Chapter 32. Cable Television

For the purpose of this chapter the following terms, phrases, words and their derivations shall have the meaning given herein. When not inconsistent with the context, words used in the present tense include the future, words in the plural number include the singular number, and words in the singular number include the plural number, and the use of any gender shall be applicable to all genders whenever the sense requires. The words "shall" and "will" are mandatory and the word "may" is permissive. Words not defined shall be given their common and ordinary meaning.

Access channel shall mean a single channel dedicated in whole or in part for local programming which is not originated by a cable company.

Basic service shall mean any cable service tier which include the retransmission of local television broadcast signals and public, educational and governmental access channels.

Cable services are defined as the one-way transmission to subscribers of video programming and other programming services together with subscriber interaction, if any, which is required for the selection of such to all subscribers generally. Examples of cable services include: video programming, pay-per-view, voter preference polls in the context of a video program, teletexts, one-way transmission of any computer software, and one-way video-tex services such as news services, stock market information, etc. Noncable services would include: shop-at-home, bank-at-home services, electronic mail, one-way and two-way transmission of non-video data and information not offered to all subscribers, data processing, video conferencing and voice communication.

Cablecasting is programming carried on a cable system, exclusive of broadcast signals, whether originated by the cable operator or any other party.

Cable system shall mean a facility, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide cable service which includes video programming and which is provided to multiple subscribers within a community, but such term does not include: (a) a facility that serves only to retransmit the television signals of one or more television broadcast stations; (b) a facility that serves only subscribers in one or more contiguous multiple unit dwellings under common ownership, control, or management, unless such facility or facilities uses any public right-of-way; (c) a facility of a common carrier which is subject, in whole or in part, to the provisions of Title II of the Communications Act of 1934, except that such facility shall be considered a cable system to the extent such facility is used in the transmission of video programming directly to subscribers; or (d) any facilities of any electric utility used solely for operating its electric utility systems.

City shall mean the City of Bellaire in its present incorporated form or as it may be changed by annexation, reorganization, consolidation or reincorporation.

Construction. The terms "completion of construction," "complete system construction," "satisfactorily complete and fully activate" shall mean that strand has been put up and all necessary cable (including trunk and feeder cable) has been lashed or, for underground construction, that all cable has been laid and trenches refilled, all road surfaces restored and, except as prevented by weather conditions or delayed because of seasons, landscaping restored; that all amplified housings and modules have been installed (including modules for return path signals if proposed); that power supplies have been installed and all bonding and grounding has been completed; that all necessary connectors, splitters and taps have been installed; that construction of the headends or hubs have been completed and all necessary processing equipment has been installed; and that any and all other construction necessary for the system to be ready to deliver cable service to subscribers has been completed. Proof of performance tests shall have been conducted on each otherwise completed segment of the cable system before direct marketing of that segment begins. It is expected that segments of less than the entire system will be activated and proofed when completed. Construction of any segment or of the entire system will not be considered complete until proof of performance tests have been conducted on such segment (or in the case of the entire system, on all segments of cable system) and any problems found during testing have been corrected. The term "completion of construction" does not include marketing and installation of subscriber service.

Council shall mean the governing body of the City of Bellaire.

Dedicate shall mean to make available access channel space or equipment for exclusive use of the designated user, subject to the authority of the city council to authorize reassignments of access channels.

Grantee or company is the party or parties to which a franchise under this chapter is granted by the council, and its or their lawful successors and assigns.

Gross revenues shall mean all cash, credits, property of any kind or nature, or other consideration received directly or indirectly by a grantee, its affiliates, subsidiaries, parent and any person in which grantee has a financial interest, or from any source whatsoever, arising from or attributable to the sale or exchange of cable services by grantee within the city or in any way derived from the operation of its system, within the City of Bellaire, including, but not limited to, basic service monthly fees, pay TV, Pay-per-View, leased channel fees, but not including revenues collected by third party users of such leased channels, converter rentals or sales, studio rental, and advertising revenues. These gross revenues shall not be reduced for any purposes other than provided herein, and shall be the basis for computing the fee imposed pursuant to section 32-15. These gross revenues shall not include converter deposits, or refunds to subscribers by the grantee, or items excluded by the Cable Communications Policy Act of 1984, or the regulations and rules of the Federal Communications Commission.

Initial activation of service, or initially providing cable service shall mean with respect to a particular segment, group of segments or the entire cable system, as the case may be, that, substantially all proposed services and system capabilities as stated in the Proposal are available and/or in place, construction has been completed (see definition of "construction") and the completed segment or segments in question or the entire cable system, as the case may be, has been activated.

