HomeMy WebLinkAboutOrdinance 2582
ORDINANCE NO. 2582
AN ORDINANCE GRANTING A FRANCHISE TO LAMONT DIGITAL
SYSTEMS, INC. DBA GATEHOUSE NETWORKS FOR USE OF PUBLIC
RIGHTS-OF-WAY WITHIN THE CITY OF NORTH RICHLAND HILLS
FOR THE PURPOSE OF CONSTRUCTING, MAINTAINING AND
OPERATING A CABLE TELEVISION SYSTEM; REQUIRING
EXECUTION OF A FRANCHISE AGREEMENT BETWEEN THE CITY
OF NORTH RICHLAND HILLS AND LAMONT DIGITAL SYSTEMS,
INC. DBA GATEHOUSE NETWORKS REGARDING CONDITIONS,
AND REQUIREMENTS RELATED TO THE USE OF PUBLIC RIGHTS-
OF-WAY WITHIN THE CITY OF NORTH RICHLAND HILLS AND TO
THE CONSTRUCTION, MAINTENANCE AND OPERATION OF A
CABLE TELEVISION SYSTEM AND TO THE PROVISION OF CABLE
SERVICES TO RESIDENTS AND BUSINESSES IN THE OF THE CITY
OF NORTH RICHLAND HILLS AND TO REASONABLE
COMPENSATION TO THE CITY OF NORTH RICHLAND HILLS FOR
THE USE OF THE PUBLIC RIGHTS-OF-WAY; PROVIDING FOR
PUBLICATION; AND PROVIDING AN EFFECTIVE DATE.
The following statements are true and correct and constitute the basis upon which the
City Council of the City of North Richland Hills ("City") has adopted this Ordinance:
A. Lamont Digital Systems, Inc. dba Gatehouse Networks ("Company") wishes to
construct a cable television system and to provide cable television services in the City of North
Richland Hills. In accordance with the City Charter and ordinances of the City, Company has
applied for a franchise from the City in order to carry out those purposes.
B. Company is a corporation wholly owned by Lamont Digital Systems, Inc.
Gatehouse Networks is wholly owned by Lamont Digital Systems, Inc.
C. The City has reviewed Company's franchise application and determined that the
granting of a franchise, on the terms and conditions set forth herein, will assist the cable-related
needs and interests of the community, including, but not limited to, the provision of necessary
competition in cable services and participation in the provision of valuable public, educational
and governmental programming.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF NORTH RICHLAND HILLS, TEXAS:
Ordinance
Section 1. The City hereby grants Company a Franchise to erect, construct, install and
maintain a cable television system in, over, under, along and across the public rights-of-way
2
within the City of North Richland Hills and to transact business related to the provision of cable
services over such cable television system subject to the execution by Company, Lamont Digital
Systems, Inc. and GateHouse Networks of a Franchise Agreement in the form attached hereto as
Exhibit 1, which is hereby made a part of this Ordinance for all purposes.
Section 3. This Ordinance shall be in full force and effect following (i) its publication in
accordance with the City Charter; (ii) its adoption by the City Council of North Richland Hills;
and (iii) in accordance the execution of the Franchise Agreement attached hereto as Exhibit "A."
Passed and approved this 26th day of November 2001.
APPROVED:
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Exhibit A
FRANCHISE AGREEMENT
The following statements are true and correct and constitute the basis upon which the
City of North Richland Hills has executed this Franchise Agreement:
A. The City Council of the City of North Richland Hills has adopted an ordinance
that grants Lamont Digital Systems, Inc. dba GateHouse Networks a franchise to erect, construct,
install and maintain a Cable Television System in, over, under, along and across the Public
Rights-of- Way within the City of North Richland Hills and to transact business related to the
provision of cable services over such Cable Television System ("Franchise Ordinance"),
subject to the execution by Company, Lamont Digital Systems, Inc. and GateHouse Networks of
this Franchise Agreement.
B. In accordance with the Franchise Ordinance, Lamont Digital Systems, Inc. and
GateHouse Networks desires to enter into this Franchise. Lamont Digital Systems, Inc. consents
to GateHouse Networks entering into this Franchise and desire, jointly and severally, to
guarantee unconditional performance by GateHouse Networks of its duties and obligations under
this Franchise Agreement.
Agreement
1. DEFINITIONS.
Capitalized terms used in this Franchise and not otherwise defined within this Franchise
shall have the following meanings:
Act shall mean the federal Cable Television Communications Act, as amended.
Affiliate means any other Person controlling, controlled by or under common control
with Grantee, where "control" means the possession, directly or indirectly, of the
power to direct and control the management and policies of Grantee or a Person
whether through the ownership of voting securities, by contract or otherwise. For
purposes of this definition, "Person" means an individual, a partnership, a
corporation, an association, a limited liability company, a joint stock company, a
trust, a joint venture, an unincorporated organization or any other entity
(including, without limitation, any governmental entity or any department, agency
or political subdivision thereof).
Cable Business shall mean the provision by Company of Cable Services solely by means
of Company's Cable Television System.
Page I
Exhibit "A"
Cabled Franchise Agreement with Lamont Digital Systems dba GateHouse Networks
Cable Services shall mean Cable Services as defined in the federal Cable Television
Communications Act as amended and for purposes of clarity, but not to expand or reduce
the definition, shall include the following:
· The one-way transmission to subscribers of (i) Video Programming or (ii)
other programming services, such as digital audio, by which is meant
information which Company makes available generally to all subscribers of
Company's Cable Services, such as digital cable radio service; and
· Subscriber interaction, if any, including, but not limited to, that which is used
for the selection or use of (i) Video Programming or other programming
services; (ii) various on-screen options; (iii) Enhanced Cable Services; (iv)
game channels; and (v) interactive services, such as the ordering of
merchandise and the downloading of programs or data access; and
· Enhanced Cable Services as described in "Exhibit B" of this document and
incorporated herein; and
. Institutional Network Services.
Cable Television System or System shall mean Cable Television System as defined in
the federal Cable Television Communications Act, and for purposes of clarity, but
not to expand or reduce, shall include the following: a facility consisting of a set
of closed transmission paths and associated signal generation, reception and
control equipment that is designed to provide Cable Services which are provided
to multiple subscribers within the City, but shall not include (i) a facility that
serves only to re-transmit the television signals of one or more television
broadcast stations; (ii) a facility that serves subscribers without occupying any
portion of the Public Rights-of-Way; (iii) a facility of a common carrier which is
subject, in whole or in part, to the provisions of Title II of the Act, except that,
other than for purposes of Section 621 (c) of the Act, such a facility shall be
considered a Cable Television System to the extent that such facility is used in the
transmission of Video Programming directly to subscribers, unless the extent of
such use is solely to provide interactive on-demand services; (iv) an open video
system that complies with Section 653 of the Act; or (v) any facilities of any
electric utility used solely for operating its electric utility systems.
Company shall mean Lamont Digital Systems, Inc., GateHouse Networks, and its
affiliates.
City shall mean the area within the corporate limits of the City of North Richland Hills,
Texas.
Complaint shall mean a telephone call or written communication from a customer
notifying Company of a problem relating to Company's billing or billing
Page 2
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
practices, Company's equipment, picture quality, failure to receive one or more
channels or services, a change in Company's practice or policy, Company
advertising or other business practice, the conduct of a Company employee or
contractor, or the failure of Company or a service representative to comply with
customer service regulations.
Drop shall mean the cable or wire that connects the distribution portion of Company's
Cable Television System to a customer's premises.
Enhanced Cable Services shall mean (i) information services; (ii) Internet protocol (IP)
telephony; (iii) high speed data service; (iv) Internet access and Internet service,
such as that of an Internet service provider; and (v) all services described in
"Exhibit B" of this document and incorporated herein.
Facilities shall mean all duct spaces, manholes, poles, conduits, underground and
overhead passageways, and other equipment, structures and appurtenances and all
associated transmission media in the Public Rights-of-Way used by Company in
the provision of Cable Services.
Franchise shall mean the authorization issued to Company by the City for the
construction and operation of Company's Cable Television System within the City
of North Richland Hills, pursuant to and in accordance with the Franchise
Ordinance and this Franchise Agreement.
FCC shall mean the Federal Communications Commission.
Gross Revenue shall mean all of the amounts earned or accrued by Company, or by an
entity in any way affiliated with Company, in whatever form and from all sources
which are in connection with or attributable to (i) the operation of the Cable
Television System within the City's corporate limits for the provision of services
authorized by this Franchise Agreement or (ii) Company's provision of Cable
Services within the City's corporate limits. Gross Revenue shall include, but not
be limited to, all subscriber and customer revenues earned or accrued net of bad
debts, including revenues for (i) basic cable services; (ii) additional tiers of
service; (iii) premium services; (iv) pay-per-view programs and services; (v)
program guides; (vi) cable modem, high speed data, IP telephony and Internet
access and services (but not including any revenue collected on behalf of or paid
over to any unaffiliated third party directly providing Internet-related services
through the System); (vii) enhanced cable services; (viii) fees for the installation
or disconnection of Cable Services; (ix) fees for service calls; (x) fees for the
provision, sale, rental or lease of converters, remote controls, additional outlets
and other customer premises equipment; (xi) revenues from the use of leased
access channels; (xii) advertising revenues from the Cable Television System; and
(xiii) revenues, commissions and other sums received as compensation from
home shopping programming and other entities providing progr.amming used on
the System.
Page 3
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
Institutional Network or I-NET shall mean the fiber optic communications network
described in Sections 5.3 et seq., 5.4 and Exhibit "B" to be constructed and
operated by Company for the provision of Institutional Network Services to 1-
NET Users.
Institutional Network Services shall mean the provision of usable bandwidth capacity
to I-NET Users through fiber optic lines for applications including, but not limited
to, (i)two-way dedicated voice, data, video and telephony channels connecting
and interconnecting facilities owned, leased or used by the City, schools, counties,
road commissions or other units of state or local government; (ii) interconnection
of facilities serving police, fire and other public safety systems; (iii)
interconnection of libraries and other government buildings for the one-way or
two-way interchange of video signals; and (iv) local area networks or wide-area
networks connecting governmental buildings, such as for geographical
informational systems purposes.
I-NET User shall mean the City and any school or unit of state or local government
designated by the City to receive Institutional Network Services under this
Franchise Agreement.
Normal Operating Conditions shall mean those service conditions which are within the
control of Company. Those conditions which are not within the control of
Company include, but are not limited to, natural disasters, civil disturbances,
power outages, telephone network outages, and severe or unusual weather
conditions. Those conditions which are within the control of Company include,
but are not limited to, special promotions, pay-per-view events, rate increases,
regular or seasonal demand periods, changes in the billing cycle, changes in the
form of bills and other billing matters, changes in channel lineups or services that
are within Company's control, and repairs, rebuilds, maintenance and upgrade of
the cable system including computer software and hardware.
PEG Channels shall mean the public channels, educational channels and government
channels, including leased access channels, provided by Company on its Cable
Television System under Section 5.1 et seq. of this Franchise Agreement.
PEG User shall mean a person or entity authorized to operate or use a PEG Channel,
including the City. If several persons or entities share in the operation of a PEG
Channel, each such person or entity shall be a separate PEG User.
Public Rights-of-Way shall mean all dedicated public streets, highways, alleys and
rights-of-way in the City, but shall not include any property of the City that is not
a dedicated public street, highway, alley or right-of-way.
Remote Signal Input Points shall mean Signal Input Points for PEG programming that
are used intermittently (but repeatedly) from the same location, such as, by way of
Page 4
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
example only and without limitation, from a community center or a high school
football field.
