HomeMy WebLinkAbout9A - Franchise to Integra Telcom for Cable Communication Services
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tO~ 4646 Dakota Street S.E.
U ~ Prior Lake, MN 55372-1714
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~l~~ CITY COUNCIL AGENDA REPORT
MEETING DATE: June 15, 2009 ~
AGENDA#: 9A
PREPARED BY: Frank Boyles, City Manage
AGENDA ITEM:
CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING THE ISSUANCE
OF A FRANCHISE FOR CABLE COMMUNICATION.
DISCUSSION:
Introduction
The purpose of this agenda item is to request Council consideration of a
resolution issuing a cable communication franchise to Integra Telecom.
Historv
The City has followed the prescribed process for solicitation for proposals for
cable communications franchise. The process has been documented in previous
reports to the City Council, correspondence from Integra and Mediacom, and the
City Council minutes.
Current Circumstances
At the last City Council meeting, the City Attorney recommended that the City
Council defer action on the franchise document in order to consider two issues:
1. Service Area and Build-Out within City Boundaries; and
2. Public Education Government Capital Grant and Operating Assistance
With respect to service area, the following has been added to 2.2, Right of
Grantor to Issue and Renew Franchise:
(a) In any application for renewal of this franchise, the City Council
may consider or may condition its approval on the extent to which Integra has
extended or has a timeline for extending its facilities to cover the remaining
portions of the City it is not presently serving. The following criteria will be
considered by the City Council in determining whether to require a timeline for
building-out cable service to include the entire geographic area of the City.
1. The number of subscribers Integra Telecom has within its service area.
2. What percentage of subscribers was captured from Mediacom.
3. The ratio between Integra's profits from cable service versus capital
investment in delivering cable service.
4. Developments or changes in the technology of delivering cable service.
5. The extent to which there are opportunities for Integra to partner with
other telecommunication providers; and
6. The extent to which Integra Telecom has explored those opportunities.
7. Whether extending its telecommunications service area is economically
viable.
With respect to PEG Channel and operating support, the following language has
been agreed to:
www.cityofpriorlake.com
Phon~.Q52A47~9800 / Fax 952.447.4245
5 SUPPORT OF PEG CHANNELS
(a.) PEG Capital Grant to City
Grantee will provide City a grant in the amount of seventy-seven
thousand dollars ($77,000.00) to be used for the acquisition of equipment used to
create and deliver PEG programming. The payment will be made on the
following schedule:
(1.) Grantee shall send City Twenty-five Thousand Six
Hundred Sixty-five Dollars ($25,665.000) as described herein for the
initial franchise period.
a) Grantee shall send City Twelve Thousand Eight
Hundred Thirty-three dollars ($12,833.00) within thirty (30) days
of acceptance of this franchise.
b) Grantee shall send the remaining Twelve
Thousand Eight Hundred Thirty-two Dollars ($12,832.00 in four
(4) equal installments of Three Thousand Two Hundred Eight
dollars ($3,208.00). The first installment shall be made July 1,
2010 and thereafter on July 1,2011; July 1,2012; July 1,2013.
(2.) Upon renewal of Grantee's franchise by the City Council,
Grantee shall send the remaining Fifty-one Thousand Three Hundred
Thirty-five dollars ($51,335.00) of the capital grant as follows:
a) On July 1, 2014, Grantee shall remit to City
Twenty-five Thousand Six Hundred Seventy dollars
($25,670.00).
b) The remaining Twenty-five Thousand Six
Hundred Sixty-five dollars ($25,665.00) shall be remitted to City
in five (5) equal installments of Five Thousand One Hundred
Thirty-three dollars ($5,133.00). The first installment shall be
remitted on July 1, 2015 and thereafter on July 1, 2016; July 1,
2017; July 1, 2018 and July 1, 2019.
(b.) Use of Capital Grant Funds
Grantee shall only use capital grant funds to purchase, replace or
repair equipment.
(c.) PEG Access Operating Support
(1.) Grantee shall collect on behalf of City a per subscriber
fee of sixty-five cents ($0.65) per month, which may be increased to a
maximum of one dollar twenty cents ($1.20) per month in City's sole
discretion, solely to fund public, educational and governmental access-
related expenditures (hereinafter "Access Operating Fee"). The Access
Operating Fee may be adjusted by the City, upon ninety (90) days written
notice to Grantee, no more frequently than once every two(2) years
during the term of the Franchise. The City agrees that any increase in
the Access Operating Fee will be applied equally to all franchised cable
operators in the City.
(2.) Adjustment for Increase in Consumer Price Index
The Access Operating Fee shall automatically be adjusted every
two (2) years equal to the cumulative increase in the Consumer Price
Index ("Cpr") during the preceding two (2) year period.
(3.) Access Operating Fee Not Part of Franchise Fee
Any grants or payments by Grantee to City in support of PEG
access equipment or programming shall not be deemed "franchise fees"
within the meaning of Section 622 of the Cable Act (47 USC Section
542).
The City Council should consider whether the new language regarding build out
and PEG addresses its concerns and reflects the direction it provided to the City
Attorney and me at the June 1, 2009 meeting. Integra has indicated the new
language is acceptable to it.
ISSUES:
The City Attorney and I have worked together with Integra representatives in
making these final changes to the franchise agreement. It is the City Attorney's
opinion that with the addition of these provisions the franchise agreement
addresses the two areas where she believed a competitor could make an
argument, not necessarily a valid one, that Integra had been treated more
favorable than Mediacom with respect to the material the terms and conditions in
their respective franchises.
FINANCIAL
IMPACT:
With Council approval, there would be a competitive choice in cable
communication services which we hope will have both financial and non-financial
benefits to the subscribers. For the City there will be added PEG capital fees to
defray PL TV 15 equipment costs. There is also the potential for additional PEG
operating funds and franchise fees.
ALTERNATIVES:
1. Adopt the attached resolution authorizing Integra Telecom to provide cable
serve to customers within its Service Area.
2. Deny Integra's application for a cable franchise to operate in the City and
direct staff to prepare findings of fact setting out the basis for the Council's
denial. (Findings will be returned to Council for action.)
3. Defer action and provide staff with direction.
RECOMMENDED Alternative #1.
MOTION:
PRl"',
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4646 Dakota Street S.E.
Prior Lake, MN 55372-1714
RESOLUTION 09-xxx
A RESOLUTION AUTHORIZING THE ISSUANCE OF A CABLE COMMUNICATION
FRANCHISE TO INTEGRA TELECOM
Motion By:
Second By:
WHEREAS, Federal, state and local laws and regulation set forth the procedures and
conditions under which a cable communications franchise can be issued; and
WHEREAS, The City has taken steps pursuant to Federal, state and local laws including:
. Publication of a notice seeking applicants in two successive
issues of the City's official newspaper.
. Preparation and issuance of a request for proposal.
. Receipt of one proposal.
. Conducted a public hearing on the proposal.
