HomeMy WebLinkAbout023835 ORD - 11/09/1999AN ORDINANCE
GRANTING TO CLEARSOURCE, INC. A NON-EXCLUSIVE FRANCHISE
TO CONSTRUCT, MAINTAIN, AND OPERATE FOR A PERIOD OF
FIFTEEN YEARS A CABLE TELEVISION SYSTEM AND FACILITIES
AND ADDITIONS THERETO, IN, UNDER, OVER, ALONG, ACROSS AND
UPON THE STREETS, LANES, AVENUES, ALLEYS, SIDEWALKS,
BRIDGES, RIGHTS-OF-WAY, EASEMENTS, HIGHWAYS AND OTHER
PLACES IN THE CITY OF CORPUS CHRISTI, TEXAS, AND PROVIDING
FOR PUBLICATION.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF CORPUS
CHRISTI, TEXAS:
SECTION 1. That the City Council hereby grants to ClearSource, Inc. a non-exclusive
franchise to construct, maintain, and operate for a period of fifteen years, a cable television
system and facilities and additions thereto, in, under, over, along, across and upon the streets,
lanes, avenues, alleys, sidewalks, bridges, rights-of-way. easements, highways and other places in
the City of Corpus Christi, Texas, subject to the terms and conditions of the attached franchise
agreement.
SECTION 2. Publication will be made in the official publication of the City of Corpus
Christi as required by the City Charter of the City of Corpus Christi.
23335
Th4 th oregoin}g o-dinance was read for the first time and passed to its second reading
on this the I ay of L'C"1, -1 1999, by the following vote:
Samuel L. Neal, Jr.
Javier D. Colmenero
Melody Cooper
Henry Garrett
Dr. Arnold Gonzales
LLLc
ccyfc--
Rex A. Kinnison
Betty Jean Longoria
John Longoria
Mark Scott
( LLk
That the 9regoing ordin r e was read for the second time and passed finally on this the
Day of ' ,si99Pby the following vote:
(1,a(
Samuel L. Neal, Jr.
Javier D. Colmenero
Melody Cooper
Henry Garrett
Dr. Arnold Gonzales
Rex A. Kinnison
Betty Jean Longoria
John Longoria
Mark Scott
I
1' I f
PASSED AND APPROVED this the I bay of , Y t , 7'
ATTEST:
J
270,171y—
Armando Chapa, City retary Samuel L. eal, Jr., Mayor
City of Corpus Christi
LEGAL FORM APPROVED C c i- S , 1999; JAMES R. BRAY, JR., CITY ATTORNEY
By:. t, r_ t k l_tv
Lisa Aguilar, Assistant City Attorney
023835
CLEARSOURCE FRANCHISE AGREEMENT
FRANCHISE AGREEMENT
Between
CLEARSOURCE, INC.
And
CORPUS CHRISTI, TEXAS
CLEARSOURCE FRANCHISE AGREEMENT
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS 3
SECTION 2. GRANT OF FRANCHISE 3
2.1 Grant. 3
2.2 Right of City to Issue and Renew Franchise 3
2.3 Effective Date of Grant 4
2,4 Term 4
2.5 Written Notice 4
2.6 Franchise Not Exclusive 5
2.7 Conflict with Cable Ordinance and Reservation of Rights 5
2.8 Compliance 6
2.9 Binding Contract 6
2.10 Customer Service Standards 6
SECTION 3. GENERAL REQUIREMENTS 7
3.1 Annual Franchise Fee 7
A. Compensation 7
3.2 Recovery of Processing Costs and Expenses 9
3.3 Liability Insurance 9
3.4 Indemnification 11
3.5 Grantee's Insurance 13
3.6 Workers' Compensation Insurance 13
3.7 Security Fund and Performance Bond 13
3.8 Procedure for Remedying Franchise Violations 15
3.9 Compliance with Applicable Laws and Ordinances 17
SECTION 4. SYSTEM CAPABILITIES 18
4.1 Cable System Build/Rebuild 18
4.2 Performance Review: Performance Monitoring 21
4.3 Franchise Modification 22
4.4 Grantee Cooperation 23
4.5 Periodic Evaluation, Review and Modification 23
4.6 Emergency Alert Capability 25
4.7 Hearing and Sight Impaired Capabilities 25
4.8 Standby Power 25
4.9 Parental Control Lock 26
4.10 Status Monitoring 26
4.11 Technical Standards 26
4.12 Year 2000 Compliance 26
4.13 HDTV/ATV Conversion 27
CLEARSOURCE FRANCHISE AGREEMENT
4.14 Right of Inspection 27
SECTION 5. SERVICES AND PROGRAMMING 27
5.1 Programming 27
A. Broad Programming Categories 27
B. Deletion or Reduction of Programming Categories 29
5.2 Leased Commercial Access 29
5.3 Periodic Subscriber Survey 29
SECTION 6. SUPPORT FOR LOCAL CABLE RELATED NEEDS 30
6.1 Institutional Network 30
6.2 Public, Educational and Governmental Access 31
A. Access Channels 31
B. Remote Origination 32
C. Additional Access Channels 32
D. Unused Channels 32
E. Interconnection 33
F. Regional Access 33
G. Community Access Corporation or 33
H. Grantee Support for Local Programming 35
I. Access Channel Designations 37
J. Public, Educational and Governmental Access Rules and Procedures 37
K. Assistance with Soliciting Contributions 37
L. Ad Avail Grants 37
M.Technical Quality 37
N. Proof of Performance Testing 38
O. Change in Technology 38
6.3 Drops To Public Buildings 35
6.4 School and Library Cable Modems 39
6.5 Non -Discriminatory Access to Cable Model Platform 39
6.6 Use of Grantee's Facilities 39
SECTION 7. REGULATION 40
7.1. Franchise Regulation 40
7.2 Force Majeure 40
EXHIBIT A: Grantee Ownership Information
EXHIBIT B: Franchise Fee Payment Worksheet
EXHIBIT C: Service to Public Building
EXHIBIT D: Customer Service and Consumer Protection Standards
CLEARSOURCE FRANCHISE AGREEMENT
FRANCHISE ORDINANCE AGREEMENT
AN ORDINANCE GRANTING TO CLEARSOURCE, INC.
("Grantee"), A FRANCHISE TO CONSTRUCT, MAINTAIN
AND OPERATE FOR A PERIOD OF FIFTEEN YEARS, AND
DURING ANY EXTENSIONS THEREOF, A CABLE
TELEVISION SYSTEM AND FACILITIES AND ADDITIONS
THERETO, IN UNDER, OVER, ALONG, ACROSS AND UPON
THE STREETS, LANES, AVENUES, ALLEYS, SIDEWALKS,
BRIDGES, RIGHTS-OF-WAY, EASEMENTS, HIGHWAYS
AND OTHER PLACES IN THE CITY OF CORPUS CHRISTI,
TEXAS ("City"), LOCATED IN THE COUNTY OF NUECES.
Franchise Agreement between the City and Grantee, granting a franchise to construct,
maintain, and operate a cable television system, as defined under applicable federal, state and
local law, throughout the City of Corpus Christi and setting forth terms and conditions herein.
WITNESSETH
WHEREAS, the City, pursuant to the Master Cable Service Regulatory Ordinance No.
023833, is authorized to grant and renew one or more nonexclusive revocable Franchises to
operate, construct, maintain and reconstruct a cable television system within the City of Corpus
Christi, Texas; and
WHEREAS, the City seeks to promote the development of advanced communications
capabilities on a competitive basis within the City, while at the same time ensuring customer
service; and
WHEREAS, ClearSource, Inc. has made application pursuant to the Master Cable
Services Regulatory Ordinance to obtain a Cable Service Franchise in the City of Corpus Christi,
Texas, to construct and operate a competitive Cable Service, and the application of ClearSource
has been made part of the public record; and
1
CLEARSOURCE FRANCHISE AGREEMENT
WHEREAS, the City has utilized professional assistance to review information provided
by ClearSource to determine whether it has the requisite legal, technical and financial
qualifications to operate a Cable System in the City; and
WHEREAS, on or before the adoption of this Franchise Agreement by the City the
Grantee has paid in full to the City the application fee and the additional costs of the Franchise
development, review and negotiation process; and
WHEREAS, the City, after due evaluation of Grantee's application for an initial
Franchise and review of a Report prepared by consultants for the City, has determined that
Grantee's application is complete and responsive to the requirements of the City, including the
specific requirements of Section 4.12 of the Master Cable Service Regulatory Ordinance related
to the grant of an initial Cable Franchise, and has the legal, technical and financial qualifications
to meet the future cable related needs of the City; and
WHEREAS, consistent with the requirements of Section 4.12, the City finds that the
grant of a Franchise to Grantee will provide the City and its residents with the benefits of
additional choice and services in precisely the manner intended by the federal Cable Act and the
Telecommunications Act of 1996, and will not materially impair the capabilities of the
Incumbent Provider in an unreasonable manner, provided that the Grantee strictly complies in all
material respects with the terms and requirements of this Franchise Agreement and Ordinance
No. 023833, including those provisions related to construction, buildout and customer service.
NOW, THEREFORE, the City hereby grants to Grantee a Cable Television Franchise in
accordance with the provisions of the City's Master Cable Services Regulatory Ordinance No.