Service Area shall mean the City of North Richland Hills.
Signal Input Points shall mean the facilities that connect a Signal Input Point Site to
Company's System and thereby provide the connection by which I-NET Users
provide their programming to Company for immediate retransmission to
subscribers.
Telecommunications Service shall mean the offering of any type of telecommunications
service, other than Cable Services, to the public, or to such classes of users as to
be effectively available directly to the public, regardless of the facilities used, by
means of the transmission, between or among points specified by the user, of
information of the user's choosing, without change in the form or content of the
information as sent and received.
Transfer or Transferred shall mean, in addition to supplements set forth in Section 14
of this Franchise, (i) any form of sale, conveyance, assignment, lease, sublease or
merger involving Company as to this Franchise or the Cable Television System or
(ii) any change in the effective control of Company, such as, by way of example
only, that described in 47 C.F.R. § 76.501 et seq. and the notes thereto.
Video Programming shall mean programming provided by, or generally considered
comparable to programming provided by, a television broadcast station.
2. GRANT OF RIGHTS.
2.1. General Use of Public Rights-of-Way for Provision of Cable Services.
Subject to the terms and conditions set forth in this Franchise Agreement and the
City Charter and ordinances, the City hereby grants Company the right to erect, construct,
install and maintain a Cable Television System in, over, under, along and across the
Public Rights-of-Way within the City of North Richland Hills, and to provide Cable
Services and transact a Cable Business in the City. Company shall build the System in
accordance with the construction schedule set forth herein in section 2.2.1. of this
document. Company hereby acknowledges and agrees that this Franchise Agreement
does not allow Company to provide any Telecommunications Service in or through the
City using Public Rights of Way. If Company or an Affiliate of Company contends that
Company or an Affiliate of Company is permitted or intends to provide any
Telecommunications Service in or through the City using Public Rights of Way,
Company shall first notifY the City in writing and shall obtain a franchise or other permit
or agreement for the use of the Public Rights-of-Way, if required by the City.
Page 5
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
2.2. ~.
2.2.1. Construction and Installation.
Company shall initiate construction of the system within 90 days after
approval of this agreement by the City.
2.2.3 Line Extensions
To provide for a reasonable and nondiscriminatory policy governing
extensions of cable service with the City, which policy was subject to public
review in the public proceeding leading to the award of this Franchise, Company
shall extend service to new subscribers, at the normal installation charge and
monthly rate for customers of that classification, under the following terms and
conditions.
(a) Where the new subscriber, or nearest subscriber of a group of new
subscribers is located within 250 feet of existing trunk cable; and
(b) Where the number of homes to be passed by such new extension
cable plant exceeds or equals 40 homes per mile of such new
extension cable plant.
"
(c) In the event the requirements of subsections (a) and (b) are not met,
the installation cost per subscriber shall be determined as set forth in
Exhibit "D" attached hereto.
2.3. Nonexclusive.
This Franchise and all rights granted to Company herein are str,ictly nonexclusive.
The City reserves the right to grant other and future Cable Television System franchises
to other persons and entities as the City deems appropriate. This Franchise does not
establish any priority for the use of the Public Rights-of-Way by Company or by any
present or future franchisees or other permit holders. In the event of any dispute as to the
priority of use of the Public Rights-of-Way, the first priority shall be to the public
generally, the second priority to the City in the performance of its various functions, and
thereafter, as between franchisees and other permit holders, as determined by the City in
the exercise of its powers, including the police power and other powers reserved to and
conferred on it by the State of Texas.
City may at any time grant authorization to use the public rights of way for any
purpose and for such additional lawful licenses and franchises for cable systems and
cable services as City deems appropriate.
2.4. Other Permits.
Page 6
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
This Franchise does not relieve Company of any obligation to obtain permits,
licenses and other approvals from the City necessary for the construction, repair or
maintenance of the System or the provision of Cable Services.
2.5. Bonds.
2.5.1. During Construction of the System.
Prior to the initiation of construction on Company's Cable Television
System and for the duration of the scheduled construction period outlined in
Exhibit "A", Company, at Company's sole cost and expense, shall obtain, deliver
to the City and maintain the following bonds, executed by a corporate surety
authorized to do business in the State of Texas and acceptable to the City: (i) a
performance bond in the amount of One Hundred Thousand Dollars
($100,000.00) that guarantees satisfactory compliance by Company with all
requirements, terms and conditions of this Franchise, including, but not limited to,
recovery by the City of any damages, losses, costs and expenses sustained or
suffered by the City due to Company's failure to construct and activate its Cable
Television System in a satisfactory and timely manner and in accordance with this
Franchise and (ii) a payment bond that guarantees full payments to all persons,
firms, corporations or other entities with whom Company has a direct relationship
pertaining to the construction of its Cable Television System. Upon full
completion of the Cable Television System and complete payments to all persons,
firms, corporations or other entities with whom Company has or had a direct
relationship pertaining to the construction of its Cable Television System,
Company shall notifY the City in writing and, after receiving the City's written
approval, which shall not be unreasonably denied or withheld, Company shall no
longer be required to maintain these bonds.
2.5.2. After Completion of Construction of System.
After Company has completed its Cable Television System, Company
shall be required to obtain, deliver to the City and maintain bonds as follows:
Prior to the commencement of any construction work in the Public Rights-of-Way
in the City that requires a cut, opening or other excavation, Company shall deliver
to the City bonds executed by a corporate surety authorized to do business in the
State of Texas and acceptable to the City in the same amount as the full cost of
work under the construction contract or construction project that will be
performed in the City's corporate limits. The bonds shall guarantee (i)
satisfactory compliance by Company with all requirements, terms and conditions
of this Franchise Agreement and (ii) full payments to all persons, firms,
corporations or other entities with whom Company has a direct relationship for
the performance of such construction, maintenance or repairs.
Page 7
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
2.5.3. Required of Company's Contractors.
If any construction, maintenance. and repair work is undertaken by a
contractor of Company on or to Company's Cable Television System, either
during or after completion of the System, Company shall require such contractor
to deliver to Company bonds in the same amount as the full cost of work under
the construction contract or construction project that will be performed by the
contractor in the City's corporate limits. The bonds shall guarantee (i) the faithful
performance and completion of all construction, maintenance or repair work in
accordance with the contract between Company and the contractor and (ii) full
payment for all wages for labor and services and of all bills for materials, supplies
and equipment used in the performance of that contract. Such bonds shall name
both the City and Company as dual obligees.
2.5.4. General Requirements for All Bonds.
All bonds required hereunder shall be in a form approved by the City and
executed by a corporate surety authorized to do business in the State of Texas and
acceptable to the City. In addition, all bonds required hereunder shall be endorsed
to provide that such bonds shall not be canceled or non-renewed by the surety
without at least sixty (60) days' advance written notice to the City
3. FEES AND PAYMENTS TO CITY.
3.1. Franchise Fee.
Company shall pay the City throughout the term of this Franchise an amount
equal to five percent (5%) of Company's Gross Revenue ("Franchise Fee").
3.1.1. When Due.
Company shall pay the Franchise Fee to the City on a calendar quarterly
basis. The Franchise Fee shall be due within thirty (30) days following the last
day of each quarter.
3.1.2. Accompanying Report.
Company shall submit with its Franchise Fee payment a written report in a
form acceptable to the City and verified by an officer of the Company that
summarizes Company's Gross Revenue for the previous quarter and computes the
amount of the Franchise Fee due the City for that quarter.
3.1.3. Audits.
Page 8
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
The City may audit Company at any time to verifY the accuracy of
Franchise Fees paid to the City. Company shall pay any additional amounts due
the City as reported in any City audit within thirty (30) days following the City's
submission to Company of an invoice for such sum. If this amount exceeds ten
percent (10%) of the Franchise Fee which the audit shows should have been paid
to the City for the period in which the audit covered, Company shall pay the
City's costs for the audit. Otherwise, the City shall pay its own costs for the audit.
3.1.4. Allocation for Bundled Services.
If Company bundles, ties or combines Cable Services (which are subject
to the Franchise Fee under this Franchise) with any service other than Cable
Services or Telecommunications Service ( a "Non-Cable Service") (which are not
subject to the Franchise Fee under this Franchise) and assesses a subscriber only
one fee, the combined revenue therefrom shall be allocated to Cable Services to
the full extent which would have been charged by Company if the subscriber had
received only Cable Services. In no event shall the amount allocated to Cable
Services under the foregoing calculation exceed (i) the total amount of combined
revenue actually received by Company (in which case Section 3.1.5 shall apply)
or (ii) the net revenue derived when mandatory tariff rates (if any) imposed by a
governmental authority for components of the bundled, tied or combined services
are deducted from the combined revenue. Notwithstanding any interpretation to
the contrary, this Franchise does not authorize Company to vary or alter any
payments or amounts of compensation to the City which may be dictated by
another franchise, ordinance, agreement or by applicable law and are related to
use of the Public Rights-of- Way in the provision of non-Cable Services in the
City.
3.1.5. Allocation for Discounted Services.
If Company offers its subscribers any kind of discount if such subscribers
receive both Cable Services (which are subject to the Franchise Fee under this
Franchise) and Non-Cable Services (which are not subject to the Franchise Fee
under this Franchise), the discount shall be applied proportionately to Cable
Services and non-Cable Services. For example, assume that a subscriber's
monthly charge for Cable Services alone would be $40; for a Non-Cable Service
alone, $30; and for another Non-Cable Service alone, $30, for a total of $100. If
Company offers a single rate to the subscriber for taking all three services from
Company that, in effect, amounts to a twenty percent (20%) discount from the
rates that would apply to the services if purchased individually, the aggregate
discount in this example is $20. For computation of the Franchise Fee, that $20
discount would be applied pro rata so that Gross Revenue hereunder would be
deemed to be $32 (a 20% discount from the $40 fee for Cable Services). The
result would be the same if Company offers a specific dollar discount for any
services provided, such as, for example, a $20 discount for a Non-Cable Service
Page 9
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
offered on the condition that the subscriber also take Cable Services at the
standard $40 rate.
3.2. Other Payments.
In addition to the Franchise Fee, Company shall pay the City all sums which may
be due the City for property taxes, license fees, permit fees, or other taxes, charges or fees
that the City may from time to time impose. Company shall reimburse the City for
publication of this Franchise as required by the City's Charter, any fees due the City
under any other laws including but not limited to access line fees due the City under
Chapter 283 of the Local Government Code, and attorney fees incurred by the system
relating to the approval of this document not to exceed $10,000.
3.3. Interest.
All sums not paid when due shall bear interest at the rate often percent (10%) per
annum or the maximum amount allowed by law, whichever is less, computed monthly. If
such outstanding sums are paid with interest within thirty (30) days following their
respective due dates, Company's failure to pay such sums by their respective due dates
shall not, in and of itself, constitute an Event of Default under Section 15 of this
Franchise Agreement.
3.4. Letter of Credit.
Within thirty (30) days following the Effective Date of this Franchise, Company
shall provide the City with a Letter of Credit in favor of the City in the amount of
Twenty Five Thousand Dollars ($25,000) issued by a financial institution in the City's
corporate limits and in a form acceptable to the City. This Letter of Credit shall serve a
security to the City for the faithful performance by Company of the provisions of this
Franchise. The Letter of Credit shall provide that the City may draw down an amount
owed by Company to the City under the provisions of this Franchise or applicable law by
presenting the issuer with (i) a written statement, signed by the City Manager, that sets
forth the basis of the City's demand and contains an appropriate reference to the
applicable law, ordinance or Franchise provision under which the City is due the sum
demanded and (ii) a copy of the Letter of Credit. Company shall keep in effect and
maintain this Letter of Credit at the amount specified herein at all times during the term
of this Franchise and for at least six (6) months following any revocation, termination or
expiration of this Franchise. The Letter of Credit shall provide that the Letter of Credit
shall not expire and that the issuer shall not cancel the Letter of Credit unless the issuer
provides written notice to the City in advance of such expiration or termination.
