§ 115.04  GRANT OF FRANCHISE.
   (A)   Grant.
      (1)   Grant.  In the event that City shall grant to the Grantee a nonexclusive, revocable Franchise to construct, operate, and maintain a cable television system within the City to provide cable television service, said Franchise shall constitute both a right and an obligation to provide the services of a cable television system as regulated by the provisions of this Ordinance and the Franchise.
      (2)   Event of conflict.  The Franchise shall be granted under the terms and conditions contained herein, consistent with the City's Charter and/or other applicable statutory requirements. In the event of conflict between the terms and conditions of this Ordinance, the Franchise, or the terms and conditions on which the City can grant a Franchise, the Charter and/or statutory requirements shall control.
      (3)   General City Ordinances.  Any Franchise granted by the City is hereby made subject to the general ordinance provisions now in effect and hereafter made effective. Nothing in the Franchise shall be deemed to waive the requirements of the various codes and ordinances of the City regarding permits, fees to be paid, or manner of construction.
   (B)   Franchise area.  The Franchise area shall be the entire City, or portions thereof, for which a Franchise is granted.
   (C)   Use of public rights of way.  For the purpose of operating and maintaining a cable television system in the City, the Grantee may erect, install, construct, repair, replace, reconstruct and retain in, on, over, under, upon, across and along the public streets and ways within the City such wires, cables, conductors, ducts, conduits, vaults, manholes, amplifiers, appliances, pedestals, attachments and other property and equipment as are necessary to the operation of the cable television systems, provided, however, that Grantee complies with all design, construction, safety, and performance provisions contained in this Ordinance, the Franchise, and other applicable local ordinances.
   (D)   Franchise required.  No cable television system shall be allowed to occupy or use the streets of the City or be allowed to operate without a Franchise.
   (E)   Term of franchise.  The term of any Franchise granted pursuant to this Ordinance shall be stated in the Franchise.
   (F)   Franchise nonexclusive.  Any Franchise granted pursuant to this Ordinance shall be nonexclusive. The City specifically reserves the right to grant at any time during the term of this Franchise or renewal thereof, if any, such additional Franchises for a cable television system as it deems appropriate. The City shall notify the Franchise of such Franchise grant in a timely manner. If any additional cable television franchise granted by the City shall contain terms and conditions, when taken as a whole, more favorable and/or less burdensome than this franchise, the City shall amend the Franchise, upon written request of the Franchisee, to incorporate the more favorable or less burdensome provisions. The Grantee must make any such request within ninety (90) days of receipt of notice from the Franchisor and the City shall act in a timely manner so amending the Grantee(s) Franchise pursuant to this section. Franchisee agrees to indemnify the City and to hold the City harmless from all claims against it by third parties arising out of its compliance with this section to  the  extent  that  such  claims  are  not  barred  by Section 635A of the Cable Television Consumer Protection and Competition Act of 1992 (Limitation of Franchise Authority Liability), or by any other provision of law.
   (G)   Time is of the essence to this agreement.  Whenever the agreement shall set forth any time for an act to be performed by or on behalf of the Grantee, such time shall be deemed of the essence and any failure of the Grantee to perform within the time allotted shall always be sufficient ground for the city to invoke an appropriate penalty including possible revocation of the Franchise.
   (H)   Law governs.  In any controversy or dispute under this Ordinance, the law of the State of North Carolina shall apply.
   (I)   Severability.  If any section, subsection, sentence, clause, phrase or portion of this Ordinance or the Franchise is for any reason held invalid or unconstitutional by any court of competent jurisdiction, or by any Federal, State, or Local statute or regulation, such portion shall be deemed a separate, distinct and independent provision and such holding shall not affect the validity of the remaining portions thereof.
   (J)   Transfer of ownership or control.
      (1)   Transfer of Franchise.  Any Franchise granted hereunder shall not be sold, transferred, leased, assigned or disposed of, including but not limited to, transfer by force or voluntary sale, merger, consolidation, receivership or other means, nor shall the control of the Grantee be changed, without the prior consent of the City, and then only under such conditions reasonably related to the qualifications of the transferee as the City may establish.
      (2)   Transfer threshold.  The Grantee shall promptly notify the City of any actual or proposed change in, or transfer of, or acquisition by any other party of, control of the Grantee. The word “control” as used herein is not limited to major stockholders but includes actual working control in whatever manner exercised. A transfer of ownership requiring approval shall arise upon the disposal by the Grantee, directly or indirectly, by gift, assignment, voluntary sale, merger, consolidation or otherwise, of twenty-five percent (25%) or more at one time of the ownership or controlling interest in the system, or forty-five percent (45%) cumulatively over the term of the Franchise of such interests to a corporation, partnership, limited partnership, trust or association, or person or group of persons acting in concert. Provided however, that no consent shall be required for any sale, transfer, or assignment of ownership or control to a person under common control with Grantee, provided that prior to such transfer, Grantee provides to the City verifiable information to establish that such transferee under common control has the financial, legal and technical ability to fully perform all obligations of the Franchise.
