HomeMy WebLinkAbout16 - Cox Communications Franchise AgreementCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 16
July 25, 2006
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: City Manager's Office
Dave Kiff, Assistant City Manager
949/644 -3002 or dkiff @city.newport- beach.ca.us
SUBJECT: CABLE TELEVISION: ORDINANCE 2006 -_ ADOPTING A FRANCHISE
AGREEMENT WITH COX COMMUNICATIONS
ISSUE:
Should the City enact an ordinance that adopts a new Franchise Agreement with Cox
Communications?
RECOMMENDATION:
1. Introduce Ordinance No. 2006 relating to the adoption of a Cable Communications
Franchise Agreement with Cox Communications;
2. Pass to second reading on August 8, 2006.
DISCUSSION:
As far back as 1966, the City of Newport Beach has had a Cable TV Ordinance and separate
"franchise agreements" with two cable providers. Today, those providers are Cox
Communications and Adelphia (see service areas on map below). The agreements have been
extended several times:
ADELPHIA FRANCHISE AGREEMENT
• Agreement adopted December 1966 -15 -year term (to 1981).
• Amended December 1970 -term reset again to 15 years (to 1986).
• Amended April 1986 -term extended by five years (to 1991)
• Amended October 1991 -term extended to January 27, 2002.
• Amended December 11, 2001 -- term extended to January 27, 2003.
• Amended January 27, 2003 -- term extended to January 27, 2004 (now on holdover
status)
COX FRANCHISE AGREEMENT
• Agreement adopted December 1966 -15 -year term (to 1981).
Cox Communications Franchise and Ordinance
July 25, 2006
Page 2
Amended November 1981 -term extended for 10 years (to 1991).
Amended October 1991 -term extended to January 27, 2002
Amended December 11, 2001 --term extended to January 27, 2003.
Amended January 27, 2003 -- term extended to January 27, 2004 (now on holdover
status).
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# of homes passed in Franchise Area 31,123 13,900 45,023
# of cable N subscribers 16,978 10,100 27,078
% of homes passed that subscribe to cable 55% 73 %. 60%
Franchise - Revenue to City
Adelphia
Cox
Total
-- 1999 (Calendar Year)
$
656,558
$
266,671
$
923,229
—2000
$
722,714
$
280,602
$
1,003,316
--2001
$
705,709
$
395,824
$
1,101,533
2002
$
714,762
$
394,732
$
1,109,494
--2003
$
640,330
$
470,404
$
1,110,734
2004
$
766,343
$
494,411
$
1,260,753
-- 2005 (to date, includes 4th Q'04)
$
411,480
$
402,014
$
813,494
Cox Communications Franchise and Ordinance
July 25, 2006
Page 3
In May of 2004, the City adopted a new Cable Communications Franchises Ordinance (Chapter
5.44 of the NBMC). Since that time, the staff team (Bill Marticorena of Rutan and Tucker,
Assistant City Attorney Aaron Harp, City Attorney Robin Clauson, Assistant City Manager Dave
Kiff, and PIO Marilee Jackson) has worked to negotiate two new franchise agreements (which
mirror each other) with Cox and Adelphia. Adelphia's bankruptcy filing and subsequent sale of
Adelphia assets to Time Warner greatly complicated our discussions.
Preparing for the franchise renewals, the City Council worked with us to amend or wholly re-
vamp three different ordinances (Public Right -of -Way, Cable Communications Franchises, and
Wireless Telecommunications) to lay a framework for the Agreements and for the overall
industry's work in the area. Those tasks are complete.
Generally, the negotiations with both Cox and Adelphia/Time Warner have centered around
template agreements - 95% of the template is a fairly standard version of the agreements that
Mr. Marticorena's clients (cities and counties) have adopted in recent years. The remaining 5%
of the discussions have centered around:
• How many channels will be dedicated for Public Access, Educational and Government
(PEG) -- now and in the future (in case our community programming grows).
• How much money might be forthcoming for a one -time capital grant to enable us to
install one -time projects like cameras in City Hall, a computer editing bay, and more.
How many remote City facilities will be hooked up with a network (called the
"Institutional" or "I -Net" we talk about).
How much will the companies provide on an ongoing basis per subscriber to support
community programming.
Not surprisingly, areawide research shows that Cox and Adelphia have given a variety of capital
grants, a variety of sums per subscriber, and different I -Net services to different municipalities.
The City has been fairly aggressive in stressing that we know what other cities have received
and that we expect similar treatment by our cable providers.
Additional Background. In the 1960s, when the City of Newport Beach entered into two
separate franchise agreements with companies that provide cable television service, cities
across the nation had a significant amount of say in cable companies' operations, including:
• Rates and rate increases;
• Customer service standards; and
• Channel selections and placement
Cities were able to dictate these aspects of cable companies' operations because the cable
companies used the public right -of -way to lay the cable "plant" (plant includes coaxial cable,
boxes in the rights -of -way, connections to homes, etc).
Federal law has changed significantly since the City adopted its franchise agreements - and
both Federal and State law will continue to affect us in the years to come. The changes, in part,
took away almost all of cities' regulatory abilities relating to cable and moved them to the
Cox Communications Franchise and Ordinance
July 25, 2006
Page 4
Federal Communications Commission (FCC or www.fcc.aov). Today, several different laws,
ordinances, and agreements direct our decisions about cable television.
The Effect of Changes in Law. It's important to remind the Council and Newport Beach
residents that:
FCC regulates rates, not cities. The FCC alone has the power to regulate rates and
channel selections, with the lone exception of rate regulation on the basic service tier of
channels (typically Channels 2 -13 and PEG channels). Cities can only regulate basic tier
rate increases if fully certified by the FCC to do so. Cable customers should note that
cable companies rarely, if ever, raise the rates on this tier - much more frequent are rate
increases on the larger (and unregulated) broadcast basictier(Channels 14 -65 and up).
Other tiers are generally unregulated. In March 1999, the FCC (generally) deemed many
cable systems subject to "effective competition" from satellite dish services and removed
almost all rate regulation from cable TV.
Cable TV in Newport Is not literally a monopoly. Cities like Newport Beach have non-
exclusive franchise agreements. Any cable provider can come into the city limits,
negotiate a franchise agreement, lay new cable, and compete directly with either Cox or
Adelphia. Similarly, Cox can attempt to compete directly with Adelphia and vice - versa.
But doing so requires significant investment in new cable infrastructure, because each
cable company owns the cable in the ground (and on poles). Very few companies
anywhere in the nation "overbuild" other systems.
Denial of renewal is extremely difficult and expensive. Cities cannot typically deny a cable
provider an opportunity to renew an existing franchise agreement.
Internet services are unregulated. Courts have ruled that the provision of Internet service
over cable is not a cable - related service and therefore not subject to municipal regulation.
Newport Beach can do very little to help cable customers interact with their Internet
Service Providers (ISPs).
Many more changes are expected. Legislation in both Sacramento and Washington
propose "statewide" franchises for telephone and cable providers - these may supercede
local agencies' franchise abilities and some or all franchise revenue.
A note aboutthe City Charter. The City Charter's section on franchises (Article XIII) requires the
City Council to adopt franchises via ordinance and to hold a public hearing prior to granting a
franchise. It also directs us to notice the public hearing in advance of considering a new
franchise. This notice was provided at the Council's July 11'" meeting. It limits all franchise
terms to 25 years or less if a determinate term is stated. The Article allows indeterminate terms
but specifies that the City may end the franchise and possess the franchisee's property if the
franchisee is out of compliance with the franchise. agreement (Section 1302).
Franchise Discussions. Since at least Fall 2000, the City has retained Mr. Marticorena to assist
us in our telecommunications work. Mr. Marticorena has extensive experience in all phases of
franchise renewals and ordinance amendments. Additionally, upon recommendation of the
Telecom Committee, we hired Sue Buske of the Buske Group to conduct a statistically valid
Cable Needs Assessment (CNA) to determine the community's desires and concerns regarding
cable TV (for more information about the Assessment itself, see the Agenda Item from April 8,
2003 whereby the City Council formally accepted the Assessment).
Cox Communications Franchise and Ordinance
July 25, 2006
Page 5
Given the problems with Adelphia (and generally no one there with whom to negotiate), we used
the Assessment and the Statement of Minimum Goals to work with Cox on a new Franchise
Agreement. A Franchise Agreement is separate and distinct from a new Cable Communications
Ordinance as follows:
• The Ordinance reflects the regulatory environment and practices that any cable provider
must follow while doing business in the City.
The Agreement(s) reflects specific permission to a specific company to use the public
right -of -way to operate a cable system. Included in the permission are negotiated terms
by the company and the City as to adequate compensation paid to the City and its
residents for the use of the right -of -way. Adequate compensation may include the 5%
franchise fee, dedication of equipment, dedication of specific channels and support for
Public, Educational, and Government (PEG) services, and more.
The Proposed Franchise Agreement with Cox. The attached Franchise Agreement - which, as
noted, must be adopted by Ordinance - has the following key provisions:
TERM:
Until April 1, 2011 -with an option to extend to April 1, 2018
FRANCHISE FEE:
5%
LETTER OF CREDIT: $17.25 per subscriber
BANDWIDTH
At least 750 Mhz
LOCAL OFFICE:
Within 20 miles
PEG SUPPORT:
Initial grant of $60 /subscriber (roughly $660,000); and
Additional grant of $30 /new subscriber over 2006's numbers in 2010.
No ongoing PEG support
PEG CHANNELS:
Three immediately, up to 2 more if needed.
OTHER:
Drops provided to City facilities in Cox service area
Undergrounding required
Subscriber Complaint Log kept
Technical Service standards met
Assurance that changes to State or Federal law will not impact Capital
Grant or Franchise Fee payments for the duration of the Franchise Term.
More
This tentative agreement with Cox compares to the negotiated settlement with Adelphia -Time
Warner, via a proposed Memorandum of Understanding (MOU). The MOU twould be binding on
Time Warner for ten years (until December 31, 2016) and includes the following benefits from
Time Warner for the City and its residents:
For support of Public, Educational, and Government (PEG) programming, an Ongoing
PEG Grant of $0.50 per subscriber per month (roughly $120,000 per year). Importantly,
Cox asserts that Cox will not and has not agreed to ongoing PEG support - instead, Cox
offers limited one -time capital grants (thus the higher number at $60 /subcriber than the
below $28 /subcriber offered by the Time Warner MOU;
An Initial PEG Access Grant of $28.00 per subscriber (roughly $476,000 on a one -time
basis); and
Maintenance of current 5% franchise fee.
Cox Communications Franchise and Ordinance
July 25, 2006
Page 6
The MOU also directs that the City and Time Warner negotiate a new Franchise Agreement with
the goal of completing the Agreement by December 31, 2006.
Staff agrees with the proposed terms of the Cox Franchise Agreement and recommends that the
Council approve the Cox FA by ordinance as required by the City Charter.
Committee Action: This item came to Council before staff had the opportunity to convene the
Media & Communications Committee, but we have discussed the recommended actions with
the Council Members who serve on the Committee.
Public Notice: This agenda item was noticed at the July 11'h meeting, per City Charter Section
1310.