4. TERM
This Franchise shall become effective on the Effective Date, as established in the
Franchise Ordinance, and shall remain in effect for ten (10) years, expiring at 11 :59 P.M. on the
tenth anniversary of the Effective Date. This Franchise and all rights of Company hereunder
Page 10
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
shall automatically terminate upon the expiration of this Franchise. The City or Company, at
either party's option, may reopen this Franchise within six (6) months following the date of
adoption of federal or state legislation or FCC rules or regulations if such affect the City's ability
to (i) regulate rates for any Cable Services provided by Company or (ii) protect subscribers
within the City on matters such as customer service or consumer protection. This Franchise may
not be reopened for any reason other than as set forth in the immediately preceding sentence.
5. ACCESS TO THE SYSTEM.
5.1. PEG Channels.
Subject to the City's rights to require additional PEG Channels and to Company's
obligation to reallocate PEG Channels in order to accommodate a conversion to HDTV,
as provided by Section 5.5 of this Franchise, Company shall provide non-commercial
PEG Channels on its System in the basic or lowest tier of service as follows:
5.1.1. Educational Channels.
Company shall designate Channels 33 and 34 as educational channels for
use by educational entities located in the city limits of North Richland hills as
. designated by the City in the City's sole discretion.
5.1.2 Government Channels.
Company shall designate Channels 7 as a government channel
administered by the City for programming provided by the City, a designee of the
City or such other units of state or local government as the City may appoint from
time to time. Company agrees to pay $1.00 per subscriber per month to the City to
fund the City's Government channel. Company may cease payment of this fee if,
upon renewal of the franchise agreement with the current cable operator in 2007,
the current cable operated does not agree to such a fee.
5.1.4. PEG Programming Support.
The City already owns and operates its own community access studio and
produces programming for the Government channel on its own or on its behalf.
Federal law allows the City to require a cable operator to provide facilities for
Government programming. In accordance with these Federal Laws, Company will
provide the facilities and equipment necessary to insure the provision of the
educational and governmental channels on the Cable System.
5.1.5. Allocation of PEG Channels.
Upon at least six (6) months' advance written notice to Company, the City
may allocate or reallocate the usage of the PEG Channels among and between
different uses and users of such PEG Channels, including, but not limited to, the
City's removing a PEG Channel or a user of a PEG Channel; replacing a PEG
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Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
Channel or a user of a PEG Channel; requiring several different users to share or
jointly use a given PEG Channel; or allowing one or more PEG Users currently
sharing a PEG Channel to have a PEG Channel in which they are the sole User.
5.1.6. Temporary Additional PEG Channels,
After the date on which Company begins to provide at least fifty (50)
channels in a high definition television format (or technological successor
thereof), Company shall provide, upon written request by the City, one additional
PEG Channel so as to allow, to the extent deemed appropriate by the City, PEG
Channel simulcasting in both 6 MHz analog NTSC format and in an HDTV
format. If Company ceases to provide any channel of programming on its System
in 6 MHz NTSC analog format, Company shall not be required to provide such
additional PEG Channel.
5.2. Interconnection.
Upon written request by the City, Company shall promptly initiate work to
interconnect its System with other Cable Systems or open video systems in any portion of
the City or contiguous communities in order to transmit, receive and exchange
programming with such systems or the entities operating PEG Channels on such systems.
In the event of any dispute between Company and a person or entity operating any other
Cable System or open video system with regard to the costs of such interconnection,
Company, the person or entity with whom Company has a dispute and the City shall meet
in good faith in an attempt to resolve the dispute.
5.3. Institutional Network.
Company, at no cost to the City, I-NET Users or subscribers, shall provide,
construct, operate and maintain an Institutional Network (excluding coders/decoders,
interface and other terminal equipment which will be supplied by I-NET Users) that will
provide I-NET Users within the City of North Richland Hills with Institutional Network
Services in accordance with the provisions and conditions set forth herein. The I-NET
shall include 0.3 sheath miles of fiber optic cable per 100 customers, which is
proportionally equal to the amount provided by the current cable operator that will
include but not be limited to connecting the new Library and Recreation Center to be
constructed in the Home Town NRH Development to the City's existing fiber optic
network. Upon approval by the City and as outlined per a written agreement between
City and Company, Company shall make payment to the City equal to the cost of
installing 0.3 sheath miles of fiber optic cable per 100 customers in lieu of I-NET
installation. Unless the City agrees otherwise in writing with Company, the I-NET,
including the individual fiber optic fibers constituting all or any portion of the I-NET,
shall be owned by the City, maintained by Company and provided for the sole and
exclusive use ofI-NET Users.
5.4. Incremental I-NET Fiber.
Page 12
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
Company shall install and terminate an additional fiber optic pair ("Incremental
I-NET Fiber") in Company's future new and replacement fiber optic installations for use
as an I-NET in the following manner:
5.4.1. Additional Facilities.
The City will inform Company in writing from time to time of any city
buildings, facilities, traffic control devices and non-profit educational institutions
that the City would like to have served by an I-NET ("Additional I-NET
Locations"). Company will use such information in its plans for future fiber
optic installations, where, for example, one routing will pass a facility the City
would like to have served and another routing of comparable cost would not.
5.4.2. Notices to Proceed.
As to any route where the City has requested a conceptual cost estimate,
Company shall provide the City with the final cost estimate of installing
Incremental I-NET Fiber, and other information that the City may reasonably
require, as soon as Company's design of the fiber for such route is reasonably
complete. The City will have thirty (30) days following receipt of the final cost
figure to notifY Company to install Incremental I-NET Fiber. All Incremental 1-
NET Fiber and all Additional I-NET Sites served by Incremental I-NET Fiber
shall be defined and treated as part of the I-NET under this Franchise Agreement
for all purposes.
5.4.3. Installation Costs.
The cost of the installation of Incremental I-NET Fiber shall be computed
on an incremental basis, meaning the cost to Company of constructing and
installing fiber on a given route with the Incremental I-NET Fiber less the cost to
Company of constructing and installing fiber on a given route without the
Incremental I-NET Fiber.
5.5. HDTV.
Broadcast and cable channels are likely to convert in whole or in part to a high
definition television ("HDTV") format during the term of this Franchise. Channels will
likely be delivered in both HDTV and conventional analog formats during a transition
period prior to the expected total conversion to HDTV in 2006. This Section 5.5 and the
provisions that follow are intended to (i) provide for additional PEG Channels so that
during the aforementioned transition period these Channels will be available in both
HDTV and conventional format, thereby enabling subscribers to receive PEG Channels
regardless of whether they have an HDTV or a conventional television set; (ii) allow a
reallocation of PEG Channels and PEG User to aid in the preceding subsection (i); and
(iii) provide funds for PEG Users to convert their facilities to an HDTV format.
Page 13
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
5.5.1. Reports.
Company shall provide the City with quarterly reports that outline
Company's plans and progress for HDTV conversion, including, but not limited
to, the number of channels to be converted, the date(s) of conversion, equipment
changes, formats to be used and other information reasonably necessary for the
City to be able to plan an appropriate and potentially concurrent conversion of
PEG Channels and facilities to HDTV format.
5.5.2. Grant/Conversion.
After the date that Company provides at least five (5) channels in one or
more of several HDTV or successor formats, as such formats may from time to
time be adopted or in effect ("HDTV Format"), upon written request by the City,
Company shall provide the City with a grant to the City that is sufficient for 1-
NET Users and PEG Users to convert all their capital facilities, including, but not
limited to, video, audio, lighting, control, storage and editing equipment, studios
and vans, to HDTV format that is compatible with the format employed by
Company. Such grant shall not exceed 30 cents per customer per month when
amortized over the number of subscribers as of the end of the calendar quarter
preceding the date when the grant is made, using straight line amortization
without interest for ten (10) years. (For example, if there were one thousand
(1,000) subscribers at the time, the maximum grant would be .30 (maximum
amount per subscriber) x 12 (per month) x 1,000 (number of subscribers) x 10
(number of years amortized) = $36,000). The City shall allocate the grant among
I-NET Users and PEG Users for HDTV conversion purposes as the City, in the
City's sole discretion, deems is in the public interest.)
5.5.3. Temporary Additional PEG Channels.
After the date that Company provides at least five (5) channels in HDTV
Format, the City may from time to time request, and Company shall provide, one
(1) additional PEG Channel so as to allow, to the extent deemed appropriate by
the City, PEG simulcasting in both 6 MHz analog NTSC format and in an HDTV
Format. Company shall not be required to continue to provide such additional
PEG Channel when Company ceases to provide any channel of programming on
its System in 6 MHz NTSC analog format.
5.6. Open Broadband Access.
Company shall provide nondiscriminatory access to Company's cable modem
platform for providers of Internet and on-line services, whether or not such providers are
affiliated with Company, subject to (i) the availability of bandwidth and (ii), at
Company's request, execution by any such provider of a reasonable written agreement
with Company pertaining to such access. Company shall (i) comply with all
Page 14
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
requirements of this Franchise regarding Cable Services in the provision of Internet and
on-line services; (ii) include revenues from Internet access and cable modem services as
part of Company's Gross Revenue for purposes of this Franchise; and (iii) comply with
any applicable commercial leased access requirements that may be established by an
applicable law, rule or regulation,
6. USE OF PUBLIC RIGHTS-OF-WAY.
6.1. No Undue Burden.
The System shall not be erected, installed, constructed, repaired, replaced or
maintained in any manner that places an undue burden on the present or future use of the
Public Rights-of-Way by the City and the public. If the City, in its sole and reasonable
judgment, determines that any portion of the System does place an undue burden on a
portion of the Public Rights-of-Way, Company, at Company's sole cost and expense and
within a reasonable time period specified by the City, shall modifY the System or take
other actions determined by the City to be in the public interest to remove or alleviate the
burden.
6.2. Minimal Interference.
The System shall be erected and maintained in a manner that causes minimal
interference with the public's use of the Public Rights-of-Way and with the rights or
reasonable convenience of the owners of property which adjoins any of the Public
Rights-of- W ay.
6.3. Parallel Installation.
All cables, wires and other similar Facilities shall be installed parallel with
existing telephone and electric utility wires whenever possible. Multiple cable
configurations shall be in parallel arrangement and bundled in accordance with
engineering and safety considerations and all applicable laws, ordinances, rules and
regulations.
6.5. Marking of Facilities.
Company's underground Facilities shall have (i) å conducting wire placed in the
ground at least several inches above Company's cable if such cable is non-conductive
and (ii) a continuous colored tape at least eighteen (18) inches above Company's cable
that contains a statement to the effect that there is buried cable below and provides
Company's name and a toll-free number that a party may call for assistance.
6.6. Directional Borings.
Page 15
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
Whenever Company places the System or any other Facilities beneath the traveled
or paved portion of a Public Right-of-Way, unless otherwise approved in writing by the
Director of the City's Public Works Department, Company shall do so by directional
boring and not by excavation of a trench. Company shall notifY the Director of the City's
Public Works Department at least five (5) business days prior to its making a directional
bore underneath any Public Right-of-Way. At the City's request and in accordance with
the City's instructions, Company will increase the size of the directional bore. In such an
event, the City shall (i) pay only the incremental cost incurred by Company in enlarging
the directional bore and (ii) have the exclusive right to use the additional space or
capacity created by the increased size of the directional bore without additional charge or
expense.
