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(A) The city may grant a franchise for a period not to exceed 15 years to serve the city.
(B) The city may make the grant of a franchise conditioned upon the completion of construction within a prescribed time or upon the performance of other specific obligations, specifying in the franchise agreement that failure to timely comply with the condition will cause the franchise to become null and void without further action by the city.
(C) In evaluating an application for a new franchise, the city shall consider the applicant’s character; the applicant’s technical, financial, and legal qualifications to construct and operate the proposed system; the nature of the proposed facilities, equipment, and services; the applicant’s record in other communities, if any; and whether the proposal will meet anticipated community needs and serve the public interest.
(D) Based upon the application, the written and oral testimony and other material presented at a public hearing before the Council, and any other information relevant to the application, the Council shall decide whether to grant or deny a franchise application.
(E) If the Council grants a franchise application, the City Attorney and the applicant must agree on the terms of a franchise agreement within 90 calendar days from the date of the resolution making the grant. This period may be extended for good cause by the Council. If agreement is not reached with the City Attorney within 90 calendar days or if the period is not extended by the Council, the franchise grant will be null and void without further action by the city.
(F) The text of a proposed franchise agreement must be made available by the city to the public and advertised as required by city procedure.
(G) After complying with the requirements of divisions (C) through (F) above, the Council shall, following a public hearing, approve or disapprove the proposed franchise agreement by resolution.
(H) The grant of an initial franchise or a renewed franchise shall be subject to a franchise acceptance fee in an amount not to exceed the city's out of pocket costs in considering the application. Within 30 calendar days of the date the resolution approving the franchise agreement the city must notify the approved applicant of the amount of any franchise acceptance fee and its method of calculation. If the franchise acceptance fee is not paid within 60 calendar days of the date of the Council resolution approving the franchise agreement, the grant will be null and void. Prior to the franchise becoming effective, the approved applicant must demonstrate compliance with the surety, insurance and similar provisions of the franchise agreement.
(Ord. 89-15, passed 5-8-89; Am. Ord. 12-49, passed 9-10-12)
(A) Unless a franchise agreement specifies otherwise, the following insurance coverage shall be in force at all times during the franchise period: workmen’s compensation insurance to meet all state requirements; and general comprehensive liability insurance with respect to the construction, operation and maintenance of a cable system, including the operation of motor vehicles, in the following minimum amounts:
(1) For bodily injury, including death, $1,000,000 for any one person, and $5,000,000 for any one accident;
(2) For property damage $1,000,000; and
(3) For damages resulting from any liability of any nature that may arise from or be occasioned by operation of the cable system, including any communication over the cable system, excepting programming on government channels, $2,000,000.
(B) All insurance policies must be with sureties qualified to do business in Illinois and in a form approved by the City Attorney. The city may require in a franchise agreement coverage and amounts in excess of the above minimums.
(C) A franchisee must, at its sole cost and expense, indemnify, hold harmless, and defend the city, its officials, boards, commissions, agents and employees, against any and all claims, suits, causes of action, proceedings and judgments for damages or equitable relief arising out of the construction, maintenance or operation of its cable system regardless of whether the act or omission complained of is authorized, allowed or prohibited by the franchise. This provision includes, but is not limited to, claims arising out of copyright infringements or a failure by the franchisee to secure consents from the owners, authorized distributors, or licensees of programs to be delivered by the cable system.
(D) The franchise agreement may require the franchisee to have in force at all times a performance bond or an irrevocable letter of credit in an amount as necessary to ensure the faithful performance by the franchisee of its obligation under the franchise agreement. Such surety instruments must be provided by an entity qualified to do business in the State of Illinois and in a form approved by the City Attorney.
(Ord. 89-15, passed 5-8-89)
FRANCHISE REGULATIONS
(A) The following minimum requirements for facilities and services apply to all franchises. The city may require that a franchise exceed these minimum requirements.
(1) A cable system constructed or rebuilt after the effective date of this chapter must have a minimum capacity of 54 video channels available for immediate or potential use and have the capability for two-way communications.
(2) A cable system may be required to provide one or more access channels for public, educational or governmental access. In addition, the city may require a franchisee to reserve one or more additional channels for present or future access use. If the city determines that the use of existing access facilities warrants the activation of such reserve channels, the franchisee shall activate them upon 90 days’ notice from the city. The city may require in a franchise agreement that the franchisee contribute to capital costs for access studios and related equipment and facilities.
(3) A cable system must provide leased access channels as required by federal law.
(4) Service to public buildings may be required without charge as set forth in the franchise agreement.
(B) Unless a franchise agreement provides otherwise, a franchisee must make cable service available to every unserved dwelling within the franchise service area. Where the franchise service area is the entire city, the franchisee shall extend service to any annexed areas within six months of the date of annexation; provided, however, the franchisee is not required to extend service in areas where the cable would pass fewer than 30 homes per cable mile.
(C) The city may waive minimum requirements of this section where, in the judgment of the city, such waiver is justified in the public interest.
(Ord. 89-15, passed 5-8-89)
(A) Unless a franchise agreement provides otherwise, a franchisee, in consideration of the privilege granted under a franchise for the use of public rights-of-way to construct and operate a cable system, must pay to the city 5% of the franchisee’s gross revenues derived from the operation of its cable system within the city during the period of its franchise. Franchise fees are payable quarterly. A franchisee must pay the franchise fee due to the city for the preceding quarter within 30 calendar days of the end of that quarter.
