HomeMy WebLinkAbout03/21/1995, C-5 - FINAL PASSAGE OF ORDINANCE NO. 1278 (1995 SERIES) GRANTING A FIFTEEN YEAR FRANCHISE TO SONIC CABLE TELEVISION IIIIu^I�III�IIIIIIIII U � MEETING DATE:
cityo San LUIS OBISPO 32•. qs
COUNCIL AGENDA REPORT ITEM NUMBER/?_,�;
FROM: Ken Hampian, Assistant City Ad strative Officer
Prepared By: Deb Hossli, Administration
SUBJECT: Final Passage of Ordinance No. 1278 (1995 Series) granting a fifteen year
franchise to Sonic Cable Television
CAO RECONIIVIENDATION: Grant final passage to Ordinance No. 1278 (1995 Series)
DISCUSSION:
On Tuesday, March 7, 1995, the San Luis Obispo City Council voted unanimously to introduce
Ordinance No. 1278 (1995 Series) to print which grants a non-exclusive fifteen year franchise
to Sonic Cable Television of San Luis Obispo. The franchise establishes the specific terms and
conditions under which Sonic Cable Television of San Luis Obispo can operate and maintain a
cable system in San Luis Obispo for the next fifteen years. Key components of the franchise
include:
■ Term - Fifteen years.
■ Type - Non-exclusive.
■ System Upgrade - Sonic will upgrade the system to a state-of-the-art 78 channel system
within three years of franchise agreement execution. The system rebuild will be designed
with fiber optics.
■ Public, Education, and Government (PEG) Access to the Cable System - Sonic will:
(1) establish a PEG Fund to purchase capital equipment for a PEG access program equal
to 1% of their gross revenues upon execution of the agreement; (2) at their expense wire
and equip the City Council and Community Room with live cable casting capabilities
within three years of agreement execution; (3) at their expense provide a cable link to
San Luis High School within three years of agreement execution; and (4) provide channel
capacity to accommodate the City's projected PEG access needs.
■ Future Upgrades - The franchise contains a "most favored nations" clause that will
require Sonic, under prescribed circumstances, to make upgrades to the cable system.
■ Customer Service Standards - Sonic has accepted the customer service standards
currently set out in the City's cable ordinance.
■ Franchise Enforcement Capabilities- Sonic will establish a security fund to insure that
all provisions of the franchise are adhered throughout the life of the franchise.
■ Franchise Fee Increase - Sonic will increase the franchise fee from 4% to 5%.
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����h� ►►IVlllll���l �u�`I City Of San LUIS OBISPO
COUNCIL AGENDA REPORT
Ordinance No. 1278 (1995 Series) is now ready for final passage and will become effective
thirty days after the date of its final passage.
ATTACEMIENTS:
Ordinance No. 1278 (1995 Series)
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ORDINANCE NO. 1278
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SAN LUIS OBISPO GRANTING A FIFTEEN YEAR FRANCHISE TO
SONIC CABLE TELEVISION OF SAN LUIS OBISPO
WHEREAS, Sonic Cable Television of San Luis Obispo notified the City in 1991 of their
desire to renew their cable television franchise that was scheduled to expire in April of 1993;
and
WHEREAS, upon receiving this notification from Sonic Cable Television of San Luis
Obispo, the City began preparing for the renewal process. Several studies and surveys were
carried out to assess the capabilities of the current cable system and ascertain the community's
future cable related needs. The results of these studies and surveys were used to create formal
franchise renewal objectives to guide the City through the franchise renewal process; and
WHEREAS, the City began meeting with Sonic Cable Television of San Luis Obispo in
early 1993 to develop a mutually acceptable franchise renewal agreement. Because the City and
Sonic Cable Television of San Luis Obispo were not able to reach agreement on a new franchise
prior to the April 1993 franchise expiration date, the City and Sonic Cable Television of San
Luis Obispo mutually agreed to extend the existing franchise for short-term increments until an
acceptable franchise agreement was developed; and
WHEREAS, in early February of 1995, City staff and Sonic Cable Television of San
Luis Obispo were able to reach agreement on a fifteen year franchise renewal proposal for the
City Council's consideration; and
WHEREAS, the City Council subsequently adopted a resolution on February 14, 1995
advising the community of the City's intention to grant a fifteen year franchise to Sonic Cable
Television of San Luis Obispo and set a public hearing for March 7, 1995 to provide interested
parties with an opportunity to comment on the franchise prior to City Council action; and
WHEREAS, the City Council has held a public hearing on this date.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF SAN LUIS OBISPO THAT:
SECTION 1. A non-exclusive fifteen year cable television franchise is granted to San
Cable Television of San Luis Obispo subject to the terms and conditions setforth in Exhibit A.
SECTION 2. A synopsis of this ordinance, approved by the City Attorney, together with
the ayes and noes shall be published once in full, at f ive 0 days prior to its final passage, in
a newspaper published and circulated in said City, and at the same time shall go into effect at
the expiration of thirty (30) days after its said final passage. A copy of the full final text of this
ordinance shall be on file in the office of the City Clerk on and after the date following the
introduction and passage to print and shall be available to any interested member of the public.
Upon motion of Vice Mayor Romero , seconded by Council Member Roalmanand
on the following roll call vote: (2-53
o-1278
Page 2
Ordinance No. 1278
AYES: Council Members Romero, Roalman, Smith, Williams, and Mayor Settle
NOES: None
ABSENT: None
the foregoing ordinance was introduced to print this 7th day of March , 1995.
