2000-020 Daniels Cablevision RESOLUTION 2000-20
APPROVING RENEWAL OF A FRANCHISE AGREEMENT BETWEEN THE CITY
OF ENCINITAS, CALIFORNIA AND DANIELS CABLEVISION, INC. TO OPERATE A
CABLE COMMUNICATIONS SYSTEM
WHEREAS, the City of Encinitas (hereinafter "City") is authorized to grant, renew and
deny franchises for the installation, operation and maintenance of cable communications systems
within the boundaries of the City by virtue of federal and state statues and court rulings, by. the
City's police powers, by its authority over its public rights-of-way and by other City powers and
authority; and
WHEREAS, Daniels Cablevision, Inc. (hereinafter "Grantee") is currently maintaining
and operating a cable system in the City pursuant to a license granted by the County of San
Diego and temporarily extended by the City; and
WHEREAS, the Grantee has agreed to comply with the applicable provisions of
regulatory Ordinance 96-08 of the City, as amended, entitled "An Ordinance of the City of
Encinitas, California Regarding the Granting of Cable Communications Franchises", and
WHEREAS, the City finds that Grantee has substantially complied with the material
terms of its existing franchise and with applicable law; and
WHEREAS, the quality of the Grantee's services, including signal quality, response to
consumer complaints and billing practices, has been reasonable in light of community needs; and
WHEREAS, Grantee has the financial, legal and technical ability to provide the services,
facilities and equipment for the operation of a cable communications system; and
WHEREAS, the terms and conditions of the proposed Franchise Agreement are
reasonable to meet the future cable related needs and interests of the community, taking into
account the costs of meeting such needs and interests.
NOW THEREFORE, BE IT RESOLVED, that the City Council of the City of Encinitas
hereby grants renewal of a non-exclusive Franchise for the construction, operation and
maintenance of a cable communications system with Daniels Cablevision, Inc. pursuant to the
terms and conditions of the agreement entitled, "Franchise Agreement Between the City of
Encinitas, California and Daniels Cablevision, Inc. to Operate a Cable Communications System"
which is attached and incorporated by reference.
PASSED AND ADOPTED this 22nd day of March , 2000, by the following vote
to wit:
AYES: Bond, Cameron, DuVivier, Guerin, Holz.
NAYS: None.
ABSTAIN: None.
ABSENT:None. ~x,,~i/~, ~,~
City of Encinitas
ATTEST:
Director of Legislative Services
CITY OF ENCINITAS,
CALIFORNIA
FRANCHISE AGREEMENT BETWEEN THE CITY OF
ENCINITAS, CALIFORNIA AND
DANIELS CABLEVlSION, INC.
TO OPERATE A CABLE COMMUNICATIONS SYSTEM
TABLE OF CONTENTS
Page
Section 1 Grant of Franchise Renewal ....................................................... 1
Section 2 Franchise Area ...................................................................... 1
Section 3 Term of Franchise .................................................................. 2
Section 4 Franchise Fees ....................................................................... 2
Section 5 System Design and Performance Requirements ................................ 3
Section 6 PEG and Local Origination Access .............................................. 5
Section 7 Support for PEG and Institutional Network ..................................... 7
Section 8 Letter of Credit, Bonds and Insurance ........................................... 9
Section 9 Open Books, Reporting Provisions and Payment of Franchise Fees ....... 11
Section 10 Customer Service .................................................................. 11
Section 11 Defense and Satisfaction of Claims/Indemnification ........................ 12
Section 12 Liquidated Damages .............................................................. 13
Section 13 Privacy .............................................................................. 14
Section 14 Alternative Remedies ............................................................. 14
Section 15 Assignment, Modification and Termination of Franchise Agreement ..... 14
Section 16 Acceptance ......................................................................... 14
Section 17 Non-Discriminatory Access: Reservation of Rights .......................... 14
Section 18 Severability ........................................................................ 15
Section 19 Guarantee ........................................................................... 15
i
Exhibit A Service to Unserved Areas
Exhibit B Public Buildings and Facilities to be Provided Cable Communication
Services
ii
FINAL
FRANCHISE AGREEMENT BETVVEEN THE
CITY OF ENCINITAS, CALIFORNIA AND DANIELS CABLEVlSION, INC.
TO OPERATE A CABLE COMMUNICATIONS SYSTEM
1. Grant of Franchise Renewal.
The City of Encinitas ("City") hereby grants a cable television franchise renewal
to Grantee pursuant to the terms and conditions of this Agreement. This renewal of a
non-exclusive franchise for a cable communications system (hereinafter the
"Franchise") is issued pursuant to the authority provided in the Cable Communications
Ordinance adopted as Ordinance No. 96-08 of the City. All of the provisions of the
Cable Communications Ordinance are incorporated herein by this reference, as if set
forth in full. The Cable Communications Ordinance and this Agreement contain the
terms and conditions of the Franchise and shall supersede all prior franchises granted
to Grantee on the effective date of the Agreement. To the extent the provisions of the
Cable Communications Ordinance are inconsistent with those of this Agreement, the
provisions of this Agreement shall prevail.