Submitted by:
6
Dave
Assistant City Manager
Attachments: Ordinance No. 2006 -
Draft Franchise Agreement with Cox
Cox Communications Franchise and Ordinance
July 25, 2006
Page 7
ORDINANCE NO. 2006 -
AN ORDINANCE OF THE CITY OF NEWPORT BEACH
GRANTING TO COXCOM, INCORPORATED, A
NONEXCLUSIVE FRANCHISE TO CONSTRUCT,
MAINTAIN AND OPERATE A CABLE
COMMUNICATIONS SYSTEM WITHIN THE CITY OF
NEWPORT BEACH
The City Council of the City of Newport Beach does ordain as follows:
SECTION 1. Definitions.
Wherever in this ordinance the following words or phrases are used, they shall have the
respective meanings assigned to them in the following definitions; and words or phrases
not defined in this section which are defined in any franchise document shall have the
same meaning in this ordinance assigned to them in such franchise document, unless
the context in which they are used shall clearly indicate a different meaning:
(a) "City" shall mean the City of Newport Beach in its present incorporated form or in
any later recognized, consolidated, enlarged or reincorporated form.
(b) "Council' shall mean the present governing body or the City, or any future board
constituting the legislative body of the City.
(c) 'Person" shall mean any individual, firm, partnership, association, corporation,
company or organization of any kind.
(d) "Cox" shall mean CoxCom, Incorporated, a Delaware Corporation, doing
business as Cox Communications Orange County, its employees, agents,
successors and assigns.
(e) "Subscribers" shall mean any person or entity receiving for any purpose the
Cable Service of Cox herein.
(f) "Franchise Area" shall mean the territory within the City throughout which Cox
shall be authorized to construct, maintain and operate its system which is
depicted on Exhibit A, which is incorporated herein by this reference, and shall
include any enlargements thereof and additions thereto approved by the City in
writing.
(g) "Franchise Documents" shall mean and shall include all of the following:
(1) Article XIII of the Charter of the City of Newport Beach.
7
Cox Communications Franchise and Ordinance
July 25, 2006
Page 8
(2) Chapter 5.44 of Title 5 of the Newport Beach Municipal Code as the same now
exists or as it may hereafter be amended.
(3) Any and all rules and regulations governing the operation of Cable Systems
within the City of Newport Beach which are adopted by the City Council.
(4) The written acceptance of a Cable Communications Franchise filed with the City
by Cox.
(5) The Franchise Agreement approved by the Office of the City Attorney executed
by the City and Cox.
(i) "Street" shall mean the surface of and the space above and below any public
street, road, highway, freeway, lane, path, alley, court, sidewalk, parkway, or
right of way whether or not improved, now or hereafter existing as such
throughout the City.
SECTION 2. Grant of Franchise.
There is hereby granted to Cox by the City a nonexclusive franchise to construct, erect,
operate and maintain, in, upon, along, across, above, over and under the public streets,
alleys, public ways and public places, now or in the future dedicated for public use in the
City, poles, wires, cables, underground conduits, manholes and other television
conductors, appurtenances and fixtures necessary or convenient for the maintenance
and operation in the City of a Cable System to transmit television and FM radio signals,
within the franchise area depicted on Exhibit A.
The Cable System herein franchised shall be used and operated solely and exclusively
for the purposes expressly authorized by ordinance of the City of Newport Beach and
no other purposes whatsoever.
SECTION 3. Nonexclusive Grant.
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 person at any time
during the term of this franchise.
SECTION 4. Term of Franchise.
The initial term of this franchise shall commence upon its approval by the Council (the
"Effective Date "), and shall expire on April 1, 2011, provided that Cox has filed written
notice of acceptance and executed the franchise agreement in accordance with the
requirement of Section 9 of this ordinance ( "Initial Term "). At Cox's written election filed
with the City no later than January 1, 2010, Cox may extend the Initial Term by seven
E
Cox Communications Franchise and Ordinance
July 25, 2006
Page 9
(7) additional years so that the franchise will expire on April 1, 2018.
SECTION 5. Inclusion of Franchise Documents.
All of the franchise documents applicable to this franchise are hereby incorporated by
reference and made a part of this ordinance. By acceptance of this franchise, Cox
agrees to be bound by all of the terms, provisions and conditions contained in said
franchise documents.
SECTION 6. Right of City to Adopt Additional Rules and Requlations.
The right is hereby reserved to the City to adopt, in addition to the provisions contained
in this ordinance and in any other applicable ordinances and resolutions, such additional
regulations as it shall determine to be necessary or convenient in the exercise of the
police power.
SECTION 7. Prohibited Activities of Cox.
Cox shall be prohibited from directly or indirectly doing any of the following:
(a) Engaging in the business of selling at retail, leasing, renting, repairing or
servicing of television sets, radios or other receiving apparatus, or any part or
component thereof.
(b) Providing any repair service to its subscribers, for a fee or otherwise which
extends beyond the connection of its service and the determination by Cox of the
quality of its signal to its subscribers.
(c) Soliciting, referring, or causing or permitting the solicitation or referral of any
subscriber to any specific named persons firms or corporations engaged in any
business which Cox is prohibited from engaging in by the provisions hereof.
SECTION 8. Transfer of Franchise.
This franchise shall not be sold, transferred, assigned, leased or otherwise disposed of
in whole or in part by voluntary or involuntary sale, merger, consolidation, or otherwise,
without the prior consent of the Council expressed by resolution, and then upon such
terms and conditions as the Council may prescribe. No sale, transfer or assignment
shall be effective until the vendee, assignee or lessee has filed in the Office of the City
Clerk an instrument, duly executed and approved as to form and content by the City
Attorney, reciting the fact of such transfers sale, assignment or lease, accepting the
terms of the franchise, and agreeing to perform all the conditions thereof, including any
additional conditions required by the Council.
M
Cox Communications Franchise and Ordinance
July 25, 2006
Page 10
SECTION 9. Acceptance of Franchise.
This franchise shall not become effective for any purpose unless and until the franchise
agreement is executed by Cox and the City and written acceptance of the franchise
shall have been filed with the City Clerk. The franchise agreement and written
acceptance of the franchise shall be in form and substance as shall be prescribed by
the City Attorney and shall be and operate as an acceptance of each and every term,
condition and limitation contained herein, or otherwise specified by ordinance or
resolution of the City Council. An executed franchise agreement and written
acceptance of the franchise shall be filed by Cox not later than 12:01 P.M. of the
fifteenth (15th) day next following the date of the adoption by the Council of this
ordinance; and, in default of the filing of an executed franchise agreement and written
acceptance of the franchise as herein required, Cox shall be deemed to have rejected
and repudiated the same; and thereafter, the acceptance by Cox of the franchise shall
not be received by the City Clerk and the City shall not execute the franchise
agreement, and such Cox shall have no rights, remedies, or redress in the premises,
unless and until the City Council shall, by resolution, determine that such written
acceptance of the franchise be received and filed and that the franchise agreement be
executed by the City, and then upon such terms and conditions as the Council may
impose.
SECTION 10. Annual Franchise Fee.
Cox shall pay annually to the City during the life of this franchise for the privilege of
operating a Cable System under this franchise the franchise fees and other payments
set forth in the franchise agreement.
SECTION 11.
If any section, subsection, sentence, clause or phrase of this ordinance is, for any reason,
held to be invalid or unconstitutional, such decision shall not affect the validity or
constitutionality of the remaining portions of this ordinance. The Council hereby declares
that it would have passed this ordinance, and each section, subsection, clause or phrase
hereof, irrespective of the fact that any one or more sections, subsections, sentences,
clauses and phrases be declared unconstitutional.
SECTION 12.
The Mayor shall sign and the City Clerk shall attest to the passage of this ordinance. The
City Clerk shall cause the same to be published once in the official newspaper of the City,
and it shall be effective thirty (30) days after its adoption; provided, however, that the
franchise hereby granted shall not become effective unless and until Cox files written
acceptance thereof and executes and delivers the franchise agreement in the manner
specified in Section 9 of this ordinance and delivers to the City all bonds and insurance
10
Cox Communications Franchise and Ordinance
July 25, 2006
Page 11
policies required to be furnished in accordance with the requirements of Chapter 5.44 of
the Newport Beach Municipal Code and /or the franchise agreement.
SECTION 13.
This ordinance was introduced at a regular meeting of the City Council of the City of
Newport Beach, held on the 25th day of July, 2006, and adopted on the 8th day of August,
2006, by the following vote, to wit:
AYES, COUNCILMEMBERS
NOES, COUNCILMEMBERS
ABSENT COUNCILMEMBERS
zo
ATTEST:
CITY CLERK
11
FRANCHISE TO PROVIDE CABLE TELEVISION SERVICES
BETWEEN THE CITY OF NEWPORT BEACH, CALIFORNIA
AND COXCOM, INCORPORATED
THIS AGREEMENT AND FRANCHISE (the "Franchise ") is made and entered into this
day of 2006, by and between CoxCom, Incorporated, a Delaware corporation
dba Cox Communications Orange County (hereinafter "Cox ") and the City of Newport Beach,
California ( "City ").
Authority.
This Franchise has been granted and approved pursuant to the provisions of Title 5,
Business Licenses and Regulations, Chapter 5.44, Cable Communications Franchise, of
the Municipal Code of the City of Newport Beach ( "NBMC "). This Franchise is in the
form of a nonexclusive franchise, contract and agreement.
2. Definitions.
A. All terms used in this Franchise Agreement shall be as defined herein and in Title
5, Business Licenses and Regulations, Chapter 5.44, Cable Communications
Franchise, of the NBMC. The provisions of the NBMC and the wordings,
specifications, and requirements in this Franchise shall constitute the terms of a
franchise as authorized in the NBMC in the form of an agreement to permit use of
the public rights -of -way and to provide cable television services by Cox. For the
purposes of this Franchise, the following words, terms, phrases, and their
derivations have the meanings given herein. When not inconsistent with the
context, words used in the present tense include the future tense, and words in the
singular number include the plural number.
"Complaint" means a dispute in which a Subscriber notifies Cox of an outage or
degradation in picture quality, billing or other issue pertaining to the Subscriber's
Cable Service which is not corrected during the initial telephone or service call.
"Control" or "Controlling Interest" means actual working control in whatever
manner exercised, including, without limitation, working control through
ownership, management, debt instruments, or negative control, as the case may
be, of the Cable System or of Cox. A rebuttable presumption of the existence of
Control or a Controlling Interest shall arise from the beneficial ownership,
directly or indirectly, by any Person or group of Persons acting in concert (other
than underwriters during the period in which they are offering securities to the
public) of twenty percent (20 1/4) or more of any Person (which Person or group of
Persons is referred to as "Controlling Person "), or being a party to a management
contract to manage the Cable System in lieu of Cox.
