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For the purpose of this chapter, the following definitions shall apply unless the context clearly indicates or requires a different meaning.
ACCESS CHANNELS. Those channels which are to be kept available by the franchisee for partial or total dedication to public access, educational access, local government access or leased access.
CABLE OFFICE. The business office of the franchisee which shall be conveniently accessible to the public and located in the franchise area or in an area served by the franchisee within the county.
CABLE TELEVISION SYSTEM. Any facility that, in whole or in part, receives directly, or indirectly over the air and amplifies or otherwise modifies the signals transmitting programs broadcast by one or more television stations, radio stations or other electronic signals and distributes the signals by wire or cable to subscribing members of the public who pay for the service, but the term shall not include any facility that serves fewer than 75 subscribers; any facility that serves only the residents of one or more apartment dwellings under common ownership, control or management, and commercial establishments located on the premises of an apartment house; and any facility that serves only the residents of an overnight residential business establishment (such as, hotel, motel and the like) or any commercial establishments or private organizations or associations that services only its own employees, members of the general public upon its own premises, or its own members as the case may be.
CATV. Cable television.
EXTENSION COSTS. One time pro rata energizing charges and cable costs, inclusive of direct and indirect overhead so as to reflect the equivalent actual cost of equipment, wire and installation labor above and beyond the cost of a normal drop.
FCC REGULATIONS. The present and future valid rules and regulations promulgated by the FCC and applicable to cable television systems in the town.
FCC. The federal regulatory agency or agencies having regulatory jurisdiction over cable television.
FRANCHISE AGREEMENT. The ordinance adopted by the Board of Commissioners designating a franchisee for the operation of a cable television system in a designated basic area within the town, and designating the particular terms and provisions thereof, as shall supplement this chapter to include by incorporation the application for franchise made by the franchisee.
FRANCHISE. Authorization granted pursuant to the terms of this chapter to construct, operate, and maintain a cable television system within all, or a specified area, in the corporate limits of the town. The franchise shall be granted in the form of a franchise ordinance (herein also sometimes referred to as the FRANCHISE AGREEMENT) separate and distinct from any license or permit required for the privilege of transacting and carrying on business within the town as required by other ordinances and laws of the town. The franchise ordinance, together with this chapter, shall contain the terms and conditions upon which any cable television system may be operated in the town.
FRANCHISEE. The person, firm or corporation granted a franchise by the Board of Commissioners under this chapter and their lawful successors or transferees.
GROSS SUBSCRIBER REVENUES. Any and all compensation and other consideration in any form received by the franchisee arising from the sale of services offered under the authority of its franchise; provided, the term shall not include any sales, service, rent, occupational or other excise tax to the extent the taxes are charged separately in addition to the regular monthly service and any additional services and are remitted to a taxing authority.
NORMAL DROP. The conductor which provides subscriber interconnection to an existing or required cable television system feeder leg with a cable length not to exceed 200 feet, including the cable length required within the subscriber’s premises, as measured from the nearest street or road right-of-way line. NORMAL DROP shall mean a cable television signal cable and appurtenances of such construction, installations and system interconnection as provides signal levels of the quality and strength consistent with the technical quality requirements of the FCC rules. It may be overhead or underground. Drops in excess of the normal length shall be in accordance with the provisions of the line extension policy in this chapter.
PROPERTY OF FRANCHISEE. All property owned and installed or used by the franchisee in the operation of a cable television system or service in the county under authority of a franchise granted pursuant to this chapter.
STREET or ROAD. The surface of and the space above and below any publicly- or privately-owned or maintained property or any public street, right-of-way, highway, freeway, bridge, lane, path, alley, court, sidewalk, cartway, drive, existing as such within the franchise area.
SUBSCRIBER or USER. Any person lawfully receiving, for any purpose any service of the franchisee’s cable television system.
TWO-WAY CAPACITY. The system shall maintain a plant having technical capacity for audio and video return communications.