6.7. Pavement Cut Coordination.
Company's activities within the Rights-of-Way of the City shall be in compliance
with City's Construction in the Public Rights-of-Way Ordinance (Ordinance #2464, or as
it is amended from time to time).
6.8. Use of Easements.
In using utility easements that cross privately-owned property, Company shall,
without limitation, (i) ensure the safety, functioning and appearance of the property and
the convenience and safety of other persons are not adversely affected by the installation
or construction of Facilities necessary for the System; (ii) pay all costs and expenses
incurred in or related to the installation, construction, operation or removal of such
Facilities; and (iii) justly compensate property owners for any damages caused by the
installation, construction, operation or removal of such Facilities.
6.9. Restoration of Public Rights-of-Way.
Company, at Company's sole cost and expense, and in a manner approved by the
City, shall promptly restore any portion of the Public Rights-of-Way that are in any way
disturbed or damaged by the construction, operation, maintenance or removal of the
System to, at Company's option, as good or better a condition as such property was in
immediately prior to the disturbance or damage. Company shall diligently commence
such restoration within fifteen (15) calendar days following the date that Company first
became aware of the disturbance or damage or, if the System is being removed, within
fifteen (15) calendar days following removal of the System.
6.10. Joint Use.
Company, at no charge, shall permit the joint use of its poles, conduits and
Facilities located in the Public Rights-of-Way by facilities owned by a City-owned
utilityor by the City (the "City Owned Facilities"); provided that (i) the services provided
by the City Owned Facilities are not Cable Services and (ii), Company may require the
City to remove City Owned Facilities (i) if, and to the extent the installation, operation or
Page 16
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
maintenance of the City Owned Facilities interferes with the installation, operation or
maintenance of the System and (ii) following at least ninety (90) calendar days' advance
written notice.
6.11. Relocation of Facilities.
Company, at Company's sole cost and expense and within a reasonable time
frame prescribed by the City, shall protect, support, disconnect, relocate or remove from
the Public Rights-of-Way any portion of the Facilities when required by the City due to
street or other public excavation, construction, repair, grading, regrading or traffic
conditions; the installation of sewers, drains, water pipes or municipally-owned facilities
of any kind; the vacation, construction or relocation of streets or any other type of
structure or improvement of a public agency; or any other type of improvement necessary
for the public health, safety or welfare.
6.12. Temporary Relocation of Facilities.
Upon advance notice. of at least fifteen (15) business days, Company shall
temporarily raise or lower its wires, cables or other equipment upon the reasonable
request of any person or entity, including, but not limited to, a person or entity with a
building moving permit issued by the City. Company may charge a reasonable fee for
this service, but such fee shall not exceed the actual and direct costs incurred by
Company in the temporary relocation of such Facilities.
6.13. Removal of Obsolete Facilities.
Company shall promptly remove all obsolete or unused Facilities in the City.
When Company opens a trench, accesses a conduit or boring, it shall remove or have
removed all unusable and/or inactive Facilities from those locations unless otherwise
approved by the City. When Company opens a trench or access to borings, it shall notify
all other owners of facilities in or at such locations so that they may remove their obsolete
facilities or install new facilities while the trench or access to borings is open. If
Company receives notification from another entity that the entity is opening a trench or
access to borings, Company shall remove all of its obsolete Facilities from such location
while the trench or access to borings is open.
6.14. Removal of System.
Upon the revocation, termination or expiration without extension or renewal of
this Franchise, Company's right to use Public Rights-of-Way under this Franchise shall
cease and Company shall immediately discontinue the provision of Cable Services in the
City and the use of the System. Within six (6) months following such revocation,
termination or expiration and in accordance with directions from the City, Company shall
remove the System, including, but not limited to, all supporting structures, poles,
transmission and distribution systems and other appurtenances, fixtures or property from
the Public Rights-of-Way. If Company has not removed all Facilities from the Public
Page 17
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
Rights-of-Way within six (6) months following revocation, termination or expiration of
this Franchise, the City may deem all of Company's Facilities remaining in the Public
Rights-of- Way abandoned and, at the City's sole option, (i) take possession of and title to
such property or (ii) take any and all legal action necessary to compel Company to
remove such property.
Within six (6) months following revocation, termination or expiration of this
Franchise, Company shall also restore any property, public or private, that is disturbed or
damaged by removal of the System. If Company has not restored all such property
within this time, the City, at the City's sole option, may perform or have performed any
necessary restoration work, in which case Company shall immediately reimburse the City
for any and all costs incurred in performing or having performed such restoration work.
7. CUSTOMER SERVICE AND CONSUMER PROTECTION.
7.1. General Standards.
Company shall comply with the more stringent of the customer service and
consumer protection provisions of (i) this Franchise or (ii) the FCC, as may be set forth
from time to time in FCC rules and regulations, such as the current FCC Rule 76.309.
7.2. Scrambling/Blocking.
If at any time the System operates at 860 MHz, Company shall at all times
scramble both the audio and video portions of all channels with predominately adult-
oriented programming. Upon request by a subscriber, Company shall entirely block such
subscriber from receiving both the audio and video portion of any channel with
predominantly adult-oriented programming with devices, such as, by way of example,
notch filters, which prevent the frequencies containing a specific channel or channels
from being transmitted into the subscriber's premises.
7.3. Pay Per View Options.
Subscribers shall be given the option of (i) not having pay per view or per
program service available at all or (ii) only having such services provided upon the
subscriber's provision of a security number selected by an adult representative of the
subscriber.
7.4. Customer Notifications.
Company shall provide all subscribers with written information on at least each of
the following matters: (i) products and services offered; (ii) prices (rates) and options for
Cable Services and the conditions of a subscription to such Cable Services, including, but
not limited to, prices for programming, equipment rental, program guides, installation,
disconnection, processing charges for late payment and other fees charged by Company;
Page 18
Exhibit "Au
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
(iii) Company's installation and service maintenance policies; (iv) Instructions on how to
use Cable Services, including procedures and options for pay per view, premium
channels and connection to a VCR; (v) channel positions of programming carried on the
System, including a listing specific to the City showing the channel names and numbers
actually available to subscribers in the City; (vi) billing and Complaint procedures with a
notice for a subscriber to contact Company initially with Complaints and questions; (vii)
applicable privacy requirements as set forth in this Franchise or provided for by law;
(viii) the availability of lockout devices and the ability to have a channel entirely blocked
or trapped; and (ix) the procedure for resolving signal quality problems as set forth in
Section 10.3. Company shall provide such written information to subscribers (i) at the
time of installation or reinstallation of service; (ii) annually to all subscribers, and (iii) at
any time upon request of a subscriber or the City. The information shall be dated with
the printing, revision, or effective date.
7.5. Notifications Pertaining to Cable Services-related Changes.
Company shall notify subscribers of any changes in rates, Cable Services or
channel positions as soon as possible through announcements on the cable system or in
writing. Company will provide written notice of such changes to the City in advance of
its notifYing subscribers and will make every effort to notifY the City forty-five (45) days
in advance of any such change. Unless a longer time period is required by applicable law
or regulation, notice must be given to subscribers a minimum of thirty (30) days in
advance of the implementation of any such change if the change is within the control of
Company and as soon as possible if the change is not within the control of Company. In
addition, Company shall notifY subscribers and the City at least thirty (30) days in
advance of any significant changes in the matters covered in Section 7.4.
7.6 Telephone Service Standards.
7.6.1. Company shall have a local or toll-free telephone number available for use
by subscribers toll-free twenty-four (24) hours per day, seven (7) days per
week.
7.6.2. The local or toll-free numbers shall be listed, with appropriate
explanations, in the directory published by each local telephone company
and in any significant directories published by others.
7.6.3. Trained Company Representatives shall be available to respond to
subscriber telephone inquiries twenty-four (24) hours perd~.y, seven (7)
days per week.
7.6.3.1. As to video service matters, the term "Trained Company
Representatives" shall mean employees of, or contractors to the,
Company who have the authority and capability while speaking
with a subscriber to, among other things, answer billing questions,
adjust bills, and schedule service and installation calls.
Page 19
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
7.6.4. Under Normal Operating Conditions, telephone answer time by a Trained
Company Representative, including; wait time, shall not exceed thirty (30)
seconds from when the connection is made. If the call needs to be
transferred, the time to complete the transfer time shall not exceed thirty
(30) seconds. These standards shall be met no less than ninety percent
(90%) of the time under Normal Operating Conditions, measured on a
quarterly basis.
7.6.5. Under Normal Operating Conditions, the subscriber shall receive a busy
signal less than three percent (3%) of the time, measured on a quarterly
basis.
7.7. Company Office.
Company shall maintain a physical office within the City of North Richland Hills,
which shall include a place where subscribers may pay their bills, pickup and return
converter boxes and comparable items and receive information on Company and its
services. The office shall be open at least from 8:00 A.M. to 6:00 P.M. Monday through
Friday and 9:00 A.M. to 1 :00 P.M. on Saturdays.
7.8. Standards for Installations and Service Calls.
Company shall meet the following standards for installations and service calls not
less than ninety-five percent (95%) of the time, measured on a quarterly basis:
7.8.1. Installations Made within Seven Business Days.
Under Normal Operating Conditions, installations shall be performed
within seven (7) business days after an order has been placed.
7.8.2. Installation/Service Calls
The following shall apply to subscribers (current or new) requesting
installation or service:
(a) Installations and service calls shall be available at a minimum from 8
AM to 7 PM Monday through Saturday. Company shall at the
subscriber's option either (1) schedule the subscriber to be the first call
of the day or last call of the day on a first come, first served basis, (2)
schedule the appointment for a date certain on a "call to meet" basis
where as the service technician finishes his/her prior task, the
technician calls the subscriber and arranges to meet the subscriber
shortly thereafter, or (3) establish an appointment window of no more
that three (3) hours with the subscriber (or adult representative of the
Page 20
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
subscriber) or another appointment window mutually agreed upon
between the subscriber and Company.
(b) Company shall respond to the request for service in accordance with
the option selected by the subscriber.
(c) Company shall not cancel an appointment with a subscriber after 5 PM
on the business day prior to the scheduled appointment.
(d) If Company's technician is running late for an appointment with a
subscriber and will not be able to keep the appointment as scheduled,
the subscriber shall promptly be contacted. The appointment shall be
rescheduled, as necessary, at a time which is convenient for the
subscriber.
(e) In the event access to the subscriber's premises is not made available
to Company's technician when the technician arrives during the
established appointments window, the technician shall leave written
notification stating the time of arrival and requesting that Company be
contacted again to establish a new appointment window.
(1) Notwithstanding the foregoing, if Company's technician or service
representative telephones the subscriber during or prior to the
appointment window and is advised that the technician will not be
given access to the subscriber's premises during the appointment
window, then the technician shall not be obliged to travel to the
subscriber's premises or to leave the written notification referred to
above, and the burden shall again be upon the subscriber (or adult
representative of the subscriber) to contact Company to arrange for a
new appointment.
(g) Except as otherwise provided above, Company shall be deemed to
have responded to a service or installation request under the provisions
of this section when a technician arrives at the service location or is
advised by telephone no access will be given.
(h) Company's service technician or service representative shall take
adequate time on each service call to address or correct the problem in
question.
