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G-99-01-14-13A3 - 1/14/1999ORDINANCE NO. qq- Dr "f -lar ( 3 AN ORDINANCE GRANTING A FRANCHISE TO COSERV COMMUNICATIONS L.L.C., A TEXAS CORPORATION, ITS SUCCESSORS AND ASSIGNS, TO BUILD, CONSTRUCT, OPERATE AND MAINTAIN A CABLE TELEVISION SYSTEM IN THE CITY OF ROUND ROCK, TEXAS, AND SETTING FORTH CONDITIONS ACCOMPANYING THE GRANTING OF THIS FRANCHISE; PROVIDING FOR A PENALTY FOR THE VIOLATION OF PORTIONS OF THIS ORDINANCE; PROVIDING FOR A SAVINGS CLAUSE; PROVIDING FOR THE EFFECT OF THIS ORDINANCE UPON OTHER ORDINANCES AND RESOLUTIONS. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ROUND ROCK, TEXAS THAT: I. SECTION 1 - TITLE This ordinance shall be known and may be cited as "CoSery Cable TV Franchise Ordinance". SECTION 2 - PREAMBLE This ordinance was passed after a full, open, and public hearing upon prior notice and opportunity of all interested parties to be heard and upon careful consideration of CoSery Communications L.L.C.'s qualifications, including its legal, financial, and technical qualifications, and the adequacy and feasibility of its construction arrangements. SECTION 3 - DEFINITIONS For the purpose of this ordinance, and when not inconsistent with the context, words used herein in the present tense include the word "shall" is always mandatory. The captions supplied herein for each section are for convenience only. Said captions have no force of law, are not part of the section, and are not to be used in construing the language of the section. The following terms and phrases, as used herein, shall be given the meaning set forth below: (A) "City" is the City of Round Rock, Texas, a municipal corporation under the laws of the State of Texas. (B) "Grantee" is CoSery Telecommunications L.L.C., a limited liability corporation organized and existing under the laws of the State of Texas, and it is the grantee of rights under this franchise. K:\WPDOCS\ORDINANC\O90114A3.WPD/s1s (C) "City Council" is the City Council of the City of Round Rock, Texas, or its designated representatives. (D) "Federal Communications Commission" or "FCC" is the present Federal agency of that name as constituted by the Communi- cations Act of 1934, or any successor agency created by the United States Congress. (E) "Person" is any individual, firm, partnership, associa- tion, corporation, company or organization of any kind. (F) "Gross subscriber revenues" shall include any and all compensation or receipts derived by Grantee from subscribers within the City from recurring monthly service charges in connection with (i) the transmission of audio and video cable service to subscribers including the retransmission of broadcast signals, programming supplied on a per channel charge basis and music services, (ii) additional outlets, (iii) program guides, and (iv) converter rental, but shall not include revenue from other "ancillary" or "auxiliary" services, which include, but are not limited to, advertising, leased channels, programming supplied on a per program basis, installation fees, late charges, and commissions derived from home shopping channels, and shall not include any refunds or credits made to subscribers or any sales tax imposed on the services furnished by Grantee. (G) "Regular subscriber services" shall include the transmission of audio and video cable service to subscribers including the retransmission of broadcast signals, programming supplied on a per channel charge basis, and music services, but shall not include other "ancillary" or "auxiliary" services, which include, but are not limited to, advertising, leased channels, programming supplied on a per program basis, installation fees, late charges, and commission derived from home shopping channels. SECTION 4 - GRANT OF AUTHORITY There is hereby granted by the City to Grantee the right and privilege to construct, erect, operate, and maintain, in, upon, along, across, above, over or under the streets, alleys, easements, public ways and public grounds now laid out or dedicated and all extensions thereof and additions thereto in the City, all poles, wires, cables, underground conduits, manholes and other conductors and fixtures necessary for the maintenance and operation in the City of a cable television system for the transmission of television signals and other signals either separately or upon or in conjunction with any public utility maintaining the same in the City with all of the necessary and desirable appliances and appurtenances pertaining thereto. Without limiting the generality of the foregoing, this franchise and grant shall and does hereby include the right in, over, under, and upon the streets, sidewalks, alleys, easements, and public grounds and places in the City to install, erect, operate or in any way acquire the use of, as by leasing or licensing, all lines and equipment necessary to a cable television system and the right to make connections to subscribers and the right to repair, replace, enlarge and extend said lines, 2 equipment and connections. Nothing herein shall be construed so as to exempt Grantee from complying with the Street Cut Ordinance or other ordinances of the City of Round Rock, Texas. SECTION 5 - POLICE POWER Grantee shall at all times during the term of this franchise be subject to all lawful exercise of the police power of the City. The right is hereby reserved to the City to adopt, in addition to the provisions herein contained and any other existing applicable ordinances, such additional applicable ordinances as it shall find necessary in the exercise of its police power; provided that such additional ordinances shall be reasonable, shall not