APPENDIX V. CATV FRANCHISE

APPENDIX V.
CATV FRANCHISE

ORDINANCE NO. 2488

AN ORDINANCE GRANTING A NON-EXCLUSIVE FRANCHISE FOR CABLE TELEVISION AND DECLARING AN EMERGENCY.

THE CITY OF COTTAGE GROVE ORDAINS AS FOLLOWS:

Section 1. GRANT OF FRANCHISE

1.1 Falcon Cable Systems Company, a California Partnership authorized to do business in Oregon, with Falcon Holding Group, Inc., as sole general partner, hereinafter called the Grantee is hereby granted for itself, its successors and assign, subject to the terms and conditions of this ordinance, the franchise, authority, right and privilege for an initial fifteen-year period from and after the effective date of this Ordinance 2488 to construct, operate and maintain a cable communications system within the public right-of-way within the City of Cottage Grove.

(Ord. 2657 §1, 1990)

1.2 Use of public street and ways. For the purpose of operating and maintaining a Cable Communications System, the Grantee may erect, install, construct, repair, replace, reconstruct, and retain in, on, over, under, upon, across, and along the public streets and ways such wires, cables, conductors, ducts, conduits, vaults, manholes, amplifiers, appliances, pedestals, attachments, and other property and equipment as are necessary and appurtenant to the operation of the Cable Communications System, and to place all equipment necessary or convenient for the transmission of signals by cable upon the poles or in ducts now existing or in the future erected in street areas which belong to or are used by the Pacific Northwest Bell Telephone Company, a corporation, or Pacific Power and Light Company, a corporation, or their successors, pursuant to the terms and conditions of an agreement for use of poles and ducts being entered into by said corporations and Grantee, subject to provisions of Section 9, 12, 14, 15 and 16 of this ordinance. Prior to construction or alteration, however, the Grantee shall in each case file plans with the appropriate City agencies, and receive written approval before proceeding.

l.3 Duration and effective date. The term of this 2015 Amended Franchise and all rights, privileges, obligations and restrictions pertaining thereto shall be five (5) years from the effective date unless terminated sooner or extended for a longer period as hereinafter provided. The effective date of this 2015 Amended Franchise shall be the date of its passage by the City Council. The parties may, upon mutual signed consent, extend this term for one additional renewal term not to exceed five (5) years.

(Ord. 3056 §2, 2015)

1.4 Franchise not exclusive. The franchise shall not be construed as any limitation upon the right of the Grantor, through its proper officers, to grant to other persons or corporations, rights, privileges or authority similar to or different from the rights of authority herein set forth, in the same or other streets, alleys and public highways or public places by franchise, permit or otherwise.

1.5 Franchise not transferable. This franchise shall not be sold, leased, mortgaged, assigned, or otherwise transferred, nor shall any of the rights, or privileges herein granted or authorized be leased, assigned, mortgaged, sold or transferred, either in whole or in part, nor shall title hereto, either legal or equitable, nor any right, interest, or property herein, pass to or vest in any person, except the Grantee, either by act of the Grantee or by operation of law, without the consent of the Grantor expressed by ordinance as provided by the City Charter. The granting of such consent in one instance shall not render unnecessary any subsequent consent in any other instance. Nothing contained herein shall be deemed to prohibit the mortgage, pledge, or assignment of system tangible assets for the purpose of financing the acquisition of equipment for or the construction and operation of the system, without the Grantor’s consent, but any such mortgage, pledge, or assignment shall be subject to the rights of the Grantor hereunder.

The Grantee, upon any sale, lease, assignment, mortgage, or other transfer of this franchise or any of the rights or privileges hereunder, shall within 60 days thereafter file with the City Manager a copy of the deed, agreement, mortgage, lease, or other written instrument evidencing such sale, lease, mortgage, assignment or transfer certified and sworn to as correct by the Grantee. Every such sale, lease, mortgage, assignment or transfer as heretofore described, whether voluntary or involuntary, shall be deemed void and shall have no effect unless Grantee shall within 60 days after the same shall have been made, file such certified copy as is required.

1.6 Change in control. The Grantee shall promptly notify the Grantor of any proposed change in, or transfer of, or acquisition by, any other party of control of the Grantee. In the event Grantee is a corporation or another entity comprised in part of a corporation or corporations, then a change in beneficial ownership of twenty-five percent of the stock of any such corporation shall be presumed to be a change in control of the Grantee, unless the Grantor finds otherwise. In the event Grantee is a partnership, or other entity comprised in part of a partnership or group of partnerships, then a change in beneficial ownership of twenty-five (25) percent of the ownership rights, number of partners, or of rights to profits and/or depreciation of any partnership shall be presumed to be a change in control of the Grantee, unless the Grantor finds otherwise. Such change in control shall make this franchise subject to revocation unless and until the Grantor shall have consented thereto. For the purpose of determining whether it will consent to such change, transfer or acquisition of control, the Grantor may inquire into the qualifications of the prospective controlling party, and the Grantee shall assist the Grantor in any such inquiry. Grantor may condition said transfer upon such terms and conditions as it deems appropriate.

(Ord. 2657 §2, 1990)

1.7 Charter and general ordinances to apply. This franchise is hereby made subject to the City of Cottage Grove Charter and general ordinance provisions passed pursuant thereto, now in effect or hereafter made effective. Nothing in this franchise shall be deemed to waive the requirements of the various codes and ordinances of the City regarding permits, fees to be paid or manner of construction.