(i) In the event that Company ceases to provide the NCT A On-Time
Customer Service Guarantee (Exhibit B 1) a violation by Company of
the provisions of this Section 10 shall automatically entitle the
subscriber to one month of free basic service and (if currently
purchased by the subscriber) one month of free cable programming
service (as defined in 47 C.F.R. § 76.901).
Page 21
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
ü) Under Normal Operating Conditions, Company shall meet the
standards of Section 10.1 through 10.3 no less than ninety-five percent
(95%) of the time, measured on a quarterly basis.
7.8.3. Service Call Charges.
No charge shall be made to the subscriber for any service call relating to
Company owned and Company maintained equipment after the initial installation
of Cable Service unless the problem giving rise to the service request can be
demonstrated by Company to have been:
(a) Caused by negligence or malicious destruction of cable equipment by
the subscriber, or
(b) A problem established as having been non-cable in origin.
7.9 Service Interruptions.
Under Normal Operating Conditions, Company shall meet the standards
of the following sections no less than ninety-five percent (95%) of the time
measured on a quarterly basis:
7.9.1. Under Normal Operating Conditions, Company shall begin working on a
Service Interruption promptly and in no event later than twenty-four (24)
hours after the interruption becomes known to Company.
7.9.2. "Service Interruption" means the loss of picture or sound on one or more
cable channels, affecting one or more subscribers.
7.9.3. Under Normal Operating Conditions, Company shall begin working on
subscriber complaints involving impairment or degradation of signal
quality (other than a Service Interruption) promptly and in no event later
than the next business day after the problem known to Company.
7.9.4. Company shall be deemed to have begun work under the provisions of this
section when a technician arrives at the service location.
7.9.5. Company shall provide affected subscribers, upon request by the City or
the subscriber, with one day's free service (equivalent to the service they
were receiving at the time of the interruption) for each day or portion
thereof of Services Interruption.
7.10. Log of Customer Complaints.
Page 22
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
Company shall maintain a written log, or an equivalent stored in computer
memory and capable of access and reproduction in printed form, of all Cable
Service-related customer Complaints originating within the City. Such log shall
be in form and substance acceptable to the City and at minimum list the date and
time of each such Complaint, identify the customer to the extent allowed by law,
and describe the nature of the Complaint and when and what actions were taken
by Company in response thereto. The log shall be organized by City. The log
shall be kept at Company's office in or near the City for a period of at least two
(2) years and shall be available for inspection during regular business hours by the
City upon request.
7.11. Ombudsman
The company will provide a senior employee who will have responsibility
of working with the City to address problems that may arise out of the Franchise
and shall be Company's ombudsman for both City and Subscribers.
7.12 City Liaison
Company shall provide problem solving liaison services to the City. The
purpose of this is to provide the City with direct access to supervisory level
personnel who can obtain prompt action on customer service problems referred by
City to Company. This service shall include at least the following:
7.12.1. The personnel providing the service shall be located in Tarrant County.
7.12.2. The personnel providing the service shall have sufficient authority to and
access to Company facilities and personnel in order to investigate and take
appropriate remedial action without delay.
7.12.3. The City shall be given a special direct phone number to use (which will
not be made available to the general public) which will generally be
answered during normal business hours by a live person and will provide
immediate access to a person having the authority specified in the
preceding section.
7.12.4. Company shall investigate (including an attempt to contact the subscriber)
and respond to the City on each call, fax or written complaint or request
by the end of the next business day and shall provide a written report
within five (5) business days.
7.12.5. Company shall give the City notice in wntmg of changes in the key
contact personnel or material changes in procedures involved in providing
this service.
7.13. Bills.
Page 23
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
7.13.1 Format.
Company's bills to customers for Cable Services shall be issued
monthly to each subscriber with a balance due or change of service. Bills
shall be clear, concise and understandable. Bills shall be fully itemized,
with itemizations including, but not limited to, basic service, cable
programming service, premium service charges, equipment charges and
processing fees for late payments as further specified in Section 7.14.
Bills shall also clearly delineate all activity during the billing period,
including optional charges, rebates, credits, and late charges. The City
shall be given thirty (30) days advance notice of any change in the format
of bills.
Each bill shall prominently display Company's local or toll-free
telephone numbers available for use by subscribers. If a bill has more than
one portion (for example, one portion that is kept by the customer and one
portion that is sent to Company) such telephone numbers shall
prominently appear on the front side of the portion of the bill retained by
the customer.
7.13.2 Complaints and Disputes.
Company shall respond in writing to all written complaints from
subscribers regarding billing matters within thirty (30) days of receipt.
Company shall not disconnect a subscriber for failure to pay legitimately
contested charges during a billing dispute. However, during a billing
dispute Company may disconnect a subscriber for failure to pay charges
that are not contested.
7.13.3 Payment Options.
Company shall provide subscribers in the City with the option of
paying for Cable Services by (i) cash; (ii) check; (iii) an automatic
payment plan under which the amount of the bill is automatically deducted
from a checking account designated by the subscriber; or (iv) by major
credit card on a preauthorized basis.
7.14. Refunds and Credits.
Refund checks for Cable Service shall be issued to subscribers promptly and in no
event later than either (i) the subscriber's next billing cycle following resolution of the
request or thirty (30) days, whichever is earlier, or (ii) if service is terminated, thirty (30)
days after return of equipment owned by Company or at the time of the next billing cycle,
whichever is earlier. Credits for Cable Service shall be issued no later than the
subscriber's next billing cycle following a determination that a credit is warranted.
Page 24
Exhibit" A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
7.15. Late Payments.
7.15.1. Notification of Additional Fee on Bills.
Each bill shall specifY on its face in a fashion emphasizing same (such as
bold face type, underlined type or a larger font): "For payments received after
[date] a $2.90 processing fee for late payment may be charged."
7.15.2. Process for Assessment of Additional Fee.
No processing fee for a late payment, however denominated, shall be
assessed or added to a subscriber's bill less than twenty-one (21) calendar days
after the mailing of the bill to the subscriber. In the event any such fee is assessed
or added, Company shall separately state the charge on the subscriber's bill and
shall include the word "late" in the description of such fee.
7.16. Disconnection of Cable Services.
Company shall comply with the following standards and procedures pertaining to
the disconnection of Cable Services to any of Company's subscribers in the City:
7.16.1. Disconnection for Non-Payment.
Company shall not disconnect a subscriber for failure to pay until at least
forty-five (45) calendar days have elapsed after the due date for payment of the
subscriber's bill and Company has provided at least ten (10) calendar days'
written notice separate from the monthly bill to the subscriber prior to
disconnection, specifying the effective date after which Cable Services are subject
to disconnection.
7.16.2. Disconnection for Illegal Practices.
Company may disconnect a subscriber at any time if Company in good
faith believes that the subscriber has tampered with or abused Company's
equipment, that there is a signal leakage problem (or other non-compliance with
FCC rules or other standards which poses a risk to lives or property) on the
subscriber's premises, or that the subscriber is or may be engaged in the theft of
Cable Services.
7.16.3. Disconnection at Subscriber's Request.
Company shall promptly disconnect any subscriber who so requests
disconnection, including those subscribers who elect to cease receiving Cable
Services from Company in order to receive Cable Services or other multi-channel
video services from another person or entity. No period of notice prior to
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Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
requested termination of service shall be required of subscribers by Company. No
charge shall be imposed upon the subscriber for or related to disconnection or for
any Cable Service delivered after the effective date of the disconnect request
(unless there is a delay by the subscriber in the return of Company equipment). If
the subscriber fails to specifY an effective date for disconnection, the effective
date shall be deemed to be the day following the date the disconnect request is
received by Company provided that Company equipment has been returned by the
subscriber.
7.17. Truth In Advertising.
Company's bills, advertising and communications to its current or potential
subscribers shall be truthful and shall not contain any false or misleading statement. For
the purposes of the preceding, a statement is false or misleading if it contains an untrue
statement of any material fact or omits to state a material fact necessary in order to make
the statements made, in the light of the circumstances under which they were made, not
misleading.
7.18 Drops
Drops shall be done in accordance with section 2.2.2. and "Exhibit D" of this
document.
7.19. Underground Facilities Requested by Customer.
If a subscriber requests Company to install Cable Services to a subscriber's
property through underground facilities, Company shall comply with the subscriber's
request but may charge the subscriber the actual difference in cost between the aerial
installation of the Drop and the underground installation of the Drop. This provision
shall not apply if the subscriber lives in an area of the City in which underground utilities
and facilities are required, in which case Company may only charge the subscriber its
normal installation charge.
7.20. Identification of Company Personnel.
All service personnel of Company, including- contractors and subcontractors,
whose normal duties involve contact with the general public shall wear on their clothing a
clearly visible identification card bearing their name and photograph. Company shall
account for all identification cards at all times. Every service vehicle of Company shall
be clearly identifiable by the public and shall display Company's logo and local
telephone number in a plainly visible manner. Vehicles used by any contractors or
subcontractors of Company shall display the contractor's or subcontractor's name,
markings indicating that such contractor or subcontractor is working for Company, and
the local telephone number of both Company and the contractor or subcontractor.
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Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
7.21. Subscriber Information.
Company shall not record or retain any information as to the programming
actually watched by a subscriber. Company shall destroy all subscriber information of a
personally identifiable nature after a reasonable period of time unless otherwise requested
by the affected subscriber. This Section 7.20 shall not prohibit Company from its
conducting system wide or individually addressed "sweeps" solely for the purpose of (i)
verifying system integrity, (ii) checking for illegal taps or (iii) billing.
7.22. Converters.
Company shall make available for rent by subscribers all converter equipment
necessary for subscribers (such as those whose television sets are not "cable ready") to
receive all Cable Services offered by Company.
7.23. Negative Options.
Company shall not engage in the practice of "negative option" marketing and
shall not charge any subscriber for any service that the subscriber has not affirmatively
requested.
8. REPORTS TO CITY.
8.1. Service-Related Reports.
Within 30 days of activation of Grantee's system, Company shall provide the
following reports to the City monthly (by the 15th business day of the following month)
and quarterly (by the 15th business day of the following quarter. These reports shall in
forms currently used by Company or otherwise in form and substance acceptable to the
City, showing on a consistent basis, fairly applied, Company's compliance with the
customer service standards set forth in this Franchise.
· Number of Subscribers;
· Report of Monthly Report of Service Calls by Reason, which shall include an
explanation of the categories of reported reasons;
· Monthly Outage Summary by Franchise;
Upon activation by Company of five hundred (500) subscribers located in the City, or
three (3) months following activation of the Company's first subscriber located in the
City, whichever shall first occur, the City may require Company to provide the following
additional reports:
· System Statistics Report;
· Monthly Service Call Availability Analysis and Installation Call Availability
Analysis;
Page 27
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
. Monthly Customer Call Sample Report, showing the results of a random
sampling of customer complaints; and
. Monthly Call Center Performance Report.
8.2. Format of Reports.
Company's service-related reports to the City shall show Company's performance
for the respective time period, excluding periods that were not Normal Operating
Conditions (" Abnormal Operating Conditions") and, if Company contends any
Abnormal Operating Conditions occurred during the period in question, it shall describe
the nature and extent of such Abnormal Operating Conditions and show Company's
performance both including and excluding the time periods Company contends such
conditions were in effect. At the City's request, Company will provide additional
information and existing reports reasonably related to the measurement and evaluation of
Company's compliance with the customer service requirements set forth in this
Franchise.
