CABLE SERVICES FRANCHISE AGREEMENT BETWEEN CITY OF GRASS VALLEY AND COMCAST OF CALIFORNIA IX, INC. EFFECTIVE:

Transcription

1 CABLE SERVICES FRANCHISE AGREEMENT BETWEEN CITY OF GRASS VALLEY AND COMCAST OF CALIFORNIA IX, INC. EFFECTIVE:

2 TABLE OF CONTENTS SECTION 1 RENEWAL OF FRANCHISE GRANT EFFECTIVE DATE OF RENEWAL FRANCHISE FEE CITY AUDIT FRANCHISE NON-TRANSFERABLE INSURANCE INDEMNIFICATION PERFORMANCE BOND PROCEDURE FOR REMEDYING FRANCHISE VIOLATIONS CITY'S POWER TO REVOKE RESERVATION OF RIGHTS STATE OR FEDERAL PREEMPTION SECTION 3 SERVICE AREA AND LINE EXTENSION POLICY FRANCHISE AND SERVICE AREA SERVICE TO RESIDENCES COMMERCIAL AREAS NEW DEVELOPMENTS DESIGN AND CONSTRUCTION REQUIREMENTS INTERCONNECTION SECTION 4 SYSTEM CAPABILITY SERVICES TO PUBLIC AGENCIES

3 4.2 EMERGENCY ALERT CAPABILITY STANDBY POWER PARENTAL CONTROL LOCK CLOSED CIRCUIT CAPTIONING FOR THE HEARING IMPAIRED TECHNICAL STANDARDS RIGHT OF INSPECTION SECTION 5 SERVICES AND PROGRAMMING SERVICES AND PROGRAMMING LEASED CHANNEL SERVICE PUBLIC REVIEWS; NEW TECHNOLOGY AND SERVICES CONVERSION TO DIGITAL SECTION 6 SUPPORT FOR EDUCATIONAL AND GOVERNMENTAL (PEG) CABLE ACCESS PEG ACCESS CHANNELS PEG ORIGINATION POINTS PEG FUNDING TITLE TO PEG ACCESS EQUIPMENT LOCAL TECHNICAL SUPPORT FOR PEG ACCESS OFFICE PROMOTION RELOCATION OF PEG ACCESS CHANNELS SECTION 7 INSTITUTIONAL NETWORK INET CITY I-NET FIBER CONNECTIONS TO BUILDINGS WITHIN FRANCHISE AREA TERM OWNERSHIP OF FACILITIES AND REMOVAL AT TERMINATION OF AGREEMENT

4 7.5 PAYMENTS CONSTRUCTION, ACCEPTANCE AND TERMINATION ADMINISTRATION, MAINTENANCE AND MANAGEMENT OF THE I-NET CITY AND I-NET USERS TO PROVIDE ELECTRONICS PRIVATE NETWORK STATUS QUALIFIED I-NET USES/PEG ORIGINATION USES FUTURE FIBER TO THE I-NET NO WARRANTIES TERMINATION COMCAST NOT A COMMON CARRIER SECTION 8 CONSUMER PROTECTION AND SERVICE STANDARDS OPERATIONAL STANDARDS SERVICE STANDARDS BILLING AND INFORMATION SUBSCRIBER COMPLAINTS AND DISPUTE STANDARDS VERIFICATION OF COMPLIANCE WITH STANDARDS OTHER REQUIREMENTS SECTION 9 RECORDS AND REPORTS RECORDS REQUIRED ANNUAL REPORTS SECTION 10 REGULATION AND OTHER PROVISIONS FRANCHISE RENEWAL FORCE MAJEURE RATE REGULATION NOTICES

5 10.5 SUCCESSORS AND ASSIGNS SEVERABILITY CHOICE OF LAW AND VENUE NO WAIVER POSSESSORY INTEREST ENTIRE AGREEMENT MODIFICATION NO THIRD-PARTY BENEFICIARIES DESCRIPTIVE HEADINGS DEFINITIONS SECTION 11 COMPETITIVE EQUITY

6 AGREEMENT This Agreement dated, 2006 is between the City of Grass Valley, California and Comcast of California IX, Inc. ( Comcast ). RECITALS A. The City of Grass Valley, (the City), pursuant to Federal and California law, is authorized to grant and renew a non-exclusive revocable Franchise to operate and maintain a Cable System within the City. B. The City has evaluated Comcast, and after public hearings, has decided to renew the franchise previously granted to Comcast. AGREEMENT SECTION 1 RENEWAL OF FRANCHISE 1.1 Grant The City, by Ordinance, has granted to Comcast a new cable services franchise subject to the terms and conditions of this Agreement. The term of this franchise shall expire on, 2016 unless extended by an ordinance of the City Council. Comcast shall notify the City of all services being offered. 1.2 Effective Date of Renewal The Franchise shall take effect on, Comcast shall submit to the Clerk of the Council, no later than, 2006, an executed franchise agreement, the performance bond, and certificates of insurance required by this Agreement. If Comcast fails to submit these documents to the City by this date, the City may, at its option, rescind this Agreement. 1

