise agreement, there shall be recoverable, jointly and severally from the principal and surety of the bond, any damages or loss suffered by the city as a result, including the full amount of any compensation, indemnification, or cost of removal or abandonment of any property of the grantee, or the cost of completing or repairing the cable system construction, upgrade, or other work in the public rights of way, plus a reasonable allowance for attorney fees, up to the full amount of the bond. The city may also recover against the bond any amount recoverable against the security fund where such amount exceeds that available under the security fund.

C. Elimination Of Bond: Upon completion of the cable system construction, upgrade, or other work in the public rights of way and payment of all construction obligations of the cable system to the satisfaction of the city, the city shall eliminate the bond or reduce its amount after a time appropriate to determine whether the work performed was satisfactory, which time shall be established considering the nature of the work performed. The city may subsequently require a new bond or an increase in the bond amount for any subsequent construction, upgrade, or other work in the public rights of way.

D. Bond Rating: The performance bond shall be issued by a surety with an A-1 or better rating of insurance in "Best’s Key Rating Guide", property/casualty edition; shall be subject to the approval of the city; and shall contain the following endorsement:

This bond may not be canceled, or allowed to lapse, until sixty (60) days after receipt by the city, by certified mail, return receipt requested, of a written notice from the issuer of the bond of intent to cancel or not to renew.

(Ord. 2003-26, 10-6-2003)

4.40.200 SECURITY FUND:

An applicant for a grant of a franchise, franchise renewal, franchise modification, or franchise transfer shall, prior to the city’s execution of the aforementioned, provide the city either a cash security deposit or an irrevocable letter of credit. The security fund shall be in an amount to be determined by the city manager, but not less than twenty five thousand dollars ($25,000.00) and shall be from a financial institution in a form satisfactory to the city manager. The amount of the fund shall be based on the scope of the applicant’s existing and proposed cable operations in the city, the applicant’s technical and financial qualifications, and the applicant’s history of compliance with its franchise agreements in the city and elsewhere. The security deposit or letter of credit shall be used to ensure the faithful performance of the franchise agreement; compliance with this chapter; applicable federal, state, and local law; all orders and permits; and the payment of any claims, liens, fees, or taxes due the city that arise by reason of the construction, operations, repair or maintenance of the cable system. The city may withdraw funds from the security deposit or make demand for payment upon the letter of credit for the monetary amount of any remedy imposed pursuant to this chapter or the franchise agreement. (Ord. 2003-26, 10-6-2003)

4.40.210 INDEMNIFICATION:

A. General Indemnity: A grantee shall agree to accept responsibility for loss or damage to any person or entity, and to defend, indemnify, hold harmless and release the city, its officers, and employees, from actions, claims, damages, disability or the cost of litigation that are asserted by any person or entity to the extent arising out of the negligent acts or omissions or wilful misconduct in the performance by the grantee under a franchise, whether or not there is concurrent negligence or wilful misconduct of the city but excluding liability due to the sole active negligence or misconduct of the city. This indemnification obligation is not limited in any way by any limitation on the amount or type of damages or compensation payable to or for the grantee or its agents, under workers’ compensation acts, disability benefits acts or other employees’ benefits acts.

B. City Property: A grantee shall be liable to the city for any loss of or damage to city property arising from the grantee’s actions, negligence, or wilful misconduct. (Ord. 2003-26, 10-6-2003)

4.40.220 REMEDIES; LIQUIDATED DAMAGES:

A franchise agreement may specify liquidated damages, for the city or third party beneficiaries of any franchise agreement. (Ord. 2003-26, 10-6-2003)

4.40.230 TERMINATION:

A. Removal Of Cable System: Upon revocation or upon any other termination of a franchise by passage of time or otherwise, the city shall have the right to require the grantee to remove, at the grantee’s expense, its cable system from streets, public property, and any private property occupied pursuant to the revoked, canceled, or terminated franchise. The city shall notify the grantee in writing that the cable system should be removed, and identify any period during which the grantee will be required to continue to operate the cable system as provided in the franchise. In removing its cable system, a grantee shall refill and compact, at its expense, any excavation that shall be made and shall leave all streets, public property, and private property in as good a condition as that prevailing prior to the grantee’s removal of the cable system. The insurance, indemnity, and damage provisions of the grantee’s franchise shall remain in full force and effect until the cable system is removed.

B. City’s Right To Purchase System: Upon revocation or cancellation of a franchise, or upon any other termination of a franchise by passage of time or otherwise, the city shall have the alternative right to buy the grantee’s cable system. If the franchise is terminated for cause, the city may purchase the cable system at an equitable price, within the meaning of the cable act; otherwise, the cable system may be purchased at fair market value, less the value of the franchise, within the meaning of the cable act. The grantee shall sell its cable system subject to such warranties and terms as are appropriate under the circumstances.