8.3. Audits Pertaining to Service-Related Reports.
The City, reserves the right to audit Company or any Affiliate of Company to
verify the accuracy of the service-related reports required under this Section 8. In the
event of any such audit, Company shall make available at a location in Tarrant County,
Texas that is convenient to the City all records of Company or an Affiliate of Company
reasonably necessary to conduct such audit. If the audit discloses performance that is
three (3) percentage points worse than any of the standards of the referenced sections
(such as compliance 92% of the time versus 95% of the time), Company shall pay the
City's costs in connection with the audit within thirty (30) days of submission of an
invoice. Otherwise, the City shall pay the costs of such audit.
8.4. Construction-Related Reports.
Company shall provide the City with a written quarterly report that outlines
Company's (i) construction activities during that quarter and (ii) plans for construction to
the System for the next twenty-four (24) months. This report shall be a public document
and kept on file in the City Secretary's Office for inspection by the public.
9. Liquidated Damages
Company acknowledges that the non-compliance with the customer service
standards identified above will harm subscribers and the City and the amounts of actual
damages will be difficult or impossible to ascertain. For the second calendar quarter of
2002 and thereafter, the City may therefore assess the following liquidated damages
against Company for noncompliance with the customer service standards set forth in
Sections 7.3,7.4,7.5,9,10.1,10.2,10.3,10.10,12.1,12.2 and 12.4 (measured on a
quarterly basis). Company acknowledges that the liquidated damages set forth below or a
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Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
reasonable approximation of actual damages and that this Section 9 is intended to
provided compensation and is n9t a penalty.
9.1. Telephone Standards:
The damages for non-compliance with one or more of the
standards in Section 7.4, 7.5, and 7.6 during a calendar quarter are:
9.1.1. First non-compliance: $1.00 per subscriber.
9.1.2. Second non-compliance within three (3) consecutive calendar
quarters: $2.00 per subscriber.
9.1.3. Third non-compliance within six (6) consecutive calendar quarters
and (subject to Section 21.4) each subsequent non-compliance:
$3.00 per subscriber
9.2. Service and Installation Standards:
The damages for non-compliance with one or more of the standards
in Sections 7.8, 7.9 and 7.14 during a calendar quarter are:
9.2.1. First non-compliance :$1.00 per subscriber
9.2.2 Second non-compliance within three (3) consecutive calendar
quarters: $2.00 per subscriber.
9.2.3. Third non-compliance within six (6) consecutive calendar quarters
and (subject to Section 21.4) each subsequent non-compliance:
$3.00 per subscriber.
9.3. Minimums:
The liquidated damages for the first and each subsequent non.,compliance
under Section 9.1 or Section 9.2 shall be no less than $5,000, unless modified as
provided in Section 9.4.
9.4. Effect of Extended Periods of Compliance:
If Company complies with all of the standards identified in Sections 9.1 and
9.2 for eight consecutive calendar quarters, the damages for the first subsequent
non-compliance with any of those standards will be the greater of $0.25 per
subscriber or $3,000.
9.4.1. Following such a non-compliance the damages provided in Section
9.1 and 9.2 will again be applicable so that the next non-
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Exhibit "An
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
compliance within four (4) consecutive calendar quarters will be
subject to Sections 9.1.2 and/or 9.2.2.
9.5. Event of Non-Compliance:
An event of non-compliance will be taken into account in determining
whether a later event of non-compliance is a second, third or subsequent event
without regard to whether City has assessed liquidated damages or taken any
other action with respect to the non-compliance.
9.6. Failure to Submit Quarterly Reports.
Company acknowledges and agrees that its failure to submit quarterly reports to
the City as required by Sections 8.1 and 8.2 will harm the City and its ability to serve its
citizens who subscribe to Company's Cable Services, and that the amounts of actual
damages will be difficult or impossible to ascertain. Therefore, for each quarter following
the Effective Date of this Franchise, the City may assess liquidated damages against
Company for Company's failure to submit quarterly reports as required by Sections 8.1
and 8.2 in the amount of $1.00 per subscriber or $5,000.00, whichever is more.
Company acknowledges and agrees that such liquidated damages are a reasonable
approximation of actual damages and that this Section 9.6 is intended to provide
compensation for damages and is not a penalty.
9.7. No Waiver.
An event of non-compliance will be taken into account in determining whether a
later event of non-compliance is a second, third or subsequent event without regard to
whether City has assessed liquidated damages or taken any other action with respect to
the non-compliance.
9.8. Procedure for Assessment.
.....",
Liquidated damages shall be assessed by the City Manager or his or her designee.
Company may obtain a review of the assessment by the City Council by making a written
request within ten (10) business days after receipt of notice in writing of the assessment
and its basis. Company shall have an opportunity to be heard at a meeting of the City
Councilor by a person designated by the City Council as a hearing officer prior to the
actual assessment of liquidated damages by the City Manager or his or her designee. The
City Council may adopt additional procedures, including appointment of a City official or
other person to act as a hearing officer. The City Council's decision may be based upon
the record of proceedings conducted by the hearing officer or a proposal for decision
submitted by the hearing officer. Nothing herein shall preclude either party from seeking
judicial review of an assessment of liquidated damages applying principles of contract
law after the foregoing procedure has been concluded.
9.9. Payment and Classification of Liquidated Damages.
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Exhibit "An
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
Liquidated damages shall be paid on or before the tenth (10th) business day
following assessment. Company acknowledges and agrees that liquidated damages paid
under this Franchise do not constitute franchjse fees, do not reduce the amounts
otherwise payable as franchise fees and will not be passed through to subscribers in the
City.
9.10 Notice and Cure. The City Manager or his or her designee shall, prior to making
any assessment of liquidated damages pursuant to Section 9.8, notifY the Company in
writing about his or her intent to levy liquidated damages (the "Liquidated Damages
Default Notice"). The Liquidated Damages Default Notice shall identity with reasonable
specificity the acts or omissions of the Company that are the basis for the assessment of
liquidated damages, the Sections of this Agreement which have been breached, the
Sections of this Agreement pursuant to which the liquidated damages are being assessed
and the steps the Company must take to cure the breach.
10. TECHNICAL STANDARDS.
The following provisions shall apply to Company's implementation of and compliance
with the FCC's rules and regulations relating to cable television technical standards for signal
quality, currently set forth at 47 C.F.R. § 76.601 and following, and subsequent amendments to
any such rules and regulations.
10.1. Testing by Company.
Company shall notifY the City in advance of testing for compliance with FCC
standards. The City may have a representative present to observe such tests and may
designate one location to be tested. Company shall provide the City with a report of
testing for compliance with such standards upon written request (but not more than twice
a year). Such ~.eport to City shall state, in pertinent part, that the person doing the testing
has reviewed the applicable rules and regulations of the FCC, the industry standards and
other materials referenced therein, and that such testing was done fairly and either shows
full compliance with such rules and regulations or sets forth with specificity and in detail
all areas of non-compliance, their actual or likely scope and causes, and Company's
professional recommendation of the best corrective measures to immediately and
permanently correct the non-compliance.
10.2. Testing by City.
Upon 30 days written notice to the Company by the City, , the City shall have
the right to employ at its own expense qualified consultants for the purpose of performing
or interpreting tests for compliance with FCC Technical Standards (47 CFR Section
76.605) provided that a historical record of complaints indicates a failure to comply with
the terms of this franchise agreement. Company agrees to pay all reasonably incurred
costs associated therewith up to a maximum cost of Two Thousand and NollOO Dollars
Page 31
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
($2,000.00) annually. Such payment will be made within 45 days following the receipt by
the Company of the historical record of complaints and a copy of the invoice from the
qualified consultant performing such work and the statement of the consultant, sworn to
under oath, identifYing with reasonable specificity the act or omission that causes the
System to not be in material compliance with the aforementioned standards, including,
without limitation, the specific standard with which there is no material compliance.
10.3 Monitoring by the City
Company shall provide a cable drop at City Hall in the office of the Managing
Director of Community Services and the office of the Director of Public Information for
the purposes of monitoring system quality as well as the signal quality and information
provided on the City's Government Channel.
10.4. Subscriber Complaints Regarding Signal Quality.
Company shall establish and notifY subscribers of the following procedure for the
resolution of complaints from subscribers about the quality of the television signal
delivered to them: (i) All complaints shall go initially to Company; (ii) All matters not
resolved by Company shall at Company's or the subscriber's option be referred to the
City for the City to resolve; and (iii) All matters not resolved by the City may be referred
to the FCC for the FCC to resolve.
11. RATES AND REGULATION.
11.1. General Rights of the City.
The City reserves the right to regulate Company, the Cable Television System, the
provision of Cable Services authorized under this Franchise, Company's rates and
charges for the provision of Cable Services and for related services, such as, without
limitation, rental deposits and downgrade fees, as expressly permitted by federal, state
and/or local laws, ordinances, rules and regulations. The rate structure of the Company is
attached hereto as "Exhibit C" and incorporated herein.
11.2. Frequency of Rate Increases.
Company will not increase or file any form or notification with the FCC related to
an increase in Company's rates for basic cable service, equipment, service calls or other
services over which the City has regulatory authority under federal, state and/or local
laws, ordinances, rules and regulations more than once in each calendar year.
11.3. Rate Orders.
Unless a final order of the FCC, affirmed on appeal if an appeal is taken,
determines that a rate order of the City, as a franchise authority, is automatically stayed
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Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
by the filing of an appeal by Company to the FCC, Company will implement each rate
order adopted by the City unless and until Company obtains an order of the FCC or a
court of competent jurisdiction staying or overruling the effectiveness of the rate order.
Company will reimburse the City for all reasonable attorneys' fees and other expenses
incurred by the City as a result of Company's violation of this Section 11.3.
11.4. Notice of Certain Costs.
During such times as the City may lawfully regulate the Company's rates, the
Company shall, on at least an annual basis and at any other time when requested by the
City, identifY to the City in writing the costs which Company claims are external costs
that Company potentially may pass through to subscribers under rules and regulations of
the FCC or successor rules with a similar effect. Company's notice to the City shall state
the individual amounts of such costs and the approximate amount that subscribers may be
billed as a result and shall contain a calculation to justify such amount.
12. LIABILITY AND INDEMNIFICATION.
12.1. Disclaimer of Liability. .
The City shall not at any time be liable for any injury or damage occurring to any
person or property from any cause whatsoever that arises out of the construction,
maintenance, repair, use, operation, condition or dismantling of the System or Company's
provision of Cable Services.
12.2. Indemnification.
Company, at Company's sole cost and expense, shall indemnify and hold harmless
the City, its officers, _ boards, commissions, agents, employees and volunteers
("Indemnitees"), from and against any and all liabilities, obligations, damages,
penalties, claims, liens, costs, charges, losses and expenses, whether legal or equitable,
which may be imposed upon, incurred by or asserted against any Indemnitees by reason
of any personal injury or property damage or any act or omission of Company, its
personnel, employees, agents, contractors or subcontractors which may arise out of or be
in any way connected with (i) the construction, installation, operation, maintenance or
condition of the System; (ii) the transmission of any programming over the System; (iii)
any claim or lien arising out of work, labor, materials or supplies provided or supplied to
Company, its contractors or subcontractors; (iv) the provision of Cable Services; or (v)
Company's failure to comply with any federal, state or local law, ordinance, franchise,
rule or regulation.
