Chapter 5.20 CATV FRANCHISE

For the purpose of this chapter, the following terms, phrases, words, and their derivations shall have the meanings given herein. Words used in the present tense include the future, words in the plural form include the singular form, and words in the singular form include the plural form. Terms listed in this section shall have their defined meanings unless the context requires that the ordinary meaning pertains. The words “shall” and “will” are mandatory and “may” is permissive. Words not defined shall be given their common and ordinary meanings.

“Abandonment” means the disconnection by the operator of specific facilities from the cable system.

“Activated” means the status of any capacity or part of the cable system in which any cable service requiring the use of that capacity or part is available without further installation of cable system equipment other than subscriber premises equipment, whether hardware or software.

“Affiliate,” when used in connection with the operator, means any person who owns or controls, is owned or controlled by, or is under common ownership or control with, the operator.

“Applicant” means any person who files an application for franchise to provide cable services within the city.

“Bad debt” means amounts lawfully billed to a subscriber and owed by the subscriber for cable service and accrued as revenues on the books of the operator, but not collected after reasonable efforts have been made by the operator to collect the charges.

“Basic service” means any cable service tier that includes, at a minimum, the retransmission of local television broadcast signals and local PEG access channels.

“Bi-directional” means that the cable system is capable of providing both upstream and downstream transmissions.

“Broadcast signal” means a television or radio signal transmitted over the air to a wide geographic audience, and received by a cable system by antenna, microwave, satellite dishes or any other means.

“Cable Act” means the Cable Communications Policy Act of 1984 as amended by the Cable Television Consumer Protection and Competition Act of 1992 and the Telecommunications Act of 1996, and any amendments thereto, 47 U.S.C. Section 521 et seq.

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

“Cable system” has the meaning specified in Section 602 of the Cable Act.

“Channel” means a portion of the frequency band capable of carrying a video programming service or combination of video programming services whether by analog or digital signal.

“Character generator” or “character generated” means the device by which alphanumerical programming is generated to be cablecast on a cable channel.

“City” means the city of Stanwood, a city of the state of Washington, existing pursuant to the Washington State Constitution, and the laws of the state of Washington.

“City council” means the council of the city of Stanwood or any future board constituting the legislative body of the city of Stanwood.

“Downstream” means carrying a transmission from the headend to remote points on the cable system or to interconnection points on the cable system.

“Emergency” means a condition of imminent danger to the health, safety, and welfare of property or persons located within the city including, without limitation, damage to persons or property from natural consequences, such as storms, earthquakes, riots or wars.

“Expanded basic service” means the tier of optional video programming services which is above “basic service,” and does not include “premium services.”

“External franchising cost” means the cost borne by the operator to fulfill a specific franchise requirement as authorized by federal law. These costs may include such items as capital contributions for public, education and government programming and institutional networks.

“Facilities” means the component parts of the cable system, including but not limited to coaxial cable, fiber-optic cable, amplifiers, taps, connectors, power supplies, electronics, towers, antennas, satellite dishes and optronics located in the rights-of-way.

“FCC” means the Federal Communications Commission.

“Fiber-optic” means a transmission medium of optical fiber cable, along with all associated optronics and equipment, capable of carrying cable service by means of electric light-wave impulses.

“Franchise” means a contractual agreement, executed between the city and the operator, containing the specific provisions of the authorization to operate a cable television system in the city is granted and regulated.

“Franchise area” means the area within the jurisdictional boundaries of the city, including any areas annexed by the city during the term of this franchise.

“Franchise fee” means any tax, fee or assessment of any kind imposed by the city or other government entity on the operator or subscriber, or both, solely because of their status as such and which may be lawfully imposed. Franchise fees shall not include any tax, fee or assessment of general applicability, capital costs required by this franchise to be incurred by the operator for public, educational or governmental access facilities and equipment, or requirements or charges incidental to the awarding or enforcing of the franchise, such as payments for bonds, insurance, indemnification, penalties or liquidated damages.

“Gross revenues” means any and all revenues derived by the operator, or an affiliate, from the operation of the cable system to provide cable services in the city, other than revenue from transactions related to real property, the capital contribution collected from subscribers and paid in support of PEG access channels, bad debt and any taxes on services furnished by the operator, imposed on the operator or any subscriber or used by any governmental unit, agency or instrumentality and collected by the operator for such entity. However, gross revenues shall include franchise fee revenue and revenues received by the operator or an affiliate from local and national advertising sales, home shopping channels, and similar sources. When the revenue of the operator includes gross revenues from sources outside of the city, an operator shall allocate the appropriate percentage of gross revenues by multiplying the revenues received by a fraction, the numerator of which is the number of operator’s subscribers in the city, and the denominator of which is the total number of all subscribers.

“Headend” means the operator’s primary facility for signal reception and dissemination on its cable system, including cables, antennas, wires, satellite dishes, monitors, lasers, switchers, modulators, processors for broadcast signals, and all other related equipment and facilities.

“Installation” means the connection of the cable system by means of a cable drop from feeder cable to subscribers’ terminals.

“Institutional network” or “I-net” means that part of a cable system’s facilities or capacity designated for noncommercial communications to, from and among the city, fire districts, government agencies, schools and libraries via cable, owned by the operator.

“Node” means that portion of the cable system where fiber-optic cables and coaxial cables meet. The node consists of an enclosure housing optronics and electronics that convert light into radio frequency (“RF”) signals and RF signals into light necessary for the delivery of bi-directional cable services to subscribers over a hybrid fiber-coaxial cable (“HFC”) cable system.

“Operator” means any person or group of persons, including the operator, who provide(s) cable service over a cable system and directly or through one or more affiliates owns a significant interest in such cable system or who otherwise control(s) or are (is) responsible for, through any arrangement, the management and operation of such a cable system in the city.

“OVS operator” shall mean any person who has been certified by the Federal Communications Commission to operate an open video system under Part 76 of its rules, 47 C.F.R., Part 76.