C. Transfer Or Abandonment: If the city does not purchase a grantee’s cable system as provided in subsection B of this section, and the grantee has failed to commence removal of its cable system within ninety (90) days after termination of the franchise, or such other date specified by the city under the franchise, or if the grantee has failed to complete such removal within six (6) months after removal is required to have begun, the city may:

1. Declare all right, title, and interest to the grantee’s cable system to be in the city or its designee with all right of ownership including, but not limited to, the right to operate the cable system or transfer the cable system to another for operation by it (upon such declaration by the city, the grantee shall be entitled to receive an equitable price from the city, within the meaning of the cable act, for the value of the cable system, less any costs and damages suffered by the city as a result of the delay in removal); or

2. Declare the cable system abandoned and cause the cable system, or such part thereof as the city shall designate, to be removed at no cost to the city (the cost of said removal shall be recoverable pursuant to sections 4.40.180 through 4.40.200 of this chapter, or from the grantee directly). (Ord. 2003-26, 10-6-2003)

4.40.240 TRANSFERS:

A. Prior Written Approval Required: Prior written approval of the city council shall be required before a franchise is assigned or transferred, either in whole or in part, or leased, sublet, or disposed of in any manner, directly or indirectly, either by forced or involuntary sale, voluntary sale, merger, consolidation or otherwise; and before title thereto, either legal or equitable, or any right, interest, or property therein, passes to or vests in any person or persons. A change in control of a grantee or any person that manages, owns, or controls the grantee is a transfer within the meaning of this section.

B. Applications: The proposed transferee shall make a written request of the city for approval of the transfer. The application shall provide complete information regarding the proposed transfer, including: 1) all documents embodying the transaction, 2) financing documents, 3) documents identifying any person who will be responsible, through any arrangement, for managing or controlling the cable system, 4) documents showing that the proposed transferee has the financial, technical, and legal ability to operate the cable system after the transfer so as to satisfy all its obligations under a franchise without adversely affecting subscribers, 5) information regarding the length of time that a grantee has held the franchise(s) involved in the transfer, and 6) the information required by subsections 4.40.050B and 4.40.070A of this chapter. The proposed transferee shall also pay all reasonable costs incurred by the city in reviewing and evaluating the application.

C. City Response: Upon receiving a transfer application, the city may require additional information from the grantee or the proposed transferee as required to evaluate the proposed transaction, and both shall cooperate to provide the information to the city. The city shall be under no obligation to transfer the franchise if the grantee’s acts or omissions make the franchise subject to revocation; nor shall the city be required to transfer the franchise unless it is fully satisfied that any interests it or the public has in the franchise will be fully preserved and protected, that past nonperformance will be corrected, and that the proposed transferee has the ability and is likely to comply with the franchise in the future. Under no circumstances shall the franchise be transferred unless the proposed transferee agrees to accept all the terms and conditions of the franchise, agrees that the transfer does not constitute a waiver of any rights by the city or indication that the prior grantee is or has been in compliance with the franchise, and agrees to assume all the obligations and liabilities of the prior grantee. The city may conduct such public hearings as it deems appropriate to consider the transfer request.

D. Change In Control: A "change in control", for purposes of this section and sections 4.40.250 and 4.40.260 of this chapter, includes a change in actual working control in whatever manner exercised and shall be deemed to have occurred whenever there is a disposition of five percent (5%) or more of any interest in a grantee or any person that, through any arrangement, manages or controls the grantee.

E. Evidence Of Transfer: A grantee, upon transfer, shall within sixty (60) days thereafter file with the city a copy of the deed, agreement, mortgage, lease, or other written instrument evidencing transfer of ownership control or lease of the cable system, certified and sworn to as correct by the grantee.

F. Transfer Null Without Authorization: Any transfer made without the authorization required herein renders a franchise null and void from the time of the transfer. (Ord. 2003-26, 10-6-2003)

4.40.250 SPECIAL RULES FOR OPEN VIDEO SYSTEMS:

A. Application For An OVS Franchise:

1. Franchise Required: Before constructing or operating an open video system ("OVS"), an OVS operator may be required to obtain an OVS franchise from the city. The grant of an OVS franchise does not obviate the obligation to obtain additional franchises, permits and authorizations, as the city may require from time to time should the system provide other services; or obviate the obligation to pay such additional compensation as the city may establish for use of the right of way to provide other services.

2. Contents Of Application For Initial Or Renewal OVS Franchise: In order to obtain an initial or renewal OVS franchise, an operator of an OVS system may be required to apply for an OVS franchise. Any application must contain the following information, and such information as the city may from time to time require. The franchise may not be transferred without the prior approval of the city.

a. Identity of the applicant; the persons who exercise working control over the applicant; and the persons who control those persons, to the ultimate parent.

b. A proposal for construction of the OVS system that sets forth at least the following:

(1) A description of the services that are to be provided over the facility.