      (3)   City approval.  Every change, transfer, or acquisition of control of the Grantee shall make the Franchise subject to cancellation unless and until the City, for those transactions requiring City approval, shall have consented thereto, which consent will not be unreasonably withheld. For the purpose of determining whether it shall consent to such change, transfer, or acquisition of control, the City may inquire into the legal, financial, character, technical qualifications, the experience in cable operation, and other relevant qualifications of the prospective controlling or ownership entity, and the Grantee shall assist the City in any such inquiry. Failure to provide all material information requested by the City as part of said inquiry may, at the discretion of the City Council, be grounds for denial of the proposed change, transfer or acquisition of control.
      (4)   Assumption of control.  The City agrees that any financial institution having a pledge of the Franchise or its assets for the advancement of money for the construction and/or operation of the Franchise shall have the right to notify the City that it or its designees satisfactory to the City will take control and operate the cable television system. Further, said financial institution shall also submit a plan for such operation that will insure continued service and compliance  with all Franchise obligations during  the term the financial institution exercises control over the system. The financial institution shall not exercise control over the system for a period exceeding one year, unless extended by the City at its discretion and during said period of time it shall have the right to petition for transfer of the Franchise to another Grantee. If the City finds that such transfer, after considering the legal financial, character, technical qualifications and the experience in cable operation of the applicant are satisfactory, the City will transfer and assign the rights and obligations of such Franchise as determined in the public interest. The consent of the City to such transfer shall not be unreasonably withheld.
      (5)   No waiver of property rights.  The consent or approval of the City to any transfer of the Grantee shall not constitute a waiver or release of the rights of the City in and to the streets and any other City property, and any transfer shall, by its terms, be expressly subject to the terms and conditions of this Ordinance and the Franchise.
      (6)   Transfer time periods.  In the absence of extraordinary circumstances, the City will not approve any transfer or assignment of the Franchise prior to initial completion of construction of the proposed system.
      (7)   Signatory requirement.  Any approval by the City of transfer of ownership or control shall be contingent upon the prospective controlling party becoming a signatory to the Franchise.
      (8)   Time frame for city review.  As required by Federal law, the City shall have 120 days to act upon any request for approval of such sale or transfer that contains or is accompanied by such information as is required in accordance with FCC regulations and by the City. In accordance with FCC regulations, if the City fails to render a final decision on the request within 120 days, such request shall be deemed granted unless the requesting party and the City agree to an extension of time.
   (K)   Franchise renewal.  Upon completion of the term  of any Franchise granted under this  Ordinance, the City may grant or deny renewal of the Franchise of the Grantee in accordance with the provisions of the Cable Act. The Grantee shall own the cable television system, but shall have no property right in the public rights of way upon the completion of the Franchise term.
   (L)   Police powers.
      (1)   Police powers.  In accepting the Franchise, the Grantee acknowledges that its rights hereunder are subject to the police power of the City to adopt and enforce general ordinances necessary to the safety and welfare of the public; and it agrees to comply with all applicable general laws and ordinances enacted by the City pursuant to such power.
      (2)   Conflicts.  Any conflict between the provisions of this Ordinance or the Franchise and any other present or future lawful exercise of the City's police powers shall be resolved in favor of the latter.
   (M)   Franchise fees.
      (1)   Because the City believes that:
         (a)   The streets of the City to be used by the Grantee in the operation of its system within the boundaries of the Franchise area are valuable public properties acquired and maintained by the City at great expense to its taxpayers.
         (b)   The grant to the Grantee of the use of the said streets is a valuable property right without which the Grantee would be required to invest substantial capital in right-of-way costs and acquisitions.
         (c)   The administration of this Ordinance and the Franchise imposes upon the City additional regulatory responsibility and expense.
         (d)   A Grantee of any Franchise hereunder shall pay to the City a Franchise fee in an amount  as  designated  in the  Franchise,  but  in  no event less than five percent (5%) of the gross annual revenues, or the maximum amount permitted under applicable Federal, State, or local law, if such maximum is greater than five percent (5%). The annual Franchise payment shall be in addition to any other fee and shall commence as of the effective date of the Franchise. The City shall be furnished a statement of said payment by a chief financial officer of the Division operating the system in the City, reflecting the total amounts of annual gross revenues, a break down by type of revenue, and the above charges and computations for the period covered by the payment.