"Gross Annual Revenue" or "Gross Annual Receipts" or "Gross Receipts" means
all revenue, as determined in accordance with Generally Accepted Accounting
Principles, which is received, directly or indirectly, by Cox and by each Affiliated
Person from or in connection with the distribution of any Cable Service, and any
0,,
Cox -CNB Franchise Agreement
Page 2
other Service which may, under now or then applicable federal law, be included
in the Cable Act definition for the purpose of calculating and collecting the
maximum allowable franchise fee for operation of the System whether or not
authorized by any Franchise, including, without limitation, leased or access
channel revenues received, directly or indirectly, from or in connection with the
distribution of any Cable Service. It is intended that all revenue collected by Cox
from the provision of Cable Service over the System, whether or not authorized
by the Franchise, be included in this definition. Gross Annual Revenue also
specifically includes any revenue received, as reasonably determined from time to
time by the City, through any means which is intended to have the effect of
avoiding the payment of compensation that would otherwise be paid to the City
for the Franchise granted. Gross Annual Revenue also includes any bad debts
recovered. Gross Annual Revenue also includes all advertising revenue which is
received directly or indirectly by Cox or any Affiliated Person from or in
connection with the distribution of any Service over the System or the provision
of any Service - related activity in connection with the System. Gross Annual
Revenue does not include: (i) the revenue of any Person to the extent that said
revenue is also included in the Gross Annual Revenue of Cox; (ii) taxes imposed
by law on Subscribers which Cox is obligated to collect; and (iii) amounts which
must be excluded pursuant to applicable law.
B. Terms Not Defined — Words, terms, or phrases not defined in the NBMC or
herein shall first have the meaning as defined in the Cable Act, and then the
special meanings or connotations used in any industry, business, trade, or
profession where they commonly carry such special meanings. If those special
meanings are not common, they will have the standard definitions as set forth in
commonly used and accepted dictionaries of the English language.
3. Scope of Franchise.
A. Cox is authorized and obligated to construct, reconstruct, and operate the System
within the public streets and rights -of -way. This authority includes the privilege
to use Cox's cable television system in the Service Area, as defined in Section 14
below, (hereinafter the "System ") to provide Cable Service to customers in the
Service Area located in all residential dwellings, commercial structures and
industrial structures.
B. This Franchise Agreement solely and exclusively creates, defines, and limits the
legal rights and obligations between City and Cox and does not; in any way,
obligate City to take any action, actions or refrain from taking any action, or
actions, to or in relation to any third party.
4. Payments.
Regular Percentage Franchise Fee. From and after the Effective Date, Cox shall pay a
Franchise Fee, in quarterly installments, in a sum equal to five percent (5 %) of the Gross
V
Cox -CNB Franchise Agreement
Page 3
Annual Revenue. The Franchise Fee shall be paid to the City within forty -five (45) days
after the close of the calendar quarter. Cox expressly acknowledges and agrees that:
A. Except for the payments expressly required by this Section 4, none of the
payments or contributions made by, or the services, equipment, facilities, support,
resources, or other activities required to be provided or performed by Cox
pursuant to this Agreement are franchise fees chargeable against the compensable
payments to be paid to City by Cox pursuant to this Section 4; and
B. As applicable, except for the compensation payments expressly required by this
Section, each of the payments or contributions made by, or the services,
equipment, facilities, support, resources, or other activities to be provided by Cox,
are voluntary and are not "franchise fees" within the meaning of the Cable Act
(47 U.S.C. §542.(g)(2)); and
C. The compensation payments due from Cox to City pursuant to this Section shall
take precedence over all other payments, contributions, services, equipment,
facilities, support, resources, or other activities to be paid or supplied by Cox
pursuant to this Franchise; and
D. The compensation and other payments to be made pursuant to this Franchise
Agreement shall not be deemed to be in the nature of a tax, and shall be in
addition to any and all taxes of general applicability or other fees or charges
which Cox or any Affiliated Person shall be required to pay to the City or to any
state or federal agency or authority, all of which shall be separate and distinct
obligations of Cox and Affiliated Persons; and
E. Neither Cox nor any Affiliated Person shall have or make any claim for any
deduction or other credit of all or any part of the amount of the compensation or
other payments to be made pursuant to this Franchise from or against any City or
other governmental taxes of general applicability (including any such tax, fee, or
assessment imposed on both utilities and cable operators or their services but not
including a tax, fee, or assessment which is unduly discriminatory against cable
operators or cable subscribers or income taxes) or other fees or charges which
Cox or any Affiliated Person is required to pay to City or other governmental
agency;and
F. Neither Cox nor any Affiliated Person shall apply or seek to apply all or any part
of the amount of the compensation or other payments to be made pursuant to this
Franchise as a deduction or other credit from or against any City or other
government taxes of general applicability (other than income taxes) or other fees
or charges, each of which shall be deemed to be separate and distinct obligations
of Cox and Affiliated Persons; and
G. Neither Cox nor any Affiliated Person shall apply or seek to apply all or any part
of the amount of any City or other government taxes or other fees or charges of
general applicability (including any such tax, fee, or assessment imposed on both
14
Cox -CNB Franchise Agreement
Page 4
utilities and cable operators or their services) as a deduction or other credit from
or against any of the compensation or other payments to be made pursuant to this
Franchise, each of which shall be deemed to be separate and distinct obligations
of Cox and Affiliated Persons; and
H. City acknowledges that, during the term of this Agreement, Cox may offer to its
subscribers, at a discounted rate, a bundled or combined package of certain cable
services that are subject to the franchise fee referenced above in Section 4, and
other services that are not subject to that fee. With regard to such bundled or
combined services, the following provisions are applicable:
During the term of this Agreement, if Cox offers to individual subscribers cable
services subject to the franchise fee that are bundled or combined with non -cable
services that are not subject to the franchise fee, then the revenue from those
bundled or combined services must be allocated on the basis of proportionality, as
follows:
1. The percentage that the price for all bundled services is discounted from
the established retail rates for the individual services, as those rates are
advertised by Cox in its marketing materials or published rate cards, will
be prorated across all services in the bundled package, subject to the
adjustment referenced below in Section 4(H)(2). Cox shall provide the
City with the all requested information regarding the charge for each
individual service for any bundled package within ten (10) days of the
City requesting this information.
2. The revenue derived by Cox from services that are subject to mandatory
tariff rates imposed by the California Public Utilities Commission, or any
similar governmental rate - setting authority, will be deducted from the
aggregate revenue to determine the revenue that is subject to the franchise
fee. By way of example, Cox may offer a bundle of voice, video, and data
services for a flat fee of $75, where the aggregate retail rate of those
services when purchased on an individual basis would equal $100. If
there is no service in that bundled package subject to a mandated tariff
rate, Cox would apply a 25 percent discount to each individual service.
Thus, if the established retail rate for video service was then $50, Cox
would recognize revenue in the amount of $37.50 and would pay a
franchise fee on that amount.
3. Cox will not structure the pricing of any bundled or combined services so
as to intentionally or unreasonably cause a reduction in the Gross Annual
Revenue against which franchise the City may impose fees or other
proportionately derived taxes, surcharges, or fees.
4. If City reasonably determines that Cox has unlawfully, inequitably, or
contrary to Section 4(H) allocated Gross Annual Revenue between video
services and non -video services in calculating franchise fee payments,
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Cox -CNB Franchise Agreement
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then the parties will meet upon advance notice from the City to discuss the
allocation methodology. If the parties cannot resolve the dispute within a
reasonable period of time, then the parties will submit the matter to a
mutually agreeable third party for non - binding mediation. The parties will
share the cost of the mediation equally. If the mediation is not successful,
or if the parties cannot mutually agree upon a mediator, then either party
may file an action in a court of competent jurisdiction or pursue any other
remedies available under the law or this Agreement.
I. If any franchise payment or recomputed amount is not made on or before the
dates specified above in Section 4, Cox shall pay as additional compensation the
greater of the following:
1. An interest charge, computed from the applicable due date, at an annual
rate equal to the prevailing commercial prime interest rate in effect upon
the due date, plus three percent (3 %).
2. In addition to any late payment made pursuant to this section, if a payment
is late by sixty (60) days or more, Cox shall pay a sum of money equal to
five percent (5 %) of the amount due in order to defray reasonable
additional documented and itemized expenses and costs incurred by City
as a result of such delinquent payment.
3. No acceptance of any payment shall be construed as a release of, or an
accord, or satisfaction of, any claim that the City might have for further or
additional sums payable under the terms of this Franchise, or for any other
performance by Cox of an obligation hereunder.
4. Payments of compensation made by a Cox to the City pursuant to the
provisions of this Franchise are in addition to, and exclusive of, any and
all authorized taxes, business license fees, and other fees, levies, or
assessments now in effect or subsequently adopted in accordance with
state and federal law.
5. Letter of Credit.
A. Pursuant to Section 5.44.060(B)(1)(a) of the NBMC, within thirty (30) days of the
Effective Date of this Franchise, Cox shall post an irrevocable standby Letter of
Credit in the amount of ($17.25 per current subscriber but not less than One
Hundred Thousand Dollars ($100,000). The Letter of Credit provider shall have,
at a minimum, a credit rating of A issued by Moody's or Standard & Poor's. The
letter of credit shall incorporate wording approved by City enabling City to draw
such sums from time to time as the City may find necessary to satisfy any
material default of Cox or to meet any payment due City under or in connection
with the NBMC or this Franchise, upon ten (10) days' written notice to the Letter
of Credit provider. The Letter of Credit shall provide in substance that, upon
written notice by City of a material default or failure to make a payment due to
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Cox -CNB Franchise Agreement
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City under or in connection with the NBMC or this Franchise, City may draw
upon the Letter of Credit without any offset, contingencies or conditions of any
kind. This Letter of Credit shall provide that it may not be revoked or amended
without City's prior written approval. Cox shall obtain prior approval by the City
of the wording of the Letter of Credit, the form of the Letter of Credit, and the
Letter of Credit provider. Such approval shall not be unreasonably withheld.
B. The Letter of Credit requirement may, in the unilateral discretion of the City, be
increased by up to three times its original amount if there is an assignment,
transfer, and /or change of control of the Franchise and /or Cox.
C. The Letter of Credit required by this Section satisfies the financial security
requirements of this Franchise Agreement and is in lieu of a Security Fund or
Faithful Performance Bond pursuant to Section 5.44.060(B)(1)(a) of the NBMC.
6. Insurance.
Within ten (10) days of the Effective Date of this Franchise, Cox, at its sole cost and
expense, for the full term of this contract (and any extension thereof), shall obtain and
maintain at minimum all of the following insurance coverage:
A. Types of insurance and Minimum Limits. The coverage's required herein may be
satisfied by any combination of specific liability and excess liability policies.
1. Workers' Compensation and Employers Liability Insurance in
conformance with the laws of the State of California (not required if Cox
has no employees).
2. Cox's vehicles, including owned, non -owned (e.g., owned by Cox's
employees and used in the course and scope of employment), leased or
hired vehicles, shall each be covered with Automobile Liability insurance
in the minimum amount of two million dollars ($2,000,000) combined
single limit per accident for bodily injury and property damage.
3. Cox shall obtain and maintain comprehensive or commercial General
Liability Insurance coverage in the aggregate annual amount of two
million five hundred thousand dollars ($2,500,000) combined single limit,
including bodily injury, personal injury, and broad form property damage.
Such insurance coverage shall include, without limitation:
a. Contractual liability coverage adequate to meet Cox's
indemnification obligations under this Contract; and
b. A cross - liability clause.