. Negotiated a franchise agreement; and
WHEREAS, One proposal was received from Integra Telecom in accordance with the public
notice; and
WHEREAS, A public hearing was conducted at the time announced in the public notice; and
WHEREAS, There was no opposition to the proposal presented at the public hearing; and
WHEREAS, Correspondence from Integra, the proposer, and from Mediacom, the existing
cable operator, has been offered and considered by the City; and
WHEREAS, Discussions have taken place between the City Attorney and staff; and Integra
and Mediacom individually with respect to the franchise document; and
WHEREAS, The staff believes that the franchise proposed for Council action conforms to all
Federal, state and local laws and regulations; and
WHEREAS, Minnesota Statutes Section 238.081 provides, "Subd. 7 Award of Franchise.
Franchises may be awarded by ordinance or other official action of the
franchising authority."
NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE,
MINNESOTA as follows:
1. The recitals set forth above are incorporated herein.
2. The franchise dated June 15, 2009 is hereby approved.
3. The Mayor and City Manager are hereby authorized to execute the agreement on behalf of
the City.
www.cityofpriorlake.com
Phone 952.447.9800 / Fax 952.447.4245
PASSED AND ADOPTED THIS 15th DAY OF JUNE 2009.
YES
NO
I Haugen
I Erickson
I Hedberg
I LeMair
I Millar
Haugen
Erickson
Hedber9
LeMair
Millar
Frank Boyles, City Manager
M:\COUNCIL\RESOLUTI\2009\09-xxx Franchise Integra. DOC
THE CITY OF PRIOR LAKE, MINNESOTA
CABLE TELEVISION
FRANCHISE AGREEMENT
Prepared By:
SCOTT RICE TELEPHONE COMPANY DBA INTEGRA TELECOM
JUNE 15, 2009
TABLE OF CONTENTS
1. GENERAL PROVISIONS ................ ........ ... ................... ................................... ........... ......... .....1
1.1) Definitions. ..................... ..... ................... ................................. ....... ............ ..................1
1.2) Written Notice. .............................. ....... .................................................... ....... ..... ........1
2. RENEWAL OF FRANCHISE........ ........................................................... ................... ...............2
2.1) Grant. ........................................ .... ......... ............ ........................................ ...................2
2.2) Right of Grantor to Issue and Renew Franchise. ..........................................................2
2.3) Effective Date of RenewaL.............. .......... ................................................... ................2
2.4) Term... ....... ...... ................... .... ............. ................... ............................................ ...........3
2.5) Franchise Not Exclusive. . ................... ..........................................................................3
2.6) Ownership of Grantee........... ............................ ....... .....................................................3
3. GENERAL REQUIREMENTS........................ ................... ..................................... ....... ............3
3.1) Governing Requirements. .............................................................................................3
3.2) Franchise Fee. ..... ............. ..... ............ .................................................. ..........................3
3.3) Not Franchise Fees. ........................ ............................................................... ...............4
3.4) Recovery of Processing Costs. .....................................................................................4
3.5) Liability Insurance. ..................................... ........................... ............................. ..........5
3.6) Indemnification............................................................................................................. 6
3.7) Grantee's Insurance. ......................................................... ............................................7
3 .8) Workers' Compensation Insurance. .. ...........................................................................7
3.9) Security Fund. ............................................................................................................... 7
3.10) Procedure for Enforcing Franchise Agreement. .........................................................8
3.11) Reservation of Rights. ................................................................................................8
4. DESIGN PROVISION.................................................................................................................8
4.1) Minimum Channel Capacity............ ........... .............. ....................................................8
4.2) System Design. ... ........................... ..... .................................. ........ .................... ............9
4.3) Operation and Maintenance of System......................................................................... 9
4.4) Special Testing. ........................ .............................................. ............................ ..........9
4.5) FCC Reports. ............................................................................................. .................10
4.6) Emergency Alert Capability. ..... ............. ........ ....... ......................................... ......... ...1 0
4.7) Parental Control Lock..................................................... .......................... ..................10
4.8) Technical Standards. ............ .......................................................................................10
4.9) Right of Inspection. ....................... ............ ......................... .......... ........ ......................10
4.10) Periodic Evaluation, Review and Modification........................................................! 0
5 . SERVICES AND PROGRAMMING. ..................................................................................... ..12
5.1) Services and Programming. ...................................................................................... ..12
5.2) Leased Channel Service. ............................................................................................ .12
5.3) Periodic Subscriber Survey. ................................ ................... ................................... .12
6. PUBLIC ACCESS PROVISIONS........................................................................ ................... ..12
6.1) Public, Educational and Government Access............................................................. 12
6.2) Grantee Support for PEG Usage.............................. ............... .... ....................... ...... ...12
7. REGULA IrON ..........................................................................................................................13
7.1) Amendment of Franchise Agreement. ....................................................................... .13
11
7.2) Conflict Between Section 306 of the City Code and Agreement. ..............................13
7 .3) Force Majeure.. ...................... .... ........................................................................... ..... .13
7.4) Rate Regulation. ........... .................. .... ......... ........ ....................... ......... ...... ............... ..14
7.5) Telecommunications Network Transfer Prohibition. .................................................14
7.6) Termination by Grantee........ ............. ..................................................... ....... ......... ....14
111
FRANCHISE AGREEMENT
THIS FRANCHISE AGREEMENT (hereinafter the "Agreement"), made and
entered into this day of 2009, by and between the City of Prior
Lake, a municipal corporation of the State of Minnesota (hereinafter the "City" or
"Grantor"), and Scott Rice Telephone Company dba Integra Telecom (hereinafter the
"Grantee").
WITNESSETH
WHEREAS, pursuant to Section 306 of the Prior Lake City Code, the City is
authorized to grant and renew one or more nonexclusive revocable Franchises to
operate, construct, maintain and reconstruct a cable television system within the City;
WHEREAS, Grantee proposes to construct, operate and maintain the Cable
Television System described at Exhibit E (the System) to provide Cable Services if
granted a Franchise by the City;
WHEREAS, the City, after due evaluation of the Grantee's technical ability,
financial condition and legal qualifications, and after public hearing, has determined that
it is in the best interest of the City and its residents to grant a Franchise to be held by
the Grantee;
WHEREAS, in consideration of Grantee's provision of Cable Services as
required by this Agreement, the City has agreed to grant a Franchise to be held by the
Grantee; and
NOW, THEREFORE, in consideration of the foregoing promises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1.
GENERAL PROVISIONS
1.1) Definitions.
Capitalized terms used in this Agreement shall be defined as set forth in Section
306 of the City Code unless (i) otherwise defined herein, or (ii) the context otherwise
requires.
Service Area or Franchise Area. For purposes of this Franchise Agreement these
terms shall mean the authorized telephone service area for Scott Rice Telephone
Company dba Integra Telecom as prescribed in the Certificate of Need issued by the
Minnesota Public Utilities Commission and dated August 12, 1998, in Docket No. P-
5643/NA-98-660. (Scott Rice Telecommunications, Inc. was initially registered with the
Minnesota Secretary of State as a domestic corporation on February 13, 1945).
1.2) Written Notice.
All notices, reports or demands required or permitted to be given under this
Agreement and/or Section 306 of the City Code shall be in writing and shall be deemed
to be given when delivered personally to the party designated below, or when five (5)
days have elapsed after it has been deposited in the United States mail in a sealed
envelope, with registered or certified mail, postage prepaid thereon, or on the next
business day if sent by express mail or nationally recognized overnight air courier
addressed to the party to which notice, report or demand is being given, as follows:
If to City:
City Manager
4646 Dakota Street S.E.
Prior Lake, MN 55372-1714
If to Grantee:
General Manager
Integra Telecom
4690 Colorado Street SE
PO Box 299
Prior Lake, MN 55372
Such addresses may be changed by either party upon notice to the other party given as
provided in this Section.
