Sample Cable Franchise Agreement

Cable television franchise agreements are different in each of the local government jurisdictions. The sample franchise agreement on the following pages is consistent with the enabling ordinance which sets the rules and regulations for all cable operators who wish to establish systems in the particular jurisdiction.

Sample County Cable Television Franchise Agreement

IS APPROVED AND THE FRANCHISE IS GRANTED AS FOLLOWS PURSUANT TO N. C. GENERAL STATUTES SECTIONS 153 A - 46, 153A - 137 AND 153A - 154 AND OTHER APPLICABLE LAW:

FRANCHISE AGREEMENT

THIS AGREEMENT is made and entered into as of the day of adoption by the County of, North Carolina, hereinafter referred to as "County" and Time Warner Entertainment/Advance -Newhouse Partnership, d. b. a. Time Warner Cable, hereinafter referred to as "Time Warner," or "Grantee." This Agreement shall be executed, by Time Warner, within thirty days following adoption by County.

SECTION 1. GRANT OF FRANCHISE.

Time Warner is hereby granted for itself and its successors and assignees, subject to the terms and conditions of this Franchise Agreement and the Ordinance, the right, privilege, and authority to construct, operate, maintain, and reconstruct a cable television system within the streets, alleys, and Public Ways of the County for the purpose of providing cable television service, subject to current and future State, Federal, and Local Laws and other regulations and the payment of any applicable fees, services or other compensation directly or indirectly to the County. Time Warner shall provide a State-of-the-Art, Countywide cable television system to the residents and institutions of the County in accordance with this Franchise Agreement and the Ordinance. Services to residents will be uniformly available and in accordance with density requirements of Section 6 of this Agreement. Service hereunder shall be provided in a competent, continuous and professional manner.

(b) Nothing in this Franchise Agreement shall be deemed to waive the various codes and ordinances of the County (specifically the Ordinance) regarding permits, fees to be paid, or manner of operation and construction, which Ordinance shall take precedent in the event of conflict.

(c) For the purpose of operating and maintaining a cable television system in the County, Time Warner may erect, in, over, under, or upon, across, and along the Public streets, alleys, and ways within the County such wires, cables, fiber optics, conductors, ducts, conduits, vaults, manholes, amplifiers, appliances, pedestals, attachments, and other property and equipment as are necessary and appurtenant to the operation of the cable television system in the County and in accordance with this Franchise Agreement and the "Cable Television Ordinance for the County of ," adopted November 13, 1997, hereinafter referred to as the "Ordinance,"

as amended, which Ordinance is codified in Chapter 7 of the County Code.

(d) Franchise nonexclusive. This Franchise Agreement shall not be construed as any limitation upon the right of the County to grant to other persons, rights, privileges, or authorities equivalent to the rights, privileges, and authorities herein set forth, in the same or other streets, alleys, or other Public Ways or Public Places. The County specifically reserves the right to grant at any time during the term of this Franchise Agreement or renewal thereof, if any, such additional franchises for a cable television system as it deems appropriate, provided, however, that such additional franchise(s), so granted, shall be on a non-discriminatory and competitively neutral basis, to the extent allowed by law.

SECTION 2. RIGHT OF COUNTY TO ISSUE FRANCHISE.

Time Warner acknowledges and accepts the legal right of the County to issue this Franchise Agreement.

SECTION 3. EFFECTIVE DATE OF FRANCHISE, EFFECT UPON EXISTING FRANCHISE.

This Franchise Agreement shall be effective as of adoption by the County Board of Commissioners and execution by the County and Time Warner and immediately upon the taking effect of this Franchise and Agreement, the prior Franchise and Agreement granted to Time Warner Entertainment/Advance - Newhouse Partnership shall be superseded and of no further force and effect; provided that any proceedings commenced under or pursuant to said prior Franchise and Agreement shall in no manner be affected.

SECTION 4. FRANCHISE TERM AND RENEWAL.

(a) This Franchise Agreement shall take effect and be in full force from and after the final passage hereof, subject to acceptance by the Grantee as provided by the Ordinance and the same shall continue in full force and effect for a period of fifteen (15) years beginning with the date of acceptance.

(b) Subject to the provisions of this Section 4, the County may amend this Franchise Agreement so as to require the Grantee to upgrade the Cable System to incorporate the State of the Art (the "State of the Art Option"). For the purposes of this Franchise Agreement the term "State of the Art" means equipment that is readily available with reasonable delivery schedules from two or more sources of supply; has the capability to perform the intended functions demonstrated within communities with similar characteristics (including, but not necessarily limited to population, density, customer penetration, etc.) under actual operating conditions for purposes other than test or experimentation; and can be implemented by the Grantee in an economically feasible manner taking into account economic waste (i.e., early retirement of assets) with the likelihood of generating a reasonable return on the Grantee's investment when measured over the then remaining term of the franchise. The term "State of the Art" does not include equipment or facilities associated with public, educational or governmental access.

