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(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;
(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)