Chapter 5.40


5.40.010    Purpose.

5.40.020    Definitions.

5.40.030    License required.

5.40.040    License application, renewal and modification.

5.40.050    Standards for granting or denying license.

5.40.060    License agreement.

5.40.070    General system operations requirements.

5.40.080    System capability.

5.40.090    Construction method.

5.40.100    Service schedule.

5.40.110    Removal of licensee property.

5.40.120    Local office, records to be maintained.

5.40.130    Service provisions.

5.40.140    Local channels required.

5.40.150    Interconnection capability.

5.40.160    Observance of rights of privacy.

5.40.170    Maintenance.

5.40.180    Fees, deposits and bonds.

5.40.190    License termination.

5.40.200    License revocation.

5.40.210    Notice of license revocation.

5.40.220    System disposal.

5.40.230    Continuity of service required.

5.40.240    Change of control.

5.40.250    Indemnification of town.

5.40.260    Insurance requirement.

5.40.270    Town administration.

5.40.280    Licensee rules and regulations.

5.40.290    Subscriber rights.

5.40.300    Compliance with laws and codes required.

5.40.310    Cumulative rights and remedies.

5.40.320    Rights reserved to the town.

5.40.330    Liquidated damages.

5.40.010 Purpose.

It is the purpose of this chapter to:

A. Authorize the town to grant nonexclusive licenses to operate cable systems in areas under its jurisdiction;

B. Provide for the payment of certain fees and other considerations to the town;

C. Promote the widespread availability of high quality cable communications service to residents of the town; and

D. Comply with all applicable federal and state laws and with the requirements of the FCC regarding cable communications. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.020 Definitions.

As used in this chapter:

A. “Basic service” means: (1) all signals carried in fulfillment of the requirements of the Cable Act; (2) any public, educational, and governmental access programming required by the license of the cable system to be provided to subscribers; and (3) any signal of any television broadcast station that is provided by the cable operator to any subscriber, except a signal which is secondarily transmitted by a satellite carrier beyond the local service area of such station.

B. “Cable Act” means the Cable Communications Policy Act of 1984, as amended, including the Telecommunications Act of 1996.

C. “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.

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

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

2. A facility that services subscribers without using any public right-of-way;

3. A facility of a common carrier which is subject in whole or in part to the provisions of Title II of the Communications Act of 1934, 47 U.S.C., except that such facility shall be considered a cable system (other than for purposes of Section 621(C)) to the extent such facility 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 47 U.S.C. Section 573; or

5. Any facility of any electric utility used solely for operating its electric utilities systems.

Any reference to licensee’s cable system refers to the cable system as a whole or any part thereof. As used above, “interactive on-demand services” means a service providing video programming to subscribers over switched networks on an on-demand, point-to-point basis, but does not include services providing video programming prescheduled by the programming provider.

E. “Channel” means a portion of the electromagnetic frequency spectrum which is used in a cable system and which is capable of delivering a television channel as defined by the FCC.

F. “FCC” or “Federal Communications Commission” means that agency as presently constituted by the Communications Act of 1934 as amended, or any successor agency.

G. “Gross annual revenues” or “gross revenues” means all revenues, cash, credits, property of any kind or nature, or other consideration, less related bad debt not to exceed one and one-half percent annually, that is received directly or indirectly by licensee, its affiliates, subsidiaries or parent or any person, firm or corporation in which licensee has a financial interest or that has a financial interest in licensee and that is derived from licensee’s operation of its cable system to provide cable service in the town. Gross revenues include all revenue from charges for cable service to subscribers and all charges for installation, removal, connection or reinstatement of equipment necessary for a subscriber to receive cable service, and any other receipts from subscribers derived from operating the cable system to provide cable service, including receipts from forfeited deposits, sale or rental of equipment to provide cable service, late charges, interest and sale of program guides. Gross revenues also include all income licensee receives from the lease of its facilities located in the public streets, unless services that the lessee provides over the leased facilities are subject to a transaction privilege tax of the town. Gross revenues do not include revenues from commercial advertising on the cable system, the use or lease of studio facilities of the cable system, the use or lease of leased access channels or bandwidth, the production of video programming by licensee, the sale, exchange, use or cablecast of any programming by licensee in the town, sales to licensee’s subscribers by programmers of home shopping services, reimbursements paid by programmers for launch fees or marketing expense, license fees, taxes, or other fees or charges that licensee collects and pays to any governmental authority, any increase in the value of any stock, security, or asset, or any dividends or other distributions made in respect of any stock or securities.

H. “License” means the right and authority granted by this chapter to the licensee to construct, maintain and operate a cable system through use of the public streets or other public rights-of-way. The term does not include any license or permit that may be required by this chapter or other laws, ordinances or regulations of the town for the privilege of transacting and carrying on a business within the town or for disturbing the surface of any street or public right-of-way.