Grantee shall at all times operate the cable communications system in
accordance with the provisions of this Franchise Agreement and all applicable local,
state, and federal laws and regulations, including but not limited to the City of Encinitas
Municipal Code, Title 47 of the Code of Federal Regulations, and the Cable
Communications Policy Act of 1984, as amended by the Cable Television Consumer
Protection and Competition Act of 1992, and as further amended by the
Telecommunications Act of 1996, (hereinafter the "Cable Act"), and any future
amendments to those documents or interpretations of law by a court of competent
jurisdiction which apply retroactively to the effective date of this Agreement.
Unless otherwise defined in this Agreement, any word, term, phrase or
abbreviation used in this Agreement shall have the meaning expressly prescribed in the
Cable Act or Title 47 of the Code of Federal Regulations, as those documents exist
upon the effective date of this Agreement or are duly amended to apply retroactively to
the effective date of this Agreement. For all other words, terms, phrases, or
abbreviations used herein, the definition identified in the Cable Communications
Ordinance shall apply. Otherwise, words shall be given their common and ordinary
meanings.
2. Franchise Area.
The Franchise Area for this Franchise shall be all property within the boundaries
of the City of Encinitas as they exist on the effective date of the Agreement, and as the
boundaries may exist during the Franchise period, through annexation, detachment, or
other reorganization provided that Grantee shall not be required to overbuild areas
already served by another cable operator.
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:3. Term of Franchise.
The term of this Franchise shall be for a period of thirteen (13) years, commencing on
April 15, 2000 and expiring on April 14, 2013, except as provided herein. If system
rebuild is completed as described in Section.5.e. below on or before January 1, 2002 to
the satisfaction of the City Manager, the term of the Franchise shall be increased by two
(2) years.
4. Franchise Fees.
a. The franchise fee shall be five percent (5%) of Grantee's gross
revenues upon the effective date of this Agreement. The franchise fee shall be payable
forty-five (45) days after the close of each quarter of Grantee's fiscal year ("billing
cycle"), including any adjustment for franchise fees paid or owed during the previous
billing quarter. An itemization of revenue sources and amounts shall accompany each
franchise fee payment.
b. Should the maximum franchise fee permitted by state and federal
law increase beyond five percent (5%), the City may increase the franchise fee not to
exceed the maximum amount allowed by law upon notification and discussion with
Grantee.
c. The franchise fee due from Grantee shall take precedence over all
other payments, contributions, services, equipment, facilities, support, resources, or
other activities to be paid or supplied by Grantee pursuant to this Agreement.
d. Grantee may designate that portion of a subscriber's bill attributable
to the franchise fee as a separate item on subscribers' bills.
e. Gross Revenues shall mean any and all revenues received directly
or indirectly by Grantee or Grantee's affiliates which are attributable to cable services
provided to subscribers in Encinitas through the use of Grantee's cable system. Gross
Revenues shall include without limitation all revenues relating to cable services for
programming on all tiers, including pay-per-view and related per event service;
installation, equipment, and customer service charges; and franchise fees; and shall
further include revenues relating to video programming received by Grantee or
Grantee's affiliates for advertising sales and leased or licensed access in Encinitas.
Grantee agrees to include revenue derived from customers' monthly subscription to
high-speed data and Internet service provided over the cable system in the franchise
area in the definition of Gross Revenues. However, if Congress, the FCC, or a court of
competent jurisdiction over the City of Encinitas, makes a final determination that
classifies high-speed data services over a cable system as a service not subject to
regulation under Title VI of the Cable Act, Grantee's revenue from such services shall
be expressly excluded from the calculation of Grantee's Gross Revenue from that point
forward. Nothing in this Section shall waive the City's right to regulate
telecommunications uses in the public right-of-way.
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5. System Design and Performance Requirements.
a. Existing System Capacity to Continue. Grantee agrees to continue
to provide, until the construction, implementation or addition of any additional system
capacity, the system's current carriage capacity (currently 450 MHz). Each channel
delivered to the subscriber shall meet all FCC standards and rules.
b. Minimum Services. Grantee agrees to keep activated and
programmed a minimum of fifty-five (55) activated and programmed channels; provided
that Grantee may utilize alternative technologies (including compression or servers) to
deliver such services.
c. Minimum Capacity. At all times, Grantee's system shall be capable
of transmitting at least ninety-eight (98) programming service options carrying
broadcast, satellite, and premium programming plus two-way data transmission.
