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Ord 2682 11/16/1971 ORDINANCE NO. 2682 AN ORDINANCE ESTABLISHING THE RIGHT AND PRIVILEGE OF THE GRANTEE OR GRANTEES HEREUNDER, OR THEIR SUCCESSORS AND ASSIGNS, TO CONSTRUCT, OPERATE,AND MAINTAIN A CABLE TELEVISION SYSTEM WITHIN THE CITY OF WICHITA FALLS; PROVIDING THAT THE FRANCHISE SHALL BE NONEXCLUSIVE; SETTING FORTH THE TERRITOR- IAL AREA INVOLVED AND THE TIME OF CONSTRUCTION; ESTABLISHING LIABILITY AND INDEMNIFICATION; ESTAB- LISHING OPERATIONAL STANDARDS AND STANDARDS OF SERVICE; ESTABLISHING CONDITIONS ON STREET OCCU- PANCY; ESTABLISHING RATES TO SUBSCRIBERS AND PAY- MENT TO THE CITY; AND FOR OTHER PURPOSES. BE IT ORDAINED BY THE BOARD OF ALDERMEN OF THE CITY OF WICHITA FALLS: SECTION 1. Definitions (a) "Board" is the Board of Aldermen of the City of Wichita Falls. (b) "Cable television system, " "CATV system, " or "system" is a system of coaxial cables , microwave links, or other electrical conductors and equipment used or to be used primarily to receive television or radio signals directly or indirectly by cable, microwave, or off the air, and to transmit these signals to subscribers for a fee. (c) "City" is the City of Wichita Falls in its present incorporated form or as it may be changed by annexations. (d) "Grantee" is the party or parties to which a franchise under this ordinance is granted by the Board, and its or their lawful successors and assigns . (e) "Gross annual receipts" is any and all compensation and other consideration in any form whatsoever and from any contributing grant or subsidy received directly or indirectly by the grantee from subscribers for use as a payment for television or FM radio signals or service received within the City from the grantee, including any installation charge and monthly charge, minus all refunds actually made by the grantee to subscribers, or from any other source related to the grantee' s provision of CATV service within the city, including, but not limited to subscriber deposits, scheduled rates and charges, rates and charges rendered on a cost of labor and materials basis, receipts from advertising on CATV-system-originated programs , receipts from advertising in CATV system publications, receipts from subscriber payments for CATV system publications, and other receipts, minus all subscriber deposit refunds actually made by the grantee to subscribers . (f) "Party" is any person, firm, partnership, association, corporation, company, or organization of any kind. SECTION 1.A. Abbreviations AGC Automatic Gain Control dB Decibels dBm V Decibels Referred to One Millivolt EIA Electronic Industries Association MHz Megahertz (one million cycles per second) NTSC National Television Standards Committee SRL Structural Return Loss UHF Ultra High Frequency VHF Very High Frequency SECTION 2 . Grant of Nonexclusive Authority (a) There is hereby granted by the City to the grantee the right and privilege to construct, erect, operate, and maintain in, upon, along, across, above, over, and under the streets, alleys, public ways, and public places now laid out or dedicated, and all extensions thereof, and additions thereto, in the City, poles, wires, cables, underground conduits, manholes, and other television conductors and fixtures neces- sary for the maintenance and operation in the City of a CATV system for the interception and distribution of television and radio signals . (b) The right to use and occupy said streets, alleys, public ways and places for the purposes herein set forth shall not be exclusive, and the City reserves the right to grant a similar use of said streets, alleys, public ways and places, to any party at any time during the period of the franchise. SECTION 3 . Compliance with Applicable Laws and Ordinances The grantee shall, at all times during the life of the fran- chise, be subject to all lawful exercise of the police power by the City and to such reasonable regulation as the City shall hereafter provide. SECTION 4. Territorial. Area Involved (a) The franchise is for the present territorial limits of the City and for any area henceforth added thereto during the term of this franchise. (b) The grantee shall, within forty-eight (48) months of its acceptance of the franchise, install and make operational in accord- ance with the provisions of this ordinance and the grantee' s application, distribution cable along at least 425 miles of streets within the City according to the following schedule: 200 miles by the end of the second year; an additional 100 miles by the end of the third year; and an additional 125 miles by the end of the fourth year. (c) Thereafter, the grantee shall extend cable to new subdivisions simultaneously with electric power and telephone utili- ties, and to other areas including City blocks, streets, and highways wherever thirty-five (35) percent of the households or commercial establishments, numbering at least twenty (20) within an area requiring -2- a total increase of one (1) mile of cable, notwithstanding any requirement to install new poles or provide underground facilities, formally request the CATV operator, in writing, to do so. (d) Failure to install cable as set forth in Section 4 (b) , or to extend cable as set forth in Section 4 (c) within three (3) months of such request shall constitute a breach of a condition for which the remedy of Section 6 (d) is applicable. Continuing failure to install or extend cable during any subsequent three (3) month period shall constitute a separate breach of a condition for which the remedy of Section 6 (d) is applicable. SECTION 5 . Construction Performance The grantee shall exercise diligence in constructing the system according to the territorial requirements and time schedule of Section 4. The grantee shall, upon each anniversary of its acceptance of the franchise, submit to the City a professionally drawn map in the scale of one (1) inch to 200 feet showing construction progress and the number of