7 2.1 Franchise Fee (a) Comcast shall pay to the City an annual franchise fee of 5% of Gross Annual Cable Service Revenues derived by Comcast from its operation of the cable system within Franchise Area in the City to provide cable services. The fee shall be paid quarterly no later than 60 days after the end of the calendar quarter for which payment is due. (b) Comcast shall include revenues collected from subscribers as the franchise fee in calculating its Gross Annual Cable Services Revenues. (c) Comcast shall submit to the City a certified account of its Gross Annual Cable Service Revenues and any deductions taken. This report shall be submitted at the same time that the franchise payment is made. (d) If the City may legally collect a franchise fee on revenues derived from services that are not now considered cable services, but are later determined to be cable services, Comcast shall then include those revenues when calculating all future Gross Annual Cable Services Revenues. The City shall provide Comcast with at least sixty (60) days advance written notification prior to collection and payment of franchise fees on those revenues. (e) Gross Annual Cable Services Revenues is defined as all revenue derived Comcast and its affiliates from providing cable services over its cable system within the Franchise Area within the City, consistent with generally accepted accounting principles (GAAP). Comcast may not determine Gross Annual Cable Services Revenues based on estimated receipts of future subscriber revenue; provided, however, the City acknowledges that Comcast bills subscribers a month in advance and reconciles annually its collection of franchise fees from subscribers. Comcast shall include, at a minimum, all of the following in its accounting of Gross Annual Cable Services Revenues: (1) All residential and commercial subscriber fees. (2) All installation, reconnection, and disconnection fees. 2

8 (3) Late fees (4) Fees for commercial use channels (leased commercial access). (5) Equipment rental, lease, or sale charges. (6) All recovered bad debts. (7) Advertising revenue with no deduction or offset for internal commissions earned by Comcast employees or its affiliates, subsidiaries, parent or any entity in which Comcast has a controlling financial interest. (8) Any other revenues generated in the operation of the cable system for the provision of cable services not included above. Gross Revenues shall not include (1) any taxes on services furnished by Comcast imposed directly upon any Customer by the state, local or other governmental unit and collected by Comcast on behalf of the governmental unit; (2) revenue received by Comcast directly from an affiliate, when the revenue received has already been included as reported Gross Revenues received by Comcast; (3) refundable deposits and unrecovered bad debt; (4) revenue from cable modem service, unless that service is classified as a cable service by federal law and regulation; (5) launch fees, marketing reimbursements, national advertising commissions, and third party advertising agency commissions; and (6) and other items based on GAAP when finally determined by a court of competent jurisdiction, provided that nothing herein shall be deemed or construed as a waiver of any party s right regarding other issues related to GAAP when not determined by a court of competent jurisdiction. 3

9 2.2 City Audit (a) All franchise fee payments are subject to the City s review and audit, and the City s acceptance of a franchise fee payment does not constitute a waiver of the City s right to review and audit the payment as set forth in this Agreement. If the City s audit determines that Comcast has underpaid the franchise fee, Comcast shall submit the amount of the underpayment to the City within thirty (30) calendar days of receiving written notice from the City. If the audit shows that Comcast has underpaid its franchise fee by more than 10%, Comcast shall reimburse the City for the cost of the audit up to an amount not exceed $7,500. If Comcast disputes the City s determination, Comcast shall first submit the amount of the underpayment to be held in an escrow account. Within thirty (30) days of this payment, Comcast shall submit a claim to the City that sets forth in detail the basis for Comcast s dispute of the City s determination. The Parties agree to make a good faith attempt to resolve any dispute relating to audit through non-binding mediation prior to commencing litigation. The Parties shall mutually agree upon the mediator and shall divide the costs of mediation equally. 2.3 Franchise Non-Transferable (a) Comcast may not transfer the Franchise by any means, voluntarily or involuntarily, without the City s prior consent, which consent shall not be unreasonably withheld. A security interest granted in any of Comcast s assets, or any mortgage of title in the Cable System to secure indebtedness, is not a transfer for the purposes of this section. This section shall not apply to an internal reorganization that does not have the effect of directly changing the control or management authority over the franchise. (b) Subsection (a) applies to any change in control of Comcast. The term "control" includes majority ownership, and actual working control, in whatever manner exercised. For purposes of this subsection, majority ownership is defined as 4

10 ownership of at least fifty percent (50%) of Comcast s voting stock as of the effective date of the Franchise. (c) Comcast shall notify the City in writing of any foreclosure or any other judicial sale of all or a substantial part of Comcast s Franchise property within the Franchise Area. This notice serves as notice that a change in control of ownership of the Franchise has taken place. (d) In seeking the Board of Supervisor s approval under this Section, Comcast shall submit a Federal Communications Commission Form 394 or equivalent. Within 30 days of receipt of the Form 394, the City may require Comcast to submit additional information consistent with Federal regulations that the City may require to determine that the proposed transferee possesses the legal, technical, and financial qualifications to operate the Franchise. In the event that Comcast is in noncompliance with any material provision of the franchise, Comcast shall either (1) correct the violation prior to completion of the transfer; or (2) provide written assurances that the acquiring company shall meet the obligation in the franchise within a reasonable period of time. The City shall render a final decision within 120 days of the date of either (1) the initial receipt of the Form 394, or (2) the date Comcast submits a complete and accurate Form 394. If the City does not render a final decision within said 120 days, the City shall be deemed to have approved the transfer or change in control. 2.4 Insurance (a) Comcast, at its own cost and expense, unless otherwise specified below, shall procure the types and amounts of insurance listed below against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work hereunder by Comcast and its agents, representatives, employees, and subcontractors. Consistent with the following provisions, within sixty (60) days of the effective date of this Agreement, Comcast shall provide certificates of 5