“Open video system” means a facility, consisting of a set of transmission paths and associated signal generation, reception and control equipment that (i) is designed to provide cable service which includes video programming and which is provided to multiple subscribers within a community; and (ii) affords open access to independent video programming providers that are not affiliates of the open video system operator.

“OVS services” shall mean any service provided through an open video system except telecommunications services regulated by the Washington Utilities and Transportation Commission. OVS services shall include, but not be limited to, multi-channel video services, video programming, video dial tone service, cable television service or other similar video services and cable modem services or other non-dial-up internet access services. “OVS services” shall not include telephone.

“Person” means any individual, sole proprietorship, partnership, association, government or corporation, or any other form of entity or organization.

“Premium service” means programming choices (such as movie channels, pay-per-view programs, or video on demand) offered to subscribers on a per-channel, per-program or per-event basis.

“Public, education and government (PEG) access channels” means channel capacity designated by the operator for the transmission of public, educational, or government access use in accordance with a franchise and 47 U.S.C. Section 521.

“Public ways” or “rights-of-way” include the surface of and space above and below any real property in the city in which the city has an ownership interest, or interest as a trustee for the public including, but not limited to, all public streets, highways, roads, alleys, sidewalks, tunnels, viaducts, bridges, skyways, or any other public place, area or property under the control of the city, and any public or utility easements established, dedicated or devoted for public utility purposes.

“Subscriber” means any person who or which elects to subscribe to, for any purpose, cable service provided by the operator by means of or in connection with the cable system and whose premises are physically wired and lawfully activated to receive cable service from the operator’s cable system.

“Tier” means a group of channels for which a single periodic subscription fee is charged.

“Upstream” means carrying a transmission to the headend from remote points on the cable system or from interconnection points on the cable system. (Ord. 1156 § M1, 2004).

5.20.020 Terms of franchise.

(1) Authority to Grant Franchises for Cable Television Systems and Other Video Systems. It shall be unlawful to engage in or commence construction, operation, or maintenance of a cable television system or other video systems without a franchise issued under this chapter. The city council may, by ordinance, award nonexclusive franchises to construct, operate and maintain cable television systems and other video systems which comply with the terms and conditions of this chapter.

Any franchise granted pursuant to this chapter shall be nonexclusive and shall not preclude the city from granting other or further franchises or permits or preclude the city from using any public rights-of-way, streets, or other public properties or affect its jurisdiction over them or any part of them, or limit the full power of the city to make such changes, as the city shall deem necessary, including the dedication, establishment, maintenance, and improvement of all new public rights-of-way and other public properties.

(2) Incorporation by Reference. The provisions of this chapter shall be incorporated by reference granting a franchise subject to this chapter, approved hereunder. The provisions of any proposal submitted and accepted by the city shall be incorporated by reference in the applicable franchise. However, in the event of any conflict between the proposal, this chapter and the franchise, the franchise shall be the prevailing document.

(3) Nature and Extent of the Franchise. Any franchise granted hereunder by the city shall authorize a franchisee, subject to the provisions herein contained, to:

(a) Engage in the business of operating and providing cable services or other video services and the distribution and sale of such services to subscribers within the city;

(b) Erect, install, construct, repair, replace, reconstruct, maintain and retain in, on, over, under, upon, across and along any street, such amplifiers and appliances, lines, cables, conductors, vaults, manholes, pedestals, attachments, supporting structures, and other property as may be necessary and appurtenant to the cable television system or other video system; and provide similar cable facilities, or properties rented or leased from other persons, firms or corporations, such as public utilities or other franchisee franchised or permitted to do business in the city. No privilege or exemption shall be granted or conferred upon a franchisee by any franchise except those specifically prescribed therein, and any use of any street shall be consistent with any prior lawful occupancy of the street or any subsequent improvement or installation therein.

(4) Length of the Franchise. The city shall have the right to grant franchises for a period of time appropriate to the circumstances of the particular grant. (Ord. 1156 § M2, 2004).

5.20.030 Application.

An applicant for franchise to construct, operate, and maintain a cable television system or other video system within the city shall file an application in a form prescribed by the city, accompanied by a nonrefundable filing fee as established by resolution of the city council. (Ord. 1156 § M3, 2004).

5.20.040 Franchise issuance.

Prior to the granting of a franchise, the city council shall conduct a public hearing to determine the following:

(1) Initial Franchise.

(a) Whether the public will be benefited by the granting of a franchise to the applicant;

(b) Whether the applicant has the requisite financial and technical resources and capabilities to build, operate and maintain a cable television system or other video system in the area;

(c) Whether the applicant has any conflicting interests, either financial or commercial, which will be contrary to the interests of the city;

(d) Whether the applicant will comply with all terms and conditions placed upon a franchisee by this chapter;

(e) Whether the applicant is capable of complying with all relevant federal, state, and local regulations, codes and standards pertaining to the construction, operation and maintenance of the cable television system or other video system facilities incorporated in its application for a franchise;

(f) Whether the public rights-of-way have the capacity to accommodate the cable television system or other video system;

(g) Whether the proposed franchise is consistent with the city’s present and future use of the public rights-of-way to be used by the cable television system or other video system;

(h) Whether the benefit to the public from the cable television system or other video system outweighs the potential disruption to existing users of the public rights-of-way to be used by the cable television system or other video system, and the resultant inconvenience which may occur to the public; and

(i) Whether all other conditions resulting from the grant of the franchise have been considered by the city and that the city determines that the grant is still in the public’s best interest.

(2) Renewal Franchise.

(a) Whether the franchisee has substantially complied with the material terms of the existing franchise.

(b) Whether the quality of the franchisee’s previous service has been reasonable in light of community needs.

(c) Whether the franchisee’s proposal is reasonable to meet the future cable-related community needs and interests, taking into account the cost of meeting such needs and interests.