1.3) Recitals Part of Agreement.
The parties to this Agreement agree that the facts set forth in the Recitals above
are a part of this Agreement as if they were restated in it.
SECTION 2.
GRANT OF FRANCHISE
2.1) Grant.
This Franchise hereby grants Grantee the authority, right and privilege to
construct, reconstruct, operate and maintain a Cable Television System described at
Exhibit E (the System) to provide Cable Services within the Franchise Area.
2.2) Right of Grantor to Issue and Renew Franchise.
Grantee acknowledges and accepts the right of Grantor to issue and/or renew
the Franchise under federal or state law and Section 306 of the City Code as it existed
on the Effective Date hereof. Any future renewals granted by Grantor will be governed
by the applicable federal or state law and Section 306 of the City Code at the time of
renewal.
(a) In any application for renewal of this franchise, the City Council may
consider or may condition its approval on the extent to which Integra has extended or
2
has a timeline for extending its facilities to cover the remaining portions of the City it is
not presently serving. The following criteria will be considered by the City Council in
determining whether to require a timeline for building-out cable service to include the
entire geographic area of the City.
1. The number of subscribers Integra Telecom has within its service area.
2. What percentage of subscribers was captured from Mediacom.
3. The ratio between Integra's profits from cable service versus capital investment
in delivering cable service.
4. Developments or changes in the technology of delivering cable service.
5. The extent to which there are opportunities for Integra to partner with other
telecommunication providers; and
6. The extent to which Integra Telecom has explored those opportunities.
7. Whether extending its telecommunications service area is economically viable.
2.3) Effective Date of Franchise.
The grant of the Franchise provided for in this Agreement shall be effective on
the date that both parties have executed this Agreement (the "Effective Date"), provided
that said date is no later than thirty (30) days after the date the City Council, by
Resolution, approves this Agreement (the "Approval Date"). The grant of the Franchise
provided for in this Agreement is further contingent upon the Grantee filing with the Prior
Lake City Clerk a fully executed copy of this Agreement together with the security fund
and insurance certificates provided for in this Agreement and Section 306 of the City
Code. If such filing does not occur within thirty (30) days after the Approval Date, the
Grantor may, in its sole discretion, declare the grant of the Franchise provided for herein
to be null and void.
2.4) Term.
The term of the Franchise granted pursuant to this Agreement shall be from the
date this Agreement was executed by both parties to November 30,2014, at which time
the Franchise shall expire and be of no force or effect unless the Franchise is then
renewed in accordance with the City Code and Applicable Laws. Notwithstanding the
foregoing, the City may extend the term of this Franchise for a period of not more than
180 days should additional time be required by the City to process an application or
request for renewal of this Franchise.
2.5) Franchise Not Exclusive.
The Franchise granted pursuant to this Agreement shall not be construed as
limiting the right of Grantor, through its proper offices, and in accordance with the City
Code and Applicable Law, to grant other Franchises containing terms and conditions
that are no more favorable or less burdensome than those imposed on Grantee by this
Franchise; provided, however, that such additional grants shall not operate to materially
modify, revoke or terminate any rights granted to Grantee herein and shall be in accord
with the provisions of Section 306 of the City Code.
3
2.6) Ownership of Grantee.
Grantee is a wholly-owned subsidiary of Integra Telecom Holdings, Inc. Integra
Telecom Holdings, Inc. is a wholly-owned subsidiary of Integra Telecom, Inc., an
Oregon corporation. Integra Telecom, Inc. is a privately-held corporation. Three private
equity investors each own more than a 5% equity interest in Grantee through their
investment in Integra Telecom, Inc.
SECTION 3.
GENERAL REQUIREMENTS
3.1) Governing Requirements.
Grantee shall comply with all lawful requirements of this Agreement, Section 306
of the Prior Lake City Code and applicable City, State and Federal Laws.
3.2) Franchise Fee.
In consideration of the grant of the Franchise provided for herein, the Grantee
shall, at all times during the term of this Agreement, pay to Grantor a Franchise Fee of
five percent (5%) of Grantee's Gross Revenues as defined in Section 306.200 but
excluding any Access Operating Support funds collected (e.g., the Access Operating
Fee and PEG Fee required by Exhibit D, Paragraph 5, shall not be included as part of
Grantee's Gross Revenues). The Franchise Fee shall be payable quarterly within thirty
(30) days of the expiration of the preceding calendar quarter. Each payment shall be
certified by Grantee's local management and shall be accompanied by a report in such
form as the City may reasonably request showing the computation of the Franchise Fee
as it relates specifically to the Franchise Area for the preceding calendar quarter and
such other relevant facts as may be required by the City, including the completion of a
Franchise Fee Payment Worksheet in the form attached hereto as Exhibit B.
3.3) Not Franchise Fees.
(a) Grantee acknowledges and agrees that the Franchise Fees payable by
Grantee to the City pursuant to Section 3.2 hereof shall take precedence over all other
payments, contributions, Services, equipment, facilities, support, resources or other
activities to be provided or performed by the Grantee pursuant to this Agreement and/or
Section 306 of the City Code and that the Franchise Fees provided for in Section 3.2 of
this Agreement shall not be deemed to be in the nature of a tax, and shall be in addition
to any and all taxes of general applicability and other fees and charges which the
Grantee shall be required to pay to the City and/or to any other governmental authority,
all of which shall be separate and distinct obligations of Grantee.
(b) Grantee shall not apply or seek to apply or make any claim that all or any
part of the Franchise Fees or other payments or contributions to be made by Grantee to
Grantor pursuant to this Agreement and/or Section 306 of the City Code shall be
deducted from or credited or offset against any taxes, fees or assessments of general
4
applicability levied or imposed by the City or any other governmental authority, including
any such tax, fee or assessment imposed on both utilities and cable operators or their
services.
(c) Grantee shall not apply or seek to apply all or any part of any taxes, fees
or assessments of general applicability levied or imposed by the City or any other
governmental authority (including any such tax, fee or assessment imposed on both
utilities and cable operators for their services) as a deduction or other credit from or
against any of the Franchise Fees or other payments or contributions to be paid or
made by Grantee to Grantor pursuant to this Agreement and/or Section 306 of the City
Code, each of which shall be deemed to be separate and distinct obligations of the
Grantee.
3.4) Recovery of Processing Costs; Cost Sharing.
(a) During the term of this Agreement, if the Grantee initiates a request for
approval regarding the transfer of this Franchise or a change in control of the Grantee
(which approval the City shall not unreasonably deny or delay), the Grantee shall, to the
extent permitted by Applicable Laws, reimburse the Grantor for all reasonable out-of-
pocket costs, including attorneys' and consultants' fees and costs, incurred by the
Grantor in connection with Grantor's review and processing of Grantee's request up to a
mutually agreed upon reasonable cap.
(b) To aid in the analysis and resolution of any future disputed matters relative
to this Agreement, the Grantor and Grantee may, by mutual written agreement (both as
to whether to hire and whom to hire), employ the services of technical, financial and/or
legal consultants, as mediators. All reasonable fees of the consultants incurred by the
Grantor and/or the Grantee in this regard shall, unless the parties otherwise agree, be
borne equally by Grantor and Grantee.