substantially or materially conflict with or alter in any manner the rights granted herein, and shall not conflict with the laws of the State of Texas, the laws of the United States of America, or the rules of the Federal Communications Commission. SECTION 6 - INDEMNIFICATION Grantee shall save the City harmless from all loss sustained by the City on account of any suit, judgment, execution, claim or demand whatsoever against the City resulting from negligence on the part of Grantee in the construction, operation or maintenance of its cable television system in the City; and for this purpose Grantee shall carry property damage and personal injury insurance with some responsible insurance company or companies qualified to do business in the State of Texas. The amounts of such insurance to be carried for liability due to property damage shall be $25,000.00 as to any one occurrence; and against liability due to injury to or death of persons, $160,000.00 as to any one person and $300,000.00 as to any one occurrence. The City shall notify Grantee, in writing, within 10 days after the presentation of any claim or demand, either by suit or otherwise, made against the City on account of any negligence as aforesaid on the part of Grantee. Where any such claim or demand against the City is made by suit or other legal action, written notice thereof shall be given by the City to Grantee not less than ten (10) days prior to the date upon which an answer to such legal action is due or within twenty (20) days after the claim or demand is made upon the City, whichever notice yields Grantee the larger amount of time within which to prepare an answer. Failure by the City to properly notify Grantee in accordance with the foregoing of any such claim, suit, or demand against the City shall release Grantee from its obligation to indemnify the City as provided herein. SECTION 7 - COMPLAINT PROCEDURE Grantee shall maintain a business office or a toll-free telephone listing in the City for the purpose of receiving inquiries and complaints from its customers and the general public. Grantee shall investigate all complaints within fourteen (14) days of their receipt and shall in good faith attempt to resolve them swiftly and equitably. The following city official shall be responsible for receiving and acting upon any unresolved complaints: City Manager. Written notice of this complaint 3 procedure shall be given to each subscriber at the time of initial subscription to the cable system. SECTION 8 - CONSTRUCTION AND MAINTENANCE (A) All structures, lines and equipment erected by Grantee within the City shall be so located as to cause minimum interference with the proper use of streets, alleys, easements, and other public ways and places and to cause minimum interference with the rights or reasonable convenience of property owners, and Grantee shall comply with all reasonable, proper and lawful ordinances of the City now or hereafter in force. Existing poles, posts, conduits, and other such structures or any electric power system, telephone company, or other public utility located in the City shall when possible be made available to Grantee for leasing or licensing upon reasonable terms and rates and shall be used to the extent practicable in order to minimize interference with travel and avoid unnecessary duplication of facilities. The City shall actively assist Grantee in obtaining reasonable joint pole or conduit use agreements from the owners of existing poles or conduits. (B) In case of any disturbance by Grantee of pavements, sidewalk, driveway, or other surfacing, Grantee shall, at its own cost and expense and in a manner approved by the City, replace and restore all paving, sidewalk, driveway or surface so disturbed in as good condition as before said work was commenced. (C) In the event that at any time during the period of this franchise the City shall lawfully elect to alter or change any street, alley, easement, or other public way requiring the relocation of Grantee's facilities, then in such event, Grantee, upon reasonable notice by the City, shall remove, relay, and relocate the same at its own expense. (D) Grantee shall, on the request of any person holding a building moving permit issued by the City, temporarily raise or lower its lines to permit the moving of the building. The expense of such temporary removal shall be paid by the person requesting the same, and Grantee shall have the authority to require such payment in advance. (E) Grantee shall have the authority to trim trees upon and overhanging all streets, alleys, easements, sidewalks, and public places of the City so as to prevent the branches of such tree from coming into contact with Grantee's facilities. (F) All poles, lines, structure and other facilities owned by Grantee in, on, over and under the streets, sidewalks, alleys, easements and public grounds or places of the City shall be kept by Grantee at all times in a safe and substantial condition. SECTION 9 - RATES (A) The rates for installation of equipment and regular sub- scriber services shall be nondiscriminatory, provided that nothing 4 contained herein shall be deemed to prohibit reasonable promotional rates which may, from time to time, be less than the Grantee's tariffed rates. (B) In order not to involve the City Council of Round Rock in rate increase controversies with the citizens of that city, the Grantee takes all responsibility for subscriber rate increases. The Grantee, believing that the free enterprise system would in this case be the best arbiter of rate structure, would expect those citizens who disagreed with the rates to simply terminate service. (C) Prior approval