(d) Whether the franchisee has the financial, legal, and technical ability to provide the services, facilities, and equipment as set forth in a franchisee’s proposal.

(e) Whether such renewal is consistent with applicable federal law. (Ord. 1156 § M4, 2004).

5.20.050 Acceptance.

Within 60 days after the effective date of the ordinance awarding a franchise, or within such extended period of time as the city council in its discretion may authorize, a franchisee shall file with the finance director its unconditional written acceptance of the franchise and all of its terms and conditions, in a form satisfactory to the city attorney, together with the bond and evidence of insurance as required by SMC 5.20.320, Insurance, and SMC 5.20.330, Performance bond. (Ord. 1156 § M5, 2004).

5.20.060 Police powers.

In accepting any franchise, a franchisee acknowledges that its rights hereunder are subject to the legitimate rights of the police power of the city and the city council to adopt and enforce general ordinances necessary to protect the safety and welfare of the public and it agrees to comply with all applicable general laws enacted by the city pursuant to such power. The city reserves the right to use, occupy and enjoy any public rights-of-way or other public places for any purpose, including, without limitation, the construction of any water, sewer or storm drainage system, installation of traffic signals, street lights, trees, landscaping, bicycle paths and lanes, equestrian trails, sidewalks, other pedestrian amenities, other city services, or uses not limited to the enumerated items as listed herein, and other public street improvement projects. The city council reserves the right to delegate its authority for franchise administration to a designated agent. (Ord. 1156 § M6, 2004).

5.20.070 Construction standards.

Any cable system or other video system constructed under this chapter shall be placed and maintained at such places and positions in or upon such public rights-of-way and public places as shall not interfere with the passage of traffic and the use of adjoining property, and shall conform to the applicable section of the National Electrical Code, codes of the state of Washington, and city rules, regulations, ordinances, codes, standards and policies pertaining to such construction.

At least seven days prior to the intended construction, a franchisee shall inform all residents in the affected area that a construction project will commence, the dates and nature of the project, and a toll-free telephone number that the subscriber may call for further information. A pre-printed door hanger may be used for this purpose.

The city reserves the right, as the interest of the public may require, to ensure that (1) the public rights-of-way have the capacity to accommodate the cable television system or other video system, (2) the proposed construction is consistent with the city’s present and future use of the public rights-of-way, (3) the benefit to the public from the construction of the cable television system or other video system outweighs the potential disruption to existing users of the public rights-of-way and the resultant inconvenience which may occur to the public, and may require the installation or construction of new facilities proposed by the franchisee to be constructed in arterial thoroughfares or to be installed in alternate public rights-of-way which are substantially comparable in terms of the expense to the franchisee for installation or construction, and which provide distribution to all affected parcels of property that is equal or better to the requested installation route. The city shall give particular preference to the alternate installation location in cases in which the existing improvements to the public right-of-way would be affected by the proposed installation, or where the structural integrity of the surface of the right-of-way, or inconvenience to the public caused by the proposed installation cannot be mitigated through alternative means.

(1) Notice of Entry on Private Property. Where the franchisee has lawful authority to enter upon private property, at least 24 hours prior to entering private property or easements adjacent to or on such private property to perform new plant construction or reconstruction, a notice indicating the nature and location of the work to be performed shall be physically posted upon the affected property. A franchisee shall make a good faith effort to comply with the property owner/resident’s preferences, if any, on location or placement of underground installations (excluding aerial cable lines utilizing existing poles and existing cable paths), consistent with sound engineering practices.

(2) Emergency Repairs. Notice requirements of subsection (1) of this section, are suspended for purposes of entry upon private property to perform repairs at the subscriber’s request or in the event of system outage repairs or other emergencies in which insufficient time is available to provide notice to subscribers.

(3) Restoration of Property. After performance of work, the franchisee shall restore private property as nearly as possible to its condition prior to construction. Any disturbance of landscaping, fencing, or other improvements on private property shall, at the sole expense of a franchisee, be promptly repaired and restored (including replacement of such items as shrubbery and fencing) to the reasonable satisfaction of the property owner. (Ord. 1156 § M7, 2004).

5.20.080 Undergrounding and landscaping.

In those areas and portions of the city where the transmission or distribution facilities of the public utility providing telephone service and those of the facility providing electric service are underground or hereafter may be placed underground, then a franchisee shall likewise construct, operate and maintain all of its transmission and distribution facilities in the same area underground upon city approval. Such activities shall be made in concurrence and cooperation with the other affected utilities. Amplifiers and associated equipment in a franchisee’s transmission and distribution lines may be in appropriate housing upon the surface of the ground, accompanied by landscaping and screening acceptable to the city. (Ord. 1156 § M8, 2004).

5.20.090 Construction in right-of-way.

(1) Right-of-Way Permit. A franchisee shall submit an application for, pay the permit fee, and obtain a right-of-way permit to perform work in any public rights-of-way. No work, other than emergency repairs or standard installations, shall commence without such a permit. Emergency repairs may be made immediately with notification given to the city no later than the next business day.

(2) Placement. In accordance with the permit issued, all transmission lines, equipment, and structures shall be located and placed so as to cause minimum interference with the rights and reasonable convenience of property owners, and at all times shall be maintained in a safe condition, and in good order and repair. Suitable barricades, flags, lights, flares, or other devices shall be used at such times and places as are reasonably required for the safety of the public. Any poles or other fixtures placed in any street by a franchisee shall be placed in such manner as not to interfere with the usual travel on such public way. A franchisee shall comply with the manual for in-street work any time any poles or other fixtures are placed in any street or public way.

(3) Interference with Use of Streets. When installing, locating, laying, or maintaining facilities, apparatus, or improvements, a franchisee shall not interfere with the use of any street to any greater extent than is necessary, and shall leave the surface of any such street in as good condition as it was prior to performance by the franchisee of such work. Any facility, apparatus, or improvement under this chapter shall be laid, installed, located, or maintained in conformance with city rules, regulations, ordinances, standards and policies. In any event, a franchisee shall, at its own expense, and to the satisfaction of the city in accordance with the terms of the right-of-way permit, restore to city standards and specifications any damage or disturbance caused to streets as a result of franchisee’s construction or operations.