Local origination programming shall mean programming locally produced by the Company.

Proposal or application refers to a formal response by a qualified cable company to a specific invitation by the city asking for proposals in accordance with city specifications to provide cable services to residents, businesses, industries, and institutions in the City of Bellaire.

Street shall mean the surface of and the space above and below any public street, road, highway, freeway, easement, lane, path, alley, court, sidewalk, parkway, or driveway now or hereafter existing as such within the city.

Subscriber is a lawful recipient of cable service for consideration.

Two-way communications means the transmission of telecommunications signals from subscriber locations or other points throughout the system back to the system's control center as well as transmission of signals from the control center to subscriber locations.

User means a part utilizing a cable system channel for purposes of production or transmission of material to subscribers, as contrasted with receipt in a subscriber capacity.

The terms "will be available," "will be equipped," "will use," "will be designed," "will perform," "will be utilized," "will permit," "will allow," "will be activated," "will be initially connected," "will be capable," "will provide," "will include," "will employ," "will be established," "will be able," "will be implemented," "will be delivered," "will utilize" and other similar uses of terms in a company's Proposal denoting the activation of cable service or the delivery of equipment, facilities or services, shall be interpreted to mean delivery or accomplishment at a date no later than the initial activation of service (as defined in this Section) unless otherwise expressly and clearly stated or qualified in the company's Proposal to mean a more specific or different time.

Each application for a franchise to construct, operate or maintain any cable system in this city shall be filed with the city clerk and shall be on forms prescribed by the city. Said forms will require, but not be limited to, the following information:

(1) The name, address, and telephone number of the applicant;

(2) A detailed statement of the corporate or business entity organization of the applicant, including but not limited to, the following and to whatever extent required by the city:

a) The names, residence and business addresses of all officers, directors, and associates of the applicant,

b) The names, residence and business addresses of all officers, persons and entities having any share of the ownership of the applicant and the respective ownership share of each such person or entity,

c) The names and addresses of any parent or subsidiary of the applicant, namely, any other business entity owning or controlling applicant in whole or in part or owned or controlled in whole or in part by the applicant, and a statement describing the nature of any such parent or subsidiary business entity, including but not limited to the cable systems owned or controlled by the applicant, its parent and subsidiary and the areas served thereby,

d) A detailed description of all previous experience of the applicant in providing cable television system service and in related or similar fields,

e) A detailed and complete financial statement of the applicant, certified by an independent certified public accountant, for the fiscal year next preceding the date of the application hereunder, or a letter or other acceptable evidence in writing from a recognized lending institution or funding source, address to both the applicant and the council, setting forth the basis for a study performed by such lending institution or funding source, and a clear statement of its intent as a lending institution or funding source to provide whatever capital shall be required by the applicant to construct and operate the proposed system in the city, or a statement from an independent certified public accountant, certifying that the applicant has available sufficient free, net and uncommitted cash resources to construct and operate the proposed system in this city,

f) A detailed financial plan (pro forma) describing for each year of the franchise, projected number of subscribers, rates, all revenues, operating expenses, capital expenditures, depreciation schedules, income statements and a sources and uses of funds statement. All information is to be presented in the format required by the city, and

g) A statement identifying, by place and date, any other cable system franchises awarded to the applicant, its parent or subsidiary; the status of said franchises with respect to completion thereof; the total cost of completion of such franchised systems; and the amount of applicant's and its parent's or subsidiary's resources committed to the completion thereof;

(3) A detailed description of the proposed plan of operation of the applicant which shall include, but not be limited to, the following:

a) A detailed map indicating all areas proposed to be served, and a proposed time schedule for the installation of all equipment necessary to become operational throughout the entire area to be served,

b) A statement or schedule setting forth all proposed classifications of rates and charges to be made against subscribers and all initial rates and charges as to each of said classifications, including installation charges and service charges,

c) A detailed, informative, and referenced statement describing the actual equipment and operational standards proposed by the applicant,

d) A copy of the form of any agreement, undertaking, or other instrument proposed to be entered into between the applicant and any subscriber, and

e) A detailed statement setting forth in its entirety any and all agreements and undertakings, whether formal or informal, written, oral, or implied, existing or proposed to exist between the applicant and any person, firm, or corporation which materially relate or pertain to or depend upon the application and the granting of the franchise.