5
3.5) Liability Insurance.
(a) Upon the Effective Date, the Grantee shall, at its sole expense and in
addition to all other required insurance under Section 306.2700 of the City Code, take
out and maintain during the term of this Agreement public liability insurance with a
company licensed to do business in the State of Minnesota with a rating by A.M. Best &
Co. or an equivalent rating service of not less than "A." The public liability insurance
shall protect the Grantee, the Grantor, their officials, officers, directors, employees and
agents from claims which may arise from operations under this Agreement, whether
such operations be by the Grantee, its officials, officers, directors, employees, agents or
any subcontractors of Grantee. The public liability insurance shall include, but shall not
be limited to, protection against claims arising from bodily and personal injury and
damage to property, resulting from Grantee's vehicles, products and operations. The
amount of insurance for single limit coverage applying to bodily and personal injury and
property damage shall not be less than Two Million Dollars ($2,000,000.00). The
following endorsements shall be attached to the liability policy:
(1) The policy shall provide coverage on an "occurrence" basis.
(2) The policy shall cover both personal injury and 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) Property damage liability.
(5) The Grantor shall be named as an additional insured on the policy.
(6) An endorsement shall be provided which states that the coverage is
primary insurance with respect to claims arising from Grantee's
operations under this Agreement and that no other insurance
maintained by the Grantor will be called upon to contribute to a loss
under this coverage.
(7) Standard form of cross-liability shall be afforded.
(b) Grantor reserves the right to adjust the insurance limit coverage
requirements of this Agreement no more often than once every three (3) years. Any
such adjustment by the Grantor will be no greater than the increase in the State of
Minnesota Consumer Price Index (all consumers) over the preceding such three (3)
year period.
(c) Grantee shall submit to Grantor a certificate of insurance signed by the
insurance agent showing proof of the required insurance. The certificate shall state that
the policies shall not be cancelled without providing thirty (30) days written notice in
advance to Grantor. Consistent with Section 7.7 of this Agreement, upon receipt of any
6
such cancellation notice, Grantee shall obtain an alternative to the required insurance
prior to the cancellation date. Failure to do shall be considered a material breach of this
Agreement for which Grantee shall be subject to revocation by the City of its right to
operate a Cable System in City pursuant to Section 7.7 of this Agreement.
3.6) Indemnification.
(a) Grantee shall indemnify, defend and hold Grantor, its officers, boards,
commissions, agents, and employees (collectively the "Indemnified Parties") harmless
from and against any and all lawsuits, claims, causes of action, actions, liabilities,
demands, damages, judgments, settlements, disability, losses, expenses (including
attorney's fees and disbursements of counsel) and costs of any nature that any of the
Indemnified Parties may at any time suffer, sustain or incur arising out of, based upon or
in any way connected with the Grantee's negligent acts or omissions or intentional
misconduct related to Cable Service operations or the exercise of this Franchise, the
breach by Grantee of its obligations under this Agreement or Section 306 of the City
Code and/or the activities of Grantee, its subcontractor, employees and agents
hereunder. Grantee shall be solely responsible for and shall indemnify, defend and hold
the Indemnified Parties harmless from and against any and all matters relative to
payment of Grantee's employees, including compliance with Social Security and
withholdings.
(b) In addition to, and without in any way limiting the foregoing, Grantee shall
indemnify and defend the Indemnified Parties from any and all proximate damages,
judgments, settlements, or costs of defense arising from an action brought in law or
equity by Mediacom challenging Grantor's grant of a franchise to Grantee, to the extent
of the limits of Grantor's liability in 47 U.S.C. 9555a. Grantee shall provide the defense
of any such claims brought against Grantor by selecting counsel of Grantee's choice to
defend the claim, subject to the consent of Grantor, which shall not unreasonably be
withheld. Nothing herein shall be deemed to prevent the Grantor from cooperating with
the Grantee and participating in the defense of any litigation by its own counsel at its
own cost and expense.
(c) The indemnification obligations of Grantee set forth in this Agreement are
not limited in any way by the amount of damages 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.
(d) Grantor does not, and shall not, waive any rights against Grantee which it
may have by reason of the indemnification provided for in this Agreement, because of
the acceptance by Grantor, or the deposit with Grantor by Grantee, of any of the
insurance policies described in this Agreement.
(e) The indemnification of Grantor by Grantee provided for in this Agreement
shall apply to all damages and claims for damages of any kind suffered by reason of
any of the Grantee's operations referred to in this Agreement, regardless of whether or
7
not such insurance policies shall have been determined to be applicable to any such
damages or claims for damages.
(f) Grantee shall not be required to indemnify Grantor for the negligence or
misconduct of Grantor, its officials, boards, commissions, agents, or employees.
Grantor shall hold Grantee harmless, subject to the limitations in Minnesota Statutes
Chapter 466, for any damage resulting from the negligence or misconduct of the
Grantor or its officials, boards, commissions, agents, or employees in utilizing any PEG
access channels, equipment, or facilities and for any such negligence or misconduct by
Grantor in connection with work performed by Grantor and permitted by this Agreement,
on or adjacent to the Cable System.
3.7) Grantee's Insurance.
Grantee shall not commence any Cable System reconstruction work or permit
any subcontractor to commence work until all insurance required under this Agreement
and Section 306 of the City Code has been obtained and the certificate of insurance
required in Section 3.5(c) is provided to Grantor. Said insurance shall be maintained in
full force and effect until the expiration of this Agreement.
3.8) Workers' Compensation Insurance.
Grantee shall obtain and maintain Workers' Compensation Insurance for all of
Grantee's employees, and in case any work is sublet, Grantee shall require any
subcontractor similarly to provide Workers' Compensation Insurance for all of their
employees, all in compliance with State laws, and to fully indemnify the Grantor from
and against any and all claims arising out of occurrences on the work performed by
Grantee and/or its subcontractors. Grantee hereby indemnities Grantor for any and all
costs, expenses (including attorneys' fees and disbursements of counsel), damages
and liabilities incurred by Grantor as a result of any failure of either Grantee or any
subcontractor to take out and maintain such insurance. Grantee shall provide the
Grantor with a certificate of insurance indicating Workers' Compensation coverage on
the Effective Date.
3.9) Security Fund.
(a) Within sixty (60) days of the Approval Date, Grantee shall establish and
provide to Grantor a security fund, as security for the full and timely payment and
performance by Grantee of all of its obligations under this Agreement and Section 306
of the City Code. The security fund shall be in the amount of at least Ten Thousand
Dollars ($10,000) and shall be in the form of an irrevocable letter of credit reasonably
acceptable to the City Attorney.
(b) The security fund shall be maintained at the Ten Thousand Dollar
($10,000) level throughout the term of this Franchise Agreement. If, at any time during
the term of this Franchise, Grantee seeks consent to a transfer or assignment of its
rights hereunder, Grantor may unilaterally increase the security fund up to Twenty
Thousand Dollars ($20,000) if it so chooses.