      (2)   Franchise fee in addition to other tax or payment.  This payment shall be in addition to any other tax or payment owed to the Governments or other taxing jurisdiction by the Grantee. Payment of the Franchise fee made by Grantee to the City shall not be considered in the nature of a tax, but shall be in addition to any and all taxes which are now or may be required hereafter to be paid by any Federal, State, or Local law.
      (3)   Acceptance by the City.  No acceptance of any payment by the City shall be construed as a release or as an accord and satisfaction of any claim the City may have for further or additional sums payable as a Franchise fee under this Ordinance or for the performance of any other obligation of the Grantee.
      (4)   Failure to make required payment.  In the event that any Franchise payment or recomputed amount is not made on or before the dates specified herein, Grantee shall pay as additional compensation an interest charge, computed from such due date, at the annual rate equal to the commercial prime interest rate of the City primary depository bank during the period that such unpaid amount is owed.
      (5)   Payments to be made quarterly.  The Franchise fee and any other cost or damage assessed against the Grantee shall be payable quarterly to the City of Monroe.  The Grantee shall file a complete and  accurate  statement of all gross  revenues  within the Franchise area during the period for which said quarterly payment is made, and said payment shall be made to the City no later than forty-five (45) days following the end of each calendar quarter. Quarterly computation dates are the last day in the months of March, June, September and December.
      (6)   The City's right of inspection.  The City shall have the right to inspect the Grantee's income records and the right to audit and to recompute any amounts determined to be payable under this Ordinance. Audits shall be at the expense of the City unless the audit reveals an underpayment of more than five percent (5%) in the amount of the Franchise fee due to the City, in which event the actual out-of-pocket cost of the audit shall be borne by the Grantee. Any additional amount due the City as a result of the audit shall be paid within thirty (30) days following written notice to the Grantee by the City which notice shall include a copy of the audit report.
   (N)   Forfeiture or revocation.
      (1)   Grounds for revocation.  The City reserves the right to revoke any Franchise granted hereunder and rescind all rights and privileges associated with the Franchise in the following circumstances, each of which shall represent a default and breach under this ordinance and the Franchise grant:
         (a)   If the Grantee shall default in the performance of any of the material obligations under this Ordinance or under such documents contracts and other terms and provisions entered into by and between the City and the Grantee.
         (b)   If the Grantee shall fail to provide or maintain in full force and effect the liability and indemnification coverage or the performance bond as required herein.
         (c)   If the Grantee shall violate any orders or rulings of any regulatory body having jurisdiction over the Grantee relative to this Ordinance or the Franchise.
         (d)   If the Grantee evades any of the provisions of this Ordinance or the Franchise or practices any fraud or deceit upon the City or cable subscribers.
         (e)   The Grantee's construction schedule is delayed later than the schedule contained in the Franchise or beyond any extended date set by the City.
         (f)   The Grantee fails to comply with the line extension formula as specified in the Franchise.
         (g)   The Grantee becomes insolvent or, unable to pay its debts or is adjudged bankrupt.
         (h)   The Grantee fails to construct and maintain the institutional network as specified in the Franchise.
         (i)   Failure to restore service after seven (7) consecutive days of interrupted service system-wide, except when approval of such interruption is obtained from the City.
         (j)   Material misrepresentation of fact in the application for or negotiation of the Franchise or any extension or renewal thereof.
         (k)   If the Grantee ceases to provide services for any reason within the control of the Grantee over the cable television system.
      (2)   Effect of circumstances beyond control of grantee.  The Grantee shall not be declared at fault or be subject to any sanction under any provision of this Ordinance in any case, in which performance of any such provision is prevented or delayed for reasons beyond the Grantee's control. A fault shall not be deemed to be beyond the Grantee's control if committed by a corporation or other business entity in which the Grantee holds a controlling interest whether held directly or indirectly.
      (3)   Effect of pending litigation.  Pending litigation or any appeal to any regulatory body or court having jurisdiction over the Grantee shall not excuse the Grantee from the performance of its obligations under this Ordinance or the Franchise unless a stay is granted by a regulatory body or a court of competent jurisdiction.  Failure of the Grantee to perform such obligations because of pending litigation or petition may result in forfeiture or revocation pursuant to the provisions of this section.
      (4)   Procedure prior to revocation.