/s/ Allen K. Settle
Mayor Allen Settle
ATTEST:
/s/ Diane R. Gladwell
Diane Gladwell, City Clerk
APPROVED:
orge s ity ttorney
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CABLE TELEVISION FRANCHISE AGREEMENT
BETWEEN THE CITY OF SAN LUIS OBISPO
AND
SONIC CABLE TELEVISION OF SAN LUIS OBISPO
EFFECTIVE: Apta 20 ,1995
TABLE OF CONTENTS
SECTION 1 RENEWAL OF FRANCHISE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2 GENERAL REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 3 SYSTEM REBUIL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4 SERVICES AND PROGRAMMING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5 SUPPORT FOR PUBLIC, EDUCATIONAL AND GOVERNMENTAL
ACCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 6 REGULATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
EXHIBITS
EXHIBIT A: SURETY GUARANTEE (SAMPLE)
EXHIBIT B: GRANTEE COMMITMENT TO PEG ACCESS FACILITIES AND
EQUIPMENT
EXHIBIT C: SERVICE TO PUBLIC FACILITIES
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AGREEMENT
This Agreement, made and entered into this day of 1995, at San Luis
Obispo, California, by and between the City of San Luis Obispo, a municipal corporation of the
State of California, and Sonic Cable Television of San Luis Obispo, a California corporation.
RECITALS
1. The City of San Luis Obispo, pursuant to Ordinance No. 1238 and applicable law,
is authorized to grant and renew one or more non-exclusive revocable franchises to operate,
construct, maintain and reconstruct a cable television system within the City.
2: The City, after due evaluation of Sonic Cable Leasing Corporation, and after public
hearings, has determined that it is in the best interests of the City-and its residents to renew its
franchise with Sonic Cable Leasing Corporation. Sonic Cable Leasing Corporation has requested
that the City consent to its transfer of the franchise to Sonic Cable Television of San Luis Obispo,
which is also a wholly owned subsidiary of Sonic Communications. The City hereby consents to
the transfer of the franchise to Sonic Cable Television of San Luis Obispo. This transfer to Sonic
Cable Television of San Luis Obispo has occurred prior to the effective date of this Agreement.
3. Therefore, the City of San Luis Obispo (hereinafter the "Grantor") hereby grants to
Sonic Cable Television of San Luis Obispo (hereinafter the "Grantee") a renewal of its cable
television franchise in accordance with the provisions of Ordinance No. 1238 and this Agreement.
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SECTION 1 RENEWAL OF FRANCHISE
1.1 Grant
The cable television franchise granted as of April 1, 1978 to Sonic Cable Television of San
Luis Obispo, which was assigned to Sonic Cable Leasing Corporation as of December 22, 1989,
pursuant to Resolution #6728, adopted by the City Council on December 5, 1989, which was
assigned to Sonic Cable Television of San Luis Obispo, is hereby renewed, subject to the terms and
conditions of this Agreement. Grantee is a wholly owned subsidiary of Sonic Communications, a
California corporation. The renewal extends the franchise, authority, right and privilege, to
construct, reconstruct, operate and-maintain a cable television system within the streets and public
ways in the City of San Luis Obispo as it is now or may in the future be constituted.
1.2 Right of Grantor to Issue and Renew Franchise
Grantee acknowledges and accepts the present right of Grantor to issue and renew a franchise
and Grantee agrees it shall not now or at any time hereafter challenge any lawful exercise of this
right in any local, State or Federal court. This is not, however, a waiver of any constitutional or
legal right or privilege on the part of the Grantee.
1.3 Effective Date of Renewal
The renewal shall be effective on the date which is thirty (30) days after the date the City
Council, by Ordinance, approves this Agreement. The renewal is further contingent upon the filing
by Grantee with the City Clerk of an original of the executed Franchise Agreement and the required
security fund and insurance certificates. If the filing of all of the above does not occur within sixty
(60) days after the effective date, the Grantor may declare this renewal null and void.
1.4 Duration
The term of the renewal shall be fifteen (15) years from the effective date hereof, at which
time the franchise shall expire and, except as otherwise provided herein, be of no force and effect
unless renewed for an additional period. Renewal shall be in accordance with applicable law.
1.5 Conflict with Cable Ordinance
The provisions of the City of San Luis Obispo Cable Television Regulatory Ordinance,
Ordinance No. 1238, are hereby incorporated herein by reference as if set out in full, and form part
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of the terms and conditions of this Agreement. In the event of any conflict between the terms and
conditions of this Agreement and the provisions of Ordinance No. 1238, this Agreement shall
prevail. Should Ordinance No. 1238 be amended, revised, superseded or otherwise changed after
the effective date hereof in such a way as would materially affect the terms and conditions of this
Agreement, said amendment, revision or change shall not apply to this Agreement without Grantee's
approval.
1.6. Definitions
The definitions contained in Ordinance No. 1238 are incorporated herein as if fully set forth.
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SECTION 2 GENERAL REQUIREMENTS
2.1 Governing Requirements
Grantee shall comply with all lawful requirements of this Agreement, Ordinance No. 1238
and applicable State and Federal law.
2.2 Franchise Fee
Commencing on the effective date of this Agreement, the Grantee shall pay to the Grantor
an annual franchise fee of five percent (5%) of Gross Annual Revenues received by Grantee from
operation of the cable system in the City of San Luis Obispo. The fee shall be payable quarterly by
April 30, July 31, October 31 and January 31 for the preceding three- (3) month period.