Section 2. DEFINITIONS

For the purpose of this ordinance, phrases and their derivations shall have the meanings given in Appendix A (a copy of this Appendix is on file in the office of the city recorder).

Section 3. COMPENSATION

3.1 Franchise Fee. As compensation for a franchise granted and in consideration of permission to use the streets and public ways of the City for the construction, operation, maintenance and reconstruction of a cable system within the City, the Grantee shall pay to the City an amount equal to three (3) percent of Grantee’s gross revenues, or such higher percentage as may be allowed by law to be used for the unrestricted purposes by the City.

3.2 Payment of Maximum Franchise Fee Permissible. In the event that any law or valid rule or regulation shall limit or prevent the City from imposing a franchise fee in the amount provided for herein, Grantee shall pay to the City at the times provided for the maximum permissible amount. Grantee shall further make a good faith effort to obtain any possible waiver or permission to pay the full amount provided for herein. In the event the maximum permissible amount is less than five percent, and the law or rule or regulation establishing the maximum permissible amount subsequently is repealed or amended to permit a higher amount, then Grantee shall pay the higher amount, up to five (5) percent, established by Section 3.1 hereof.

3.3 Quarterly Payment Schedule. Payments due the City under this provision shall be computed quarterly. Each quarterly payment shall be due and payable no later than sixty (60) days after the relevant computation and such other relevant facts as may be required by the City.

3.4 Audit and Recomputation. No acceptance of any payment shall be construed as an accord that the amount paid is, in fact, the correct amount, nor shall such acceptance of payment be construed as a release of any claim the City may have for further or additional sums payable. All amounts paid shall be subject to audit and recomputation by the City. Recomputation and final accord shall be made by the City within 90 days after receipt by City of audited financial statements from the company for the most recent fiscal year. In the event that recomputation results in additional revenue to be paid to the City, such amount shall be subject to a ten (10) percent annual interest charge.

3.5 Local Taxes. Nothing in this section shall limit a Grantee’s liability to pay other local real and personal property taxes.

Section 4. RATE REGULATION

4.1 Full Regulatory Power Reserved. All rates and charges shall be subject to regulation by the City in a manner to be provided by the City Council. In the absence of any City action taken to exercise rate regulation, the Grantee shall be subject to the rate regulation provisions provided for herein.

In addition to the power to regulate rates and charges, the City hereby reserves the right to adopt or reject regulations which may be proposed from time to time by Grantee including governing Grantee’s collection of advance charges and deposits, installation and reconnection charges, disconnection charges, policies and procedures, and the availability of refunds.

4.2 Schedule of Rates. All rates shall be published and non-discriminatory, and be uniform to all persons and organizations of like classes, under similar circumstances and conditions. Nothing in this provision shall be construed to prohibit the reduction or waiving of charges in conjunction with promotional campaigns for the purpose of attracting subscribers, nor shall this provision be interpreted to prohibit the establishment of a graduated scale of charges and rate schedules which vary with volume of usage, to which any subscriber, or programmer on a leased channel, included within a particular classification shall be entitled. The initial schedule of rates to be utilized by the Grantee for entertainment and access purposes on the home subscriber network shall not exceed those in the Grantee’s franchise application for a period of at least two years from adoption of this ordinance. The schedule of rates shall include installation and monthly charges for providing basic subscriber service, rates for additional services, any special rates for large institutions, motels, multiple family dwelling units, or any other type of special subscriber.

4.3 Change of Rates. Increases in rates for entertainment and access service may be made no more often than annually by Grantee by filing a requested revision of the schedule of rates with the City Manager. Each rate increase request shall be referred to the Council for review and shall not take effect until the 31st day after the Council shall decide the matter.

If 75 days have passed from the date of the request without the City Council approval or disapproval, such failure to act by the City Council shall be deemed a decision approving the rate increase.

4.4 Required Cash Balances. The company shall make no cash distributions to shareholders or others, except in the normal course of business, without approval by the Cottage Grove City Council. Grantee shall not be granted any rate increase which the Cottage Grove City Council determines would cause the Grantee’s end-of-year cash balance in any calendar year to exceed the figures shown in Appendix C (a copy of this Appendix is on file in the office of the city recorder). For purposes of determining end-of-year cash balances, any cash distribution to shareholders or others approved by the Cottage Grove City Council shall be added back onto actual or projected cash balances.

4.5 Payments to Affiliated Organizations. Notwithstanding the provisions of Section 4.4 of this ordinance, Grantee shall not pay, to any one or combination of McCaw Communications Companies, Inc. of Washington, its parent or subsidiary corporations, or any company or partnership in which said corporations hold more than a 10% interest, in excess of the sum or money shown in Appendix D (a copy of this Appendix is on file in the office of the city recorder) for each year of the franchise period for goods or services from said companies or partnerships for the following specific services purchased from said companies or partnerships: Services for financing, accounting, engineering, marketing and operational policy direction. Grantor may from time to time amend Appendix D (a copy of this Appendix is on file in the office of the city recorder) to adequately reflect the effects of general inflation, specific price increases, or scope of services beyond that envisioned in Grantee’s proposal dated July ll, 1983.

Section 5. FRANCHISE AREA

The area of the franchise shall be the entire territory included within the city limits.

Section 6. SERVICE REQUIREMENTS

Grantee shall provide all systems and services described in Grantee’s proposal dated July 11, 1983, namely Sections 13--23 thereof, a copy of which is attached to this ordinance, marked Appendix B (a copy of this Appendix is on file in the office of the city recorder), and by this reference is incorporated herein as if set out in full.