(4) Relocation/Removal. Upon receipt of 30 days’ prior written notice, a franchisee, at its own expense, and within the time period prescribed by the city, shall protect, support, temporarily disconnect, relocate, or remove any of its facilities or property within the public rights-of-way when, in the judgment of the city, the same is required by reason of traffic conditions, public safety or improvements by governmental agencies of that portion of the right-of-way. Nothing herein shall be deemed a taking of the property of a franchisee, and a franchisee shall be entitled to no surcharge by reason of this section.

(5) City’s Performance of Work. After receipt of 30 days’ prior written notice, and upon the failure of a franchisee to commence, pursue, or complete any work required by the provisions of this chapter or failure to comply with any applicable federal, state or city laws, ordinances, rules, regulations or standards to be performed on any street, within the reasonable time prescribed and to the satisfaction of the city, the city may, at its option, cause such work to be done, and a franchisee shall pay to the city the reasonable cost thereof, which costs may include the city’s reasonable overhead and administrative expense, within 30 days after receipt of demand. (Ord. 1156 § M9, 2004).

5.20.100 Safety requirements.

A franchisee, in accordance with applicable national, state, and local safety requirements, shall, at all times, employ ordinary care and shall install and maintain and use commonly accepted methods and devices for preventing failures and accidents which are likely to cause damage, injury, or nuisance to the public. All structures and all lines, equipment and connections in, on, over, under, across and upon public rights-of-way or places of a franchise area, wherever situated or located, shall at all times be kept and maintained in a safe, suitable condition, and in good order and repair. (Ord. 1156 § M10, 2004).

5.20.110 Building moving.

Whenever any person shall have obtained a permit from the city to use any street for the purpose of moving any building, a franchisee, upon seven days’ written notice from the city, shall raise or remove, at the expense of the permittee desiring to move the building, any of a franchisee’s wires which may obstruct the removal of such building; provided, that the moving of such building shall be done in accordance with all city codes, regulations and general ordinances of the city. A franchisee shall be indemnified and held harmless from any and all damages or claims of whatsoever kind or nature, caused directly or indirectly from this action, except to the extent such damages or claims are the result of franchisee’s negligent action. A franchisee may also require payment in advance from the permittee. (Ord. 1156 § M11, 2004).

5.20.120 Trimming of trees.

Upon approval of the city public works department and upon granting of a permit by the director of public works where applicable, a franchisee shall have the authority to trim trees, in accordance with National Arborist Association standards, ordinance and easement restrictions, upon and hanging over streets, alleys, sidewalks, and public places of the city so as to prevent the branches of such trees from coming in contact with the wires and cables of the franchisee. A franchisee shall be responsible for debris removal from such activities. Failure to remove debris after a reasonable time shall result in the debris being removed by the city and the costs involved charged to the franchisee. Tree trimming shall be coordinated with other utility providers, including but not limited to Public Utility District No. 1 of Snohomish County. (Ord. 1156 § M12, 2004).

5.20.130 Rates.

Within 30 days after the grant of an initial franchise hereunder, a franchisee shall file with the city a complete schedule of all present rates charged to all subscribers. Prior to implementation of any change in rates or charges for any service or equipment provided by a franchisee, a franchisee shall provide the city and all subscribers a minimum of 30 days’ prior written notice of such change.

Subject to the Act and resultant FCC regulations, the city may regulate the rates or charges for providing basic service and equipment and may establish rate regulation review procedures as permitted by federal law. (Ord. 1156 § M13, 2004).

5.20.140 Cable availability.

Cable service shall not be denied to any group of potential residential cable subscribers because of the income of the residents of the local area in which such group resides. (Ord. 1156 § M14, 2004).

5.20.150 Franchise fee.

A franchisee shall pay to the city quarterly, on or before the thirtieth day after the end of each calendar quarter, a percentage, as established by separate ordinance, of gross revenues, as defined herein for the preceding calendar quarter. Such remittances shall be accompanied by forms furnished by the city to report detailed information as to the sources of such revenues. Any remittance not paid when due shall bear interest at the rate established in the ordinance conferring the franchise. (Ord. 1156 § M15, 2004).

5.20.160 External franchising costs.

Prior to incurring any expense for any franchise-related requirements that would be treated as an external cost passed through to subscribers under applicable federal law, the franchisee shall notify the city of its intent to exercise its right and the amount to be passed through to subscribers. The city may waive the franchise-related requirement if, in the city’s opinion, the increase in rates would be a burden on subscribers. (Ord. 1156 § M16, 2004).

5.20.170 Cable television system evaluation.

The city may require annual franchise compliance evaluations during the term of a franchise. The city may also require periodic meetings in addition to the annual franchise compliance evaluations. The city shall provide a franchisee 30 days’ prior written notice of the franchise compliance evaluation or meeting date and topic of discussion. (Ord. 1156 § M17, 2004).

5.20.180 Records required and city’s right to inspect.

(1) A franchisee shall at all times maintain at its office a full and complete set of maps showing the location of the cable television system or other video system installed or in use in the city, exclusive of subscriber drops and equipment provided in subscribers’ homes, and a summary of service calls, identifying the number, general nature and disposition of such calls. Subject to reasonable notification this information will be available for review by the city. Furthermore, a summary of such service calls shall be submitted to the city, within 30 days of a written request from the city, in a form reasonably acceptable to the city.

(2) Upon 48 hours’ written notice, and during normal business hours, the franchisee shall permit examination by a duly authorized representative of the city, of all franchisee property and facilities, together with any appurtenant property and facilities of the franchisee situated within the city, and all records relating to the franchise or this chapter, provided they are necessary to enable the city to carry out its regulatory responsibilities under local, state and federal law. Such records include all books, records, maps, plans, financial statements, service complaint logs, performance test results, records of request for service, and other like materials of the franchisee. The franchisee shall have the right to be present at any such examination.