2.3 Resolution of Disputes
To aid in the analysis and resolution of any future disputed matters relative to the franchise,
the Grantor and Grantee may, by mutual agreement (both as to whether to hire and whom to hire),
employ the services of technical, financial or legal consultants, as mediators. All reasonable fees
of the consultants incurred by the Grantor and/or the Grantee in this regard shall be borne by the
parties in such proportion as is appropriate, in the judgment of the employed consultant(s).
2.4 Payment to Grantor
No acceptance of any payment shall be construed as an accord that the amount is in fact the
correct amount, nor shall such acceptance of payment be construed as a release of any claim the
Grantor may have for further or additional sums payable under the provision of this Agreement. All
amounts shall be subject to audit, as authorized by Section 1.18 of Ordinance No. 1238.
2.5 Liability Insurance
(a) Upon the effective date of renewal the Grantee shall, at its sole expense, take
out, and maintain during the life of this Agreement and furnish to the Grantor, a policy of insurance
as required by the State of California for Workers' Compensation, and a policy of liability insurance
that shall conform to the provisions of Section 1.23 of Ordinance No. 1238.
The amounts of insurance shall not be less than the following:
Single Limit Coverage applying to Bodily and Personal Injury and Property Damage: T,,vo
Million Dollars ($2,000,000).
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The following endorsements shall be attached to the liability policy:
(1) The policy shall cover on an "occurrence" basis.
(2) The policy shall cover Personal Injury as well as Bodily Injury.
(3) The policy shall cover blanket contractual liability subject to the standard universal
exclusions of contractual liability included in the carrier's standard endorsement as
to bodily injuries, personal injuries and property damage.
(4) Broad Form property damage liability shall be afforded.
(5) The Grantor shall be named additional insured on the policy.
(6) An endorsement shall be provided which states that the coverage is primary
insurance and that no other insurance effected by the Grantor will be called upon to
contribute to a loss under this coverage.
(7) Standard form of cross-liability shall be afforded.
(8) An endorsement stating that the policy shall not be canceled without thirty (30) days'
notice of such cancellation given to the Grantor.
(b) Grantor reserves the right to adjust the limit coverage requirements no more
often than every four(4)years, after conducting a.duly noticed public hearing. Any such adjustment
by the Grantor will be no greater,than the increase in the Los Angeles/Long Beach Metropolitan
Area Consumer Price Index (all consumers) for such four- (4) year period, and will be based on
current prudent business practices of like enterprises involving the same or similar risks.
(c) Grantee shall submit to Grantor documentation of the required insurance
including a certificate of insurance signed by the insurance agent and companies named, as well as
all properly executed endorsements.
(d) Any deductible or self-insured retentions must be declared to and approved
by Grantor. At the option of Grantor, insurer shall reduce or eliminate such deductible or self-
insured retention as respects Grantor, its officers and employees or Grantee shall procure a bond
guaranteeing payment of losses and related investigation, claims, administration and defense
expenses.
(e) Grantee hereby indemnifies Grantor for any damage resulting to it from
failure of either Grantee or any subcontractor of Grantee to take out and maintain such insurance.
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2.6 Indemnification
(a) Grantee shall indemnify, hold harmless, release and defend Grantor, its
officers, employees and agents from and against any and all actions, claims, demands, damages,
disability, losses, expenses including attorneys' fees and other defense costs or liabilities of any
nature that may be asserted by any person or entity including Grantee from any cause whatsoever
including another's concurrent negligence arising out of or in any way connected with Grantee's
operation of the cable system, the exercise or enjoyment of the franchise renewed pursuant to this
Agreement, and/or the activities of Grantee, its subcontractors, employees and agents hereunder.
Grantee shall be solely responsible and save Grantor harmless from all matters relative to payment
of Grantee's employees including compliance with Social Security, withholding, and other similar
matters.
(b) This indemnification obligation is not limited in any way by a limitation on
the amount or type of damages or .compensation payable by or for Grantee under Workers'
Compensation, disability or other employee benefit acts, acceptance of insurance certificates
required under this Agreement, or the terms, applicability or limitations of any insurance held by
Grantee.
(c) Grantor does not, and shall not, waive any rights against Grantee which it may
have by reason of this indemnification, because of the acceptance by Grantor, or the deposit with
Grantor by Grantee, of any of the insurance policies described in this Section.
(d). This indemnification by Grantee shall apply to all damages and claims for
damages of any kind suffered by reason of any of the aforesaid operations referred to in this Section,
regardless of whether or not such insurance policies shall have been determined to be applicable to
any of such damages or claims for damages.
(e) Grantee shall not be required to indemnify Grantor for negligence or
misconduct on the part of Grantor or its officials, boards, commissions, agents, or employees.
(f) Grantor shall hold Grantee harmless from any damage resulting from any such
acts of the Grantor or its officials, boards, commissions, agents or employees in utilizing any
governmental or educational access channels, or in activating_ emergency alert equipment or
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facilities, or from work performed by Grantor and permitted by this Agreement, on or adjacent to
the cable system.
2.7 Security Fund
(a) In accordance with Section 1.19 of Ordinance No. 1238, within sixty (60)
days after the effective date of this Agreement, Grantee shall establish and provide to Grantor a
security fund, as security for the faithful performance by Grantee of all material provisions of this
Agreement. The security fund shall consist of two (2) parts. The first part shall be a bond or a
corporate guarantee from Sonic Communications and which shall be in the amount of Two Hundred
Thousand Dollars ($200,000). Any guarantee shall be essentially similar to the example provided
in Exhibit "A". The second part shall be in the amount of at least Fifteen Thousand Dollars
($15,000) and shall be in the form of an irrevocable bank letter of credit, whose wording shall be
subject to the approval of Grantor's City attorney, and shall reflect the provisions of paragraph (c)
below.
