§ 38.5.11. Conditions of franchise.

(a)

Franchise Nonexclusive. Any cable franchise granted shall be nonexclusive. The City may grant any number of cable franchises subject to applicable state and federal law. The City may limit the number of franchises granted, based upon, but not necessarily limited to, the requirements of applicable law and specific local considerations such as:

(1)

The capacity of the public rights-of-way to accommodate multiple cables in addition to the cables, conduits and pipes of the utility systems, such as electrical power, telephone, gas and sewerage.

(2)

The disadvantages that may result from cable system competition, such as the requirement for multiple pedestals on residents' property, and the disruption arising from numerous excavations of the rights-of-way.

(b)

Additional Franchises. In the event the City grants an additional franchise to use and occupy the public right-of-way for the purpose of operating a cable system, such additional franchise shall only be granted if the terms, conditions, and requirements of such subsequent franchise relating to payments, facilities, equipment and services to be provided by the subsequent cable operator satisfy the applicable requirements set forth in Section 11-42-11 of the Illinois Municipal Code (65 ILCS 5/11-42-11), as now or hereafter amended.

(c)

Inspections. The cable system and all its parts shall be subject to inspection by the City, and the City hereby reserves the right to review the grantee's construction plans prior to the commencement of construction. The City shall not, however, be required to make inspections or approve the grantee's system and plans, and specifically disclaims such obligations. The grantee shall be solely responsible for taking all steps necessary to assure compliance with all laws and regulations and the safety of its systems as installed.

(d)

Compliance With Codes and Permits. Each grantee shall comply with all applicable City construction codes and permit procedures and all applicable sections of Federal and State occupational safety and health acts, including any amendments thereto. All installations of electronic equipment shall be of a permanent nature, durable and installed in accordance with the provisions of the National Electrical Code, the National Electrical Safety Code, the Illinois Commerce Commission's rules for construction of electric power and communication lines, and all applicable state and local codes. The City shall be entitled to charge reasonable permit and inspection fees to recover the special nonrecurring inspection costs imposed by the construction or rebuild of the cable system. Any fees or charges paid, so long as not discriminatory and generally applicable to entities, including but not limited to, like users of the public right-of-way, shall be paid in addition to any franchise fees.

(e)

Construction Standards and Requirements. All of a grantee's plant and equipment, including but not limited to the antenna site, headed and distribution system, towers, house connections, structures, poles, wire, cable, coaxial cable, fiber optic cable, fixtures and appurtenances, shall be installed, located, erected, constructed, rebuilt, replaced, removed, repaired, maintained, and operated in accordance with good engineering practices, so as not to unnecessarily hinder or obstruct pedestrian or vehicular traffic, and in accordance with the standards set forth in Article III of this Chapter.

(f)

Safety—Nuisance Requirements. Each grantee shall at all times employ ordinary care and shall install and maintain in use commonly accepted methods and devices preventing failures and accidents which are likely to cause damage, injury or nuisance to the public.

(g)

General Technical Standards. Each grantee shall construct, install, operate and maintain its system in a manner consistent with all technical standards which are established in applicable laws, ordinances, construction standards, governmental requirements, FCC technical standards, and any detailed technical standards set forth in the franchise agreement. In addition, each grantee shall provide to the City, upon request, a written report of the results of the grantee's periodic proof of performance tests conducted pursuant to FCC and franchise standards and guidelines.

(h)

Tests and Performance Monitoring.

(1)

Not later than ninety (90) days after any new or substantially rebuilt portion of the system is made available for service to subscribers, technical performance tests shall be conducted by the grantee to demonstrate full compliance with the technical standards applicable pursuant to Section 38.5.18(e) and Subsection (g) of this Section. Such tests shall be performed by, or under the supervision of, a qualified engineer with proper training and experience. A copy of the report shall be submitted to the City, upon its request, describing test results, instrumentation, calibration and test procedures, and the qualifications of the engineer responsible for the tests. At the option of the City, additional tests may be required at the expense of the grantee, which tests shall be conducted by a qualified engineer when evidence exists of inadequate system performance.