Section 7. CONSTRUCTION AND EXTENSION SCHEDULES

Grantee shall complete construction of the system within six (6) months from the date of this ordinance. Any extension of said completion date shall be pursuant to the provisions of Section 10 of Grantee’s proposal, a copy of which is attached hereto marked Appendix E (a copy of this Appendix is on file in the office of the city recorder), and by this reference is incorporated herein as if set out in full.

Section 8. OPERATIONAL STANDARDS

Grantee shall comply with the operational standards included in the City’s request for proposals (RFP), the Grantee’s proposal and Appendix B of this ordinance (a copy of this Appendix is on file in the office of the city recorder). Copies of the operational standards of the City’s RFP and the Grantee’s proposal are attached hereto marked Appendix F (a copy of this Appendix is on file in the office of the city recorder), and by this reference are incorporated herein as if set out in full.

In the event of a conflict in the terms of the operational standards described herein, Grantee shall comply with the most stringent of said standards.

Section 9. REGULATORY PROVISIONS

Grantee shall comply with the following provisions:

9.1 Interconnection. Any interconnection of services between the system operated by Grantee and any other system shall be subject to the regulatory authority of the City.

9.2 Penalties for delay in construction. The Grantor may, at its sole option, apply any of the following in connection with delays in system construction:

(a) Impose a penalty of up to $100 a day for each mile of cable not completed within 15 days of the scheduled completion date.

(b) Impose a penalty of up to $1000 a day for each day in excess of thirty days that any major facility proposed by applicant is not completed as scheduled. For the purpose of this section, major facility shall include items such as headend facilities and community access studio.

(c) Reduce the duration of the franchise on a month-to-month basis for each month of delay exceeding three (3) months in the construction of any substantial part of the system.

(d) Declare a forfeiture of performance bonds for delays in the construction of any substantial part of the system exceeding one (1) year.

(e) Terminate the franchise for delays in the construction of any substantial part of the system exceeding eighteen (18) months.

For purposes of penalizing the delays in system construction described in this section, the penalties set out herein shall be exclusive, and the delays shall not be subject to other penalties established by this franchise for other franchise violations.

9.3 Undergrounding of Cable. Present and future undergrounding of cables is strongly encouraged. Cables shall be installed underground where all existing utilities already are underground, where all utilities are placed underground, or where statute or ordinance requires utilities to be placed underground. Previously installed aerial cable shall be undergrounded in concert, and on a reasonable cost-sharing basis, with other utilities pursuant to the general ordinances of the City or applicable State law, or in the event that the telephone and electric utility decides to underground its facilities on a voluntary basis, unless the City Council grants an exception.

9.4 Emergency Requirements. The Grantee shall design and construct the system to provide for a restricted audio and video override of all audio and video channels during emergencies, with override to be placed under City control.

The emergency alert system shall provide for activation from the Central Dispatch office with coded access for both audio and video (character generator) messages. The audio override shall include a squeal alert tone to precede the verbal and video messages.

9.5 Emergency Power. Emergency power sources shall be provided by Grantee at the headend of the system and at such locations as may be necessary to guarantee that in the event of a power failure on any part of the system, service will be maintained on the rest of the system.

9.6 Construction Codes. The Grantee shall strictly adhere to all building and zoning codes currently or hereafter in force. The Grantee shall arrange its lines, cables, and other appurtenances, on both public and private property, in such a manner as to cause no unreasonable interference with the use of said public or private property by any person. In the event of such interference, the Grantor may require the removal of the Grantee’s lines, cables and appurtenances from the property in question.

9.7 Construction and Use of Poles. The construction, maintenance and use of Grantee’s cable communications system shall comply with the standards of materials and engineering and all other provisions of an agreement for use of poles being entered into by and between the Pacific Northwest Bell Telephone Company, a corporation, Pacific Power and Light Company, a corporation, or their successors, and the Grantee herein. In the event Grantee cannot obtain the necessary poles and allied facilities pursuant to the provisions of such an agreement and only in such event then it shall be lawful for the Grantee to make all needed excavations in any of the streets, alleys or public highways for the purpose of placing, erecting, laying, maintaining, repairing and removing poles, conduits, supports for wires and conductors, and any other facility needed for the maintenance or extension of the system of the Grantee. This provision shall not exempt the Grantee from compliance with all Charter and ordinance provisions relating to such excavations or construction or from any provision requiring payment of permit or license fees pertaining thereto. All poles of the Grantee shall be erected between the curb and the sidewalk unless otherwise designated by the proper city authorities, and each pole shall be set whenever practicable at an extension of a lot line. The Grantor shall have the right to require the Grantee to change the location of any pole, conduit, structure or facility within the street area when in the opinion of the Grantor the public convenience requires such change, and the expense thereof shall be paid by the Grantee. All pipes, conduits and underground facilities shall be laid down and maintained, in such manner as not to interfere with sewers, water pipes, or any other property of the Grantor, or with any pipes, wires or conduits of said Grantor by or under its authority, and the system of pipes, wires and conduits constructed or erected by the Grantee shall be of good quality and workmanship and shall be maintained in good repair and efficiency.