(b) The bond or guarantee shall be maintained at the amount provided above until
the system rebuild provided for in Section 3.1 herein is completed, at which time the bond or
guarantee shall be released, provided there are then no outstanding material violations of this
Agreement. The letter of credit portion of the security fund shall be maintained at the amount
provided above throughout the tern of this Agreement, provided that at intervals no more often than
every four(4) years, Grantor shall have the right to require that this amount be increased to reflect
changes in the Los Angeles/Long Beach Metropolitan Area Consumer Price Index during the prior
four- (4) year period.
(c) The security fund may be assessed by Grantor for those purposes specified
in Sections 1.19 and 1.34 of Ordinance No. 1238, in accordance with the procedures of Section 1.35
of said Ordinance, provided that Grantee has received written notice, an opportunity to be heard and
an opportunity to cure any material violations prior to any assessment. As long as the Grantor
follows the procedures specified herein and in Ordinance No. 1238 for assessing and withdrawing
funds from said security fund, Grantee shall not initiate litigation or non-City administrative action
to prevent or impair Grantor from accessing those funds. Grantee's recourse, in the event Grantee
believes any taking of security funds is improper, shall be through legal action after the security has
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been drawn upon. If the Grantor's action or taking is found to be improper by any court or agency
t
of competent jurisdiction, Grantee shall be entitled to a refund of the funds, including interest .F
accrued thereon.
(d) After any withdrawal from the security fund, Grantee, within thirty (30) days,
shall cause the security fund to be replenished to its full value, in-accordance with the provisions of
Ordinance No. 1238. Any failure to replenish shall be deemed a material breach of this Agreement.
(e) Nothing herein shall be deemed a waiver of the normal permit and bonding
.requirements made of all contractors working within the City's rights-of-way.
2.8 Procedure for Remedying Franchise Violations
(a) The procedures for remedying franchise violations shall be those expressly
set forth in Section 1.34 of Ordinance No. 1238.
(b) If the violation is reasonably curable within thirty (30) days of receipt of
Grantors written notice following the public hearing, and if Grantee has not commenced appropriate
corrective action within that thirty- (30) day period, or provided a plan to correct the violation in
accordance with subsection(c) below, then Grantor may proceed to assess from the security fund
damages for Grantee's individual or repeated willful violations of a material franchise requirement
of up to Five Hundred Dollars($500)per day, or per incident, for unexcused violations of the system
rebuild completion schedule provided in Section 3.1 herein, and up to One Hundred Dollars ($100)
per day, or per incident, for all other unexcused violations, provided that all such violations of
similar nature occurring at the same time shall be deemed one incident.
(c) In the event any stated violation is not reasonably curable within such thirty
(30) days, the franchise will not be terminated or revoked or damages assessed if the Grantee has
provided, within said thirty(30) days, a plan, satisfactory to the Grantor, to remedy the violation and
continues to demonstrate good faith in seeking to correct said violation.
(d) In determining whether violations are material, Grantor shall take into
consideration the nature of the violation, whether the violation was chronic, the person or persons
bearing the impact of the violation, the nature of the remedy required in order to prevent further such
violations and such other matters as the Grantor may deem appropriate.
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2.9 Reservation of Rights
Grantor and Grantee reserve all rights that they may possess under the law unless expressly
waived herein.
2.10 State or Federal Preemption
In the event that the State or Federal Government discontinues preemption in any area of
cable communications over which it currently exercises jurisdiction in such manner as to expand
rather than limit municipal regulatory authority, Grantor may, if it so elects, adopt rules and
regulations in these areas, to.the extent permitted by the then applicable law. If such regulation of
previously preempted areas conflicts with any provision of this Agreement, it shall not be
implemented without Grantee's concurrence.
2.11 Recovery of Litigation Costs
If any legal action is brought for the enforcement of this Agreement or because of any
alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this
Agreement, the successful or prevailing party shall be entitled to recover reasonable attorneys' fees
and other costs incurred in that action or proceeding, in addition to any other relief to which it may
be entitled.
212 Settlement of Potential Prior Claims
Grantor and Grantee acknowledge that a dispute has arisen between them as to whether
Grantee's predecessor has complied with franchise obligations regarding the obligation to pay
franchise fees. Grantor contends that Grantee's predecessor was not allowed to deduct amounts paid
by subscribers as franchise fees when determining gross annual revenues prior to determining
franchise fee obligations under the franchise superseded by this Agreement. Grantee contends that
amounts paid by subscribers as franchise fees should have been deducted from gross annual
revenues when determining franchise fee obligations under the franchise superseded by this
Agreement. While Grantor acknowledges that a substantial legal controversy exists as to the
correctness of its position on this issue, Grantee acknowledges that, for purposes of interpretation
of this Agreement, the parties have adopted Grantor's position with respect to the inclusion of
franchise fees paid by subscribers in the definition of gross revenues for the purpose of calculating
franchise fees due, as set forth in Ordinance No. 1238. The Grantor and Grantee hereby waive any
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and all claims that may have arisen or may arise due to noncompliance with the prior franchise
including, without limitation, any claim for nonpayment, underpayment or overpayment of franchise
fees.
