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HomeMy WebLinkAboutOrd 16001 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ORDINANCE NO, 1600 ORDINANCE OF THE CITY OF BURLINGAME APPROVING CABLE SYSTEM FRANCHISE AGREEMENT BETWEEN THE CITY OF BURLINGAME AND TCI AMERICAN CABLE HOLDINGS H. L.P., TO RENEW THE NONEXCLUSIVE CABLE SYSTEM FRANCHISE The CITY COiJNCIL of the CITY OF BURLINGAME does hereby ordain as follows: Section 1. Chapter 6.48 of the City of Burlingame Municipal Code ("CATV Code") authorizes the City, as Grantor, to grant one or more non-exclusive franchises ("Franchise") to construct, operate, install and maintain a cable communications system ("System") within the City. In accordance with the CATV Code and Ordinance No. 1210 adopted on June 15, 1981 ("Franchise Ordinance), and Resolution 44-81 adopted on June 15, 1981 ("Franchise Rules"), the City approved a Franchise for Capital Cities Peninsula Cable, Inc. Subsequently, the Franchise was duly acquired by Post -Newsweek Pacific Cable, Inc. The Franchise was extended for a period of one year by Resolution 28-96 to expire on June 24, 1997. Pursuant to Ordinance No. 1566, the City approved the transfer of the rights, title, and interest of Post -Newsweek Pacific Cable, Inc. to Post -Newsweek Cable, Inc., and in turn to TCI American Cable Holdings U, L.P. (`TCI"). On June 2, 1997, the City Council adopted Resolution 41-97 extending the franchise to January 31, 1998, to allow TCI to evaluate the system and initiate negotiations for renewal of the Franchise with the City. On January 20, 1998, the City Council adopted Resolution 4-98 extending the franchise to August 31, 1998, to allow those negotiations to be completed. On August 3, 1998, the City Council adopted Resolution 79-98 extending the franchise to October 31, 1998, to allow the public hearings on the renewal of the Franchise to be conducted and this ordinance and the amendments to Chapter 6.48 to become effective. Section 2. The City and TCI have met in extended negotiations, and TCI has had an extended opport unity to evaluate its system and its customers needs and wishes. Notice of the public hearing on the proposed renewal has been given as required bylaw. The City Council has received and considered all testimony and documentation submitted by any interested person C:\ WP51\FQ.ES\CA1'V\Gnnre"aw. cN.wpd 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 regarding the proposed renewal. Pursuant to that process, the City Council is willing to enter into the franchise agreement attached hereto as Exhibit A and the agreement is approved. Section 3. This ordinance supersedes Ordinance Nos. 1210 and 1566, and Resolution 45- 81. Section 4. The City Manager is directed and authorized to execute the franchise agreement attached hereto as Exhibit A, subject to the understanding that Exhibit C to Exhibit A shall be completed by the City Manager as to the list of public school and City facilities to be connected and served. Section 5. This ordinance shall be published in accord''a e wi aw. f I, Judith A Malfatti, City Clerk of the City of Burlingame, do hereby certify that the foregoing Ordinance was introduced at a meeting of the City Council of the City of Burlingame on August 3 1998, and the Ordinance was duly adopted at a regular meeting of the City Council on September 23 , 1998, by the following vote: AYES: COUNCILMEMBERS: GALLIGAN, JANNEY. KNIGHT, O'MAHONY, SPINELI NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE Deputy City Clerk -2- C:\1W51\FQ,ES\CATV\Uanrenew.cN.wpd CABLE SYSTEM FRANCHISE AGREEMENT BETWEEN THE CITY OF BURLINGAME AND TCI AMERICAN CABLE HOLDINGS II, L.P. EFFECTIVE: c:�Tmic�cueNrsa�nmyamewyreame�eaentroi.dog 1998 7/22/98 TABLE OF CONTENTS SECTION 1 RENEWAL OF FRANCHISE ..........................2 SECTION 2 GENERAL REQUIREMENTS................ 9999490950 5 SECTION 3 SERVICE AREA AND LINE EXTENSION POLICY........ 16 SECTION 4 SYSTEM UPGRADE ................................ 17 SECTION 5 SERVICES AND PROGRAMMING ......................23 SECTION 6 SUPPORT FOR LOCAL ORIGINATION AND PUBLIC, EDUCATIONAL AND GOVERNMENTAL (PEG) ACCESS..... 24 SECTION 7 REGULATION....................................25 EXHIBITS A OWNERSHIP B SURETY GUARANTEE (SAMPLE) C GRANTEE COMMITMENT TO LOCAL ORIGINATION AND TO PUBLIC, EDUCATIONAL AND GOVERNMENTAL (PEG) ACCESS FACILITIES AND EQUIPMENT AGREEMENT This Agreement, made and entered into this day of 1998, at , California, by and between the City of Burlingame, a municipal corporation of the State of California, and TCI American Cable Holdings II, L.P., a California limited partnership. WITNESSETH WHEREAS, the City of Burlingame, pursuant to Federal and California law and ordinance No. is authorized to grant and renew one or more non-exclusive revocable Franchises to own, operate, construct, maintain and reconstruct a Cable System within the City; and WHEREAS, the City, after due evaluation