(2)

At any time after commencement of service to subscribers, the City may require additional reasonable tests, including full or partial repeat tests, different test procedures, or tests involving a specific subscriber's terminal, at the grantee's expense to the extent such tests may be performed by the grantee's employees utilizing its existing facilities and equipment; provided, however, that the City reserves the right to conduct its own tests upon reasonable notice to the grantee and if noncompliance is found, the expense thereof shall be borne by the grantee. The City will endeavor to arrange its request for such special tests so as to minimize hardship or inconvenience to the grantee or to the subscriber.

(3)

A copy of any annual performance tests report required by the Federal Communications Commission shall be submitted to the City within thirty (30) days of its completion.

(i)

Use of Facilities During Emergencies. In the event of any disaster or emergency, each grantee shall, upon the City's request, make available its facilities to the City, without cost, for emergency use during the period of the emergency or disaster.

(j)

Emergency Override. The system shall have an audio emergency override system that can be activated by the City. The override shall be capable of providing an audio signal over all NTSC channels of the grantee's system. Additionally, any grantee may, in a franchise agreement, be required to provide an audio/video override. The City shall be solely responsible for the content of all transmissions over the emergency override. A grantee shall not be liable for any claim or cause of action arising from the City's transmission, or failure to transmit, over the emergency override. The City agrees to indemnify and hold each grantee harmless from any damages or penalties arising out of the negligence of the City, its employees or agents in using such service.

(k)

Personnel.

(1)

Each grantee is responsible for all of its personnel, including its contractors, agents, employees and subcontractors engaged in system construction and maintenance.

(2)

Each grantee shall agree not to refuse to hire, discharge from employment, or discriminate against, any person regarding compensation, terms, conditions or privileges of employment because of age, sex, race, color, creed, national origin, or disability unrelated to ability. Each grantee shall take affirmative action to ensure that employees are treated fairly and equally during employment, without regard to their age, sex, race, color, creed, national origin, or disability unrelated to ability. Each grantee will comply with the Cable Act's requirements for employment and the provisions of Illinois law.

(l)

Books and Records.

(1)

List of Stockholders and Roster of Managerial Personnel. Each grantee shall, within thirty (30) days following the acceptance of a franchise, and at least yearly thereafter if a change has occurred, and within thirty (30) days of the change of ownership of three percent or more of any class or series of the outstanding voting stock or equivalent ownership interest of such grantee, furnish the City a list showing the names and addresses of persons owning three percent or more of any class or series of the outstanding voting stock or equivalent ownership interest of such grantee, together with a roster of the grantee's officers and directors, or equivalent managerial personnel, and their addresses, and if fifty (50) percent or more of the grantee's voting stock is owned by another corporation, such information as to such other corporation.

(2)

Operations in City. Each grantee shall maintain books and records of its operations within the City to show the following in sufficient detail, consistent with generally accepted accounting principles:

(A)

Total revenues, by service category;

(B)

Operating expenses, categorized by general and administrative expenses, technical expenses, programming expenses, and overhead where applicable;

(C)

Capital expenditures, to include capitalized interest and overhead, if any;

(D)

Depreciation expenses, by category.

(3)

Franchise Area. Each grantee shall maintain such books and records for the franchise area specified in the franchise separately from any other operations; provided, however, that any expenses or expenditures which apply to both the system in such franchise area and any other operations shall be reasonably allocated between all such operations, consistent with generally accepted accounting principles. Such books and records shall be retained, in any reasonable form, for a period of not less than seven years, or as required for Internal Revenue Service audit requirements, whichever is shorter. The City shall have the right to extend the retention period through the term of any renewed franchise.