of the City Council need not be obtained for any increase in rates charged for installation of equipment and/or subscriber services. A copy of Grantee's tariff shall be filed with the City Secretary prior to initiating service within the City, and shall be kept up to date at all times. SECTION 10 - FCC RULES APPLICABLE This franchise is governed by and subject to all applicable rules and regulations of the Federal Communications Commission, specifically including Part 76, and by the laws of the State of Texas. Should there be any modifications of the provisions of the Rules and Regulations of the Federal Communications Commission which must be incorporated into this franchise, the City and Grantee agree that such incorporation shall be accomplished within one (1) year after the effective date of the FCC's adoption of the modification or upon renewal of this franchise, whichever occurs first. SECTION 11 - FRANCHISE TERM This franchise shall take effect and be in full force from and after acceptance by Grantee as provided in Section 18, and the same shall continue in full force and effect until the earlier of July 14, 2004 or the date of termination, revocation, renewal or amendment of the Time Warner Entertainment - Advance/Newhouse Partnership franchise (Ordinance No. G -98-10-22-9A1). SECTION 12 - RENEWAL This Franchise Ordinance is being granted as an interim measure pending comprehensive negotiation of a new franchise agreement with Grantee, which will occur simultaneously with the City's upcoming review of the current Time Warner Entertainment - Advance/Newhouse Partnership franchise. This franchise is therefore granted with the understanding that it will not be subject to renewal, and that the appropriateness of issuance of a new cable franchise to CoServ, as well as the terms and conditions to be contained in any such franchise, will be evaluated by the City on a de novo basis at the time the Time Warner franchise is reviewed. 5 SECTION 13 - FORFEITURE If Grantee should violate any of the terms, conditions or provisions of this franchise or if Grantee should fail to comply with any reasonable provisions of any ordinance of the City regulating the use by Grantee of the streets, alleys, easements or public ways of the City, and should Grantee further continue to violate or fail to comply with the same for a period of thirty (30) days after Grantee shall have been notified in writing by the City to cease and desist from any such violation or failure to comply so specified, then Grantee may be deemed to have forfeited and annulled and shall thereby forfeit and annul all the rights and privileges granted by this franchise; provided that such forfeiture shall be declared only by written decision of the City Council after an appropriate public proceeding before the City Council affording Grantee due process and full opportunity to be heard and to respond to any such notice of violation or failure to comply; and provided further that the City Council may, in its discretion and upon a finding of violation or failure to comply, impose a lesser penalty than forfeiture of this franchise or excuse the violation or failure to comply upon a showing by Grantee of mitigating circumstances. Grantee shall have the right to appeal any finding of violation or failure to comply and any resultant penalty to any court of competent jurisdiction. In the event that forfeiture is imposed upon Grantee, it shall be afforded a period of six (6) months within which to sell, transfer, or convey this cable television system to a qualified purchaser, approved by City, at fair market value. During this six month period, which shall run from the effective date of the final order or decision imposing forfeiture, including any appeal, Grantee shall have the right to operate this cable television system pursuant to the provisions of this franchise. SECTION 14 - TRANSFERS All of the rights and privileges and all of the obligations, duties, and liabilities created by this franchise shall pass to and be binding upon the successors of the City and the successors and assigns of Grantee; and the same shall not be assigned or trans- ferred without the written approval of the City Council, which approval shall not be unreasonably withheld; provided, however, that this section shall not prevent the assignment of the franchise by Grantee as security for debt without such approval; and provided further that transfers or assignments of this franchise between any parent and subsidiary corporation or between entities of which at least fifty percent (50%) of the beneficial ownership is held by the same person, persons, or entities shall be permitted without the prior approval of the City Council. SECTION 15 - FRANCHISE FEE In consideration of the terms of this franchise, Grantee agrees to pay the City a sum of money equal to four percent (4%) of Grantee's gross subscriber revenues per calendar quarter derived from regular subscriber services in the City as set out in Section 3(F). Such quarterly payments shall be made within forty-five (45) days after 6 the end of each calendar quarter. All other license fees or taxes levied upon Grantee by the City shall be credited against the payments required herein. SECTION 16 - RECEIVER SALES PROHIBITED As a condition of this franchise, Grantee agrees that it shall not engage in the business of sales or repair of television receivers owned by its subscribers; nor shall it be responsible for the operating condition of said receivers; provided however, that this paragraph shall not apply to converters, decoders, home inter- active terminals and other such devises as may be used in furnishing any