Chapter 10
CABLE COMMUNICATIONS1

Sec. 10-1 Title.

This chapter is known and may be cited as cable communications.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-2 Intent and purposes.

It is the intent of the city to promote the public health, safety and general welfare by providing for the grant of one (1) or more licenses for the construction and operation of a cable system; to provide for the regulation of each cable system by the city; to provide for the payment of fees and other valuable consideration by a licensee to the city for the privilege of using the public rights-of-way for constructing and operating a cable system; to promote the widespread availability of cable service to city residents wherever economically feasible, including to those who reside in multifamily buildings and in rural communities; to encourage the development of cable as a means of communication between and among the members of the public and public institutions; and to encourage the provision of diverse information to the community over cable.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-3 Definitions.

In this chapter, the following words and phrases have the meanings indicated in this section. Words not defined are given their meaning in section 602 of the Cable Act and, if none, their common and ordinary meaning.

Access channel means any channel set aside under the license agreement for governmental use on a non-commercial basis, without a charge by the licensee for channel usage.

Application means a proposal to construct and operate a cable system within the city, transfer a license, renew a license, or modify a license. An application includes the initial proposal plus all subsequent amendments or supplements to the proposal and relevant correspondence.

Cable Act means the Cable Communications Policy Act of 1984, 47 U.S.C. § 521 et seq., as amended, including the Telecommunications Act of 1996 (“1996 Act”).

Cable system means a facility, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is to provide cable service which includes video programming and which is provided to multiple subscribers within the city. This term does not include:

(1) A facility that serves only to retransmit the television signals of one (1) or more television broadcast stations;

(2) A facility that serves only subscribers without using any public right-of-way;

(3) A facility of a common carrier that is subject, in whole or in part, to the provisions of Title II of the Communications Act of 1943, except that the facility will be considered a cable system to the extent that it is used in the transmission of video programming directly to subscribers, unless the extent of such use is solely to provide interactive on-demand services;

(4) An open video system that complies with Section 653 of the Cable Act; or

(5) Any facilities of any electric utility used solely for operating its electric utility systems.

Cable service means the one-way transmission of video or other programming service to subscribers and any subscriber interaction required for the selection or use of such video programming or other programming service.

City means City of Kingman. Unless otherwise clear from the context, where the term “city” is used in this article, it means the city manager or designee. However, where legislative approval of an activity is specifically required under this article, “city” means the city manager subject to the approval of the city council.

City manager means the chief executive officer of the city or designee.

Control of a licensee or applicant means the legal or practical ability to direct the affairs of the licensee or applicant either directly or indirectly, whether by contractual agreement or majority ownership of an economic interest.

Council means the present governing body of the City of Kingman or any future council constituting the legislative body of the city.

Fair market value means the price that a willing buyer would pay to a willing seller for a going concern based on the system valuation prevailing in the industry at the time but with no value allocated to the license itself.

FCC means the Federal Communications Commission.

Gross revenues means all revenues derived by a licensee from the peration of its cable system within the city for the provision of cable service, including revenues derived from home shopping channels, rental or lease of cable television equipment or installation fees and excluding fees and taxes.

Institutional services means video, audio, data and other transmission services provided by a licensee to institutional users on an individual application, private channel basis, including, two-way video, audio or digital signals among institutions, or from institutions to residential subscribers.

Leased access channel means a channel designated in accordance with Section 612 of the Cable Act, for commercial use by persons unaffiliated with the licensee.

License means the right granted by the city to a licensee to construct, maintain and operate a cable system over, on, or under streets, roads and all other public ways, easements and rights-of-way within all or specified areas of the city. The term does not include any license or permit that may be required by this article or other laws, ordinances, or regulations of the city for the privilege of transacting and carrying on a business within the city or for disturbing the surface of any street or public thoroughfare.

License agreement means a contract entered into in accordance with the provisions of this article between the city and a licensee that sets forth the terms and conditions under which the license will be exercised.

Licensee means any person granted a license under this article.

Overbuild means a cable system constructed to serve any subscribers served by an existing cable system.

Person means any individual, corporation, partnership, association, joint venture, or organization of any kind and the lawful trustee, successor, assignee, transferee, or personal representative thereof.

Subscriber means any person who legally receives any cable service provided by a cable system but does not include persons who receive not more than two (2) channels of non-commercial closed circuit video service which is not made available to the general public.

System malfunction means an equipment or facility failure that results in the loss of satisfactory service on one (1) or more channels. A malfunction is major if it affects thirty (30) percent or more of the subscribers.

User means a person utilizing a cable system’s facilities for purposes of transmission of material or information to subscribers or others.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-4 Grant of authority; license required.

The city may grant one (1) or more licenses in accordance with this chapter. A person must not construct or operate a cable system in the city without a license granted by the city.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-5 License characteristics.

(a) A license authorizes use of the public rights-of-way for installing cables, fiber, wires, lines, and other facilities to operate a cable system, but does not expressly or implicitly authorize the licensee to provide service to, or install cables, wires, lines, or any other equipment or facilities on private property without owner consent (except for use of (i) compatible easements or (ii) rights-of-way under the Cable Act or other applicable law), or to use publicly or privately owned utility poles or conduits without a separate agreement with the owners.

(b) A license is subject to the paramount right of use by the city and the public for public purposes. The city reserves the right to authorize use of public rights-of-way to other persons as it determines appropriate.

(c) A license is nonexclusive and does not expressly or implicitly preclude the issuance of other licenses to operate cable systems within the city.

(d) A license does not convey a property right to the licensee or a right to renewal other than as may be required by state or federal law.

(e) A license agreement constitutes a contract between the licensee and the city once it is accepted by the licensee. A licensee and the city contractually commit themselves to comply with the terms, conditions and provisions of the license agreement and with all applicable laws, ordinances, codes, rules, regulations, and orders.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-6 Licensee subject to other laws, police power.

(a) A licensee is subject to and must comply with all applicable local, municipal, city, state and federal laws, ordinances, codes, rules, regulations, and orders including those pertaining to nondiscrimination.