(4)

Regulatory Records. Each grantee shall maintain copies of all correspondence, petitions, reports, applications and other documents filed by the grantee with Federal or State agencies having appropriate jurisdiction in matters affecting cable television operation with the City or received from such agencies.

(5)

Policies. Each grantee shall maintain copies of its schedule of charges, contract or application forms for subscriber and user services, policy regarding the processing of subscriber complaints, delinquent subscriber disconnect and reconnect procedures and any other terms and conditions adopted as its policy in connection with its subscribers or users, shall file such documents with the City, and shall make such documents available for inspection by the public in its local office.

(6)

Availability for Inspection and Audit. The books and records of each grantee's operation within the City shall be made available in the City, during normal business hours, for inspection and audit by the City within thirty (30) days after such request has been made.

(m)

Area Wide Interconnection of Cable Systems.

(1)

If ordered to do so by ordinance or resolution of the City, each grantee shall interconnect access channels and local origination channels of its cable system with all other cable systems in adjacent areas.

(2)

Upon receiving such an order to interconnect, a grantee shall make a good faith effort to obtain agreements for the sharing of interconnection costs among all interconnecting companies. The corporate authorities may extend the time to interconnect or may rescind its order to interconnect upon finding that the grantee has made a good faith effort but has been unable to obtain a reasonable interconnection agreement or that the cost of the interconnection would cause an unreasonable increase in subscriber rates.

(3)

Each grantee shall reasonably endeavor to cooperate with any entity established for the purpose of regulating, financing or otherwise providing for the interconnection of cable systems.

(4)

The corporate authorities may require a grantee to provide local origination equipment that is compatible with that used by other cable systems within the adjacent areas; provided, such equipment is consistent with industry and area standards for such equipment.

(5)

The City shall make every reasonable effort to cooperate with the franchising authorities in contiguous communities, and with each grantee, in order to provide cable television service in areas outside the City.

(n)

Responsibility for the System. An owner of the system to be constructed and, if different, a grantee, are responsible for performance of and compliance with all provisions of this Article.

(o)

Insurance. Unless otherwise provided in a franchise agreement, each grantee shall, at its own expense, as a condition of the grant, secure and maintain the following liability insurance policies insuring both the grantee and the City, and its elected and appointed officers, officials, agents, employees and volunteers as coinsured or additional insureds:

(1)

Comprehensive general liability insurance with limits not less than:

(A)

Five million dollars ($5,000,000.00) for bodily injury or death to each person;

(B)

Five million dollars ($5,000,000.00) for property damage resulting from any one accident; and

(C)

Five million dollars ($5,000,000.00) for all other types of liability.

(2)

Automobile liability for owned, nonowned and hired vehicles with a limit of three million dollars ($3,000,000.00) for each person and three million dollars ($3,000,000.00) for each accident.

(3)

Worker's compensation within statutory limits and employer's liability insurance with limits of not less than one million dollars ($1,000,000.00).

(4)

Comprehensive form premises, operations, explosions and collapse hazard, underground hazard and products completed hazard with limits of not less than three million dollars ($3,000,000.00).

(5)

Broadform contractual liability endorsement providing coverage for the indemnification provisions of this Chapter.

(6)

The liability insurance policies required by this Section shall be maintained by a grantee throughout the term of the franchise or permit as the case might be, and such other period of time during which the grantee is operating without a franchise hereunder, or is engaged in the removal of its cable system. Each such insurance policy shall contain the following endorsement:

It is hereby understood and agreed that this policy may not be canceled nor the intention not to renew be stated until 90 days after receipt by the City, by certified mail, of a written notice addressed to the City Manager of such intent to cancel or not to renew.

(7)

Within sixty (60) days after receipt by the City of such notice, and in no event later than thirty (30) days prior to such cancellation, a grantee shall obtain and furnish to the City replacement insurance policies meeting the requirements of this Section.

(8)

All policies of insurance required by this Section shall be placed with companies which are qualified to write insurance in the State of Illinois and which maintain throughout the policy term a general rating of "A" and a financial category of "XV" as determined by the A. M. Best Company, or its successor in interest.