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

J. “License area” means the current incorporated boundaries of the town and any future annexed area.

K. “Licensee” means a person who executes a license agreement with the town, in accordance with this chapter, for the nonexclusive privilege to construct, install, operate, maintain or dismantle a cable system in the town.

L. “Person” means any individual, corporation (whether for profit or nonprofit), joint venture, partnership, or any other business entity who holds or applies for a license from the town.

M. “Public right-of-way” means all roads, streets, alleys and all other dedicated public rights-of-way and public utility easements in the town.

N. “Public street” means only a street, road, highway, freeway, lane, path, alley, court, sidewalk, parkway, right-of-way, or drive that is owned by a public entity in fee or as to which a public easement has been dedicated for street purposes, and with respect to which, and to the extent that, town has a right to grant the use of the surface of, and space above and below in connection with this license for the cable system, or other compatible uses; provided, however, a requirement that licensee also obtain a permit from another government agency or entity to use of street, road, highway, freeway, lane, path, alley, court, sidewalk, parkway, right-of-way, or drive does not mean that such street, road, highway, freeway, lane, path, alley, court, sidewalk, parkway, right-of-way, or drive is not a public street.

O. “Subscriber” means any person or entity lawfully receiving cable services of the licensee.

P. “Subscriber density” means the number of residential units per mile of system. Residential units shall be counted when they are within 125 feet of the nearest technically feasible point of connection to the cable distribution system.

Q. “Town” means the town of Sahuarita in the state of Arizona.

R. “Town building” means a building that is both (1) occupied by the town or owned by the town and (2) used for municipal purposes.

S. “Town channels” means the public, government, or education channels.

T. “Town council” means the present governing body of the town or any future body constituting the legislative body of the town.

U. “Town manager” means the town manager or the town manager’s designee.

V. “Two-way capability” means the ability to receive and transmit signals of any type from a subscriber terminal to other points in the system. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.030 License required.

A. No person shall construct, install, maintain or operate a cable system within, along, over or under any street in the town, or otherwise use town right-of-way for cable, unless a license has first been granted pursuant to the provisions of this chapter.

B. Any license issued by the town shall be nonexclusive, and the town specifically reserves the right to grant, at any time, such additional licenses for cable systems that the town deems appropriate. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.040 License application, renewal and modification.

A. Any person desiring to construct, install, maintain or operate a cable system within the areas under the jurisdiction of the town shall make an application for license.

1. The application shall consist of executed application forms as prescribed and furnished by the town.

2. Failure of any applicant to fully provide all information requested on the application forms will be sufficient cause for not considering the application.

3. If the applicant is a company or corporation, an audited or reviewed financial statement of applicant, or prepared on a consolidated basis with applicant, must be submitted. If the applicant is an individual, a reviewed or audited personal financial statement is required. Financial documents may be subjected to an in-depth review by the town.

4. To be accepted for consideration, an application shall be submitted with any required application fee, be properly executed on the forms prescribed by the town, and contain information required by any application form, this chapter and any applicable requests of the town.

B. A licensee may initiate a formal license renewal process in accordance with the Federal Telecommunications Act, 47 U.S.C., in which case the town may conduct a formal renewal process in accordance with the Telecommunications Act or the town may, after affording the public notice as provided by ARS 9-507(B) and opportunity for comment, grant the renewal.

C. An application for modification of a license agreement shall 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 Telecommunications Act, 47 U.S.C., and, if so, a demonstration that the requested information meets the legal requirements of the Act; and

4. Any other information the town reasonably requires to make a determination on the modification request.

D. Applications for license, renewal, and modification shall be made to the town manager or designee. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.050 Standards for granting or denying license.

In making any determination as to an application, the town council shall give due consideration to the following:

A. The quality of the service proposed;

B. Applicant’s experience in providing cable service;

C. Applicant’s character;

D. Applicant’s background;

E. Financial responsibility of the applicant;

F. Willingness of applicant to abide by terms of this chapter and the requests of the town in performing its duties;

G. Ability to abide by the license limitations and requirements; and

H. Any other considerations deemed pertinent by the town council for safeguarding the interest of the town and the public. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.060 License agreement.

A. Upon granting of a license, modification, or renewal by the town, the licensee shall execute a license agreement within 60 days.

B. The license agreement shall incorporate all terms and provisions of this chapter wherein a requirement is placed upon the licensee, whether expressed or implied by this chapter.

C. The licensee shall expressly and specifically accept the terms of and be bound by the terms of this chapter and any amendments thereto.