11 insurance to the City of such insurance that meets the requirements of this section. Comcast shall maintain the insurance policies required by this section throughout the term of this Agreement. (b) Workers Compensation. Comcast shall, at its sole cost and expense, maintain Statutory Workers Compensation Insurance and Employer s Liability Insurance for any and all persons employed directly or indirectly by Comcast in accordance with the laws of the State of California. Comcast shall indemnify and hold harmless the City from any workers compensation claims to which the Company may become subject during the term of this Franchise Agreement. (c) Commercial General and Automobile Liability Insurance. (1) General requirements. Comcast, at its own cost and expense, shall maintain commercial general and automobile liability insurance for the term of this Agreement in an amount not less than TWO MILLION DOLLARS ($2,000,000.00) per occurrence, combined single limit coverage for risks associated with the work contemplated by this Agreement. If a Commercial General Liability Insurance or an Automobile Liability form or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement or the general aggregate limit shall be at least twice the required occurrence limit. Such coverage shall include but is not be limited to, protection against claims arising from bodily and personal injury, including death resulting there from, and damage to property resulting from activities contemplated under this 6

12 Agreement, including the use of owned and non-owned automobiles. (2) Minimum scope of coverage. Commercial general coverage shall be at least as broad as Insurance Services Office Commercial General Liability occurrence form CG 0001 (ed. 11/88) or GL 0002 (ed.1/73) covering comprehensive General Liability and Insurance Services Office form number GL 0404 covering Broad Form Comprehensive General Liability. Automobile coverage shall be at least as broad as Insurance Services Office Automobile Liability form CA 0001 (ed. 12/90) Code 1. No endorsement may be attached limiting the coverage. (3) Additional requirements. Each of the following shall be included in the insurance coverage or added as a certified endorsement to the policy: a. The insurance shall cover on an occurrence or an accident basis, and not on a claims-made basis. b. Any failure of Comcast to comply with reporting provisions of the policy shall not affect coverage provided to the City and its officers, employees, and agents. (4) Acceptability of Insurers. All insurance required by this section is to be placed with insurers with a Bests rating of no less than A-. (5) Notice of Reduction in or Cancellation of Coverage. A certified endorsement shall be attached to all insurance obtained pursuant to this Agreement stating that coverage 7

13 may not be suspended, voided, canceled by either party, or reduced in coverage or in limits, except after 30 days' prior written notice by certified mail, has been given to the City. If any coverage required by this section is reduced, limited, cancelled, or materially affected in any other manner, Comcast shall provide written notice to the City at Comcast s earliest opportunity but no later than 10 working days after Comcast is notified of the change in coverage. (6) Additional insured; primary insurance. A certified endorsement at least as broad as Insurance Services Office form number CG (11/85 ed.) shall be attached to all policies stating that the City and its officers, employees, and agents are covered as additional insureds with respect to each of the following: liability arising out of activities performed by or on behalf of Comcast, products and completed operations of Comcast, as applicable, premises owned, occupied, or used by Comcast, and automobiles owned, leased, or used by Comcast in the course of providing services pursuant to this Agreement. The coverage may not contain special limitations on the scope of protection afforded to the City or its officers, employees, or agents. (7) Certified Endorsement A certified endorsement shall be attached to all policies stating that coverage is primary insurance with respect to the City and its officers, officials, employees and agents, and that no insurance or self- 8

14 insurance maintained by the City may be called upon to contribute to a loss under the coverage. (8) Deductibles and Self-Insured Retentions. Comcast shall disclose to and obtain the approval of the City for any selfinsured retentions and deductibles. During the period covered by this Agreement, only upon the prior express written authorization of the City, Comcast may increase such deductibles or self-insured retentions with respect to the City, its officers, employees, agents, and volunteers. The City may condition approval of an increase in deductible or self-insured retention levels with a requirement that Comcast procure a bond, guaranteeing payment of losses and related investigations, claim administration, and defense expenses that is satisfactory in all respects to each of them. (9) Subcontractors. Comcast shall require that all cable subcontractors performing work within the City name the City as an additional insured on any insurance policy Comcast contractually requires the subcontractor to provide. (10) Variation. The City may approve a variation in the foregoing insurance requirements, upon a determination that the coverage, scope, limits, and forms of such insurance are either not commercially available, or that the City s interests are otherwise fully protected. 9