(B) Any payment of franchise fees to adjust for a shortfall in the quarterly payments for the preceding year must be made no later than the filing date for the annual financial statements. Adjustments for any overpayment will be credited to subsequent quarterly payments.
(C) Unless a franchise agreement provides otherwise, franchisee fee payments shall be accompanied by a financial statement showing the gross revenues received by the franchisee during the period covered by the payments and the number of subscribers served at the end of the period.
(D) A franchisee must file within three months of the end of its fiscal year the franchisee’s annual financial statements for the preceding year, audited by a certified public accountant or certified as accurate by the franchisee’s chief financial officer. The franchisee will bear the cost of the preparation of such financial statements.
(E) The city may inspect and audit any and all books and records of the franchisee, and recompute any amounts determined to be payable under the franchise. The cost of the audit will be borne by the franchisee if the annual payment to the city is increased by more than 5% as a result of the audit.
(F) In the event that a franchise payment is not received by the city on or before the due date, interest will be charged from the due date at an interest rate of 1 1/2% per month. In addition, the franchisee will pay a late charge of 5% of the amount of such payment. Interest and late charges will not be imposed for any payment necessary as a result of the yearly adjustment provided for in division (B) above, if the payment to correct for a shortfall does not exceed 10% of the total payments made during the year. In the event such payment exceeds 10% of the total payments made during the year, the franchisee will be liable for interest and late charges for the entire amount due.
(G) When a franchise terminates for whatever reason, the franchisee must file with the city within 90 calendar days of the date its operations cease a financial statement, audited by a CPA or certified by the franchisee’s chief financial officer, showing the gross revenues received by the franchisee since the end of the previous fiscal year. Adjustments will be made at that time for franchise fees due to the date that the franchisee’s operations ceased.
(Ord. 89-15, passed 5-8-89)
(A) Within three months of the close of its fiscal year, a franchisee must file with the city an annual report that includes the following information:
(1) A summary of the previous calendar year’s activities in development of the system, including but not limited to services begun or dropped, number of subscribers (including gains and losses), homes passed, and miles of cable distribution plants in service. The summary shall also include a comparison of any construction, including system upgrades, during the year with any projections previously provided to the city.
(2) A financial statement, including a statement of income, a balance sheet, and where the franchisee is in a significant construction phase, a statement of sources and applications of funds. The statement shall include notes that specify all significant accounting policies and practices upon which it is based. A summary shall be provided comparing the current year with previous years since the beginning of the franchise.
(3) A copy of updated maps depicting the location of all trunks where there was construction in the year of the report.
(4) A summary of complaints, identifying the number and nature of complaints and their disposition. Where complaints involve one or more recurrent system problems, the nature of each problem and what steps have been taken to correct it shall be identified. More detailed information on complaints shall be submitted upon request of the city.
(5) If the franchisee is a corporation, a list of officers and members of the board and the officers and board members of any parent corporation; and where a parent corporation’s stock is publicly traded, a copy of its most recent annual report.
(6) A list of all partners or stockholders holding 5% or more ownership interest in the franchisee and any parent corporation; provided, however, when any such entity has fewer than ten persons holding 5% ownership interest, the ten largest such holders. Alternatively, the annual ownership information required by the FCC for broadcast licensees may be supplied.
(7) A copy of all the franchisee’s rules and regulations applicable to subscribers and users of the cable system.
(B) A franchisee must maintain a complete set of books and records available for inspection upon reasonable prior notice by the city during normal business hours.
(C) Upon written request of the franchisee and approval by the City Attorney, information of a proprietary nature submitted to the city pursuant to this chapter or a franchise agreement will not be made available for public inspection.
(D) The franchisee shall provide to the city a copy of all filings of the franchisee or affiliated entity made with the Federal Communications Commission, the Securities and Exchange Commission, or other federal agency where such filings involve matters that affect, or could affect, the operation of the franchised cable system or the franchisee’s capability to carry out its obligations under the franchise agreement and this chapter.
(Ord. 89-15, passed 5-8-89)
(A) A franchisee must have available at all times personnel, equipment and procedures capable of locating and correcting major system malfunctions. Major system malfunctions must be corrected without delay. Corrective action for all other malfunctions must be initiated not later than the next business day after the subscriber service call is received, and must be completed as promptly as possible.
(B) A franchisee must provide each subscriber at the time cable service is installed written instructions for placing a service call, filing a complaint, or requesting an adjustment. Each subscriber must also be provided with a schedule of the subscriber’s rates and charges, a copy of the service contract, delinquent subscriber disconnect and reconnect procedures, and a description of any other of the franchisee’s policies in connection with its subscribers.
(C) A franchisee must maintain a complete record of service complaints received and action taken. These records must be open to the city for inspection during normal business hours. Such records must be retained for not less than two years.
(D) Upon termination of service to a subscriber and at the subscriber’s request, a franchisee must remove all its facilities and equipment from the subscriber’s premises within 30 days of the subscriber’s request. Where removal is impractical, such as with buried cable or internal wiring, facilities and equipment may be disconnected and abandoned rather than removed.
(E) If warranted in the city’s judgment, the city may adopt regulations governing customer service so as to assure prompt, courteous or responsive treatment of the public by a cable operator.
(Ord. 89-15, passed 5-8-89; Am. Ord. 12-49, passed 9-10-12)
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