D. The agreement shall be binding upon the licensee, its successors, lessees or assigns.

E. The license shall be nonexclusive and shall be for a period not to exceed 15 years commencing upon the execution of the license agreement between the town and the licensee. In the event that the license is for a period exceeding five years, certain terms of the license shall be subject to renegotiation by the town and licensee at five-year intervals or more frequently, if mutually agreed. These renegotiable terms include provisions which will accommodate changes in technology, community needs, services, and franchise or license fees as permitted by federal law.

F. Upon written notice by the licensee, as required by the Federal Telecommunications Act, 47 U.S.C., or in any event, not less than one year prior to the fourteenth anniversary of the effective date, and after the holding of a public hearing affording due process, the license may be renewed for a reasonable term. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.070 General system operations requirements.

A. A licensee shall conform to the minimum standards set forth in this chapter relative to the construction, operation and maintenance of a cable system in the town, unless such standards are waived by the town in writing.

B. It is not the intent of this chapter to prevent any licensee from providing more than the required minimum to meet the standards listed in this chapter. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.080 System capability.

Each cable system shall be equipped to provide:

A. Two-way capability; and

B. Emergency override of the audio portion of all channels during a declared emergency or disaster. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.090 Construction method.

A. The cable system shall be constructed, installed, operated, and maintained in a manner such that it operates at all times consistent with all laws, the construction standards of the town, and the FCC rules and regulations, Part 76, Subpart K (Technical Standards), as amended from time to time. In addition, the town may at any time conduct independent measurements of the cable system.

B. Construction, installation, and maintenance of a cable system shall be performed in an orderly and professional manner. All cables and wires shall be installed, where possible, parallel and in a manner similar to the installation of electric and telephone lines. Multiple cable configurations shall be arranged in parallel and bundled with due respect for engineering considerations. Installations shall be in conformance with all applicable codes. Licensee must at all times comply with applicable sections of:

1. National Electrical Safety Code (ANSI) C2-1990;

2. National Electrical Code (National Bureau of Fire Underwriters);

3. The Uniform Building Code as may be adopted and amended by the town, together with applicable portions of all other uniform codes, as may be adopted and amended by the town, promulgated by the International Conference of Building Officials; and

4. The town zoning code and subdivision regulations, all as amended and revised from time to time, and all other applicable rules and regulations now in effect or hereinafter adopted by the town.

C. A licensee shall utilize, with the owner’s permission, existing poles, conduits or such other facilities whenever possible. Underground street, sidewalk and driveway crossings not using existing conduits shall be bored unless specific town approval is received. Copies of agreements for use of poles, conduits or other facilities shall be filed with the town upon town request.

D. Any poles, wires, cable lines, conduits, or other properties of licensee to be constructed or installed in public streets shall be so constructed or installed only at such locations and in such manner approved by the town consistent with the town’s technical and permitting regulations. Licensee or its authorized contractors will obtain any required permits before any physical work is done in the town’s rights-of-way or on town-owned property. The town may from time to time adopt such reasonable rules and regulations concerning the installation and maintenance of the cable system installed in the public rights-of-way as may be consistent with this chapter and state and federal law.

E. Suitable safety devices and practices as required by town, state and federal laws, ordinances, regulations and permits shall be used during construction, maintenance and repair of a cable system.

F. A licensee shall remove, replace or modify at its own expense the installation of any of its facilities within any public right-of-way when required to do so by the town to allow the town to change, maintain, repair, improve or eliminate a public right-of-way. Nothing in this section shall prevent licensee from seeking and obtaining reimbursement from sources other than the town.

G. On streets and roads where electrical and telephone utility wiring are located underground, either at the time of initial construction or subsequently, the cable shall also be located underground at the licensee’s expense. Between a street or road and a subscriber’s residence, the cable shall be located underground. If both electrical and telephone utility wiring are aerial, a licensee may install aerial cable except where a property owner or resident requests underground installation and agrees to bear the additional cost over aerial installation.

H. A licensee shall obtain any required permits before doing any excavation or causing disturbance to public rights-of-way or private property as a result of its construction or operations and shall restore as close as reasonably possible to their former condition such private property and public rights-of-way, the latter in a manner consistent with all applicable rules, regulations, resolutions or other town requirements relative to construction, repair or maintenance of facilities in the public right-of-way. If such restoration is not satisfactorily performed within a reasonable time, the town may, after prior notice to the licensee, cause the repairs to be made at the expense of the licensee. The town may inspect ongoing construction and require a licensee to halt construction where it finds the construction to create a public hazard or to be in noncompliance with the requirements of this chapter, the license agreement, the permit, or other applicable laws.

I. Simultaneously with the filing of construction plans with the town for a permit or otherwise, a licensee shall file a copy of the plans with all public utilities in the construction area as determined by the Blue Stake Center or separately to the Blue Stake Center.