of TCI American Cable Holdings II, L.P., and after public hearings, has determined that it is in the best interests of the City and its residents to renew its Franchise with American Cable Holdings II, L.P. NOW, THEREFORE, the City of Burlingame (hereinafter "the Grantor" or "Grantor") hereby grants to American Cable Holdings II, L.P. (hereinafter "the Grantee" or "Grantee") a renewal of its Cable System Franchise in accordance with the provisions of Ordinance No. and this Agreement. E SECTION 1 RENEWAL OF FRANCHISE 1.1 Grant (a) The Cable System Franchise currently held by TCI American Cable Holdings II, L.P., a California limited partnership whose current ownership is indicated in Exhibit "A," is hereby renewed, subject to the terms and conditions of this Agreement. The renewal extends the Franchise, authority, right and privilege, to construct, reconstruct, operate and maintain a Cable System within the Streets and Public Ways in the City of Burlingame as it is now or may in the future be constituted, and also provides the authority to offer to Subscribers any Cable Serviceorother services that legally may be offered, utilizing the facilities of Grantee's Cable System. (b) If Grantee contends that it may lawfully provide Non -Cable 1.2 Right or telecommunications services over the facilities of the Cable System, Grantee shall give Grantor written notice of its intent to provide such services at least thirty (30) days prior to services becoming available to Subscribers. This is not, however, a waiver of of Grantor to Issue and Renew Franchise Grantee acknowledges and accepts the present right of Grantor to issue and/or 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. 2 1.3 Effective Date of Renewal The renewal shall be effective on the date that both parties have executed this Agreement, provided that said date is no later than thirty (30) days after the effective date the City Council, by Resolution or Ordinance, approves this Agreement. The renewal is further contingent upon the filing by Grantee with the City Clerk, of the executed Franchise Agreement and the required security fund and insurance certificates, except that if the filing of the security fund or any such insurance certificate does not occur within sixty (60) days after the effective date of the Resolution or Ordinance approving this renewal and any extension of time hereunder, the Grantor may declare this renewal null and void. 1.4 Duration (a) The term of the renewal shall be ten (10) years from the effective date hereof, after which time it shall expire and be of no force and effect unless renewed. Renewal shall be in accordance with applicable law. (b) If the Grantee offers residential interactive services to the City's residents within eighteen (18) months after the effective date of this Agreement, the duration of the franchise shall be extended by two (2) additional years. 1.5 Conflict with Cable Ordinance (a) The provisions of the City of Burlingame Cable Television Regulatory Ordinance, Ordinance No. are hereby incorporated herein by reference as if K3 set out in full, and form part of the terms and conditions of this Agreement. In event of any conflict between the terms and conditions of this Agreement and the provisions of Ordinance No. this Agreement shall prevail. (b) Should Ordinance No. be amended, revised, superseded or otherwise changed after the effective date hereof in such 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; provided, that Grantor, upon sixty (60) days prior notice, may reasonably amend the Customer service standards of Ordinance No. from time to time, in accordance with Federal and State law, and such amended standards shall apply to Grantee. 1.6 Definitions The definitions contained in Ordinance No. incorporated herein as if fully set forth. 0 are SECTION 2 GENERAL REQIIIREMENTS 2.1 Governing Requirements Grantee shall comply with all lawful requirements of this Agreement, Ordinance No. and applicable State and Federal law. 2.2 Franchise Fee (a) The Grantee shall pay to the Grantor an annual Franchise Fee of up to five percent (5%) of Gross Annual Cable Service Revenues received by the Grantee from all operations of the Cable System in the City of Burlingame, provided, that if Federal or State law permits the Grantee to provide Non -Cable Services to Subscribers such as data or telephone communications through the facilities of the Cable System, and the Grantor has the legal authority to collect either a Franchise Fee or an in- lieu -of -franchise -fee payment on such services, then the fee for revenues derived by the Grantee from such services shall be at the maximum rate permitted by law, not to exceed five percent (5%) of Gross Non -Cable Service Revenue, beginning on the date that such services are first provided. The fee shall be payable quarterly, by no later than sixty (60) days after the end of the quarter for which payment is due. (b) Upon