8
(c) The security fund may be drawn upon by Grantor for those purposes
specified in Section 3.10 hereof, in accordance with the procedures of Section 3.10 and
Section 306 of the City Code. Grantee's recourse, in the event Grantee believes that
Grantor's actions in taking any security funds is improper, shall be through legal action
after the security has been drawn upon. Actions brought by Grantee hereunder may be
subject to 47 U.S.C. 9555A - Limitations of Franchising Authority Liability - which is
hereby incorporated by reference as if fully set forth herein.
(d) Nothing herein shall be deemed a waiver of the normal permit
requirements made of all contractors working within the City's rights-of-way.
3.10) Procedure for Enforcing Franchise Agreement.
(a) The procedures for enforcing violations or breaches of this Franchise
Agreement and/or Section 306 of the City Code shall be consistent with the procedures
set forth in Section 306.3000 of the City Code in effect on the date of enactment of the
Franchise.
(b) In the event the Council finds that a material violation or breach exists and
that Grantee has not cured the same in a satisfactory manner, has not diligently
commenced correction of such violation or breach or has not diligently proceeded to
fully remedy such violation or breach, the Council may impose liquidated damages,
assessable from the security fund, of Three Hundred Dollars ($300) per day or per
incident for unexcused violations or breaches regarding Section 306.1200 of the City
Code and up to One Hundred Fifty Dollars ($150) per day or per incident for all other
violations or breaches of this Agreement and/or Section 306 of the City Code, provided
that all violations or breaches of a similar nature occurring at the same time shall be
considered one (1) incident. However, City reserves the right to impose separate
penalties for each day said violation continues.
3.11) Reservation of Rights.
Grantor and Grantee reserve all rights that they may possess under Applicable
Laws unless expressly waived herein.
SECTION 4.
DESIGN PROVISION
4.1) Minimum Channel Capacity.
(a) Grantee currently operates and maintains a communications system
which provides telecommunications and information services to residents and
businesses ("Telecommunications Network") within the City pursuant to authority
prescribed in the Certificate of Need issued by the Minnesota Public Utilities
Commission. Utilizing its Telecommunications Network, Grantee shall maintain and
operate within the City a System which shall be capable of delivering a minimum of one
hundred twenty (120) video program channels and which shall at System turn-up deliver
9
to all subscribers capable of receiving said channels a minimum of one hundred twenty
(120) video program channels.
(b) All programming decisions remain the sole discretion of Grantee provided
that Grantee complies with federal law regarding notice to City and Subscribers prior to
any channel additions, deletions, or realignments, and further subject to Grantee's
signal carriage obligations pursuant to 47 U.S.C. SS 531-536, and subject to City's
rights pursuant to 47 U.S.C. S 545. .
4.2) System Design.
(a) The System required herein will be engineered and built to provide a
minimum of one hundred twenty (120) channels. Grantee shall, upon request, meet
with City to explain its System operations prior to the commencement of Cable Services
in the City and shall, at the request of City, participate in public meetings designed to
inform residents of City of said operation. The System shall at all times meet the
technical standards established by the FCC as they may be amended from time to time
and shall be operated so as to minimize disruption of signal to Subscribers. The
general System description is outlined in Exhibit E, which is incorporated herein by
reference.
(b) When System has been turned up and service commenced, upon a
request for service from a prospective Subscriber, Grantee shall generate a service
order and service order will contain an installation date. Grantee shall advise
prospective Subscriber that if installation is not accomplished within the time frame
specified by the service order, installation shall be free to the Subscriber or, at the
election of the Subscriber, Grantee shall provide the Subscriber with a Twenty Dollar
($20) credit, provided that no such free installation or credit shall apply if delay in
installation is caused by prospective Subscriber or by events pursuant to Section 7.3
herein.
4.3) Operation and Maintenance of System.
The Grantee shall render effective service, make repairs promptly, and interrupt
service only for good cause and for the shortest period of time possible. Such
interruption, to the extent feasible, shall be preceded by notice in accordance with
Section 1.2 herein and all applicable provisions of the Section 306 of the City Code, and
shall occur, to the extent feasible, during periods of minimum use of the System.
4.4) Special Testing.
City may require special testing of a location or locations within the System if
there is a particular matter of controversy or unresolved complaints pertaining to such
location(s). Demand for such special tests may be made on the basis of complaints
received or other evidence indicating an unresolved controversy or noncompliance.
Such tests shall be limited to the particular matter in controversy or to unresolved
complaints. The City shall endeavor to so arrange its request for such special testing so
as to minimize to the extent reasonably feasible hardship or inconvenience to Grantee
10
or to the Subscribers caused by such testing. Before ordering such tests, Grantee shall
be afforded thirty (30) days to correct problems or complaints upon which tests were
ordered. The City shall meet with Grantee prior to requiring special tests to discuss the
need for such and, if possible, visually inspect those locations which are the focus of
concern. If, after such meetings and inspections, City wishes to commence special
tests and the thirty (30) days have elapsed without correction of the matter in
controversy or unresolved complaints, the tests shall be conducted by a qualified
engineer selected by City. In the event that special testing is required by City to
determine the source of technical difficulties, the cost of said testing shall be borne by
the Grantee if the testing reveals the source of the technical difficulty to be within
Grantee's reasonable control. If the testing reveals the difficulties to be caused by
factors which are beyond Grantee's reasonable control then the cost of said test shall
be borne by City.
4.5) FCC Reports.
Upon request, the results of tests required to be filed by Grantee with the FCC
shall also be copied to City.
4.6) Emergency Alert Capability.
Grantee shall at all times comply with all Applicable Laws regarding the provision
of emergency alert services. At a minimum, Grantee shall at all times have the
capability for an emergency override alert. The emergency override by City shall
emanate from Prior Lake City Hall, 4646 Dakota Street S.E., Prior Lake, MN.
4.7) 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 any Channels offered by Grantee.
4.8) Technical Standards.
Grantee shall, at a minimum, comply at all times with all applicable Federal
Communications Commission (FCC) Rules and Regulations, including but not limited to,
Part 76, Subpart K (Technical Standards), as may be amended from time to time.
4.9) Right of Inspection.
Grantor shall have the right to inspect all construction, reconstruction or
Installation work performed by Grantee under the provisions of this Agreement and
Applicable Laws, to ensure Grantee's compliance and to protect the health, safety and
welfare of Grantor's citizens.
4.10) Periodic Evaluation, Review and Modification.
11
Grantor and Grantee acknowledge and agree that the field of cable television is a
relatively new and rapidly changing one which may see many regulatory, technical,
financial, marketing and legal changes during the term of this Agreement. Therefore, in
order to provide for the maximum degree of flexibility in this Agreement, and to help
achieve a continued, advanced and modern Cable System, the following evaluation
provisions will apply:
(a) The City reserves the right to adopt rules and regulations controlling the
procedures as set forth below and the subjects for evaluation sessions. (Evaluation
sessions are public meetings in which the City enquires regarding topics concerning
Cable service, such as those found in subsection (c) below, and Grantee provides such
information and documents as reasonably requested by City.) In the absence of any
City action taken to exercise these rights, Grantee shall be subject to the procedures
and the subjects described in this Section 4.10.
(b) The City may require, in its sole discretion, that the Grantee participate in
evaluation sessions with the City at any time and from time to time during the term of
this Agreement; provided, however, there shall not be more than one (1) evaluation
session during any calendar year.