J. Prior to the commencement of construction, a licensee shall have complied with the following requirements:

1. Have received a permit from the town for construction on public property or rights-of-way;

2. Have received clearance from utilities in the area of construction; and

3. Where construction will be on private property or in public rights-of-way adjoining private property, and the construction in some way impairs or impedes ingress or egress from such private property, licensee shall provide no less than seven days’ prior written notice by mail or hand delivery to all such property occupants. The notice shall identify the name and the address of the licensee and provide a local or toll-free telephone number that the affected person may call for more information or to lodge a complaint.

K. A licensee may trim trees within public rights-of-way at its own expense as necessary to protect its wires and facilities, subject to approval by the town and any direction that may be provided by the town. Approval by the town shall not be unreasonably withheld, conditioned or delayed. Trees on private property may be trimmed only with the consent of the property owner.

L. At the request of any person holding a valid building moving permit and upon sufficient notice, the licensee shall temporarily raise, lower or cut its wires as necessary to facilitate such move upon not less than 10 days’ advance written notice. The direct expense of such temporary changes, including standby time, shall be paid by the holder of the moving permit and the licensee may require payment in advance. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.100 Service schedule.

Unless the license agreement provides otherwise, a licensee shall be required to extend its cable system pursuant to the following requirements:

A. Upon reasonable written request for service by any person located within the service area, the licensee shall, within 60 days, furnish the requested service to such person, unless prevented from providing said service due to factors outside licensee’s control such as permit restrictions or private easement considerations. If such service has not been implemented within 90 days of written notice from the town, the town may impose liquidated damages for each day thereafter in accordance with this chapter.

B. When requested by a resident or developer in the town, the licensee shall, at licensee’s sole expense, extend the cable system to any single-family residence or dwelling within the town; provided, that such extension involves density of 35 existing homes per cable plant mile measured from the nearest technically feasible point of connection on the cable system, determined by licensee in its sole discretion. Upon request, this density requirement may be modified by the town for a particular location, provided licensee demonstrates that it would be commercially impracticable to comply with said requirement. For purposes of this section, a density requirement may be considered commercially impracticable if licensee’s compliance with said requirement would create a significant adverse impact on the capital costs of licensee’s cable system.

C. Given reasonable notice by the town or the builder of a residential development and cooperation by the utilities, licensee shall prevent unnecessary damage to streets, rights-of-way and property by installing underground cable or conduit in all new subdivisions of six or more dwelling units within the service area at the same time and in the same trench as telephone, electric or similar services are installed. Cable need not be installed and/or activated until the new subdivision meets the criteria established for line extensions.

D. The licensee shall extend and make cable television service available to any resident requesting connection within the licensee’s authorized service area and within an area that meets or exceeds the minimum subscriber density at the standard connection charge if the connection to the isolated resident would require no more than a 125-foot aerial or underground drop line.

E. With respect to requests for connection requiring an aerial or underground drop line in excess of 125 feet, the licensee shall extend service to such residents within the licensee’s authorized service area and within an area that meets or exceeds the minimum subscriber density at a one-time charge not to exceed the actual installation costs incurred by the licensee for the distance exceeding 125 feet. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.110 Removal of licensee property.

A. In the event that licensee property has been installed in a street or other dedicated public right-of-way without complying with the requirements of this chapter, or the license has been terminated, revoked or expired, or the use of any licensee property is discontinued for any reason for a continuous period of 12 months, the licensee shall, at its sole expense, on the demand of the town, remove within 120 days from the street all licensee property other than that which the town may permit to be abandoned in place.

B. Upon such removal of licensee property, the licensee shall promptly restore the street or other public places from which the licensee property was removed to a condition as near as possible to its prior condition.

C. Licensee property no longer in service may be left in place with the approval of and in a manner prescribed by the town.

D. Upon abandonment of licensee property in place, the licensee shall deliver to the town an instrument transferring ownership of such abandoned licensee property to the town.

E. Any cost arising from compliance with this provision shall be borne by the licensee. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.120 Local office, records to be maintained.

A. Licensee shall maintain a business office accessible during all normal business hours for the purpose of receiving inquiries regarding new service, handling converters, paying bills and receiving complaints. In the alternative, licensee shall have a listed telephone number and operator to receive such inquiries and complaints and employ a sufficient number of telephone lines to allow reasonable access by subscribers and members of the public.

B. Licensee shall establish and maintain a written log listing all subscriber complaints. The written log shall include the name and telephone number, if given, of the subscriber making the complaint and licensee’s action on the complaint. The log shall be maintained by licensee for three years and, to the extent permitted by federal law, shall be available to the town manager and the public for inspection upon request during licensee’s normal business hours. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.130 Service provisions.

A. The licensee shall render efficient service, make repairs promptly and interrupt service only for good cause and for the shortest time possible; the licensee shall be able to demonstrate by instruments and otherwise to subscribers that a signal of adequate strength and quality is being delivered to the subscriber’s terminal.