         (a)   The City shall make written demand that the Grantee do so comply with any such requirement, limitation, term condition, rule or regulation or correct any action deemed cause for revocation.  If the failure, refusal or neglect of the Grantee continues for a period of sixty (60) days following such written demand, the City shall place its request for termination of the Franchise upon a regular Council meeting agenda. The City shall cause to be served upon such Grantee at least thirty (30) days prior to the date of such Council meeting, a written notice of this intent to request such termination, and the time and place of the meeting, notice of which shall be published by the City Clerk at least once, thirty (30) days before such meeting in a newspaper of general circulation within the City. The time for the Grantee to correct any alleged violation shall be extended by the City, if the necessary action to correct the alleged violation is of such a nature or character to require more than thirty (30) days within which to perform, provided the Grantee provides a plan acceptable to the City and the Grantee commences the corrective action within the thirty (30) day period and thereafter uses all reasonable efforts to correct the violation.
         (b)   The Council shall hear any persons interested therein, and shall determine whether or not any failure, refusal or neglect by the Grantee was with just cause.
         (c)   If such failure, refusal or neglect by the Grantee was with just cause, as defined by  the City, the Council shall direct the Grantee to comply within such time and manner and upon such terms and conditions as are reasonable.
         (d)   If the Council shall determine such failure, refusal, or neglect by the Grantee was without just cause, then the Council shall, by resolution, declare that the Franchise of the Grantee shall be terminated and the performance bond forfeited unless there is compliance by the Grantee within a specified period of time not to exceed ninety (90) days.
      (5)   Disposition of facilities.  In the event a Franchise is not renewed, is revoked or otherwise terminated, the City may in its sole discretion, do any of the following:
         (a)   Purchase the system under the procedures set forth in Section 115.04(T) of this Ordinance.
         (b)   Effect a transfer of ownership of the system to another party;
         (c)   Order the removal of the system facilities required by public necessity from the City within a reasonable period of time as determined by the City or utilize the provisions of subsection (8) herein below.
      (6)   Restoration of property.  In removing its plant, structures and equipment, the Grantee shall refill, at its own expense, any excavation that shall be made by it and shall leave all public ways and places in as good a condition or better as that prevailing prior to the Grantee's removal of its equipment and appliances without affecting the electrical or telephone cable wires or attachments. The City shall inspect and approve the condition of the public ways and public places and cables, wires, attachments, and poles after removal. The liability, indemnity, insurance and performance bond as provided herein shall continue in full force and effect during the period of removal and until full compliance by the Grantee with the terms and conditions of this paragraph, this Ordinance and the Franchise.
      (7)   Restoration by city; reimbursement of costs.  In the event of a failure by the Grantee to complete any work required by Sections 115.04(C) and (E) and/or (6) above, or any other work required by City law or ordinance within the time as may be established and to the satisfaction of the City, the City may, after affording Grantee notice and a reasonable opportunity to cure, cause such work to be done and the Grantee shall reimburse the City the cost thereof within thirty (30) days after receipt of an itemized list of such costs or the City may recover such costs through the performance bond provided by Grantee. The City shall be permitted to seek legal and equitable relief to enforce the provisions of this Section.
      (8)   Extended operation.  Upon either the expiration or revocation of a Franchise, the City may require the Grantee to continue to operate the system for a period of six (6) months from the date of such expiration or revocation, or until such time as is mutually agreed upon. The Grantee shall, as trustee for its successor in interest, continue to operate the cable television system under the terms and conditions of this Ordinance and the Franchise and to provide the regular subscriber service and any and all of the services that may be provided at the time. The City shall be permitted to seek legal and equitable relief to enforce the provisions of this Section.
   (O)   Receivership and foreclosure.
      (1)   Termination by insolvency.  The Franchise granted hereunder shall, at the option of the City, cease and terminate one hundred twenty (120) days after the appointment of a receiver or receivers or trustee or trustees to take over and conduct the business of the Grantee whether in a receivership, reorganization, bankruptcy or other action or proceeding unless such receivership or trusteeship shall have been vacated prior to the expiration of said one hundred twenty (120) days, or unless:
         (a)   Such receivers or trustees shall have, within one hundred twenty (120) days after their election or appointment, fully complied with  all the terms and provisions of this Ordinance and the Franchise granted pursuant hereto, and the receivers or trustees within said one hundred twenty (120) days shall have remedied all defaults under the Franchise; and
         (b)   Such receivers or trustees shall, within said one hundred twenty (120) days, execute an agreement duly approved by the Court having jurisdiction in the premises, whereby such receivers or trustees assume and agree to be bound by each and every term, provision and limitation of the Franchise herein granted.