C. Cox shall obtain and maintain Slander /Libel /Defamation Liability
Insurance in the aggregate annual amount of one million dollars
($1,000,000).
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Cox -CNB Franchise Agreement
Page 7
B. All required Automobile Liability insurance and Comprehensive or Commercial
General Liability Insurance shall contain the following endorsement as a part of
each policy:
"The City of Newport Beach is hereby added as an
additional insured as respects the operations of the named
insured pursuant to cable television franchise as granted by
the City and said insurance shall specifically cover the acts
and omissions of Cox and the acts and omissions of its
employees, agents and subcontractors in the performance of
work hereunder."
C. Within thirty (30) days from Effective Date of this Franchise, Cox shall furnish
proof to City that a satisfactory insurance policy for all insurance required by this
Franchise so that the City can ensure that the insurance is in place. The insurance
policies for vehicles shall be in effect prior to usage and the City may, from time
to time, reasonably increase the required amount of said insurance so long as said
increased coverage is reasonably available at reasonable prices.
D. The insurance required of Cox pursuant to this Franchise shall be primary and no
insurance held by City shall be called upon to contribute to a loss under this
coverage.
E. All insurance policies shall provide that in the event of material change,
reduction, or cancellation or non - renewal by the insurance carrier for any reason,
not less than thirty (30) days written notice will be given to City by registered
mail of such intent to cancel, materially change, reduce or not renew the coverage.
An authorized agent of such insurance carrier shall provide to City, on such
schedule as is requested by City, a certification that all insurance premiums have
been paid and all coverage's are in force. If for any reason Cox fails to obtain or
keep any of such insurance in force, City may (but shall not be required to) obtain
such insurance, in which event Cox shall promptly reimburse City its premium
cost therefor plus interest at the City's portfolio rate until paid.
F. All insurance shall be contracted through companies licensed to do business in
California.
G. Any deductible or self - insured retentions must be declared to and approved by
City. At the option of City, insurer shall reduce or eliminate such deductible or
self - insured retention as respects City, its officials, officers, employees and
agents, or Cox shall procure a bond guaranteeing payment of losses and related
investigations, claims, administration and defense expenses.
7. Defense and Satisfaction of Claims.
A. Cox shall, at the sole cost and expense of Cox, upon demand by City, defend City,
its officers, boards, commissions or employees, in any and all suits, actions, or
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Cox -CNB Franchise Agreement
Page 8
other legal proceedings, whether judicial, quasi judicial, administrative, or
otherwise arising out of the negligent or willful acts or omissions of Cox, its
employees, subcontractors and agents. Where Cox is required to provide legal
services to City under this paragraph, and chooses to utilize joint counsel, the
parties shall make a good faith effort to cooperate and agree upon litigation
strategy and implementation thereof. In the event that Cox's litigation strategy or
choice of legal counsel create a conflict of interest, or result in inadequate
representation to protect the City's interests and separate counsel is necessary for
the representation of City, City may obtain separate legal counsel chosen by City
at Cox's cost and expense provided, however, that if City obtains separate legal
counsel as set forth above, Cox is only obligated to pay an hourly amount for
legal services which does not exceed one hundred percent (100 %) of the highest
hourly rate that City has paid for legal services within the twenty -four (24) month
period prior to obtaining legal services as provided in this paragraph. City shall
submit to Cox on regular basis statements for attorney's fees which shall be paid
to City within sixty (60) days of Cox's receipt of said statement.
B. Cox shall cause to be paid and satisfied any judgment, decree, or order rendered,
made, or issued against Cox, City, its officers, boards, commissions, or
employees, and hold City harmless therefrom, arising out of Cox's negligent or
willful acts or omissions in connection with the construction, operation,
maintenance, or other activities in relation to Cox's cable television system
including, but not limited to, damages arising out of copyright infringement,
defamation, personal and property liability; and antitrust liability, whether or not
said damages are compensatory or punitive, provided, however, Cox shall not be
required pursuant to this paragraph to hold City harmless for actions relating to
programming decisions outside of Cox's control. Such indemnity shall exist and
continue without reference to the amount of any bond, policy of insurance,
deposit, undertaking, or other assurance; provided, however, City may not enter
into any compromise or settlement which imposes any obligation on Cox without
Cox's consent, which consent shall not be unreasonably withheld, and Cox shall
not make or enter into any compromise or settlement of any claim, demand,
causes of action, suit, or other proceedings which settlement involves anything
other than the payment of money by Cox without contribution by City, without
first obtaining the written consent of City, which consent shall not be
unreasonably withheld.
C. The indemnification provided pursuant to paragraphs 7(A) and 7(B) above shall
apply to all damages and claims for damages of any kind suffered by reason of
any of the aforesaid operations referred to in those paragraphs, regardless of
whether or not City has prepared, supplied, or approved the plans and /or
specifications for the operation or regardless of whether or not any insurance
policies shall have been determined to be applicable to any of such damages or
claims for damages.
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Cox -CNB Franchise Agreement
Page 9
8. Liquidated Damages and Other Remedies.
A. Damages for Violation of Technical Standards, Customer Service Standards and
Other Violations.
In addition to, and without limiting the damages for delays as specified in Section
4 of this Franchise, City may impose any of the other liquidated damages
described below for the violations and in the amounts described below:
1. Technical Standards violations.
If more than ten percent (10 %) of the locations tested pursuant to FCC
regulations fail to meet the FCC technical standards, City may impose
liquidated damages in an amount equal to two hundred dollars ($200) per
day, if Cox does not cure the violation in accordance with Section 8(B)(1)
below.
2. Customer Service Violations.
If Cox violates, in any material way, any of the customer service standards
specified in the NBMC or this Franchise, City may impose liquidated
damages in the amount of two hundred dollars ($200) per violation per
day if Cox does not cure the violation in accordance with Section 8(B)(1)
below.
3. Other Violations.
For all violations and breaches specified in the Franchise or the NBMC,
the City may impose liquidated damages in the amount of two hundred
dollars ($200) per day if Cox does not cure the violation in accordance
with Section 8(B)(1) below.
4. Reduction of Damages and Letter of Credit.
If City does not impose any damages on Cox for delays in violation of
technical standards, violation of customer service standards or for other
violations in the four (4) year period which shall commence on the date
which is sixty (60) days from the Effective Date of this Franchise, after
such four (4) year period, the penalties contained in Sections 8(A)(1) and
8(A)(2) above shall be reduced to one hundred fifty dollars ($150) per day
per violation, and the letter of credit contained in Section 5 above shall be
reduced to seventy -five percent (75 %) of the original amount thereof;
provided however, that the original, penalties and the original amount of
the letter of credit, as increased as allowed herein upon transfer,
assignment or change of control, shall be immediately reinstated if (a) City
imposes two (2) penalties on Cox in any twelve (12) month period, and/or
(b) if Cox assigns, sells, leases or otherwise transfers this Franchise or
control of the System. This entire paragraph shall immediately cease to
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Cos -CAT Franchise Agreement
Page 10
have any force or effect if City imposes a penalty or penalties on Cox
within the four (4) year period which commences sixty (60) days from the
Effective Date of this Franchise Agreement.
B. Payment of Damages.
1. Cure.
In the event that City has reason to believe that Cox has failed to comply
with any material provision of this Franchise or the NBMC and therefore
desires to impose damages on Cox as stipulated above and /or in the
NBMC City shall notify Cox in writing of the provision or provisions
which City believes may be in default as well as the applicable cure
period. Cox shall, upon receipt of said Notice:
a. Cure the alleged violation within the cure period provided by the
NBMC, or if no cure period is provided, within five (5) working
days of said notice. In the event that Cox does not correct said
violation within the applicable cure period, said liquidated
damages may be imposed from the date of original violation; or
b. Respond to City in writing during the cure period contesting City's
assertion of violation and providing such information or
documentation as may be necessary to support Cox's position
and/or request an extension of the cure period. The decision to
extend the cure period shall be within the sole discretion of the
City; however such request for an extension of the cure period
shall not be unreasonably withheld by City.
2. Appeal and Payment.
In the event Cox fails to respond to said notice of violation, or to cure the
violation within the applicable cure period, or provide an explanation for
failure to cure acceptable to City, City or its designee shall schedule a
hearing no sooner than ten (10) days after written notice to Cox of the
expiration of the cure period and the scheduling of said hearing. Cox shall
be provided an opportunity to be heard at such hearing, including the right
to present evidence, cross - examine witnesses, and be represented by
counsel. Within thirty (30) days after said hearing, City shall determine
whether or not Cox is in violation and submit written findings of facts
supporting such determination. The hearing described above may be
conducted, at City's selection, either before the City Council or before an
administrative officer or commission selected by the City Council. In the
event that said hearing is not held before the City Council, Cox shall
possess the right to appeal said determination to the City Council within
ten (10) days of issuance of the statement of decision and findings of fact.
The City Council shall decide said appeal pursuant to a hearing at which
Cox -CN6 Franchise Agreement
Page 11
Cox has an opportunity to be heard and the right to present evidence,
examine witnesses and be represented by Counsel. Cox shall have the
right to appeal the City Council's decision to a court of competent
jurisdiction within ninety (90) days of any final decision by the City
Council. In the event a court orders repayment of said liquidated damages
from City to Cox, interest on such amounts shall be included at the rate
paid by the Local Agency Investment Fund to the City for City
Investments. All liquidated damages shall be due and owing thirty (30)
days after the final decision by either the City Council or the hearing
officer in the event of no appeal to the City Council. The aforesaid
assessment may be levied directly against the letter of credit and collected
by City thirty (30) days from date said damages are due and owing. Such
assessment shall not constitute a waiver by City of any other right or
remedy it may have under the Franchise or under applicable law including,
without limitation, its right to recover from Cox such additional damages,
losses, costs and expenses, including reasonable attorneys' fees, as may
have been suffered or incurred by City by reason of or arising out of such
breach of the Franchise. Nothing in this paragraph is intended to waive,
modify or otherwise affect Cox's rights under the NBMC, this Franchise,
or any applicable law, except for the specific procedures expressly
provided herein, including without limitation the right to judicial review of
the legal rights and obligations of the parties with respect to each other,
Cox's right to challenge the decision of City under applicable legal
standards, and/or any issue of performance or breach by either party to this
Franchise.
C. Validity of Liquidated Damages.
The parties acknowledge that it would be impractical or extremely difficult to fix
actual damages in the case of Cox's default, and that the amount of damages
specified above is a reasonable and complete estimate of City's damages. Cox
recognizes that Cox's prompt development and offering of cable television
service for which penalties can be imposed is of critical importance to City.
City:
Cox:
(Initials) (Initials)
D. Sole Financial Remedy.
No financial penalties will be applied pursuant to Ordinance or other similar
document for the same offenses to which the liquidated damages apply.
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Cox -CN6 Franchise Agreement
Page 12
9. Cox Support for Development of Technology and Programming.
Cox shall provide the following support for the purpose of technology development and
implementing non - commercial public, benefit uses of the Cable System. The provision of
the support items listed herein shall be considered as binding commitments of Cox within
the terms of this Franchise, and if not provided, shall subject Cox to applicable remedies
and penalties for violations of the Franchise.