(3) The city agrees to treat as confidential any books and records that constitute proprietary or confidential information under federal or state law, to the extent a franchisee makes the city aware of such confidentiality. A franchisee shall be responsible for clearly and conspicuously stamping the word “Confidential” on each page that contains confidential or proprietary information, and shall provide a brief written explanation as to why such information is confidential under state or federal law. If the city believes it must release any such confidential books and records in the course of enforcing a franchise or this chapter, or for any other reason, it shall advise a franchisee in advance so that a franchisee may take appropriate steps to protect its interests. If the city receives a demand from any person for disclosure of any information designated by a franchisee as confidential, the city shall, so far as consistent with applicable law, advise a franchisee and provide a franchisee with a copy of any written request by the party demanding access to such information within a reasonable time. Until otherwise ordered by a court or agency of competent jurisdiction, the city agrees that, to the extent permitted by state and federal law, it shall deny access to any of a franchisee’s books and records marked confidential as set forth above to any person.

(4) Copies of all petitions, applications, communications and reports submitted by a franchisee, or on behalf of or relating to a franchisee, to the Federal Communications Commission, Securities and Exchange Commission, or any other federal or state regulatory commission or agency having jurisdiction with respect to any matters affecting a cable television system or other video system authorized pursuant to this chapter and a franchise shall be made available to the city upon request. Copies of responses from the regulatory agencies to a franchisee shall likewise be furnished to the city upon request. (Ord. 1156 § M18, 2004).

5.20.190 Public, educational and government access.

The city may require, as a condition of a franchise granted pursuant to this chapter, provisions for public, educational and government (“PEG”) access. (Ord. 1156 § M19, 2004).

5.20.200 Citywide PEG access interconnection.

In the case of multiple cable television systems and other video systems operating in the city, the city may request a franchisee to begin negotiations with the other franchisees to interconnect PEG access channels delivered to subscribers by each of the franchisees in the city. Interconnection of PEG access channels may be accomplished by direct cable connection, microwave link, or other technically feasible method.

Upon receiving a request of the city to interconnect, a franchisee shall commence negotiations and shall report the results of such negotiations no later than 60 days after such initiation. (Ord. 1156 § M20, 2004).

5.20.210 Institutional networks (I-nets).

The city may require a franchisee to construct an I-net in accordance with applicable law. (Ord. 1156 § M21, 2004).

5.20.220 PEG access equipment.

A franchisee may be required to provide PEG access support in accordance with applicable law. (Ord. 1156 § M22, 2004).

5.20.230 Nondiscrimination.

In connection with rates, charges, cable facilities, rules, regulations and in all franchisee’s services, programs or activities, and all franchisee’s hiring and employment made possible by or resulting from this franchise, there shall be no discrimination by a franchisee or by a franchisee’s employees, agents, subcontractors or representatives against any person because of sex, age 40 through 70 (except minimum age), race, creed, national origin, marital status or the presence of any disability, including sensory, mental or physical handicaps, unless based upon a bona fide occupational qualification in relationship to hiring and employment. A franchisee shall not violate any applicable federal, state or local law or regulation regarding nondiscrimination in employment or the provision of services.

Any material violation of this provision shall be grounds for termination of a franchise by the city and, in the case of the franchisee’s breach, may result in ineligibility for further city agreements; provided, that nothing in this chapter shall be deemed to prohibit the establishment of a graduated scale of charges and classified rate schedules to which any subscriber coming within such classification would be entitled; and provided further, that connection and/or service charges may be waived or modified during promotional campaigns of a franchisee. (Ord. 1156 § M23, 2004).

5.20.240 Parental control devices.

Upon request by a subscriber, a franchisee shall make available and may charge the subscriber a fee not to exceed the franchisee’s actual cost including applicable handling fees, a device by which the subscriber can prohibit viewing and audio reception of a particular cable service or video programming service. (Ord. 1156 § M24, 2004).

5.20.250 Devices for the hearing impaired.

A franchisee shall comply with FCC closed captioning requirements, 47 C.F.R. 76.606, or any successor rules and regulations thereto. (Ord. 1156 § M25, 2004).

5.20.260 Discounts.

The operator shall offer a discount of 30 percent from the normal charge for basic services and installations to those individuals age 62 or older or handicapped who are the legal owner or lessee/tenant of their residence; provided, that their combined disposable income from all sources does not exceed income levels used by the city for other utility discounts. The city or its designee shall be responsible for certifying to the operator that such applicants conform to the specific criteria. At its sole option the operator may offer a limited level of service commonly referred to as “lifeline” at a reduced rate for those individuals unable to afford additional levels of service including such programming as satellite-delivered superstations and movies, etc. (Ord. 1156 § M26, 2004).

5.20.270 Continuity of service.

It shall be the right of all subscribers to continue receiving cable service or other video services so long as their financial and other obligations to a franchisee are fulfilled. In this regard a franchisee shall act, so far as it is within its control, to ensure that all subscribers receive continuous uninterrupted service during the term of the franchise.

In the event a franchisee fails to operate a cable television system or other video system for 72 continuous and consecutive hours without prior notification to and approval of the city council or without just cause such as an impossibility to operate the cable television system or other video system because of the occurrence of an emergency or other circumstances reasonably beyond a franchisee’s control, the city may, after notice and an opportunity for a franchisee to commence operations at its option, operate the cable television system or other video system or designate someone to operate the cable television system or other video system until such time as a franchisee restores cable service or other video service or a replacement franchisee is selected. If the city is required to fulfill this obligation for a franchisee, a franchisee shall reimburse the city for all reasonable costs in excess of revenues from the cable television system received by the city that are the result of a franchisee’s failure to perform. (Ord. 1156 § M27, 2004).