B. The following minimum requirements for facilities and services apply to all licenses. The town may require that a licensee exceed these minimum requirements:

1. The channel capacity of the cable system shall be expandable as future needs arise. At a minimum, system capacity of 750 MHz must be available for signal transmission on the cable system.

2. A cable system shall provide leased access channels as required by federal law.

3. Standard installation and basic service to town buildings may be required without charge as set forth in the license agreement.

4. In accordance with the provisions of FCC rules and regulations, as they may from time to time be amended, licensee shall install and maintain an emergency alert system and shall transmit all emergency act notifications and emergency act terminations relating to local and statewide situations as may be designated to be an emergency by the local primary, the state primary and/or the state emergency operations center, as those authorities are identified and defined with the FCC rules and regulations, Part 11.

5. A licensee shall provide standby power for the head end so as to be able to operate some channels during a power outage for a minimum of six hours.

C. A licensee shall have available at all times personnel, equipment and procedures capable of locating and correcting major system malfunctions. System outages and major system malfunctions shall be corrected without delay. Corrective action for all other service problems shall be initiated as provided for in the license agreement.

D. Each cable system shall be operated in a manner consistent with the principles of fairness and equal accessibility of facilities, equipment, channels, studios and other services to all residences, businesses, public agencies or other entities having a legitimate use of the system, and no one shall be arbitrarily excluded from its use. A licensee shall not discriminate in terms of rates, terms of service, or extension of service on the basis of age, race, creed, color, religion, national origin, sex or marital status, nor shall a licensee fail to extend service to any part of the town within its licensed service area on the basis of the income of the residents.

E. A licensee shall establish procedures for the investigation and resolution of all complaints, including, but not limited to, those regarding the quality of service and equipment malfunction. A copy of such procedures shall be provided to the town upon request and to all subscribers upon installation of initial service.

F. A licensee shall provide each subscriber, at the time cable service is installed, written instruction for placing a service call, filing a complaint, or requesting an adjustment. The name, address, and telephone number of the town office responsible for supervision of cable operations shall be listed. Each subscriber shall 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 of the licensee’s applicable policies in connection with its subscribers.

G. A licensee may interrupt service on the cable system only for good cause and for the shortest time reasonably possible and, except in emergency situations, only after prior notice to subscribers and the town of the anticipated service interruption; provided, however, no prior subscriber or town notice shall be required for the performance of system maintenance work requiring a maximum of one-hour duration during the hours of 6:00 a.m. until 12:00 midnight or four hours’ duration during the hours of 12:00 midnight until 6:00 a.m.

H. Upon termination of service to a subscriber and at the subscriber’s request, a licensee shall promptly remove all its facilities and equipment from the subscriber’s premises. Where removal is impractical, such as with buried cable or internal wiring, facilities and equipment may be disconnected and abandoned rather than removed.

I. The town may waive any requirement of this section for licenses where the applicant demonstrates that such waiver is in the public interest. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.140 Local channels required.

A. Each cable system shall carry, as part of the basic service, local channels broadcast in its area as required and defined in current FCC regulations; all parts of 47 C.F.R. Part 76 relating to carriage of local channel signals as existing, or as may be amended, shall apply and are incorporated in this section by reference.

B. In the event the FCC deletes the requirement referred to in this section, or ceases to exercise jurisdiction in this area, to the extent permitted by federal law the requirement shall continue to apply to this chapter as it existed on the date immediately preceding such federal action. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.150 Interconnection capability.

A. Each cable system shall be designed and operated so as to facilitate interconnection to any or all other cable systems within the town and the city of Tucson for the sole purpose of exchanging PEG access signals.

B. The cost of such interconnection links shall be equally shared by the two connecting cable systems.

C. A licensee may be required to interconnect its cable system with any or all other systems located in the town upon the request of the town, where economically and technically feasible as determined by the town. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.160 Observance of rights of privacy.

The licensee shall strictly observe and protect the rights of privacy and property rights of subscribers and users at all times.

A. Individual subscriber preferences of any kind, viewing habits, political, social or economic philosophies, beliefs, creeds, religions or names, addresses or telephone numbers shall not be revealed to any person, governmental unit, police department or investigating agency unless upon the authority of a court of law or upon prior voluntary valid authorization of the subscriber.

B. Such authorization shall not in any event be required as a condition of receiving service.

C. Exclusive of signals useful only for the control or measurement of cable system performance, licensees shall not permit the transmission of any signal, including “polling” or monitoring of channel selection from the subscribers’ premises, without first obtaining written permission from the subscribers. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.170 Maintenance.

The cable system shall be maintained in accordance with the highest accepted standards of the industry.