      (2)   Termination by judicial action.  In the case of a foreclosure or other judicial sale of the plant, property and equipment of the Grantee or any part thereof, including or excluding the Franchise, the City may serve notice of termination upon the Grantee and the successful bidder at such sale, in which event the Franchise and all rights and privileges of the Grantee granted hereunder shall cease and terminate thirty (30) days after service of such notice, unless:
         (a)   The City shall have approved the transfer of the Franchise, in the manner this Ordinance provides, and
         (b)   Such successful bidder shall have covenanted and agreed with the City to assume and be bound by all the terms and conditions of the Franchise.
   (P)   Equal opportunity policy.  Equal opportunity employment shall be afforded by all operators of cable television systems to all qualified persons, and no person shall be discriminated against in employment because of race, color, religion, age, national origin, sex, or physical handicap. Grantee shall comply with all equal opportunity provisions enacted by Federal, State and local authorities, as well as all such provisions contained in this Ordinance and the Franchise.
   (Q)   Notices.  All notices from Grantee to the City pursuant to this Ordinance and the Franchise shall  be  to  the City Manager  or  his/her  designee. Grantee shall maintain with the City, throughout the term of the Franchise, an address for service of notices by mail. Grantee shall also maintain with the City a local telephone number for the conduct of matters related to the Franchise during business hours. The Grantee shall be required to advise the City of such address(es) and telephone numbers and any changes thereof.
   (R)   Failure of city to enforce this franchise, no waiver of the terms thereof.  The Grantee shall not be excused from complying with any of the terms and conditions of this Ordinance or the Franchise by any failure of the City upon any one or more occasions to insist upon or to seek compliance with any such terms or conditions.
   (S)   Rights reserved to the grantor.
      (1)   Rights upon denial.  If a renewal of the Franchise held by the Grantee is denied and the franchising authority acquires ownership of the cable system or effects a transfer of ownership of the system to another person, any such acquisition or transfer shall be at fair market value, determined on the basis of the cable system valued as a going concern but with no value allocated to the Franchise itself.
      (2)   Rights upon termination.  If the Franchise held by the Grantee is revoked for cause and the franchising authority acquires ownership of the cable system or effects a transfer of ownership of the system to another person, any such acquisition or transfer shall be at an equitable price.
      (3)   Right of inspection of records.  The City shall have the right to inspect all books, records, reports, maps, plans, financial statements, and other like materials of the Grantee, reasonably related to the enforcement of this Ordinance, and the Franchise, at any time during normal business hours.
      (4)   Right of inspection of construction.  The City shall have the right to inspect all construction or installation work performed subject to  the  provisions  of  the  Franchise  and,  following reasonable notice, to make such tests as it shall find necessary to ensure compliance with the terms of this Ordinance and other pertinent provisions of the law.
      (5)   Right of inspection of property.  At all reasonable times, Grantee shall permit examination by any duly authorized representative of the City, of system facilities, together with any appurtenant property of Grantee situated within or without the City where necessary to ensure compliance with the terms of this Ordinance, the Franchise and other pertinent provisions of the law or regulation.
      (6)   Right of intervention.  The City shall have the right of intervention in any suit or proceeding to which the Grantee is party, and the Grantee shall not oppose such intervention by the City.
      (7)   Right to require removal of property.  Upon denial of renewal of this Ordinance or the Franchise, or upon its revocation or non-renewal, as provided for herein, the City shall have the right to require the Grantee to remove, at its own expense, all portions of the cable television system required by public necessity from all streets and public ways within the City.
      (8)   Expense reimbursement to City.  At the time of an initial Franchise award, the Grantee shall pay the City a sum of money which will, when added to application fees received, reimburse all costs and expenses incurred by it in connection with preparation of this Ordinance and the Franchise including, but not limited to, consultant fees, attorneys' fees, publication fees, travel expenses and all other direct costs; provided, however, that the City shall submit a detailed schedule of all such costs. Such payment shall be made within thirty (30) days after the City furnishes the Grantee with a written statement of such expenses.
   (T)   No recourse against the grantor.  Except for actions seeking equitable relief, the Grantee shall  have  no recourse whatsoever against the City  or  its officials, boards, commissions, agents, or employees for any loss, cost, expense or damage arising out of any provision or requirements of the Franchise or because of the enforcement of this Ordinance or the Franchise except for unlawful acts of the City. Notwithstanding the foregoing, Grantee may make application for non-monetary equitable relief (e.g. injunction or mandamus) to a court of competent jurisdiction.
(Ord. O-1997-53, passed 12-10-97; Am. Ord. O-1998-04, passed 1-20-98)