the effective date of this Agreement, the Grantor shall establish the percentage Franchise Fee it desires initially. If that percentage is less than five percent (5%), the Grantor may, at any time during the franchise term, increase the Franchise Fee up to five 5 percent (50), upon ninety (90) days written notice to the Grantor. (c) Revenues collected as Franchise Fees shall be included in Gross Annual Cable Service Revenues. (d) For the purposes of this Agreement, revenues generated from the provision of interactive residential services and digital video services shall be defined as Cable Service revenues, if permitted by law. 2.3 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 6.48.240 of Ordinance No. Audits shall be limited to no more than one (1) for any three (3) year Franchise period. 2.4 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 6.48.310 of Ordinance No. C The amounts of insurance shall not be less than the following: Single Limit coverage applying to Bodily and Personal Injury and Property Damage: Two Million Dollars ($2,000,000) 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 (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 three (3) years. Any such adjustment by the Grantor will be no greater than the increase in the San Francisco Metropolitan Area Consumer Price Index (all consumers) for such three (3) year period. (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 to take out and maintain such insurance. 2.5 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 attorney's 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 arising from 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, etc. (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 D 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 (hereinafter "such acts"). Grantor shall hold Grantee harmless from any damage resulting from any acts of the Grantor or its officials, boards, commissions, agents or employees without limitation activating any Emergency Alert facilities, or in utilizing any Governmental or Educational Access Channels, equipment, or facilities and for any such acts committed by Grantor in connection with work performed by Grantor and permitted by this Agreement, on or adjacent to the Cable System. 2.6 Security Fund (a) In accordance with Section 6.48.250 of Ordinance No. within sixty (60) days of the Resolution adopting this Agreement, Grantee shall establish and provide to Grantor a security fund, as security for the faithful performance by Grantee of all material provision of this Agreement. The security fund shall consist of two (2) parts. The first part shall be a bond, which may be a corporate guarantee and which shall be in the amount of Two Hundred Fifty Thousand Dollars ($250,000), and in a form acceptable to the Grantor's City Attorney, and essentially 10 similar to the example provided in Exhibit "B." The second part shall be in the amount of at least Fifty Thousand Dollars ($50,000) and shall either be in the form of an irrevocable letter of credit, or a cash deposit established in a local bank in an interest-bearing account payable to the order of the Grantor as trustee for Grantee, with all interest distributed to the Grantee. (b) The bond shall be maintained at the Two Hundred Fifty Thousand Dollar ($250,000) level until the System upgrade provided for in Section 4.1 herein is completed, at which time the bond shall be released, provided there are then no outstanding material violations of this Agreement. Upon receipt of information verifying completion of the upgrade, the Grantor shall release the bond. The cash or letter of credit portion of the security fund shall be maintained at the Fifty Thousand Dollar ($50,000) level throughout the term of this Agreement, provided that at intervals no more often than each three (3) years, Grantor shall have the right to require that this amount be increased to reflect changes in the San Francisco Metropolitan Area Consumer Price Index during the prior three (3) year period. (c) The security fund may be assessed by Grantor for those purposes specified in Sections 6.48.250, 6.48.370, and/or 6.48.390 of Ordinance No. in accordance with the procedures of said Ordinance, provided 11 that Grantee has received written notice and thirty (30) days after receipt of notice to cure any material violations prior to any assessment. As long as the Grantor follows the procedures specified herein and in Ordinance No. for assessing and/or 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 been drawn upon. If the Grantor's action or taking is found to be improper by any court or agency of competent jurisdiction, Grantee shall be entitled to a refund of the funds plus interest and/or any other award which such court or agency shall make. (d) 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. 