023833, (hereinafter referred to as "Master Ordinance") and this Franchise Agreement.
2
CLEARSOURCE FRANCHISE AGREEMENT
SECTION 1. DEFINITIONS
For the purpose of this Franchise, the terms, phrases, words, abbreviations and their
derivations shall have the meaning given in the Master Ordinance, unless specifically
stated otherwise in this Franchise Agreement the definitions in the Master Ordinance are
made part of this Franchise as if fully set forth herein. The term "City Manager" means
the City Manager of the City of Corpus Christi, Texas or his/her designee.
SECTION 2. GRANT OF FRANCHISE
2.1 Grant.
The cable television Franchise granted on the 9'h day of November, 1999 to Clearsource,
Inc., and now held by Grantee, a corporation whose ownership is indicated in Exhibit A,
is hereby granted, subject to the terms and conditions of this Franchise Agreement
(hereinafter also referred to as the "Franchise"). The grant provides Grantee authority,
right and privilege, to construct, reconstruct, operate and maintain a cable television
System within the Streets and public ways in the City of Corpus Christi, Texas, as it is
now or may in the future be constituted.
2.2 Right of City to Issue and Renew Franchise.
Grantee acknowledges and accepts the right of City to issue and/or renew a Franchise
Agreement and Grantee agrees that it shall not now or at any time hereafter challenge any
lawful exercise of this right in any local, State or federal court.
3
CLEARSOURCE FRANCAISE AGREEMENT
2.3 Effective Date of Grant.
The grant shall be effective sixty-one (61) days following passage and approval of this
Ordinance by the City Council. The grant is further contingent upon the filing by Grantee
with the City Secretary of the executed Franchise Agreement and the required security
fund and insurance certificates, and has paid all sums owed to the City, except that if the
filing of the security fund or any such insurance certificate does not occur within sixty
(60) days after the effective date of the Ordinance approving this Franchise and any
extension of time hereunder, the City may declare this grant null and void.
2.4 Term.
A. This Franchise Agreement shall commence upon its effective date and shall expire
fifteen (15) years thereafter on January 9, 2015 unless extended, renewed, revoked
or terminated sooner as provided for in the Master Ordinance or pursuant to the
specific terms of this Franchise. Provided that the combined term of this
agreement and an earlier one-year Franchise Agreement shall not exceed a total of
fifteen years. For purposes of the Master Ordinance, this Agreement and the one-
year Agreement shall jointly be considered an "Initial Franchise Grant."
2.5 Written Notice.
All notices, reports or demands required to be given in writing under this Franchise
Agreement shall be deemed to be given when delivered personally to the Person
designated below. or when five (5) days have elapsed after it is deposited in United States
mail in a sealed envelope, with registered or certified mail, postage prepaid thereon, or on
the next business day if sent by express mail or overnight courier addressed to the party to
which notice is being given, as follows:
4
CLEARSOURCE FRANCHISE AGREEMENT
If to City:
If to Grantee:
City Corpus Christi
Attention: City Manager
1201 Leopard Street
Corpus Christi, Texas 78401-2825
ClearSource, Inc.
Attention: Vice President Regulatory & External Affairs
1825-B Kramer Lane, Suite 100
Austin, TX 78758
Such addresses may be changed by either party upon notice to the other party given as
provided in this Section.
2.6 Franchise Not Exclusive.
This Franchise shall not be construed as any limitation upon the right of City, through its
proper offices, and in accordance with applicable law, to grant to other Persons or
corporations rights, privileges or authority similar to or different from the rights,
privileges and authority herein set forth, in the same or other Streets and public ways or
public places or other places the Grantee is entitled to occupy by this Franchise
Agreement, permit or otherwise,
2.7 Conflict with Cable Ordinance and Reservation of Rights.
The provisions of the Master Ordinance, are hereby incorporated herein by reference as if
set out in full, and form part of the terms and conditions of this Franchise Agreement. In
the event of any conflict between the terms and conditions of this Franchise Agreement
and the provisions of the Master Ordinance, and other generally applicable regulatory
ordinances of the City, such ordinances shall control, except as may be specifically
provided in this Franchise Agreement. City and Grantee reserve all rights that they may
possess under the law unless expressly waived herein.
5
CLEARSOURCE FRANCHISE AGREEMENT
2.8 Compliance.
Grantee agrees to comply with the terms of the Master Ordinance and any lawfully
adopted, generally applicable local ordinance, to the extent that the provisions of the
ordinance do not have the effect of materially limiting the benefits or expanding the
obligations of Grantee that are granted by this Franchise. Grantee agrees that it is subject
to the lawful exercise of the police power of the City and amendments to the Master
Ordinance, and any ordinance adopted by City based on such exercise.
2.9 Binding Contract.
This Franchise (including all of Grantee's particular rights, powers, protections,
privileges, immunities and obligations associated therewith as the same exist on the date
hereof) shall constitute a legally binding contract between the City and Grantee, and as
such, cannot be amended, modified or changed by the City without the consent of Grantee
in any manner whatsoever, whether by ordinance, rule, regulation or otherwise, to impose
on Grantee more stringent or burdensome requirements or conditions; provided, however,
that nothing herein contained shall preclude the City from the proper exercise of its
police powers, as set forth in Section 2.8 and/or its powers of eminent domain.
2.10 Customer Service Standards.
Grantee will comply with the customer service and consumer protection provisions set
forth in the Master Ordinance and Exhibit D to this Franchise, including the requirement
that the Grantee maintain a customer service office within the City, which shall include a
place where Subscribers may pay their bills, pick-up and return converter boxes and
comparable items and receive information on the Grantee and its services.
6
CLEARSOURCE FRANCHISE AGREEMENT
SECTION 3. GENERAL REQUIREMENTS
3.1 Annual Franchise Fee.
A. Compensation.
As compensation for this Franchise and in consideration of permission to use the Public
Right -of -Way of the City for the construction, operation, maintenance and reconstruction
of a Cable System, and to defray the costs of Franchise obligations, Grantee shall pay to
the City on an annual basis throughout the term of this Franchise, a sum totaling five
percent (5%) of Grantee's Gross Revenues. If Grantee calculates Gross Revenues on an
accrual basis, Grantee may subtract its uncollected Subscriber billings in the Franchise
Area for the relevant period from Gross Revenues, as appropriate, provided, however,
that the amount subtracted for uncollected bills shall not exceed three (3) percent of
Gross Revenues for any period, and provided further that any uncollected Subscriber bills
subsequently collected shall be included in Gross Revenues, as appropriate, in the period
in which the uncollected Subscriber bills are collected.
(1) Such Franchise Fee shall be considered separate and distinct from any
Municipal Telecommunications Consent Fees assessed against a Grantee
for its use of the City's Rights -of -Way for the provision of
telecommunications services pursuant to the terms of Title 9, Chapter 283
of the Texas Local Government Code, or other applicable law.
(2) Payments due the City under this Section shall be computed quarterly, for
the preceding quarter of each year during the term of this Franchise. Each
quarterly payment shall be due and payable no later than forty-five (45)
days after the end of the preceding month. All payments shall be made
7
CLEARSOURCE FRANCHISE AGREEMENT
electronically to a financial institution designated by the City. Verification
of this payment shall be provided to the City Treasurer. Each payment
shall be accompanied by a brief report showing the basis for the
computation and other relevant facts and information, and a "Franchise
Fee Payment Worksheet," attached as Exhibit B, which shall accurately
reflect the sources of all cable service revenues derived from the operation
of the system within the City. A Grantee that is subject to a Municipal
Telecommunications Consent Fee shall maintain separate accounts and
records with respect to the calculation and payment of such fees.
(3) Grantee will deliver to the City Manager, not later than 45 days after the
last day of each City fiscal year during the term of this Franchise (or
portion thereof in the event of any prior termination for any reason), a
statement signed by a duly authorized officer of Grantee with respect to
the entire prior fiscal year, setting forth the same information as is required
to be submitted by Grantee in accordance with the Payment Worksheet,
Exhibit B. Upon the City Manager's request, such annual statements shall
be certified by a certified public accountant, at no additional cost to the
City.
(4) 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 City may have for
further sums payable under the provisions of this Franchise. All amounts
paid shall be subject to audit and re -computation by the City or its
8
CLEARSOURCE FRANCHISE AGREEMENT
designee, at any time during any calendar year upon ten (10) days notice
and specification of the documents requested to be reviewed.
3.2 Recovery of Processing Costs and Expenses.
A. During the term of this Franchise, if the Grantee initiates a request for approval
regarding the transfer of this Franchise or change in control of the Grantee, the
Grantee shall reimburse the City for all reasonable out-of-pocket costs, including
attorneys' and consultants' fees and costs, incurred by the City as part of City's
review and processing of Grantee's request. Payments of such costs and expenses
shall not be deemed to be "Franchise Fees" within the meaning of Section 622 of
the Cable Act (47 U.S.C. § 542), and such payments shall not be deemed to be: (i)
"payments in kind" or any involuntary payments chargeable against the
compensation to be paid to the City by Grantee pursuant to Section 3.1 hereof; or
(ii) part of the compensation to be paid to the City by Grantee pursuant to Section
3.1 hereof.