miles of cable installed. SECTION 6. Liability and Indemnification (a) The grantee by its acceptance of the franchise specifi- cally agrees that it shall save the City harmless from all loss sustained by the City by reason of any suit, judgment, execution, claim, or de- mand resulting from the construction, operation, or maintenance by the grantee of its CATV system in the City, and that it shall pay all damages and penalties which the City may legally be required to pay as a result of granting the franchise. These damages or penalties shall include, but shall not be limited to, damages arising out of copyright infringe- ments and all other damages arising out of the installation, operation, or maintenance of the CATV system authorized herein, whether or not any act or omission complained of is authorized, allowed, or prohibited by the franchise. (b) The grantee shall pay and by its acceptance of the franchise specifically agrees that it will pay all expenses incurred by the City in defending itself with regard to all damages and penal- ties mentioned in Section 6 (a) . These expenses shall include all out- of-pocket expenses, such as attorney fees, and shall also include the reasonable value of any services rendered by the City Attorney or his assistants or any employees of the City. (c) The grantee shall maintain and by its acceptance of the franchise specifically agrees that it will maintain throughout the term of the franchise, liability insurance insuring the City and the grantee with regard to all damages mentioned in Section 6 (a) in the minimum amount of: (1) $300, 000 for property damage to any one person; (2) $500, 000 for property damage in any one accident; (3) $500, 000 for personal injury to any one person; and (4) $1, 000, 000 for personal injury in any one accident. -3- (d) The grantee shall maintain, and by its acceptance of the franchise specifically agrees that it will maintain throughout the term of the franchise a faithful performance bond running to the City, with at least one good and sufficient corporate surety or two good and sufficient individual sureties approved by the City, in the penal sum of $50, 000 conditioned that the grantee shall well and truly observe, fulfill, and perform each term and condition of the franchise and that in case of any breach of condition of the bond, the amount thereof shall be recoverable from the principal and sureties thereof by the City for all damages proximately resulting from the failure of the grantee to well and faithfully observe and perform any provision of the franchise. (e) The insurance policy and bond obtained by the grantee in compliance with this section must be approved by the Board and such insurance policy and bond, along with written evidence of payment of required premiums, shall be filed and maintained with the City Clerk during the term of the franchise. (f) Neither the provisions of this section, nor any bond accepted by the City pursuant hereto, nor any damages recovered by the City thereunder, shall be construed to excuse faithful performance by the grantee or limit the liability of the grantee under any franchise issued hereunder or for damages, either to the full amount of the bond or otherwise. SECTION 7 . Prohibition of Pay TV The grantee is specifically barred from delivering television signals, directly or indirectly, from any pay-television source. SECTION 8. Color TV The facilities used by the grantee shall be capable of distributing color TV signals, and when the signals the grantee distri- butes are originally broadcast in color, they shall be distributed in color which preserves NTSC standards and quality. When local education- al or civic programs , including those of the CATV system-operated studio, are originated in color of either NTSC or NTSC-type standard or quality, they shall be distributed in equivalent color. Color program distri- bution from the CATV system-operated studio shall not require subscriber television receivers commercially designed for color reception to be additionally modified or adjusted to fully utilize such color program distribution. SECTION 9. Operational Standards (a) The grantee shall at all times use ordinary care and shall install and maintain in use commonly accepted methods and devices for preventing failures and accidents which are likely to cause damage, injuries, or nuisances to the public. The CATV system shall be in- stalled and maintained in accordance with the highest and best industry standards in conformity with the National Electrical Safety Code (Sixth Edition) , the National Electrical Code (1968 Edition) , the Bureau of Standards Handbook 130, and any applicable City of Wichita Falls -4- municipal codes, to the effect that all subscribers shall receive the most satisfactory service possible during the franchise period, consistent with the existing and progressing state of the art. The following standards shall be observed. (b) The system shall be capable of transmitting at least twelve (12) standard VHF television channels and shall use cables, amplifiers, and terminating devices which shall permit system expan- sion by at least an additional eight (8) channels at mid-band frequen- cies through the use of adjunct converters . The additional channels at mid-band frequencies shall be designated as special purpose channels ordinarily for use, with converters , by educational and civic organi- zations and persons. Such channels shall not, however, be restricted to such users , and any subscriber may receive such twenty (20) -channel service by purchasing, leasing, or otherwise obtaining a converter from the grantee under terms , and with a payment, to be determined by the grantee and approved by the Board, or to be made a part of this ordinance by subsequent amendment thereto. (c) The system shall be installed using solid state equip- ment of demonstrated reliability, capable of passing all standard VHF TV channels between 54 and 216 MHz, all