2.7 Procedure for Remedying Franchise Violations (a) The procedure for remedying Franchise violations or breaches shall be consistent with the procedures of Ordinance No. 0 Grantor, by action of the Grantor's City Manager, or a delegate, shall first notify Grantee of the violation in writing by personal delivery or registered or certified mail, and demand correction within a reasonable time, which shall not be less than fifteen (15) days in the case of the failure of the 12 Grantee to pay any sum or other amount due the Grantor under this Agreement or Ordinance No. and thirty (30) days in all other cases. If Grantee fails to correct the violation within the time prescribed, or if Grantee fails to commence corrective action within the time prescribed and diligently remedy such violation thereafter, the Grantee shall then be given written notice of not less than thirty (30) days of a public hearing to be held before the Council. Said notice shall specify the violations alleged to have occurred. (b) At the public hearing, the Council shall hear and consider all relevant evidence, and thereafter render findings and its decision. (c) In the event the Council finds that Grantee has corrected the violations or has diligently commenced correction of such violation after notice thereof from Grantor and is diligently proceeding to fully remedy such violation, or that no material violation has occurred, the proceedings shall terminate and no penalty or other sanction shall be imposed. In determining whether a violation is material, Grantor shall take into consideration the reliability of the evidence of the violation, the nature of the violation and the damage (if any), caused to the Grantor thereby, whether the violation was chronic, and any justifying or mitigating circumstances and such other matters as the Grantor may deem appropriate. {d) In the event the Council finds that a material violation exists and that Grantee has not corrected the same in a satisfactory manner or has not diligently commenced correction of such violation, the Council may impose liquidated damages, assessable from the security fund, of up to One Thousand Dollars ($1,000) per day, for unexcused violations of the System upgrade herein, and up to Two Hundred Dollars ($200) per day per violation for all other violations, provided that all violations of a similar nature occurring at the same time shall be considered one (1) violation. If the Grantor elects to assess liquidated damages, pursuant to the provisions of this Franchise Agreement, then such election shall constitute Grantor's exclusive remedy for a period of sixty (60) days. Thereafter, if the Grantee remains in non-compliance with the requirements of the Franchise Agreement, the Grantor may pursue any available remedy. 2.8 Reservation of Rights Grantor and Grantee reserve all rights that they may possess under the law unless expressly waived herein. By entering into this Agreement, neither Grantee nor Grantor waives any rights which it now or may later enjoy under applicable law, and specifically Grantor and Grantee reserve their rights to take full advantage of any changes in law during the term of the Franchise. 14 2.9 State or Federal Preemption In the event that the State or Federal Government discontinues preemption in any area of Cable System regulation 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 in the then applicable law. If such preemption has a material impact upon the term of this Agreement, Grantor and Grantee agree to negotiate in good faith to attempt to restore the mutual considerations provided in this Agreement. 15 SECTION 3 SERVICE AREA AND LINE EXTENSION POLICY 3.1 Franchise and Service Area The Grantee's Franchise and Service Areas shall be the entire City of Burlingame, including any and all territory as may be annexed thereto, during the term of this Agreement. The Grantor shall provide the Grantee with thirty (30) days prior written notice of any action that might lead to an annexation. The Grantee shall offer the full range of residential cable services to all residents of the City of Burlingame, at standard installation and monthly charges; provided, that Grantee may offer discounts to select subscriber groups, such as senior citizens and/or low income residents. 3.2 Commercial Areas Upon City request, for areas of the City that are primarily commercial, the Grantee shall install appropriate conduit at any time that open utility trenches are available and the Grantee has received at least ninety (90) days advance notice of the availability of the trenches. Residences in primarily commercial areas shall be provided with cable service upon request, on a time and materials basis. F[. SECTION 4 SYSTEM UPGRADE 4.1 Upgrade (a) Phase 1 The Grantee shall upgrade or rebuild, as appropriate, the existing Cable System to provide a capacity of at least Seventy-four (74) video Channels including the use of digital compression within six (6) months of the effective date of this Agreement. Grantee may activate portions of the rebuilt plant and offer upgraded services in phases, as Grantee may determine. Completion of Phase 1 of the upgrade shall be defined as the ability to provide at least Seventy- four (74) Channels of video programming to all residential Subscribers within the City, as well as satisfactory completion of any permit -specified requirements and the public building connections provided in Section 4.2 below, and enumerated in Exhibit 11C.11 (b) Phase 2 Grantee shall provide the activated capability to offer all residents of the City interactive residential services by no later than thirty-six (36) months after the effective date of this Agreement. 