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SECTION 3 SYSTEM REBUILD
3.1 Rebuild
Grantee shall rebuild the existing cable system to provide a capacity of at least seventy-eight
(78) analog downstream video channels [corresponding to an upper operating frequency of Five
Hundred Fifty Megahertz (550MHz)], within thirty-six (36) months of the effective date of this
Agreement. The system rebuild design shall utilize a "fiber to the serving area" approach in which
optical fiber cable shall be installed from the headend to nodes in areas comprising approximately
one hundred(100)to two thousand (2,000) homes, with coaxial cable utilized for the portion of the
system distributing signals from the node to the cable subscribers. Completion of construction shall
be defined as the ability to provide up to seventy-eight (78) channels of video programming, without
digital compression, to all residential subscribers within the City, as well as satisfactory completion
of any permit-specified requirements.
3.2 Future System Modifications
(a) To assure that Grantee's cable system continues to reflect the general cable industry
state-of-the-art throughout the term of the franchise, Grantor and Grantee agree to utilize cable
systems in terms of numbers of subscribers, penetration, and demographics as a basis for
comparison. The comparison communities ( also referred to as to as the "comparison group") shall
be selected no later than six years after the effective date of this Agreement. 'Grantor and Grantee
shall each select four communities to be included in the comparison group.
(b) Grantor and Grantee agree that subsequent to the completion of the rebuild required
in Section 3.1 above, but no sooner than seven (7) years after the effective date of this Agreement,
when (i) five or more cable systems in the comparison group (also referred to as the "comparison
sub.-group") offer programming services which exceed the services provided on Grantee's system
by ten (10) services or more, and (ii) addition of such services is commercially reasonable, then
Grantor may require Grantee to provide additional programming services to meet the average
provided by the comparison sub-group. Grantee shall complete the modification within twelve (12)
months of receipt of Grantor's request, subject to the availability of system channel capacity. If this
provision would require Grantee to incur additional capital costs in excess of 5500,000, then prior
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to incurring any such additional capital costs, Grantee shall be entitled to an appropriate extension
of the franchise tern on a commercially reasonable basis.
(c) Grantor and Grantee further agree that subsequent to the completion of the rebuild
required in Section 3.1 above, but no sooner than seven (7) years after the effective date of this
Agreement, when (i) five or more of the cable systems in the comparison group have activated
upstream communications capacity and are offering interactive residential services to all subscribers
on a regular (and not a test case or other experimental) basis, and (ii) the addition of such services
is commercially reasonable, then Grantor may require Grantee to activate the upstream capacity of
Grantee's system. Grantee shall complete this activation within twelve (12) months of receipt of
Grantor's request. If this provision would require Grantee to incur additional capital costs in excess
of $500,000, then prior to incurring any such additional costs, Grantee shall be entitled to an
appropriate extension of the franchise term on a commercially reasonable basis. Capital costs shall
include, without limitation, all costs to meet the provisions of Section 3.5 of this Agreement.
(d) For the purposes of this Section 3.2, the addition of programming services shall be
"commercially reasonable" if Grantee is able to recoup all capital costs and earn a reasonable return
on any such addition.
3.3 Emergency Alert Capability
Concurrent with the completion of the system rebuild provided in Section 3.1 above, Grantee
shall provide the system capability to transmit an emergency alert signal to all participating
subscribers, in the form of an audio override capability to permit Grantor and/or the County of San
Luis Obispo to interrupt and cablecast an audio message on all channels simultaneously in the event
of disaster or public emergency.
3.4 Standby Power
Concurrent with the completion of the system rebuild provided in Section 3.i above, Grantee
shall provide standby power generating capacity at the cable system control center capable of
providing at least twelve (12) hours of emergency supply. Grantee shall maintain standby power
system supplies throughout the cable network and nodes capable of providing emergency power
within the standard limits of commercially available power supply units.
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3.5 Status Monitoring
Grantee shall provide an automatic status monitoring system or a functional equivalent when
the'cable system has been activated for interactive service, provided that such status monitoring is
utilized by at least fifty percent (50%) of the comparison communities in Section 3.2(a).
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SECTION 4 SERVICES AND PROGRAMMING
4.1 Provision of Service
(a) No later than the completion of the system rebuild provided in Section 3.1,
Grantee shall offer its normal range of services to all residents of the City, as the City exists on the
effective date of this Agreement, at standard installation charges and monthly rates.
(b) Service to all residents in any areas annexed to the City after the effective date
of this Agreement shall be provided at standard installation charges and monthly rates no later than
twelve (12) months after the date of such execution.
(c) In commercial areas, wherever Grantee has been given at least ten (10) days'
notice of a street opening, Grantee shall install conduit or cable in the affected trenches prior to the
trenches being closed.
(d) Grantee shall have no obligation to extend its distribution lines to allow it to
provide service in any residential or commercial area where it cannot secure on commercially
reasonable terms any additional rights-of-way necessary for service to be provided to such area on
a commercially reasonable basis.
4.2 Services and Programming
Grantee shall provide Grantor with a list of program services offered, which list shall be
updated each time a change is made. Grantee shall not voluntarily reduce the number of program
services without thirty (33 0) days' prior notification to the Grantor and system subscribers.
4.3 Leased Channel Service
Subject to available system capacity, Grantee shall offer leased channel service in accordance
with applicable law.
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C-s-a�
SECTION 5 SUPPORT FOR PUBLIC, EDUCATIONAL AND GOVERNMENTAL ACCESS
5.1 PEG Access Operating Costs
Based on the provisions of the Cable Communications Policy Act of 1984 and future
applicable law, Grantor shall determine from time to time the funding level Grantor desires to make
available for public, educational and governmental (PEG) access operating costs, and the most
appropriate entity or entities to manage PEG access operations.