(Prior Code, § 114.03) (Ord. passed 11-12-1981)
It shall be unlawful for any person to own, operate or construct a cable television system in the corporate limits of the town or to provide cable television service to any subscriber within the town, except pursuant to a franchise agreement granting the right to do so between the town and the franchisee, which agreement shall incorporate by reference and be subject to this chapter to the same extent as though this chapter in its entirety is a part of the agreement. Notwithstanding the provisions of this section, the franchisee may designate others under contractual arrangement, to construct, own and lease to the franchisee the physical assets of the cable television system; provided, however, that, the franchisee shall be fully and solely responsible under the terms of this chapter and the franchise agreement. Neither the franchise, nor any rights of the franchisee arising thereunder shall be assigned, without the prior written consent of the Board of Commissioners. Nothing in this section is intended to prevent the Board from granting a pre-existing permitted use franchise to any CATV system in operation in the corporate limits of the town at the time of passage of this chapter under such terms and conditions as will enable that CATV to maintain its then current customers for a sufficient length of time to recoup its investment.
(Prior Code, § 114.04) (Ord. passed 11-12-1981) Penalty, see § 10.99
(A) Applications. Applications for construction, operation and maintenance of CATV systems shall be submitted to the Board of Commissioners.
(B) Hearing. The Board shall have a full and complete public hearing affording all interested parties, including members of the public, the right to be heard. The Board may at the conclusion of the hearing or some subsequent time, grant a franchise to the applicant whose proposed system is in the best interest of the public and the potential subscribers within the area covered by the franchise.
(C) Contents of application. The application, filed by a person seeking issuance of a franchise, shall contain:
(1) The name and address of the applicant. If the applicant is a partnership, the name and address of each partner must be submitted. If the applicant is a corporation, the application shall state the names and addresses of its directors, officers, parent and subsidiary companies and all shareholders owning as much as 5% of the outstanding stock of any class, and shall include a certified copy of its articles of incorporation together with all amendments thereto. The application shall state the names and address of all persons whose beneficial interest in the applicant amounts to 5% or more, regardless of how the interest is held.
(2) A statement demonstrating the applicant’s experience and expertise, if any, in establishing a cable television system and in providing a CATV service, including the names and locations of any other CATV systems currently or formerly constructed, operated or maintained by the applicant.
(3) If applicant had prepared by a certified public accountant, an audit for the fiscal year next preceding the application date, a copy of that audit. In any event an income statement and balance sheet for the fiscal quarter next preceding the application which may be either audited or unaudited, which shall show the applicant’s financial status and its financial ability to complete the construction of the proposed CATV system and to provide the CATV service. Any additional financial information which the applicant feels would further evidence his or her ability to construct the proposed system and provide CATV service may also be submitted. Information with respect to financial projections of the proposed system, including methods of financing, shall be submitted as part of the application. All financial and ownership information relating to the applicant submitted in compliance with this chapter shall be confidential and shall not be regarded as public information to the extent provided by law.
(4) To the extent permitted by law, a statement containing a description of the CATV system proposed to be constructed, installed, maintained and operated by the applicant, the technical specifications of the materials to be used, the services to be provided to subscribers, the services, material and equipment to be provided without cost to local government units, qualified under the FCC regulations, the facilities, material and equipment to be made available for access cablecasting, the manner in which the applicant proposes to construct, install, maintain and operate the system, and the extent and manner in which existing or future poles or other facilities of other public utilities will be used for the system. The statement required by this subdivision shall include all information above, relative to the full term of the franchise and not merely the initial system.
(5) A statement setting forth all agreements and understandings, whether written or oral, or implied, existing between the applicant and any person or entity with respect to the ownership, control or transfer of the proposed franchise or the proposed CATV system and service. If a franchise is granted to a person who is an agent or representative of another person, and the relationship is not disclosed in the original application, the franchise shall be void and of no force and effect.
(6) A statement or schedule of proposed rates and charges to subscribers for installation and service, and a list of those services to be provided to subscribers.
(7) The applicant shall provide to the Board any additional information which the Board deems necessary. A request by the Board for additional information shall be made in writing after the opening of applications and before the public hearing.
(D) Reservation of rights. The town expressly reserves the right or privilege to grant by franchise to any other person the right to construct, operate and maintain a CATV system within the same area during the same period of time granted to any other franchisee.