standard FM broadcasting channels between 88 and 108 MHz, and additional nonstandard TV channels between 50 and 230 MHz. It shall have the further capabilities of providing conversion for standard UHF TV channels between 470 and 890 MHz, for the purpose of distribution to the subscribers at VHF TV fre- quencies. It shall have the further capabilities of providing certain local origination of TV programming, including modulation and distri- bution through VHF TV frequencies to the extent required under applica- ble Federal Communications Commission Rules . (d) The system shall be capable of distributing, at standard VHF TV channel frequencies between 54 and 216 MHz, all tele- vision station signals serving Wichita Falls with either a predicted or measured Grade B contour as defined in the Federal Communications Com- mission Regulations. For purposes of this standard, Wichita Falls shall be defined as the City of Wichita Falls, including all trunk and strand peripheries associated with the system. (e) The system, as installed and maintained, shall be capable of passing full NTSC color and monochrome signals. as these are defined by the Federal Communications Commission Regulations and the system shall be further capable of delivering these signals to standard EIA design television receivers without the introduction of material degradation of color fidelity, picture intelligence, audio distortion, or cross-channel interference. (f) The system and all associated equipment, except equipment such as studio origination and headend equipment housed in temperature controlled buildings, shall be designed, rated, and maintained for twenty-four (24) hour per day continuous operation within the ambient temperature range of 0° to 140° Fahrenheit. -5- (g) The signal level of the visual carrier at the 75-ohm service drop termination at any subscriber location and/or at the out- put of converters supplying " special service" channels shall not be less than +6 dBmV or greater than +20 dBmV at any channel. (h) The difference in level between any two channels at any subscriber location shall not exceed ten (10) dB. (i) The difference in level between visual carriers in any two television channels adjacent in frequency at any subscriber locat- ion shall not exceed six (6) dB. (j) The signal level of the aural carrier for any television channel, as measured at any subscriber location shall be at least thir- teen (13) dB and not more than seventeen (17) dB below the level of the associated visual carrier. (k) AGC shall be installed at not fewer than one (1) trunk amplifier location of every three (3) in cascade. The AGC stiffness ratio shall not be less than six (6) to one (1) . The output level of any test or pilot carrier at the last AGC station in each trunk branch shall not vary more than two (2) dB for a 11.3 dB change in the test or pilot carrier input level. (1) The ratio of visual carrier level to system noise over a four (4) MHz bandwidth as appropriate to the visual carrier frequency shall not be less than thirty-six (36) dB. This shall apply to any sub- scriber location and channel. (m) The ratio of visual carrier level to discrete frequency interference including intermodulation, harmonies, and cross-modulation shall not be less than forty-six (46) dB. This shall apply to any sub- scriber location and channel. (n) Hum modulation or the ratio of one-half of the peak-to- peak hum to average carrier envelope shall be no greater than two (2) percent at any time, at any subscriber location and status of line voltage regulation between 105 and 135 volts. (o) Direct pickup causing leading ghosts or blanking bars shall not be visible on a thoroughly shielded test receiver or converter connected to any customer service drop or monitor test station. Ghosts , ringing, or reflections of any sort shall be eliminated or minimized subject to limitations imposed by the technical state of the art. If not eliminated, residual problems shall be thoroughly analyzed and filed with the City, on subscriber or other request including that by affected television broadcast stations located within the City of Wichita Falls. The City may thereupon seek further solution as a responsibility of the CATV franchise grantee. The design, construc- tion, and operation of the entire system from antenna or origination point input to service drops, including baluns, shall be such as to minimize reflections. All unused taps shall be properly terminated. (p) Peak to valley response over any six (6) MHz channel on the cable distribution system shall not exceed one (1) dB. -6- • (q) All trunk and feeder distribution cable shall be of coaxial design employing a solid aluminum outer conductor. Such cable shall be of first quality, new and 'previously unused, and shall be sweep tested prior to installation. Structural return loss (measured with a balanced bridge) shall be thirty (30) dB or more for not less than seventy-five (75) percent of reels received in any shipment. In no case shall SRL be less than twenty-six (26) dB. The character- istic impedance of the cable shall be seventy-five (75) ohms ±2 ohms, tested at both ends of each reel. Attenuation versus frequency shall compare uniformly within ±0 .25 dB for all reels of 2 ,000 feet in length or greater. (r) Incidental radiation from any part of the system or service outlets shall conform to Sub-part D of Part 15 of the Federal Communication Commission Regulations or modifications subsequently adopted. (s) The frequency of each visual carrier shall be 1.25 -0.050 MHz above the lower boundary of nominal channel assignment. Visual carr- iers on adjacent channels shall be separated by at least 5.980 MHz and not more than 6.050 MHz. (t) The CATV franchise grantee shall establish a repre- sentative series of convenient access monitor boxes throughout the cable distribution subsystem sufficient in number to signify one (1) monitor box per twenty-five (25) miles of cable strand as a