(1) The County may not initiate the State of the Art Option at any time when the

Grantee is subject to effective competition as defined from time to time by federal law

(2) In order to initiate the State Of the Art Option, the County shall first commence a review of the Cable System. There shall not be more than one (1) such review every two (2) calendar years. A review may not commence prior to the ninth (9th) or after the twelfth (12th) anniversary of the acceptance date.

a. The review described in this paragraph (2) shall, at a minimum, take into account the following:

1. Characteristics of the existing Cable System,

2. The State of the Art

3 The additional benefits provided to customers by the State of the Art

4. The marketplace demand for the State of the Art taking into account any associated rate increase; and

5. Any additional factors deemed relevant by the County or the Grantee.

b. If, after conducting such a review, the County determines that the exercise of the State of the Art option may be warranted, the County shall hold at least two (2) public hearings to enable the general public and the Grantee to comment and present additional evidence.

(3) If, following such hearings, the County determines that the exercise of the

state of the Art Option is warranted, it may order the State of the Art be implemented (the "Order"). The Order shall be in writing and shall set forth the basis for the County’s decision. Upon agreement, the parties may amend this Franchise Agreement accordingly. If, however, the Grantee is not willing to comply with such Order, the Grantee may, within sixty (60) days after the County's Order;

a. Appeal the County's Order to any court of competent jurisdiction; or

b. Notify the County pursuant to Section 626 of the Cable Act that it wishes to commence renewal proceedings to renew the franchise. Such notice shall be deemed to shorten the term of the Franchise such that the Franchise will expire thirty-six (36) months from the date of the Grantee’s notice. The Grantee shall not be deemed in violation of the Order or the Franchise if such renewal proceedings are commenced.

(4) If the Court finds that the Grantee has demonstrated that the County’s Order is not supported by a preponderance of evidence based on the record of the proceeding from (2) above, the Court shall grant appropriate relief, unless inconsistent with federal law.

(5) Should Federal Law change, causing significant and necessary modifications of this Franchise Agreement, the County and the Grantee agree to negotiate necessary additions as an amendment to this Franchise Agreement.

(6) Any renewal of this Franchise Agreement shall be done in accordance with applicable, state and federal law.

SECTION 5. FRANCHISE FEES AND PERFORMANCE BOND.

During the term of this Franchise Agreement, Time Warner shall pay to the County for use of its streets, Public places, and other facilities, as well as the maintenance, improvements, and supervision thereof, an annual franchise fee in the amount of three (3%) percent of the gross subscriber revenue, as defined in the Ordinance, during the period of its operation under this Franchise Agreement. This payment shall be in addition to any other tax or payment owed to the County by the Time Warner. Should national legislation regarding maximum franchise fees change, the County may, by adoption of an ordinance restate the franchise fee. If the Franchise Fee is changed, the County shall give Time Warner sufficient notice to make necessary announcements to the subscribers and allow time for changes to the billing system as provided for in Section 7-16 of the Ordinance.

In accordance with Section 7-29 A. of the Ordinance a performance bond is required. The performance bond amount is set at $50,000, which shall be filed with the County Manager or his designee upon execution of the Franchise Agreement by Time Warner. Said bond may be reduced or increased per Section 7-30 of the Ordinance.

(c) Upon acceptance of this Franchise Agreement, the Grantee shall make a one-time lump sum payment to the County in the amount of Two Hundred Thousand ($200,000) Dollars to be used in support of access activities. The parties agree that this grant will not be deducted from any franchise fee payment due and payable to the County, will not be passed through to subscribers and will not be treated as an external cost, provided however, in the event the County should increase the franchise fee pursuant to paragraph (a) above then the Grantee shall be entitled to a credit on franchise fee payments thereafter in the amount of Two Hundred Thousand ($200,000) Dollars. The Grantee shall be entitled to such a credit over the then remaining term of the franchise or three (3) years, whichever is shorter.

SECTION 6. SERVICE AREA.

(a) Service area. The service area of Time Warner shall be the entire unincorporated boundaries of the County of to include those incorporated areas which are not serviced by a cable television franchise agreement with Time Warner, to the extent allowed by law.

(b) New residential construction. Time Warner shall extend service to all new residences, all unwired developments and commercial developments within eighteen months of a request pursuant to the following requirements:

(1) Line extension policy. Time Warner shall extend its cable system and make cable service available to every existing residentially zoned area within the franchise area and within eighteen (18) months for newly developed areas, which is unserved by another cable system whenever density of at least twenty (20) residential dwelling units per cable plant mile, as measured from the existing facilities of Time Warner’s cable system in the Franchise Area. For purposes of this section, density per cable mile shall be computed by dividing the number of residential dwelling units in the area by the length, in miles or fractions thereof, of the total length of aerial or underground cable necessary to make service available to residential dwelling units in such area in accordance with Time Warner’s system design parameters. The cable length shall be measured from the nearest point that is located within the Public Ways. The total cable length shall exclude the drop cable necessary to serve subscriber premises.