B. To aid in the analysis and resolution of any future disputed matters relative to this
Franchise Agreement or Master Ordinance, the City and Grantee may, by mutual
agreement (both as to whether to hire and whom to hire), employ the services of
technical, financial or legal consultants, as mediators. All reasonable fees of the
consultants incurred by the City and/or the Grantee in this regard shall be born by
the Grantee.
3.3 Liability Insurance.
A. Upon the effective date of this Franchise Agreement, the Grantee shall, at its sole
expense, take out and maintain during the life of this Franchise public liability
9
CLEARSOURCE FRANCHISE AGREEMENT
insurance with a company licensed to do business in the State of Texas with a
rating by Best of not less than "A" that shall protect the Grantee, the City, and the
City's officials, officers, employees and agents from claims which may arise from
operations under this Franchise, whether such operations are by the Grantee, its
officials, officers, directors, employees and agents, or any subcontractors of
Grantee. This liability insurance shall include, but shall not be limited to,
protection against claims arising from bodily and personal injury and damage to
property, resulting from all Grantee operations, products, services or use of
automobiles, or construction equipment. The amount of insurance for Single Limit
Coverage applying to Bodily and Personal Injury and Property Damage shall be
three million dollars ($3,000,000.00) Combined Single Limit Coverage. The
following endorsements shall attach to the liability policy:
(1)
The policy shall cover Personal Injury as well as Bodily Injury.
(2) The policy shall cover blanket contractual liability subject to the standard
universal exclusions of contractual liability included in the carrier's
standard endorsement as to bodily injuries, personal injuries and property
damage.
(3) Broad Form property damage liability shall be afforded.
(4) The City shall be named as an additional insured on the policy.
(5) An endorsement shall be provided which states that the City is listed as an
additional insured.
(6) Standard form of cross -liability shall be afforded.
10
CLEARSOURCE FRANCHISE AGREEMENT
(7) An endorsement stating that the policy shall not be cancelled, modified or
not renewed without thirty (30) days advance written notice of such event
being given to the City Manager.
13. The City Manager reserves the right to adjust the limit coverage requirements.
Insurance, insurance certificates and evidence of insurance are subject to review
and approval of the City Manager for compliance with these requirements.
C. Grantee shall submit to City Risk Manager documentation of the required
insurance including a certificate of insurance signed by the insurance agent and
companies named, as well as the policy with all properly executed endorsements.
D. Any deductible or self-insured retention must be declared to City Manager.
3.4 Indemnification.
A. Except as otherwise provided herein, Grantee shall indemnify, hold harmless,
release and defend City, its officers, agents and employees from and against any
and all lawsuits, claims, actions, demands, damages, disability, losses, expenses
including attorney's fees and other defense costs or liabilities of any nature that
may be asserted by any Person or entity, including Grantee, from any cause
whatsoever, including Grantor's concurrent negligence, arising out of or in any
way connected with the operations, expressly authorized herein, the exercise of
the Franchise pursuant to this Franchise, and/or the activities of Grantee, its
subcontractor, employees and agents hereunder. Grantee shall be solely
responsible and save City harmless from all matters relative to payment of
Grantee's employees including compliance with Social Security, withholdings,
etc.
11
CLEARSOURCE FRANCHISE AGREEMENT
B. This indemnification obligation is not limited in any way by a limitation of the
amount or type of damages or compensation payable by or for Grantee under
Workers' Compensation, disability or other employee benefit acts, acceptance of
insurance certificates required under this Franchise, or the terms, applicability or
limitations of any insurance held by Grantee.
C. City does not, and shall not, waive any rights against Grantee which it may have
by reason of this indemnification, because of the acceptance by City, or the
deposit with City by Grantee, of any of the insurance policies described in this
Franchise.
D. This indemnification by Grantee shall apply to all damages and claims for
damages of any kind suffered by reason of any of the operations referred to in this
Section, regardless of whether or not such insurance policies shall have been
determined to be applicable to any such damages or claims for damages.
E. Grantee shall not be required to indemnify City for damages arising solely from
the negligence or malfeasance of the City or its officials, boards, commissions,
agents, or employees.
F. Grantee shall immediately notify the City Risk Manager of any and all claims
raised against the Grantee or Grantee and City jointly, and shall provide the City
with a copy of the same.
G. Grantee shall indemnify, defend and hold harmless the City, its officers, agents
and employees against any and all claims or challenges brought against the City
with respect to the validity of the terms and conditions of this Franchise grant.
3.5 Grantee's Insurance.
12
CLEARSOURCE FRANCHISE AGREEMENT
Grantee shall not commence or continue any Cable System work or permit any
subcontractor to commence or continue work until both shall have obtained or caused to
be obtained all insurance required under this Section. Said insurance shall be maintained
in full force and effect until the completion of construction, and approval thereof by the
City.
3.6 Workers' Compensation Insurance.
Grantee shall obtain and maintain Workers' Compensation Insurance for all Grantee's
employees, and in case any work is sublet, Grantee shall require any subcontractor
similarly to provide Workers' Compensation Insurance for all subcontractor's employees,
all in compliance with State laws, and to fully protect the City from any and all claims
arising out of occurrences on the work. Grantee hereby indemnifies City for any damage
resulting to it from failure of either Grantee or any subcontractor to take out and maintain
such insurance. Grantee shall provide the City Manager with a certificate of insurance
indicating Workers' Compensation coverage prior to commencing reconstruction of the
system.
3.7 Security Fund and Performance Bond.
A. Grantee shall deposit into a bank account established by the City and maintain on
deposit through the term of this Franchise, the sum of one hundred thousand
dollars ($100,000.00) as security ("Security Fund") for the faithful performance by
it of all the provisions of this Franchise, and compliance with all orders, permits
and directions of the City, and the payment by Grantee of any claim, liens and
taxes due the City which arise by reason of the construction, operation or
maintenance of the Cable System. Interest accrued on this deposit shall remain
13
CLEARSOURCE FRANCHISE AGREEMENT
with the deposit as additional security unless, after periodic review, the City
determines, in its sole discretion, to rebate all or part of the accrued interest or to
reduce the required amount of such security fund. Provision shall be made to
permit the City to withdraw funds from such security fund as and to the extent
permitted by this Franchise. Grantee shall not use such security fund for other
purposes and shall not assign, pledge or otherwise use this security fund as
security for any purpose.
B. The Security fund may be drawn on by City for those purposes specified in
Section 3.8 hereof, according to the procedures of Section 3.8, as the case may be,
provided that Grantee has received written notice and thirty (30) days after receipt
of notice to cure any material violations before any payment.
C. Within thirty (30) days after notice to Grantee that any amount has been
withdrawn by the Grantee from the security fund pursuant to Section 3.8, Grantee
shall deposit a sum of money sufficient to restore such security fund to its original
amount.
D Commencing in the second year of the Franchise, Grantee shall maintain a Five
Hundred Thousand Dollar ($500,000.00) performance bond until the System
construction or upgrade and/or rebuild provided for in Section 4.1 herein is
completed, at which time that portion of the performance bond shall be released.
The residual portion of the security fund shall be maintained at a level of one
hundred thousand dollars ($100,000.00) throughout the term of this Franchise.
E. Nothing herein shall be deemed a waiver of the normal permit and bonding
requirements made of all contractors working within the City's rights-of-way.
14
CLEARSOURCE FRANCHISE AGREEMENT
F. Maintenance of the requisite security fund and performance bond shall not in any
way limit the liability of the Grantee for any failure to fully perform its obligations
under this Franchise Agreement.
3.8 Procedure for Remedying Franchise Violations.
A. The procedures for remedying Franchise violations or breaches shall be consistent
with the procedures of the Master Ordinance. City shall first notify Grantee of the
violation in writing by personal delivery or registered or certified mail, and
demand correction within a reasonable time, which shall not be less than twenty
(20) days in the case of the failure of the Grantee to pay any sum or other amount
due the City under this Franchise or the Master Ordinance, and thirty (30) days in
all other cases. If Grantee fails to correct the violation within the time prescribed,
or if Grantee fails to commence corrective action within the time prescribed and
diligently remedy such violation thereafter, the Grantee shall then be given a
written notice of not less than twenty (20) days of a public hearing to be held
before the City Council. Said notice shall specify the violations alleged to have
occurred.
B. At the public hearing, the Council shall hear and consider all relevant evidence
and thereafter render findings and a decision based upon the evidence. Any such
hearing shall, at a minimum, provide the Grantee a full and fair opportunity to be
heard by the City.
C. In the event the Council finds that Grantee has corrected the violation or has
diligently commenced correction of such violation after notice thereof from City
or City residents and is diligently proceeding to fully remedy such violation, or
15
CLEARSOURCE FRANCHISE AGREEMENT
that no material violation has occurred, the proceedings shall terminate and no
penalty or other sanction shall be imposed. In determining whether a violation is
material City shall take into consideration the reliability of the evidence of the
violation, the nature of the violation and the damage, if any, caused to the City or
the City's residents thereby, whether the violation was chronic, any justifying or
mitigating circumstances, and such other matters as the City may deem
appropriate.