4.2 Interactive Network Services to Public Agencies (a) In addition to the Cable System upgrade provided in Section 4.1 above, Grantee shall connect selected public buildings, as defined in Exhibit "C," to the closest node of Grantee's upgraded system. Grantee shall 17 provide interactive communications capability to the listed public facilities under the terms specified in Exhibit "C." (b) The connections provided in (a) above shall be completed and operational by not later than six (6) months after the completion of the Phase 2 upgrade. (c) Grantor and Grantee agree that any use of the interactive links by public agencies to generate revenue or to serve nonpublic entities shall occur only with the prior written consent of Grantee, which may contain revenue sharing provisions. 4.3 Most Favored Nation (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 operated by Grantor in the following Northern California cities as a basis for comparison. The comparison communities (also referred to as the "comparison group") shall be: (1) Daly City (2) Fremont (3) Monterey (4) Redwood City (5) Salinas (6) San Jose (7) San Mateo (8) San Rafael (b) Grantor and Grantee agree that subsequent to the completion of the upgrade required in Section 4.1 above, but no earlier than five (5) years after the effective date oL this Agreement, when four (4) or more of the Cable Systems in the comparison group (also referred to as the 'comparison sub -group") offer video programming services which exceed the services provided on Grantee's System by fifteen (15) or more programmed channels, Grantor may require Grantee to provide additional programming services to meet or exceed the average provided by the comparison sub -group. (c) Grantor and Grantee further agree that subsequent to the completion of Phase 2 of the upgrade required in section 4.1 above, but no earlier than three (3) years after the effective date of this Agreement, when four (4) or more of the Cable Systems in the comparison group have activated upstream communications capacity and are offering interactive residential services, Grantor may require Grantee to offer comparable services. (d) If Grantor initiates any request under the provisions of paragraphs (b) or (c) above, Grantor and Grantee shall negotiate in good faith to determine the most expeditious and appropriate response to Grantor's request. (e) Grantor shall conduct at least two (2) public hearings at lawfully noticed meetings to provide the public the opportunity to comment on the issues related to Grantor's request for additional or new services. (f) Following an analysis of the input from the public hearings, Grantor and Grantee shall negotiate in good faith to develop a plan, including a timetable, for the process of offering new services or an appropriate upgrade of the System, taking into account the cost of providing such services and upgrades. (g) If the delivery of such additional or new services would require a substantial incremental investment by Grantee in the Cable System, Grantee may request, and Grantor may consider, an appropriate extension of the Franchise term. (h) If Grantee objects to any requirement for modification, alteration or expanded capabilities of the System requested by Grantor, Grantee must do so in writing within thirty (30) days of Grantor's notification. If Grantee is unwilling to comply with Grantor's request, Grantor may, after a public hearing, shorten the existing franchise term so that the term expires not less than thirty-six (36) months after the decision is made to shorten the term. 4.4 Emergency Alert Capability Upon completion of the System upgrade provided in Section 4.1 of this Agreement, or sooner if required by the Federal Communications Commission, Grantee shall provide Emergency Alert System capability in full compliance with applicable Federal Communications Commission requirements. 4.5 Standby Power Upon completion of the System upgrade provided in Section 4.1 of this Agreement, Grantee shall provide standby power generating capacity at the Cable System control center capable of providing at least twelve (12) hours of emergency 20 supply. Grantee shall maintain standby power system supplies throughout the major trunk cable networks capable of providing emergency power for three (3) rated hours, or within the standard limits of commercially available power supply units. 