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O-77-501 - 7/14/1977ORDINANCE NO. SO/ AN ORDINANCE GRANTING A FRANCHISE TO STOKES CABLE CO., INC., 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: SECTION 1 - TITLE This ordinance shall be known and may be cited as "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 Stokes Cable Co., Inc.'s qualifications, including its legal, character, 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 Stokes Cable Co., Inc., a corporation organized and existing under the laws of the State of Texas, and it is the grantee of rights under this franchise. (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 recurring monthly service charges in connection with the carriage of broadcast signals and Federal Communications Commission mandated non -broadcast services within the City, but shall not include any refunds or credits made to subscribers on any sales tax imposed on the services furnished by Grantee. Nor shall it include revenue from "ancillary" or "auxiliary" services, which include, but are not limited to, advertising, leased channels, program or per channel charge (G) "Regular subscriber and programming basis, if any. services" shall supplied on a per include the carriage of broadcast signals and FCC mandated non -broadcast services, but shall not include "ancillary" or "auxiliary" services, which include, but are not limited to, advertising, leased channels, and programming supplied on a per program or per channel charge basis, if any. 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 places now laid out or dedicated and all extensions thereof and additions thereto in the City, all poles, wires, cables, underground and fixtures necessary for City of a cable television conduits, manholes and other conductors the maintenance and operation in the system for the transmission of television signals and other signals either separately or upon or in conjunc- tion with any public utility maintaining the same in the City with -2- all of the necessary and desirable appliances and appurtenances pertaining thereto. Without limiting the generality of the fore- going, 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, equipment and connections. Nothing herein shall be construed sous 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 cons°rLiction, operation or maintenance of its cable television system ,_n 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, $100,000.00 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 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 -4- 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 -5- 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. (G) Should any construction be necessary for Grantee to provide the cable television service contemplated under this franchise, a significant portion of such construction (at least 20%) shall be accomplished within one (1) year after the effective date of this Ordinance, or, if FCC certification is required prior to implemen- tation of the cable television service contemplated under this franchise, within one (1) year after the effective date of the grant by the FCC of the necessary certification. Thereafter, Grantee shall equitably and reasonably proceed to complete the necessary construc- tion at a rate of not less than 20% per year of the total construction contemplated. SECTION 9 - RATES The rates for installation of equipment and regular sub- scriber services shall be nondiscriminatory and shall be as set forth below; provided that nothing contained herein shall be deemed to prohibit reasonable promotional rates which may, from time to time, be less than the rates set forth below: (A) Residential Subscribers: (1) Not to exceed $7.00 per month for each residential primary connection. (2) Not to exceed $2.00 per month for each residential secondary connection. (3) Maximum installation charge not to exceed $25.00. (B) Commercial Subscribers: (1) Not to exceed $5.00 per month for each nursing home, motel, hotel, or other commercial, municipal or school establishment for each primary connection. (2) Not to exceed $1.00 per month for each secondary connection per room. (C) In order not to involve the City Council of Round Rock in rate increase controversies with the citizens of that city, -6- 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. (D) Recognizing the pendency of court litigation and Congressional legislation at the time of the passing of this Ordinance which may impose copyright liability upon all or a part of the cable television service rendered by Grantee in the City, and further recognizing the uncertainty and jeopardy into which such potential liability places Grantee, should such copyright liability be imposed upon Grantee by any court or by the Congress, Grantee shall have the right to increase its rates for regular subscriber services in order to offset such copyright liability. (E) Prior approval of the City Council need not be obtained for any increase in rates charged for installation of equipment and regular subscriber services resulting from the imposition of or an increase in taxes or license charges imposed upon cable television facilities, services, operations, or income. (F) Prior approval of the City Council need not be obtained for any increase in rates charged for installation of equipment and regular subscriber services. (G) Rates for services other than installation of equip- ment and regular subscriber services shall be established and published by Grantee pursuant to the rules of the Federal Communications Commissio2 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 Section 76.31 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 -7- 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 for a term of fifteen (15) years; provided, however, that should FCC certification be necessary prior to implementation of the cable television service contemplated under this franchise, then the term shall begin upon the effective date of the grant by the FCC of the necessary certifi- cation. SECTION 12 - RENEWAL PROCEDURE Grantee shall have the option to request renewal of this franchise for a first additional period not to exceed fifteen (15) years. Should Grantee desire to exercise this option, it shall so notify the City, in writing, not less than three (3) months prior to expiration of this franchise. Upon exercise of this option by Grantee, the City shall conduct a full, open and public renewal proceeding upon prior notice and opportunity of all interested parties to be heard. The renewal proceeding shall be held for the sole purpose of considering the performance of Grantee under this franchise and any other factors deemed relevant in determining whether to renew this franchise. Renewal shall not be unreasonably denied. If this franchise is renewed by the City, all of the terms and provisions contained herein shall be controlling during the renewal period, except to the extent that said terms and provisions are modified by the City, or unless this franchise is superceded by a new franchise. Should the City, for any reason, be unable to complete the renewal proceeding prior to expiration of this franchise, Grantee shall have the right to continue operation of this cable television system pursuant to the terms of this franchise until such time as the renewal proceeding is concluded. Should the City deny renewal of this franchise, such denial shall be accompanied by a written statement setting forth the reasons for the denial by -8- any court of competent jurisdiction. Furthermore, in the event that the City denies renewal, Grantee shall be afforded a period of six (6) months following denial within which to sell, transfer, or convey this cable television system to a qualified purchaser at fair market value. During this six month period, which shall run from the effective date of the final order or decision denying renewal, including any appeal, Grantee shall have the right to operate this cable television system pursuant to the terms of this franchise. 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 juris- diction. 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 -9- 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 two percent (2%) of Grantee's gross subscriber revenues per year derived from regular subscriber services in the City as set out in Section 3(F). Such annual sum shall be payable at the end of each annual period. The annual anniversary shall be the last day of December of each year, and each annual payment shall be paid within sixty (60) days thereafter. All other license fees or taxes levied upon Grantee by the City shall be credited against the payment 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 -10- 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 - 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 18 - 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. -11- SECTION 19 - 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. SECTION 20 - CONFLICTING ORDINANCES AND RESOLUTIONS All ordinances or resolutions in conflict herewith are expressly repealed to the extent of such conflict. SECTION 21 - 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. READ, PASSED, AND ADOPTED this ATTEST: it LAND, Ci y Secretary day of July, 1977. RAY/LI IN, Mayor City of Round Rock, Texas