D. In the event the Council finds that a material violation exists and that Grantee has
not corrected the same in a satisfactory manner or has not diligently commenced
correction of such violation, the Council may impose liquidated damages, payable
from the security fund, of up to two thousand dollars ($2,000) per day or per
incident, for major construction or safety violations or unexcused violations of the
System construction schedule provided in Section 4.1 herein, and up to three
hundred dollars ($300) per day or per incident for all other violations. A schedule
of liquidated damages is attached as part of Exhibit D hereto, and is incorporated
by reference. Grantee may appeal any such damages before a court of competent
jurisdiction.
E. If Grantor elects to assess liquidated damages, then such election shall constitute
Grantor's exclusive remedy for a period of sixty (60) days. Thereafter, if the
Grantee remains in non-compliance, the Grantor may pursue any other available
remedy.
F. Repeated violations, whether remedied or not, shall result in special notice by the
City outlining further remediation requirements. Failure to cure, measured by
16
CLEARSOURCE FRANCHISE AGREEMENT
continuation of notice of violation and opportunity to cure the same type of
violation, may lead to franchise revocation action under Article 11 of the Master
Cable Services Regulatory Ordinance, as an evasive practice. Grantee may appeal
any revocation before a court of competent jurisdiction.
3.9 Compliance with Applicable Laws and Ordinances.
A. Grantee shall conform to all generally applicable laws, rules and regulations of the
United States and the State of Texas in the construction and operation of its Cable
System and all generally applicable rules and regulations of the FCC.
B. Grantee shall not refuse to hire or employ nor bar nor discharge from employment
nor discriminate against any person in compensation or terms, conditions or
privileges of employment because of age, race, creed, color, national origin or sex.
C. Any right, power, protection, privilege or immunity which is provided, granted or
imposed on Grantee under or by virtue of the federal Cable Acts or the federal
Telecommunications Act of 1996, as may be amended or interpreted from time to
time after the date hereof, shall remain inviolate and shall be available to Grantee
notwithstanding any contrary provision of this Franchise, and the acceptance of
the terms and conditions of this Franchise shall not be construed as a waiver or
release by Grantee or City of any right, power, protection, privilege, immunity or
obligation under the above Acts, the laws or Constitution of the United States or
the laws and Constitution of the State of Texas.
SECTION 4. SYSTEM CAPABILITIES
4.1 Cable System Build
17
CLEARSOURCE FRANCHISE AGREEMENT
A. The design and construction of a hybrid fiber optic -coaxial cable Cable System
will begin with the effective date of this Franchise and shall be completed
throughout the City in accordance with the density requirements of the Master
Ordinance, and activated to provide Services according to a construction plan and
schedule developed by the Grantee and approved by the City. Construction and
activation of the Cable System will be substantially completed six and a half (6
1/2) years from the earlier of: the date of the activation of the System's 200`h
Subscriber; or one year after commencement of construction. Grantee shall
commence construction within the first year of the effective date of this
Agreement or one-year Agreement. For purposes of this Agreement, "substantially
completed" shall mean service to all residential areas within the City having a
density of thirty (30) homes per aerial mile. During the six and a half year
construction phase of the Franchise, Grantee shall comply with all customer
service obligations with respect to customers whose premises are passed by
portions of the Grantee's network which are fully activated, tested and available
for Service. In constructing and activating its Cable System the Grantee shall not
discriminate between different areas of the City on the basis of race, creed,
religion or income level. For purposes of this Franchise Agreement, "Standard
Installation" shall be a drop of one hundred twenty five (125) feet or less.
B. In order to ensure that the construction of the Cable System described in
paragraph A will be performed as promised, the parties agree to establish a
process that includes: a review of the system design plan; testing of the actual
design as part of the earliest phase of construction; preventative testing of system
18
CLEARSOURCE FRANCHISE AGREEMENT
components before and after installation to ensure that performance is adequate;
and time lines for performance. As part of this process the Grantee may request,
and the City shall consider, an extension of up to one year of the construction
schedule if it can be demonstrated that such extension is warranted as the result of
circumstances beyond the Grantee's control.
C. The proposed Cable System design plan will specify at least the following
elements:
(1) Design type, trunk and feeder design, and number and general location of
hubs;
(2) Typical trunk and distribution system cable, fiber and equipment to be
used;
(3) Projected number of channels and channel capability for both standard six
(6) MHz bandwidth channels and digital channels that will be activated
upon completion of each construction area of the Cable System and a
description of the future activation requirements.
(4) Voice, video, and data two-way capability and activation requirements.
(5) Standby power for the System including the headend;
(6) Longest amplifier cascade in the Cable System (number of amplifiers,
number of miles, type of cable/fiber);
(7) Construction schedule, including proposed dates for commencement and
completion of construction by locations; and
(8) Extension of service to new areas having 30 homes per mile or more and
any costs associated with extension.
19
CLEARSOURCE FRANCHISE AGREEMENT
(9) Grantee shall provide the City with "as built" maps and information for all
aerial and underground facilities in an agreed upon electronic format
within 90 days of the completion of such construction.
D. The Grantee shall provide the City with written progress reports on the status of
the Cable System construction and Subscriber activation on a quarterly basis,
beginning with the first month of construction.
E. The Grantee and City recognize that the Cable System capabilities are a material
part of the consideration given by the Grantee in return for the issuance of this
Franchise, and that the City would have established different requirements in the
absence of such enforceable requirements. If Section 4.1.A -D is not fully
enforceable, and if the Grantee does not meet the requirements of Section 4.1.A -D
in reliance upon such unenforceability, the City may, pursuant to the procedures
for revocation either:
(1) Terminate the Franchise; or
(2) Impose as additional consideration $250,000 as a capital grant that can be
utilized for any cable related purpose authorized under applicable state and
federal law.
Provided that both of these enforceability remedies will terminate six months after
the date the Cable System build/rebuild is completed and available to substantially
all of the Subscribers throughout the City. Such time limitation on the remedies
shall not apply with respect to any specific claim of non-compliance raised prior
to the end of the six-month period referenced above if the Grantee claims that the
provision with which it is alleged to have failed to comply is unenforceable.
20
CLEARSOURCE FRANCHISE AGREEMENT
4.2 Performance Review: Performance Monitoring.
A. Any time after December 1, 2002 and every two years thereafter, the City may
commence a review of Grantee's performance under this Franchise. As part of
this review, the City may consider:
(1) Whether Grantee has complied with its obligations under this Franchise,
the Master Ordinance, and applicable State and federal law; and
(2) Whether the Cable System is capable of providing Services desired by the
City comparable to those being provided over cable systems in at least
three similarly situated communities nationwide.
(3) Whether the construction period should be extended.
B. The City may conduct public hearings to provide the Grantee and the public an
opportunity to comment on Grantee's performance and other issues considered as
part of the review.
C. Any revisions to this Franchise that are made as a result of these reviews shall be
proposed under the procedures established herein.
D. The City may require that the Grantee pay one half of the reasonable expenses of
at least one such performance review, if undertaken prior to the statutory renewal
negotiation period.
4.3 Franchise Modification.
A. The City or Grantee may, at any time after the public hearing referenced in
Section 4.2B above, provide the other with a full description of any changes it
proposes, as well as the reasoning behind the proposal. If the City is the party
proposing the changes, Grantee shall develop a thorough analysis of the impact of
21
CLEARSOURCE FRANCHISE AGREEMENT
such changes upon its operations or its Subscribers, taking into consideration the
acceptability of such changes and their cost, if any, to its Subscriber rates and
Grantee's return on investment. City shall consider all the alternative means for
recovering such costs.
B. Following its receipt and analysis of a proposal, the City and Grantee shall
negotiate the proposed changes in good faith. If the parties are unable to reach
agreement within ninety (90) days, or whatever longer period may be mutually
acceptable, either party may call for arbitration of the disagreement pursuant to the
then current arbitration rules of the American Arbitration Association.
C. The City and Grantee will indemnify the arbitrator so selected, whose fees will be
shared equally by the parties.
D. At the completion of the process outlined above, the City may amend this
Franchise either: (i) as agreed upon by the parties; or (ii) in the case of an
impasse, in accordance with the arbitrator's findings to allow for implementation
of the changes, which findings shall take into account the submissions of the
parties pursuant to Section 4.2A above.
4.4 Grantee Cooperation.
Grantee shall cooperate in the performance review and this Franchise modification
process described in this Franchise.
4.5 Periodic Evaluation, Review and Modification.
City and Grantee acknowledge and agree that the field of cable service is a relatively new
and rapidly changing one that may experience many regulatory, technical, financial,
marketing and legal changes during the term of this Franchise Agreement. Therefore, to
22
CLEARSOURCE FRANCHISE AGREEMENT
provide for the maximum degree of flexibility in this Franchise Agreement, and to help
achieve a continued, advanced and modern Cable System, the following evaluation and
review provisions will apply:
A. The City may request evaluation and review sessions at any time during the term
of this Franchise and Grantee shall cooperate in such review and evaluation;
provided, however, that there shall not be more than one (1) evaluation and
review session during any calendar year.
B. Topics which may be discussed at any evaluation and review session include, but
are not limited to, rates, channel capacity, System performance, programming,
cable modem platform access, PEG access, municipal uses of cable, Subscriber
complaints, judicial rulings, FCC rulings and any other topics the City or Grantee
may deem relevant.