9.8 Restoration of Streets. Whenever the Grantee shall disturb the surface of any street, alley, public highway or ground for any purpose mentioned herein, he shall restore the same to the condition in which it was prior to the disturbance, and when any opening is made by the Grantee in any hard surface pavement in any street, alley or public highway the Grantee shall promptly refill the opening and restore the pavement. The Grantor may refill and/or repave in case of neglect of the Grantee. The cost thereof, including the cost of inspection and supervision, shall be paid by the Grantee. All excavations made by the Grantee in the streets, alleys and public highways shall be properly safeguarded for the prevention of accidents. The work hereby required shall be done in strict compliance with the rules, regulations and ordinances of the Grantor as now or hereafter provided.

9.9 Reservation of Street Rights. Nothing in this franchise shall be construed to prevent the Grantor from constructing sewers, grading, paving, repairing and/or altering any street, alley, or public highway, or laying down, repairing or removing water mains or constructing or establishing any other public work. All such work shall be done, insofar as practicable in such manner as not to obstruct, injure or prevent the free use and operation of the system of the Grantee herein; provided, however, that if any of the poles, wires, conduits, conductors, pipes or appurtenances of the Grantee herein shall interfere with the construction or repair of any street or public improvement, whether it be construction, repair or removal of a sewer or water main, the improvement of a street or any other public improvement, all such poles, wires, conduits or other appliances and facilities shall be removed or replaced in such manner as shall be directed by the Grantor so that the same shall not interfere with the said public work of the Grantor, and such removal or replacement shall be at the expense of the Grantee herein.

9.10 Trimming of Trees. Nothing contained in this franchise shall be deemed to empower or authorize Grantee to cut or trim any trees, ornamental or otherwise, in any of the streets, alleys or public highways, but Grantee may cut or trim such trees as necessary under the same rules and regulations applied to public utilities within the City limits of Cottage Grove.

9.11 Use of Poles and Conduits by Grantor. The Grantee shall permit the Grantor to fasten wires and cables and stretch such wires and cables on any and all poles of the Grantee, provided that the Grantee shall not be responsible for any damage without his fault resulting to the wires, cables or property of the Grantor resulting from such use of its poles by the Grantor.

9.12 Street Vacation or Abandonment. In the event any street, alley, public highway or portion thereof used by the Grantee shall be vacated by the Grantor, or the use thereof discontinued by the Grantee, during the term of this franchise, the Grantee shall forthwith remove his facilities therefrom unless specifically permitted to continue the same, and on the removal thereof restore, repair or reconstruct the street area where such removal has occurred, and place the street area where such removal has occurred in such condition as may be reasonably required by the Grantor. In the event of failure, neglect or refusal of the Grantee, after thirty-days’ notice by the Grantor to repair, improve or maintain such street portion, the Grantor may do such work or cause it to be done, and the cost thereof shall be paid by the Grantee and collection may be made by court action or otherwise.

9.13 Movement of Facilities. In the event it is necessary temporarily to move or remove any of the Grantee’s wires, cables, poles or other facilities placed pursuant to the franchise, in order lawfully to move a large object, vehicle, building or other structure over the streets, alleys or highways of the Grantor, Grantee upon reasonable notice shall move at the expense of the person requesting the temporary removal of such of his facilities as may be required to facilitate such movements.

9.14 Common User. Whenever in the judgment of the Grantor it is deemed impracticable to permit erection of poles or construction of underground conduit system by any other utility which may at the time have authority to construct or maintain a conduit or poles in street area, the Grantor may require the Grantee herein to afford to such utility the right to use such of the poles or facilities of the Grantee as the Grantor finds practicable in common with the Grantee, both parties sharing the costs incident thereto and under such rules and regulations as they may agree upon, but in case they fail to agree within a reasonable time, then upon such terms, conditions and regulations governing the same as the Grantor may determine to be just and reasonable.

9.15 Filing of Pole User Agreement. Prior to the effective date of the franchise, Grantee shall file with the Grantor a certified copy or photocopy of all pole attachment agreements entered into by Grantee in the operation of the Cable Communications System in the City.

Section 10. OPERATION AND MAINTENANCE

10.1 Open Books and Records. The Grantee shall maintain an office within the City of Cottage Grove. The Grantor shall, upon reasonable advance notice to Grantee, have the right to inspect at any time during normal business hours, at the office of the Grantee to be maintained within the City, all books, records, maps, plans, service complaint logs, performance test results and other like materials of the Grantee which re l ate to the operation of the franchise for the purpose of verifying compliance herewith. City shall also have the right, upon advance notice to Grantee, to inspect at any time during normal business hours the income tax returns or financial statements relating solely to Grantee at its headquarters at 2000 116th Avenue N.E., Bellevue, Washington. Access to the aforementioned records shall not be denied by the Grantee on the basis that said records contain "proprietary" information, provided all documents and records so inspected shall be kept strictly confidential by City. Grantee shall provide the transportation costs for one trip per year by a representative of City to Bellevue if necessary to obtain the information to be provided herein.

10.2 Communications with Regulatory Agencies. Copies of all petitions, applications, communications, and reports submitted by the Grantee to the Federal Communications Commission, Securities and Exchange Commission, or any other Federal or State regulatory commission or agency having jurisdiction in respect to any matters affecting all communications operations authorized pursuant to the franchise, shall also be submitted simultaneously to the Grantor. Copies of responses or any other communications from the regulatory agencies to the Grantee shall likewise be furnished simultaneously to the Grantor.