minimum. The subject monitor box, at a "technical access only location" ten (10) or more feet above ground or within suitable aboveground housings in the case of underground cable, shall be designed to permit repre- sentative performance, as identified above, to be measured for both amplifier and customer service drop test conditions. Monitor box locations, as well as their representative cable areas and test arrangement, including schematic diagram and calculations to illus- trate test relationships to typical customer service drops, shall be filed with the City as placed. The existing numbers of monitor boxes capable of being utilized during any year of construction shall be scheduled for measurements to be evenly spread throughout the year and a full series of measurements shall be filed with the City on an anniversary date each year. The City shall be informed of schedules with sufficient notice in order that its qualified observers may witness any tests deemed necessary to assure the City of proper com- pliance with the franchise and agreed upon conditions. SECTION 10. Operation and Maintenance of System (a) The Grantee shall render efficient service, make repairs promptly, and interrupt service only for good cause and for the shortest time possible. Such interruptions, insofar as possible, shall be preceded by notice and shall occur during periods of mini- mum use of the system. (b) The grantee shall maintain an office in the City, which shall be open during all usual business hours, have a listed telephone, and be so operated that complaints and requests for re- pairs or adjustments may be received at any time. -7- • (c) The grantee shall establish and maintain locally a studio facility capable of distributing and processing color programs by cable. Cameras, tape recorders, and other origination equipment may be capable of originating either black and white or color pro- grams. SECTION 11. Service to Subscribers (a) The grantee shall receive and distribute television and radio signals which are disseminated to the general public without charge by broadcasting stations licensed by the Federal Communications Commission. All Federal Communication Commission Regulations shall be complied with regarding the importation of distant signals and the carriage and non-duplication of the programming of any existing or future television broadcasting stations which cover the City of Wichita Falls in their principal broadcasting areas. The system shall origi- nate programming on one channel; provide at least one additional channel for the nearest Texas educational television broadcasting station (s) ; provide at least one additional channel for an independent television broadcasting station (s) ; provide at least one additional channel for local educational broadcasting; provide at least one addi- tional channel for local civic interest broadcasting; provide at least one additional channel for a public access channel; and provide channel capacity to carry Wichita Falls and other FM radio stations. (b) The grantee shall, in addition, provide all other ser- vices specifically set forth in its Application to provide CATV services to the City of Wichita Falls , Texas, and by its acceptance of the fran- chise, the grantee specifically grants and agrees that its Application is thereby incorporated by reference and made a part of the franchise. SECTION 12 . Service to Schools The grantee shall provide one outlet and service to all public and private elementary and secondary schools and institutions of higher learning in the City for educational services upon request by the City at no cost to the City or the school or the institution of higher learning. The grantee may, at its option, provide similar service without cost to other educational institutions. The grantee shall make available at least one channel for these educational pur- poses and shall, upon request by the City, provide cable transmission facilities from one studio operated by the elementary and secondary schools and from one studio operated by Midwestern University to the system' s headend, and shall provide the required electrical equipment to transmit signals from these two studios on the local educational channel or, channels, at no cost to the City or the schools or the institution of higher learning. SECTION 13. Service to the City The grantee shall reserve at least one (1) channel for City use and shall, upon request by the City provide cable transmission faci- lities from a City-operated studio, to the systems headend, and shall provide the required electrical equipment to transmit signals from the City-operated studio on the City channel or another channel at no cost -8- to the City. The grantee shall also provide one outlet and service to up to five (5) City buildings upon request by the City at no cost to the City. SECTION 14. Continuing Maintenance of Standards and Service The grantee shall continue, throughout the term of the fran- chise, to maintain the technical standards and quality of service set forth in this ordinance. Should the Board find, by resolution, that the grantee has failed to maintain these technical standards and quality of service, and should it, by resolution, specifically enumerate improve- ments to be made, the grantee shall make such improvements. Failure to make such improvements within three (3) months of such resolution shall constitute a breach of a condition for which the remedy of Section 6 (d) is applicable. Continuing failure to make such improvements during any subsequent three (3) month period shall constitute a separate breach of a condition for which the remedy of Section 6 (d) is applicable. SECTION 15 . Emergency Use of Facilities In the case of any emergency or disaster, the grantee shall, upon request of the Board, make available its facilities to the City for emergency use during the emergency or disaster period. SECTION 16. Other Business Activities (a) Neither the grantee hereunder