Cox shall provide the following support:
A. Channel Capacity Requirements.
Cox Support for Public, Educational or Government Access "PEG Access ":
1. Cox shall designate three (3) channels for the exclusive use of the City
( "PEG channels "). The PEG channels shall be under the exclusive
management and editorial control of the City and shall not be shared with
other cities. The City may designate a representative, such as a non - profit
entity, to use and administer to said channels, with all of the attendant
rights and obligations provided to the City hereunder.
In the event Cox is required by federal law, regulations, or otherwise to
change the channel number of a PEG channel, Cox shall provide thirty
(30) days advance notice to the City and its customers. Should Cox desire
to change the channel number of a PEG channel that is in use by a PEG
user within the criteria set forth in Section 9(A)(2) for any other reason,
Cox shall provide the City with the reason for change at least ninety (90)
days prior to the proposed change, advertise the change to customers on its
website, in at least three (3) bill messages prior to the change, and in a
television spot announcement that Cox shall carry on its system for at least
six weeks prior to the change. Cox shall also reimburse the City for its
actual costs for reprinting any materials such as program guides or other
promotional materials occasioned by the change in an amount not to
exceed $7,500.00 for its costs of remarketing the channel.
2. Cox shall make available additional PEG channels designated for use
exclusively by the City pursuant to the following criteria:
a. The initial governmental channels must be in use and programmed
with non - commercial PEG programming, of which no more than
ten (10) hours can be character generated programming, during at
least 80% of the weekdays for at least 80% of the time during any
consecutive 6 -hour period for ten (10) consecutive weeks.
b. The initial public and educational channel must be in use and
programmed with non - commercial and at least 50% locally
produced programming, of which no more than ten (10) hours per
week can be character- generated programming during at least 80%
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Cox -CNB Franchise Agreement
Page 13
of the weekdays for at least 80% of the time during any
consecutive 6 -hour period for ten (10) consecutive weeks.
C. No more than 33 -1/3% of the aggregate hours utilized for PEG
programming during such ten week period can represent repeat
programming.
d. Any additional PEG channel shall be made available within 180
days following the City's written request and verification of
compliance with each of the foregoing conditions.
e. Whenever such additional PEG channels but not the original three
PEG channels, are programmed for less than ten (10) hours per day
for six (6) days per week for a continuous period of not less than
twelve (12) consecutive weeks, the City may permit Cox to utilize
unused channel capacity on that channel under the following
conditions:
(i) Any request from Cox to use any fallow capacity
designated for PEG Access must be submitted in writing to
the City.
(ii) The City shall approve the request from Cox to use fallow
channel capacity if it finds that: (i) the utilization of the
channel is as represented; (ii) Cox has not acted in violation
of any of the provisions of the Franchise regarding
utilization of the channel; and (iii) there are no special
circumstances which would justify the denial or delay of
implementation of the use of the channel. After approval,
Cox may continue to utilize the channel for any other
purposes it so chooses, consistent with the Franchise, until
it is required to be designated for PEG purposes pursuant to
the provisions hereof.
(iii) Unless Cox receives written notice within one hundred and
twenty (120) days that the City disapproves Cox's request,
the City's approval shall be deemed granted.
f. The maximum number of access channels which may be required
under this Franchise shall be five (5), subject to the City's right to
exchange channels, as set forth herein. On six months notice to
Cox, City may exchange each analog PEG channel for four (4)
digitally compressed channels upon satisfaction of the following
conditions:
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Cos -CNB Franchise Agreement
Page 14
(i) Cox provides digitally compressed channels which offer at
least as many services as are available by analog charmels
on the system; and
(ii) Digital decompression terminal devices are installed in the
homes of a least 50% of Cox's subscribers, and are used to
receive Cox's services; and
(iii) City provides six (6) months notice to Cox.
(iv) City provides written waiver of any state or federal laws
pertaining to requirements for the placement of such
channels.
As used in this section, a "digitally compressed channel" shall mean a data
stream capable of delivering video programming on a basis comparable to
the delivery of other digitally compressed video programming.
3. The City shall have sole responsibility for the administration and
programming of the Governmental channel(s) provided by Cox, including
without limitation, the carriage of programming on the channel(s) to
include trafficking of tapes and playback and the establishment and
administration of all rules, regulations and procedures pertaining to the use
and scheduling of the programming presented over the channel(s). The
channels) shall be used for noncommercial, public, governmental or
educational programming. In relation to the public access channel(s), Cox
shall continue its current practices of providing studio facilities,
equipment, trafficking of tapes, playback, for public access users in a
quality and quantity generally consistent with that provided over the past
franchise term.
4. City and Cox acknowledge that there are certain logistic and technical
issues that remain unresolved as of the Effective Date due to the fact that
two separate cable companies provide cable service in the City of Newport
Beach and the City Hail main operation for PEG Channels) resides in the
cable service area of another cable service provider. Cox agrees to work
in good faith to resolve any logistic and technical issues to ensure
seamless quality and continuity of PEG channel(s) access by the City's
citizens including but not limited to:
a. Allowing physical playout equipment and signal to remain at
Cox's Rancho Santa Margarita facility or arranging for transfer of
decks and racks in the City Hall area at a mutually agreeable
location;
b. Ensuring that signal transmission/reception mutual exchange
across cable service boundaries is accomplished; and
Cox -CNB Franchise Agreement
Page 15
C. Ensuring continuation of transmission/reception across the two
cable systems.
B. A Grant in the amount of sixty dollars ($60.00) per Basic Service Tier subscriber
( "BST ") of Cox in the City as of the Effective Date ( "Threshold Subscribers ")
shall be paid by Cox to be utilized for any capital or non - capital purposes (the
"Initial Grant'). Said Initial Grant shall be paid by Cox within thirty (30) days of
the Effective Date of this Agreement.
C. On January 1, 2010, the City shall provide Cox with a list of newly constructed
residential units which have been constructed in the City subsequent to the
Effective Date, if any, (the "Construction List'). Within thirty (30) days of
receipt of the Construction List, Cox shall determine and report in writing to the
City the number of newly constructed units which are BST Subscribers as of that
date (the "New Construction Subscriber List'). Cox shall also report to the City
the number of BST Subscribers contained in the City other than those subscribers
set forth on the New Construction Subscriber List (the "Continuing Subscribers ").
Within ten (10) days thereafter, Cox shall pay to the City an additional grant (the
"Additional Grant") equal to the number of New Construction Subscribers, less
the difference between Threshold Subscribers and Continuing Subscribers times
$30.00 per subscriber.
D. City and Cox agree that said Initial Grant and Additional Grant are neither
franchise fees nor offsettable against franchise fees, irrespective of how they are
expended, for the purposes of the Cable Act. City shall waive normal permit fees,
but not inspection fees, for residential dwelling units, constructed subsequent to
the Effective Date in new subdivisions where Cox installs its cable television
plant in otherwise open trenches along with other utilities at the time of new
subdivision construction. Other than the waiver of normal permit fees as
provided above, Cox will comply with all other City requirements.
E. In the event any dedication to PEG Programming required by this Franchise is
deemed by a legislative body, administrative body, or court of competent
jurisdiction to constitute a payment which must or may be offset against the
franchise fee, City hereby reserves the right, but is not required to do so, to
terminate said program and /or requirement so as to provide the maximum
allowable franchise fee. Cox shall not offset any charge, of any kind, against a
franchise fee or other payment due City without prior written consent of City.
Nothing in this Franchise is intended, and shall be so construed, to confer any
third party beneficiary rights on any party(s), and no rights are created by this
Agreement other than rights in City and Cox.
10. Governmental and Institutional Drop Policy, Provision of Live Local Insertion Locations.
A. Drops to City Facilities.
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Cox -CN6 Franchise Agreement
Page 16
Within one hundred eighty (180) days of written notice provided by the City, Cox
shall provide, without charge, up to four (4) cable drops, as determined by City,
for all levels and all tiers of Cable Service per building, excluding premiums and
pay - per -view, a cable modem drop, and cable modem service (residential speed of
up to 3 mbs) per drop for those buildings, institutions and facilities on Exhibit
"A ", plus those buildings, institutions and facilities which are constructed
subsequent to the Effective Date of this Franchise Agreement, as designated by
City in writing. Except for a City Hall which shall be served irrespective of
distance if it is located in the Service Area, existing or future, which Cox shall
construct at its sole expense, drops to all buildings, institutions and facilities
which are constructed subsequent to the Effective Date of this Franchise
Agreement shall be limited to 250 feet from the closest point to Cox's distribution
system. In the event that requested drops exceed said distance, Cox shall
determine the incremental cost beyond said distance and the City shall pay such
incremental costs to Cox upon completion of construction. Cox shall not impose
programming or other charges for any additional outlets within said buildings.
Installation and maintenance of interior wiring of said building(s) beyond the four
(4) drops per building shall be the responsibility of the building owner, provided
that if Cox is requested to install such wiring, it will do so within a reasonable
time at its actual cost of labor and materials.
B. Live Insertion Locations.
Within one hundred eighty (180) days of written notice provided by the City, Cox
shall provide live insertion points at the locations set forth on Exhibit `B" by way
of fiber connection so that the City can insert and transmit audio, video, and
digital programming from said site to Cox's headend for retransmission over one
or more of the PEG Channels specified in Section 9(A) (collectively, the "Return
Feeds "). The Return Feeds shall be constructed pursuant to technical standards
mutually agreed upon by Cox and the City (the "Design Specifications "). The
City shall possess no obligation to insert programming upon the Governmental
Channel pursuant to Section 9(A) (3) until such time as the Return Feeds are
constructed and activated pursuant to the Design Specifications. Within one
hundred and twenty (120) days of the completion and activation of the Return
Feed, any playback of local government programming or insertion of audio, data
or other information on the Government Access channel shall be the sole
responsibility of the City.
I I . Services and Broad Categories of Video Programming.
Cox should provide, at a minimum, the following broad categories of services and video
progranuning: local broadcast, public affairs, satellite services, news, sports, cultural,
foreign language programming, general entertainment, and children's. If any listed broad
category of service or video programming shall become unavailable, or is commercially,
impractical, or cannot be provided under existing FCC regulations, Cox should provide
substitute programming of the same category if reasonably available. City may request
Cox to cooperate with City in developing and distributing a printed PEG channel guide at
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Cox -CNB Franchise Agreement
Page 17
City's cost. Said printed guide shall be of a reasonable weight and size and could include,
but is not limited to, a printed guide distributed through the bills, via direct mail, or
included in local newspaper or Cox's printed guide, all at City's cost, if any, but shall not
include advertising. If City requests Cox to distribute a printed guide through the bills,
Cox shall comply so long as City produces said guide at its own cost for production and
insertion and provides Cox sufficient advance notice and there is room for said guide in
Cox's billing envelopes, and said guide does not take the place of other inserts desired by
Cox. City shall have complete responsibility for the content of any information included
in said guide. The payments by City referred to in this Section shall be limited to
reimbursing Cox's actual incremental cost of providing and distributing the guide.
12. Minimum System Design and Capacity Requirements.
A. Channel Capacity.
The cable television system shall be constructed with hybrid fiber coax ( "HFC")
architecture and engineered to deliver signals at forward frequencies up to and
including a minimum bandwidth of seven hundred and fifty (750) megahertz
(MHz) on the Residential Network. The System will be engineered to allow
simultaneous downstream delivery of no less than one hundred ten (110) analog
video channels and shall be constructed pursuant to the specifications and routing
described herein.