10.3 Reports.

(a) Annual Report. In conjunction with Section 10.1 no later then 90 days following the close of Grantee’s fiscal year, the Grantee shall make available to City in Grantee’s office in Cottage Grove its records of the Cottage Grove system which shall include:

(1) A summary of the previous year’s activities in development of the system, including, but not limited to, services begun or dropped; subscribers gained or lost; cable miles added; equipment and facilities rebuilt, replaced or added; changes in management; development of local origination channels dedicated to community programming; and plans for system development for the following fiscal year;

(2) An audited financial statement including a statement of income, a balance sheet, and a statement of sources and applications of funds, covering the previous two years on a comparative basis;

(3) The amount collected annually from the Grantor by Grantee and the character and extent of the service rendered therefor to the Grantor; and the amount collected annually from other users of the service and the character and extent of the service rendered therefor to them;

(4) A current statement of cost of construction by component category;

(5) A projected income statement, balance sheet, statement of sources and applications of funds and statement of construction for the next two years, including assumptions necessary to an understanding of the projections;

(6) A summary of complaints, identifying the number and the nature of complaints and their disposition;

(7) A list of officers and members of the board of Grantee and any parent corporations;

(8) A list of all owners of over 3% in both the Grantee and any parent corporations, indicating percentage of each owner.

in the form prescribed by the Grantor, such other reports with respect to its operation, affairs, transactions, or property, as the Grantor may deem reasonably necessary or appropriate to the performance of its function.

(d) The Grantor after consultation with the Grantee may specify the form and details of all reports. If directed by the Grantor, the Annual Report shall be presented at a public hearing at which the Grantee shall summarize the content of the report and members of the general public may comment thereon.

(e) The Grantor shall take such actions as are lawful and necessary to ensure that the Grantee’s trade secrets, including the information provided under Section lO.J(b)(5), and information regarding limited partnership disbursements declared and the amounts of depreciation and investment credits allowed to limited partners shall remain confidential and shall not be subject to the public disclosure.

10.4 Maintenance and Complaints.

(a) Local Office.

(1) Franchisee acknowledges that a convenient customer service experience is important to the Franchisee, the City and its residents. Franchisee currently maintains a local office in the City. The office continues to be adequately staffed to receive bill payments and respond to customer inquiries. Beginning 120 days after the Effective Date of the 2015 Amended Franchise, upon provision of 60 days’ prior written notice as provided in Section 10.4(a)(2), Franchisee may close or relocate the office outside of the City, but only if it demonstrates the capability to conveniently serve its Subscribers’ needs by:

i. Continuing to afford alternative customer service options, including at least one other opportunity for Subscribers to pay bills or exchange equipment without charge;

ii. Providing a 24-hour, toll-free customer service telephone number with company personnel capable of handling complaints and inquiries 7 days per week; or

iii. Contracting with one or more third party agents in the City that are capable of receiving payments from Franchisee’s Subscribers.

(2) Additionally, in no event shall Franchisee close or relocate the current office without providing a minimum of 60 days’ prior written notice to the City and customers in the City. Such notice shall include information about the name and location of any third party payment agents located in the City.

(b) The Grantee shall render efficient service, make repairs promptly, and interrupt service only for good cause and for the shortest time possible. Such interruptions, insofar as possible, shall be preceded by notice and shall occur during periods of minimum use of the system. A written log shall be maintained of all service interruptions.

(c) The Grantee shall maintain a repair force of technicians capable of responding to subscriber complaints or requests for service within 48 hours after receipt of the complaint or request. No charge shall be made to the subscriber for this service.

(d) Other policy or procedures as stipulated in applicant’s proposal.

(Ord. 3056 §3, 2015)

10.5 Safety.

(a) The Grantee shall, at all times, employ the standard of care attendant to the risks involved and shall install and maintain in use commonly accepted methods and devices for preventing failures and accidents which are likely to cause damage, injury, or nuisance to the public or to employees of the Grantee.

(b) The Grantee shall install and maintain its wires, cables, fixtures, and other equipment in accordance with the requirements of the Electrical Code of the Grantor, and in such manner that they will not interfere with any installations of the Grantor or any other public utility.

(c) The Grantee shall provide and put in use such equipment and appliances as shall control and effectually carry all electric currents and television signal impulses in a manner so as to prevent injury to the wires, pipes, structures and property belonging to the City of Cottage Grove or to any person, firm or corporation within said City, and the Grantee, at his own expense, shall so repair, renew, change and improve said facilities and appliances from time to time as may be necessary to accomplish said purpose.

Section 11. GENERAL FINANCIAL AND INSURANCE PROVISIONS

11.1 Cash Deposit or Performance Bond.

(a) Within ten (10) days from the adoption of this ordinance Grantee shall provide to City to assure completion of construction of the improvements plus compliance with all orders, permits and directions of any governmental agency regulating said construction one of the following:

(1) A cash deposit of $25,000, to be deposited in the name of the City of Cottage Grove with interest thereon to be paid to Grantee, or

(2) A performance bond with good and sufficient surety in an amount of not less than $25,000.

(b) The purpose of the foregoing deposit or bond shall be to assure that Grantee shall well and truly observe, fulfill and perform each and every term and condition of this ordinance.

11.2 Reduction of Deposit or Bond. Upon the completion of the construction and installation of improvements called for herein it is agreed that the cash deposit or performance bond shall be reduced to the sum of $5,000, provided however, that in the event of the extension of this franchise at the end of five years or any year thereafter the requirement for a performance bond or cash deposit shall automatically terminate.