Grantee may utilize alternative technologies (including video compression or servers) to
deliver all such programming choices and options.
d. Provision of Service. The Grantee shall provide cable television
service to any requesting residential unit within the franchise area no later than thirty
(30) days from the date of request, provided that (1) such subscriber is located one
hundred fifty (150) feet of activated trunk or distribution cable, and (2) the Grantee is
able to secure all rights-of-way necessary to extend service to such subscriber within
such thirty (30) day period on reasonable terms and conditions. Additionally, on or
before twenty-four (24) months from the effective date of this Agreement, Grantee shall
install cable plant to pass unserved areas as described in Exhibit A. Standard
installation rates shall apply for new subscribers located within one hundred fifty (150)
feet of activated trunk or distribution cable. Non-Standard installation rates may be
charged based upon the distance necessary to extend services beyond one hundred
fifty (150) feet from activated trunk or distribution cable.
e. Upgrade of System. Grantee has formally announced and
commenced a systemwide upgrade as detailed in letters to city officials, press releases
and newsletters to customers. The upgrade/rebuild is designed to provide a system
which is capable of additional channels for television programming, video on demand
services, two-way high-speed data service, and various telephony and
telecommunications options. System architecture will be comprised of a sophisticated
hybrid fiber-coaxial broadband network. The City recognizes that Grantee's intent to
upgrade is not an obligation of the Franchise, however if the upgrade/rebuild is
completed as planned and to the satisfaction of the City Manager, which approval shall
not be unreasonably withheld, by January 1, 2002, Grantee shall be entitled to a two (2)
year extension to the term of this Franchise as provided in Section 3 above.
f. Plans and Specification Required.
(1) If Grantee undertakes a major construction or reconstruction
program, including system upgrades or rebuilds, excluding plant line extensions and
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related activity, Grantee shall submit to the City such plans at least ninety (90) days
before the start of construction, unless such ninety (90) day time period shall be
reasonably shortened by the City. The plans shall be engineered to scale and include
the proposed location of project, Grantee's existing facility locations, construction
timetables, equipment specifications, and design performance criteria. City shall make
reasonable efforts to expedite approvals and the issuance of permits required for such
construction.
(2) Grantee shall maintain in its business office, and make
available to the City upon request, maps, using standard industry designations, that at a
minimum disclose (i) cable routes (ii) locations and identifications of aerial and above
and below ground appurtenances (such as risers, vaults, pedestals and power supplies)
and (iii) physical locations and identifications of system components, including but not
limited to cables and active and passive electronics and the electrical values of its taps,
splitters or directional couplers.
(3) The City shall have the power to review and approve such
plans, to ensure that they are consistent with this Agreement and applicable statutes,
ordinances, codes, regulations, determinations and rulings governing construction
within the public streets of the City, including without limitation, the Public Works Code,
zoning ordinances and traffic safety standards. Where such plans and specifications
are not in compliance with such statutes, ordinances, codes, regulations, determinations
and rulings, the City may require that Grantee modify or revise such plans and
specifications so as to achieve such compliance. The City shall also have the power to
review such plans to avoid negative aesthetic impacts. Upon reasonable request by the
City, Grantee shall remove or relocate facilities, if and when made necessary by a
public project, in accordance with Section 1.10526 of the Cable Communications
Ordinance.
g. Proof of System Performance Tests. Grantee shall operate the
system at all times in compliance with FCC technical standards. Grantee shall perform
proof of performance tests at least semi-annually or as otherwise required by the FCC
in a manner and with the frequency required by the FCC's technical standards rules.
Upon the City's request, Grantee shall provide to the City a written report showing the
results of such proof of performance tests.
h. Parental Control. The Grantee shall provide a parental control
option, trap or other device to subscribers requesting the capability of removing video
programming and its audio track from any premium, pay-per-view and adult services.
There shall be no additional charge for use of such parental control option.
i. Emergency Override System. Grantee shall provide, install,
activate, and maintain emergency alert capability, which includes audio alert on all
channels of Grantee's system, and character generated message capabilities on a
designated channel. The City shall be able to activate, provide audio programming, and
terminate such emergency audio alert on City designated channels via dial-up or
dedicated telephone control. The City shall use the audio alert and character generated
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system only when the City Council or City Manager has declared an emergency and the
emergency meets the definition set forth at 47 CFR sec. 76 11.55, and as amended.
j. Standby Power. Grantee shall provide standby power
generating capacity during utility power outages at its cable television system control
center and at all hubs and nodes, subject to City permit and zoning code standards.
k. System Rebuild/Upgrade Itemization. The cost associated with
any system rebuilds or other performance standards of this section may not be itemized
on subscribers' bill, unless the FCC requires such itemization.
6. PEG and Local Ori.qination Access:
a. Access Channel Capacity. The Grantee shall provide channel
capacity on the Basic Cable Service Tier for educational and governmental ("EG")
programming and for public access or local origination programming ("P"). Until the
completion of a system rebuild and/or upgrade or January 1, 2002, whichever is sooner,
Grantee agrees to continue televising the Encinitas City Council meetings and any local
origination video programming submitted by residents of Encinitas. No later than
January 1, 2002, Grantee shall designate two (2) separate and distinct channels for
educational and governmental programming by the City or its designee. The
designated EG channels shall have the ability to transmit the City's, or its designee's,
EG programming to subscribers of Grantee's cable system within the franchise area.
The City shall have the right to override programming within the City of Encinitas on the
designated channels as follows:
(1) The Grantee will air County Television Network or other
governmental-type programming on the designated government channel. The City shall
have the right to override programming on the government channel at its discretion
within the City of Encinitas.