B. Interactive Capacity and Services.
The cable television system shall be two -way activated in all of the distribution
plant.
C. Minimum Design Criteria.
In addition to the requirements of Section 12(A) -(B) above, minimum system
construction requirements shall be as follows:
Cox shall at all times maintain equipment capable of providing standby
power for the entirety of the cable system for a minimum of two hours.
2. Emergency Override System.
a. Cox shall provide, install, activate, and maintain an emergency
override system which includes audio override on all analog
channels of Cox's system and character generated message
capabilities on a designated channel, receivable only within the
City. City shall be able to activate, provide audio programming,
and terminate such emergency audio override via dial -up or
dedicated telephone control upon system upgrade. City shall use
the audio override and character generated system only in
emergency situations, as declared by the City Council or the City
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Cox -CNB Franchise Agreement
Page 18
Manager when there is threat to the public welfare, health or
safety.
b. In addition to subsection (a) above, and in accordance with the
provisions of FCC Rules and Regulations Part 11, Subpart D,
Section 11.5(h)(1), and as such provisions may from time to time
be amended, Cox shall install and maintain an Emergency Alert
System (EAS). As allowed by FCC Order FCC 97 -338, Paragraph
33, Cox shall transmit all national, state, and local activations of
the Federal EAS, utilizing the four -part message protocol specified
in FCC Rules and Regulations Part 11, Subpart B, or successor
protocols. This shall include such local and state -wide situations
as may be designated to be an emergency by the Local Primary
(LP), the State Primary (SP) and/or other authorities identified and
defined within FCC Rules and Regulations, Part I I or the Local
and State Plans provided for under those rules.
3. Cox shall provide subscribers, upon request, with a parental control
locking device or digital code or other means that permits inhibiting the
viewing of parental designated channels.
4. All new underground trunk and distribution cables shall be in conduit.
5. Minimum Technical Standards for Forward (Downstream) and Reverse
(Upstream) Directions.
The minimum technical standards shall be those adopted by the FCC from
time to time. To the extent that no FCC standards exist, the standards shall
be those FCC technical standards in effect on the Effective Date, or, if
none, those established by City.
13. Universal Service.
Cox shall design, construct and maintain the cable television system in such a manner as
to pass by every existing single or multiple - family dwelling unit in the City and shall
make the system available on an identical basis to all single or multiple family dwelling
units constructed during the term of this Franchise. For new construction in residential
and industrial areas, Cox shall make the system available at the, same time as the units,
residential, or otherwise, are constructed. Nothing herein shall preclude Cox from
providing service to multi - family dwellings and other residential developments on a
discounted bulk - billing basis.
14. System Extension Policies.
Description of Service Area(s).
A. The service area shall constitute that portion of the City set forth on Exhibit "C"
(the "Service Area ").
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Cox -CNB Franchise Agreement
Page 19
B. All subscribers, residential, or otherwise, within one hundred twenty -five (125)
feet from the closest public right -of -way or easement, shall be provided service
for the standard installation fee. Subscribers located beyond one hundred twenty -
five (125) feet from the closest public right -of -way or easement will be connected
upon the payment of Cox's time and materials for that portion of the installation
which exceeds one hundred twenty -five (125) feet.
15. Provision of Service.
Unless the subscriber requests otherwise, Cox shall deliver initial service within seven (7)
business days after receipt of a subscriber order so long as the subscriber is within the
existing Service Area. Service additions or deletions shall be made within twenty -four
(24) hours of a subscriber request, unless additional terminal equipment is required, in
which case Cox shall make such service change within seven (7) calendar days. Cox shall
provide all subscribers, prior to the initiation of cable service and thereafter, with the
ability to subscribe to only Basic Service.
16. Technical Standards Testing.
A. Cox's cable television system shall be periodically tested by Cox, at Cox's sole
expense, at the times, and pursuant to the procedures, described in the then
applicable rules and regulations of the FCC or, if no such rules and regulations
exist, in the manner prescribed in rules and regulations in effect on the Effective
Date.
B. Reimbursement of City Expenses. City shall bear all costs associated with its
attendance, either directly or through an independent consultant, in the initial
testing but not retesting procedure described herein except as provided below:
Upon written request by the City and based on a pattern of customer
complaints to the City regarding system performance, Cox shall measure
and report to City the number of service complaints, which related to
customer dissatisfaction with the quality of the picture excluding partial or
total system outages. The number of said complaints over the first twelve
(12) month period after the Effective Date shall be divided by twelve (12)
and constitute the "base year average monthly subscriber complaints" for
the purposes of this paragraph.
2. At the conclusion of said twelve (12) month period, Cox shall calculate
and report to City monthly the number of subscriber complaints relating to
the quality of the picture ( "Monthly Subscriber Complaints "). Said
information shall be provided to City within fifteen (15) working days of
the last day of each calendar month.
3. So long as Monthly Subscriber Complaints, as defined herein, remain
within twenty percent (20 %) of the base year average monthly subscriber
complaints, as defined herein, City shall bear all costs relating to its
3O
Cox -CNB Franchise Agreement
Page 20
participation in the technical standards testing process defined herein.
However, if, for any given two (2) consecutive months or any three (3)
nonconsecutive months in any six (6) month period, said Monthly
Subscriber Complaints increase more than twenty percent (20 %) over the
base year average Monthly Subscriber Complaints, Cox shall reimburse
City for City's actual and reasonable cost of supervising and /or
participating in the technical standards testing for a three (3) quarter
period commencing upon the occurrence of the contingency(ies) provided
herein if the unsupervised periodic testing, as defined herein, indicates that
Cox's system during said period is operating in conformance with the
technical performance standards provided by Section 12 hereof. Cox shall
reimburse City for any and all costs incurred by it in monitoring Cox's
technical standards testing for twelve (12) months subsequent to a
determination by City that liquidated damages pursuant in Section 8(A)(2)
may be imposed.
4. Subscriber Complaint Log. Cox shall maintain a written or computerized
record of subscriber complaints, including: loss of signal requiring a field
visit, non - receipt of programming or services ordered, billing disputes,
missed appointments, unsatisfactory performance of maintenance,
malfunctioning signal traps on blocked channels, and unresolved or
chronic technical problems. Said record shall indicate:
a. Date and time of Subscriber complaints;
b. Street name of complainant;
C. Nature of complaint;
d. Cox's action(s) to resolve complaint; and
e. Date(s) and time(s) actions(s) taken.
Said record shall be kept at Cox's local office for a period of two (2)
years. A copy of said Subscriber complaint record shall be submitted by
Cox to City within ten (10) working days following receipt of a written
request by City.
5. To the extent that Cox maintains and provides Subscriber complaint
information consistent with the above requirements, it shall be deemed to
have maintained and provided sufficient Subscriber complaint information
as required by this paragraph.
17. Equipment in Rights of Way.
A. Design and construction requirements, permit and other fees, public and customer
notifications, requirements for public communication, and other oversight
requirements by City imposed on Cox shall be consistent to the extent legally
h�
Cox -CNB Franchise Agreement
Page 21
permissible and technically feasible, with those requirements imposed upon other
users of the public rights -of -way and easements within the City.
B. The Cable System shall be constructed or installed in the City only after the
express written approval of the City and only at such locations and in such
manner, design, and size as shall be approved by the City. In granting such
approvals, the City shall exercise reasonable discretion in accordance with
applicable law. Upon Cox's written request, City staff shall meet and confer with
Cox in order to develop a process for expediting City processing and approval of
proposed Cable System installation of multiple "like- kind" facilities.
C. The Cable System shall be placed underground or where all other utilities are
located in all areas which are subject to the provisions of the NBMC unless
otherwise approved by the City Engineer. Such approval shall not unreasonably
be withheld.
D. All construction or maintenance work shall be conducted in a good and
workmanlike manner consistent with industry standards. Installation of new
facilities shall occur, whenever practical, concurrent with the installation of
subdivision public improvements.
E. Upon its receipt of reasonable advance notice, not to be less than five (5) business
days, Cox shall, at its own expense, protect, support, temporarily disconnect,
relocate in the Public Way, or remove from the Public Way, any property of Cox
when lawfully required by City by reason of traffic conditions, public safety,
street abandonment, freeway and street construction, change or establishment of
street grade, installation of sewers, drains, gas or water pipes, or any other type of
structures or improvements by the Franchising Authority; but, Cox shall in all
cases have the right of abandonment of its property.
18. Franchise Term.
The term of this franchise shall commence upon its approval by the City Council (the
"Effective Date "), and shall expire on April 1, 2011. At Cox's written election filed with
the City no later than January 1, 2010, Cox may extend the Initial Term by seven (7)
additional years so that the Franchise will expire on April 1, 2018.
19. Most Favored Nations Review.
A. At any time and at City's request, Cox shall provide information on any Cable
Services not being provided in the City which are being provided on an
operational basis in systems operated by Cox, or any affiliate thereof in the States
of California, Arizona and Nevada (the "Comparison Systems "). For purposes of
this section, "operational basis" means that Cox has offered a Cable Service to all
Subscribers in the Comparison Systems for at least six (6) months, but does not
include Cable Services that are offered on a trial or test basis to a limited number
of subscribers.
$1
Cox -CNB Franchise Agreement
Page 22
B. If Cox is providing Cable Services on an operational basis in any Comparison
Systems, City may require Cox, and Cox shall comply, to provide said Cable
Service(s) within one (1) year of the City's written request, and to upgrade its
Cable System, if necessary, to provide said Cable Service. Further, City shall
reasonably consider not requiring such service based upon information supplied
by Cox but, after considering said information, may still require the provision of
these Cable Services.
C. After the Effective Date of the Franchise, if Cox, or any affiliate, parent, or
subsidiary thereof, enters into any renewal, franchise extension, of a franchise or a
new franchise to provide cable television service to any city located within
Orange County or the County of Orange itself, within thirty (30) days thereof,
Cox shall provide to the City a copy of the Other Franchise.
D. In the event that the City concludes that the Other Franchise contains terms,
conditions or provisions regarding Public, Educational or Government access (the
"PEG Access Provision "), including, without limitation, the financial support
thereof) or Cable System Technology (i.e., channel capacity, services offered,
etc.) (hereinafter the "Technology Provision "), as originally contained therein or
as modified that are more favorable than those contained in the Franchise, when
considering the Franchise and its requirements as a whole, then the City may, at
its sole discretion, require Cox to provide the more favorable PEG Access
Provision and the more favorable Technology Provision, or either of them;
provided, however, (1) the City must notify Cox in writing of its election to
require Cox to provide the more favorable provision within one hundred eighty
(180) days of the City's receipt of the Other Franchise or the City shall be deemed
to have irrevocably declined to impose such requirement; and (2) any requirement
imposed pursuant to this paragraph of the Franchise to incorporate the more
favorable PEG Access Provision and the Technology Provision, or either of them,
shall also include, upon Cox's identification and request, the imposition of any
and all other terms or conditions in the Other Franchise which are more favorable
to Cox than those contained in the Franchise when considering the Franchise and
its requirements as a whole, (by way of example, if the Other Franchise contains a
franchise fee less than the franchise fee in the Franchise or has a term longer than
the term of the Franchise, then the Franchise shall be modified to include such
more favorable terms to the City at the same time that the Franchise is modified to
include the more favorable PEG Access Provision or the more favorable
Technology Provision).