15 2.5 Indemnification (a) Comcast shall indemnify, hold harmless, release, and defend the City, its officers, employees, and agents from and against any and all actions, claims, 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 Comcast from any cause whatsoever arising solely from the construction, operation and maintenance of its cable system within the Franchise Area, its subcontractors, employees and agents. (b) This indemnification obligation is not limited in any way by a limitation on the amount or type of damages or compensation payable by or for Comcast under Workers' Compensation, disability or other employee benefit acts, acceptance of insurance certificates required under this Agreement, or the terms, applicability or limitations of any insurance held by Comcast. (c) The City does not waive any rights against Comcast that it may have by reason of this indemnification, because of the acceptance by the City, or the receipt of certificates of insurance described in Section 2.4. (d) Comcast shall not be required to indemnify and hold harmless the City, its officers, employees and agents due to the negligence or willful misconduct of the City, its officers, employees and agents. 2.6 Performance Bond. (a) Performance Bond. Within sixty (60) days of the effective date of this Agreement, Comcast shall post a performance bond in the amount of $100, as surety for the faithful performance and discharge by Comcast of all obligations imposed by this Franchise Agreement. The performance bond shall remain in force and effect throughout the Term of this Franchise Agreement. If Comcast fails to timely pay any amount required to be paid under this Agreement after receipt of written notice from the City, the City shall give Comcast twenty (20) business days notice of its intent to draw 10

16 the amount owed from the performance bond. The City may not draw from the performance bond while any action, appeal or other process has been instituted by Comcast to challenge the amount owed. Upon transfer, revocation, termination or renewal of the Franchise, Comcast shall be entitled to the return of the bond or portion thereof as soon as possible; provided that the City has not notified Comcast of any actual damages incurred as a result of Comcast s material violation of the Franchise. 2.7 Procedure for Remedying Franchise Violations (a) The City shall first notify Comcast of a violation of a provision of this Franchise in writing by personal delivery or certified mail, and demand correction of the violation. The demand letter shall include a reasonable date by which Comcast shall either correct the violation, or provide a remediation plan to the City detailing the steps and a reasonable timetable to correct the violation. The demand notice shall give Comcast a minimum of 10 business days from receipt of the notice to correct the violation or submit the remediation plan. If Comcast does not correct the violation by the date specified in the demand notice or the remediation plan, or fails to demonstrate that a violation has not occurred, the City may exercise its rights under this Agreement and provide written notice of noncompliance to Comcast. If Comcast disagrees that it is in noncompliance, Comcast may submit a response to the City within 10 business days of receiving the notice of noncompliance that documents the basis for Comcast s disagreement. The City Administrator shall review such response and render a written decision within 10 business days after receipt of the response. If the City Administrator determines that Comcast is not in compliance with a provision of this Agreement, the City Administrator may pursue the City s remedies provided in this Agreement. (b) The City may impose liquidated damages for those unexcused violations set forth in Section 2.7(d) below in the amounts indicated. 11

17 ( c) The City may assess the Performance Bond to collect the liquidated damages after complying with the requirements of Section 2.6. (d) The following violations are subject to liquidated damages: (1) Comcast fails to provide requested records or reports the franchise agreement requires within 30 calendar days after receiving the City s written request, $ per day. (2) Comcast fails to comply with those subscriber service requirements that are measured on an aggregate basis, as set forth in Section 7 of this Agreement, $ per percentage point below the threshold requirement. (3) Comcast fails to comply with its PEG access obligations, $ per day. (e) For a first violation of this Agreement for which liquidated damages are assessed under Section 2.7(d), the City may assess total liquidated damages up to $5, If Comcast remedies this first violation, but subsequently is assessed liquidated damages for a violation of the same provision, the City may assess liquidated damages up to $10, If Comcast remedies this second violation, but subsequently is assessed liquidated damages for a violation of the same provision, the City may assess total liquidated damages up to $50, Any fourth violation of the same provision for which Comcast is assessed liquidated damages of any amount is a material breach for purposes of Section City's Power to Revoke (a) The City may revoke the Franchise granted and rescind all rights and privileges associated with this Agreement in the following circumstances, each of which represents a default by Comcast and a material breach under this Agreement: 12

18 (1) If Comcast willfully fails to perform any of its material obligations under this Agreement as set forth in Sections 2.7 and 7.5; (2) If Comcast willfully fails to provide or maintain in full force and effect the insurance coverage or performance bond as required in this Agreement; (3) If Comcast willfully violates any order or ruling of any federal regulatory body having jurisdiction over Comcast relative to Comcast's Franchise covering the Franchise Area, unless such order or ruling is being contested by Comcast in good faith in an appropriate proceeding; (4) If Comcast knowingly practices any material fraud or deceit upon the City; (5) If Comcast becomes insolvent, unable, or unwilling to pay its debts, or declares bankruptcy, to the extent allowed under Federal Bankruptcy law or (6) If Comcast willfully fails to comply with a provision of this Agreement for which non-compliance is designated a material breach. (b) If the City determines that grounds exist to revoke the Franchise, the City shall agendize the matter for a public hearing before the City Council. The City shall provide at least thirty (30) days prior written notice to Comcast of the grounds for revoking the Franchise, and the date and time of the public hearing. Comcast may appear at the hearing, present and cross examine witnesses, and present any evidence, oral or in writing, that it considers relevant to the Council s deliberations. Based on the evidence presented by the City and Comcast, the City may (1) revoke the franchise; (2) determine that revocation is not appropriate but may impose any other remedy permitted under this 13