(2) The Grantee will air educational programming from Palomar
College and/or the San Diego County Office of Education, or other educational
programming on the designated education channel. The Grantor shall have the right to
override programming at its discretion on the education channel within the City of
Encinitas.
(3) Managerial and Editorial Control of the EG Channels. The
EG channel(s) shall be under the exclusive management and editorial control of the
City, provided, however that the City shall not air repeat or character generated
programming more than 33 1/3 percent of the time on the EG channels. The EG
channel(s) shall be used only for non-commercial, local programming, however
advertising may be carried on the channel(s) so long as the revenue for such
advertising is used solely for the operation and maintenance of the EG channels. The
City shall have sole responsibility for the programming of the EG channel(s) and the
establishment of all rules, regulations and procedures pertaining to the use and
scheduling of the programming presented over the channel(s).
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b. Change in EG Channel Designation. Grantee shall provide thirty
(30) days advance written notice to the City, should Grantee desire to change the
channel number for any reason.
c. Interconnection. Grantee shall work with other franchised cable
· operators in the City to ensure that EG programming is delivered to Encinitas residents
as designated by the City.
d. Additional Channels. Grantee shall designate up to two (2)
additional EG channels for a total of four (4), at the City's request subject to the
following conditions:
(1) One (1) original EG channel is in use at least 80% of the
time during any consecutive thirteen (13) hour weekday period for twelve (12)
consecutive weeks. Background programming provided to all subscribers throughout
the system shall not contribute to said programming threshold.
(2) Additional EG channels shall be used exclusively for non-
commercial educational or governmental programming by the City or its designee. The
City may not receive compensation for the use of original or additional EG channels by
a third-party designee. Further, the City shall not assign or otherwise authorize the use
of original EG channels by a third-party designee for the purpose of obtaining additional
EG channels. Grantee may be allowed to utilize unused channel capacity on additional
EG channels upon notification and permission of the City, which permission shall not be
unreasonably withheld.
(3) Any additional EG channel shall be made available within
one hundred eighty (180) days following the City's written request and upon verification
of compliance with each of the foregoing conditions, provided, however, Grantee shall
not be required to delete any programming then carried in order to meet this
requirement, but shall designate as the additional PEG channel the first channel on
which capacity becomes available.
e. Public Access/Local Origination Programming. Grantee shall make
available and provide scheduling time on the designated public access channel for local
origination and community programming. Scheduling time shall be allocated in the
following manner:
(1) One hundred percent (100%) of programming time for public access
channel(s) which are solely or exclusively received by Grantee's subscribers in the
franchise area; or
(2) The proportion percentage of the total time of public access channel
programming time where the numerator is the number of Grantee's subscribers in the
franchise area designated by the City, and the denominator is the total number of
subscribers in the Grantee's system(s) in northern San Diego County.
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(3) Grantee may use the unused channel capacity on the designated public
access channel for non-public access or local origination programming.
f. Grantee shall make available studio time, equipment and
assistance for the production of community programming. The Grantee may establish
reasonable procedures and lease rate charges for the scheduling and use of production
facilities and assistance.
g. Service to Governmental/Educational Facilities. Grantee shall
provide, at the request of the City and without charge, cable service to existing and
future educational and governmental buildings, institutions and facilities located within
Grantee's service area. Cable service shall be provided with system drops to the
building within six (6) months after the effective date of this Agreement to those public,
educational and governmental facilities designated as "immediate" on Exhibit "B"
attached hereto and fully incorporated herein. Also as identified on Exhibit "B", Grantee
shall provide cable service to Mira Costa College with system drops to the property line
at such time as Grantee's plant passes within 300 feet of the College building. Service
to the building shall be provided to all future public educational and governmental
facilities within three hundred (300) feet of Grantee's plant, so long as a "raceway",
trench or conduit is made available to Grantee from the property line to the point of
demarcation. Grantee shall provide to institutions and facilities so serviced free access
to the Basic Service Tier and Cable Programming Service Tier. The charge for monthly
service shall not require or allow an offset against the franchise fee, nor shall the cost
be passed through to subscribers as a separate line item on subscriber's bills.
7. Support for PEG and Institutional Network.
a. Capital Contribution. Grantee shall pay Two Hundred Fifty
Thousand Dollars ($250,000.00) to be paid in installments to the City as a capital
contribution to support PEG and INET facilities and equipment. One Hundred
Thousand Dollars ($100,000.00) shall be due thirty (30) days after the effective date of
this Agreement. The remainder shall be paid to the City upon thirty (30) days written
request from City, but in no event sooner than April 15, 2001 and no later than April 15,
2002.
b. Use of Capital Contribution. Said moneys may be used for the
following public purposes: (1) purchase or lease of equipment and facilities for
producing public, educational and governmental programming; (2) expenses necessary
to provide a point of access at governmental and educational institutions designated by
City, and the necessary modulators, demodulators, two-way amplifiers, conductors,
signal processing equipment, optical transmission equipment, switching equipment,
production equipment, playback equipment and other facilities to enable such location
to engage in the transmission and/or reception of internal non-commercial
transmissions among such locations; (3) Internet access for exclusive use by
government or educational institutions; (4) reimbursement of City costs associated with
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current Franchise renewal proceedings; and/or (5) any other costs associated with the
transmission of video for distribution over access channels on the subscriber network.