nor any shareholder holding more than five (5) percent of the stock of the grantee shall engage in the business of selling, repairing, or installing television receivers, radio receivers, or accessories for such receivers within the City of Wichita Falls during the term of the franchise and the grantee shall not allow any of its shareholders to so engage in any such business. (b) The franchise authorizes only the operation of a CATV system as provided for herein, and does not take the place of any other franchise, license, or permit which might be required by law of the grantee. SECTION 17 . Safety Requirements (a) The grantee shall at all times employ ordinary care and shall install and maintain in use commonly accepted methods and devices for preventing failures and accidents which are likely to cause damage, injuries, or nuisances to the public. (b) The grantee shall install and maintain its wires, cables, fixtures, and other equipment in accordance with the require- ments of the National Electrical Safety Code (Sixth Edition) , the National Electrical Code (1968 Edition) , the Bureau of Standards Handbook 130, and any applicable City of Wichita Falls municipal codes, and in such manner that they will not interfere with any installations of the City or of a public utilities serving the City. -9- (c) All structures and all lines, equipment, and connec- tions in, over, under, and upon the streets, sidewalks, alleys, and public ways or places of the City, wherever situated or located, shall at all times be kept and maintained in a safe, suitable, substantial condition, and in good order and repair. (d) The grantee shall maintain a force of one or more resident agents or employees at all times and shall have sufficient employees to provide safe, adequate, and prompt service for its facilities. SECTION 18. New Developments It shall be the policy of the City liberally to amend this ordinance, upon application of the grantee, when necessary to enable the grantee to take advantage of any developments in the field of trans- mission of television and radio signals which will afford it an oppor- tunity more effectively, efficiently, or economically to serve its customers ; provided however, that this section shall not be construed to require the City to make any amendment or to prohibit it from uni- laterally changing its policy stated herein. SECTION 19. Conditions on Street Occupancy (a) All transmissions and distribution structures, lines, and equipment erected by the grantee within the City shall be so located as to cause minimum interference with the proper use of streets, alleys, and other public ways and places, and to cause minimum interference with the rights and reasonable convenience of property owners who join any of the said streets, alleys, or other public ways and places . (b) In case of disturbance of any street, sidewalk, alley, public way, or paved area, the grantee shall, at its own cost and ex- pense and in a manner approved by the City, replace and restore such street, sidewalk, alley, public way, or paved area in as good a condi- tion as before the work involving such disturbance was done. (c) If at any time during the period of the franchise the City shall lawfully elect to alter or change the grade of any street, sidewalk, alley, or other public way, the grantee, upon reasonable notice by the City, shall remove, relay, and relocate its poles, wires, cables , underground conduits, manholes , and other fixtures at its own expense. (d) Any poles or other fixtures placed in any public way by the grantee shall be placed in such manner as to comply with all requirements of the City. (e) The grantee shall, on the request of any person holding a building moving permit issued by the City, temporarily raise or lower its wires to permit the moving of buildings . The expense of such tem- porary removal or raising or lowering of wires shall be paid by the person requesting the same, and the grantee shall have the authority to require such payment in advance. The grantee shall be given not less -10- than forty-eight (48) hours advance notice to arrange for such tempo- rary wire changes . (f) The grantee shall have the authority to trim trees upon and overhanging streets, alleys, sidewalks, and public ways and places of the City so as to prevent the branches of such trees from coming in con- tact with the wires and cables of the grantee, except that at the option of the City, such trimming may be done by it or under its supervision and direction at the expense of the grantee. (g) In all sections of the City where the cables, wires , or other like facilities of public utilities are placed underground, the grantee shall place its cables , wires , or other like facilities under- ground to the maximum extent that existing technology reasonably permits the grantee to do so. (h) The grantee shall provide plans and specifications for all construction within City streets, alleys, or other public ways and places to the Directors of Public Works and Traffic for their review at least 30 days prior to the start of construction. The approval of both departments shall be necessary before construction commences'. This provision shall apply to each construction sequence if the con- struction is accomplished in phases . SECTION 20 . Erection, Removal, and Common User of Poles (a) No poles or other wire-holding structures shall be erected by the grantee without prior approval of the Board with regard to location, height, type, and any other pertinent aspect. However, no location of any pole or wire-holding structure of the grantee shall be a vested interest and such poles or structures shall be removed or modified by the grantee at its own expense whenever the Board deter- mines that the public convenience would be enhanced thereby. (b) Where poles or other wire-holding structures already existing for use in serving the City are available for use by the grantee, but it does not make arrangements