(b) A licensee is expressly subject to the city’s police power to adopt and enforce general ordinances necessary for the health, safety, and welfare of the public, and it agrees to comply with all applicable state laws and ordinances enacted by the city pursuant to such power.

(c) A licensee or other person is not excused from complying with any of the terms and conditions of this chapter or a license agreement by any failure of the city, on one or more occasions, to require compliance or performance.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-7 Interpretation of license terms.

(a) This article applies to a license agreement as if fully set forth in the license agreement.

(b) The provisions of a license agreement must be liberally construed in order to effectuate its objectives consistent with this article and the public interest.

(c) A license agreement is governed by, and construed in accordance with, the laws of Arizona, the communications act and the rules of the FCC.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-8 Applications for grant, renewal, modification or transfer of licenses.

(a) An application must be filed with the city for grant of a new license, renewal of a license under either the formal or informal procedures in accordance with Section 626 of the Cable Act, modification of a license agreement, transfer of a license, or, where approval is required, for a transfer of an interest in a licensee. An applicant has the burden to demonstrate compliance with all application requirements of this chapter. To be acceptable for filing, an application must:

(1) Be submitted in the number of copies required by the city.

(2) May be accompanied by the non-refundable application filing fee.

(3) Conform to any applicable request for proposals.

(4) Contain all required information.

(b) All applications must include the names and addresses of persons authorized to act on behalf of the applicant with respect to the application.

(c) All applications accepted for filing must be made available by the city for public inspection.

(d) An application for the grant of a new license may be filed pursuant to a request for proposals issued by the city or on an unsolicited basis. The city may at its option, issue a request for proposals upon receipt of an unsolicited application. If the city elects to issue a request for proposals upon receipt of an unsolicited application, the applicant may submit an amended application in response to the request for proposals, or may inform the city that its unsolicited application should be considered as its response to the request for proposals, or may withdraw its unsolicited application. An application which is unresponsive to the requirements of a request for proposals may be dismissed by the city without further consideration.

(e) An application for the grant of a new license must contain, at minimum, the following information:

(1) Identification of the ownership and control of the applicant, including:

a. The names and addresses of the ten (10) largest holders of an ownership interest in the applicant, and all persons with five (5) percent or more ownership interest, including the percentage interest held by all such persons.

b. The persons, if any, who control the applicant; all officers and directors of the applicant; and

c. Any other business affiliation and cable system ownership interest of each named person.

(2) A statement addressing whether the applicant, or any person controlling the applicant, or any officer or major stockholder of the applicant;

a. Has been adjudged bankrupt.

b. Has had a cable license revoked; or

c. Has been found guilty by any court or administrative agency of a violation of a security or antitrust law, a felony, or any crime involving moral turpitude.

Any statement under this paragraph must identify the person or persons involved and provide a full explanation of the circumstances.

(3) A demonstration of the applicant’s technical, legal and financial ability, including financing sources and commitments, to construct and operate the proposed cable facility, including identification of key personnel.

(4) The geographic area to be served by the cable system.

(5) If the applicant seeks a variance to any condition in this article, applicant must submit a description and justification for any waiver to any requirement of this article (see section 10-9 below).

(6) A detailed description of the physical facility proposed, including channel capacity, technical design, performance characteristics, headend, and access facilities and equipment.

(7) A description of the construction of the proposed system, including an estimate of above-ground and below-ground mileage and its location, the proposed construction schedule, a description, where appropriate, of how services will be converted from existing facilities to new facilities, and information on the availability of space on poles and conduits including, where appropriate, an estimate of the cost of rearrangement of facilities to accommodate such use.

(8) A description of the services to be provided initially, including all broadcast and non-broadcast signals to be carried and all non-television services, and if services will be offered by tiers, identification of the signals or services, or both, to be included on each tier.

(9) The proposed rate structure including charges for each service tier, installation, converters, and other equipment or services.

(10) A demonstration of how the proposal will reasonably meet the future cable-related needs and interests of the community, including a description of how the proposal will meet the needs described in any recent community needs assessment conducted for the city.

(11) An affidavit of the applicant or authorized officer that:

a. Certifies the truth and accuracy of the information in the application.

b. Acknowledges the enforceability of application commitments.

c. Certifies that the proposal meets all applicable federal and state requirements.

(12) If an applicant proposes to construct a cable system which would constitute an overbuild, the identification of the area where the overbuild would occur, the potential subscriber density in the area to be served by competing cable systems, and other information as necessary for the city to make its determination under subsection 10-9(f).

(13) Any other information necessary to demonstrate compliance with the requirements of this article and information that the city may reasonably request of the applicant.

(f) An application for modification of a license agreement must include, at a minimum, the following information:

(1) The specific modification requested.

(2) The justification for the requested modification, including the impact of the requested modification on subscribers and others, and the impact on the applicant if the modification is not approved.

(3) A statement whether the modification is sought pursuant to Section 625 of the Cable Act, and, if so, a demonstration that the requested modification meets the legal standards of the Cable Act.

(4) Any other information necessary for the city to make a determination on the requested license modification.

(g) An application for approval of a transfer of a license or a transfer of an interest in a licensee must comply with the requirements of section 10-23.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-9 Grant of license.

(a) The city may grant a license for a period not to exceed fifteen (15) years to serve all or any specified geographic areas of the city.

(b) The city may grant a variance to this article with conditions less constraining than the language in this article subject to the nature and details of the applicant’s request. Nothing herein guarantees any variance to the conditions of this article.

(c) The city may make the grant of a license conditioned on the completion of construction within a specified time or the performance of other specific obligations and specify that the failure of the licensee to comply with the condition will void the license without further action by the city.

(d) A public hearing must be held on each application for a new license that meets all requirements of this article. At least fifteen (15) calendar days public notice shall be given before the public hearing. At the public hearing the city manager may accept written and oral testimony and any other material relevant to the application. If more than one (1) application has been submitted, the applications may be considered in the same proceeding.

(e) In evaluating an application for a new license, the city must consider:

(1) The applicant’s character.

(2) The applicant’s technical, financial, and legal qualifications to construct and operate the proposed system.

(3) The nature of the proposed facilities, equipment, and services.