(E) Findings. If the Board determines that no system proposed by any applicant is in the best interest of the public, no franchise will be granted. The franchise, if granted, shall contain recitations that demonstrate that the Board has examined and approved the franchisee’s legal, financial and technical qualifications, as well as the adequacy and feasibility of franchisee’s construction arrangements, concluding that the granting of the franchise to the applicant is in the best interest of the public and potential subscribers.
(Prior Code, § 114.05) (Ord. passed 11-12-1981)
(A) Time. Within 60 days after the Board has granted the franchise, the franchisee shall file with the Clerk to the Board, a written acceptance of the franchise, acknowledged before a notary public. This acceptance shall acknowledge that the franchisee agrees to be bound by and to comply with the provisions of this chapter, and the assurances set forth in his or her application, and shall be of the form and of the content, as shall be satisfactory to and be approved by the Town Attorney.
(B) Other requirements. Concurrently with the filing of the written acceptance, the franchisee shall file with the Clerk to the Board the bond and proofs of insurance as required by § 114.11(C) and (D) of this chapter and proof of loan commitments or other proof of ability to obtain construction funds.
(C) Effective date. The effective date of this franchise shall be the date on which the franchisee files the acceptance, bond, proof of insurance, and proof of acquisition of construction funds as required in this section; provided, however, if any of the material required to be filed with the acceptance or the acceptance itself is defective or fails to meet with approval, the franchise shall not be effective until the defect is cured or the approval is obtained.
(Prior Code, § 114.06) (Ord. passed 11-12-1981)
(A) Term. The franchise and rights therein granted shall take effect and be in force for a period of 15 years from and after the grant and acceptance date of the franchise, unless the time is extended by the Board of Commissioners.
(B) Termination of franchise. Upon termination of the franchise for whatever reason, including expiration or revocation, the town shall have the right to determine whether the franchisee shall be eligible to continue to operate and maintain the CATV system.
(C) Expiration of franchise.
(1) Within three years of the expiration of the term of the franchise and subject to approval by the Board of Commissioners, the franchisee may negotiate renewal of its franchise for an additional period not inconsistent with FCC rules and regulations.
(2) The franchisee shall notify the town in writing not less than one year in advance of the expiration date of its desire to renew or not to renew the franchise. The town may propose certain franchise modifications to the franchisee and make any given renewal contingent upon acceptance of such modifications. Renewal shall be preceded by a public hearing held at least 30 days in advance of decision by the Board of Commissioners. A renewal may be granted not more than two years prior to the expiration of any existing term. The Board of Commissioners may determine whether or not the franchisee has performed satisfactorily its obligations under the franchise by reviewing the following:
(a) Technical developments and performances of the system;
(b) Programming;
(c) Other services offered;
(d) Cost of service;
(e) Compliance with any requirement in the ordinance or in FCC regulations;
(f) Annual and other reports made to the town or the FCC;
(g) Extension of service; and
(h) Other matters of concern.
(3) In the event the current franchisee is determined by the Board of Commissioners to have performed unsatisfactorily, new applicants shall be sought and evaluated by the Mayor and Board of Commissioners and a franchise award may be made according to application and award procedures set forth in this section.
(D) Revocation of franchise.
(1) The Board of Commissioners may terminate the franchise conferred under this chapter at any time prior to a date of expiration upon a finding that the franchisee has failed to cure one or more of the following defects:
(a) Material breach, whether by act or omission, of any terms or conditions of this chapter;
(b) Material misrepresentation of fact in the application for or negotiation of the franchise;
(c) Insolvency of the franchisee, or inability or unwillingness of the franchisee to pay its just debts when they accrue, or application of the franchisee for adjudication as a bankrupt;
(d) Failure to provide subscribers or users with adequate service in the best interest of the public convenience and welfare;
(e) Failure to have obtained authorization from all required governmental agencies and acceptable pole attachment agreements within 12 months after acceptance of the franchise provided the period of 12 months may be extended by the Board of Commissioners if the franchisee is diligently pursuing the authorization and the delay is not caused by any fault of the franchisee or results from strikes, natural disaster or other occurrences over which the franchisee would have no control; or
(f) Failure to have full service available as set forth in franchisee’s application and in § 114.08(B) of this chapter; provided, the period may be extended by the Board of Commissioners under the same circumstances set forth in this section.