for such use, the Board may require the grantee to use such poles and structures if it determines that the public convenience would be enhanced thereby and the terms of the use available to the grantee are just and reasonable. (c) Where the City or a public utility serving the City desires to make use of the poles or other wire-holding structures of the grantee, but agreement therefor with the grantee cannot be reached, the Board may require the grantee to permit such use for such consi- deration and upon such terms as the Board shall determine to be just and reasonable, if the Board determines that the use would enhance the public convenience and would not unduly interfere with the grantee' s operations . SECTION 21. Rates to Subscribers The grantee shall be permitted to charge subscribers up to the following rates for its services: -11- (a) Single family residence, apartment unit, and commercial uses (1) Monthly rate for one outlet $ 5.75 (2) Monthly rate for each extra outlet in a household or single commercial use 1.00 (3) Installation charge for a household or single commercial use 10 .00 (b) Department store, appliance store, hotel, motel, hospital, and apartment complex (1) Monthly rate for each outlet To be negotiated (2) Installation charge Cost of labor and materials (c) The grantee may decrease the rates to subscribers at any time at its option. The grantee may increase the rates only with the approval of the Board. The grantee shall collect no money from the inhabitants of the City until the system is operable. SECTION 22 . Preferential or Discriminatory Practices Prohibited The grantee shall not, as to rates, charges, service, ser- vices facilities, rules, regulations , or in any other respect, make or grant any undue preference or advantage to any party, nor subject any party to any prejudice or disadvantage. SECTION 23 . Removal of Facilities Upon Request Upon termination of service to any subscriber, the grantee shall promptly remove all its facilities and equipment from the premises of such subscriber upon his request. SECTION 24. Transfer of Franchise If the grantee shall at any time sell or assign its rights and privileges under this ordinance and the cable television system located in the City of Wichita Falls to any other party, the assign- ment shall be in writing and a duly authenticated copy thereof shall be filed with the City Clerk, provided such assignment shall not become effective until the assignee shall have agreed in writing to become responsible for the full performance of all the conditions, liabilities, covenants, and obligations contained in this ordinance and until such assignment shall have been approved by the City. -12- SECTION 25. Transactions Affecting Ownership of Facilities (a) In order that the City may exercise its option to take over the facilities and property of the CATV system authorized herein upon expiration or forfeiture of the rights and privileges of the grantee under the franchise, as is provided for herein, subsequent to the initial construction and operation of the CATV system, the grantee shall not make, execute, or enter into any deed, deed of trust, mo-t- gage, conditional sales contract, or any loan, lease, pledge, sale, gift, or similar agreement concerning any of the facilities and pro- perty, real or personal, of the CATV business without prior approval of. the Board upon its determination that the transaction proposed by the grantee will not be inimical to the rights of the City under the franchise; provided, however, that this section shall not apply to the disposition of worn out or obsolete facilities or personal property in the normal course of carrying on the CATV business . (b) Except as provided for in Section 25 (a) , the grantee shall at all times be the full and complete owner of all facilities and property, real and personal, of the CATV business. SECTION 26. Change of Control of Grantee (a) Prior approval of the Board shall be required where ownership or control of more than twenty-five (25) percent of the right of controlof the grantee is acquired by a party or group of parties acting in concert, none of whom already owns or controls twenty-five (25) percent or more of such right of control, singularly or collectively. (b) Prior approval of the Board shall be required where the ownership or control of the right of control of the grantee by parties permanently resident in the City of Wichita Falls or Wichita County decreases below twenty (20) percent. (c) By its acceptance of the franchise, the grantee specifically grants and agrees that any such acquisition occurring without prior approval of the Board shall constitute a violation of the franchise by the grantee. Failure to obtain approval of the Board or to return ownership or control to the previously acceptable level within three (3) months shall constitute a breach of a condition for which the remedy of Section 6 (d) is applicable. Continuing failure to obtain approval of the Board or to return ownership or control to the previously acceptable level for any subsequent three (3) month period shall constitute a separate breach of a condition for which the remedy of Section 6 (d) is applicable. SECTION 27 . Filings and Communications with Regulatory Agencies Copies of all petitions, applications, and communications submitted by the grantee to the Federal Communications Commission, Securities and Exchange Commission, or any other federal or state regulatory commission or agency having jurisdiction in respect to any -13- • • matters affecting CATV operations authorized pursuant to the franchise, shall also be submitted simultaneously to the City Council. SECTION 28. City Rights in Franchise (a) The right is hereby reserved to the City or the Board to adopt, in addition to the provisions contained herein and in existing applicable ordinances, such additional regulations as it shall find necessary in the exercise of the police power; pro- vided that such