(c) Topics which may be discussed at any evaluation session include, but are
not limited to, rates, channel capacity, the System performance, programming, PEG
access, municipal uses of the System, Subscriber complaints, judicial rulings, FCC
rulings and any other topics the City or Grantee may deem relevant.
(d) During an evaluation session, Grantee shall fully cooperate with the City
and shall provide without cost and in a timely manner such information and documents
as the City may reasonably request to perform the evaluation and the disclosure of
which would not violate federal law or reveal confidential proprietary information.
(e) As a result of an evaluation session, the City or Grantee may determine
that an amendment in the terms of this Agreement may be required, that the
requirements of the System or this Agreement should be updated, changed or revised,
and/or that additional services should be provided by Grantee (collectively a "Proposed
Modification"). If the Proposed Modification is consistent with the terms of this
Agreement, Section 306 of the City Code, the needs of the City and existing state-of-
the-art technology, including what is provided by Grantee in other Systems owned,
operated or managed by it, its parent company or any affiliated company, Grantee and
the City will, in good faith, review the terms of the Proposed Modification and consider
amending this Agreement accordingly. All franchise modifications, however, must be
mutually acceptable to both the City and Grantee.
12
SECTION 5
SERVICES AND PROGRAMMING
5.1) Services and Programming.
Grantee shall provide Grantor with a list of programming services and other
services offered, which list shall be attached hereto as Exhibit C (the 'Channel Line-up').
The Channel Line-up shall include all applicable charges and pricing schedules. The
Channel Line-up shall be updated each time a change is made by Grantee. Grantee
shall not alter the number of program services or other services without thirty (30) days
prior written notification to the Grantor and System Subscribers. Notwithstanding the
foregoing, Grantee may not reduce the number of channels or services below the
minimum number of 120 as provided for in Section 4.1.
5.2) Leased Channel Service.
Grantee shall offer leased channel service on reasonable terms and conditions
and in accordance with Applicable Laws.
5.3) Periodic Subscriber Survey.
(a) To the extent Grantee conducts customer surveys with respect to all or a
portion of the system serving the City, upon request, it shall provide the City with all
information and findings from such surveys, subject to the privacy rights of subscribers
and the right of Grantee to withhold confidential proprietary material.
(b) Grantee shall provide the City with the results of any survey conducted
and shall report in writing or orally before the City Council what steps Grantee is taking,
if any, to implement the findings of the survey, such as correcting problems and
expanding services.
SECTION 6.
PUBLIC ACCESS PROVISIONS
6.1) Public, Educational and Government Access.
(a) City or its designee is hereby designated to operate, administer, promote,
and manage access (public, education, and government programming) (hereinafter
"PEG access") to the cable system established pursuant to this Section 6. Grantee shall
have no responsibility whatsoever for PEG access except as expressly stated in this
Section 6.
6.2) Grantee Support for PEG Usage.
13
In accordance with the provisions of the Cable Act and Minn. Stat. S 238.084,
Grantee shall provide and make available for public, educational and governmental
(PEG) access usage within the Service Area the following:
(a) Provision and use of the grant funds and Channels designated in Exhibit D
of this Agreement for local educational and governmental programming and access use
at no charge in accordance with the requirements of Exhibit D.
(b) Maintenance of the Access Facilities and Channels, and support of
educational and governmental programming to the extent specified in Exhibit D of this
Agreement.
(c) Provision of free public building Installation and cable service as more
clearly specified in Exhibit D1, and provision of cablecasting capability to the locations
specified in Exhibit D2.
(d) Access Facilities shall be operated by the City.
SECTION 7
REGULATION
7.1) Amendment of Franchise Agreement.
Grantee and City may agree, from time to time, to amend this Franchise. Such
written amendments may be made subsequent to a review session pursuant to Section
4.1 0 or at any other time if City and Grantee agree that such an amendment will be in
the public interest or if such an amendment is required due to changes in federal, state
or local laws. City shall act pursuant to local law pertaining to the amendment of
Section 306 of the City Code.
7.2) Conflict Between Section 306 of the City Code and Agreement.
In the event of any conflict between the terms and conditions of this Franchise
Agreement and the provisions of the Section 306 of the City Code, the provisions of this
Franchise Agreement shall control. Grantee expressly acknowledges and agrees that
the City hereby retains all of its police powers and the City may unilaterally amend
Section 306 of the City Code in the exercise of its police powers and Grantee shall
comply with Section 306 of the City Code as may be amended; provided, however that
City hereby agrees to use reasonable efforts to address public health, welfare and
safety needs without resorting to amending Section 306 of the City Code.
7.3) Force Majeure.
14
In accordance with Section 306.3100 of the City Code, in the event Grantee's
performance of any of the terms, conditions, obligations or requirements of this
Agreement or Section 306 of the City Code is prevented or impaired due to strike, riot,
war, earthquake, flood, unusually severe rain or snow storm, tornado or other
catastrophic act of nature, labor disputes, failure of utility service necessary to operate
the Cable System, governmental administrative or judicial order or regulation,
unavailability of materials or qualified labor to perform the work necessary or other
event that is reasonably beyond the events beyond the reasonable control of the
Grantee's ability to anticipate or control, such inability to perform shall be deemed to be
excused for the period of such inability and no penalties or sanctions shall be imposed
as a result thereof.
7.4) Rate Regulation.
Nothing in this Agreement shall in any way prevent Grantor from regulating any
rates charged by Grantee. If Grantor elects to so regulate, Grantor shall follow the
procedures outlined in Section 306.1900 of the City Code or Applicable Laws.
7.5) Telecommunications Network Transfer Prohibition
Under no circumstance including, without limitation, upon expiration, revocation,
termination, denial of renewal of the Franchise or any other action to forbid or disallow
Grantee from providing Cable Services, shall Grantee or its assignees be required to
sell any right, title, interest, use or control of any portion of Grantee's
Telecommunications Network to the City or any third party. Grantee shall not be
required to remove its Telecommunications Network or to relocate the
Telecommunications Network or any portion thereof as a result of revocation, expiration,
termination, denial of renewal or any other action to forbid or disallow Grantee from
providing Cable Services. This provision is not intended to contravene PEG
requirements set out in this Agreement. Upon expiration of franchise, Grantee will
remove any Cable system equipment from City property and restore property to its
original condition.
7.6) Termination by Grantee
Grantee shall have the right to terminate this Agreement and all obligations
hereunder upon ninety (90) days' notice to the City if Grantee concludes in its
reasonable business judgment that the provision of Cable Service in the City is no
longer technically, economically or financially consistent with Grantee's business
objectives.
7.7) Termination by Grantor.
In accordance with Section 306.3000 of the City Code, Grantor may revoke
Grantee's right to operate a Cable System in City if Grantee violates any material term
of this Agreement, Section 306 of the City Code, or Applicable Laws, including, but not
limited to, state and federal laws and regulations relating to Cable Services.