(4) The applicant’s record of cable performance in other communities, if any.

(5) Whether the proposal will serve the public interest.

(f) Where an applicant proposes to overbuild an existing cable system, the city must also consider:

(1) The beneficial effects of competition, including any reduced rates to consumers, higher technical standards, and more varied programming offerings.

(2) Any interference or disruption of the existing licensee’s operations or service.

(g) Based upon the application, the written and oral testimony and other material presented at the hearing, and any other information relevant to the application, the city manager must notify the applicant of the proposed grant or the denial of the application.

(h) If the city manager proposes to grant a license application, the city manager and the applicant must agree on the terms of a license agreement within sixty (60) days from the notice of the proposed grant. This period may be extended for good cause by the city manager. If agreement is not reached within sixty (60) days or if the period is not extended, the notice of proposed grant is void.

(i) The city must make the text of a proposed license agreement available to the public. A summary of the terms of a proposed license agreement must be advertised for three (3) successive weeks in one (1) or more newspapers of general circulation in the city to give the public the opportunity to comment on the proposed license agreement as required by state law.

(j) After complying with the requirements of this section, the city manager may submit recommendations to grant one (1) or more licenses and proposed license agreements to the council. The council must approve or disapprove the grant of a license.

(k) Every license grant is subject to a license acceptance fee in an amount not to exceed the city’s reasonable costs in considering the application, less the amount of the filing fee. Within thirty (30) days of the date the grant of the license is approved by the council, the city must notify the approved applicant of the amount of the license acceptance fee and its method of calculation. If the license acceptance fee is not paid within thirty (30) days of the date the city notifies the approved applicant of the amount, the grant is void. Before the license is effective, the approved applicant must demonstrate compliance with the bond, insurance, and similar provisions of the license agreement.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-10 Insurance; bond; indemnification.

(a) A licensee must have the following insurance coverage in force at all times during the license period:

(1) Workmen’s compensation insurance to meet all state requirements.

(2) Commercial general liability insurance with respect to the construction, operation and maintenance of the cable system, and conduct of the franchisee’s business, coverage shall consist of a minimum amount of five million dollars ($5,000,000.00) per occurrence, combined single limit for property damage and bodily injury. The policy must include coverage for contractual liability, premises and operations, independent contractors, broad form property damage, personal injury, and products and completed operations. The policy must also include coverage for the explosion, collapse and underground hazard.

(3) Broadcasters liability coverage, covering errors and omissions and negligent acts and other operations of the franchisee, committed during the term of the franchise period with the city, with a limit of liability of at least one million dollars ($1,000,000.00) per claim and an aggregate of equal limit. Franchisee agrees to provide a one-year discovery period under such policy.

(4) Automobile liability insurance covering all vehicles as specified in the license but not less than two hundred fifty thousand dollars ($250,000.00) per person, five hundred thousand dollars ($500,000.00) per occurrence, and one hundred thousand dollars ($100,000.00) for property damage; and

(5) Any additional types of insurance and coverage amounts as the city may require. All insurance policies must be with sureties qualified to do business in Arizona and in a form approved by the city attorney. The city may accept a self-insurance plan that assures comparable protection in lieu of these insurance policies.

(b) To ensure the licensee’s performance of license obligations, a licensee shall have in force at all times during the license period a bond in a form approved by the city attorney, consisting of cash, an irrevocable letter of credit, or a performance bond. A performance bond shall be provided by a surety qualified to do business in Arizona. The bond shall be to the benefit of the city or to other parties as necessary to ensure the faithful performance and discharge of obligations imposed by law and the license agreement. The minimum bond amount shall not be less than two hundred fifty thousand dollars ($250,000.00).

(c) A licensee shall, at its sole cost and expense, indemnify, hold harmless, and defend the city, its officials, boards, commissions, agents, and employees, against any claims, suits, causes of action, proceedings and judgments for damages or equitable relief arising out of the construction, maintenance, or operation of its cable system regardless of whether the act or omission complained of is authorized, allowed or prohibited by the license. This requirement includes claims arising out of copyright infringement or a failure by the licensee to secure consent from the owner, authorized distributor, or licensee of a program to be delivered by the cable system.

(d) In an overbuild situation the city may require licensees to indemnify each other for any damage to facilities and services caused by construction or maintenance of their respective cable systems.

(e) To the fullest extent permitted by law, licensee shall defend, indemnify and hold harmless the City of Kingman, its agents, officers, officials and employees from and against all tort claims, damages, losses and expenses (including but not limited to attorney fees, court costs, and the cost of appellate proceedings), relating to, arising out of, or alleged to have resulted either wholly or in part from the acts, errors, mistakes, omissions, work or services of the licensee, its agents, employees, contractors or subcontractors in the performance of this agreement, and regardless of whether or not such claim, damages, loss or expenses are caused in part by the city.

(f) All liability insurance policies shall name the city, their officers, boards, commissions, agents, and employees as additional insureds and shall further provide that any cancellation or reduction in coverage shall not be effective unless sixty (60) days’ prior written notice, via registered mail, thereof has been given to the city. The franchisee shall not cancel any required insurance policy without submission of proof that the franchisee has obtained alternative insurance satisfactory to the city which complies with this agreement.

(g) Licensee’s duty to defend, hold harmless and indemnify the city, its agents, officers, officials and employees shall arise in connection with any tort claims, damages, losses or expenses that are attributable to bodily injury, sickness, disease, death, or injury to, impairment, or destruction of property including loss of use resulting there from, caused either wholly or in part by licensee’s acts, errors, mistakes, omissions, work or services in the performance of this agreement including any employee of the licensee or any other person for whose acts, errors, mistakes, omissions, work or services the licensee may be legally liable, and regardless of whether or not such claim, damages, losses or expenses are caused in part by the city.

(h) The amount and type of insurance coverage requirements set forth herein will in no way be construed as limiting the scope of the indemnity in this paragraph.

(i) All policies shall be available for review by the city, and the franchisee shall deliver to the city a copy of the required certificates of insurance, evidencing that the required policies are in effect no later than fifteen (15) days after such policies is required to be effective.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-11 Minimum facilities and services.