c. Accounting for Capital Contribution. The City shall account for the
expenditures of such funds as the Grantee provides in accordance with Section 7.b.
above. Such accounting shall be in reasonable detail so as to adequately identify the
sources and uses of all such funds. Such accounting shall be completed and made
available to the Grantee upon request within ninety (90) days after each fiscal year
during which the funds were expended.
d. External Costs. The City and Grantee agree that Grantee may
recover such capital contributions identified in Section 7.a. as incremental "externals"
that may be itemized upon subscriber bills. The recovery of capital contribution shall
not exceed nine cents ($.09) per subscriber until such time as the remainder of the
capital contribution provided in Section 7.a. is paid to the City at which time the total
itemized external recovery shall not exceed twenty-five cents ($.25). The itemization on
subscriber's bills shall read "PEG Capital Expenses." The pass-through of such
externals may begin thirty (30) days after written notice to subscribers and shall cease
at such time that said capital contributions are recovered in full, not allowing for interest
or other adjustments.
e. Institutional Network. Concurrently with the system upgrade
identified in Section 5.e., Grantee shall install optical fiber or conduit capable of housing
optical fiber at no cost to the City from the point of demarcation at Fire Station # 4,
located at 2011 Village Park Way to interconnect with fiberoptical lines operated by
another franchise cable operator serving City Hall. If Grantee chooses to install optical
fiber, said fiber shall have the capacity to transmit voice, video, and data impulses at
high traffic volumes from City Hall to Fire Station # 4. Grantee shall dedicate said
optical fiber or conduit to the City for its exclusive use. The City and Grantee
acknowledge that Grantee shall not be responsible for providing, installing, or
maintaining modulators, processors, or optical equipment necessary to originate,
deliver, or receive transmissions via said optical fiber. The City shall not resell the
Institutional Network constructed by Grantee to any third party for commercial use
unrelated to a municipal institutional network.
f. Ongoing Financial Support for Access and Equipment. Grantee
shall pay to the City two percent (2%) of the annual Gross Revenues generated in the
franchise area to support public, educational or governmental access facilities. Said
funds shall be remitted to the City at the same time and in the same manner as
franchise fees pursuant to Section 4 herein. The funds may be used by the City, in its
discretion without limitation, to offset costs associated with the EG channel and
institutional network programming, equipment and operations, and may be offered by
the City to residents to offset costs associated with local origination programming. The
City may, in its discretion, assign all or a portion of the support funds to a non-profit
foundation or similar organization for the purpose of administering local origination
programming. PEG Financial Support provided pursuant to this paragraph shall not be
separately itemized on subscriber bills.
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g. Based on the provisions of the Cable Communications Policy Act of
1984, City shall determine from time to time the funding level that it desires to make
available for EG operating costs, and the most appropriate entity to manage EG and ~
I-Net operations. City may negotiate agreements with municipalities within the County,
or with neighboring jurisdictions, educational institutions, or others to share operating
expenses, as appropriate. City and Grantee may negotiate an agreement for the
management of EG and I-Net facilities, if so desired by both parties.
8. Letter of Credit, Bonds and Insurance.
a. Letter of Credit. The Grantee shall establish a letter of credit in the
sum of twenty-five thousand dollars ($25,000) within forty-five (45) days after the
effective date of this Agreement. The letter of credit shall be in a form acceptable to the
City Manager. The Grantee shall restore to the letter of credit any amount the City
withdraws as liquidated damages, within thirty (30) days after the City withdraws the
money.
b. Performance Bond. Grantee shall obtain a performance bond
acceptable to the City Attorney in the amount of one hundred thousand dollars
($100,000) to guarantee Grantee's compliance with this Franchise.
c. Insurance. Grantee, at its sole cost and expense, for the full term of
the Agreement (and any extension thereof), shall be responsible for obtaining and
maintaining the following insurance coverage:
(1) Types of Insurance and Minimum Limits. The coverage
required herein may be satisfied by any combination of specific liability and excess
liability policies.
(i) Grantee's vehicles, including owned, non-owned (e.g.
owned by grantee's employees and used in the course and scope of employment),
leased or hired vehicles, shall each be covered with Automobile Liability Insurance in
the minimum amount of Two-Million Dollars ($2,000,000) combined single limit per
accident for bodily injury and property damage.
(ii) Grantee shall obtain and maintain comprehensive or
Commercial General Liability Insurance coverage and shall include, but not be limited
to, coverage for premises operation, explosion and collapse hazard, underground,
hazards, contractual insurance, broad form property damage, independent contractors
and personal injury liability. The limit of such insurance shall be at least Five Million
Dollars ($5,000,000) combined single limit liability for personal injury and property
damage.
(iii) Grantee shall not be required to obtain Broadcasters
Liability coverage.
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(iv) Insurance is to be placed with insurers authorized and
admitted to do business in California and with a current A.M. Best's rating of A or better
and a financial size of VII or greater, unless otherwise acceptable to the City.
