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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;
(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)
(A) Remedies for breach and contravention of franchise. A breach by the franchisee of the franchise agreement, in addition to constituting a breach of contract, shall constitute a violation of this chapter. The cost of any litigation incurred by the town to enforce this chapter or the franchise granted pursuant hereto, or the franchise agreement or in relation thereto, or in relation to the cancellation or termination of a franchise, shall be reimbursed to the town by the franchisee. The costs shall include filing fees, costs of depositions, discovery and expert witnesses, all other expenses of suit and a reasonable attorney’s fee. Violation of material provisions of this chapter shall subject the franchisee to the following penalties:
(1) Failure of the franchisee to meet performance standards, as determined by the Mayor, to which it has agreed, may result in a rebate of rates or charges to subscribers affected; provided that, the Mayor shall provide ten days written notice of the failure to the franchisee. Any rebate may be charged to the performance bond;
(2) For failure to provide data and reports as requested by the Mayor or the Board of Commissioners and as required by this chapter, the penalty shall be $50 per day for each day not delivered. This penalty may be chargeable to the performance bond;
(3) For failure to complete construction and installation of the cable system, unless the Board of Commissioners approves the delay because of reasons beyond the control of the franchisee, the franchise term may be reduced one year for each three months’ delay. The Mayor shall notify the franchisee during the first month of the three-month period that the system has failed to meet performance standards;
(4) For any other material violation of the ordinance in such amounts per day as the Board may reasonably determine; and
(5) The franchisee may appeal any penalty which it considers unreasonable to the Board of Commissioners and then into the state judicial system as permitted by state law.
(B) Liability and indemnification of the town. The franchisee shall indemnify and hold harmless the town at all times during the term of the franchise granted hereby and specifically agrees that it will pay all damages and penalties which the town may legally be required to pay as a result of granting the franchise. Such damages and penalties shall include, but not be limited to, damages arising out of copyright infringements, and other damages arising out of the installation, operation or maintenance of the CATV system authorized herein, whether or not any act or omission complained of is authorized, allowed or prohibited by the franchisee. In case suit shall be filed against the town either independently or jointly with the franchisee to recover for any claim or damages, the franchisee, upon notice of it by the town, shall defend the town against the action and, in the event of a final judgment being obtained against the town, either independently or jointly with the franchisee solely by reason of the acts of the franchisee, the franchisee will pay the judgment and all costs and hold the town harmless therefrom.
(C) Insurance.
(1) The franchisee shall be required to maintain insurance in such forms and in such companies as shall be approved by the town with the town named as the co-insured, such approval not to be unreasonably withheld, to protect the town and the franchisee from and against any and all claims, injury or damage to persons or property, both real and personal, caused by the construction, erection, operation or maintenance of any aspect of the system. The amount of such insurance shall not be less than the following:
(a) General liability insurance:
1. Bodily injury per person, $500,000;
2. Bodily injury per occurrence, $1,000,000; and
3. Property damage per occurrence, $500,000.
(b) Automobile insurance:
1. Bodily injury per person, $100,000;
2. Bodily injury per occurrence, $300,000; and
3. Property damage per occurrence, $300,000.
(2) The town may require the foregoing insurance coverage to be changed from time to time during the term of the franchise.
(3) Workers’ compensation insurance shall also be provided as required by the laws of the state, as amended.
(4) All insurance coverage shall provide a 30-day notice to the Mayor, c/o of the Town Clerk-Treasurer, in the event of material alteration or cancellation of any coverage afforded in the policies prior to the date the material alteration or cancellation shall become effective.
(5) A certificate of coverage for all policies required in this section shall be furnished to and filed with the Mayor at Town Clerk-Treasurer’s office, prior to the commencement of operations or expiration of prior policies, as the case may be.
(D) Non-waiver. Neither the provisions of this section, nor any bonds accepted by the town pursuant hereto, nor any damage recovered by the town hereunder, shall be construed to excuse unfaithful performance by the franchisee or limit the liability of the franchisee under this chapter or the franchise for damages, either to the full amount of the bond, or otherwise.