19 Agreement; or, (3) determine that revocation is not appropriate and impose no other remedy. The Council Council s decision shall be in writing and shall be transmitted to Comcast within 10 business days of the date of the decision. The decision of the City is final. Comcast has the right to appeal the City s decision or file an action or claim in the appropriate forum. 2.9 Reservation of Rights (a) The City and Comcast reserve all rights that they may possess under the law unless expressly waived in this Agreement. By entering into this Agreement, neither the City nor Comcast waive any rights that it now has or may later enjoy under applicable State or federal law, and specifically both the City and Comcast reserve their rights to take full advantage of any changes in State and federal law during the term of the Franchise. In the event of a conflict between this Franchise Agreement and any other local ordinance, this Franchise Agreement, and the provisions contained herein shall prevail, except where the ordinance represents the lawful exercise of the City s general police powers State or Federal Preemption If the State or Federal Government discontinues preemption in any area of cable system regulation over which it currently exercises jurisdiction, the City may adopt rules and regulations in these areas, to the extent permitted in the then applicable law. SECTION 3 SERVICE AREA AND LINE EXTENSION POLICY 3.1 Franchise and Service Area Comcast's Franchise and service areas include the unincorporated areas of the City served on the effective date of this Agreement. Comcast shall provide service on a nondiscriminatory basis to all subscribers that meet line extension and density requirements as outlined in Section

20 3.2 Service to Residences (a) Within the Franchise Area. Comcast shall extend its trunk and distribution system to serve Customers requesting service where the density of dwelling units passed by such extension is equal to or greater than forty (40) dwelling units per cable mile in areas passed by overhead cable or sixty (60) households per cable mile in areas passed by underground cable. In areas with less than forty (40) dwelling units per cable mile aerial or sixty (60) dwelling units per cable mile underground, service shall be offered in conformance with Comcast s line extension policies. Comcast shall not be required to extend its trunk and distribution system where the area is already served by another Cable System provider. (b) Policy on Non-Standard Installations. Comcast s maximum standard length for a service drop is one hundred twenty-five (125) aerial feet, and any distance beyond that length Comcast may charge its non-standard installation fee. For underground drops, which require Comcast to cut pavement curbs, sidewalk, or similar "hardscape" surfaces, and for that incremental portion of all drops greater than one hundred twenty-five (125) feet, Comcast may charge its non-standard installation fee. Comcast may elect to provide Cable Service to areas not meeting the above density and distance standards. Comcast may impose an additional charge in excess of its regular installation charge for any service installation requiring a drop in or line extension in excess of the above standards. (c) Other Extensions of the Cable System. Comcast shall extend its Cable Service to areas serviced by power and electrical utilities that do not satisfy the density requirement in paragraphs (a) and (b) above, if the area is contiguous to Comcast s Cable System and: (1) The distance from the nearest potential Customer in the unserved area and Comcast s Cable System is not more than 500 cable-bearing strand feet, and no fewer than three 15

21 (3) Customers in the unserved area have entered into an agreement with Comcast for Cable Services for a reasonable term upon completion of the extension of service; or (2) The distance of the nearest potential Customer in the unserved area and Comcast s Cable System is not less than one (1) cable-bearing strand mile, and no fewer than twenty (20) Customers in the unserved area have entered into an agreement with Comcast for Cable Services for a reasonable term upon completion of the extension of service. Extension of service meeting the requirements of subparagraphs 1 and 2 above shall be at no cost to such Customers for the Cable System extension, other than the published Standard/non-Standard Installation fees charged to all Customers. For the purpose of this Section, the term contiguous means that the unserved area in question lies reasonably between two areas served by Comcast along or within one-half mile of a Public Right of Way or utility easement used by power, telephone or other utilities. The provisions of this paragraph (c) is intended to provide Cable Service to Customers who have agreed to subscribe to Comcast s Cable Service for a reasonable contract term in order to allow Comcast to receive a reasonable rate of return on its investment in extending its Cable System to such unserved areas. It is not intended in anyway to be deemed or construed as a universal service requirement. 3.3 Commercial Areas (a) For areas of the City that are primarily commercial, Comcast may elect to install appropriate conduit when open utility trenches are available, provided that Comcast is able to acquire the proper permits through the City. Comcast agrees that it shall make reasonable efforts to participate in joint trenching in new developments where 16