(a) The following minimum requirements for facilities and services apply to all licenses:

(1) A cable system must have a minimum capacity of ninety (90) video channels available for immediate or potential use.

(2) A cable system/provider must provide at least to two (2) access channels, which will be individually designated by the city for governmental access. The city may require the licensee to make a reasonable contribution to capital costs for access studios and related equipment and facilities.

(3) A cable system must provide additional leased access channels as required by federal law. The licensee must provide information on all leased access channels in its annual report under subsection 10-13(a). This information must include a description of any applications to lease access channels that are pending consideration or which have been denied by the licensee.

(4) Service to all public buildings within the city may be required without charge as set forth in the license agreement.

(5) A licensee must design its system to allow the city to interrupt cable service in an emergency to deliver necessary information to subscribers in accordance with FCC rules.

(b) The city may require that a license exceed the minimum requirements set forth in subsection (a) if so designated in the license.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-12 License fee.

(a) Application fee. Each application for a license to be granted under the authority of this article shall be accompanied by a non-refundable filing fee in the amount required by the city. For the city to consider granting the privilege granted under this article for the use of public rights-of-way to construct and operate a cable system, the applicant must pay the city, by a certified or cashier’s check made payable to the city. Non-refundable filing fees in the following amounts are required:

New license agreement    

$5,000

Renewal of license    

4,000

Consent to transfer or change of control of this license    

3,000

License modifications (unless requested by the city)

pursuant to 47 U.S.C. § 545    

2,500

for any other modifications up to    

2,000

(b) License fee. A licensee, in consideration of the privilege granted under a license for the use of public rights-of-way to construct and operate a cable system, must pay the city five (5) percent of the licensee’s gross revenues within its license area during the period of its license. A licensee must pay the license fee due to the city for the preceding quarter within thirty (30) days of the end of that quarter. Monthly payments will be acceptable.

(c) Processing fee. Every licensee shall reimburse the city for any costs associated with reviewing and processing a license application within thirty (30) days of the date the grant of the license if approved by the council. The city shall notify the approved applicant of the amount of the license acceptance fee and its methods of calculation. Such fee shall not be considered part of the license fee.

(d) Any payment of license fees to adjust for a shortfall in the quarterly payments for the preceding year must be made no later than the filing date for the annual financial statements as specified in subsection (d) of this section. An adjustment for any overpayment will be credited in one (1) or more subsequent quarterly payments.

(e) Unless a license agreement provides otherwise, a licensee must file with the city within thirty (30) days of the end of each quarter a financial statement showing the gross revenues received by the licensee during the preceding quarter and the number of subscribers.

(f) A licensee must file within three (3) months of the end of its fiscal year the licensee’s or the licensee parent’s annual financial statements for the preceding year audited by a certified public accountant. The licensee will bear the cost of the preparation of all financial statements. If the licensee is unable to provide the city with the said statements within three (3) months due to a significant technical, legal or financial hardship, the licensee shall inform the city in writing of the delay and the city may provide amnesty on this item if the city determines the justification to be reasonable and prudent.

(g) The city may inspect and audit any books and records relevant to the calculation of gross revenues, and recompute any amounts determined to be payable under the license. The reasonable cost of the audit, up to the amount determined to be due to the city, will be borne by the licensee if the annual payment to the city for the preceding year is increased by more than five (5) percent as a result of the audit.

(h) In the event that a license payment is not received by the city on or before the due date, interest will be charged from the due date at the annual interest rate then charged for unpaid federal income taxes. In addition, the licensee will pay a late charge of five (5) percent of the amount of the payment. Interest and late charges will not be imposed for any payment necessary as a result of the yearly adjustment provided for in subsection (b) of this section, if the payment to correct for a shortfall does not exceed ten (10) percent of the total payments made during the year. In the event such payment exceeds ten (10) percent of the total payments made during the year, the licensee will be liable for interest and late charges for the entire amount due.

(i) When a license terminates for any reason, the licensee must file with the city within ninety (90) days of the date the license operations stop, an audited financial statement showing the gross revenues received by the licensee since the end of the previous fiscal year. Adjustments must be made at that time for license fees due to the date that the licensee’s operations ceased.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-13 Reports and records.

(a) Within three (3) months of the close of its fiscal year, a licensee must file with the city and each participating municipality an annual report that includes the information required in the license agreement.

(b) A licensee must maintain a complete set of books and records, relevant to its obligations under the license, available for inspection by the city during normal business hours.

(c) Upon written request of the licensee and approval by the city attorney, information of a proprietary nature submitted to the city under this article or a license agreement must not be made available for public inspection.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-14 Customer service requirements.

(a) A licensee must maintain a conveniently located business office open during normal business hours with a listed local telephone number and a sufficient number of telephone lines to allow reasonable access by subscribers and members of the public. When the business office is closed, the licensee must have an answering machine or service to take complaints and inquiries.

(b) A licensee must have personnel and equipment available at all times to locate and correct major system malfunctions. Major system malfunctions must be corrected without delay. Corrective action for all other malfunctions must be initiated as provided in the license agreement but not later than the next business day after the subscriber service call is received. Corrective action must be completed as promptly as possible.

(c) A license agreement must include procedures to investigate and resolve all complaints, including those regarding the quality of service and equipment malfunction.

(d) A licensee must provide each subscriber at the time cable service is installed written instructions for placing a service call, filing a complaint, or requesting an adjustment. Each subscriber must also be provided with a schedule of the subscriber’s rates and charges, a copy of the service contract, delinquent subscriber disconnect and reconnect procedures, and a description of any other relevant licensee subscriber policies. The city shall receive all forms describing customer service policies and procedures when they are distributed to subscribers. All forms must be conspicuously posted in the licensee’s local business office.

(e) A licensee may interrupt service on the cable system only for good cause and, except in emergency situations, only after prior notice to subscribers and the city of any significant anticipated service interruption. Any interruption must be for the shortest time possible.

(f) A licensee must maintain a complete record of service complaints received and action taken. These records must be open to the city for inspection during normal business hours, subject to applicable law, including privacy laws. A monthly summary of such records must be submitted to the city at the city’s request by all licensees. Complaint records must be retained for three (3) years.