(2) Cost-sharing. In areas with less than twenty (20) homes per proposed cable mile, Time Warner shall offer a cost-sharing arrangement to residents. Time Warner shall bear its pro rata share of the current construction costs based upon the actual number of homes per mile. The cost-sharing arrangement shall consist of the following: On the request of a subscriber desiring service, Time Warner shall prepare, at its cost, an engineering survey and cost analysis to determine the cost of the plant extension required to provide service to the subscriber from the closest usable point on the cable system. The cost of construction shall be allocated based on the following formula: If a request for extension into a residential area requires the construction of cable plant, which does not pass at least twenty (20) homes per mile, Time Warner and subscribers will each bear their proportionate share of construction costs. For example, if there are ten(10) dwelling units per mile, Time Warner’s share will equal 10/20th of the construction cost. The remaining cost will be shared equally by each subscriber in the area to be constructed. The line extension formula shall also be applied to a portion of a mile meeting proportionate density requirements. For example, if there are five (5) dwelling units per one fifth mile, then Time Warner shall construct the plant. The cost sharing described above would be utilized if there were less than the proportionate share of dwelling units per the portion of a mile needed to reach the dwelling units. Should additional subscribers request cable television service, subscribers utilizing the cost-sharing plan for extension shall be reimbursed pro-rata for their contribution or a proportional share thereof. In such case, the pro-rata shares shall be recalculated and each new subscriber shall pay the new pro-rata share, and all prior subscribers shall receive refunds. In any event, at the end of twenty-four (24) months from completion of the project, the subscribers are no longer eligible for refunds, and the amounts paid in construction costs will be credited to the plant account of Time Warner. The average cost of the line extension shall be recalculated annually and based upon the current costs of labor and material. Each person contributing toward the direct cost of the line extension agrees to waive all ownership interest in the line extension. All equipment and components of the line extension, including, but not limited to, cable wire, electronics and pedestals shall at all times remain the exclusive property of Time Warner.

(c) Performance Testing. Time Warner shall perform all system tests and maintenance procedures as required by the FCC and the ordinance, to the full extent allowed by law.

(d) Technical Standards. The cable television system permitted to be operated hereunder shall be installed and operated in conformance with the Ordinance, this Franchise Agreement, and FCC rules and regulations. Any FCC technical standards or guidelines related to the cable television system and facilities shall be deemed to be regulations under this Franchise Agreement and are incorporated by reference. At such time as the FCC does not regulate technical standards, Time Warner will continue to comply with the FCC standards which were effective prior to such discontinuance of regulation by the FCC.

(e) Employee Identification. Time Warner shall provide a standard identification document to all employees, including employees of subcontractors, who will be in contact with the Public. Such documents shall include a telephone number that can be used to verify identification. In addition, Time Warner shall use its best efforts to clearly identify all field personnel, vehicles and other major equipment that are operating under the authority of Time Warner.

(f) Stereo. Upon completion of the rebuild, the system will have the capability and shall pass Broadcast Television Systems Committee (BTSC) stereo signals or other stereo signals for those broadcast, satellite and locally-originated services which transmit the stereo signals, excepting alphanumeric and news channels.

(g) Underground Drops. The cost of replacing aerial drops with underground placement will be determined by the location of the utility drops. If the subscriber is served underground for power, there will be no charge for the replacement. There will be a time and material charge assessed only if underground replacement is requested though power is served by aerial means.

(h) Digital Signals. Time Warner agrees to comply with all FCC regulations and requirements for the transmission of broadcast digital television signals on its cable system.

SECTION 7. SYSTEM SERVICES AFTER UPGRADE

Under the terms of the Ordinance, Time Warner agrees to the following:

(a) Initial Residential Subscriber Service. During the upgrade period, Time Warner shall use its best efforts to provide a good mix of entertainment and information programming generally available to the cable television industry, taking into account the needs and interests of the diverse population of the County of .

(b) Service Upon Completion of the Upgrade. Service will be at least comparable to that provided to the City of Greensboro.

Access Channels. In accordance with Section 611 of the Cable Act (47 U.S.C. Section 531), the Time Warner agrees to provide at no cost to the County, unless directed otherwise by the County Board of Commissioners, one channel for Public Access; one channel for Educational Access; and one channel for Government Access.