22 developers and other utilities make joint trenching available upon reasonable notification except in those cases where market conditions do not warrant Comcast participation. (b) The City will endeavor to place a condition of approval on subdivision and non-subdivision projects that trenching and backfilling of utility easements will be at the developer s cost unless the developer and an affected utility enter into a mutually-acceptable cost sharing agreement. 3.4 New Developments The City or its designee shall provide Comcast with reasonable written notice in order to place conduit in public utility easements within new residential developments that are constructed and where all utilities are required to be placed underground after the effective date of this Agreement. Comcast shall cooperate with the developers of the new developments to coordinate installing the conduit during the construction of the new development. The City will endeavor to place a condition of approval on subdivision and non-subdivision projects that trenching and backfilling of utility easements will be at the developer s cost unless the developer and an affected utility enter into a mutually-acceptable cost sharing agreement. 3.5 Design and Construction Requirements (a) To the extent feasible and where all other users of the public rightof-way are required to place their lines underground, Comcast shall place its cable lines underground. Any underground installations shall comply with all City regulations in effect at the time of construction. Comcast is subject to, and shall comply with, the provisions of the City s Code relating to the formation of underground utility districts. Comcast shall bear all costs of complying with the provisions of this paragraph (a), unless applicable law provides otherwise. Nothing herein shall be deemed to require Comcast to place its distribution equipment and facilities underground. 17

23 (b) Comcast shall minimize, to the extent economically and technically practicable, any adverse visual impacts caused by future above-ground facilities. Upon written request by the City, Comcast shall, within 30 days, submit in writing to the City s Planning Department for review and approval the measures it intends to implement to mitigate adverse visual impacts. Once approved by the City s Planning Department, Comcast shall have an additional 30 days to remedy the problem. If Comcast neglects to respond or remediate in accordance with the provision, then the City may take whatever measures it deems necessary to mitigate the impact at Comcast s sole cost as long as the City treats all utility providers in a like manner, to the extent that it has the regulatory authority to do so. 3.6 Interconnection (a) Interconnection with Other Systems. Comcast agrees to facilitate the physical interconnection of PEG Access Channels in the Cable System to the most effective meet point at the boundary of Comcast s Franchise Area to franchise areas that are geographically contiguous to the City or to other areas in the City, with: (1) any other cable system serving the Franchise Area, (2) all cable systems serving communities contiguous to Comcast s Cable System, or (3) any Open Video System (established pursuant to Section 653 of the Cable Act, unless federal law is amended to no longer require such interconnection) serving the Franchise Area. The cost of constructing any such Interconnection shall be Comcast s to the meet point at the boundary of its Franchise Area. The City or the other video provider shall be financially responsible for the cost of any interface device which may be required to accomplish the interconnection. Notwithstanding the generality of the foregoing, any Interconnection with other cable systems shall also be contingent upon Comcast and the other cable operator reaching an agreement for the required Interconnection on reasonable terms and conditions. If Comcast is unable to reach agreement with such other cable operator, Comcast shall 18

24 provide to the City documentation that Comcast made multiple attempts in a timely manner to reach an Interconnection agreement on mutually acceptable terms and conditions. (b) Interconnection Functionality, Timing, and Costs. Comcast shall construct the interconnection to its meet point described above using optical fiber or other technology providing equivalent capacity and functionality. The interconnection shall be capable of receiving and delivering PEG Access programming to and from the interconnected systems. No later than twelve (12) months after receipt of written request from the cable company seeking interconnection, the interconnection shall be completed between Comcast s Cable System serving the Franchise Area to the meet point described above. (c) There shall be no charge for use by the City of the PEG Access programming being transmitted and received through any such interconnection. However, the requirement to interconnect PEG programming with geographically contiguous cable systems shall not result in an increase in the number of Access Channels beyond the number of Access Channels provided for in this Franchise. The other cable operator or regulatory authority, as originator of signals and programming, is responsible for providing technically adequate signals and programming to be carried on interconnected Access Channels. (d) Cooperation. The City understands that interconnection requires cooperation from other cable system operators and other local franchise authorities. The City shall make every reasonable effort to assist Comcast in achieving the cooperation necessary to realize interconnection. (e) Comcast Not a Common Carrier. Nothing in this Agreement shall be deemed or construed in any manner whatsoever that would render or place Comcast in the status of a common carrier as defined under applicable law. 19

25 SECTION 4 SYSTEM CAPABILITY 4.1 Services to Public Agencies As a voluntary initiative, Comcast will provide one complimentary standard cable service drop and complimentary basic tier service to all of the public buildings and locations currently receiving such service and, in the future, to any newly constructed or re-purposed City public building and Schools within Comcast s Franchise area and within one hundred twenty-five (125) feet of existing cable service lines. Comcast will have one hundred twenty (120) days from the date of a written request by the City to install service. All such buildings shall be publicly owned, operated, and occupied. Buildings used for housing or occupied by prison/jail populations are excluded. If the drop line from the feeder cable to such building exceeds one hundred twenty-five feet (125 ) the City or other entity agrees to pay the incremental cost of such drop line in excess of one hundred twenty-five (125) feet, including the cost of labor and materials. The City shall hold Comcast harmless from and against any and all liability or claims arising out of the use of such outlets including but not limited to those arising from copyright liability. The City may subscribe to additional cable and other services at Comcast s prevailing rates and charges. 4.2 Emergency Alert Capability Comcast shall provide emergency alert system ( EAS ) capability consistent with the EAS rules set forth in the FCC Regulations Part 11, subpart D, section 11.1 et seq. The EAS shall be accessed only as required under federal law and in accordance with the California Emergency Alert Plan. 4.3 Standby Power Comcast shall provide standby power at the cable system headend and/or control center capable of providing at least four (4) hours of emergency supply. Comcast shall maintain standby power system supplies at all nodes and throughout the major trunk 20