(1) A licensee must promptly remove all its facilities and equipment from the subscriber’s premises if service is terminated and the subscriber requests removal.

(2) Notwithstanding paragraph (1), a licensee may disconnect and abandon facilities and equipment where removal is impractical, such as with buried cable or internal wiring.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-15 Service discrimination and exclusive programming agreements prohibited.

(a) Unless approved by the city and to the extent consistent with federal law, a licensee must not, in its rates or charges, or in the availability of the services or facilities of its system, or in any other respect, grant undue preferences or advantages to any subscriber or potential subscriber, or to any user or potential user, nor subject any of these persons to any undue prejudice or any disadvantage. A licensee must have a uniform rate structure for its services throughout the license area as required by the Cable Act and FCC rules. A licensee must not deny, delay, or otherwise burden service or discriminate against subscribers or users on the basis of age, race, religion, color, sex, sexual orientation, handicap, national origin, or martial status, except for discounts for the elderly and handicapped.

(b) A licensee must not deny cable service to any potential subscriber because of the income of the residents of the area in which the subscriber resides.

(1) Except as provided in paragraph (2) of this subsection, a licensee must not enter into an agreement with a programming service or broadcast station that provides for:

a. A refusal by the programming service or broadcast station to deal with a competing multi-channel provider in the city.

(2) The prohibition contained in paragraph (1) may not be construed to apply to a provision in an agreement that provides for bona-fide volume discounts that are either cost-based or which otherwise would be applied equally to both affiliated or unaffiliated customers of the programming service or broadcast station.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-16 Subscriber privacy and unauthorized reception.

(a) A licensee must protect the privacy of all subscribers under Section 631 of the Cable Act. A licensee must not condition subscriber service on the subscriber’s grant of permission to disclose information which cannot be disclosed without the subscriber’s explicit consent under federal law.

(b) A person must not make any unauthorized connection, whether physically, electrically, acoustically, inductively or otherwise, or attach any unauthorized device to any cable, wire, microwave or other component of a licensed cable television system, to intercept, receive or use any video, voice or data signal transmissions over a cable television system, unless such connection, interception, reception or use is authorized by the licensee or other person having the lawful right to authorize the connection, interception, reception or use. A violation of this subsection is a Class 2 misdemeanor offense and is also punishable pursuant to Arizona Revised Statutes, A.R.S. 13-3709(A).

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-17 Construction and use of rights-of-way.

(a) A licensee must use, with the owner’s permission, existing poles, conduits or other facilities whenever possible. Copies of agreements for use of poles, conduits or other facilities must be filed with the city as required by the license agreement.

(b) All transmission lines, equipment and structures must be installed and located to cause minimum interference with the rights and reasonable convenience of property owners.

(c) Suitable safety devices and practices as required by local, city, state and federal laws, regulations, and permits must be used during construction, maintenance, and repair of a cable system.

(d) A licensee must remove, replace, or modify at its own expense any of its facilities in a public right-of-way when the city requires it to do so, to allow the city to change, maintain, repair or improve a public thoroughfare as long as such requirement also applies to all other utilities including telephone electric and gas.

(e) The licensee must put the cable underground at its expense on streets and roads where both electrical and telephone utility wiring are underground, and must move the cable underground after initial installation when electrical and telephone utility wiring are moved underground. The licensee must put the cable underground between a street or road and a subscriber’s residence if both electrical and telephone utility wiring are underground. A licensee may install aerial cable if either electric or telephone utility underground installation is unavailable and licensee agrees to pay the additional license cost of aerial installation.

(f) A licensee must obtain any required permits before starting construction work on public and private property and must restore the public and private property to their former condition after construction is completed. The city or private property owner may, after prior written notice to the licensee, repair any damage done by the licensee at the licensee’s expense if restoration is not satisfactorily performed within a reasonable time.

(g) Subject to the supervision and direction of the city, a licensee may trim trees within public rights-of-way at its own expense as necessary to protect its wires and facilities. A licensee may trim trees on private property with the consent of the property owner.

(h) At the request of any person holding a valid building moving permit and upon sufficient notice, the licensee must temporarily raise, lower or cut its wires as necessary to facilitate a move. The direct expense of these temporary changes, including standby time, must be paid by the permit holder. The licensee may require payment in advance.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-18 Technical standards.

(a) Guidelines for system facilities, equipment, and services. The following performance guidelines shall serve as the initial minimum guidelines for the design, installation, maintenance and operation of the system:

(1) Compliance with FCC rules:

a. The system shall meet FCC requirements as set forth in (but not limited to) 47 C.F.R. Part 76 or as amended. If federal law is subsequently amended or minimum technical specifications are no longer mandated by the FCC, the technical specifications in effect at the time of adoption of the license agreement shall govern.

b. Should the FCC promulgate amended technical requirements which exceed the performance guidelines set forth within this license agreement, licensee shall operate its system in compliance with such FCC requirements.

c. All maintenance performed on the cable system by the licensee shall be in accordance with FCC regulations governing technical performance and operating standards, currently in effect or hereinafter amended.

(2) Continuous twenty-four hour operation. The system shall operate continuously for twenty-four (24) hours daily without severe material degradation of signal except immediately following extraordinary storms which adversely affect utility services or which damage major system components to the extent technically feasible under the circumstances.

(3) Scheduled testing. For any scheduled testing of the system which causes any substantial interruption to subscriber’s service, the licensee must make reasonable efforts to notify subscribers within thirty (30) days prior to such testing and possible interruption. This notification includes but is not limited to notification by character generator on the cable system, or neighborhood flyers in the areas to be tested. Insofar as feasible, licensee shall voluntarily interrupt the provision of cable service only with good cause and for the shortest time possible during periods of minimum cable system use.

(4) Testing for compliance with FCC standards. Following construction of the system, tests shall be conducted on this system which shall meet FCC Cable Television System Technical Performance Standards of 47 C.F.R. § 76.601 through and including § 76.630. On request of the licensing authority, the licensee shall provide copies of test results and documentation of any required repairs determined to be needed by the required tests.