11.3 Damages and Defense.

(a) The Grantee shall hold harmless the Grantor for all damages and penalties as a result of the exercise of the franchise. These damages and penalties shall include, but shall not be limited to, damages arising out of copyright infringements, defamation, and all other damages arising out of the construction, operation, maintenance or reconstruction of the Cable Communications System authorized herein, whether or not any act or omission complained of is authorized, allowed, or prohibited by this franchise.

(b) The Grantee shall pay all expenses incurred by the Grantor in defending itself with regard to all damages and penalties mentioned in section (a) above. These expenses shall include but not be limited to all out-of-pocket expenses, such as attorney fees.

11.4 Liability Insurance and Indemnification.

(a) The Grantee shall maintain, throughout the term of the franchise, liability insurance insuring both the Grantee and the Grantor with regard to all damages mentioned in subsection (a) of the section entitled "Damages and Defense" above, in the minimum amounts of:

$300,000 for bodily injury or death to any one person,

$100,000 for bodily injury or death resulting from any one accident,

$300,000 for property damage resulting from any one accident,

$1,000,000 for all other types of liability.

(b) Upon the effective date of the franchise, the Grantee shall furnish proof to the Grantor that a satisfactory insurance policy has been obtained. Said insurance policy shall be approved by the Grantor and such insurance policy, along with written evidence of payment of required premiums, shall be filed and maintained with the City Manager.

11.5 Costs of Publication of Franchise. The Grantee shall pay the costs of publication of the franchise, as such publication is required by law.

Section 12. RIGHTS RESERVED TO THE GRANTOR

12.1 Right of Inspection of Construction. The Grantor shall have the right to inspect all construction or installation work performed subject to the provisions of the franchise and to make such tests as it shall find necessary to ensure compliance with the terms of this franchise and other pertinent provisions of law.

12.2 Right of Intervention. The Grantor shall have the right of intervention in any suit or proceeding to which the Grantee is a party, and the Grantee shall not oppose such intervention by the Grantor.

12.3 Right to Require Removal of Property. At the expiration of the term for which the franchise is granted, including any extensions thereto, or upon its revocation or expiration, as provided for herein, the Grantor shall have the right to require the Grantee to remove, at Grantee’s expense, all portion of the Cable Communications System from all streets and public ways within the City.

12.4 In addition to the fees paid grantor under Section 3, as Grantor may require from time to time Grantor shall have the right to require Grantee to deposit with Grantor in advance the Grantor’ s estimated reasonable expenses, including attorney and consultant fees, for awarding, modifying, transferring and enforcing this franchise.

(Ord. 2657 §3, 1990)

Section 13. RIGHTS OF INDIVIDUALS PROTECTED

13.1 Further Regulatory Powers Reserved. The City reserves the right to regulate the conduct of the Grantee in regard to the privacy and property rights of private citizens. Such regulations may include but are not limited to the security of all records maintained by the Grantee containing privacy sensitive information, personnel practices relating to such records and any other matters related to privacy and individual rights.

Section 14. TERMINATION AND RENEWAL

14.1 Revocation. In addition to any rights set out elsewhere in this document, the Grantor reserves the right to revoke the franchise, and all rights and privileges pertaining thereto, in the event that:

(a) The Grantee violates any material breach of the franchise; or,

(b) The Grantee’s construction schedule is delayed for over 12 months; or,

(d) The Grantee is found to have practiced any fraud or deceit upon the Grantor; or,

(e) The Grantee fails to obtain and maintain any permit required by any federal or state regulatory body.

City may give Grantee sixty days’ written notice of intention to revoke the franchise, and state the reason for the revocation. If Grantee removes the stated reason for the revocation within thirty days of written notice being given, revocation shall not take place.

Upon failure of the Grantee to comply with the terms of the franchise, the City, following a full public hearing, may by ordinance declare a forfeiture, whereupon all rights of the holders of the franchise shall immediately be divested without a further act upon the part of the Grantor, and the Grantee shall forthwith remove its structures or property from the streets and restore the streets to such condition as the Grantor may perform the work and collect the cost thereof from the Grantee. The cost thereof shall be a lien upon all plant and property of the Grantee.

14.2 Receivership. The Grantor shall have the right to revoke the franchise one hundred and twenty (120) days after the appointment of a receiver, or trustee, and to take over and conduct the business of the Grantee, whether in receivership, reorganization, bankruptcy, or other action or proceeding, unless such receivership or trusteeship shall have been vacated prior to the expiration of said one hundred and twenty (120) days, or unless:

(a) Within one hundred and twenty (120) days after his election or appointment, such receiver or trustee shall have been approved by City Council resolution and shall have fully complied with all provisions of the franchise and remedied all defaults thereunder; and,

(b) Such receiver or trustee, within said one hundred and twenty (120) days, shall have executed an agreement with the Grantor, duly approved by the Grantor and the court having jurisdiction in the premises, whereby such receiver or trustee assumes and agrees to be bound by each and every provision of the franchise.

14.3 Expiration. Upon expiration of the initial term of the franchise, the Grantor shall have the right, at its election, to:

(a) Renew or extend the franchise, in accordance with then existing rules of the FCC, the Cottage Grove City Charter, and applicable law, though nothing herein shall be construed to require such renewal or extension,

(b) Invite additional proposals and award a cable communications franchise to another grantee,

(d) Take such other action as the Grantor deems appropriate,

(e) Grantor will not unreasonably withhold renewal of franchise.