Any Grantor request for grant funds for equipment, facilities and channels for PEG access
use shall be accompanied by an operating plan which delineates the source of the required operating
funds to the extent required by Exhibit "B".
5.2 Grantee Support of PEG Usage
Grantee shall provide the following or equivalent support for PEG cable usage within the
franchise area:
(a) Provision and use of the grant funds and channels designated in Exhibit "B"
of this Agreement for local PEG programming and access use at no charge in accordance with the
requirements of Exhibit "B".
(b) Maintenance of Grantee's PEG access facilities and channels, and support of
PEG programming to the extent specified in Exhibit "B" of this Agreement.
(c) Provision of free public building installation and basic service, and provision
of one upstream transmission line to allow for live cablecasting capability from the locations
specified in Exhibit "C", including San Luis Obispo High School, which capability shall be available
not later than the completion of the rebuild outlined in Section 3.1 above.
(d) Provision of wiring and equipment for a turn-key system(when used in
conjunction with the upstream transmission line described in (c) above) for live broadcast from the
City Council Chambers located in City Hall and the City Council Auxiliary Chamber located in the
San Luis Obispo City-County Library using the equipment described in Exhibit "C", which
equipment shall be available not later than the completion of the rebuild outlined in Section 3.1
above.
The parties agree that the commitments outlined in (c) and (d) above are voluntarily entered
into pursuant to the provisions of the Cable Communications Policy Act of 1984, and the cost of
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providing such commitments will not be considered to be an amount required to satisfy franchise
requirements to support PEG during the term of the franchise and will not be charged against any
PEG funding due Grantor during the term of the franchise.
5.3 Compliance with Federal Law
In accepting this franchise, the Grantee agrees that the commitments indicated in Section 5.2
above are voluntarily entered into pursuant to the provisions of the Cable Communications Policy
Act of 1984, and will not be charged against any franchise fees due the Grantor during the term of
the franchise.
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C=��a
SECTION 6 REGULATION
6.1 Franchise Regulation
The franchise renewed under this Agreement shall be subject to regulation by Grantor in
accordance with all of the lawful provisions of Ordinance No. 1238.
6.2 Force Majeure
The force majeure provisions of Section 1.36 of Ordinance No. 1238 shall apply.
6.3 Rate Regulation
Grantor may elect to regulate rates at any time in accordance with applicable law.
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�00Z3
IN WITNESS WHEREOF, Grantor and Grantee have executed this Agreement the date and
year first above written.
APPROVED AS TO FORM: CITY OF SAN LUIS OBISPO
ett G
cay Attomey By:
Date: 3/21/95
ATTEST:
C' + erk
(SEAL)
(CORPORATE SEAL) SONIC CABLE TELEVISION OF SAN
LUIS OBISPO
By:
O-L
Christopher Cohan, President
Date: 3/7/95
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c-5 a�
EXHIBIT A
SURETY GUARANTEE
(SAMPLE)
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A-1
EXHIBIT A: SURETY GUARANTEE
WHEREAS, the City of San Luis Obispo (hereinafter called "Grantor") under this Franchise
Agreement dated the day of , 1995, has granted a franchise to Sonic Cable
Television of San Luis Obispo (hereinafter called "Grantee") to own, operate, and maintain a cable
television system(hereinafter called "the Franchise"); and
WHEREAS, Sonic Communications, (hereinafter called "Guarantor") a California
corporation, being the parent company of the Grantee, has a substantial interest in said Franchise,
the conduct of the Grantee, and the Franchise Agreement between Grantor and Grantee establishing
Franchise requirements, which Agreement is hereby specifically referred to, incorporated herein and
made a part hereof; and
WHEREAS, Section 2.7 of said Franchise Agreement requires the Grantee, as Principal, to
furnish security issued to cover the faithful performance of certain of the Grantee's obligations under
said Franchise,and which security shall be in favor of the Grantor;
NOW THEREFORE, subject to the provisions of Section 2.8, Guarantor hereby
unconditionally guarantees the due and punctual performance of any and all obligations of Grantee
contained in the Franchise Agreement, up to Two Hundred Thousand Dollars ($200,000). This
Guarantee shall, unless terminated, substituted or canceled as hereinafter provided, remain in full
force and effect for the period provided by said Franchise. Provided that, upon substitution of
another Guarantor reasonably satisfactory to the Grantor, this Guarantee may be terminated,
substituted or canceled upon thirty(30) days' prior written notice from Guarantor to the Grantor and
Grantee.
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Any such notice to be given hereunder shall be addressed to Grantor, with a copy to Grantee.
Such terminations shall not affect liability incurred or accrued under this Guarantee prior to the
effective date of such termination or cancellation.
No claim, suit or action under this Guarantee by reason of any default of the Grantee shall
be brought against Guarantor unless asserted or commenced no later than six (6) months after the
effective date of such termination or cancellation of the Guarantee.
IN WITNESS WHEREOF, the Grantee and Guarantor have hereunto set their hands and
seals this day of , 1995.
SONIC CABLE SONIC COMMUNICATIONS
TELEVISION OF SAN LUIS OBISPO
By: By:
Title: Title:
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E)GFDBIT B
GRANTEE CONMTMENT TO
PEG ACCESS FACILITIES AND EQUIPMENT
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B-1
EXHIBIT B: GRANTEE COMMITMENT TO PEG ACCESS FACILITIES AND EQUIPMENT
1.. PUBLIC, EDUCATIONAL AND GOVERNMENTAL (PEG) ACCESS CHANNELS
(a) From the effective date of this Agreement until the system rebuild provided in
Section 3.1 is completed, Grantee shall continue to provide capacity of one (1) downstream video
channel for composite PEG use.