(5) Maintenance of the system in good working order. Until the termination of this agreement and the satisfaction in full by the licensee of its obligations under this agreement and the article, in consideration of the license, the licensee agrees that it will maintain all of the material properties, assets and equipment of the system, and all such items added in connection with any upgrade, in good repair and proper working order and condition throughout the term of this agreement.

(6) Compliance with zoning and construction codes. Licensee shall comply with the terms of all applicable and lawful zoning, building and other ordinances, regulations, codes, guidelines and laws controlling the location or construction of towers, poles, cables, amplifiers, conduits and other facilities owned, leased and otherwise used by licensee for the cable system. This includes requirements to obtain applicable permits and to pay applicable and lawful plan review, permit and inspection fees. No construction will take place in public easements or public rights-of-way prior to any required permitting by and approval of City of Kingman, which shall not be unreasonably withheld or delayed.

(b) Specifications of the system:

(1) General requirements. Within ninety (90) days after the effective date of the agreement, licensee shall provide to the licensing authority a plan for construction of the system indicating, at least, a general overview of the construction schedule.

(2) General description. The system shall operate as a 750 MHZ system. It shall be two-way active and shall have a return capacity of 5 - 40 MHZ.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-19 Security deposit.

(a) The licensee must post with the city a cash security deposit in the amount specified in the license agreement before the license is effective. The city must hold the security deposit as security for:

(1) Faithful performance of all applicable provisions of law and the license agreement;

(2) Compliance with all orders, permits, and directions of the city; and

(3) Payment by the licensee of any claims, liens, or taxes due to the city because of the construction, operation or maintenance of the system.

(b) The city must place any security deposit in an interest bearing account such as those in which the city general funds are located. The interest will accrue to the benefit of the licensee but may not be withdrawn. All interest is added to and becomes part of the original security deposit during the term of the license.

(c) The city may immediately withdraw an appropriate amount, including interest and penalties, from the security deposit if:

(1) After ten (10) days’ notice the licensee fails to pay to the city any fees or taxes due and unpaid, damages, or costs or expenses that the city is compelled to pay by reason of any act or default of the licensee in connection with this license, unless licensee contests the matter within the ten-day notice period; or

(2) After thirty (30) days’ notice to the licensee, the licensee fails to comply with any provision of the license that the city reasonably determines can be remedied by an expenditure of the security deposit.

The city must promptly notify the licensee of the amount and date of any withdrawal.

(d) No automatic replenishment. If the amount is contested then there needs to be a resolution of that issue first. The parties agree to negotiate in good faith about any replenishment should the initial security fund be depleted.

(e) The city must return the security deposit to the licensee after the license is terminated if there is no outstanding default or unpaid amounts owed to the city by the licensee.

(f) The rights reserved to the city with respect to the security deposit are in addition to all other rights of the city under this article or other law. An action, proceeding, or exercise of a right with respect to the security deposit does not affect any other right the city may have.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-20 Enforcement remedies.

(a) Notice of violation. The city shall provide licensee with a detailed written notice of any license violation upon which it proposes to take action, and a ninety-day period within which licensee may: (1) demonstrate that a violation does not exist or to cure an alleged violation, or, (2) if the nature of the violation prevents correction of the violation within ninety (90) days, to initiate a reasonable plan of action to correct such violation (including a projected date by which it will be completed) and notify the city of such plan of action.

(b) Default. If licensee fails to disprove or correct the violation within ninety (90) days or, in the case of a violation which cannot be corrected in ninety (90) days and licensee has failed to initiate a reasonable plan of corrective action and to correct the violation within the specified time frame, then the city may declare the licensee in default, which declaration must be in writing. In the event that the city declares licensee in default, the city shall have the right to institute legal proceedings to collect damages from the date of declaration of default, or to exercise any other rights and remedies afforded to the city in law or equity, provided, however, that the city may institute revocation proceedings against licensee only after declaration of default, pursuant to subsection (f) and only on the grounds set forth therein.

(c) Hearing available to licensee. Within fifteen (15) days after receipt of a written declaration of default from the city, licensee may request, in writing, a hearing before the city or its agent, in a full public proceeding affording due process. Such hearing shall be held within thirty (30) days of the receipt of the request therefore and a decision rendered within ten (10) days after the conclusion of the hearing. Any decision shall be in writing and shall be based upon written findings of fact.

(d) Appeal of default. Licensee may appeal a declaration of default to arbitration.

(e) Procedures applicable to arbitration. Any arbitration held pursuant to this article or the license shall be conducted as follows:

(1) Licensee and the city each shall, within fifteen (15) days of the decision to proceed to arbitration, appoint one (1) arbitrator experienced in the cable television business, which arbitrators shall mutually select a third arbitrator of similar qualifications.

(2) Within thirty (30) days after appointment of all arbitrators and upon fifteen (15) days’ written notice to the parties to the arbitration, the arbitrators shall commence a hearing on the dispute.

(3) The hearing shall be recorded and may be transcribed at the request of either the city or licensee.

(4) At the close of the hearings and within thirty (30) days, the arbitrators shall prepare written findings and serve such decision upon the city and licensee.

(5) The decision of a majority of the arbitrators shall be binding upon the parties to the arbitration. Either party may seek judicial relief to the arbitrators’ decision under the following circumstances:

i. Either party fails to select an arbitrator.

ii. The arbitrators fail to select a third arbitrator.

iii. One (1) or more arbitrator is unqualified.

iv. Designated time limits have been exceeded.

v. The arbitrators have not proceeded expeditiously; or

vi. Based upon the record, the arbitrators’ decision is arbitrary, capricious, unsupported by substantial evidence, an abuse of discretion, or based upon a mistake of law.

(6) All costs of arbitration shall be borne equally by the parties to the arbitration unless otherwise ordered by the arbitrators.

(f) Revocation. The city may revoke the license only after declaration of default and only for defaults by licensee arising from the following circumstances:

(1) Material misrepresentation by licensee to the city in information required to be provided under the license.

(2) Licensee willfully or persistently violates any material orders or rulings of any regulatory body having jurisdiction over the license.