C. During an evaluation and review session, Grantee shall fully cooperate with the
City and shall provide without cost such reasonable information and documents as
the City may reasonably request to perform the evaluation and review.
D. If at any time during the evaluation and review, the City reasonably believes there
is evidence of inadequate technical performance of the Cable System, the City
may require Grantee, at Grantee's expense, to perform appropriate tests and
analyses directed toward such suspected technical inadequacies. In making such
request, the City shall describe and identify as specifically as possible the nature
of the problem and the type of test the City believes to be appropriate. Grantee
shall cooperate fully with the City in performing such tests and shall report to the
City the results of the tests, which shall include at least:
23
CLEARSOURCE FRANCHISE AGREEMENT
(1) A description of the problem in System performance which precipitated
the special tests;
(2) The System component tested;
(3) The equipment used and procedures employed in testing;
(4) The method, if any, by which the System performance problem was
resolved; and
(5) Any other information pertinent to said tests and analyses.
E. As a result of an evaluation and review session, the City or Grantee may
determine that a change in the System or in the terms of the Franchise Agreement
may be appropriate. In that event, either the City or the Grantee may propose
modifications to the System or the Franchise. Grantee and the City shall, in good
faith, review the terms of the proposed change and any proposed amendment to
this Franchise Agreement and seek to reach agreement on such change or
amendment.
F. The City and Grantee shall act in good faith during such negotiations and shall be
obligated to agree to the reasonable requests of the other party for changes in the
System or amendment to the Franchise Agreement when the change or
amendment is not inconsistent with the other terms of the Franchise Agreement,
or with applicable law or regulations, and the change or amendment is technically
feasible, and economically reasonable and will not result in a material alteration of
the rights and duties of the parties under the Franchise Agreement.
4.6 Emergency Alert Capability.
24
CLEARSOURCE FRANCHISE AGREEMENT
Consistent with the FCC's Emergency Alert System rules, within twelve (12) months of
the effective date of this Franchise, Grantee shall provide the System capability to
transmit an emergency alert signal to all participating Subscribers, in the form of a video
override capability to permit City to interrupt and cablecast a video message on all
channels simultaneously in the event of disaster or public emergency.
4.7 Hearing and Sight Impaired Capabilities
Grantee will make audio descriptive service and closed captioning capabilities available
to the extent required by state and federal law.
4.8 Standby Power.
Within twelve (12) months of the effective date of this Franchise, Grantee shall provide
standby power generating capacity capable of providing at least twelve (12) hours of
emergency supply at the cable communications System control center hubs. For nodes,
two hours with emergency power supply. Grantee shall maintain standby power System
supplies throughout the major trunk cable networks capable of providing emergency
power within the standard limits of commercially available power supply units.
4.9 Parental Control Lock.
Upon request, Grantee shall provide Subscribers a parental control locking device or
digital code that permits inhibiting the video and audio portions of any channels offered
by Grantee. Such device shall be provided at a reasonable charge unless otherwise
required under applicable federal law. The Grantee may in all instances impose a
reasonable security deposit requirement for the use of such devices.
4.10 Status Monitoring.
25
CLEARSOURCE FRANCHISE AGREEMENT
Grantee shall provide an automatic status monitoring System, or a functional equivalent,
when the Cable System has been activated for interactive service provided that such
status monitoring is technically and economically feasible.
4.11 Technical Standards.
City shall have the right to enforce the Federal Communications Commission (FCC)
Rules and Regulations, Part 76, Subpart K (Technical Standards), as may be amended
from time to time, to the extent permitted by applicable law. The Grantee shall furnish
the City Manager a copy of its annual proof of performance filing with the FCC. If the
FCC no longer establishes technical standards, this Franchise shall control and the then -
current FCC standards shall, at a minimum, be made part of this Franchise and
enforceable by the City.
4.12 Year 2000 Compliance.
To the extent that Grantee is offering service prior to January 1, 2000, the Grantee shall
take steps to ensure that its cable system is year 2000 compliant and provide a certified
compliance report to the City on its state of readiness including contingency steps it is
taking to minimize any potential service disruptions.
4.13 HDTV/ATV Conversion.
Conversion to High Definition Television/Advanced Television (HDTC/ATV) formats
shall occur in accordance with applicable law. The Grantee shall provide channel capacity
on the Cable System to allow cablecasting of programming in both HDTV/ATV and
analog NTSC for a reasonable period of transition. Channel capacity on the Cable
System for Public, Educational and Governmental (PEG) programming shall be made
available during the transition period commensurate with programmer's production use of
26
CLEARSOURCE FRANCHISE AGREEMENT
HDTV/ATV. The Grantee shall participate in funding an upgrade of PEG facilities to
HDTV/ATV as required under Section 6.2
4.14 Right of Inspection.
City shall have the right to inspect all construction, reconstruction or installation work
performed by Grantee under the provisions of the Franchise and other pertinent
provisions of law, to ensure Grantee's compliance and to protect the public health, safety
and welfare of City's citizens. Grantee shall have the right to be present at such
inspection.
SECTION 5. SERVICES AND PROGRAMMING
5.1 Programming.
A. Broad Programming Categories. Grantee shall provide or enable the provision of
at least the following Initial broad categories of Programming, unless otherwise
required by state or federal law:
(1) Educational programming;
(2) News & information;
(3) Sports;
(4) General entertainment (including movies);
(5) Children/family-oriented;
(6) Arts; culture and performing arts;
(7) Foreign language based on population;
(8) Science/documentary;
(9) Weather information;
27
CLEARSOURCE FRANCHISE AGREEMENT
(10) Programming addressed to diverse ethnic and minority interests in the
City;
(11) National, state and local government affairs;
(12) Local Origination Programming concerning local and regional issues,
events, and affairs of interest to City residents;
(13) Public access programming;
(14) Educational access programming;
(15) Governmental access programming;
(16) Audio programming (including local radio signals);
(17) Program channel guide
(18) Two-way interactive programming
(19) Internet access; and
(20) Interior design/landscape programming (e.g., Home and Garden)
B. Deletion or Reduction of Programming Categories.
(1) Grantee shall not delete or change the mix, level, or quality of
programming and services, or so limit as to effectively delete any broad
category of Programming identified in Section 5.1.A and within its control
without complying with the modification procedures required under
federal law, including notice requirements.
(2) In the event of a modification proceeding under federal law, the mix, level,
and quality of services provided by the Grantee on the effective date of
this Franchise shall be deemed the mix and quality of services required
under this Franchise throughout its term.
28
CLEARSOURCE FRANCHISE AGREEMENT
5.2 Leased Commercial Access.
Grantee shall offer leased commercial access on reasonable terms and conditions and
according to applicable law. Grantee shall publicize the availability of channel capacity
and rates to encourage community use. Commercial leased access programming shall not
be aired on PEG Access channels.
5.3 Periodic Subscriber Survey.
A. Every two years from effective date of grant, the Grantee shall fund a telephone
Subscriber survey to be conducted by the City, the results of which shall be shared
with the Grantee. Each survey shall be conducted in good faith so as to present
reasonably reliable and competitively neutral measures of Subscriber satisfaction
with:
(1) Signal quality;
(2) Response to Subscriber complaints;
(3) Billing practices;
(4) Program services; and
(5) Installation practices.
As a part of each annual report, Grantee shall report in writing to the City the
steps it is taking to implement the findings of the most recently conducted survey,
such as correcting problems and expanding services.
SECTION 6. SUPPORT FOR LOCAL CABLE RELATED NEEDS
6.1 Institutional Network .
Grantee shall provide the City with an Institutional Network, as it constructs its system,
consisting of the following elements:
29
CLEARSOURCE FRANCHISE AGREEMENT
A. The dedication of four (4) dark fibers with forty (40) access points specified by
the City;
B. 200 two-way cable modems at facilities designated by the City which the City
Manager shall identify. Grantee shall be responsible for the operation and
maintenance of the two-way capabilities up to the cable modem. This shall satisfy
Grantee's I -Net obligations under 3.28 and 5.3A of the Master Ordinance.
C. One high-speed Internet connection, at a location designated by the City utilizing
one of the four dark fibers provided herein or other City owned fiber, with the
equipment terminating such fiber at Grantee's facilities to be provided by Grantee.
Such connection shall provide a dedicated connection to the Grantee's Corpus
Christi connection to the Internet and shall provide a minimum bandwidth
capacity of 1.54 MBPS, and may be increased over the life of the franchise up to
200% of that initial capacity (1.54 MBPS X 2) upon a demonstrated showing of
need by the City, additional increases in capacity may be obtained by the City at
the Grantee's cost of providing such capacity. The capacity shall only be utilized
by the City and shall not be provided for the use of any third parties.
D. A sufficient number of class C IP addresses to meet the City's current and future
needs, as such demonstrated needs arise during the term of the franchise with
sufficient justification provided by City to enable Grantee to procure such
addresses, in an amount not to exceed ten (10) class C IP addresses. Any
additional IP addresses may be purchased by the City from the Grantee at the
lowest retail price for which the Grantee makes class C IP addresses available
within the state.