(b) Concurrent with the completion of the system rebuild provided in Section 3.1,
Grantee shall make two (2) downstream video channels available exclusively for PEG use. These
channels shall be dedicated for the term of the franchise renewal, provided that Grantee may utilize
any portions of these channels during any time when they are not scheduled for PEG use. Grantor
and Grantee shall establish rules and procedures for such scheduling in accordance with Section 611
of the Cable Communications Policy Act of 1984.
(c) After the completion of the system rebuild, at any time during the term of this
franchise, Grantor may request and Grantee shall provide up to a total of two (2) additional
downstream video channels for PEG use. Grantor may not submit such a request unless the PEG
channels already being utilized each are cablecasting at least eight (8) hours per weekday, exclusive
of weekends, of unduplicated video programming on each channel already designated for PEG use,
and, further, that additional contemplated PEG programming cannot effectively utilize the existing
channels during the time they are available.
(d) Upon completion of the system rebuild provided in Section 3).1, Grantee shall make
available for interactive EG use at least thirty mei=ahertz (30 NIHZ) of upstream capacity and thirty
megahertz(30 M[HZ) of downstream capacity, on a closed-circuit basis, at no cost to EG users. The
EG users shall be responsible for the procurement, installation and operating costs of any terminal
and interface equipment needed at the user facilities to utilize this interactive bandwidth. Using
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B-2
monies available in the PEG Fund, Grantee shall be responsible for the procurement, installation and
operation costs of all equipment external to the EG user facilities necessary to provide and maintain
the communications network paths, except that Grantee shall be responsible for maintenance of the
external cable plant at its sole expense.
(e) As used in subparagraphs (a) (b) and (c) above, "PEG use" shall mean the use of the
channels and bandwidth to provide live, taped or character generated programming, or data
transmission for public, educational or governmental purposes by the Grantor and the governmental
and educational institutions listed in Exhibit C (collectively the "Other PEG Users"). Grantee
reserves the right to add other public, governmental and educational institutions to the list of Other
PEG Users from time to time. Grantor and the Other PEG Users shall establish rules and
procedures for scheduling the use of the channels available for PEG access use and provide a copy
of such rules to Grantee. As used in subparagraph (d) above, "EG use" shall mean the use of the
channels and bandwidth to provide live, taped or character generated programming, or data
transmission, for educational or governmental purposes by the Grantor and the governmental and
educational institutions listed in Exhibit C (collectively the "Other EG Users"). Grantor reserves
the right to add other governmental and educational institutions to the list of Other EG Users in a
timely manner to allow for construction of the necessary facilities in connection with the rebuild.
Grantor and the Other EG Users shall establish rules and procedures for scheduling the use of the
channels available for EG access use and provide a copy of such rules to Grantee. Grantee may
utilize any portion of these channels during any time when they are not scheduled for EG use.
Grantor, the Other PEG Users, the Other EG Users and Grantee shall establish rules and procedures
for scheduling use by Grantee in accordance with Section 611 of the Cable Communications Policy
Act of 1984, as amended from time to time.
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2. ESTABLISHMENT OF PEG FUND
On the effective date of this Agreement, Grantee agrees to establish a fund (the "PEG Fund")
for Grantor to use solely for PEG access equipment and facilities. Grantee shall pay into the PEG
Fund in arrears an amount equal to one percent (1%) of gross revenues. If applicable federal law
and regulations permit Grantee to "pass through" the cost of these funds to system subscribers,
Grantor shall not oppose such a pass-through. Grantor reserves the right to request, and receive,
an advance credited against the PEG Fund of up to Two Hundred Fifty Thousand Dollars
($250,000), no sooner than three (3) years after the effective date of this Agreement, for designated
PEG capital equipment and facilities. The advance provided above shall accrue any interest costs.
At the Grantor's request, Grantee shall provide Grantor with a calculation of the current balance
available to Grantor in the PEG Fund.
3. REQUEST FOR GRANTS FROM PEG FUND
Including the advance provided in paragraph 2 above, any request by Grantor for funds from
the PEG Fund shall be in accordance with an operating plan prepared by Grantor. The operating
plan shall contain, as a minimum, the following information:
(a) List of intended PEG users.
(b) Planned type and level of programming for each user.
(c) Capital equipment, facilities and estimated costs required to support the intended
uses. This shall include a survey of existing publicly-owned equipment that might be available for
the intended purposes.
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(d) User commitments by Grantor or another PEG user to cover operating expenses for
at least a three- (3) year period. The user commitments shall be approved by resolution of the City
Council.
(e) An evaluation by Grantor that the existing public facilities and equipment are
inadequate to meet the needs of the operating plan.
(f) Except for the advance provided in paragraph 2 above, a statement of the amount
requested and that the amount requested is less than or equal to the amount available in the PEG
Fund.
Based solely on Grantor's certification that the PEG operating plan is reasonable and
appropriate to meet PEG needs and objectives, Grantee shall provide the requested funds no later
than sixty (60) days after receipt of Grantor's request and the operating plan.
4. PEG OPERATIONS
Grantor may negotiate agreements with neighboring jurisdictions served by the same cable
system, educational institutions, or others to share operating expenses as appropriate. Grantor and
Grantee may negotiate an agreement for management of PEG facilities, if so desired by the parties.