(4) A copy of any agreement covering the franchise area, if existing between the applicant and any public utility providing for the use of any facilities of the public utility including but not limited to poles, lines, or conduits.

(5) Any other details, statements, information or references pertinent to the subject matter of such application which shall be required or requested by the council, or by any other provision of law.

(a) Amount. Notwithstanding any other requirement of this chapter, each applicant must furnish with its proposal a nonrefundable filing fee in the amount of $5,000.00 by certified or cashier's check made payable to the City of Bellaire. No proposal for a franchise shall be considered without receipt of said check.

(b) Deposit and use. All checks received will be deposited to an account of the City and will serve to recover all expenses incurred by the city in the preparation and granting of a franchise, the execution of a franchise and regulation of franchise pursuant to this chapter. Said expenses shall include, but not be limited to, any and all administrative, engineering, publication, or legal costs, and consultant's expenses, incurred in connection with the processing, evaluation and preparation of documents relating to the franchise.

(c) Additional fee. In the event that expenses exceed the total amount of filing fees collected from the applicants, an applicant awarded a franchise shall pay to the city the excess amount, not to exceed $30,000.00 within 60 days of demand by the city.

(a) Solicitation of proposals. The council may, by advertisement or any other means, solicit and call for applications for cable system franchises, and may determine and fix any date upon or after which the same shall be received by the city, or the date before which the same must be received, or the date after which the same shall not be received, and may make any other determinations and specify any other times, terms, conditions, or limitations respecting the soliciting, calling for, making and receiving of such applications. The terms and conditions for application shall be described in a document called "request for proposals."

(b) Compliance with city requirements. Any person submitting a proposal for a cable system in response to the city's request for proposals shall provide all information required by this chapter and all other information requested by city's request for proposals or otherwise required by the city. Each proposal shall be responsive to the questions soliciting the information, and shall completely, accurately and materially supply all of the information so solicited. Any misrepresentation, failure, neglect or refusal to provide any of such information may, at the option of the city, render a proposal invalid. The requested information must be complete and verified as true by the applicant.

(c) Property of city. All proposals received by the city from an applicant shall become the sole property of the city.

(d) Applicant responsibility. Before submitting a proposal, each applicant shall be solely responsible for and must: (1) examine this chapter and the request for proposal documents thoroughly; (2) be familiar with local conditions that may in any manner affect performance under the franchise, including, but in no event limited to, community and institutional telecommunication needs, relevant demographics, topographics, pole attachment policies of appropriate utility authorities, undergrounding, and subscriber desires; (3) be familiar with federal, state and local laws, ordinances, rules and regulations affecting performance under the franchise; and (4) carefully correlate all observations with the requirements of this chapter and the request for proposals documents.

(e) Referral to city manager. Upon receipt of any application for franchise, the council shall refer the same to the city manager who shall prepare or cause to be prepared a report, including recommendations respecting such application, and cause the same to be completed and filed with the council. The city will evaluate all proposals that have complied with its requirements. All applicants that have met the city's qualifications in the RFP and have submitted proposals on the required forms will be offered the opportunity to make a formal presentation to the council in support of their applications.

(f) Investigations. The city may make such investigations as it deems necessary to determine the ability of the applicant to perform under the franchise, and the applicant shall furnish to the city all such information and data for this purpose as the city may request. The city reserves the right to reject any proposal if the evidence submitted by, or investigation of such applicant fails to satisfy the city that such applicant is properly qualified to carry out the obligations of the franchise agreement, comply with the provisions of this chapter, or to satisfactorily construct and operate the system. Proposals that modify or place conditions upon requirements stated in the city's request for proposals may be rejected by the city.

(g) Rejection. The city may reject any and all applications from whatever source and whenever received, and the city also reserves the right to waive all formalities where the best interest of the city may be served, and may, if it so desires, request new or additional proposals.

(h) Public comment. If, upon receiving the city manager's report, the council shall determine to further consider the application, it shall pass a resolution setting a public hearing for the consideration of competing applications; fixing and setting forth a day, hour and place certain when and where any persons having an interest therein or objections may file written comments and appear before the council and be heard, and directing the city clerk to publish said resolution at least once within ten days of the passage thereof in a newspaper of general circulation within the city.

(i) Consideration. In making any determination hereunder as to any application for a new franchise, the council may consider factors including but not limited to the quality of the service proposed, rates to subscriber, income to the city, experience, character, background, and financial responsibility of any applicant, and its management and owners, technical and performance quality of equipment, willingness and ability to meet construction and physical requirements, to meet all requirements set forth in this chapter, and to abide by all purpose and policy conditions, franchise limitations and requirements, and any other considerations deemed pertinent by the council for safeguarding the interests of the city and the public.