5.20.280 Franchise nontransferable.

(1) A franchisee shall not sell, transfer, lease, assign, sublet or dispose of, in whole or in part, either by forced or involuntary sale, or by ordinary sale, consolidation or otherwise, the franchise and/or cable television system or any of the rights or privileges granted by the franchise without the prior consent of the city council which consent shall not be unreasonably denied or delayed and shall be denied only upon a good faith finding by the city that the proposed transferee lacks the legal, technical or financial qualifications to perform its obligations under the franchise agreement or such other ground as may be permitted. Any attempt to sell, transfer, lease, assign or otherwise dispose of the franchise and/or cable television system without the consent of the city council shall, by federal law, result in an immediate termination of the franchise. This provision shall not apply to sales of property or equipment in the normal course of business. No consent from the city shall be required for a transfer in trust, mortgage, or other instrument of hypothecation, in whole or in part, to secure an indebtedness, or for a pro forma transfer to a corporation, partnership or other entity controlling, controlled by or under common control with a franchisee.

(2) The following nonexclusive list of events shall be deemed to be a sale, assignment or other transfer of the franchise and/or cable television system requiring compliance with this section:

(a) The sale, assignment or other transfer of all or a majority of a franchisee’s assets;

(b) The sale, assignment or other transfer of capital stock or partnership, membership or other equity interests in a franchisee by one or more of its existing shareholders, partners, members or other equity owners so as to create a new controlling interest in the franchisee;

(c) The issuance of additional capital stock or partnership, membership or other equity interest by a franchisee so as to create a new controlling interest in the franchisee; and

(d) The entry by the franchisee into an agreement changing the management or operation of the franchisee and/or the cable television system. The term “controlling interest” as used herein means majority equity ownership of the franchisee.

(3) Except as provided below, no franchisee may sell or otherwise transfer ownership in a franchise and/or cable television system within a 36-month period following either the acquisition or initial construction of said cable television system by the franchisee. In the case of a sale of multiple cable television systems, if the terms of the sale require the buyer to subsequently transfer ownership of one or more such cable television systems to one or more third parties, such transfer shall be considered a part of the initial transaction. The above-described 36-month holding period shall not apply to:

(a) Any transfer of ownership interest in any franchise and/or cable television system which is not subject to federal income tax liability;

(b) Any sale required by operation of any law or any act of any agency, any state or political subdivision or the city; or

(c) Any sale, assignment, or transfer, to one or more purchasers, assignees, or transferees controlled by, controlling, or under common control with, the seller, assignor, or transferor.

(4) In the case of any sale or transfer of ownership of any franchise and/or cable television system after the 36-month period following acquisition of such cable television system, and in accordance with federal law, the city shall have 120 days to act upon any request for approval of such sale or transfer that contains or is accompanied by such information as is required in accordance with Federal Communications Commission regulations, the requirements of this chapter or a franchise, and such other reasonable information as the city, in its sole discretion, may request. If the city fails to render a final decision on the request within 120 days from receipt by the city of all required information, such request shall be deemed granted unless the requesting party and the city agree to an extension of time.

(5) A franchisee shall notify the city in writing of any foreclosure or any other judicial sale of all or a substantial part of the franchise property of the franchisee or upon the termination of any lease or interest covering all or a substantial part of said franchise property. Such notification shall be considered by the city as notice that a change in control of ownership of the franchise has taken place and the provisions under this section governing the consent of the city to such change in control of ownership shall apply.

(6) For the purpose of determining whether it shall consent to such change, transfer, or acquisition of control, the city may inquire into the qualifications of the prospective transferee or controlling party, and franchisee shall assist the city in any such inquiry. In seeking the city’s consent to any change of ownership or control, the franchisee shall have the responsibility of ensuring that the transferee completes an application in form and substance reasonably satisfactory to the city, which application shall include the information required under state and federal law. An application, acceptable to the city, shall be submitted to the city no more than 120 days nor less than 90 days prior to the date of transfer. The transferee shall be required to establish that it possesses the legal, technical and financial qualifications to operate and maintain the cable television system and comply with all franchise requirements for the remainder of the term of the franchise. If, after considering the legal, financial, character and technical qualities of the applicant and determining that they are satisfactory, the city finds that such transfer is acceptable, the city shall transfer and assign the rights and obligations of such franchise. The consent of the city to such transfer shall not be unreasonably denied.

(7) Any financial institution having a pledge of the franchisee or its assets for the advancement of money for the construction and/or operation of the franchise shall have the right to notify the city that it or its designee satisfactory to the city shall take control of and operate the cable television system, in the event of a franchisee default in its financial obligations. Further, said financial institution shall also submit a plan for such operation within 30 days of assuming such control that will ensure continued service and compliance with all franchise requirements during the term the financial institution exercises control over the cable television system. The financial institution shall not exercise control over the cable television system for a period exceeding one year unless extended by the city in its discretion and during said period of time it shall have the right to petition the city to transfer the franchise to another franchisee.

(8) The city shall be reimbursed for its out-of-pocket costs associated with its review of a franchisee’s request.

(a) A cable system or other video system shall not be sold, assigned, transferred, leased, or disposed of, either in whole or in part, either by involuntary sale or by voluntary sale, merger, consolidation, nor shall title thereto, either legal or equitable, or any right, interest, or property therein pass to or vest in any person or entity, without the prior written consent of the city, which consent shall not be unreasonably withheld.

(b) A franchisee shall promptly notify the city of any actual or proposed change in, or transfer of, or acquisition by any other party of control of a franchisee. The word “control” as used herein is not limited to majority stockholders but includes actual working control in whatever manner exercised. A rebuttable presumption that a transfer of control has occurred shall arise on the acquisition or accumulation by any person or group of persons of a majority of the shares or the general partnership interest in the grantee. Every change, transfer or acquisition of control of a franchisee shall make a franchise subject to cancellation unless and until the city shall have consented thereto.