(2) Workers Compensation and Employee Liability Insurance in
conformance with the laws of the State of California for the statutory limits.
(3) The City and its officers, employees, agents, and volunteers
shall be named as insureds or additional insureds to all required coverage of Grantee
by endorsement at no cost to the City. The coverage shall contain no special limitations
on the scope of protection afforded to the City, its officers, employees, agents, or
volunteers. For any claims related to this Franchise, the Grantee's insurance coverage
shall be primary insurance in respect to the City, its officers, officials, employees,
agents, and volunteers. Any insurance or self-insurance maintained by the City, its
officers, officials, employees, agents, or volunteers shall be excess of the Grantee's
insurance and shall not contribute with it.
(4) Within thirty (30) days from approval of this Agreement, the
Grantee shall furnish certificates and endorsements to the City proving that a
satisfactory insurance policy of General Comprehensive, Bodily Injury Liability, and
Property Damage Insurance is in place and that the appropriate individuals and entities
are listed as additional insureds. Insurance policies for vehicles shall be in effect prior to
usage of any vehicle by Grantee. The City may, by resolution, from time to time,
reasonably increase said insurance to the amounts which other contractors operating
within the public right-of-way in a manner similar to the Grantee and operating in the
jurisdiction of the City are required to provide so long as said increased coverage is
reasonably available.
(5) All insurance policies shall provide that in the event of
material change, reduction, cancellation, or non-renewal by the insurance carrier for any
reason other than nonpayment of the premium, not less than thirty (30) days notice will
be given to the City by registered mail of one (1) copy of a written notice of such intent
to cancel or not to renew the coverage. An authorized agent of such insurance carrier
shall provide to the City, on such schedule as is requested by the City, a certification
that all insurance premiums have been paid and all coverages are in force. If for any
reason Grantee fails to obtain or keep any of such insurance in force, the City may, but
shall not be required to, obtain such insurance, in which event Grantee shall promptly
reimburse the City the premium cost therefor plus one and one-half percent (11/2
percent) monthly interest thereon until paid.
9. Open Books, Reporting Provisions and Payment of Franchise Fee-~
a. Annual Reports. Within one hundred and twenty (120) days after the end
of Grantee's fiscal year, or portion thereof, Grantee shall file with the City an annual
statement of revenue, profits and loss for the previous fiscal year, sufficient to verify any
fees based on Gross Revenue. Such annual statement shall be prepared in
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accordance with generally accepted accounting principles applied on a consistent basis
and verified by an officer of Grantee.
b. Audit. The City shall have the right to inspect and audit Grantee's fiscal
and financial records, and to recompute any amounts that are payable under this
Section by the Grantee for a period of two (2) years after receipt thereof, after which
payments shall be final. The expenses for such an audit shall be borne by the City
unless the audit discloses an underpayment to the City of two percent (2%) or more, in
which case the costs of the audit shall be borne by the Grantee as a cost incidental to
the enforcement of its Franchise. If an audit reveals an overpayment or an
underpayment due to a mistake of fact, the difference in payment shall be applied to the
franchise fee payment immediately following resolution of the discrepancy so as to
make the parties whole.
c. Access to Books. Upon 72 hours prior written notice, the City shall have
the right to inspect, during normal business hours, all books, receipts, plans, financial
statements, contracts, service complaint logs, performance test results, records of
requests for service, codes, and other like materials in the possession of Grantee which
may be directly relevant to the Grantee's compliance with the requirements and
obligations imposed upon it by this Agreement, or applicable law. The right of the City
to inspect under this Section extends to the materials identified above that are in the
possession or under the control of the Grantee, and of any other person responsible for
managing and administering the cable system.
d. Proprietary Information. Upon a request for confidentiality by the Grantee,
information obtained by the City pursuant to this Section and Section 5.(f) shall be made
available only to persons needing access to the materials in order to perform their
responsibilities on behalf of or for the City and, as to all other persons, shall be treated
as confidential to the extent permitted by law. The City shall promptly noti~ Grantee
whenever a third party seeks access to Grantee confidential information. Grantee also
maintains the right to require that the City execute a confidentiality and/or non-
appropriation agreement prior to gaining access to any materials under this section.
Nothing in this section shall be read to require a Grantee to violate the Cable Act, 47
U.S.C. §551, or the California Public Records Act.