(E) Faithful performance bond. The franchisee shall, concurrently with its acceptance of this franchise, file with the Mayor at Town Clerk-Treasurer’s office and at all times thereafter maintain in full force and effect for the term of this franchise or any renewal thereof, at the franchisee’s sole expense, a corporate surety bond with a responsible company licensed to do business in the state and approved by the town, in the amount of 5% of the anticipated cost of construction of the proposed CATV system for the town, renewable annually, and conditioned upon the faithful performance of the franchisee, and in accordance with the provisions of this chapter and upon the further condition that in the event the franchisee shall fail to comply with any one or more of the provisions of the franchise, there shall be recoverable jointly and severally from the principal and surety of such bond any damages or loss suffered by the town as a result thereof, including the full amount of any compensation, indemnification, or cost of removal or abandonment or any property of the franchisee as prescribed hereby, plus a reasonable allowance for attorneys’ fees and costs, up to the full amount of the bond, the condition to be a continuing obligation for the duration of the franchise and any renewal thereof and thereafter until the franchisee has liquidated all of its obligations with the town that may have arisen from the acceptance of this franchise or renewal by the franchisee or from its exercise of any privileges or rights herein granted. The bond shall provide that at least 30 days prior written notice of intention not to renew, cancellation, or material change be given to the town by filing same with the Mayor at Town Clerk-Treasurer’s office. The required performance bond shall be reduced to $2,000 once the franchisee has connected sufficient energized cable to serve the areas required to be served by § 114.08(B) of this chapter. Failure to keep a performance bond in force at all times as herein provided shall constitute an event of default.
(F) Deposit in lieu of bond. In lieu of the performance bond by a surety company as provided in this chapter, the franchisee may file and deposit with the town a performance bond without a corporate surety but secured by a certificate of deposit in some bank or savings and loan association in the state, in the sum of the performance bond required by § 114.11(E) of this chapter conditioned in the same manner as the performance bond of a surety company hereinbefore described. The income from such deposit shall be payable to the franchisee. As an alternative, the franchisee may provide such other security as may be approved by the Board of Commissioners, but absent such approval it shall provide a bond or deposit in lieu thereof as above provided.
(Prior Code, § 114.11) (Ord. passed 11-12-1981)
(A) Emergency override. The cable system shall include an “emergency alert” capability which will permit the Mayor or his or her designee to override, by remote control, the video and/or audio of all channels simultaneously programming in the case of public emergencies. The franchisee shall designate a channel which will be used for emergency broadcasts.
(B) Standby power. The franchisee shall maintain equipment capable of providing standby powering for headend. The equipment shall be constructed so as to notify automatically the cable office when it is in operation and to revert automatically to the standby mode when the AC power returns.
(C) System standards. The franchisee shall install and maintain a cable system which shall be in accordance with the highest and best accepted standards of the industry to the end that subscribers shall
receive the best possible service. In addition, the franchisee shall comply with all requirements of all duly constituted regulatory agencies having jurisdiction over cable television or the operator of the cable system.
(D) State of the art. The franchisee shall upgrade its facilities, equipment and service so that its system is as advanced as the current state of production technology will allow. The franchisee shall install additional channel capacity as required to keep channel capacity in excess of demand therefor by users. At all times, the cable system shall be no less advanced than any other system of comparable size and age excepting only systems which are experimental, pilot or demonstration. The Board of Commissioners shall order the franchisee to comply with this section in case of specific violations, which it may investigate upon complaint or on its own motion.
(E) System carriage.
(1) At all times, the signal carriage and channel utilization shall conform to the regulations of the FCC, state and other regulatory agencies which are not in conflict therewith. The operator shall provide at least one access channel for each of the following activities:
(a) Public access;
(b) Educational access; and
(c) Government access.
(2) As each of these channels is defined under FCC regulations, such channels shall not be required to remain idle if not in use by the public, but rather can be used by the franchisee to produce revenue. Except in cases of emergency, governmental units must give ten days’ notice of intent to use.
(Prior Code, § 114.12) (Ord. passed 11-12-1981)
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