(c) The parties to the sale or transfer shall make a written request to the city for its approval of a sale or transfer and furnish all information required by law and the franchise.

(d) The city shall render a final written decision on the request within 120 days of the request, provided it has received all requested information. Subject to the foregoing, if the city fails to render a final decision on the request within 120 days, such request shall be deemed granted unless the requesting party and the city agree to an extension of time.

(e) Within 30 days of any transfer or sale, if approved or deemed granted by the city, a franchisee shall file with the city a copy of a written instrument evidencing such sale or transfer of ownership or control, certified and sworn to as correct by a franchisee and the transferee.

(f) In reviewing a request for sale or transfer, the city may inquire into the legal, technical and financial qualifications of the prospective controlling party or transferee, and the franchisee shall assist the city in so inquiring.

(g) The consent or approval of the city to any transfer by a franchisee shall not constitute a waiver or release of any rights of the city, and any transfer shall, by its terms, be expressly subordinate to the terms and conditions of the franchise.

(h) Notwithstanding anything to the contrary in this section, the prior approval of the city shall not be required for any sale, assignment or transfer of the franchise and cable television system or other video system to an entity controlling, controlled by or under the same common control as a franchisee; provided, that the proposed assignee or transferee must show financial responsibility as may be determined necessary by the city and must agree in writing to comply with all provisions of the franchise. (Ord. 1156 § M28, 2004).

5.20.290 Removal and abandonment of property of franchisee.

The city may direct a franchisee to temporarily disconnect or bypass any equipment of a franchisee in order to complete street construction or modification or install and remove underground utilities. Such removal, relocation or other requirement shall be at the sole expense of a franchisee.

In the event that the use of any part of the cable television system is discontinued for any reason for a continuous period of 12 months, or in the event such system or property has been installed in any street or public place without complying with the requirements of the franchise or other city ordinances or the franchise has been terminated, canceled or has expired, a franchisee shall promptly, upon being given 10 days’ written notice, remove, at its expense, within 180 days from the streets or public places all such property and poles of such system other than any which the city may permit to be abandoned in place. In the event of such removal, a franchisee shall promptly restore the street or other areas from which such property has been removed to a condition satisfactory to the city.

Any property of a franchisee remaining in place 180 days after the termination or expiration of the franchise shall be considered permanently abandoned. The city may extend such time not to exceed an additional 90 days.

Any property of a franchisee to be abandoned in place after 180 days shall be abandoned in such manner as the city shall prescribe. Upon permanent abandonment of the property of a franchisee in place, the property shall become that of the city, and a franchisee shall submit to the finance and accounting manager an instrument in writing, to be approved by the city attorney, transferring to the city the ownership of such property. None of the foregoing affects or limits a franchisee’s rights to compensation for an involuntary abandonment of its property under state or federal law. (Ord. 1156 § M29, 2004).

5.20.300 Revocation for cause.

Any franchise granted by the city may be terminated during the period of such franchise for failure by a franchisee to comply with material provisions of this chapter and/or the franchise.

Unless a franchisee requests termination of its franchise, the following procedures shall be followed by the city:

(1) The city shall provide the franchisee with a detailed written notice, by certified mail, detailing the violation and the change of condition necessary to cure such violation. Within 30 days thereafter, the franchisee shall respond demonstrating that no violation occurred, that any problem has been corrected, or with a proposal to correct the problem within a specified period of time.

(2) If said response is not satisfactory to the city, the city may declare a franchisee to be in default, with written notice, by certified mail, to the franchisee. Within 10 business days after notice to the franchisee, the franchisee may deliver to the city a request for a hearing before the city council. If no such request is received, the city may declare the franchise terminated for cause.

(3) If the franchisee files a timely written request for a hearing, such hearing shall be held within 30 days after the city’s receipt of the request therefor. Such hearing shall be open to the public and the franchisee and other interested parties may offer written and/or oral evidence explaining or mitigating such alleged noncompliance. Within 10 days after the hearing, the city council, on the basis of the record, will make the determination as to whether there is cause for termination and whether the franchise will be terminated. The city council may in its sole discretion fix an additional time period to cure violations. If the deficiency has not been cured at the expiration of any additional time period or if the city council does not grant any additional period, the city council may by resolution declare the franchise to be terminated and forfeited.

(4) If a franchisee appeals revocation and termination, such revocation may be held in abeyance pending judicial review by a court of competent jurisdiction, provided a franchisee is otherwise in compliance with the franchise.

(5) Nothing contained in this section shall prevent the issuance of a new franchise containing terms substantially the same or identical to a franchise which previously was revoked, upon satisfactory assurances made to the city that the terms and conditions of this chapter can be met by the new franchisee. (Ord. 1156 § M30, 2004).

5.20.310 Effect of termination for noncompliance.

Subject to state and federal law, if any franchise is terminated by the city by reason of a franchisee’s noncompliance, that part of the cable television system under such franchise located in the streets and public rights-of-way, shall, at the election of the city, become the property of the city at a cost consistent with the provisions of the Act. If the city, or a third party, does not purchase the cable television system, a franchisee shall, upon order of the city council, remove the cable television system as required under SMC 5.20.290, Removal and abandonment of property of franchisee. (Ord. 1156 § M31, 2004).

5.20.320 Insurance.

A franchisee shall provide evidence of a policy of public liability insurance naming the city as an additional insured, in a sum as specified in the franchise agreement. The franchise shall require advance notice to the city prior to cancellation. The city may, but is not required to, procure such insurance at the franchisee’s expense, in case it fails to do so. (Ord. 1156 § M32, 2004).

5.20.330 Performance bond.

A franchisee shall promptly repair or cause to be repaired any damage to city property caused by a franchisee or any agent of a franchisee. A franchisee shall comply with all present and future ordinances and regulations regarding excavation or construction and, if deemed necessary by the city, shall be required to post a performance bond or other surety acceptable to the city, in an amount specified by the city and issued by a surety company licensed to do business in the state of Washington, naming the city as beneficiary and conditioned upon all restoration work being done promptly and in a workmanlike manner that conforms to city standards. (Ord. 1156 § M33, 2004).