26 cable networks capable of providing emergency power within the standard limits of commercially available power supply units. Comcast shall comply with the City s normal permitting and bonding requirements for work within the City's rights-of-way. 4.4 Parental Control Lock Upon request, Comcast shall provide to subscribers, and reserves the right to charge for a parental control locking device or digital code that permits inhibiting the video and audio portions of all Channels. 4.5 Closed Circuit Captioning for the Hearing Impaired Comcast may make available to any hearing-impaired residential subscriber, upon request and at the subscriber s cost, any special equipment beyond the subscriber s equipment that Comcast makes available beyond the subscriber s equipment that is necessary for decoding closed-circuit captioning information for the hearing impaired. 4.6 Technical Standards (a) Comcast shall comply at all times with Federal Communications Commission (FCC) Rules and Regulations, Part 76, Subpart K (Technical Standards), as amended. (b) Comcast shall construct, operate, and maintain its Cable System consistent with all applicable laws, construction standards, and governmental requirements. In addition, Comcast shall provide to the City, no more often than once per calendar year and upon written request, a written report of the results of Comcast's periodic proof of performance tests conducted pursuant to FCC standards and guidelines. (c) Should the FCC no longer require proof of performance tests, Comcast shall submit equivalent proof of performance tests and reports in response to a written request from the City. This report shall be submitted to the City within 60 calendar days of issuance of the City request. 21

27 (d) Comcast s willful and repeated and verified failure to maintain, or repair to specified technical standards are a material breach of the Franchise. 4.7 Right of Inspection The City may inspect all construction and installation work performed as part of the City's safety audit upon reasonable advance written notice and during Comcast s normal business hours. Comcast may have its personnel accompany the City s inspectors during any such inspection. SECTION 5 SERVICES AND PROGRAMMING 5.1 Services and Programming Comcast shall provide the City and all subscribers with a list of program services offered. This list shall be updated at least annually. Comcast may not reduce the number of program services without 30 calendar days prior written notification to the City and subscribers, or as soon as feasible if subject reduction is not under the control of Comcast. Comcast shall, at a minimum, continue to provide the broad categories of programming services offered on the effective date of this Agreement throughout the term of this Agreement. 5.2 Leased Channel Service Comcast shall offer leased channel service on terms and conditions and in accordance with FCC regulations. 5.3 Public Reviews; New Technology and Services (a) The City may hold public reviews of Comcast s performance under the terms of this Agreement during the term of this Agreement; provided, however, there shall not be more than one (1) public review in any three year period of this Agreement. Comcast may participate in these reviews, and the City shall give Comcast at least thirty (30) days prior written notice of the date and scope of the review. 22

28 (b) If at any time during its review, the City determines that reasonable evidence exists of inadequate system performance subject to applicable law, the City may reasonably require Comcast to perform tests and analyses directed toward such suspected inadequacies at Comcast expense. Comcast shall fully cooperate with the City in performing such testing and any report prepared by Comcast shall include at least: (1) A description of the alleged problem in the System performance which precipitated the special tests; (2) The cable system component tested; (3) The equipment used and procedures employed in testing; (4) The method by which the cable system performance was resolved; and (5) Any other information pertinent to said tests and analyses that may be reasonably required by the City, or determined when the test is performed. (c) As a result of a review, the City and Comcast may jointly determine that an amendment to applicable terms of this Agreement may be necessary, that the requirements of the cable system or this Agreement should be updated, changed, revised, and/or that additional services should be provided by Comcast (collectively a Proposed Modification ) taking into consideration the cost and technical feasibility of any such modification. If the Proposed Modification is consistent with the terms of the parties mutual agreement as set forth in this Agreement, the needs of Comcast and the City, and existing technology, Comcast and the City shall, in good faith, review the terms of the Proposed Modification and consider amending this Agreement accordingly. Nothing herein shall be construed as requiring either Comcast or the City to agree to any Proposed Modification. 23

29 5.4 Conversion to Digital If the Jurisdictions, as defined in Section 6.2 or their designated access provider(s) transmit programming in a digital format before Comcast has converted all channels to a digital format, the Jurisdictions shall be responsible for all costs associated with equipment required to deliver such programming to Comcast. If Comcast converts all channels to a digital format the Jurisdictions shall be responsible for the costs of the end user equipment necessary to provide and transport digital programming for the PEG access channels. End user equipment means equipment necessary to receive and transmit access programming. Comcast will provide a fiber transmitter or its equivalent at the Jurisdiction s PEG control site in order to transport the control site s digital signal over the fiber to Comcast s headend. The Jurisdictions may use PEG capital funds for these equipment needs, if any. Comcast shall be responsible for any equipment necessary at its headend or in its Cable System, or return lines to provide the transport and distribution of the PEG channels to the Subscriber. SECTION 6 SUPPORT FOR EDUCATIONAL AND GOVERNMENTAL (PEG) CABLE ACCESS 6.1 PEG Access Channels (a) Within ninety (90) days of the effective date of this Agreement, Comcast shall make four (4) video channels available for Public, Educational and Governmental (PEG) Access use to be programmed at the discretion of the City, Nevada County and Nevada City. In the event Comcast converts all channels to digital, the four (4) video channels provided for herein shall convert to four (4) digital channels. At such time as Comcast converts to a complete digital channel line up, the Jurisdictions may request an additional two (2) digital channels. Comcast shall provide the additional two (2) digital channel within one hundred twenty (120) days advance written notice from the Jurisdictions. Under no circumstances shall there be more than six (6) PEG access channels total. All channels made available for PEG Access use under this Agreement 24