regulations, by ordinance or otherwise, shall be reasonable and not in conflict with the rights herein granted. (b) The City shall have the right to inspect' the books , records, maps, plans, income tax returns, and other like materials of the grantee at any time during normal business hours . (c) The City shall have the right, during the life of the franchise, to install and maintain free of charge upon the poles of the grantee any wire and pole fixtures necessary for a police and fire alarm system, on the condition that such wire and pole fixtures do not interfere with the CATV operations of the grantee. (d) The City shall have the right to supervise all con- struction or installation work performed subject to the provisions of the franchise and make such inspections it shall find necessary to insure compliance with the terms of the franchise and other pertinent provisions of law. (e) At the expiration of the term for which the franchise is granted, or upon its termination and cancellation, as provided for herein, the City shall have the right to require the grantee to remove at its own expense all portions of the CATV system from all public ways within the City. (f) At the expiration of the term for which the franchise is granted, or upon its termination and cancellation, as provided for herein, the Board, at its election, shall have the first right to negotiate a price with the grantee to purchase and take over the CATV system in its entirety. The purchase price of said property shall be the reproduction cost new thereof, less the observed depreciation therein, as determined by a committee of three engineers, one appointed by City, one appointed by Grantee, and the third selected by the first two thus appointed. The decision of a majority of said committee of engineers shall be sufficient to make the determination. Such deci- sion shall be in writing, supported by the fact findings rendered after reasonable notice and hearing. If either City or Grantee be dissatisfied with the determination made by said committee of three engineers, then either one, or both, shall have the right, within thirty days from the date said committee of engineers has made its determination, to institute a suit in a court of competent jurisdic- tion in Wichita County, Texas, to set aside or enjoin the enforcement of said decision on the grounds that the said determination is azesult of fraud, or misconduct, or that the determination of the reproduction -14- cost new or/and the amount of observed depreciation in said property as arbitrary, erroneous or contrary to the facts. The court trying any such suit shall not be bound by the award of said committee of engineers but shall try the issue according to the law and rules ob- taining in ordinary civil suits . If such a suit is not instituted within the time aforesaid, then the decision of the said committee of engineers shall be final and binding upon both City and Grantee. Upon the purchase of the system by the City and its service of an official notice of such action upon the grantee, the grantee shall immediately transfer to the City possession and title to all facili- ties and property, real and personal, of the CATV system, free from any and all liens and encumbrances not agreed to be assumed by the Board in lieu of some portion of the purchase price set forth above; and the grantee shall execute such warranty deeds or other instruments of conveyance to the City as shall be necessary for this purpose. The grantee shall make it a condition of each contract entered into by it with reference to its operations under the franchise that the contract shall be subject to the exercise of this option by the City and that the City shall have the right to succeed to all privileges and obligations thereof upon the exercise of such option. (g) After the expiration of the term for which the franchise is granted, or after its termination and cancellation, as provided for herein, the Board shall have the right to determine whether the grantee shall continue to operate and maintain the CATV system pending the de- cision of the Board as to the future maintenance and operation of such system. SECTION 29. Maps, Plats, and Reports (a) The grantee shall file with the City Clerk true and accurate maps or plats of all existing and proposed installations . (b) The grantee shall file annually with the City Clerk not later than sixty (60) days after the end of the grantee ' s fiscal year, a copy of its report to its stockholders (if it prepares such a report) , an income statement applicable to its operations during the preceding twelve (12) month period, a balance sheet, and a statement of its properties devoted to CATV operations, by categories, giving its investment in such properties on the basis of original cost, less applicable depreciation. These reports shall be prepared or approved by a certified public accountant and there shall be submitted along with them such other reasonable information as the Board shall re- quest with respect to the grantee' s properties and expenses related to its CATV operations within the City. (c) The grantee shall keep on file with the City Clerk a current list of its shareholders and bondholders. SECTION 30. Payment to the City The grantee shall pay to the City annually the amount of $15,000 or an amount equal to three (3) percent of the annual gross receipts up to $1, 000, 000, and five (5) percent on amounts in excess -15- / of $1, 000, 000, for the first five (5) years of this franchise and for the next seven (7) years of the franchise the grantee shall pay to the City annually the amount of $30, 000 or an amount equal to five (5) percent of the annual gross receipts up to $1, 000, 000, and seven (7) percent on amounts in excess of $1, 000, 000 taken in and received by it on all retail sales of television signals and other services within the City during the year, whichever amount is greater, for the use of the streets and other