5.20.340 Recourse against bonds and other security.

Bonds and other security may be utilized by the city for purposes including, but not limited to, reimbursement of the city by reason of a franchisee’s failure to pay the city any sums due under the terms of this chapter or the franchise, reimbursement of the city for reasonable costs borne by the city to correct franchise violations not corrected by a franchisee after due notice, and monetary remedies or damages assessed against a franchisee due to default or violations of the franchise requirements or this chapter.

(1) Recourse. In the event a franchisee has been declared to be in default by the city under SMC 5.20.300, Revocation for cause, and if a franchisee fails, within 30 days of mailing of the city’s finding of a final and unappealable determination, to pay the city any franchise fees, penalties, or monetary sanctions, or fails to perform any of the conditions of the franchise, the city may thereafter, with 30 days’ prior written notice to the franchisee, foreclose against the performance bond and/or withdraw from any other security an amount sufficient to compensate the city’s damages, with interest at the maximum legal rate. Upon such foreclosure or withdrawal, the city shall notify a franchisee in writing, by certified mail, postage prepaid, of the amount and date thereof.

(2) Restoration. Within 30 days after mailing notice to a franchisee that the city has foreclosed franchisee’s performance bond or that any amount has been withdrawn by the city from the other security pursuant to subsection (1) of this section, a franchisee shall deposit such further bond or sum of money, or other security, as the city may require, sufficient to meet the requirements of this chapter.

(3) Rights of the City. The rights reserved to the city with respect to any bond or security are in addition to all other rights of the city whether reserved by this chapter or authorized by law, and no action, proceeding, or exercise of a right with respect to any bond or other security shall constitute an election or waiver of any rights or other remedies the city may have. (Ord. 1156 § M34, 2004).

5.20.350 Franchising costs.

Upon acceptance of any initial franchise or renewal franchise granted hereunder, the franchisee shall pay to the city the city’s out-of-pocket costs associated with the franchising process. Costs shall include such items as consulting fees and expenses and fees associated with publishing notices and ordinances. Such payment is not to be considered in lieu of franchise fee payments. Payment is due within 30 days of receipt of appropriate invoice from the city. (Ord. 1156 § M35, 2004).

5.20.360 Equalization of civic contributions.

In the event of one or more franchises being granted, the city may require that such subsequent franchisees pay to the city an amount proportionally equal to costs contributed by the original franchisee. These costs may include but are not limited to such features as access and institutional network costs, bi-directional or equivalent cable installed to municipal buildings and similar expenses.

On the anniversary of the grant of each later awarded franchise, such subsequent franchisees shall pay to the city an amount proportional to the amount contributed by the original franchisee, based upon the number of subscribers held by such subsequent franchisees. Such payments will be based upon incremental increases in subscribers, if any.

Additional franchisees shall provide all PEG access channel(s) currently available to the subscribers of existing franchisees. In order to provide these PEG access channels, additional franchisees shall interconnect, at their cost, with existing franchisees, subject to any reasonable terms and conditions that the existing franchisee providing the interconnection may require. These interconnection agreements shall be made directly between the franchisees. The city council, in such cases of dispute of award, may be called upon to arbitrate regarding these arrangements. Any cost associated with the process shall be equally distributed by both franchisees. (Ord. 1156 § M36, 2004).

5.20.370 Inconsistency.

If any portion of this chapter should be inconsistent or conflict with any rule or regulation now or hereafter adopted by the FCC or other federal or state law, then to the extent of the inconsistency or conflict, the rule or regulation of the FCC or other federal law shall control for so long, but only for so long, as such rule, regulation, or law shall remain in effect; provided the remaining provisions of this chapter shall not be affected thereby. (Ord. 1156 § M37, 2004).

5.20.380 Severability.

If any section, sentence, paragraph, term, subsection, clause or phrase of this chapter should be held to be illegal, invalid or unconstitutional by a court of competent jurisdiction, or by any state or federal regulatory authority having jurisdiction thereof, such illegality, invalidity or unconstitutionality shall not affect the legality, validity or constitutionality of any other section, sentence, clause or phrase of this chapter. (Ord. 1156 § M38, 2004).

5.20.390 Effect of change in law.

In the event that state or federal laws, rules or regulations preempt a provision or limit the enforceability of a provision of this chapter, then the provision shall be read to be preempted to the extent and for the time, but only to the extent and for the time, required by law. In the event such state or federal law, rule or regulation is subsequently repealed, rescinded, amended, voided or otherwise changed, so that the provision hereof that had been preempted is no longer preempted, such provision shall thereupon return to full force and effect and shall thereafter be binding on the parties hereto, without the requirement of further action on the part of either party. (Ord. 1156 § M39, 2004).

5.20.400 Independent contractors.

This chapter shall not be construed to provide that a franchisee is the agent or legal representative of the city for any purpose whatsoever. A franchisee is not granted any express or implied right or authority to assume or create any obligation or responsibility on behalf of or in the name of the city or to bind the city in any manner or thing whatsoever. (Ord. 1156 § M40, 2004).

5.20.410 Force majeure.

In the event a franchisee’s performance of any of the terms, conditions or obligations required by this chapter or a franchise granted hereunder is prevented by a cause or event not within a franchisee’s control, such inability to perform shall be deemed excused and no penalties or sanctions shall be imposed as a result thereof. For the purpose of this section, causes or events not within the control of the franchisee shall include without limitation acts of God, strikes, sabotage, riots or civil disturbances, restraints imposed by order of a governmental agency or court, failure or loss of utilities, explosions, acts of public enemies, and natural disasters such as floods, earthquakes, landslides, and fires. (Ord. 1156 § M41, 2004).