15
Notwithstanding the foregoing, should Grantee's insurer provide thirty days
written notice pursuant to Section 3.5(c) above of insurer's intent to cancel Grantee's
public liability insurance policy, Grantee, on or before the thirtieth day of the thirty day
notice, shall produce satisfactory evidence to Grantor of one of the following: 1) an
alternative public liability insurance policy in force, consistent with the requirements of
Section 3.5; or 2) self-insurance capable of providing coverage consistent with the
requirements of Section 3.5; or 3) a letter of credit in the amount equal to the coverage
required under Section 3.5. If Grantee fails to produce any of the above alternatives by
the termination of the 30 days notice, Grantor may immediately suspend Grantee's right
to provide service pursuant to the franchise, and will provide Grantee fourteen (14) days
notice of a public hearing to be held before the Council, pursuant to Section 306.3000 of
the City Code, to address a franchise violation, and proceed thereafter pursuant to
Section 306.3000. At any time in the City's process under Section 306.3000 of the City
Code, through termination of Grantee's right to appeal an adverse decision, or the
issuance of a final decision upon appeal, Grantee may produce to the Grantor
satisfactory evidence of one of the three alternatives listed above and Grantor will
immediately lift the suspension of Grantee's right to provide service pursuant to its
franchise.
In the event that Grantee does not receive 30 days notice from its insurer of
intent to cancel its public liability insurance, upon Grantee's learning that said insurance
was cancelled or will be cancelled in less than 30 days, Grantee shall notify the Grantor
of the cancellation, and Grantee shall have fourteen 14 days from learning of the
cancellation, or the remainder of the notice period of an impending cancellation if longer
than 14 days, to produce one of the three alternatives above. If Grantee fails to
produce any of the above alternatives by the expiration of the 14 days or remaining
notice period, Grantor may immediately suspend Grantee's right to provide service
pursuant to the franchise, and will provide Grantee 14 days notice of a public hearing to
be held before the Council, proceeding thereafter as provided above.
8) Severability
If any section, subsection, paragraph, phrase or sentence is held invalid by a
court of competent jurisdiction, the remaining provisions shall continue in full force and
effect and the invalidated provision shall be treated as if it never existed.
16
IN WITNESS WHEREOF, Grantor and Grantee have executed this Agreement
the day, month and year first above written.
Dated:
CITY OF PRIOR LAKE, MINNESOTA
By:
Its: Mayor
ATTEST:
By:
Its: City Manager
(SEAL)
17
SCOTT RICE TELEPHONE COMPANY DBA
INTEGRA TELECOM
Dated:
By:
Its:
(CORPORATE SEAL)
STATE OF MINNESOTA )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me on , 2009,
by , the Mayor of the City of Prior Lake, on behalf of the City.
Notary Public
STATE OF MINNESOTA )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me on ,2009,
by , the of Scott Rice Telephone Company dba
Integra Telecom, on behalf of the Company.
Notary Public
18
EXHIBIT A
OWNERSHIP
SCOTT RICE TELEPHONE COMPANY DBA INTEGRA TELECOM IS A WHOLLY
OWNED SUBSIDIARY OF INTEGRA TELECOM HOLDINGS, INC., AN OREGON
CORPORATION. INTEGRA TELECOM HOLDINGS, INC., IS A WHOLLY OWNED
SUBSIDIARY OF INTEGRA TELECOM, INC., AN OREGON CORPORATION.
INTEGRA TELECOM, INC. IS A PRIVATELY HELD CORPORATION. THREE
PRIVATE EQUITY INVESTORS EACH OWN MORE THAN A 5% EQUITY INTEREST
IN GRANTEE THROUGH THEIR INVESTMENT IN INTEGRA TELECOM, INC.
EXHIBIT B
FRANCHISE FEE PAYMENT WORKSHEET
Scott Rice Telephone Company dba Integra Telecom
(Prior Lake)
Subs
Franchise Fee: 5% Gross
Date ,20_
Revenue Source
I Basic
Pay
Tier
Advertising and
Pay-Per-View
Other
Total $
2
EXHIBIT C
CHANNEL LINE-UP
C-l
EXHIBIT D
GRANTEE COMMITMENT TO
PEG ACCESS FACILITIES AND EQUIPMENT
1. PUBLIC, EDUCATIONAL AND GOVERNMENT (PEG) ACCESS CHANNELS
Grantee shall provide to each of its subscribers who receive some or all of the
services offered on the Cable System, reception on at least one (1) specially designated
noncommercial public access channel available for use by the general public on a first
come, first-served nondiscriminatory basis; at least one (1) specially designated access
channel for use by local educational authorities; at least one (1) specially designated
access channel available for government use (hereinafter collectively referred to as the
'PEG Channels'); and at least one (1) specially designated access channel available for
lease on a first-come, first-served, nondiscriminatory basis by commercial and
noncommercial users. No charges may be made for channel time or playback of
prerecorded programming on the specially designated noncommercial access channels.
Personnel, equipment and production costs may be assessed, however, for live studio
presentations exceeding five (5) minutes in length. Charges for those production costs
and fees for use of other public access channels must be consistent with the goal of
affording the public a low-cost means of television access.
Whenever the PEG Channels are in use during eighty percent (80%) of the
weekdays, Monday to Friday, for eighty percent (80%) of the time for any consecutive
three (3) hour period for six (6) weeks running, and there is demand for use of an
additional channel for the same purpose, the Grantee shall then have six (6) months in
which to provide a new PEG Channel for the same purpose, provided that provision of
the additional channel or channels must not require the Cable System to install
converters.
The PEG Channels shall be dedicated for PEG use for the term of the Franchise
Agreement, provided that Grantee may, utilize any portions of the PEG Channels not
scheduled for PEG use. Grantor shall establish rules and procedures for such
scheduling in accordance with Section 611 of the Cable Act (47 U.S.C. 9 531).
Grantee shall also designate the standard VHF channel 6, or its digital
equivalent, for uniform regional channel usage currently provided by 'Metro Channel 6'
as required by Minn. Stat. 9 238.43. Programming on this regional channel shall
include a broad range of informational, educational, and public service programs and
materials to cable television subscribers throughout the Twin Cities metropolitan area.
2. PEG OPERATIONS
Grantor may in its sole discretion, negotiate agreements with neighboring
jurisdictions served by the same Cable System, educational institutions or others to
share the operating expenses of the PEG Channels. Grantor and Grantee may
negotiate an agreement for management of PEG facilities, if so desired by both parties.
DI-I
3. PROMOTION OF PEG ACCESS
Grantee shall allow the Grantor to place bill stuffers in Grantee's Subscriber
statements at a cost to the Grantor not to exceed Grantee's cost, no more than twice
per year upon the written request of the Grantor if the placement of such materials
would not materially and adversely affect Grantee's cost for the production and mailing
of such statements. The Grantor agrees to pay Grantee in advance for the actual cost
of such bill stuffers. Upon request, 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 within the Service Area. To the extent
Grantee utilizes local advertising insertion equipment and has the requisite capability,
Grantee shall also distribute, at no charge to Grantor, through advertising insertion
equipment, 28 weekly promotional and awareness commercial spots at randomly
selected times in unpurchased advertising space on a 'run of schedule basis' produced
at the Grantor's cost and submitted by the Grantor in a format compatible with such
advertising insertion equipment once Grantee has acquired and activated such
capability.
4. SERVICE TO PUBLIC BUILDINGS
(a) One (1) cable drop connection and the highest level of cable service
excluding pay-per-view and pay-per-channel programming shall be provided free of
charge to each public building listed in Exhibit 0-1 with no Installation charges or
monthly service charges. Said drop connection and service provision shall be provided
no later than eighteen (18) months from the Effective Date of this Agreement. Grantee
shall, in any public building hereinafter built within Grantee's Franchise Area, provide all
materials, design specifications and technical advice for anyone cable outlet to be
installed during the construction of such building, without cost to the Grantor and
Grantee shall provide the same service to such new public building as required in this
paragraph (a).