5. TITLE TO PEG EQUIPMENT
Grantor shall retain title to all PEG equipment provided with funding made available in
accordance with paragraphs 2 and 3 above.
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B-5
6. RELOCATION OF PEG CHANNELS
If Grantee relocates any PEG access channel to a different channel number, Grantee shall
reimburse Grantor for any out-of-pocket Grantor costs incurred as a result of the relocation up to a
maximum of$1,000. Granted shall provide Grantor and all subscribers with at least thirty(30) days'
written notice of the relocation of any PEG access channel.
7. PROMOTION OF PEG ACCESS
Grantee shall allow the Grantor to place bill stuffers in Grantee's.subscriber statements sent
in the franchise area, for the purposes of promoting or explaining PEG access, no more than twice
per year upon the written request of the Grantor and at such times that the placement of such
materials would not effect Grantee's cost for the production and mailing of such statements. The
Grantor agrees to pay Grantee in advance for the actual costs incurred by Grantee in connection with
the placement of such materials. Grantee shall also make available access information provided by
Grantor in subscriber packets at the time of installation and at the counter in the system's business
office. Not more often than three (3) times per year, Grantee shall also distribute, at no charge to
Grantor, through advertising insertion equipment, promotional and awareness commercial spots
produced at the Grantor's cost and submitted by the Grantor in a format compatible with such
equipment once Grantee has acquired and activated such capability. Grantee shall also include a
listing of the known programming to be cablecast on PEG access channels in any program guide of
services for the cable system.
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EXHIBIT C
SERVICE TO PUBLIC FACILITIES
C-1
1. PUBLIC BUILDINGS TO BE PROVIDED WITH FREE CABLE TV CONNECTIONS
AND THE HIGHEST LEVEL OF BASIC SERVICE:
City of San Luis Obispo Buildings:
City Hall
Police Station
Fire Stations
Senior Citizens Center
City Recreational Center
City-County Library
City Recreation Department (current location and new location at 1341 Npomo)
Public Works Department
Other Public Buildings:
San Luis Obispo High School
Pacific Beach High School
Laguna Middle School
Pachecho Elementary School
Hawthorne Elementary School
Sinsheimer Elementary School
Bishop Peak's Elementary School
Teach Elementary School
C.L. Smith Elementary School
Jesperson School
San Luis Coastal Office of Education
State of California (675 Califomia Blvd.)
San Luis Jr. High School
San Luis Obispo County General Hospital
Crisis Center
2. PUBLIC BUILDINGS TO BE PROVIDED WITH LIVE PROGRAM ORIGINATION
CAPABILITY:
City of San Luis Obispo City Hall
San Luis Obispo City-County Library
San Luis Obispo High School
3. PUBLIC BUILDINGS TO BE PROVIDED WITH DATA TRANSMISSION
CAPABILITY:
City of San Luis Obispo City Hall
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4. EQUIPMENT FOR COUNCIL CHAMBERS AND COUNCIL AUXILIARY CHAMBER:
LOCATION: City Council Chambers
EQUIPMENT TO BE INSTALLED:
1 Fixed mounted camera with remote control pan, tilt and zoom capability
1 portable camera w/tripod and dolly
1 video/audio mixer
1 character generator
1 S-VHS editing recorder/player deck
4 Black & white video monitors
1 Color Monitor
1 waveform monitor/vectorscope
1 audio monitor
1 microphone mixer
Wiring of all above equipment to master control room located adjacent to Council
Chambers and tie-in to house audio system.
LOCATION: Library Community Room
One fixed mounted camera with remote control pan, tilt and zoom capability wiring
to enable use of above provided portable camera. Tie to house audio system.
EQUIPMENT:
Equipment specifications will be of comparable quality as listed below
Qt—Y Description
2 Sony PAC1/DXC-930 Color CCD camera with CMA-D2
power supply
1 Panasonic AG455 camcorder
2 Sony CCDC-25 DC power cable
2 Fujinon S 16x6.7BMD-AS tele-conferencing lens
2 Vicon V6033PT pan tilt head, 151b load rating
1 Vicon V7000C desktop controller for use with two pan tilt
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heads
1 Vicon V6634LM modification to all tele-conferencing lens
for presets
2 Vicon V6616WM wall mounts for V6033PT
1 Bogen 3196 Professional Tripod
1 Bogen 3198 dolly
1 Panasonic WJ-MX50 Video/Audio mixer
1 Panasonic WJ-KB50 Character generator for WJ-MX50
1 Panasonic AG-1970 S-VHS editing recorder/player
4 Panasonic TR-930B 9" monitors
2 Panasonic TY-K930 rackmount for single or dual rackmount
1 Panasonic CT-1383Y 13" Color monitor
1 Panasonic CT-1383 Custom rackmount kit for CT-1383Y
1 Videotek TVM-621- Combination Waveform monitor/
vectorscope, case not included
1 Videotek DRC-1 double rack mount case for TVM-621
1 Videotek BLK-1 blank panel
1 Videotek APM-200 Stereo rackmount audio program monitor
1 Shure AMS-2415" black gooseneck microphone with 20'
cable
1 Shure AMS-8000 8-channel automatic microphone mixer
New conduit to be laid to cross Palm Street at 18" depth as well as a reasonable
easement and location for Palm Street to City Hall building to enable return wiring
from Community Room to Control Center adjacent to City Council chambers.
5. QUALIFIED PUBLIC, EDUCATIONAL AND GOVERNMENTAL
ACCESS USERS:
City of Morro Bay
Cal Poly State University
6. OTHER EG USERS:
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