A. Each cable system shall be maintained so as to comply with all applicable technical standards and regulations as promulgated by the FCC. In this regard, 47 C.F.R. relating to technical standards (including, but not limited to, performance monitoring and measurements), as existing or as may be amended, shall apply in full and are incorporated in this section by reference.

B. In the event the FCC deletes the technical standards referred to in subsection A of this section, or ceases to exercise jurisdiction in this area of technical standards, the standards shall continue to apply to this chapter as they existed on the date immediately preceding such federal action. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.180 Fees, deposits and bonds.

The following fees are required for each license granted under the authority of this chapter:

A. Application Fee.

1. Each application for license to be granted under the authority of this chapter shall be accompanied by a nonrefundable filing fee in the amount of $2,500 by a certified or cashier’s check made payable to the town.

2. If an application is for service to more than one license area, there shall be an additional filing fee of $500.00 for each such license area.

3. Subsequent applications by a licensee for renewal or modification of a license shall be accompanied by a nonrefundable filing fee in the amount of $500.00 for each license area.

B. License Fee.

1. Each licensee shall pay to the town an amount equal to five percent of the licensee’s annual gross revenues as defined in this chapter.

2. The payment shall be computed quarterly, for the preceding quarter, as of March 31st, June 30th, September 30th and December 31st of each year. Each quarterly payment shall be due and payable no later than 45 days after the relevant computation date. Each payment shall be accompanied by a financial report certified by the chief financial officer of licensee, showing in detail the gross revenues of the licensee related to that quarter. The payment required pursuant to this section shall be in addition to any other tax or payment owed to the town pursuant to any other applicable ordinance, regulation or law of the town, the state of Arizona or other jurisdiction. The requirements of this section shall not require licensee to disclose any proprietary information.

3. The licensee may identify as a separate line item on each regular bill for each subscriber the amount of the total bill assessed as a license fee and the identity of the license authority to which the fee is paid.

C. Letter of Credit.

1. Within 30 days after the execution of the license agreement, the licensee shall deposit with the town an irrevocable letter of credit in an amount not to exceed $5,000, replenishable as specified below, issued by a federally insured commercial lending institution. The form and substance of said letter of credit will be used to assure (a) the faithful performance by licensee of all provisions of this license; (b) compliance with all orders, permits, and directions of any agency, commission, board, department, division, or office of the town having jurisdiction over licensee’s acts or defaults under this license; and (c) licensee’s payment of any penalties, liquidated damages, claims, liens, and taxes due to the town that arise by reason of the construction, operation, or maintenance of the cable system, including cost of removal or abandonment of any of licensee’s property.

2. The letter of credit may be drawn upon by the town by presentation of a draft at sight on the lending institution, accompanied by a written certificate signed by the town manager certifying that licensee has been found, pursuant to the provisions of the license agreement, to have failed to comply with the license, stating the nature of noncompliance, and stating the amount being drawn. The rights reserved to the town with respect to the letter of credit are in addition to all other rights of the town, whether reserved by the license or authorized by law, and no action proceeding against a letter of credit will affect any other right the town may have.

3. The letter of credit shall be structured in such a manner so that if the town at any time draws upon the letter of credit, upon notice to licensee by the issuing lending institution, licensee shall immediately increase the amount of available credit by the amount necessary to replenish that portion of the available credit exhausted by the honoring of the town’s draft; provided, however the maximum amount available to be drawn on this letter of credit for any one event shall not exceed $25,000. The intent of this section is to make available to the town at all times a letter of credit in the amount of $5,000. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.190 License termination.

The license shall terminate upon the expiration of the term thereof, unless renewal is applied for under this chapter. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.200 License revocation.

A. Sufficient cause for revocation shall exist when the licensee:

1. Fails to comply with any material provision of this chapter or the license agreement;

2. Makes willful false or misleading statements in any application;

3. Engages in the practice of any fraud or deceit upon the town or subscribers;

4. Fails to abide by the privacy provision of this chapter;

5. Fails to make timely payment of any moneys due the town pursuant to this chapter; or

6. Fails to commence construction in the license area within six months and to commence basic service within 18 months from the effective date of the license agreement.

B. Before revoking a license pursuant to this chapter, the town shall give licensee written notice of the violation and the opportunity (1) to contest the town’s assertion of a violation and (2) to cure the violation within 30 days and provide written evidence of the same, or (3) if, in the town’s sole discretion, the violation cannot be cured within the 30-day period, take reasonable steps to cure the violation as soon as practicable and diligently continue such efforts until the violation is cured. If such extended arrangements are made with the town, licensee shall report to the town, in writing, at 30-day intervals as to licensee’s efforts, indicating the steps taken by licensee to cure the violation and reporting licensee’s progress until such violation is cured. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.210 Notice of license revocation.