14.4 Continuity of Service Mandatory. It shall be the right of all subscribers to receive all available services insofar as their financial and other obligations to the Grantee are honored. In the event that the Grantee elects to rebuild, modify, or sell the system, the Grantee shall do everything in its power to ensure that all subscribers receive continuous, uninterrupted service regardless of the circumstances during the lifetime of the franchise. In the event of any purchase, lease-purchase, condemnation, acquisition, taking over, or holding of plant and equipment by the Grantor, including subsequent assignment, sale, lease, or other transfer to any other person, including any other grantee of a cable communications franchise, the Grantee shall cooperate with the Grantor or such future grantee by operating the system for a temporary period in order to maintain continuity of service to all subscribers, with Grantor paying reasonable management expenses to Grantee.

14.5 Removal of Plant and Equipment. In the event the Grantor has by ordinance declared a forfeiture of the franchise as provided in this Section, or in the event of the expiration of the initial term of the franchise without the franchise being renewed or extended, or in the event of Grantor’s purchase, lease-purchase, condemnation, acquisition, taking over, or holding of plant and equipment, then all rights of the Grantee immediately shall be divested without further act by the Grantor. Forthwith thereafter, except as otherwise provided by ordinance, the Grantee shall remove its structures or property from the streets and public ways and restore the streets and public ways to such condition as the Grantor may require. In the event of failure by the Grantee properly to perform such work, then the Grantor may perform the work and collect the cost thereof from the Grantee. The cost thereof shall be a lien upon the system of the Grantee and set-off against any sums owed Grantee by Grantor.

14.6 Additional Remedies for Franchise Violations. In addition to any rights set out elsewhere in this franchise, and except as specifically provided in Section 9.2, Grantor reserves the right to apply at its sole option any one or combination of the following, in the event Grantee violates any provision of the franchise:

(a) Impose a financial penalty in such amount, whether per day, incident, or other measure of violation, as Grantor may deem reasonable;

(b) Reduce the duration of the franchise on such basis as Grantor may deem reasonable;

(d) Require Grantee to make payments to its customers or classes of customers in such amount and on such basis as Grantor may deem reasonable;

(e) Require Grantee to correct or otherwise remedy the violation prior to any rate increase becoming effective.

In determining which remedy or remedies for Grantee’s violation are appropriate, Grantor shall take into consideration the nature of the violation, the person or persons bearing the impact of the violation, the nature of the remedy required in order to prevent further such violations, and such other matters as the Grantor may deem appropriate; provided, however, that adequate penalties may be imposed if service is in any way lessened, or if any material provision of this franchise is not complied with.

Section 15. MISCELLANEOUS PROVISIONS

15.1 Compliance with Laws. The Grantee shall comply with all Federal and State of Oregon laws, as well as all City ordinances, resolutions, rules and regulations heretofore or hereafter adopted or established during the entire term of the franchise.

15.2 Separability. If any section of the franchise is held to be invalid or preempted by Federal or State regulations or laws, such finding or preemption shall not affect the remaining sections of the franchise except as provided in Section 15.6 of this document.

15.3 Captions. The captions to sections throughout this proposal are intended solely to facilitate reading and reference to the sections and provisions of this proposal. Such captions shall not affect the meaning or interpretation of this proposal.

15.4 No Recourse Against the Grantor. The Grantee shall have no recourse whatsoever against the Grantor or its officials, boards, commissions, agents, or employees for any loss, costs, expense, or damage arising out of any provisions or requirement of the franchise or because of the enforcement of the franchise or in the event the franchise or any part thereof is determined to be invalid.

15.5 Nonenforcement by the Grantor. The Grantee shall not be relieved of its obligation to comply with any of the provisions of this permit by reason of any failure of the Grantor to enforce prompt compliance.

15.6 Subsequent Action by State or Federal Agencies. Should the State of Oregon, or any agency of the Federal government or agency thereof subsequently require the Grantee to act in a manner which is inconsistent with any provisions of the franchise, the Grantee shall so notify the Grantor. Upon receipt of such notification, the Grantor shall determine if a material provision of the franchise is affected. Upon such determination, the Grantor shall have the right to modify or amend any of the sections of the franchise to such reasonable extent as may be necessary to carry out the full intent and purpose of the franchise. The Grantor may terminate the franchise in the event the Grantor determines that substantial and material compliance with the original proposed terms of the franchise has been frustrated by such State or Federal requirements.

15.7 Competitive Advantage. No Grantee nor any major stockholder or partner of a Grantee shall directly or indirectly within the City use the position as cable franchisee to gain competitive advantage in the business of selling, leasing, renting, servicing or repairing radio or television sets or other receivers or parts thereof which make use of standard broadcast entertainment signals, provided that nothing therein shall prevent Grantee from making modifications to the tuner input circuit of the subscribers, television receivers and the fine tuning of the customers’ operating controls only, to ensure proper operation under conditions of cable connection at the time of installation or in response to subscriber complaints, or from the selling, servicing or repairing of receivers and other equipment belonging to other CATV system operators for use in the conduct of their businesses.

15.8 Material Content. Grantee shall not transmit or permit to be transmitted over any channel over which it has programming control any material that is obscene or indecent. For purposes of this subsection, material shall be deemed obscene or indecent if (a) It depicts or describes in a patently offensive manner sadomasochistic abuse or sexual conduct; (b) The average person applying contemporary state standards would find the material, taken as a whole, appeals to the prurient interest in sex; and (c) Taken as a whole, it lacks serious literary, artistic, political, or scientific value. Also for purposes of this subsection, the terms "sadomasochistic abuse" and "sexual conduct" shall have the meanings assigned to them by ORS 167.060, 1971 Oregon Laws Chapter 743, Section 255.