(2) The location of proposed facility and facility design, including a description of the miles of plant to be installed, where it is to be located, and the size of facilities and equipment that will be located in, on, over, or above the rights of way.

(3) Identification of the area of the city to be served by the proposed cable system, including a description of the proposed franchise area’s boundaries.

c. A description of the manner in which the system will be installed, and the time required to construct the system, and the expected effect on right of way usage, including information on the ability of the rights of way to accommodate the proposed system, including, as appropriate given the system proposed, an estimate of the availability of space in conduits and an estimate of the cost of any necessary rearrangement of existing facilities.

d. A description, where appropriate, of how services will be converted from existing facilities to new facilities, and what will be done with existing facilities.

e. Proof, attested to by a certified public accountant, that the applicant has the financial resources to complete the proposed project, and to construct, operate and repair the proposed facility over the franchise term. It is not the intent of the city to require an applicant to prove that the services it proposed to offer will succeed in the marketplace.

f. Proof that applicant is technically qualified to construct, operate and repair the proposed facility. At a minimum, the applicant must show that it has experience or resources to ensure that work is to be performed adequately, and can respond to emergencies during and after construction is complete.

g. Proof that the applicant is legally qualified, which proof must include a demonstration that the applicant:

(1) Has received, or is in a position to receive, necessary authorizations from state and federal authorities;

(2) Has not engaged in conduct (fraud, racketeering, violation of antitrust laws, consumer protection laws, or similar laws) that allows the city to conclude the applicant cannot be relied upon to comply with requirements of franchise, or provisions of this chapter;

(3) Is willing to enter into a franchise, to pay required compensation and to abide by the provisions of applicable law, including those relating to the construction, operation or maintenance of its facilities, and has not entered into any agreement that would prevent it from doing so.

h. An affidavit or declaration of the applicant or authorized officer thereof certifying the truth and accuracy of the information in the application, and certifying that the application meets all requirements of applicable law.

3. Additional Information Regarding Affiliates; Presumptions: To the extent that the applicant is in any respect relying on the financial or technical resources of another person, including another affiliate, the proofs required under subsection A2 of this section should be provided for that person. An applicant will be presumed to have the requisite financial, or technical or legal qualifications to the extent such qualifications have been reviewed and approved by a state agency of competent jurisdiction; or if applicant is a holder of a franchise in the city for a cable system, and conduct under other franchise provides no basis for additional investigation.

4. Applications For Transfer: An application for a transfer of an OVS franchise must contain the same information required by subsection A2 of this section, except that, if the transferor submitted an application under subsection A2 of this section, to the extent information provided by the transferor under that section remains accurate, the transferee may simply cross reference the earlier application.

5. City Review: The city may request such additional information as it finds necessary, and require such modifications to the application as may be necessary in the exercise of the city’s authority over OVS facilities. Once the information required by the city has been provided, the application shall be promptly reviewed and shall be granted if the city finds that:

a. The applicant has the qualifications to construct, operate and maintain the system proposed in conformity with applicable law. The city shall provide a reasonable opportunity to an applicant to show that it would be inappropriate to deny it a franchise under subsection A2g of this section, by virtue of the particular circumstances surrounding the matter and the steps taken by the applicant to cure all harms flowing therefrom and prevent their recurrence, the lack of involvement of the applicant’s principals, or the remoteness of the matter from the operation of telecommunications facilities. An application for a franchise area shall not be granted if the grantee has no plans for constructing a system within the entire area for which the franchise is sought.

b. The applicant accepts the modifications required by the city to its proposed system. This section shall not be read to authorize the city to exercise authority it does not otherwise have under applicable law.

c. The applicant enters into a franchise agreement and complies with any conditions precedent to its effectiveness.

d. In the case of a transfer, the city must also determine that:

(1) There will be no adverse effect on the public interest, or the city’s interest in the franchise;

(2) Transferee agrees to be bound by all the conditions of the franchise and to assume all the obligations of its predecessor; and

(3) Any outstanding compliance and compensation issues are resolved or preserved to the satisfaction of the city.

e. An applicant shall not be issued a franchise if it files or in the previous five (5) years filed materially misleading information in a franchise application; or intentionally withheld information that the applicant lawfully is required to provide.