10. Customer Service.
a. Grantee shall comply with the FCC customer service guidelines
contained at Section 76.309 of Title 47 of the Code of Federal Regulations and with
Grantor's Subscribers Service Standards contained in the City of Encinitas Cable
Communications Ordinance 96-08, Section 1.10.602. as amended from time to time.
b. Grantee shall locate, operate and maintain a business office within
at least 20 miles of the City limits. Business office shall be adequately staffed by
knowledgeable representatives of Grantee to accept subscriber payments, subscriber
refunds, respond to service requests and accept equipment owned by Grantee returned
by subscribers and other on-site customer service functions in the operation of a cable
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communications system. Should Grantee relocate its full-service business office beyond
10 miles of the city limits, Grantee shall provide a pay station within the city limits.
c. Consistent with applicable law, once each year, Grantee shall, at
the City's request and upon ninety (90) days written notice, include in monthly billing
statement, educational, public interest, or community interest materials and/or an
envelope or other mechanism provided by the City to provide information or to solicit
contributions to city-related, non-profit, cable-related foundations or community access
corporations as specified by the City, provided, however that the City shall provide the
materials to Grantee and reimburse Grantee for any incremental mailing costs. Grantee
shall not be responsible for collecting donations on behalf of the City.
d. Verification of Subscriber Service Standards. Grantee shall
demonstrate compliance with subscriber service standards as required by Section
1.10.610 of the Cable Communication Ordinance by providing yearly reports when
requested to do so by the City.
e. Subscriber Service Complaints. Grantee shall comply with
addressing subscriber complaints, as required by Section 1.10.612 of the Cable
Communication Ordinance, acknowledging any complaint made in person or by
telephone within twenty-four (24) hours of receipt, regardless of the time the complaint
is made.
11. Defense and Satisfaction of Claims/Indemnification.
a. The Grantee shall indemnify, defend and hold harmless the City
from all damages, penalties, judgments and liability of any kind, and defend all claims,
actions or causes of action arising as a result of the Grantee's operation of the cable
television system, regardless whether any act or omission complained of is authorized,
allowed, or prohibited by the Franchise, to the extent such damages, penalties,
judgments, claims, actions or causes of action arise out of or are caused by the
negligent or willful act or omission of the Grantee. Upon demand of the City, made by
and through the City Manager, the Grantee shall appear in and defend the City, its
officers, employees and agents in any legal action, whether judicial, administrative or
otherwise, with respect to which the City is entitled to indemnification hereunder.
b. The City shall indemnify, defend and hold harmless Grantee, its
affiliates and their respective officers, directors, employees and shareholders from and
against any and all damages, penalties, judgments and liability of any kind, and defend
all claims, actions or cause of action arising as a result of the City's use of the EG
channels or the imposition of taxes or fees by the City. This indemnity shall not apply
with respect to any programming provided by the Grantee and which is carried on the
EG channels.
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'12. Liquidated Damages.
a. The City finds, and Grantee, by its Acceptance, agrees, that as of
the time of the renewal of this Franchise, it is impractical, if not impossible to reasonably
ascertain the extent of damages which will be incurred by the City as a result of a
material breach by Grantee of its obligations pursuant to this Franchise Agreement.
Accordingly, the City, through its City Manager, Council or a hearing officer, may, in its
discretion, assess liquidated damages as set forth below for any violation of the
standards and requirements of this Agreement:
1. Up to two hundred dollars ($200.00) for each day of each
material breach, not to exceed six hundred dollars ($600.00) for each occurrence of
material breach;
2. For a second material breach of the same nature occurring
within 12 months where a fine or penalty was previously assessed, up to four hundred
dollars ($400.00) for each day of each material breach, not to exceed twelve hundred
dollars ($1,200.00) for each occurrence of the material breach;
3. For a third or further material breach of the same nature
occurring within those same 12 months, where a fine or penalty was previously
assessed, up to one thousand dollars ($1,000.00) for each material breach, not to
exceed three thousand dollars ($3,000.00) for each occurrence of the material breach.
b. These liquidated damages shall not apply in actions of tort, nor
shall they act to restrict, limit, or prevent recovery in accordance with the provisions of
Section 12, Defense and Satisfaction of Claims/Indemnification, and the provisions of
Section 9, Letter of Credit, Bonds and Insurance.
c. Prior to assessing any liquidated damages against the Grantee, the
City shall have provided Grantee with notice and an opportunity to cure the breach
within forty-five (45) days from the receipt of the notice by Grantee. In cases of
emergency posing risk to life or property, the City may act to temporarily alleviate the
breach with or without advance notice, and recover the actual reasonable costs so
incurred through assessment of the Grantee.
d. The City finds, and the Grantee, by its Acceptance, acknowledges
and agrees that the above described liquidated damages provisions represent a
reasonable sum in light of all of the circumstances. Said liquidated damages sums shall
be applicable to each calendar day of delay following expiration of the forty-five (45) day
cure period provided above during which Grantee has been found by the City to be in
material default pursuant to this Section and the Cable Communications Ordinance.
13. Privacy.
Grantee shall comply with the Right of Privacy of Subscribers requirements
contained in the City of Encinitas Cable Communication Ordinance 96-08, Section
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1.10.604. Grantee retains rights granted through the Cable Act to sell its customer list,
provided it informs customers in writing prior to the sale and gives customers the option
of requesting that their names not be released.
14. Alternative Remedies.
Notwithstanding Section 13, neither the termination of the Franchise nor the imposition
of liquidated damages shall be deemed to be the exclusive remedy for a breach of this
Franchise.