programming or service via Grantee's cable television system. SECTION 17 - INSURANCE (a) Grantee shall, as a condition of this Franchise, secure and maintain the following liability insurance policies insuring both the Grantee and the City, and its elected and appointed officers, officials, agents and employees as coinsureds: (1) General liability insurance with limits not less than: (A) Five Million Dollars ($5,000,000) for bodily injury or death to each person; (B) Five Million Dollars ($5,000,000) for property damage resulting from any one accident; and, (C) Five Million Dollars ($5,000,000) for all other types of liability. (2) Automobile liability for owned, non -owned and hired vehicles with a limit of Three Million Dollars ($3,000,000) for each person and Three Million Dollars ($3,000,000) for each accident. (3) Worker's compensation within statutory limits and employer's liability insurance with limits of not less than One Million Dollars ($1,000,000). (4) Comprehensive form premises -operations, explosions and collapse hazard, underground hazard and products completed hazard with limits of not less than Three Million Dollars ($3,000,000). (b) The liability insurance policies required by this section shall be maintained by the Grantee throughout the term of this Franchise, and any such other period of time during which the Grantee is operating without a franchise hereunder, or is engaged in the removal of its facilities. Each such insurance policy shall contain the following endorsement: 7 "It is hereby understood and agreed that this policy may not be canceled nor the intention not to renew be stated until 90 days after receipt by the City, by registered mail, of a written notice addressed to the City Manager of such intent to cancel or not to renew." Within sixty (60) days after receipt by the City of said notice, and in no event later than thirty (30) days prior to said cancellation, the Grantee shall obtain and furnish to the City replacement insurance policies meeting the requirements of this Section. SECTION 18- ACCEPTANCE This ordinance shall become effective when accepted by Grantee and shall then be and become a valid and binding contract between the City and Grantee; provided that this ordinance shall be void unless Grantee shall, within seven (7) days after the final passage of this ordinance, file with the City Clerk of the City a written acceptance of this ordinance and the franchise herein granted, agreeing that it will comply with all of the provisions and con- ditions hereof and that it will refrain from doing all of the things prohibited by this ordinance. SECTION 19 - UNLAWFUL ACTS (A) It shall be unlawful for any person to make any unauthorized connection, whether physically, electrically, acoustically, inductively, or otherwise, with any part of Grantee's cable television system for the purpose of enabling himself or others to receive any television signals, radio signals, pictures, programs, sounds, or any other information or intelligence trans- mitted over Grantee's cable system without payment to Grantee or its lessee. (B) It shall be unlawful for any person, without the consent of the owner, to willfully tamper with, remove, or injure any cable, wires, or other equipment used for the distribution of television signals, radio signals, pictures, programs, sounds or any other information or intelligence transmitted over Grantee's cable system. (C) It shall be a misdemeanor punishable by a fine of not more than Two Hundred Dollars ($200.00) for any person to violate any of the provisions of this Section. SECTION 20 - SAVINGS CLAUSE If any section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason held invalid or unconstitutional by a federal or state court or administrative or governmental agency of competent jurisdiction, specifically including the Federal Communications Commission, such portion shall be deemed a separate, distinct and independent provision, and such holding shall not affect the validity of the remaining portions hereof. 8 SECTION 21 - CONFLICTING ORDINANCES AND RESOLUTIONS All ordinances or resolutions in conflict herewith are expressly repealed to the extent of such conflict. SECTION 22 - EFFECTIVE DATE This ordinance shall become effective upon acceptance by Grantee as provided in Section 17. The effective date shall be the date upon which the written acceptance provided for in Section 17 is received by the City Clerk. II. A. All ordinances, parts of ordinances, or resolutions in conflict herewith are expressly repealed. B. The invalidity of any section or provision of this ordinance shall not invalidate other sections or provisions thereof. C. The City Council hereby finds and declares that written notice of the date, hour, place and subject of the meeting at which this Ordinance was adopted was posted and that such meeting was open to the public as required by law at all times during which this Ordinance and the subject matter hereof were discussed, considered and formally acted upon, all as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended, and the Act. n� READ and APPROVED on first reading this the day of 0 1998. READ, APPROVED and ADOPTED on second reading this the /Litt, qday of , 1999. 9 ATTEST: E LAND, City Secretary (/// CHARLES CULPEP`PMayor City of Round Rock, Texas DATE: January 7, 1999 SUBJECT: City Council Meeting — January 14, 1999 ITEM: 13.A.3. Consider an ordinance granting a franchise to CoSery Communications L.L.C., a Texas Corporation to build, construct, operate and maintain a cable television system in the City of Round Rock, Texas. (Second Reading) Staff Resource Person: Steve Sheets, City Attorney.