(2) The franchisee shall have 60 days to remedy defects following written notice by the Mayor to the franchisee of such a defect. If any defect continues beyond the 60 days (or any extension thereof granted by the Board of Commissioners) without written proof that corrective action has been taken or is being actively and expeditiously pursued, the Board of Commissioners shall call a public hearing on the termination of the franchise. Immediately following the public hearing, the Board of Commissioners may, by resolution, declare that the franchise be terminated. At least ten days prior to the Board of Commissioners’ meeting at which the public hearing will be held, the Mayor shall cause to be served upon the franchisee a written notice of the public hearing on the question of termination. The notice shall state the time and place of the meeting.
(3) Should the town revoke the franchise, new applicants shall be sought and evaluated by the Mayor and Board of Commissioners and a franchise award may be made according to application and award procedures set forth in this section.
(E) Foreclosure. Upon the foreclosure or other judicial sale of all or a substantial part of the system, or upon the termination of any lease covering all or a substantial part of the system, the franchisee shall notify the Board of Commissioners of such fact, and the notification shall be treated as a notification that a transfer in control of the franchise has taken place, and the provisions of § 114.07(G) of this chapter governing the consent of the Board of Commissioners to the change in control of the franchise shall apply.
(F) Receivership. The Board of Commissioners shall have the right to cancel this franchise 120 days after the appointment of a receiver, or trustee, to take over and conduct the business of the company, whether in receivership, reorganization, bankruptcy, or other action or proceeding, unless such receivership or trusteeship shall have vacated prior to the expiration of the 120 days, or unless:
(1) Within 120 days after his or her election or appointment, the receiver or trustee shall have fully complied with all the provisions of this chapter and remedied all defaults thereunder; and
(2) Such receiver or trustee, within the 120 days, shall have executed an agreement, duly approved by the court having jurisdiction in the premises, whereby the receiver or trustee assumes and agrees to be bound by each and every provision of this chapter and the certification granted to the company.
(G) Transfer of control.
(1) No transfer of effective ownership or control of the CATV system may take place, whether by forced or voluntary sale, lease, mortgage, assignment, encumbrance or any other form of disposition, without prior notice to and approval by the Board of Commissioners. The notice shall include full identifying particulars of the proposed transaction, and the Board of Commissioners shall act by resolution.
(2) The franchisee shall not issue any additional capital stock and shall not permit the transfer of more than 10% of its presently outstanding shares without the prior written consent of the Board of Commissioners. No sale, lease, assignment or transfer shall be effective until the vendee, lessee, assignee, or transferee has filed with the town its acceptance of this grant.
(3) In the absence of extraordinary circumstances, the Board of Commissioners will not approve any such transactions before completion of construction of energized cable passing before each dwelling unit, as specified in § 114.08(C) and (D) of this chapter.
(4) Prior approval of the Board of Commissioners shall be required where ownership or control of more than 10% of the right of control of or interest in the franchise is acquired by a person or a group of persons acting in concert, none of whom already own or control 10% or more of the right of control or interest, singularly or collectively. Provided, however, that, the Board of Commissioner’s approval shall not be unreasonably withheld after proper application is made therefor.
(5) “Transfer of effective ownership or control” shall not include:
(a) Pledge or hypothecation or mortgage or similar instrument transferring conditional ownership or all or part of the system’s assets to a lender, or creditor in the ordinary course of business so long as the lender does not thereby acquire the right to control the system’s operations; but no transfer of conditional title can be made absolute or become effective without prior approval of the Board of Commissioners; or
(b) The disposition of facilities or equipment no longer required in the conduct of business.
(6) The franchisee may hypothecate its interest under this chapter and the franchise agreement and in the CATV system to be constructed pursuant thereto for the purpose of securing a loan, the entire proceeds of which will be utilized in construction and operation of its CATV system in the franchise area.
(7) By its acceptance of the franchise, the franchisee specifically concedes and agrees that any acquisitions or transfers as set forth in this section without prior approval of the Board of Commissioners as may be required, shall constitute a violation of the franchise agreement and this chapter by the franchisee.