15. Assi.qnment, Modification and Termination of Franchise Agreement
a. The City has selected Grantee as the recipient of this Franchise after due
diligence and thorough review of Grantee's financial, legal, and technical abilities to
provide the services, facilities, and equipment required in the Agreement. Because of
the unique nature of Grantee's qualifications and the level of performance required by
City, no part of this Franchise Agreement may be transferred, sold, hypothecated or
assigned by Grantee to another entity, nor may a change in control in Grantee occur
without the express approval of the City. So long as Grantee remains a privately held
company, "change in control" shall mean any acquisition or transaction that could result
in control of fifty-one percent (51%) or more of Grantee's or Grantee's parent's voting
power by an entity or group of entities acting in concert. If Grantee or Grantee's parent
becomes a publicly held company, the standard for "change in control" provided in
Section 1.10.312 of the Cable Communications Ordinance shall be applied.
b. This Agreement may be modified or altered only by mutual agreement in
writing by the parties or by a court of law with competent jurisdiction over the City of
Encinitas.
c. The City reserves the right to terminate this Agreement in the event of
substantial breach by Grantee in accordance with Sections 1.10.324 through 1.10.334
of the Cable Communications Ordinance.
16. Acceptance.
The Grantee shall, within thirty (30) days after the approval of this Agreement by
the City Council, file in the office of the City Clerk an executed copy of this Agreement.
17. Open Access: Reservation of Rights
The City reserves the right to impose a requirement at any time in the future that
the Grantee shall provide non-discriminatory access to its cable modem platform to
providers of Internet access services, whether or not such providers are affiliated with
Grantee, if authorized by a court of competent jurisdiction, federal or state laws, or
interpretations and regulations promulgated by the Federal Communications
Commission. Grantee and the City have not waived any rights obligations, claims,
defenses or remedies regarding the City's authority to impose such conditions. Prior to
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the enactment or enforcement of any such requirement, Grantee shall be provided with
reasonable notice and an opportunity to be heard including the right to present evidence
on any findings to be made by the City with respect to the need for such a requirement.
18. Severability.
If any Section or provision of this Franchise Agreement or any ordinance, law, or
document incorporated herein by reference is held by a court of competent jurisdiction
to be invalid, unconstitutional or unenforceable, such holding shall be confined in its
operation to the Section or provision directly involved in the controversy in which such
holding shall have been rendered and shall not in any way affect the validity of any
other Section or provision hereof. Under such a circumstance, the Grantee shall, upon
the City's request, meet and confer with the City to consider amendments to the
Franchise Agreement to meet the original intent of the parties, as the circumstances
warrant and unless prohibited by law, provided, however, that the Grantee, in its sole
and exclusive discretion, is not required to enter an agreement with the City concerning
such an amendment. Both the City and the Grantee agree to be bound by all terms and
conditions of this Franchise except as may be finally determined to be unenforceable by
a Court of competent and appropriate jurisdiction with proper venue over this Franchise,
provided that the City or the Grantee need not comply with any term or condition of this
Franchise Agreement or the Cable Ordinance which it is contesting in good faith by
appropriate proceedings.
19. Guarantee.
Daniels Cablevision, Inc. (Daniels) shall agree to guarantee all obligations of
Grantee hereunder. The Guarantee shall be notarized so as to indicate that the person
executing the Acceptance and Guarantee has the authority to bind Daniels.
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IN WITNESS WHEREOF, the parties hereto have executed this Franchise Agreement
as of the day and year first written above.
CITY OF ENCINITAS, CALIFORNIA
By:
Kerry L. Miller, City Manager
Date:
ATTEST:
Deborah Cervone, City Clerk
Daniels Cablevision, Inc.
By:
Joni Odum, President and General Manager
Date:
ATTEST:
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EXHIBIT "A"
SERVICE TO UNSERVED AREAS
Upon upgrade and rebuild of Grantee's system, Grantee shall extend cable plant to
pass the unserved areas below:
Blocks Street
100- 200 Hummingbird Hill Road
2100- 2200 Hummingbird Hill Road
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EXHIBIT "B"
PUBLIC BUILDINGS AND FACILITIES TO BE PROVIDED
CABLE COMMUNICATION SERVICES
IMMEDIATE - Service Drops to be provided within six (6) months of effective date of
Franchise Agreement.
Asterisk (*) denotes facilities already receiving cable service.
Municipal Facilities
* Fire Station ~4 - 2011 Village Park Way, Encinitas, Ca. 92024
* Encinitas Ranch Golf Course- 1275 Quail Gardens Road, Encinitas, Ca. 92024
Schools
* Diegueno Jr. High - 2150 Village Park Way, Encinitas, CA 92024
* Flora Vista Elementary - 1690 Wandering Road, Encinitas, CA 92024
* Parkdale Lane Elementary - 2050 Parkdale Lane, Encinitas, CA 92024
FUTURE - to be provided when Grantee's plant passes public facility.
MiraCosta College - 3333 Manchester Avenue, Cardiff, CA 92007.
Grantee shall provide at no cost to the City, service to the MiraCosta College property
line at such time as road improvements occur on Manchester Avenue from Rancho
Santa Fe Road to the college entrance, provided that improvements include the opening
of joint trenches to allow Grantee to place its facilities in said trenches and City notifies
Grantee seven (7) days in advance.
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