12.3. Assumption of Risk.
Company hereby undertakes and assumes, for and on behalf of Company, its
officers, agents, contractors, subcontractors, agents and employees, all risk of dangerous
Page 33
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
conditions, if any, on or about any City-owned or -controlled property, including, but not
limited to, the Public Rights-of-Way. In addition, Company hereby agrees to and shall
indemnify and hold harmless any Indemnitee against and from any claim asserted or
liability imposed upon any Indemnitee for any personal injury or property damage
incurred or asserted by Company or any of its employees, agents, servants, contractors or
subcontractors, and arising from the installation, operation, maintenance or condition of
the System.
12.4. Defense of Indemnitees.
In the event any action, lawsuit or other proceeding is brought against any
Indemnitee by reason of any matter for which the Indemnitees are indemnified under
Sections 12.2 or 12.3, the City shall give Company prompt notice of the making of any
claim or commencement of any such action, lawsuit or other proceeding, and Company,
at Company's sole cost and expense, shall resist and defend the same with legal counsel
selected by the Company and reasonably acceptable to the City and with reasonable
participation by the City. In such an event, Company shall not admit liability in any
matter on behalf of any Indemnitee or otherwise settle any claim without the advance
written consent of the City, not to be unreasonably withheld or delayed.
13. INSURANCE.
Company shall procure and maintain at all times, in full force and effect, a policy or policies
of insurance to provide coverages as specified herein, naming the City as an additional insured and
covering all public risks related to the use, occupancy, condition, maintenance, existence or location
of the Public Rights-of-Way and the construction, installation, operation, maintenance or condition
of the System.
13.1. Primary Liability Insurance Coverage.
· Commercial General Liability:
$1,000,000 per occurrence;
· Property Damage Liability:
$1,000,000 per occurrence;
· Automobile Liability:
$1,000,000 per accident,
including, but not limited to, all owned, hired or non-owned motor vehicles used
in conjunction with the rights granted under this Franchise
· Worker's Compensation:
As required by law; and, Employer's Liability as follows:
$1,000,000 per accident.
Page 34
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
13.2. Excess Liability Insurance Umbrella.
$10,000,000, including Primary Coverage, for each coverage listed in § 13.1.
13.3. Revisions to Required Coverage.
At the reasonable recommendation of the City's Risk Manager, the City may at any
time revise insurance coverage requirements and limits required by this Franchise.
Company agrees that within thirty (30) days of receipt of written notice from the City,
Company will implement all such revisions requested by the City. The policy or policies of
insurance shall be endorsed to provide that no material changes in coverage, including, but
not limited to, cancellation, termination, non-renewal or amendment, shall be made without
thirty (30) days' prior written notice to the City.
13.4. Underwriters and Certificates.
Company shall procure and maintain its insurance with underwriters authorized to
do business in the State of Texas and who are reasonably acceptable to the City in terms of
solvency and financial strength. Within thirty (30) days following adoption of this
Franchise by the City Council, Company shall furnish the City with certificates of insurance
signed by the respective companies as proof that it has obtained the types and amounts of
insurance coverage required herein. In addition, Company shall, on demand, provide the
City with evidence that it has maintained such coverage in full force and effect.
13.5. Deductibles.
Deductible or self-insured retention limits on any line of coverage required herein
shall not exceed $25,000 in the annual aggregate unless the limit per occurrence, or per line
of coverage, or aggregate is otherwise approved by the City.
13.6. No Limitation of Liability.
The insurance requirements set forth in this Section 13 and any recovery by the City
of any sum by reason of any insurance policy required under this Franchise shall in no way
be construed or effected to limit or in any way affect Company's liability to the City or other
persons as provided by this Franchise or law.
14. TRANSFERS, OWNERSHIP AND CONTROL.
14.1. Management of Cable Television System.
Company shall personally manage the Cable Television System and the provision
of Cable Services within the City. Company shall not, directly or indirectly, contract for,
subcontract or assign, in whole or in part, the management of the Cable Television
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Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
System or the provision of Cable Services within the City unless the City provides
advance written consent, not to be unreasonably withheld or delayed.
14.2. Transfers.
This Franchise and the Cable Television System shall not be sold, Transferred,
assigned or otherwise encumbered without the prior written consent of the City. For
purposes of this Franchise, in addition to the definition provided in Section 1, a
"Transfer" shall specifically include (i) any change in limited partnership interests, non-
managing limited liability company interests, or non voting stock representing thirty
percent (30%) or more of the equity interests in the entity in question and (ii) any option,
right of conversion or similar right to acquire interests constituting control without
substantial additional consideration. If Company seeks to obtain the consent of the City
for any kind of Transfer, sale, assignment or other encumbrance, Company shall submit
an application for such consent in the form requested by the City and shall submit or
cause to be submitted to the City all such documents and information that the City may
reasonably need for its consideration of the application. Company shall pay on the City's
behalf or reimburse the City for all costs reasonably incurred by the City due to any
proposed sale, Transfer, assignment or other encumbrance.
15. DEFAULTS.
The occurrence at any time during the term of this Franchise of one or more of the
following events shall constitute an "Event of Default" under this Franchise:
15.1. Failure to Pay Franchise Fees.
An Event of Default shall occur if Company fails to pay any Franchise Fee on or
before the respective due date.
15.2. Failure to Initiate Construction of System.
An Event of Default shall occur if Company fails to initiate construction of its
System on or before 90 days after City Council approval.
15.3. Breach.
An Event o(Default shall occur if Company materially breaches or violates any
of the terms, covenants, representations or warranties set forth in this Franchise
(including any exhibits thereto) or fails to perform any obligation required by this
Franchise.
15.4. Bankruptcy. Insolvency or Receivership.
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Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
An Event of Default shall occur if Company (i) files a voluntary petition in
bankruptcy; (ii) is adjudicated insolvent; (iii) files any petition or fails to contest any
petition filed against it seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief for itself under any laws relating to
bankruptcy, insolvency or other relief for debtors; (iv) seeks, consents to or acquiesces in
the appointment of any trustee, receiver, master, custodian or liquidator of Company, any
of Company's property, franchises, or any revenues, issues, earnings or profits thereof;
(v) makes an assignment for the benefit of creditors; or (vi) fails to pay Company's debts
generally as they become due.
15.5. Violations of the Law.
An Event of Default shall occur if Company violates any existing or future federal,
state or local laws or any existing or future ordinances, rules and regulations of the City.
16. UNCURED DEFAULTS AND REMEDIES.
16.1. Notice of Default and Opportunity to Cure.
If an Event of Default occurs, the City shall provide Company with written notice
and shall give Company the opportunity to cure such Event of Default. For an Event of
Default which can be cured by the immediate payment of money to the City, Company
shall have thirty (30) days from the date it receives written notice from the City to cure
the Event of Default. For any other Event of Default, Company shall have sixty (60)
days from the date it receives written notice from the City to cure the Event of Default or,
if the Event of Default is such that it cannot be fully cured within sixty (60) days, the
Company has within sixty (60) days commenced the cure and is proceeding diligently to
complete the cure. If any Event of Default is not cured within the time period specified
herein, such Event of Default shall, without further notice from the City, become an
"Uncured Default" and the City immediately may exercise the remedies provided in
Section 16.2.
16.2. Remedies for Uncured Defaults.
Upon the occurrence of an Uncured Default, the City shall be entitled to exercise,
at the same time or at different times, any of the following remedies, all of which shall be
cumulative of and without limitation to any other rights or remedies the City may have:
16.2.1. Termination of Franchise.
Upon the occurrence of an Uncured Default, the City may terminate this
Franchise. Upon such termination, Company shall forfeit all rights granted to it
under this Franchise, and, except as to Company's unperformed obligations and
existing liabilities as of the date of termination, this Franchise shall automatically
be deemed null and void and shall have no further force or effect. Company shall
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Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
remain obligated to pay and the City shall retain the right to receive Franchise
Fees and any other payments due up to the date of termination. Company shall
remove the System from the City as and when requested by the City. The City's
right to terminate this Franchise under this Section 16.2.1 does not and shall not
be construed to constitute any kind of limitation on the City's right to terminate
this Franchise for other reasons as provided by and in accordance with this
Franchise.
16.2.2. Legal Action Against Company.
Upon the occurrence of an Uncured Default, the City may commence
against Company an action at law for monetary damages or in equity for
injunctive relief or specific performance of any of the provisions of this Franchise
which, as a matter of equity, are specifically enforceable.
16.3. Bankruptcy. Notwithstanding anything else in this Franchise Agreement to
the contrary, if the Event of Default is a bankruptcy as set forth in Section 15.4, then any and all
of the parties rights and remedies shall be subject and subordinate to 11 U.S.c. Section 325.
17. RIGHTS AND RESERVATIONS OF THE CITY.
In addition to the rights reserved to the City under this Franchise, the City shall have the
following rights and reservations, subject to state and federal law:
17.1. To require proper and adequate construction and maintenance of the System and
provision of Cable Services at the highest practicable standards of efficiency; and
17.2. To establish reasonable standards of Cable Service and product quality and to
prevent unjust discrimination in Company's provision of Cable Services and/or
rates for Cable Services; and
17.3. To require continuous and uninterrupted service to the public in accordance with
the terms and conditions of this Franchise throughout the entire term of this
Franchise; and
17.4. To control and regulate the use of the City's Public Rights-of-Way, public places
and other City-owned property and the spaces above and beneath them; and
17.5. To install and maintain, without charge, City equipment upon Company's poles
and in Company's conduit upon the condition that such equipment does not itself
provide Cable Services and does not actually and unreasonably interfere with
Company's provision of Cable Services; and
17.6. Through representatives designated by the City, to inspect all construction,
Facility-installation or other work performed by Company in the City, and to
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Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
make any inspections that the City reasonably finds necessary to ensure
compliance with the terms of this Franchise and applicable laws, ordinances, rules
and regulations.
18. PROVISION OF INFORMATION.
18.1. Filings.
Company shall provide copies of all documents which Company files with or
sends to the FCC and, upon the City's request, copies of records that Company is required
to maintain under FCC regulations (currently 47 C.F.R. § 76).
18.2. Lawsuits.
Company shall provide the City with copies of all pleadings in all lawsuits to
which Company is a party and that pertain to the granting of this Franchise and/or the
operation of the Cable Television System within thirty (30) days of Company's receipt of
same.
18.3. Books and Records.
From time to time, during normal business hours and on a non-disruptive basis,
the City may review all portions of Company's books and records that are reasonably
necessary to monitor compliance by Company with the terms and conditions of this
Franchise. Such records shall include, but shall not be limited to, records that Company
is required to maintain under FCC and financial information underlying reports provided
to the City in accordance with this Franchise. However, Company shall not be required
to release (i) personally identifiable subscriber information if prohibited by applicable
law (such as § 631 of the Cable Act, codified at 47 U.S.C. § 551) or (ii) Company's
income tax returns or information directly underlying the preparation of any such returns.
To the extent permitted by law, the City shall treat any information released to it by
Company on a confidential basis if requested by Company and upon execution of a City-
signed written agreement or letter to that effect.
19. COMPANY AS INDEPENDENT CONTRACTOR.
It is expressly understood and agreed that Company shall operate as an independent
contractor as to all rights and privileges granted by this Franchise, and not as an agent,
representative or employee of the City. Company shall have the exclusive right to control the
details of its Cable Business and operation, in accordance with the terms and conditions of this
Franchise, and shall be solely responsible for the acts and omissions of its officers, agents, servants,
employees, contractors and subcontractors. Company acknowledges that the doctrine of respondeat
superior shall not apply as between the City and Company, its officers, agents, employees,
Page 39
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
contractors and subcontractors. Company further agrees that nothing herein shall be construed as
the creation of a partnership or joint enterprise between the City and Company.