30
CLEARSOURCE FRANCHISE AGREEMENT
6.2 Public, Educational and Governmental Access.
A. Access Channels. Consistent with applicable law, within one year of the grant of
this Franchise, Grantee shall offer the following access channels to each of its
Subscribers who receive all or any part of the Cable Services offered on the Cable
System.
(1) Public Access -- Two (2) specifically designated standard 6 MHz channels
for non-commercial public access available on a first-come, non-
discriminatory basis, one of which based on volume of usage and for the
convenience of Subscribers, shall be dedicated to religious programming.
(2) Local Educational Access -- One (1) specifically designated standard 6
MHz channel for local educational access use.
(3) Government Access -- Two (2) standard 6 MHz Government Access
channels. One (1) channel shall be specifically designated as a City
Government Access Channel for use by the City of Corpus Christi; and
one (1) other Government Access channel. The City shall be responsible
for the oversight and programming of the City Channel.
B. Remote Origination. Signal input points and equipment shall be made available at
sites specified by the City for live program origination on the Government and
Educational Access channels. Each Access Channel shall be activated to enable
the City and schools to remotely initiate programs and services.
C. Additional Access Channels. Upon demonstration that an Access Channel is in
use during seventy percent (70%) of the weekdays (Monday -Friday), for eighty
percent (80%) of the time between the hours of 7:00 a.m. and 10:00 p.m. for eight
31
CLEARSOURCE FRANCHISE AGREEMENT
(8) consecutive weeks, and there is a request or demand for use of an additional
Channel for the same purposes, Grantee shall, upon receipt of written request
from the City, have six (6) months in which to provide an additional Access
Channel dedicated for the same purpose, provided that the provision of such
additional Channel(s) shall not require the Cable System to install Converters. In
calculating use, character generated programming shall be included and repeat
programming may be counted once per day in addition to the original broadcast.
D. Unused Channels. If demand for use of the Access Channels does not warrant
activation of all such Channels, Public and Educational Access programming may
upon grant of express written City authority be combined on one or more
Channels In no case, however, shall the Government Access Channels or
government programming be combined with any other use except by express
written permission of the City of Corpus Christi, and only upon a demonstration
that there is no suitable alternative capacity available on other access channels.
E. Interconnection. Grantee shall cooperate with other cable providers in the City and
the surrounding area to interconnect its network where feasible in order to
facilitate shared access programming on a local and regional basis. The Cable
System shall be designed to enable cablecasting of all access or local origination
channels throughout the entire City without respect to the specific cable operator.
To the extent permissible under applicable law the City will require the Incumbent
Provider to provide the Grantee with a PEG feed from the incumbent provider at a
mutually agreeable location. Grantee and City shall jointly be responsible for
coordination of technical arrangements with other cable service providers in the
32
CLEARSOURCE FRANCHISE AGREEMENT
City and the surrounding area. The City shall utilize its best efforts to facilitate
such interconnection.
F. Regional Access. The City shall require all providers of cable or open video
services in the Franchise area to cooperate in good faith with Grantee in the
formation of a regional interconnection of PEG access entities.
G. Community Access Corporation or "CAC" . Oversight and administration of the
PEG Access channels shall be originally carried out by the Incumbent Provider,
however, at any time after commencement of this Franchise, the City may elect to
transfer responsibility for these channels to itself or a designated Community
Access Corporation (CAC), or another Franchised Grantee. The City may elect to
establish flexible powers for the CAC to work in conjunction with surrounding
communities so as to allow for public access programming on a regional basis.
The CAC may be given the following and other functions:
(1) Responsibility for program production and management policy of the
Public and Educational Access Channels required under this Franchise;
(2) Responsibility to assure that these Channels are made available to all
Residents of the City on a nondiscriminatory, first-come, first -serve, basis;
(3) Responsibility to assure that all Access Programming decisions comply
with applicable law;
(4) Responsibility to devise, establish and administer all rules, regulations and
procedures pertaining to the use and scheduling of Public and Educational
Access Programming Channels and facilities required under this
Franchise;
33
CLEARSOURCE FRANCHISE AGREEMENT
(5) Responsibility to prepare such regular or special reports as may be
required or desirable;
(6) Responsibility to authorize and or review all purchases of materials and
equipment that may be required provided that the CAC obtains input from
Grantee as to compatibility with the Cable System;
(7) Responsibility to develop and identify additional sources of funding, such
as foundations, federal or state grants, to further community programming;
and
(8) Responsibility to perform such other functions relevant to the Access
Channels as may be appropriate under the circumstances.
(9) Responsibility for the administration and control of production facilities
and equipment in lieu of the Incumbent Provider.
H. Grantee Support for Local Programming. The Grantee shall provide the following
support for Access:
(1) Reservation, dedication, and use of all Access Channels required by this
Franchise.
(2) During the first year of the Franchise, Grantee shall contribute a grant of
two hundred thousand dollars ($200,000) for municipal production
facilities, which the City may draw down upon as needed, on or before the
seventh anniversary date of this Franchise Agreement the Grantee shall
contribute an additional fifty thousand dollars ($50,000) for such purposes.
34
CLEARSOURCE FRANCHISE AGREEMENT
(3) In an effort to further assist the City in meeting the cable related needs of
the City, the Grantee agrees to provide a capital contribution of twenty-
five cents ($.25) per month, per Subscriber, adjusted annually as measured
by changes in the Consumer Price Index, (until terminated or adjusted, at
the City's discretion) such contribution shall not be credited towards the
calculation of the five percent Franchise Fee. The capital contribution
may at the City's discretion be utilized for the capital costs of the
Municipal Access channel facilities, or to help defray its costs of the I -Net.
Notwithstanding, the non -treatment of such contribution as a "Franchise
Fee," it shall nevertheless comprise a Franchise related cost, and as such,
any passthrough of such grant shall be separately identified on Subscriber
bills as "Municipal Access Fee." The Grantee will not be required to
commence the payment of the above described capital contribution until
after the adoption of a similar requirement for the Incumbent Provider as
part of a Franchise Renewal Agreement. Such contribution requirement
must be applied by the City on a competitively neutral basis between all
Franchisees granted pursuant to the Master Ordinance but need not be
identical.
(4) After the adoption of a Franchise Renewal Agreement for the Incumbent
Provider, the City Manager shall negotiate with the Grantee to determine a
mutually agreed appropriate amount that Grantee shall contribute which
would constitute a reasonable equivalent of one half of the amount of
reasonably incurred, audited, long run incremental costs which were
35
CLEARSOURCE FRANCHISE AGREEMENT
incurred by the Incumbent Provider for production equipment used solely
for Public and Educational Access Channels in Corpus Christi, and which
were incurred after prior approval for such costs was given in writing by
the City. If Grantee disputes such proposed costs or the reasonableness of
such proposed costs, Grantee may, at Grantee's expense, audit such cost
records and propose appropriate costs to the City Manager. Absence of
adequate cost support documentation shall create a presumption that such
costs are unreasonable and not to be included. After the amount due from
Grantee to the City has been mutually agreed to, that amount will be
remitted by Grantee to the City, and the City will, in its sole discretion,
either deduct such amount from sums owed it by the Incumbent Provider,
or pay it to the Incumbent Provider, or use such funds as the City
determines to be in the public interest. Grantee may appeal a decision of
the City Manager under this subsection to the City Council.
(5) Any time after the third year of the effective date of this Franchise, either
City or Grantee may initiate a review of the community need for initiating
or increasing Public, Educational and Governmental (PEG) access capital
contributions on the part of the Grantee.
Access Channel Designations. Grantee acknowledges and agrees that unless
otherwise agreed in writing, the Access Channels activated and used by the City
will have the same Channel number designations as those that are utilized by the
Incumbent Provider as of the Effective Date of this Franchise Agreement.
36
CLEARSOURCE FRANCHISE AGREEMENT
J. Public Educational and Governmental Access Rules and Procedures. The use of
Access Channels shall be in accordance with and subject to the rules and
procedures adopted by the Grantee, City or CAC, administrator as authorized
under the Cable Act.
K. Assistance with Soliciting Contributions. Once per year, if requested by the City,
the Grantee shall provide its Subscribers an Access promotion
L. Ad Avail Grants. In order to promote Access Programming, Grantee will provide
the City ad avails each year at Grantee's lowest unit cost. The ad avails will be on
a "run of schedule" basis and shall appear on Channels used by Grantee for local
advertising.
M. Technical Quality. Grantee shall maintain all Access channels, including
interconnected Access channels, at the same level of technical quality and
reliability required by this Franchise, the Master Cable Services Regulatory
Ordinance and the FCC, for residential cable television Subscribers.
N. Proof of Performance Testing. To ensure high quality service on Access
Channels, proof of performance testing of the Cable System shall be made
available to the City throughout the term of this Franchise. Included in such proof
of performance testing, a number of Cable System taps will be designated,
corresponding to each of the public buildings where programming is originated.
O. Change in Technology. In the event Grantee makes any change in the Cable
System and related equipment and facilities or in its signal delivery system, which
will have a material adverse impact on the transmission or signal quality of
37
CLEARSOURCE FRANCHISE AGREEMENT
Access Programming, the Grantee shall at its own expense take all necessary steps
to ensure, at a minimum, the same level of quality for PEG Access Programming.