(9)

All insurance policies shall provide that the insurance provided by a grantee shall be primary and that any provision of any contract of insurance or other risk protection benefit or self insurance policy purchased or in effect or enacted by the City and any other insurance or benefit shall be in excess thereof.

(10)

In the event of the cancellation of any insurance policy required herein or upon grantee's failure to procure said insurance, the City shall have the right to terminate the franchise agreement or revoke any permit or, alternatively, to procure such insurance and charge the cost thereof to the grantee. Such costs may be paid from the security fund or letter of credit established in this Chapter, or from the construction bond, or by any other means deemed appropriate by the City.

(p)

Indemnification.

(1)

As a condition of any franchise granted pursuant to this Chapter, each grantee shall agree to defend, indemnify and hold the City and its officers, agents and employees free and harmless from and against any and all claims, actions, suits, damages, costs, expenses and liabilities, including the reasonable fees and expenses of their attorneys, expert witnesses and consultants, court costs and fines, which may be incurred by them, asserted against them, or sought to be imposed upon them, individually, jointly or severally, and which arise directly or indirectly out of or are connected in any way with the construction, installation, maintenance, operation or condition of the cable system pursuant to a franchise granted hereunder except to the extent those damages, claims, awards and judgments arise from the sole negligence of the City, its officers, agents and employees, including but not limited to:

(A)

Any negligent, tortious or wrongful act or omission of the grantee, and its officers, agents, employees, contractors or subcontractors, resulting in personal injury, bodily injury, sickness or death to any person, or in loss or damage of any kind to the property of any person including the grantee and its officers, agents, employees, licensees and invitees.

(B)

Any negligent, tortious or wrongful act or omission of the grantee, and its officers, agents, employees, contractors or subcontractors, resulting in damage to, loss of, destruction or unauthorized use of any trademark, trade name, copyright, patent or other intangible property rights of any person including libel, slander and invasion of privacy.

(C)

Loss or damage of any kind related to the grantee's failure to comply with the provisions of this Chapter, or of the franchise, or of any federal, state or local law or regulation applicable to the grantee or its telecommunication facilities.

(2)

As a condition of any franchise granted pursuant to this Chapter, each grantee shall assume for its officers, agents, employees, contractors and subcontractors all risk of dangerous or hazardous conditions in, on or about any public streets or ways of the City, except for latent conditions actually caused by the willful or negligent acts of the City or its employees.

(q)

Security Fund. Each grantee shall establish a permanent security fund with the City by depositing the amount of fifty thousand dollars ($50,000.00) with the City in cash, an unconditional letter of credit, or other instrument acceptable to the City, which fund shall be maintained at the sole expense of the grantee so long as any of the grantee's cable system is located within the public rights-of-way of the City, as follows:

(1)

The fund shall serve as security for the full and complete performance of this Chapter, including any costs, expenses (including attorneys' fees, together with all costs and expenses of prosecution or defense), damages or loss the City pays or incurs because of any failure attributable to the grantee to comply with the codes, ordinances, rule, regulations or permits of the City.

(2)

Before any sums are withdrawn from the security fund, the City shall give written notice to the grantee:

(A)

Describing the act, default or failure to be remedied, or the damages, cost or expenses which the City has incurred by reason of the grantee's act or default;

(B)

Providing a reasonable opportunity for the grantee to first remedy the existing or ongoing default or failure, if applicable;

(C)

Providing a reasonable opportunity for the grantee to pay any monies due the City before the City withdraws the amount thereof from the security fund, if applicable;

(D)

Providing that the grantee will be given an opportunity to review the act, default or failure described in the notice with the City Manager or his designee.

(3)

A grantee shall replenish the security fund within fourteen (14) days after written notice from the City that there is a deficiency in the amount of the fund.

(Ord. 6-2000 § 2 (part))