4.6 Parental Control Lock Grantee shall provide, for sale or lease, to Subscribers, upon request, a parental control locking device or digital code that permits inhibiting the video and audio portions of premium Channels. 4.7 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 technically and economically feasible to Grantee's satisfaction. 4.8 Technical Standards The Federal Communications Commission (FCC) Rules and Regulations, Part 76, Subpart K (Technical Standards), as amended from time to time, shall apply, to the extent permitted by applicable law. 4.9 Right of Inspection Grantor shall have the right to inspect all construction, reconstruction or installation work performed subject to the provisions of the Franchise and other pertinent provisions of law, and as part of Grantor's 21 obligation to protect the public health, safety and welfare of its citizens. 22 SECTION 5 SERVICES AND PROGRAMMING 5.1 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 reduce the number of program services without thirty (30) days prior written notification to the Grantor and System Subscribers, or as soon as feasible if the reduction is not within Grantee's control 5.2 Leased Channel Service Grantee shall offer leased channel service on reasonable terms and conditions and in accordance with applicable law. 23 SECTION 6 SUPPORT FOR LOCAL ORIGINATION AND PUBLIC, EDUCATIONAL AND GOVERNMENTAL (PEG) ACCESS 6.1 Grantee Support Grantee shall provide the following support for Local Origination and PEG Access within the Franchise Area: (a) Provision and use of the grant funds and Channels designated in Exhibit "C" of this Agreement. (b) Maintenance and continued support of Grantee's Local Origination programming efforts, to the extent specified in Exhibit "C." (c) Provision of free public building installation and basic service to the public buildings listed in Exhibit "C," Figure 1. (d) Provision of interactive communications capability in accordance with the requirements of Exhibit "C," Figure 2. 6.2 Compliance with Federal Law In accepting this Franchise, the Grantee agrees that the commitments indicated in Section 6.1 above are voluntarily entered into and will not be charged against any Franchise Fees due the Grantor during the term of the Franchise. The Grantee also agrees to meet all of the commitments of Section 6.1 above, through the term of the Franchise. SECTION 7 REGULATION 7.1 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. 7.2 Force Majeure The force majeure provisions of Section 6.48.410 of Ordinance No. shall apply. 7.3 Rate Regulation If Grantor is permitted under Federal and/or State law, to regulate the rates charged by Grantee, and if Grantor elects to so regulate, Grantor shall establish reasonable procedures consistent with due process and applicable laws and regulations and follow those procedures while regulating. 7.4 Service Standards A verified and continuing pattern of noncompliance with the service standards contained in Ordinance No. , this Agreement or standards established by any regulatory body having the authority to formulate service standards for Cable Systems, shall constitute a material breach of this Agreement, entitling Grantor to utilize the provisions set forth in Sections 6.48.370 to 6.48.390 of Ordinance No. 7.5 Notices Notices transmitted by either party to this Agreement to the other party shall be addressed as follows: 25 Grantor: City Manager City of Burlingame 501 Primrose Road Burlingame, CA 4010-3997 Grantee: TCI of California 1691 Bayport Avenue San Carlos, CA 94070 Attn: General Manager With a copy to: TCI - Division Office 1850 Mt. Diablo Blvd, Suite 200 Walnut Creek, CA 94596 Attn: Franchise Department Either party may designate by written notice a different address to which notices shall be sent. 7.6 Successors and Assigns All provisions of this Agreement shall apply to any lawful successors and assigns. 7.7 Severability If any provision of this Agreement or the application of such provision to any circumstance is declared unconstitutional or otherwise invalid by the lawful judgment of any court of competent jurisdiction, the remainder of this Agreement or the application of the provision to other circumstances, shall not be affected thereby. 7.8 Choice of Law This Agreement shall be governed by and interpreted under the laws of the State of California and applicable Federal law. 7.9 No Aaiver Grantee shall not be excused from complying with any of the terms and conditions of this Agreement by any failure of the Grantor upon any one (1) or more occasions to insist upon or to seek compliance with any such terms or conditions. 