E. Cox shall provide the same Cable Services to customers in the City as it provides
to customers in communities served off the same headend as of the date of this
Agreement. In the event Cox deploys new or different Cable Services as a result
of a Cable System upgrade in one or more of the communities served off the same
headend as of the date of this Agreement, then Cox shall deploy those new or
different services within 24 months to customers in the City provided however
Cox may request an extension for good cause and the City may or may not in its
discretion consent to the extension.
35
Cox -CNB Franchise Agreement
Page 23
20. Construction Responsibility.
Cox shall be responsible for the acts and omissions of its contractors, subcontractors and
employees. Only authorized employees and/or agents of Cox shall apply for and be
issued all necessary permits and building authorizations. Cox shall designate to City a
construction manager who is an employee of Cox to be contacted regarding all cable
construction issues.
21. Compliance with Construction Standards.
Cox shall not construct any portion of its cable television system in City streets and
rights -of -way without obtaining all necessary City building permits and paying in
addition to, the franchise fee, all then applicable fees to the extent legally and practically
feasible to be required of all users of the public rights -of -way and public utility easements
and shall only construct said system in accordance with City standards for methods of
construction in public rights -of -way.
22. Compliance with all Laws, City Orders and the NBMC.
A. Cox shall at its own cost and expense comply with all statutes, ordinances,
regulations and requirements of all governmental entities, including federal, state,
county or municipal, whether now in force or hereinafter enacted. In addition, all
work prepared by Cox shall conform to applicable City, county, state and federal
laws, rules, regulations and permit requirements.
B. Cox shall promptly comply with all lawful City orders, resolutions and the
NBMC related to Cox's operation of the System, including all lawful rate orders.
Failure to so comply shall be considered a breach of this Franchise and shall
subject Cox to (1) all liquidated damages contained in this Franchise and the
NBMC, and (2) all other actions, remedies and penalties available to City as a
result of such failure to comply.
C. In accepting this Franchise, the Company agrees that the commitments indicated
in Section 9 above are voluntarily entered into and shall not be charged against
any Franchise Fees due the City during the term of the Franchise. The Company
agrees to meet all of the commitments of Section 9 above, through the term of the
Franchise.
23. Performance Audits.
City may require, at its option, that performance audits of the System be conducted every
two (2) years by an independent technical consultant selected and employed by City at its
sole expense to verify that the System complies with all technical standards and other
specifications of the Franchise.
3µ
Cox -C'N6 Franchise Agreement
Page 24
24. Franchise Construction.
This Franchise shall be construed according to the internal laws of the State of California
and all federal laws of the United States. Any action brought relating thereto must be
brought exclusively in the state or federal courts located in Orange County, California.
25. Notices.
Any notice required to be given by this Agreement shall be presumed given five (5) days
after deposit in the United States mail, properly addressed by certified mail and return
receipt requested, as follows:
To City: City Manager
City of Newport Beach
3300 Newport Blvd.
Newport Beach, CA 92663
With a COPY to: City Attorney
City of Newport Beach
3300 Newport Blvd.
Newport Beach, CA 92663
To Cox: Cox Com, Inc.
Cox Communications Orange County
29947 Avenida de las Banderas
Rancho Santa Margarita, CA 92688
Attn: Vice President, Government Affairs
With a COPY to: CoxCom, Inc.
Attn: Director, Government Affairs
1400 Lake Hearn Drive
Atlanta, GA 30319
26. Pass - Through of Expenses.
Cox will not separate out, line itemize, or surcharge the cost of the Initial Grants and the
Additional Grants described in Section 9 or any other cost related to this Agreement
(except the franchise fee) as a line item on City customer's cable bills. Additionally, Cox
shall not impose rates and charges on subscribers which are higher for like -kind services
or of packages of services than those imposed upon subscribers in any of the cities of
Mission Viejo, Laguna Hills, Tustin, Rancho Santa Margarita, and Aliso Viejo.
15S
Cos -CNB Franchise Agreement
Page 25
27. Possessory Interest.
By accepting this Franchise, Cox acknowledges that notice is and was hereby given to
Cox pursuant to California Revenue and Taxation Code Section 107.6 that use or
occupancy of any public property pursuant to the authorization herein set forth may
create a possessory interest which may be subject to the payment of property taxes levied
upon such interest. Cox shall be solely liable for, and shall pay and discharge prior to
delinquency, any and all possessory interest taxes or other taxes levied against Cox's
right to possession, occupancy or use of any public property pursuant to any right of
possession, occupancy or use created by this Franchise. Cox shall not be barred from
challenging such try on any amounts assessed pursuant thereto.
28. Rates.
City may, without amendment of this Franchise, regulate Cox's rates, charges, and prices
to the maximum extent permitted by law.
29. Force Majeure.
In the event Cox's performance of any of the terms, conditions, obligations or
requirements of this Franchise is prevented or impaired due to any cause beyond its
reasonable control and not reasonably foreseeable, such inability to perform shall be
deemed to be excused, and no penalties or sanctions shall be imposed as a result thereof.
Such causes beyond Cox's reasonable control and not reasonably foreseeable shall
include, but not be limited to, any acts of God, civil emergencies, labor unrest, strikes,
inability to obtain access to an individual's property and any inability of Cox to secure all
necessary permissions or permits to utilize necessary poles or conduits so long as Cox
utilizes due diligence to timely obtain said permissions or permits.
30. Meet and Confer.
Prior to exercising any rights of audit or inspection upon Cox pursuant to Chapter 5.44 of
the NBMC, City and Cox shall reasonably attempt to meet and confer to achieve
voluntary compliance.
31. Interpretation.
The terms of this Franchise shall be construed in accordance with the meaning of the
language used and shall not be construed for or against either party by reason of the
authorship of the Franchise or any other rule of construction which might otherwise
apply.
32. Successors and Assigns.
All provisions of this Agreement shall apply to any lawful successors and assigns.
3b
Cox -CNi Franchise Agreement
Page 26
33. Severability.
If any provision of this Agreement or the application of such provision to any
circumstance is rendered unconstitutional or otherwise invalid by any law, ordinance,
regulation or court of competent jurisdiction, the remainder of this Agreement or the
application of the provision to other circumstances, shall not be affected thereby.
34. Riehts Cumulative.
The rights and remedies of the parties pursuant to this Franchise are cumulative, except
as otherwise provided in this Franchise, and shall be in addition to and not in derogation
of any other rights or remedies which the parties may have with respect to the subject
matter of this Franchise.
35. No Waiver.
A waiver of any right or remedy by a party at any one time shall not affect the exercise of
said right or remedy or any other right or other remedy by such party at any other time.
The failure of the City to take any action in the event of a material breach by Cox shall
not be construed or otherwise be deemed to constitute a waiver of the right of the City to
take such action at any other time in the event that said material breach has not been
cured, or with respect to any other material breach by Cox.
36. Declaration of Invalidity.
In the event that, after the Effective Date of this Franchise, any court, agency,
commission, legislative body, or other authority of competent jurisdiction: (A) declares
that this Franchise is invalid, in whole or in part; or (B) requires Cox either to: (1)
perform any act which is inconsistent with any provision of this Franchise or (2) cease
performing any act required by any provision of this Franchise, City shall reasonably
determine whether said declaration or requirement has a material and adverse effect on
this Franchise. When Cox intends to exercise its rights pursuant to such declaration or
requirement, Cox shall so notify the City Manager's Office of said declaration or
requirement. If the City determines that said declaration or requirement does have a
material and adverse effect on this Franchise, then Cox shall then enter into good faith
negotiations with the City to amend this Franchise to eliminate any inconsistency or
conflict between said declaration or requirement and the provisions of this Franchise and
to meet the original intent of the parties as the circumstances warrant.
37, Time of the Essence; Maintenance of Records.
In determining whether Cox has substantially complied with the Franchise, the City and
Cox agree that time is of the essence. As a result, Cox's failure to complete construction,
extend service, seek approval of transfers, or provide information in a timely manner
shall constitute substantial breaches of material terms of the Franchise. Maintenance of
records and provision of reports in accordance with the Franchise is also an essential part
of this Franchise Agreement.
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Cox -CNB Franchise Agreement
Page 27
38. Exhibits.
Exhibits "A" through "C" are an integral part of this Agreement and these Exhibits are
incorporated herein by reference. All references to this Agreement shall include all Exhibits. In
recognition of the obligations stated in this Agreement, the parties have executed this Agreement
on the date indicated above.
APPROVED AS TO FORM:
Aaron C. Harp,
Assistant City Attorney
for the City of Newport Beach
ATTEST:
C
LaVonne Harkless,
City Clerk
CITY OF NEWPORT BEACH:
A Municipal Corporation
Don Webb, Mayor
for the City of Newport Beach
COXCOM, INCORPORATED
A Delaware corporation dba Cox
Communications Orange County
By:_
Title:
(Corporate Officer)
Print Name:
By:
(Financial Officer)
Title:
Print Name:
-0
Cox -CN Franchise Agreement
Page 28
I�:ffi:3Y�1
Drops to City Public Buildings, Institutions and Facilities
1. Central Library — 1000 Avocado Avenue
2. Police Department — 870 Santa Barbara Drive
3. Fire Station 3 — 868 Santa Barbara Drive
4. Fire Station 5 /Corona del Mar Library — 410 & 420 Marigold Avenue
5. Fire Station 8 — 6502 Ridge Park Road
6. Big Canyon Reservoir— 3300 Pacific View Drive
7. Oasis Senior Center — 800 Marguerite Avenue.
8. Grant Howald Park/Community Youth Center - 3000 Fifth Avenue
9. Newport Coast Community Center —NP Coast Drive & San Joaquin Rd
10. Between the Police Facility and Newport Coast Fire Station
11. Andersen Elementary — 1900 Port Seaboume Way
�h
Cox -CNB Franchise Agreement
Page 29
EXHIBIT B
Live Local Insertion Locations
1. Police Department Emergency Operations Center
2. Central Library Friends Meeting Room
3. Oasis Senior Center Community Meeting Room
4. Newport Coast Community Center Meeting Room
ao
Cox -CN6 Franchise Agreement
Page 30
EXHIBIT C
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CITY OF NEWPORT BEACH COUNCitOEDA
CITY COUNCIL STAFF REPORT n -a5
Agenda Item No. S16
July 11, 2006
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: City Manager's Office
Dave Kiff, Assistant City Manager
949/644 -3002 or dkiff @city.newport- beach.ca.us
SUBJECT: CABLE TELEVISION: RESOLUTION NO. 2006- EXPRESSING THE
CITY'S INTENT TO ADOPT A FRANCHISE AGREEMENT WITH COX
COMMUNICATIONS
ISSUE:
Should the City prepare to adopt a Franchise Agreement with Cox Communications?
RECOMMENDATION:
1 ?