The town shall deliver to the licensee written notice of intent to revoke, setting forth causes for revocation. Subject to the provisions for notice and cure in this chapter, a public hearing on this revocation shall be held by the town council no less than 30 days after issuance of the notice. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.220 System disposal.

In the event of termination or revocation of a license, the licensee involved shall offer to sell the cable system, at the fair market value, to another licensee or applicant for a license.

A. The fair market value shall be determined in accordance with generally accepted appraisal procedures.

B. The original cost of all tangible and intangible property, as well as salvage value, book value, replacement cost, cash flow, and other factors will be considered.

C. Under no circumstances shall any valuation be made for any right or privilege granted by license.

D. Should the licensee fail to negotiate a sale, as described in this section, the town may, at its sole discretion, purchase the system at the fair market value for the purpose of leasing to a qualified operator until a buyer can be found. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.230 Continuity of service required.

A. The licensee shall provide continuous service for the entire term of the license agreement to all subscribers and users in return for payment of the established rates, fees and charges by such subscribers and users.

B. If the licensee seeks to sell or transfer, or if the town revokes or fails to renew the license, the licensee shall continue to operate the system as trustee for its successor in interest until an orderly and lawful change of operation is affected. This period of operation shall not exceed six months from the occurrence of any of the events described in this section without prior approval from the town, such approval not being unreasonably withheld, conditioned or delayed. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.240 Change of control.

A. The licensee shall not sell, transfer, assign, exchange or release, or permit the sale, transfer, assignment, exchange or release of more than 50 percent of the cumulative ownership of the cable system without prior written authorization from the town, such authorization not being unreasonably withheld, conditioned or delayed.

B. For purposes of this section, a merger or consolidation shall be deemed a transfer or assignment.

C. Nothing in this section shall be deemed to prohibit or require the town’s approval of a pledge or hypothecation or mortgage or similar instrument transferring conditional ownership of the system’s assets to a lender or creditor in the ordinary course of business, unless such interest shall exceed 75 percent of the original cost or the fair market value, whichever is higher. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.250 Indemnification of town.

Each licensee shall, at its sole cost and expense, indemnify, hold harmless and defend the town, its officials, town council, commissions, agents and employees by providing immediate defense with counsel approved by the town, against any and all claims, suits, causes of action, proceedings and judgments for damages arising out of construction, maintenance or operation of the cable system. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.260 Insurance requirement.

Each licensee, within 30 days after written notice of the granting of a license, shall provide the town with and maintain in full force throughout the term of the license agreement, insurance issued by a company duly authorized to do business in the state of Arizona, insuring with respect to the installation, construction, operation and maintenance of the cable system as follows:

A. Liability, comprehensive general and automobile liability coverage including, but not limited to, blanket contractual liability, completed operations liability, broad form property damage, including, but not limited to, coverage for explosion, collapse and underground hazard, and automobile nonownership liability. This insurance shall be written in the following minimum amounts:

1. For bodily injury, including death, $500,000 combined single limit;

2. Property damage, $500,000 combined single limit;

3. Comprehensive automobile liability, bodily injury, $500,000 combined single limit; and

4. Excess umbrella liability in the minimum amount of $5,000,000;

B. Workers’ compensation coverage as required by the law and regulations of the state;

C. All insurance policies required in this section shall include the town as a named insured party;

D. The licensee shall be solely responsible for all premiums due and payable for insurance required in this section; and

E. All insurance policies required in this section shall be in a form approved by the town risk manager and shall include a 60-day notice of cancellation endorsement. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.270 Town administration.

A. The town manager shall administer cable communications operations within the town as governed by this chapter and applicable license agreements. The town manager or designee may take all administrative action on behalf of the town except for those actions specified herein which are reserved for the town council. The town council has the sole authority to grant licenses, modify license agreements, renew licenses, revoke licenses, and authorize the transfer of licenses.

B. The town reserves the right during the term of the license agreement and during normal business hours and upon the giving of reasonable notice to examine, audit, review and obtain copies of the licensee’s contracts, engineering plans, accounting, financial data, and service records relating to the property and operations of the licensee and to all other records required to be kept pursuant to this chapter.

C. The town expressly reserves the right to regulate a licensee’s rates and charges to the extent permitted by law at any time it deems it to be desirable or in the public interest. If the town decides to exercise any such authority it may have, it shall develop regulations which shall govern the procedure pursuant to which a licensee may seek authority for rate increases. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.280 Licensee rules and regulations.

Copies of rules, regulations, terms and conditions adopted by the licensee for the conduct of its business shall be filed with the town and remain a public record therein. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.290 Subscriber rights.