27 IN WITNESS WHEREOF, Grantor and Grantee have executed this Agreement the date and year first above written. APPROVED AS TO FORM: (SEAL) (CORPORATE SEAL) CITY OF BURLINGAME By: Date: ATTEST: ty Clerk TCI AMERICAN CABLE HOLDINGS II, L.P. By: Name, Title Date: EXHIBIT A OWNERSHIP JUN -08-1999 11:27 =e OF BURLINGAME 650 342 e3se mo s EXHIBIT B SURETY GUARANTEE (SAMPLE) B-1 EXHIBIT B: SURETY GUARANTEE WHEREAS, the City of Burlingame (hereinafter called "Grantor") under this Franchise Agreement dated the 1998, has granted a Franchise to TCI American Cable Holdings II, L.P., (hereinafter called "Grantee") a subsidiary of (hereinafter called "Guarantor") to own, operate, and maintain a Cable System (hereinafter called "Franchise"); and WHEREAS, Guarantor, 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 2.6 of said Franchise Agreement requires the Grantee, as Principal, to furnish security issued to cover the faithful performance of certain of the Grantee's obligation under said Franchise, and which security shall be in favor of the Grantor; NOW THEREFORE, subject to the provisions of Section 2.7, Guarantor hereby unconditionally guarantees the due and punctual performance of any and all obligations of Grantee contained in the Franchise Agreement, up to the financial limits provided in Section 2.6. This Guarantee shall, unless terminated, substituted or cancelled 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 cancelled upon thirty (30) days prior written notice from Guarantor to the Grantor and Grantee. 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. B-3 IN WITNESS WHEREOF, the Grantee and Guarantor have hereunto set these hands and seals this day of 1998. GRANTEE TCI AMERICAN CABLE HOLDINGS II, L.P. By: GUARANTOR By: Title: Title: EXHIBIT C GRANTEE COMMITMENT TO LOCAL ORIGINATION AND TO PUBLIC, EDUCATIONAL AND GOVERNMENTAL (PEG) ACCESS FACILITIES AND EQUIPMENT C-1 EXHIBIT C: GRANTEE COMMITMENT TO LOCAL ORIGINATION AND TO PUBLIC, EDUCATIONAL AND GOVERNMENTAL (PEG) ACCESS FACILITIES AND EQUIPMENT 1. LOCAL ORIGINATION (a) Throughout the term of the Franchise, Grantee shall maintain a cablecasting facility within the City limits. Grantee shall continue to provide for the following programs, as a minimum: • Four (4) special community events annually; • Six (6) monthly programs; • Broadcasting of City Council meetings produced by Grantor or a third party; • Character generated messages and equipment maintenance. Grantee shall not significantly reduce its Local Origination budget, level of staffing or equipment capability throughout the life of this Agreement. (b) Grantee shall give full consideration to any Grantor request to cablecast Educational and/or Governmental (EG) Access programming on Grantee's Local Origination C-2 Channel, to the extent that capacity on the channel is available. 2. DOWNSTREAM VIDEO LOCAL ORIGINATION AND PEG ACCESS CHANNELS (a) Upon the effective date of this Agreement, Grantee shall continue to make one (1) downstream video Channel available exclusively for Local Origination programming and incidental Educational and Governmental (EG) Access programming in accordance with 1(b) above. This Channel shall be dedicated for the term of the Franchise renewal. (b) Upon completion of Phase 2 of the System upgrade, Grantee shall provide, within one hundred twenty (120) days of Grantor's written request, one (1) Channel for PEG Access use. Upon activation of said PEG Channel, Grantor shall become responsible for cablecasting of City Council meetings. In addition, if Grantor intends to utilize said PEG Channel for SAMNET programming, Grantee may require verification from Grantor regarding the authority to cablecast SAMNET programming. (c) Upon completion of Phase 2 of the System upgrade, Grantor may submit a request for a second and final PEG Channel only if the initial PEG Channel programming exceeds fifteen (15) hours per week of non -duplicated video programming produced by or for Grantor or SAMNET. Character C-3 generated programming shall not be considered video programming for this purpose. Upon verification of satisfaction of the above requirement, Grantee shall provide Grantor the second and final PEG Channel within one hundred twenty (120) days of Grantor's written request. 3. BASIC SERVICE TO PUBLIC BUILDINGS Upon completion of Phase 1 of the Cable System upgrade provided in Section 4.1, Grantee shall provide at least one (1) connection and the highest tier of basic service, at no installation or monthly service charge, to all of the public buildings listed in Figure 1 of this Exhibit, and to any new public buildings that may be erected during the term of the Franchise, provided that such buildings meet the line extension requirements of Section 6.48.180(a)(5) of Ordinance No. . 