15.9 Notice. When Grantor or Grantee are required by ordinance to give notice to the other, it shall be given by certified mail to the following addresses:

To Grantor at:	City Manager
	City of Cottage Grove
	400 Main Street
	Cottage Grove, OR 97424

To Grantee at:	Falcon Cable Systems Company
	10866 Wilshire Blvd.
	Suite 500
	Los Angeles, CA 90024

Grantor or Grantee may change their address anytime upon written notice to the other.

(Ord. 2657 §4, 1990)

15.10 Entire Agreement. This franchise agreement contains the entire agreement between the parties, supersedes all prior agreements or proposals except as specifically set forth herein, and cannot be changed orally but only by an instrument in writing executed by the parties.

Section 16. REGULATION

At all times the power and right to regulate in the public interest the exercise of the privileges permitted by this ordinance shall remain in and be vested in the Council of the City of Cottage Grove. The Grantee may collect rates and charges for services as mentioned in Section 4 above, but in addition to the specific powers referred to elsewhere in this ordinance, there are reserved to the Council all rights of control, regulation, investigation and rate-fixing prescribed by the Charter and ordinances of the City of Cottage Grove and Statutes of the State of Oregon. The City reserves the right to delegate authority for regulatory activity, including control of community access, in whatever manner the City Council deems appropriate.

Section 17. WRITTEN ACCEPTANCE

Within 60 days after this Ordinance 2657 is adopted, Grantor and Grantee shall file with the City Recorder their unconditional acceptance of this franchise amendment and shall promise to comply with and abide by all its provisions, terms and conditions. The acceptance and promise required in this paragraph shall be in writing. Execution of this franchise by the Parties where indicated shall be deemed such acceptance of this franchise as of the date of passage of this ordinance.

(Ord. 3056 §4, 2015: Ord. 2657 §5, 1990)

Section 18. FORCE MAJEURE

If by reason of force majeure the Grantee is unable in whole or in part to carry out its obligation under this agreement, the Grantee will not be deemed in violation or default during the period of such inability. The term "force majeure" as used here means the following: acts of God; strikes, lockouts or other industrial disturbances; acts of public enemies, orders of the government of the United States of America, or of the State of Oregon, or their departments, agencies, political subdivisions, or officials except as provided for in Section 15.6, "Subsequent action by State or Federal agencies," acts of any civil or military authority; insurrections; riots; epidemics; landslides; earthquakes; lightning; fires; icing conditions; hurricanes; volcanic activity; storms; floods; washouts; droughts; restraint of government and people; civil disturbances; explosions; or partial or entire failure of utilities, or any other circumstances found by the Grantor to be beyond the reasonable control of the Grantee. The Grantee agrees, however, to exert its best efforts to remedy as soon as possible, under the circumstances, the cause or causes preventing it from carrying out its responsibilities and duties under this franchise agreement. In determining whether circumstances beyond the control of the Grantee exist, the Grantor will consider the cause of the nonperformance and whether any action or inaction of the Grantee was a material contributing factor.

Section 19. HOLD HARMLESS AGREEMENT

In addition to the waiver of recourse against Grantor as set forth in Section 15.4 the Grantee covenants and agrees that Grantee will indemnify, defend and hold Grantor harmless from any claims, actions or suits commenced against Grantor by any third party relating to the process, terms or circumstances surrounding the award of the franchise to Grantee and the adoption of this ordinance.

Section 20. EMERGENCY CLAUSE

It being deemed by the Council that it is in the public interest that cable television service be made available as soon as is reasonable an emergency is declared to exist and this ordinance shall take effect immediately upon its passage by the Council and approval by the Mayor.

PASSED BY THE COUNCIL AND APPROVED BY THE MAYOR THIS 7TH DAY OF NOVEMBER, 1983.

ATTEST:	APPROVED:
_______________________________	_______________________________
LOIS G. HOWES - CITY RECORDER	WILLIAM A. WHITEMAN - MAYOR

McCAW CABLEVISION OF COTTAGE GROVE, INC. hereby unconditionally accepts and agrees to Ordinance No. 2488 of the City of Cottage Grove and all of the terms, provisions, and conditions thereof.

McCAW CABLEVISION OF COTTAGE GROVE, INC., Grantee
By:	________________________
Date:	12/5/83

ORDINANCE NO. 2783

AN ORDINANCE CONSENTING TO TRANSFER OF CATV FRANCHISE

The City of Cottage Grove ordains as follows:

Section 1. Purpose. The purpose of this ordinance is to consent to the transfer of the CATV franchise (Ordinance No. 2488) from Falcon Cable System to a new entity, Falcon Cable Systems Company II.

Section 2. Enactment. Pursuant to Section 1.5 of Ordinance 2488 the City does hereby consent to the transfer of the CATV franchise from Falcon Cable Systems Company to Falcon Cable Systems Company II.

Passed by the Council and approved by the Mayor this 8th day of July, 1996.

ATTEST:

__________________________

Jeff Towery, City Manager

APPROVED:

_____________________________

Jean Sinclair-Edwards, Mayor

Date: July 8, 1996

APPENDIX V.CATV FRANCHISE

APPENDIX V.
CATV FRANCHISE