Adopt Resolution No. 2006 - expressing the City's intent to adopt a Cable Communications
Franchise Agreement with Cox Communications during a public hearing.
DISCUSSION:
The City Charter (Section 1301 - see below) directs us to notice and conduct a public hearing in
advance of considering a new franchise. Because City staff intends to bring to Council a draft
Cable Communications Franchise Agreement (and its related ordinance) with Cox
Communications on July 25h, the action proposed in this staff report meets the requirements of
Section 3101 relating to a Resolution of Intention for the public hearing.
Section 1301. Resolution oflntention. Notice and Pub lic Hearing.
Before granting any franchise, the City Council shall pass a resolution declaring its
intention to grant the same, stating the name of the proposed grantee, the character of
the franchise and the terms and conddions upon which it is proposed to be granted. Such
resolution shall fix and set forth the day, hour and place when and where any persons
haying any interest therein or any objection to the granting thereof may appear before
the City Council and be heard thereon. It shall direct the City Clerk to publish said
resolution at least once, within fifteen days of the passage thereof, in the official
newspaper. Said notice shall be published at least ten days prior to the date of heanng
At the time set for the hearing the City Council shall proceed to hear and pass upon all
protests and its decision thereon shall be final and conclusive. Thereafter it may by
ordinance grant the franchise on the terms and conditions specified in the resolution of
Resolution of Intent— Cable Franchise Agreement
July 11, 2006
Page 2
intention to grant the same, subject to the right of referendum of the people, or it may
deny the same if the City Council shall determine that changes should be made in the
terms and conditions upon which the franchise is proposed to be granted, a new
resolution of intention shall be adopted and like proceedings had thereon.
Committee Action: None.
Public Notice: This agenda item may be noticed according to the Brown Act (72 hours in
advance of the public meeting at which the City Council considers the item).
Submitted by:
— 1��- (46
Dave Kiff
Assistant City Manager
Attachments: Resolution 2006-
Resolution of Intent— Cable Franchise Agreement
July 11, 2006
Page 3
RESOLUTION NO. 2006-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH DECLARING ITS INTENTION TO
CONDUCT A PUBLIC HEARING TO CONSIDER THE
GRANTING OF A NON - EXCLUSIVE CABLE SYSTEM
FRANCHISE TO COXCOM INCORPORATED
WHEREAS, the City Council finds and determines that providing cable service
within the City is a vital public service and is a matter of great public concern because
cable providers use the public right -of -way, provide Public, Educational, and
Governmental ( "PEG ") access within the franchise area, and collect personal information
regarding subscribers creating a need to protect the rights of subscribers; and,
WHEREAS, non - exclusive franchises for use of the public right -of -way to provide
cable services will promote the public health, safety, and welfare by promoting
permanence and stability among those businesses wishing to provide such service and
l accountability to the City for compliance with current and future state and federal
1 mandates; and,
WHEREAS, pursuant to Article XIII of the City Charter and pursuant to Newport
Beach Municipal Code section 5.44.030, the City is authorized to grant a franchise to
provide cable service with private cable service providers; and,
WHEREAS, CoxCom Incorporated ( "Cox") has requested a non - exclusive
franchise to provide cable service.
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as
follows:
Section 1: A public hearing shall be conducted on July 25, 2006, at 7:00 p.m.,
or as soon thereafter as practical, in the City Council Chambers, 3300 Newport
Boulevard, Newport Beach, California, to consider the granting of a franchise to Cox
pursuant to the following terns and conditions:
a. Franchise effective date: The franchise will be effective upon approval of the
City Council.
b. Franchise fee: Five percent (5 %) of gross annual revenue.
Resolution of Intent— Cable Franchise Agreement
July 11, 2006
Page 4
c. Grant: Sixty dollars ($60.00) per basic service tier subscriber of Cox in the
City as of the effective date with an additional grant of thirty dollars ($30.00)
per basic tier subscriber located in newly constructed units as of January 1,
2010.
d. Term of Franchise: From the effective date to April 11, 2011 with an option to
extend the initial term for seven (7) years to April 1, 2018.
e. PEG access: Three (3) PEG channels with the option to increase the number
of channels up to five (5) PEG channels depending upon demand.
f. Letter of credit: Seventeen dollars and twenty five cents ($17.25) per
subscriber, but not less than one hundred thousand dollars ($100,000.00).
g. Laws: Franchisee shall comply with all State, Federal laws and regulations,
terms and conditions of the franchise agreement, and City Charter and
Municipal Code.
Section 2: The City proposes to offer a non - exclusive cable service franchise to
Cox which is presently licensed and permitted to conduct business in the City. Persons
who have an interest in or objection to the proposed franchise may appear before the
City Council and be heard on the date and time listed above.
Section 3: This Resolution of Intention shall be published in the City's official
newspaper within fifteen (15) days of its adoption and at least ten (10) days prior to July
25, 2006.
ADOPTED this day of 200_
Don Webb, Mayor
ATTEST:
LaVonne Harkless,
City Clerk
RESOLUTION NO. 2006- 67
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH DECLARING ITS INTENTION TO
CONDUCT A PUBLIC HEARING TO CONSIDER THE
GRANTING OF A NON - EXCLUSIVE CABLE SYSTEM
FRANCHISE TO COXCOM INCORPORATED
WHEREAS, the City Council finds and determines that providing cable service
within the City is a vital public service and is a matter of great public concern because
cable providers use the public right -of -way, provide Public, Educational, and
Governmental ("PEG'S access within the franchise area, and collect personal information
regarding subscribers creating a need to protect the rights of subscribers; and,
WHEREAS, non - exclusive franchises for use of the public right -of -way to provide
cable services will promote the public health, safety, and welfare by promoting
permanence and stability among those businesses wishing to provide such service and
accountability to the City for compliance with current and future state and federal
mandates; and,
WHEREAS, pursuant to Article XIII of the City Charter and pursuant to Newport
Beach Municipal Code section 5.44.030, the City is authorized to grant a franchise to
provide cable service with private cable service providers; and,
WHEREAS, CoxCom Incorporated ( "Cox") has requested a non - exclusive
franchise to provide cable service.
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as
follows:
Section 1: A public hearing shall be conducted on July 25, 2006, at 7:00 p.m.,
or as soon thereafter as practical, in the City Council Chambers, 3300 Newport
Boulevard, Newport Beach, California, to consider the granting of a franchise to Cox
pursuant to the following tems and conditions:
a. Franchise effective date: The franchise will be effective upon approval of the
City Council.
b. Franchise fee: Five percent (5 %) of gross annual revenue.
c. Grant: Sixty dollars ($60.00) per basic service tier subscriber of Cox in the
City as of the effective date with an additional grant of thirty dollars ($30.00)
per basic tier subscriber located in newly constructed units as of January 1,
2010.
d. Term of Franchise: From the effective date to April 11, 2011 with an option to
extend the initial term for seven (7) years to April 1, 2018.
e. PEG access: Three (3) PEG channels with the option to increase the number
of channels up to five (5) PEG channels depending upon demand.
f. Letter of credit: Seventeen dollars and twenty five cents ($17.25) per
subscriber, but not less than one hundred thousand dollars ($100,000.00).
g. Laws: Franchisee shall comply with all State, Federal laws and regulations,
terms and conditions of the franchise agreement, and City Charter and
Municipal Code.
Section 2: The City proposes to offer a non - exclusive cable service franchise to
Cox which is presently licensed and permitted to conduct business in the City. Persons
who have an interest in or objection to the proposed franchise may appear before the
City Council and be heard on the date and time listed above.
Section 3: This Resolution of Intention shall be published in the City's official
newspaperwithin fifteen (15) days of its adoption and at least ten (10) days prior to July
25, 2006.
ADOPTED this 11"' day of July, 200E
ATTEST:
City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE } as.
CITY OF NEWPORT BEACH }
I, LaVonne M. Harkless, City Clerk of the City of Newport Beach, California, do
hereby certify that the whole number of members of the City Council is seven; that the foregoing
resolution, being Resolution No. 2006 -67 was duly and regularly introduced before and adopted by
the City Council of said City at a regular meeting of said Council, duly and regularly held on the
11th day of July 2006, and that the same was so passed and adopted by the following vote, to wit:
Ayes: Curry, Selich, Rosansky, Daigle, Nichols, Mayor Webb
Noes: None
Absent: Ridgeway
Abstain: None
IN WITNESS WHEREOF, I have hereunto subscribed my name and allied the
official seal of said City this 12th day of July 2006.
(Seal)
TVA
moiled ��ices- ��
City Clerk
Newport Beach, California
Authorized to Publish Advertisements of all kinds including Public notices by
Decree of the Supercr Cant of Orange Coonty, Cauibmia_ Number A -6214.
September 29.196 1. and A -24831 June 11. 196..3.
PROOF OF PUBLICATION
STATE OF CALIFORNIA)
) ss.
COUNTY OF ORANGE )
I am a Citizen of the United States and a
resident of the County aforesaid; I am
over the age of eighteen years, and not a
party to or inter9stGd_4n- the -bel0w entitled
matter. I am a principal clerk of the
NEWPORT BEACH - COSTA. MESA
DAILY PILOT, a newspaper of general
circulation, printed and published in the
Cry of Costa Mesa, County of Orange,
State of California, and that attached
Notice is a true and complete copy as
was prnted and published on the
followina dates:
JULY 15,2006
I declare, under penalty of perjury, that
the foregoing is true and correct.
Executed on 'JULY 15,2006
at Costa Mesa, California.
Signature
RECEIVED
'06 ,1U, 21 A911 1
OFFICE OF THE CITY CLERK
CITY OF NEWPORT BEACH
a. ra hise ettec-
five date: The franchise
IfESOWi�ONN0 W6.67 well v effective .upon
approval. of the City
A RFCn1 IITION OF .. . .
A
WHEREAS. the City sfructed units as of Jan -
Council finds and deter- uary 1.2010. .
mines that providing ca- d. Term of Fran -
ble service within the: chile: From the eftec-
City is a vital public five date to April 11.
service and is a matter 2011 with an .option to
of great public. :conceril, extend the Initial test'
because cable providers for seven (7) years to
use the .public right-of- April I. 8118.
way. provide Public,.' s. PEG ace m Thraa
Educational. and Gov- (3) PEG channel$ v lth
ernmental ( "PEG ") ac the option to fRCreaaa
cess within the fran• the numEHt Of CpWlagb
chile area. and collec up to 144 (5)'PEG chan-
no
use of the
of -way to
with current and future)
state and federal. manl
dates: and. I
WHEREAS. pursuant'
to ktiw xlq of the CQ
Charter and pursuant to
Newport Beach Munici•
P al Code. section
5.44.030: the City.is au•
tharized to grant a fran-
chise tq provide cable
service with private ca-
ble service providers:
and.
WHEREAS. Cox Com
Incorporated ( "Cox ")
has, requested a non•
exclusive' franchise to
provide cable service.
NOW, THEREFORE.
the City Council of the
City of Newport.Beach
resolves as follows:
Sectlw 1: A public
hearing shall he can.
ducted on July 25. 2006.
at 7:01) p.m., or as soon
thereafter �as practical,
in the City .Council
with
laws
1. Max"
Harkles%
lla
:1t