A. A licensee shall not unreasonably deny service, access, or otherwise discriminate against subscribers, users, or residents of the town. A licensee shall comply at all times with all applicable federal, state and town laws, rules and regulations, executive and administrative orders relating to nondiscrimination and equal employment opportunity requirements. A licensee shall strictly adhere to the equal employment opportunity requirements of the FCC, state statutes and local regulations, and as the same may be amended from time to time.

B. A licensee shall at all times comply with the subscriber privacy provisions of the Cable Act, 47 U.S.C.

C. No equipment shall be installed by the licensee for subscriber service without first securing a service request from the owner or resident of any private property involved.

D. A licensee shall not originate or knowingly permit subliminal transmission at any time for any purpose whatsoever.

E. A licensee shall establish and conform to the following policy regarding refunds to subscribers and users:

1. If the licensee collects a deposit or advance charge on any service or equipment requested by a subscriber or user, the licensee shall provide such service or equipment within 30 days of the collection of the deposit or charge or it shall refund such deposit or charge within five days thereafter upon request of the subscriber or user. The subscriber shall be advised of this right of refund at the time the order is placed.

2. If any subscriber or user terminates any monthly service during the first 12 months of said service because of the failure of the licensee to render satisfactory service in terms of signal quality in accordance with the standards set forth in the license agreement, the licensee shall refund, on a pro rata basis, to such subscriber or user an amount equal to the installation or reconnection charges paid by the subscriber or user for the period of unsatisfactory service.

3. In the event that a subscriber or user makes an annual or other payment in advance, the appropriate pro rata portion of said payment shall be refunded by the licensee.

F. The following requirements shall apply to disconnection:

1. There shall be no charge for disconnection of any installation or outlet unless such charge was disclosed at the time the subscriber ordered service. All cable communications equipment shall be removed within a reasonable time from a subscriber’s property at the subscriber’s request, such time not to exceed 30 days from the date of the request.

2. If any subscriber fails to pay a properly due monthly subscriber’s fee or other charge, the licensee may disconnect the subscriber’s service outlet; provided, however, that such disconnection shall not be effected until 30 days after the due date of the charges and shall include a prior written notice to the subscriber of the intent to disconnect. After disconnection, upon payment in full of all proper fees or charges, including the payment of any reconnection charge, the licensee shall promptly reinstate the service. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.300 Compliance with laws and codes required.

Each licensee shall comply fully with all applicable local, town, state and federal laws, codes, rules and regulations. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.310 Cumulative rights and remedies.

All rights and remedies of the town in this chapter are cumulative and may be exercised singly or cumulatively at the discretion of the town. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.320 Rights reserved to the town.

Without limitation upon the rights which the town may otherwise have, the town expressly reserves the right to amend any section or provision of this chapter consistent with the town’s police powers. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]

5.40.330 Liquidated damages.

A. The town may impose liquidated damages as set forth in this section and the license agreement.

B. All license agreements executed subsequent to the adoption of this chapter shall contain a provision for liquidated damages, in amounts as mutually agreed upon between the town and the licensee, for the licensee’s failure to comply with various requirements of this chapter and the license agreement in amounts not to exceed those specified below:

1. For failure to substantially complete system construction or line extensions as required, unless the town specifically approves a delay caused by the occurrence of conditions beyond the licensee’s control, the licensee shall pay $500.00 per day for each day, or part thereof, the deficiency continues.

2. For material failure to provide data, documents, reports and information in a timely manner as required, the licensee shall pay $100.00 per day, or part thereof, that each violation occurs or continues.

3. For substantial failure to remedy any other violation of this chapter or the license agreement within 15 days of receipt of notice of each violation, the licensee shall pay $300.00 per day for each day, or part thereof, that the violation continues.

4. For failure to substantially comply with reasonable orders of the town, the licensee shall pay $50.00 per day for each day, or part thereof, that noncompliance continues.

C. Liquidated damages will not be imposed if the town finds that the failure of the licensee resulted from conditions beyond the licensee’s control. Liquidated damages may be reduced or eliminated by the town if it finds that the failure of the licensee resulted from excusable neglect. The licensee shall bear the burden of proof in establishing the existence of such conditions.

D. Prior to assessing any of the liquidated damages set forth in this section, the town shall give licensee 30 days’ written notice of its intention to assess such damages. In said notice(s), the town shall set forth, at a minimum, the following:

1. The amount to be assessed;

2. The factual basis for such assessment; and

3. The specific provision of this chapter or the license alleged to have been violated.

Following receipt of the notice set forth in this section, licensee shall have a 30-day period during which time licensee and the town shall make reasonable efforts to resolve the dispute in question.

E. The imposition and collection of liquidated damages shall not prevent the town from pursuing other remedies for violations of this chapter or the license agreement. [Ord. 2019-137 § 1; Ord. 2013-084 § 2, 2013.]