(b) No later than eighteen (18) months from the Effective Date of this
Agreement, Grantee shall provide a two-way connection to the public buildings listed in
Exhibit 0 2 to facilitate cablecast programming from those buildings.
(c) Grantee shall at all times cooperate with City in providing technical
assistance required by City regarding PEG access programming. Within a reasonable
time period following City's request, but no later than five (5) business days, Grantee
shall provide technical assistance necessary to improve signal quality on the PEG
access Channels.
5 SUPPORT OF PEG CHANNELS
(a.) PEG Capital Grant to City
Grantee will provide City a grant in the amount of seventy-seven thousand
dollars ($77,000.00) to be used for the acquisition of equipment used to create
2
and deliver PEG programming. The payment will be made on the following
schedule:
(1.) Grantee shall send City Twenty-five Thousand Six Hundred
Sixty-five Dollars ($25,665.000) as described herein for the initial franchise
period.
a) Grantee shall send City Twelve Thousand Eight
Hundred Thirty-three dollars ($12,833.00) within thirty (30) days of
acceptance of this franchise.
b) Grantee shall send the remaining Twelve Thousand
Eight Hundred Thirty-two Dollars ($12,832.00 in four (4) equal
installments of Three Thousand Two Hundred Eight dollars
($3,208.00). The first installment shall be made July 1, 2010 and
thereafter on July 1, 2011; July 1, 2012; July 1, 2013.
(2.) Upon renewal of Grantee's franchise by the City Council,
Grantee shall send the remaining Fifty-one Thousand Three Hundred
Thirty-five dollars ($51,335.00) of the capital grant as follows:
a) On July 1, 2014, Grantee shall remit to City Twenty-
five Thousand Six Hundred Seventy dollars ($25,670.00).
b) The remaining Twenty-five Thousand Six Hundred
Sixty-five dollars ($25,665.00) shall be remitted to City in five (5)
equal installments of Five Thousand One Hundred Thirty-three
dollars ($5,133.00). The first installment shall be remitted on July
1, 2015 and thereafter on July 1, 2016; July 1,2017; July 1, 2018
and July 1, 2019.
(b.) Use of Capital Grant Funds
Grantee shall only use capital grant funds to purchase, replace or
repair equipment.
(c.) PEG Access Operating Support
(1.) Grantee shall collect on behalf of City a per subscriber fee of
sixty-five cents ($0.65) per month, which may be increased to a maximum
of one dollar twenty cents ($1.20) per month in City's sole discretion,
solely to fund public, educational and governmental access-related
expenditures (hereinafter "Access Operating Fee"). The Access
Operating Fee may be adjusted by the City, upon ninety (90) days written
notice to Grantee, no more frequently than once every two(2) years during
3
the term of the Franchise. The City agrees that any increase in the
Access Operating Fee will be applied equally to all franchised cable
operators in the City.
(2.) Adjustment for Increase in Consumer Price Index
The Access Operating Fee shall automatically be adjusted every
two (2) years equal to the cumulative increase in the Consumer Price
Index ("CPI") during the preceding two (2) year period.
(3.) Access Operating Fee Not Part of Franchise Fee
Any grants or payments by Grantee to City in support of PEG
access equipment or programming shall not be deemed "franchise fees"
within the meaning of Section 622 of the Cable Act (47 USC Section 542).
4
EXHIBIT 01
SERVICE TO PUBLIC FACILITIES
PUBLIC BUILDINGS
CITY OF PRIOR LAKE, MINNESOTA BUILDINGS:
City Hall
Police Station
Fire Station 1
Public Works Maintenance
Library
Club Prior
Water Treatment Facility
Other: Any city building hereafter built within the Franchise Area or existing city
building hereafter encompassed within the Franchise Area.
SCHOOLS IN PRIOR LAKE:
District Services Center
Alternate Learning Center
Edgewood
Five Hawks
Grainwood
Hidden Oaks
Twin Oaks
Westwood
Jeffers Pond Elementary
Other: Any school district building hereafter built within the Franchise Area or
existing school building hereafter encompassed within the Franchise Area.
5
EXHIBIT 02
PUBLIC BUILDINGS TO BE PROVIDED WITH CABLECASTING CAPABILITY
City Hall
Police Station
Prior Lake Senior High (to the extent Grantee has legal authority to serve this
facility)
District Service Center
D2-1
EXHIBIT E
DESCRIPTION OF SYSTEM
INTEGRA TELECOM
Prior Lake
(This exhibit is intended to provide City with a general description of the System and
Grantee reserves the right to substitute comparable technology or design parameters to
provide or enhance the described System.)
Grantee will use IPTV (Internet Protocol Television) to provide Cable service to
residents, businesses and facilities in Prior Lake. IPTV will deliver television content to
the viewer via Grantee's Telecommunications Network facilities that currently provide
broadband Internet access as well as voice telephony to subscribers.
The International Telecommunication Union focus group on IPTV (ITU-T FG
IPTV) defines IPTV as follows:
"IPTV is defined as multimedia services such as
television/video/audio/textlgraphics/data delivered over IP based networks
managed to provide the required level of quality of service and experience,
security, interactivity and reliability. "
A general definition of IPTV is television content that, instead of being delivered through
traditional broadcast and cable formats, is received by the viewer through the
technologies used for computer networks. IPTV allows the transmission of single or
multiple program transport streams by the same network operator that owns or directly
controls the telecommunications "Last Mile," or copper loop, to the consumer's
premises. This control over delivery enables a guaranteed quality of service, and also
allows the service provider to offer an enhanced user experience such as programming
guides, interactive services etc.
Telecommunications providers' IPTV service can be contrasted with "Internet
TV," such as "You-Tube," which offers transport streams sent over public IP networks
(normally the Internet) from outside the network that connects to the user's premises.
An Internet TV provider has no control over the final delivery and so broadcasts on a
"best effort" basis. IPTV, on the other hand, is usually delivered over a
telecommunications provider's complex and investment-heavy network, which is
carefully engineered to ensure bandwidth efficient delivery of vast amounts of multicast
video traffic.
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In order to provide its IPTV service, Grantee will construct a commercial satellite
antenna and broadcast antenna receiving station at its central office at 5786 Credit
River Road SE, Prior Lake, MN to capture video and network broadcast programming
signals. The signals are obtained through contractual relationships with video content
networks and companies. Grantee will convert those signals into a format that allows
them to be carried out over its broadband Internet connection to subscribers.
Grantee will use a "dedicated," or non-public, data network infrastructure to
manage and control video quality. As previously noted, a dedicated data network
infrastructure design is distinctly different from "Internet Video" obtained over the public
Internet network, which offers no end-to-end service management or quality of service
capabilities.
With the addition of its IPTV offering, Grantee will be able to offer its Prior Lake
subscribers "Triple Play"--the commercial bundling of IPTV, Voice and Internet access
into a unified service offering. Grantee's Telecommunications Network is expandable
and may increase capacity and bandwidth to respond to consumer demand for new
service offerings and programming.
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