(H) Continuing of service mandatory. The franchisee shall be required to provide continuous service to all subscribers in return for payment of the established fee. If the franchise agreement becomes void whatever reason including normal expiration, revocation or foreclosure, the franchisee is required, at the option of the town as a part of this franchise to continue to operate the system for either a period of six months or until an orderly change of operation is effected whichever is the earlier. In the event the franchisee fails to operate the system or allows a lapse in service without prior approval of the Board of Commissioners, the town or its agent may operate the system until such time that a new operator is selected. If the town is required to fulfill this obligation for the franchisee, the franchisee shall reimburse the town for any costs or damages that are the result of the franchisee’s failure to perform.
(I) Periodic review.
(1) Because of the regulatory, technical, financial, marketing and legal uncertainties associated with cable communications, the franchisee shall agree to the following review provisions in order to provide for a maximum degree of flexibility in this franchise and to help achieve a continued advance and modern system for the town:
(a) The town and the franchisee shall hold scheduled review sessions within 30 days of the fifth and tenth anniversary dates of the effective date of the franchise.
(b) Special review sessions may be held in the town municipal building at any time during the term of the franchise upon reasonable notice by either party to the other. A special review session shall be held in the event any clause or section of this chapter is voided, nullified, deleted or modified by the authority of any regulatory agency including the FCC, and the franchisee will comply with the FCC rules within one year from adoption of the new rule.
(2) The following topics shall be discussed at every scheduled review session: service, rate structures, free or discounted services, application of new technologies, state of the art, system performances, services provided, programming offered, customer complaints, privacy in human rights, amendments to this chapter, undergrounding provisions, judicial and FCC rulings and extension of service. In addition, other topics may be discussed as determined by the town.
(3) At either a scheduled or special review session a public hearing may be called if and as determined by the Board of Commissioners.
(Prior Code, § 114.07) (Ord. passed 11-12-1981)
(A) Franchise territory. The franchise is for the territory or area within the corporate limits of the town and any new areas annexed during the franchise term.
(B) Service. Within the first year after the effective date of the franchise, the franchisee agrees to make available basic CATV service to all residents of the town as set forth in franchisee’s application.
(C) Annexed areas. The franchisee agrees to extend and make cable television service available to every resident in any new annexed area within 12 months of annexation.
(D) Service connection. Request for connection requiring an aerial drop line in excess of 200 feet, the franchisee must extend and make available cable television service to such residents at a connection charge not to exceed the normal drop installation charge plus the actual installation costs incurred by the franchisee for the distance exceeding 200 feet.
(Prior Code, § 114.08) (Ord. passed 11-12-1981)
(B) Limitations on rates. The charges made to subscribers for services of the franchisee in this chapter shall be fair and reasonable. The franchisee shall receive no consideration whatsoever from its subscribers other than in accordance with this section, without approval of the Board of Commissioners.
The franchisee shall not charge rates for basic services and for installations and disconnections in excess of the rate schedule appearing in the franchisee’s application unless approved in accordance with division (C) of this section.
(C) Adjustment to rates.
(1) Initial rates and charges for basic sources and for installation and disconnection shall be fixed in the franchise application. Thereafter, the town or the franchisee may request rate adjustments at any time. After a public hearing affording due notice to the franchisee and other interested persons, the Board of Commissioners may adjust rates. (Public hearing advertisement to be once per week in a newspaper of general circulation in the town for two weeks preceding the hearing.) The criterion to determine whether rates adjustments shall be permitted are the same as those currently set forth in G.S. Ch. 162 for rate adjustment hearings related to rate adjustments for public utilities other than motor carriers and certain water and sewer utilities. The franchisee may appeal the decision of the Board to the courts as permitted by law.