(1) Education Access Channel:

(4) Future Channels. The Grantee shall make available up to an additional three (3) full time channels for public, educational and governmental access use. An additional channel shall be made available within six (6) months of a request from the County. Any such request from the County shall include a demonstration to the reasonable satisfaction of the Grantee that all current public, educational and governmental access channels are being substantially utilized and there is demand for an additional channel. For the purposes of this paragraph (4) the term "substantially utilized" shall mean that the existing channels have been programmed at least eighteen (18) hours a day for seven (7) days a week over six (6) consecutive weeks with non-repetitive, locally-produced audio-video programming. The Grantee shall be entitled to use any of the dedicated public, educational or governmental access channels when those channels are not being used for their dedicated purposes. Should the City of Greensboro receive additional Access Channels, these Access Channels will be interconnected to the County system, upon request of the Board of Commissioners.

(d) Closed Captioning. Time Warner shall pass through all closed-circuit signals received by the system for the hearing impaired.

SECTION 8. CUSTOMER SERVICES

Time Warner will meet the customer service standards as established in the Ordinance and Appendix A, as may be amended from time-to-time.

SECTION 9. REPORTS REQUIRED.

Time Warner shall file with the County:

(a) Time Warner rules. Time Warner's schedule of charges, contract or application forms of regular subscriber policy regarding the processing of subscriber complaints, delinquent subscriber disconnect or reconnect procedures and any other terms and conditions adopted as the Time Warner's policy in connection with its system subscribers.

(b) Proof of bonds and insurance. Upon execution of the Franchise Agreement, Time Warner shall submit to the County the required performance bond in a form acceptable to the County Attorney, or a certified copy thereof, and written evidence of payment of required premium, and certification of policies of insurance required by this Franchise Agreement, and written notice of payment of required premium.

(c) Financial reports. The financial reports required to document franchise fees paid under the provisions of Section 5 of this Agreement.

(d) A summary of the previous year's activities, including, but not limited to, new services offered upon reasonable notice.

(e) Any other reports required by the Ordinance.

SECTION 10. RECORDS REQUIRED.

(a) In accordance with the Ordinance, the Time Warner shall at all times maintain and make available to the County upon written notice and reasonable request and as may be reasonably necessary to monitor or ascertain the Time Warner’s compliance with the provisions of the Ordinance and this Franchise Agreement: a full and complete set of plans, records and "as-built" maps showing the exact location of all cable communication system equipment installed or in use in the County, exclusive of subscriber service drops. These plans, records and "as built maps" will be treated as proprietary information to the full extent allowed by law and will be maintained and viewed at the cable operator’s office.

(b) Other records. The County may impose reasonable requests for additional information, records and documents from time to time, as may be reasonably necessary to monitor or ascertain the Time Warner’s compliance with the Ordinance and this Franchise Agreement.

SECTION 11. ENTIRE AGREEMENT.

This agreement and all attachments hereto, as incorporated herein, represent the entire understanding and agreement between the parties hereto with respect to the subject matter hereof, supersede all prior oral negotiations between the parties, and can be amended, supplemented, modified, or changed only by a written document executed by the parties. However, requirements of the Ordinance shall take precedence over any conflicting requirement of this Agreement.

SECTION 12. REMEDIES.

(a) The County may enforce this Franchise by use of any remedy, or any combination of remedies, provided for in the Ordinance or other applicable law.

(b) Violations. For the violation of any of the following, the County will notify Time Warner in writing of the violation. The County shall provide Time Warner with detailed written notice of any alleged franchise violation upon which it proposes to take action, and a forty-five (45) day period within which Time Warner may demonstrate that a violation does not exist or to cure an alleged violation or, if the violation cannot be corrected in 45 days, to submit a plan satisfactory to the County to correct the violation. If an alleged violation is proven to exist, and no cure or action on a plan acceptable to the County has been received by the County within thirty (30) days, such damages shall, from the end of the forty-five (45) day period, be chargeable to the performance bond as set forth in this Franchise Agreement if not tendered by Time Warner within forty-five (45) days. Time Warner may petition the County Board for relief for just cause.

SECTION 13. FORCE MAJEURE

Notwithstanding any provision of the contrary contained herein, neither the County nor the Time Warner shall be held liable for or suffer any penalty or detriment for, any failure to comply with any provision of this Franchise Agreement if such failure to comply accrues from any act of God or any other condition not within the reasonable control of such non-complying person; provided, however, that this provision shall not apply to Time Warner’s financial obligations hereunder.

SECTION 14. NOTICES

All notices and other communications hereunder shall be in writing and shall be deemed to have been given on the date of actual delivery, by registered or certified mail, return receipt requested, postage prepaid. The address for service of notice to the Time Warner shall be addressed to Time Warner Entertainment/Advance - Newhouse Partnership, Post Office, North Carolina 27404. Notices to the County shall be addressed to the Clerk to the Board of Commissioners, County of , Post Office Box , North Carolina 27402. Either the County or the Time Warner may change address to which all notices shall be sent by addressing a notice of such change in the manner provided in this section.