facilities of the City in the operation of the CATV system and for the municipal supervision thereof. This payment shall be in addition to any other tax or payment owed to the City by the grantee. The annual fee shall be payable quarterly and the grantee shall file a complete and accurate verified statement of all gross re- ceipts within the City during the period for which said quarterly pay- ment is made, and said payment shall be made to the City not later than fifteen (15) days after the expiration of the quarter when due. The grantee shall also, within one (1) month after its acceptance of the franchise make a payment of $30, 000 to the City. SECTION 31. Forfeiture of Franchise (a) In addition to all other rights and powers pertaining to the City by virtue of the franchise or otherwise, the City reserves the right to terminate and cancel the franchise and all rights and privileges of the grantee hereunder in the event that the grantee: (1) Violates any provision of the franchise or any rule, order, or determination of the City or Board made pursuant to the franchise, except where such violation, other than of Section 26 or Section 31 (a) (2) , is without fault or through excusable neglect; (2) Becomes insolvent, unable, or unwilling to pay its debts, or is adjudged a bankrupt; (3) Attempts to dispose of any of the facilities or property of its CATV business to prevent the City from purchasing same, as provided for herein; (4) Attempts to evade any of the provisions of the franchise or practices any fraud or deceit upon the City; or (5) Fails to begin or complete construction as provided under the franchise. (b) Such termination and cancellation shall be by ordinance duly adopted after fifteen (15) days notice to the grantee and shall in no way affect any of the City' s rights under the franchise or any pro- vision of law. In the event that such termination and cancellation depends upon a finding of fact, such finding of fact as made by the Board or its representative shall be conclusive. Provided, however, that before the franchise may be terminated and cancelled under this section, the grantee must be provided with an opportunity to be heard before the Board. -16- SECTION 32. City' s Right of Intervention The grantee agrees not to oppose intervention by the City in any suit or proceeding to which the grantee is a party. SECTION 33. Further Agreement and Waiver by Grantee The grantee agrees to abide by all provisions of the fran- chise, and further agrees that it will not at any future time set up as against the City or the Board the claim that the provisions of the franchise are unreasonable, arbitrary, or void. SECTION 34. Duration and Acceptance of Franchise (a) The franchise and the rights, privileges and authority hereby granted shall take effect and be in force from and after final passage thereof, as provided by law, and shall continue in force and effect for a term of twelve (12) years, provided that within fifteen (15) days after the date of the passage of the franchise the grantee shall file with the City Clerk its unconditional acceptance of the franchise and promise to comply with and abide by all its provisions, terms, and conditions. Such acceptance and promise shall be in writing duly executed and sworn to,by, or on behalf of the grantee before a notary public or other officer authorized by law to administer oaths. Provided, however, that at the end of the initial period such term may be extended for a period of five (5) years upon the condition that the grantee provide the City with ninety (90) days written notice of the grantee' s desire that the term be extended and upon the condition that the technical specifications, services, payments to the City, and other sections of the franchise. ordinance may be adjusted as the parties deem appropriate. The Board of Aldermen shall either allow or refuse to allow the renewal. (b) Should the grantee fail to comply with Section 34 (a) , it shall acquire no right, privileges, or authority under the franchise whatever. SECTION 35. Application for Franchise An application for a franchise hereunder shall be in writing, shall be filed with the City Clerk, and filed therewith, the sum of $500 for processing, and said application shall contain the following information: (a) The residences and technical and management capabilities of the applicants ' principals and the system' s manager and chief engi- neer. (b) The technical, management, and financial capabilities of the applicant. (c) The previous and present experience of the applicant in owning and operating CATV systems. -17- (d) Complete technical information, including maps and equipment descriptions, of the CATV system proposed by the applicant to be installed in the City of Wichita Falls. The applicant shall also provide an attestation by an engineer authorized to represent the applicant that the technical standards and specifications required by the ordinance and proposed in the application are fully understood and will be adhered to by the applicant if awarded the franchise. (e) The CATV channel services to be offered to subscribers, the City, and educational interests in the City of Wichita Falls. (f) A copy of the subscriber agreement to be used by the applicant. (g) Any other information requested by the Board. SECTION 36. Publication Costs The grantee shall assume the cost of publication of the fran- chise as such publication is required by law and such is payable upon the grantee' s filing of acceptance of the franchise. SECTION 37 . Separability If any section, subsection, sentence, clause, phrase, or portion of this ordinance is for any reason held invalid or unconsti- tutional by any court of competent jurisdiction, such portion shall be deemed a separate, distinct, and independent provision and such holding shall not affect the validity of the remaining portions hereof. PASSED AND APPROVED THIS the 16th day of November, 1971. M A Y O R ATTEST: City. Clerk -18-