(2) However, the franchisee may increase or decrease its rates at any time, without prior Board approval; provided that, no increase has been made in the preceding six months and provided that the annualized rate of increase within a given 12-month period shall not exceed the average annual rate of
increase over the preceding 12 months in the Consumer Price Index for all Urban Consumers & U.S. City Average Other Utilities and Public Services (1967-100) as Published by the United States Department of Labor, Bureau of Labor Statistics. (In the event that at any time the United States Department of Labor begins publishing a consumer price index on the annual cost adjustments in cable television costs in particular, then that index and its base year shall be used in lieu of the index for other utilities and public services.) The franchisee shall notify the town in writing at least 90 days in advance of the effective date of any proposed rate increase within the limits set forth above. The town may then challenge the increase and schedule meetings, hearings, request additional information, or take whatever action it deems appropriate. If no such action is taken within 60 days of receipt of the original written notice by the town, then the increase will automatically take effect.
(3) Except as set forth in division (C)(2) of this section, rates shall not be changed without Board approval, except that nothing in this provision shall prohibit the reduction or waiving of charges in conjunction with promotional campaign for the purpose of attracting subscribers.
(D) Refunds to subscribers and users.
(1) If any subscriber terminates any monthly service during the first six months of the service because of failure of a franchisee to render the service offered, the franchisee shall refund to such subscriber an amount equal to all charges paid by the subscriber during the period in which no service was received.
(2) If any subscriber terminates for any reason any monthly service prior to the end of a prepaid period, a pro rata portion of any prepaid subscriber service fee shall be refunded to the subscriber by the franchisee using the number of months as the basis.
(E) Advance charges and deposits. A franchisee may require subscribers to pay the installation charge in advance and to pay for each month of basic service in advance at the beginning of each month. No other advance payment or deposit of any kind shall be required by a franchisee for basic subscriber service. Other than for a converter, nothing in this provision shall be construed to prohibit charges for or waiver for charges for initial installation or reconnection.
(F) Installation and reconnection. Except as otherwise provided elsewhere in this chapter, a franchisee may make a charge to subscribers for the installation of service outlets and for the reconnection of service outlets. The rates for such connection or reconnection shall be as authorized in the rate schedule.
(G) Other governmental regulation of rates. If in the future, the state or the United States government or any regulatory agency thereof regulates the rates of the franchisee for the service provided for in the franchise, this section shall be of no effect during such regulation to the extent of any conflict therewith.
(H) Public service installation. The franchisee shall without charge for installation, maintenance or service make single installations of its standard CATV service facilities to those public buildings operated by town and county when the building is located on the franchisee’s system when the system is constructed consistent with the requirements of this chapter. Such installations shall be made at such reasonable locations as shall be requested by the Mayor. Any charge for relocation of such installation shall, however, be charged at the actual cost. Additional installations at the same location may be made at the actual cost. No monthly service charges shall be made for distribution of the franchisee’s basic service, including access channels within the publicly-owned buildings.
(I) Charges for public access. Charges to users of the franchisee’s production facilities for public access programming shall not exceed actual costs incurred. The charges shall be publicly posted and made available at no cost to anyone upon request. Charges shall be clearly and completely stated in the operating rules for public access programming. The charges may be amended only upon approval by the Board of Commissioners. The franchisee shall furnish standard playback facilities and labor at actual cost incurred for the public access channel.
(Prior Code, § 114.09) (Ord. passed 11-12-1981)
As compensation for the authorization granted in this chapter and in consideration for permission to use the easements which the town controls for the construction, operation, and maintenance of a CATV system within the town, the franchisee shall pay to the town quarterly on or before July 1, October 1, January 1 and April 1 for the preceding quarter an amount equal to 3% of the gross revenues. This payment shall be in addition to any other fees or payments made to the town by the franchisee, such as pole rental, business licenses and other fees not based on gross revenues. Payment shall be accompanied by a certified annual report showing the basis for the computation and such other relevant facts as may be required by the town. 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 town may have for further or additional sums payable under the provisions of this chapter. All amounts paid shall be subject to recomputation by the town within 60 days of the receipt of the franchise annual report. This time limitation shall not apply should the franchisee provide false or erroneous information. In the event that recomputation results in additional revenue to be paid to the town, such amount shall be subject to an interest charge at the highest rate permitted by law. Nothing in this provision shall limit the franchisee’s liability to pay other local taxes and charges.
(Prior Code, § 114.10) (Ord. passed 11-12-1981)
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