6.3 Drops To Public Buildings
Grantee shall provide installation of at least one (1) cable Drop, and one (1) outlet,
provide monthly Basic Cable Service, without charge, to public buildings as specified by
the City pursuant to Section 6.1.A, with the drop length not to exceed two hundred (200)
feet. Except that the City may designate up to ten (10) locations where the drop length
may exceed two hundred (200) feet provided that the City gives the Grantee one hundred
eighty (180) days prior notice of such need and that the required drop does not exceed
five hundred (500) feet. Drops and outlets for other public buildings that are in addition
to the one free Drop and outlet required by this Section and the I -Net requirements shall
be provided by Grantee at the cost of Grantee's time and material. Alternatively, at such
a public institution's request, the institution may add outlets at its own expense, as long as
such installation meets the Grantee's standards.
6.4 School and Library Cable Modems.
Upon completion of the initial construction , Grantee shall provide a cable modem and
Internet access service without charge to every public school and library in the Franchise
Area. Such access shall not be counted towards the 200 facilities obtaining cable
modems provided under the I -Net.
6.5 Review of Non -Discriminatory Access to Cable Modem Platform.
A. The City and its Residents have an increasing need and desire for broadband
access to the Internet and other on-line services within the City.
38
CLEARSOURCE FRANCHISE AGREEMENT
B. M order to protect competition and provide for the future needs of the City, unless
otherwise required by applicable state or federal law, the Grantor reserves any
legal right it now has or may in the future have to implement an "open access"
requirement to ensure that Grantee will be required to provide non-discriminatory
access to its Cable System to providers of Internet Access Service, irrespective of
whether such providers are affiliated with the Grantee. Grantee may be required, if
legally permissible, to implement "open access" requirements to its Cable System
to non-affiliated Internet Access Service providers if the Grantee or its affiliates or
subsidiaries under its control determine to do so in a similar manner in other
Cable Systems owned and operated by the Grantee or its affiliates or subsidiaries
under its control.
C. The foregoing notwithstanding, it is recognized that "open access" and the legal
authority of local franchise authorities to compel such access is under review, and
the potential impact on Subscribers is not yet fully known. Accordingly, Grantee
will not be required to provide non-discriminatory access to its Cable System until
further review by the Grantor and pending clarification of the City's legal
authority, as well as an evaluation by the City of the merits and policy
considerations related to this issue. By adopting this Ordinance, neither the City
nor Grantee has waived any rights, obligations, claims, defenses or remedies
regarding the City's authority to impose such conditions. Prior to the enactment
of any such requirement, Grantee will be provided with reasonable notice and an
opportunity to be heard, including the right to present evidence on any findings to
be made by the City with respect to the need for such a requirement.
39
CLEARSOURCE FRANCHISE AGREEMENT
6.6. Use Of Grantee's Facilities
The City shall have the right to install and maintain, free of charge, upon the poles and
within the underground pipes and conduits of Grantee, any wires and fixtures desired by
the City to the extent that such installation and maintenance does not interfere with
existing or planned future operations of a Grantee.
SECTION 7. REGULATION
7.1 Franchise Regulation.
The Franchise renewed under this Franchise shall be subject to regulation by City in
accordance with all of the lawful provisions of the Master Ordinance.
7.2 Force Majeure.
In accordance with the Master Ordinance, in the event Grantee's performance of any of
the terms, conditions, obligations or requirements of this Franchise Agreement or Master
Ordinance is prevented or impaired due to any cause beyond its reasonable control or not
reasonably foreseeable, such inability to perform shall be deemed to be excused and no
penalties or sanctions shall be imposed as a result thereof, provided Grantee has notified
City in writing within thirty (30) days of its discovery of the occurrence of such an event,
and provided such notice is reasonable under such circumstances. In the event said notice
is not given, then the delay permitted under this Section shall be thirty (30) days from the
date of discovery of the event causing said delay. Such causes beyond Grantee's
reasonable control or not reasonably foreseeable shall include, but shall not be limited to,
acts of God, civil emergencies and labor unrest or strikes, untimely delivery of
equipment, inability of Grantee to obtain, without cost, access to an individual's property,
and inability of Grantee to secure all necessary permits to utilize utility poles and conduit
40
CLEARSOURCE FRANCHISE AGREEMENT
so long as Grantee made all reasonable efforts to ensure that required equipment, parts,
components, personnel and proprietary activity was ordered, hired, paid for, scheduled,
checked, approved and/or facilitated.
41
CLEARSOURCE FRANCHISE AGREEMENT
IN WITNESS WHEREOF, City and Grantee have executed this Franchise the date and
year first above written.
ATTEST:
004'J/ear
ity Secretary
(SEAL)
(Corporate Seal)
STATE OF
COUNTY OF Mies
Thg foLregoing
oe-
) §§•
instrument w. s
,the
STATE OF T -e -id S
CITY OF C : ' PUS CHRISTI, TEXAS
By: --
K' De't j:e rg-116, 41 PlAan4cter
1-40-2,000Date: V �0-2,000 J
Approved as to form:
James R. Bray Jr
City Attorney
By_4.ti
Lisilar
Assistant City Attorney
CLEARSOUR INC.
By: ���% �f�_
Date: - 2-1-9 i
acknowledged before me on HO
of the City of Corps Christi, on b
COUNTY OF T(d J t S
)
) §§•
Notary Public
,4t_by
If of the City.
CONNIE PARKS
Notary Pub1c
STATE OF TEXAS
My Comm. Exp. 11-09-2003
The foregoing instrument was acknowledged before me on LkC r,b-a! 21 , 199, by
i2(/QII A . Po 5b, , the Fres', derX of ClearSource, Inc., on behalf of the company.
s' KIMBERLY SWOFFORD
$s'
Notary Public, State of Texas
0 ,/i My Commission Expires
/ APRIL 24, 2000
Notary Public
42
CLEARSOURCE FRANCHISE AGREEMENT
EXHIBIT A
OWNERSHIP
OF CLEARSOURCE
This exhibit shall be completed by Grantee with its acceptance of Franchise and, unless
previously provided by Grantee to City, shall include at a minimum:
1. Description of ownership;
2. Authority (corporate resolution authorizing execution);
3. Proof of financial qualifications of Grantee to satisfy terms of franchise; and
4. Guarantee of performance executed by
CLEARSOURCE FRANCHISE AGREEMENT
EXHIBIT "B"
FRANCHISE FEE PAYMENT WORKSHEET
REVENUE SOURCE
NUMBER OF
SUBSCRIBERS
GROSS
REVENUE
5%
FRANCHISE
FEE
YTD
Installation
Basic Service
Premium — HBO 1
Premium — HBO 2
Premium — HBO 3
Premium — Cinemax 1
Premium — Cinemax 2
Premium - The Movie
Channel
Premium — Showtime 1
Premium — Showtime 2
Premium — Showtime 3
Premium — Disney
Premium — MSC
Premium — Other
Pay -Per -View
Additional Outlets
FM Service
Remote Control
VCR
Late Fees
Collection Fees
Advertising
Shopping
Internet Access
Subscriber Franchise Fees
Other
TOTAL
Grantee must periodically update the list of services contained on the Worksheet and
failure to do so will not relieve the Grantee of the requirement to pay franchise fees on any
services that are actually provided.
CLEARSOURCE FRANCHISE AGREEMENT
REVENUE SOURCES INCLUDE:
INSTALLATION:
Standard Installation
Additional Outlet
FM Service
VCR
Reconnection of Service
A/B Switch
Relocation
Non -Standard
Change of Service
BASIC SERVICE:
Basic Service
Bulk Rates
Reduced Promotional Basic
PREMIUM SERVICE:
All Premium Services
PAY-PER-VIEW
All Movie Services
Events
ADVERTISING:
National
Regional
Program Launch Fees/
Marketing Support
Local Ad Production
Production Income
Tape Duplication
Cable Guide
Bill Stuffer
Commonly occurring normal installation
Installation on additional sets within a customer's home
Separate installation of FM Service
Installation of converter to a VCR
Reconnection of cable to a customer's address
Separate installation of an A/B Switch
Moving an outlet within a customer's home
Usually installation of a commercial type of an account
Charge for upgrading or switching a premium service
Revenue derived from basic service
Revenue derived from non-standard billings (i.e., apt. complex)
Revenue derived from a discounted basic service
Revenue derived from premium service(s).
Revenue derived from separate pay movie services
Revenue derived from special events (i.e., concerts, boxing
matches, etc.)