(3) Licensee willfully fails to acquire the insurance required by this article.

(g) Procedures governing revocation:

(1) The city shall give written notice to the licensee of its intent to revoke the license and the lawful grounds therefore. Licensee shall have ninety (90) days from such notice to object, in writing, and to state its reasons for such objection. In the event the city has not received a response satisfactory to it, it may then proceed to take its request for termination of the license before the council. The city shall cause to be served upon the licensee, at least ten (10) days prior to the time and place of such meeting, a written notice of this intent to request such termination, and the time and place of the meeting, notice of which shall be published by the city at least once, ten (10) days before such meeting in a newspaper of general circulation within the city.

(2) In addition to the licensee’s right to appeal any declaration of default to arbitration under this section, if the city orders the termination of the license, the licensee shall have the right to appeal the determination of the city within thirty (30) days to any agency or court of competent jurisdiction for de novo review. The city’s determination to terminate the license shall not be effective pending final resolution of all appeals under this section.

(3) The council may, at its sole discretion, take any other lawful action which it deems appropriate to enforce the city’s rights under the license in lieu of revocation of the license.

(h) Jurisdiction and venue. Any legal action, whether in law or equity, and including any arbitration or other alternative dispute resolution, commenced by either party to the license, shall be commenced in the superior court of the state in the State of Arizona, Mohave County.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-21 Performance evaluations.

(a) The city may hold a maximum of five (5) formal performance evaluations with public hearings per license during the term of each license. The city manager may determine the times for the hearings and the issues that the licensee must address in the hearings.

(b) The city may hold informal performance evaluations as described in the license agreement and as determined necessary by the city manager.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-22 Renewal of license.

(a) If a licensee initiates a formal license renewal process under Section 626(a)—(g) of the Cable Act, the licensee must notify the city at least thirty (30) months and no more than thirty-six (36) months before the license expiration date. When the city receives a notice from the licensee, or at any time at the city’s own initiative, the city must take the following actions:

(1) The city must review and evaluate the future cable-related community needs and interests and the licensee’s past performance. The review and evaluation must include opportunity for public comment.

(2) On completion of the review and evaluation, the city must notify the licensee that it may file a renewal application. The notice must specify the information to be included in the renewal application and the deadline for filing the application. The filing deadline must not be earlier than thirty (30) days after the date of the notice. If the licensee does not submit a renewal application by the specified date, the license may not be renewed under this subsection.

(3) The city must hold one (1) or more public hearings on the renewal application when the application is received or provide some other procedure for public comment on the application.

(4) After the public hearing or comment period, the city manager must recommend to the council that it either:

a. Renew the license, subject to the negotiation of a license agreement satisfactory to the city and the licensee; or

b. Issue a preliminary decision that the license should not be renewed.

(5) The council’s action under subsection (a)(4) must be taken within four (4) months of the date of the renewal application notice to the licensee under subsection (a)(2).

(b) In considering a renewal application, the city must consider whether:

(1) The cable operator has substantially complied with the material terms of the existing license and with applicable law.

(2) The quality of the cable operator’s service, including signal quality, response to consumer complaints, and billing practices has been reasonable in light of community needs (but without regard to the mix or quality, of cable services or other services provided over the system).

(3) The cable operator has the financial, legal, and technical ability to provide the services, facilities, and equipment in its proposal; and

(4) The cable operator’s proposal is reasonable to meet the future cable-related community needs and interests, taking into account the cost of meeting the needs and interests.

(c) If a preliminary decision is made that a license should not be renewed, at the request of the licensee or on its own initiative, the city must commence an administrative proceeding under Section 626(c) of the Cable Act Parties to the hearing and the public must have thirty (30) days after the recommended decision is issued to comment. The city manager must recommend that the council grant or deny an application within thirty (30) calendar days after the deadline for receipt of comments.

(d) The council must hold a public hearing on a renewal application. After the public hearing, the council must consider all of the evidence, either grant or deny the renewal application by resolution, and give the reasons for its determination in the resolution.

(e) The council must hold a public hearing on any negotiated license agreement prior to final council action on the license. This may be done in conjunction with the public hearing held under subsection (d).

(f) Notwithstanding subsections (a) through (c) in this section, a licensee may submit a proposal for renewal of a license under [Section] 626(h) of the Cable Act. The city must hold one (1) or more public hearing or provide some other procedure for public comment on the proposal. After the public hearing or comment period, the city manager must recommend that the council grant or deny the license renewal and the terms and conditions of any recommended renewal. A denial under this subsection shall not affect licensee’s renewal rights under Sections (a)—(g) of the Cable Act.

(g) The renewal of a license is not effective until the licensee has paid the renewal fee. The city must notify the licensee of the amount of the renewal fee.

(h) If the city denies the renewal of a license, the city may, on the recommendation of the city manager and with the approval of the council, acquire ownership of the cable system or transfer ownership of the system to another person. Any acquisition or transfer under this subsection must be at fair market value, determined on the basis of the cable system valued as a going concern.

(i) If the city does not renew a license and the city does not buy the cable system, the city may require the former licensee to remove its facilities and equipment. If the former licensee fails to do so within a reasonable period of time, the city may remove the facilities and equipment at the former licensee’s or the surety’s expense or at the expense of both.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-23 Transfers.

(a) The rights granted under the license may not be transferred, assigned, sublet or subdivided in any way or through any mechanism, including a sale or lease of the cable system or a sale or change in the control of the licensee without the express prior permission of the city, except as otherwise provided under federal law.

The word “transfer” as used herein means a transaction in which control of the licensee is transferred from one person or group of persons acting in concert with another person or another group of persons acting in concert. “Control” for purposes of this section shall mean majority voting control of the licensee; provided that, any financing arrangement, including but not limited to a mortgage or pledge, shall not be deemed a “transfer.”

(b) An entity which seeks approval of a proposed transfer shall file an application for approval of that transfer no later than one hundred twenty days (120) prior to the proposed effective date of the transfer. In making a determination to approve or disprove the application, the city shall only consider the legal, financial and technical qualifications of the proposed transferee to operate the cable system.