20. NOTICES.
Notices required pursuant to the provIsIons of this Franchise shall be conclusively
determined to have been delivered when (i) hand-delivered to the other party, its agents, employees,
servants or representatives, or (ii) received by the other party by United States Mail, postage
prepaid, return receipt requested, or (iii) received by the other party when sent by a nationally
recognized courier for overnight delivery, addressed as follows:
To THE CITY:
To COMPANY:
City Secretary
City of North Richland Hills
Ned Lamont
Lamont Digital System, Inc. d/b/a/GateHouse
Networks
7301 NE Loop 820
North Richland Hills, TX 76180
35 Mason Street
Greenwich, Conn. 06830
with a copy to:
City Manager's Office
City of North Richland Hills
7301 NE Loop 820
North Richland Hills, TX 76180
Dan Quinto
North Richland Hills Town Center
5000 Quorum Drive
Dallas, TX 75240
21. NON-DISCRIMINATION COVENANT.
Company shall not discriminate against any person on the basis of race, color, national
origin, religion, handicap, sex, sexual orientation or familial status in the provision of Cable
Services, in the receipt of benefits from Company's Cable Business, in any opportunities for
employment with Company that Company may offer or in the construction or installation of
Company's Cable Television System or other Facilities.
22. NO WAIVER.
The failure of the City to insist upon the performance of any term or provision of this
Franchise or to exercise any rights that the City may have, either under this Franchise or the law,
shall not constitute a waiver of the City's right to insist upon appropriate performance or to assert
any such right on any future occasion.
Page 40
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
23. GOVERNING LAW AND VENUE.
This Franchise shall be construed pursuant to and in accordance with the laws of the United
States of America and the State of Texas. If any action, whether real or asserted, at law or in equity,
arise out of the terms of this Franchise, Company's provision of Cable Services or Company's use
of the Public Rights-of-Way, venue for such action shall lie exclusively in state courts located in
Tarrant County, Texas or the United States District Court for the Northern District of Texas, Fort
Worth Division.
24. CONFERENCES.
At the request of either the City or Company, the City and Company shall meet at
reasonable times and upon reasonable notice to discuss any aspect of this Franchise, Company's
provision of Cable Services, Company's Systems or Cable Business or Company's use of Public
Rights-of-Way.
25. SEVERABILITY.
If any provision of this Franchise is held to be invalid, illegal or unenforceable by a final
order entered by a court of competent jurisdiction, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired. For purposes of this Franchise,
a court order shall be final only to the extent that all available legal rights and remedies pertaining to
such order, including, without limitation all available appeals, have been exhausted. In such an
event, the City and Company agree that they shall amend or have amended this Franchise to
comply with such final order entered by a court of competent jurisdiction.
26. FORCE MAJEURE.
In the event Company's performance of any of the terms, conditions or obligations required
by this Franchise is prevented by a cause or event that is not within Company's reasonable control,
Company's non-performance shall be deemed excused for the period of such inability. Causes or
events that are not within the Company's control shall include, but not be limited to, acts of God,
strikes, sabotage, riots or civil disturbances, failure or loss of utilities, explosions and natural
disasters.
27. HEADINGS NOT CONTROLLING.
Headings and titles, other than those captions in Section 1, that are used in this Franchise
are for reference purposes only and shall not be deemed a part of this Franchise.
28. ENTIRETY OF AGREEMENT.
Page 41
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
This Franchise, including the schedule of exhibits attached hereto and any documents
incorporated herein by reference, contains the entire understanding and agreement between the City
and Company as to the matters contained herein. Any prior or contemporaneous oral or written
agreement is hereby declared null and void to the extent in conflict with the terms and conditions of
this Agreement. This Franchise shall not be amended unless agreed to in writing by both parties
and approved by the City Council of the City.
29. GUARANTEE OF PERFORMANCE.
Company hereby acknowledges that it carefully has read the terms and conditions of this
Franchise and accepts and agrees to perform the duties and obligations set forth in this Franchise.
Lamont Digital Systems, Inc. and GateHouse Networks hereby jointly and severally guarantee
unconditional performance of Company's duties and obligations under this Franchise.
LAMONT DIGITAL SYSTEMS, INC.
By:
Name:
Title:
GATEHOUSE NETWORKS
By:
Name:
Title:
Page 42
Exhibit "A"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
"Exhibit B"
Cable Services
1. Summary.
a. The System will be installed, updated, and maintained as a State of the Art design.
"State of the Art" means that level of technical performance or capacity, service,
equipment or construction techniques which have been developed and
demonstrated to be workable and economically feasible and viable and are at least
equal to commercially deployed cable television services offered by other
providers to comparable residential properties in the Dallas-Fort Worth Statistical
Metropolitan Area during the term of this franchise.
b. The System includes a fiber to the home ("FTTH") distribution network with a
minimum of six strands of fiber optic cable will be installed and terminated
directly up to the side Qf each residence. Only two (2) of the strands will be used
initially.
c. The System will be capable of delivering a private local area network for
residents in the Service Area.
d. The System will be capable of providing cable television, high speed internet
access, telephony, video on demand, security and meter reading.
2. Components.
a. Video Headend/Earthstation: -Digital quality headendlearthstation consisting
of a small 24" DES antenna and traditional UHF /VHF antennas for off air
reception and digital quality receivers, processors and modulators to receive the
satellite, off-air and local origination programming for the Service Area. The local
origination programming may include local events, cameras at the gate, and
public access channels.
b. Data Headend -The headend will include a high-speed data circuit capable of
connecting residents to the Internet using a 100Base T -switched hub.
c. FTTH Distribution Network -a complete fiber-to-the-home (FTTH)
deployment. The network is totally passive meaning there are no active devices
such as amplifiers, power supplies or RF converters between the headend and the
side of the house. The fiber is armored which means it has some protection from
cuts and can be located using conventional methods for locating buried wire.
3. Service Descriptions
Page I
Exhibit "B"
Cable Franchise Agreement with Lamont Digital Systems dba GateHouse Networks
a. Changes. Except as otherwise provided by Section 11 of this Franchise
Agreement or applicable state or federal law, the Company has the sole discretion
regarding the selection, pricing, packaging, addition, deletion, removal or
modification of any service on the System, including, without limitation the
services and prices described in Exhibits A and C.
b. Basic Internet Package 256k/128k. Internet connectivity at a speed up to 256
kbs.
c. Pro Package up to 1.5 Mbps. Internet connectivity at a speed up to 1.5 mbs.
d. Basic Cable Services. To be determined.
e. Premium Cable Services. To be determined.
f. Bulk Services. If and to the extent bulk service is provided to all residents of the
Service Area, it will also be provided in the common areas that have a television
set provided by a third party such as the clubhouse or recreation room.
. ',," ~.",."",
Page 2
Exhibit "B"
Cable Franchise with Lamont Digital Systems Inc. dba GateHouse Networks
"Exhibit C"
GateHouse Rate Structure for North Richland Hills
Monthly Subscription Programming
Standard Cable (74 Analog channels, no converter included)
Digital Services (Digital converter required but not included)
Digital Basic (63 Channels,)
Multiplexed HBO (8 Screens)
Multiplexed Cinemax (4 Screens)
Multiplexed Showtime (12 Screens)
Multiplexed Starz/Encore (17 Screens)
Digital Packages ( One Digital converter included)
Standard Cable + Digital Basic + 1 Multiplex
Standard Cable + Digital Basic + 2 Multiplex
Standard Cable + Digital Basic + 3 Multiplex
Standard Cable + Digital Basic + 4 Multiplex
Equipment Charges
Analog cable converter (if required)
Digital cable converter
Remote Control Unit
Installation Fees
Previously Unwired Home 1 st TV Set
Previously Unwired Home additional TV sets at same time
Additional TV Sets requiring new truck roll
Previously Wired Home 1st TV Set
Previously Wired Home additional TV sets at same time
Additional TV Sets requiring new truck roll
Pay-Per View Telephone Jack(required if no line exists near TV set)
Drop or add multiplex service (no home visit required)
Drop or add multiplex service (home visit required)
Miscellaneous Fees
Returned check
Collection Fee
Late Fee
Hourly Home Service Charge (30 minute intervals)
Page 1
Exhibit "C"
Cable Franchise Agreement with Lamont Digital Systems, Inc. dba GateHouse Networks
Price
$39.99
$14.99
$14.99
$14.99
$14.99
$14.99
$74.99
$84.99
$94.99
$99.99
$4.99
$7.99
$ .79
$49.99
$15.00
$39.99
$45.99
$15.00
$39.99
$70.00
$2.00
$30.00
$25.00
$25.00
$2.90
$40.00
Exhibit "D"
Line Extension Formula
Gatehouse Networks will extend its trunk an distribution system to serve new subscribers
requesting service after the date hereof at the normal installation charge and monthly rate under
the following terms and conditions.
(a) Where the new subscriber or subscribers requesting service are all located witin
500 feet from the existing trunk cable; and
(b) Where the number of homes to be passed by such extension is equal to or greater
than 50 homes per mile of such extension.
In the event that the requirements set forth in (a) and (b) above are not met, Gatehouse will
extend its cable television system based upon the following cost-sharing formula.
1) Total Cost to Construct Extension* =
Miles of Extension
2) Total Cost Per Mile of Extension =
50
3) Total Cost to Construct Extension =
Subscribers Requesting Service
4) Cost Per Subscriber minus
Company's Share Per Home
Cost Per mile of Extension
Company's Share Per Home
Cost Per Subscriber
Subscriber's
Share
*Total Cost to Construct Extension is defined as the actual turn-key cost to
construct the entire extension including electronics, pole make-ready
charges, labor and the cost of the house drops.
Gatehouse does not assess any additional cost for service drops of 150 feet or less. For drops
greater than 150 feet, the subscriber must pay for the additional feet on a cost-plus-labor basis.
Page 1
Exhibit "D"
Cable Franchise Agreement with Lamont Digital Systems, Inc. dba GateHouse Networks
INVOICE
Bill To:
CITY OF N RICHLAND HILLS/SECRET
PO BOX 820609
NORTH RICHLAND HILLS, TX 76182-
Fi Ie wi () V J4 Y\-,-,,\ -Q.
Nð, ~..v
Customer ID:
Invoice Number:
Invoice Date:
Terms:
Due Date:
PO Number:
Order Number:
Sales Rep:
Description:
Publication Date:
CIT 13
206848571
10/29/01
Net due in 21 days
10/31/01
Star- Telegram
400 w. 7th Street
FORT WORTH, TX 76102
(817)390-7761
Federal Tax ill 22-3148254
20684857
073
NOTICE OF PUBLI
10/29/01
NOTICE OF PUBLIC HEARING FOR T
13580
1
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46
LINE
$6.08
$279.68
Notice is
to 'all Inte _~_ _ -
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ordinance a
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THE STATE OF~t~
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depose and say tnat'tmf attached èTíj)ping of an advertisem nt s blwhed in the above a . pa r t~e Y1t" dates:
Signed :::k /J/i!.á-t-G
SUBSCRIBED AND SWORN TO BEFORE ME, THIS Wednesday, October 2' 200 - - ~ / i1 1'1 /ì A""'-. A
. "-i.Ud- 7 ß (/) __ ~_Ú j/~
Notary Public - ","..
¡l~'~'Iiií¢_ VICKI L. WASON
té~¡rh MY COMMISSION EXPIRES
'~~./ AUGUST 28
".;..f,,,~,,,,,,..,'" , 2004
($263.12)
Sales Discount
Net Amount:
$16.56
Thank You For Your Payment
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