Revenue generated from a national ad sales representation firm
Revenue generated from a regional ad sales representation firm
Revenue from programmers for program launch market support
Revenue generated locally from the production of a locally Ads
Revenue generated from the production of training tapes, studio
rentals, personnel fees, or rental income from renting vans or
equipment
Revenue generated from duplication of L.O. or Access tapes
Revenue generated from selling advertising in our guide
Revenue generated as a result of providing a bill stuffer to an
advertiser
CLEARSOURCE FRANCHISE AGREEMENT
OTHER:
Returned Check Fees
Pre -wire Cable Purchases
Antenna Rental
A/B Switch
Late Tape Fee
Internet Access
Subscriber Franchise Fees
Verified and submitted this
Revenue generated from charges on returned checks
Revenue generated from the sale of cable to individuals who
pre -wire their home
Any revenue derived from renting space on one of the towers
Revenue generated from sale of an A/B Switch
Revenue generated from receiving a late fee for in-house tape library
Revenue generated from Internet Access service as defined in the
Franchise
Fees collected from Subscribers to pay franchise fees.
day of ,199_
By:
Its:
CLEARSOURCE FRANCHISE AGREEMENT
EXHIBIT C
PUBLIC BUILDINGS
Note: Buildings not identified on above list may be included by City's notice to Grantee of the
building and location. City shall be provided a drop within one hundred and twenty (120) days
after receipt of notice.
CLEARSOURCE FRANCHISE AGREEMENT
EXHIBIT D
CUSTOMER SERVICE AND CONSUMER PROTECTION STANDARDS
Customer Service Standards: Grantee shall at all times comply with the more stringent of the
customer service and consumer protection provisions of this Franchise the Master Cable Services
Regulatory Ordinance or the FCC.
A. Grantee will at all times comply with this Service Program in addition to compliance with
the FCC standards made part of the Master Cable Regulatory Ordinance.
B. Grantee shall comply with the National Cable Television Association's On -Time
Customer Service Guarantee, a copy of which is attached. The guarantee promises on-
time service calls or the customer receives $20.00, and on-time installation calls or the
customer receives a free installation. The $20.00 may be in the form of a credit.
C. Ombudsman: Grantee will provide a senior employee (General Manager for the Corpus
Christi market) to act as the City's point of contact with the Grantee. The Ombudsman
will have responsibility for working with the City and other cities in the area to address
problems that may arise under the Franchise and shall be Grantee's Ombudsman for both
the City and Subscribers during construction and any rebuild of its cable system.
D. City Liaison: Grantee shall provide problem solving liaison services for the City. The
purpose of this service is to provide the City with direct access to supervisory level
personnel who can obtain prompt action on customer service problems referred by the
City to Grantee. This service shall include at least the following:
1. The personnel providing the service shall have sufficient authority and access to
Grantee facilities and personnel in order to investigate and take appropriate
remedial action without delay.
2. The City shall be given a special direct phone number to use, if one exists (which
may also be used by other cities, but which will not be made available to the
general public), which will generally during normal business hours be answered
by a live person and will provide immediate access to a person having the
authority specified in the preceding section.
3. Grantee shall investigate (including an attempt to contact the Subscriber) and
respond to the City on each call, fax or written complaint or request by the end of
the next business day and shall provide a written report within five (5) business
days.
4. Grantee shall give the City notice in writing of changes in the key contact
personnel or material changes in procedures involved in providing this service.
CLEARSOURCE FRANCHISE AGREEMENT
E. Late Payment for Cable Service
1. If Grantee assesses a processing fee for late payments, each bill shall specify on
its face in a fashion emphasizing same such as bold face type, underlined type or a
larger font): "For payments received after [date] a $ processing fee for late
payment may be charged."
2 No processing fees for late payment, however denominated, shall be added to a
subscriber's bill less than fifteen (15) calendar days after the date printed on
mailing of the bill to the subscriber, and shall not exceed $5.00
F. Schedule of Liquidated Damages
Grantee acknowledges that non-compliance with the provisions of the Franchise
Agreement and the Master Ordinance will harm Subscribers and the City and the amounts
of actual damages will be difficult or impossible to ascertain. The City may therefore
assess the following liquidated damages against Grantee for unexcused non-compliance
with the requirements of the Franchise Agreement and Master Ordinance. Grantee
acknowledges that the liquidated damages set forth below are a reasonable approximation
of actual damages and that this provision is intended to provide compensation and is not a
penalty.
1. Major Construction/System Safety Violation (likely to cause serious injury to
person or property)
$2,000 per incident, per day
2. Minor Construction/System Safety Violation
$500 per incident, per day
3. Construction Violation Not Involving Safety
$100 per incident per day
4. Failure to Meet Construction Schedule
$2,000 per day
5. Failure to Pay Proper, or Timely Franchise Fee
$300 per day
CLEARSOURCE FRANCHISE AGREEMENT
6. Telephone Standards. The damages for noncompliance with one or more of the
telephone standards during a calendar quarter are:
$300 per month of non-compliance
7. Service and Installation Standards. The damages for non-compliance with one or
more of the service and installation standards during a calendar quarter are:
$300 per month of non-compliance
8. Other Violations
$100 per incident per day
State of Texas
County of Nueces
}
}
PUBLISHER'S AFFIDAVIT
CITY OF CORPUS CHRISTI
ss: Ad # 3154923
PO #
Before me, the undersigned, a Notary Public, this day personally came Darrell
G. Coleman, who being first duly sworn, according to law, says that he is Vice -
President and Chief Financial Officer of the Corpus Christi Caller -Times, a daily
newspaper published at Corpus Christi in said City and State, generally
circulated in Aransas, Bee, Brooks, Duval, Jim Hogg, Jim Wells, Karnes,
Kenedy, Kleberg, Live Oak, Nueces, Refugio, San Patricio, Victoria and Webb
Counties, and that the publication of, NOTICE OF PASSAGE OF ORDINANCE
ON which the annexed is a true copy, was inserted in the Corpus Christi Caller -
Times and on the World Wide Web on the Caller -Times Interactive on the 17TH
day(s) of OCTOBER 1999.
1
•
TWO (2 ) Time(s)
$99.23
!HAR4 1/4
c
•�•:FXPRESP'••
02i38'3'[ 0z3K35'
Vice -President and Chief Financial Officer
Subscribed and sworn to me on the date of
OCTOBER 18, 1999.
L.GLW ti�� LLt aX rti
Notary Public, Nueces County, Texas
CONNIE HARALSON
Print or Type Name of Notary Public
My commission expires on 5/14/01.
Lassa Ca11er- t Imes, Ju
.. LEGAL rt(18 October 17, 1999
Odro as Christ"
his t m
ved on first rthee 4Ings
granting a,
enonear trenchse and a 1
Clde 8 urcecto
slow 1bof Article 1)(1
e City
Charter.' The franchisee
p+ro'vidl the, purpose oft
'lebvision gsystem cable and
Wales within the City.
Monthly payments shall-
tlre rise made
public ply is
and ways which shell be
'equal to 5% of the groes
revenues. The
forand
franchises also provide
service
s -t a n d a
indemnificatiion,
insurance, security fund,
Pdrforrjance-bphd,
system capabilities,
performance review,
broad programming
Categgories,, use of
"'factlitles for`, City
0urposee, access
channels,grant for
municipal production
facilities, and related
matters, all as contained
in the franchise, a copy
of which Is available for
inspection in the office of
the City Secretary,
Chaps
of C n r4 Christi
State of Texas
County of Nueces
}
}
PUBLISHER'S AFFI AV1T 22 A,,i 1:: 2,0
CITY OF CORPUS CHRISTI
ss: Ad # 3211280
PO #
Before me, the undersigned, a Notary Public, this day personally came Darrell
G. Coleman, who being first duly sworn, according to law, says that he is Vice -
President and Chief Financial Officer of the Corpus Christi Caller -Times, a daily
newspaper published at Corpus Christi in said City and State, generally
circulated in Aransas, Bee, Brooks, Duval, Jim Hogg, Jim Wells, Karnes,
Kenedy, Kleberg, Live Oak, Nueces, Refugio, San Patricio, Victoria and Webb
Counties, and that the publication of, NOTICE OF PASSAGE OF ORDINANCE
which the annexed is a true copy, was inserted in the Corpus Christi Caller -
Times and on the World Wide Web on the Caller -Times Interactive s/on the 14TH
day(s) of NOVEMBER, 1999. V v4, Q o i a sea Lf t oo� b 36---
TWO (2 ) Time(s)
$101.32
�E111HARA Hs 11. i
"747F0fj0-
••..;XPIRES •'
Vice -President and Chief Financial Officer
Subscribed and sworn to me on the date of
NOVEMBER 15. 1999.
‘.1-6(x_o_15-0-Thrvi
Notary Public, Nueces County, Texas
CONNIE HARALSON
Print or Type Name of Notary Public
My commission expires on 5/14/01.
Christi Caller -limes, Sunda , November forpu
OF PASSAGE
ANCE NOS.
g231,st & 023835
Ot mbar 9, 1990, the
City Council of the City of
.Corpus Christi, Texas,
approved on second
,aiding ordinances
raft
nli�ftsm -
anchU• to
ClearSource, I
g 1 of the City
Charter. Thedfranchisee
are for the purpose of
providing a cable
television system and
facilities within the
steal.
Monthly payments
be made to the City for
the use of public streets
and ways which shall be
equal to 5% of the gross
revenues. The
franchises also provide
for customer service
standards,
indemnification,
insurance, security fund,
performance bond,
system capabilities,
performance review,
broad programming
categories, use 01
facilities for City
purposes, access
channels, grant for
municipal production
facilities, and related
maters, all as contained
in the franchise, a copy
of which is available for
inspection in the office of
the City Secretary.
• la/Armando Chaps
City Secretary
City of Corpus Christ