(c) The city shall have one hundred and twenty (120) days following the submission of the application for transfer to render a decision. If the city does not render a decision within this time, the transfer shall be deemed approved.

(d) Approval by the city of a transfer of a license does not constitute a waiver or release of any of the rights of the city under this article or the license agreement.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-24 Revocation or termination of license.

(a) A license may be revoked by the city on the recommendation of the city manager and with the approval of the council, for failure to construct, operate, or maintain the cable system as required by this article or the license agreement, or for some other material breach of this article or the license agreement. If the city has issued a license specifically conditioned upon the completion of construction or other specific obligations by a specified date under subsection 10-9(c), failure of the licensee to complete construction or comply with other specific obligations as required will result in the automatic forfeiture of the license without further action by the city. However, the city, at its discretion and for good cause shown by the licensee, may grant an extension of time. The city must give a licensee written notice that it is in material breach of this article or the license agreement. If the licensee does not correct the breach within thirty (30) days of the notice, or corrective action is not being actively and expeditiously pursued, the city may give written notice to the licensee of its intent to revoke the license. The city must give the licensee written notice of the basis for a revocation, stating its reasons.

(b) The council must hold a public hearing, and then determine by written resolution whether or not to revoke the license based the recommendations of the city manager, information presented at the public hearing, and other evidence in the record. The resolution must include reasons for the council’s decision.

(c) The city may revoke any license one hundred twenty (120) days after an assignment for the benefit of creditors or the appointment of a receiver or trustee to take over the business of the licensee, whether in a receivership, reorganization, bankruptcy assignment for the benefit of creditors, or other action or proceeding. The city must hold a public hearing before revoking a license under this subsection. The city may not revoke a license under this subsection if, during the one hundred twenty-day period:

(1) The assignment, receivership, or trusteeship is vacated; or

(2) The assignee, receiver, or trustee has fully complied with the terms and conditions of this article and the license agreement and has executed an agreement, approved by the court having jurisdiction, assuming and agreeing to be bound by the terms, and conditions of the license.

(d) The city may revoke the license if there is a foreclosure or other judicial sale of any of the facilities, equipment or property of a licensee, by serving notice on the licensee and the successful bidder at the sale. The license and all rights and privileges of the license will be revoked thirty (30) days after the city serves notice under this subsection unless:

(1) The city has approved a transfer of the license; and by the terms and conditions of the license.

(2) The successful bidder has agreed with the city to assume and be bound by the terms and conditions of the license.

(e) If the city revokes a license, or if for any other reason a licensee abandons, terminates, or fails to operate or maintain service to its subscribers, the city may:

(1) Require the former licensee to remove its facilities and equipment at the licensee’s or surety’s expense, or at the expense of both, after determining that the cable system cannot be economically maintained and operated;

(2) Acquire ownership of the cable system at an equitable market price on the recommendation of the city manager and with the approval of the council;

(3) After a public hearing, sell, assign, or transfer all or part of the assets of a cable system abandoned by a licensee for the best price offer obtainable. However, the legal, character, financial, technical, and other qualifications of the purchaser must meet city approval. The city must pay any consideration received in excess of the city’s costs, and after other creditors and subscriber claims have been satisfied, to the original licensee.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-25 Continuity of service mandatory.

It is the right of all subscribers to receive all available services from the licensee if their financial and other obligations to the licensee are satisfied.

(a) If the license is terminated, the licensee must do everything in its power to ensure that all subscribers receive continuous, uninterrupted service. The licensee must cooperate with the city to operate the system for a transition period following termination as necessary to maintain continuity of service to all subscribers. The transition period must not exceed twelve (12) months without the licensee’s written consent. During the transition period, the cable system must be operated under terms and conditions to which the city and the licensee agree, or on such other terms and conditions that will continue, to the extent possible, the same level of service to subscribers and that will provide reasonable compensation to the cable operator.

(b) If the licensee discontinues service to its subscribers without city approval, the license may be terminated immediately, and the city may take possession of all facilities and property, real and personal, related to the cable system for the purpose of operating the system. The city may undertake such operation itself or authorize operation by a contractor.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-26 Unlawful solicitation or acceptance of gifts.

It is unlawful for any person to solicit, accept, or offer any gift, favor, loan, service, promise, employment, or anything of value to a city official or employee, or for a city official or employee to solicit or accept anything of value, for the purpose of influencing the grant, modification, renewal, transfer, or any other matter affecting a license or the administration or enforcement of this article.

(Ord. No. 1582, § 1, 7-16-07)

Sec. 10-27 Administration.

(a) The city manager has responsibility for the administration and enforcement of this article and any license agreement, including:

(1) Establishing procedures for the conduct of public hearings and other proceedings required by this article or a license agreement.

(2) Conducting public hearings, including designating hearing officers.

(3) Coordinating management and operation of city government access channels.

(4) Providing technical, programming, and operational support to public agency users of a cable system.

(5) Planning and evaluating cable use and the development of cable services.

(6) Approving a transfer of an interest in a licensee.

(7) Approving modifications of a license agreement that do not substantially alter material provisions of the license; and issuing requests for proposals for licenses.

(b) Actions by the city manager in the following matters are subject to approval by the council:

(1) Granting or renewing a license.

(2) Approving transfer of a license.

(3) Revoking a license.

(4) Modifying a license agreement in a manner that substantially alters material provisions of the license.

(Ord. No. 1582, § 1, 7-16-07)


1

Editor’s note: Formerly, at the direction of the city, the rules and regulations for CATV licensees, adopted by reference by § 1 of Ord. No. 360 on Aug. 13, 1979, having been made public record by Res. No. 693, are set out in §§ 10-1—10-18.

Editor’s note: Ord. No. 1582, § 2, adopted July 16, 2007, repealed the former Ch. 10, §§ 10-1—10-18, and enacted a new Ch. 10 as set out herein. The former Ch. 10 pertained to similar subject matter and derived from Ord. No. 360, § 1(1), 8-13-79, made pub. Rec. by Res. No. 693, 8-13-79.

Cross references: Licenses and taxation, Ch. 8; cable television franchise listed, App. A.