30 shall be for the joint or shared use of the City, Nevada County and Nevada City (sometimes collectively referred to herein as Jurisdictions ) and any duly authorized designee. Nothing herein shall be deemed or construed as requiring Comcast to provide separate channels for PEG access use to any of the jurisdictions above and any duly authorized designee. The Jurisdictions may among themselves enter into a joint use agreement and designate an authorized designee for the administration, management, and operation of PEG Access channels and facilities and equipment. (1) Use of channels for PEG access shall be provided on the most basic tier of service, or functional equivalent offered by Comcast in accordance with the Cable Act, Section 611. (2) Comcast does not relinquish its ownership of or ultimate right of control over a channel by designating it for PEG Access uses, subject only to the Jurisdictions use as provided under this Agreement. A PEG access user, whether an individual, educational or governmental user, acquires no property or other interest by virtue of the use of a channel so designated, and may not rely on the continued use of a particular channel number, no matter how long the same channel may have been designated for such use. (3) Comcast shall not exercise editorial control over any public, educational, or governmental use of PEG Access channel. The Jurisdictions shall be responsible for developing, implementing, interpreting and enforcing rules for PEG Access Channel use. (4) Comcast s Use of Fallow Time. In the event the Jurisdictions or other PEG access user elects not to fully program its Channel(s), thereby leaving a channel(s) completely unused or dark for a period of time during the 25

31 day, Comcast may program this unused time on those channels subject to 60 days written notice to the Jurisdictions of Comcast s intent to do so. If within 60 days, the Jurisdictions do not program the unused time, Comcast may use such time. The Jurisdictions may reclaim the unused time by providing Comcast with no less than 60 days advance written notice. (b) The Jurisdictions shall indemnify Comcast for any liability, loss, or damage it may suffer due to violation of the intellectual property rights of third parties on any PEG channel, and from claims arising out of the City s or Jurisdictions rules for administration of access. 6.2 PEG Origination Points (a) Within six (6) months after the Jurisdictions written request, but not prior to February 1, 2007, Comcast shall provide, at the Jurisdictions cost, live origination links from the locations listed below to the control site for PEG access programming designated by the Jurisdictions or other configuration as agreed to by the Jurisdictions and Comcast. The origination sites are: (1) Nevada County Eric Rood Administration Center, 950 Maidu Ave, Nevada City; (2) Grass Valley City Hall, 125 E. Main Street, Grass Valley; (3) Nevada County Office of Education, 112 Nevada City Highway, Nevada City; (4) Nevada Union High School, Ridge Rd., Grass Valley; (5) Imaginarium, 112 Nevada City Highway, Nevada City; (6) Nevada City Hall, 317 Broad Street, Nevada City. 26

32 The purpose of these connections is to permit live cablecasting of video and audio programming from those locations on Comcast's Cable System within the Jurisdictions franchise areas with Comcast. Each link shall consist of at least one pair (2 strands) of fiber optic cable providing bi-directional communications to or between each of the locations. Each Jurisdiction is responsible for all construction to a jointly agreed upon demarcation location at each location. (b) The Jurisdictions may request additional connections to public facilities within the Jurisdictions franchise areas with Comcast, at the Jurisdictions expense. The Jurisdictions request shall be made in writing and provide Comcast with at least 180 days to provide the connections. Costs for additional connections are the Jurisdictions responsibility and shall be charged on an actual cost basis for labor and materials by Comcast and shall be paid by the Jurisdictions within thirty (30) days of receipt of an invoice by Comcast. Comcast shall not be obligated to commence construction until the Jurisdictions have agreed, in writing, to pay for the construction. 6.3 PEG Funding It is understood that the Jurisdictions shall jointly fund the operations of Public, Education and Government programming efforts in their respective areas. Comcast shall make the following payments to and as directed by the City. (a) Within sixty (60) days of the effective date of this Franchise Agreement, Comcast agrees to pay $0.60 (sixty cents) per month per residential subscriber each quarter for the purpose of funding PEG capital facilities and equipment. The City shall allocate such funding to PEG capital uses exclusively. All such payments shall be made at the same time as Comcast pays the franchise fee to the City. (b) Within one hundred eighty (180) days of the end of the City s fiscal year, the City shall provide Comcast with an annual report signed by the City Administrator or designee documenting the use of the previous year s PEG capital 27