6. Compensation: Every operator of an OVS system shall pay compensation to the city as follows:

a. To the extent that the system is used to provide cable services: A percentage of gross revenues each quarter equal to the gross revenue percentage paid by any cable operator for the same quarter. In addition, unless an OVS franchise agreement provides otherwise, an OVS operator: 1) shall pay to the city, at a time directed by the city, an amount equal to the highest amount contributed by any cable operator under its franchise for and in support of public, educational and government use (including institutional network use) of its cable system; and 2) to the extent that a cable operator is providing other support for public, educational or governmental use, the operator must duplicate that support within a time and in a manner directed by the city, or provide a cash equivalent acceptable to the city. In applying this section, the city shall ensure that the obligations borne by the OVS operator are no greater or lesser than the obligation imposed upon the cable operator providing the greatest benefits to the community. The compensation required under this section or specified in a franchise shall increase as the compensation that a cable operator is required to provide (in cash and in other forms) increases.

b. To the extent that the OVS system is used for the provision of telecommunications services, the OVS operator shall pay such fee as may be established from time to time by the city.

7. Minimum OVS Franchise Requirements: Every OVS franchise must require the applicant to comply with all provisions of this chapter, as if the OVS system were a cable system, as may be permitted by applicable law. Without limiting the foregoing, the franchise must ensure that the OVS system operator is obligated to comply with sections 4.40.030, 4.40.140, and 4.40.170 of this chapter (except as inconsistent with subsection A6 of this section, "compensation"); sections 4.40.180 through 4.40.220 of this chapter as if the OVS system were a cable system; and must preserve the city’s rights to establish additional obligations from time to time and to regulate the system to the maximum extent permitted by law. Further, the OVS franchise must ensure that the relevant books and records of the OVS system, no matter who may hold them, are available for inspection and copying; and that the OVS operator will prepare and submit such relevant reports as may be required by the city.

8. Customer Service Standard Certification: An OVS system that enters into an agreement to comply with the customer service standards applicable to cable systems may be certified by the city for so long as it complies with those requirements and may advertise its compliance with those standards. (Ord. 2003-26, 10-6-2003)

4.40.260 MISCELLANEOUS:

A. Connections To A Grantee’s System; Use Of Antennas: It shall be unlawful for any person, firm, or corporation to make any unauthorized connection, whether physically, acoustically, inductably, or otherwise, with any part of a grantee’s cable system or facilities, for the purpose of enabling the reception of any television, radio, picture, program, sound, or data signals, or other services, without payment to and authorization from the grantee, except that subscribers shall have the right to attach devices to the grantee’s cable system to allow them to transmit signals or services for which they have paid to VCRs, television sets, or other terminal devices; and subscribers shall have the right to use their own remote control devices, converters, and other similar equipment, and the grantee shall provide information to subscribers which will allow them to adjust such devices so that they may be used with the grantee’s cable system. It shall also be unlawful for any person, without the consent of the grantee, to wilfully tamper with, remove, or injure any cables, wires, or equipment of the grantee used for the distribution of television, radio, picture, program, sound, or data signals, or other services, unless the grantee fails to remove such devices from the property of such person if the person chooses not to take service, or if the grantee places such devices on any property where it has no right to place such devices. The grantee shall not, as a condition to providing service, require a subscriber or potential subscriber to remove or disconnect any existing antenna, except at the express direction of the subscriber or potential subscriber, or prohibit or discourage a subscriber from installing an antenna switch, provided such equipment and installations are consistent with applicable codes.

B. Warranties And Guarantees: The city may require a grantee to provide guarantees and warranties from any entity that manages, owns, or controls it, as required to ensure compliance with any franchise issued to the grantee.

C. Severability: If any term, condition, or provision of this chapter shall, to any extent, be held to be invalid or unenforceable, the remainder hereof shall be valid in all other respects and continue to be effective. In the event of a subsequent change in applicable law so that the provision which had been held invalid is no longer invalid, said provision shall thereupon return to full force and effect without further action by the city and shall thereafter be binding on the grantee and the city.

D. Operation Of A Cable System Without A Franchise: Any person who occupies public rights of way for the purpose of operating or constructing a cable system and who does not hold a valid franchise from the city shall be, to the extent permitted by applicable law, subject to all provisions of this chapter including, without limitation, section 4.40.140 of this chapter regarding conditions of occupancy of the streets and public rights of way and section 4.40.170 of this chapter regarding franchise fees. In its discretion, the city at any time may require such person to enter into a franchise agreement within thirty (30) days of receipt of a written notice by the city that a franchise agreement is required; require such person to remove its property and restore the area to a condition satisfactory to the city within such time period; remove the property itself and restore the area to a satisfactory condition and charge the person the costs therefor; require such person to pay fair compensation to the city in the form of fees or in-kind benefits; and/or take any other action it is entitled to take under applicable law, including filing for and seeking damages for trespass. In no event shall a franchise be created unless it is issued by action of the city and is memorialized in a written franchise agreement.

E. Effective Date: This chapter shall become effective thirty (30) days after the date of passage. However, any existing grantee or its immediate successor need not comply with all the terms and conditions set out herein until a date mutually agreed to by the city and the grantee in writing; in no event shall that date be later than the expiration date of the existing franchise. (Ord. 2003-26, 10-6-2003)