4. INTERACTIVE COMMUNICATIONS CAPABILITY TO PUBLIC BUILDINGS (a) Within one hundred twenty (120) days after the effective date of this Agreement, Grantee shall provide Grantor with a firm cost proposal based on Grantee's incremental construction costs, to interconnect each public building listed in Figure 2 so that any connected public building will have the capability to transmit and receive high speed data and/or video communications signals to any C-4 other connected building on a closed-circuit basis. If Grantor opts for the above dedicated interactive capability, Grantee shall provide a minimum capability to transmit data at 1.5 MBPS. (b) Within ninety (90) days after receipt of Grantee's proposal provided in accordance with paragraph (a) above, Grantor shall indicate, in writing, its acceptance, rejection or request for modification of the proposal. If the proposal is accepted, including agreement on the schedule for payment to Grantee of the connection costs, Grantee shall proceed to interconnect the designated public buildings. Completion of the interconnected network shall occur no later than six (6) months after the date of completion of the Phase 2 Cable System upgrade provided in Section 4.1 of this Agreement. (c) A point of demarcation shall be established within each interconnected public building. Grantee shall be responsible for acquiring, installing, operating and maintaining all networking equipment and facilities on the network side of the demarcation point. Each EG user shall be responsible for acquiring, installing, operating and maintaining all equipment on its side of the point of demarcation necessary to interface with and utilize Grantee's network. c-5 (d) Grantee shall not impose a network utilization and maintenance charge for interactive communications within Grantor's jurisdictional area. For communications to and from locations outside the City, Grantee may impose a network utilization charge. To the extent not specifically prohibited by the California Public Utilities Commission (CPUC) or the Federal Communications Commission (FCC), such charge shall not exceed fifty percent (500) of the lowest rate tariffed by the CPUC or FCC for facility -based California common carriers providing similar bandwidth to functionally similar users for comparable communications distances. (e) Grantee may submit, and Grantor may consider, additional and/or alternative proposals involving new technologies and/or products that will provide interactive communications capability to public buildings. 5. PEG ACCESS FUNDING SUPPORT (a) Grantee shall provide a grant of up to forty-two cents ($0.42) per month per subscriber to Grantor, as requested by Grantor, to support Public, Educational and Governmental Access and Institutional Network communications. This grant shall continue throughout the duration of the Franchise. The grant funds may be used for equipment and facilities for both one-way video PEG Access services and two-way interactive EG Access services, at Grantor's sole discretion. (b) The grant shall be payable quarterly in conjunction with the franchise fee, unless otherwise agreed to by Grantor and Grantee. Grantor shall inform Grantee, no later than January 1 of each year, of Grantor's grant needs and preferred schedule of payment. (c) If permitted by Federal and State law, Grantor shall not oppose the inclusion on Subscribers' bills of the Access grant provided in 5(a) above, so long as said inclusion is done in a manner consistent with the provisions of Federal and State law. 6. PEG AND I -NET OPERATIONS (a) Grantor may negotiate agreements with neighboring jurisdictions served by the same Cable System, educational institutions, or others to share PEG and I -net operating expenses as appropriate. Grantor and Grantee may negotiate an agreement for management of PEG facilities, if so desired by the parties. (b) Grantor shall not enter into any agreement which will compete with any services or products provided on Grantee's Cable System. C-7 7. TITLE TO PEG EQUIPMENT Grantor shall retain title to all PEG equipment procured with funding made available in accordance with paragraph 5 above. 8. 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 necessarily incurred as a result of the relocation. Grantee shall provide Grantor and all subscribers with at least thirty (30) days written notice of such relocation. 9. PROMOTION OF PEG ACCESS (a) Grantee shall provide Grantor access to third party providers to include PEG Access Channel listings in their print and electronic program guides provided by Grantee to its Customers. Grantor shall be responsible for the timely updating of these listings. Any fees associated with special placement or handling beyond the standard manner of presenting program schedule listings shall be the responsibility of Grantor. (b) On an annual basis, Grantee shall allow Grantor to submit a "bill stuffer," created at Grantor's expense, to be inserted into all Customer statements within Grantee's Cable C-8 System. In consideration of regulatory notification requirements, Grantee has final approval on of the dates for insertion. C-9 LIST OF PIIBLIC BUILDINGS TO BE CONNECTED FOR BASIC CABLE SERVICE C-10 FIGURE 2 LIST OF PUBLIC BUILDINGS ELIGIBLE TO BE CONNECTED