(j) Determination. At the time set for the hearing, or at any adjournment thereof, the council shall proceed to hear all protests. Thereafter, the council shall make one of the following determinations:

(1) That such application be denied, which determination shall be final and conclusive; or

(2) That such franchise be granted and the terms and conditions thereof.

No provision of this chapter shall be deemed or construed so as to require the granting of a franchise when, in the opinion of the council, it is in the public interest to restrict the number of grantees to one or more.

(k) Additional information. The council may at any time demand and applicants shall provide such supplementary, additional or other information as the council may deem reasonably necessary to determine whether the requested franchise should be granted.

(l) Awards based on merit. It is the intention of the city to award any cable franchise on the basis of merit of proposals. To this end any communications with the city council by those wishing to submit proposals for a cable franchise should be limited to public sessions. Requests for information should be directed to the office of the city manager. Proposals will not be evaluated on the basis of ownership by individuals, institutions and community agencies in corporations submitting cable franchise proposals.

(m) Council decisions final. Any decision of the city council concerning selection of a franchisee pursuant to this chapter shall be final.

(a) Successful applicants chosen by the city council will be granted the right and privilege to construct, erect, operate and maintain, in, upon, along, across, above, over and under the streets, alleys, public ways and public places now laid out or dedicated and all extensions thereof, and additions thereto, in the city poles, wires, cables, underground conduits, manholes, and other cable conductors and fixtures necessary for the maintenance and operation in the City of Bellaire of a cable system, to be used for the sale and distribution of cable services to the residents of the city.

(b) Any privilege claimed under any such franchise by the grantee in any street or other public property shall be subordinate to any prior lawful occupancy of the streets or other public property.

(c) Insofar as it is not inconsistent with or otherwise preempted by federal or state regulations, the city council also grants the right and privilege to successful grantees to provide non-cable communications services. The city council retains all authority, not otherwise preempted, to regulate noncable communications services.

(d) The construction, maintenance, and operation of grantee's CATV system and all property of grantee subject to the provisions of this chapter shall be subject to all lawful police powers, rules and regulations of the city. The city shall have the power at any time to order and require grantee to remove or abate any pole, line, tower, were, cable, guy, conduit, electric conductor, or any other structure or facility that is dangerous to life or property. In the event grantee, after written notice, fails or refuses to act, the city shall have the power to remove or abate the same at the expense of the grantee, all without compensation or liability for damages to grantee.

(a) The duration of the rights, privileges and authorizations granted in a franchise agreement shall be not to exceed 15 years from the date of execution of an agreement. A franchise may be renewed by the city upon application of the grantee pursuant to the procedure established in subsection (b) of this section and in accordance with the then applicable law.

(b) Renewal.

(1) During the six month period which begins with the 36th month before the franchise expiration, the city may on its own initiative, and shall at the request of the grantee commence proceedings which afford the public appropriate notice and participation for the purpose of:

a) Identifying the future cable-related community needs and interests; and

b) Reviewing the performance of the grantee under the franchise during the then current franchise term.

(2) a) Upon completion of a proceeding under subsection (1), the grantee seeking renewal of a franchise may, on its own initiative or at the request of the city, submit a proposal for renewal.

b) Any such proposal shall contain such material as the city may require, including proposals for an upgrade of the cable system in accordance with the then applicable law.

c) The city may establish a date by which such proposal shall be submitted.

(3) a) Upon submittal by the grantee of a proposal to the city for the renewal of the franchise, the city shall provide public notice of such proposal and, during the four month period which begins on the completion of any proceedings under subsection (1), renew the franchise or, issue a preliminary assessment that the franchise should not be renewed and, at the request of the grantee or on its own initiative, commence an administrative proceeding, after providing prompt public notice of such proceeding, in accordance with subsection (3)b) to consider whether:

1) The grantee has substantially complied with the material terms of the existing franchise and with applicable law;

2) The quality of the grantee's service, including signal quality, response to consumer complaints, and billing practices, but without regard to the mix, quality, or level of cable service or other services provided over the system, has been reasonable in light of community needs;

3) The grantee has the financial, legal, and technical ability to provide the services, facilities, and equipment as set forth in the grantee's proposal; and

4) The grantee's proposal is reasonable to meet the future cable-related community needs and interests, taking into account the cost of meeting such needs and interests.

b) In any proceeding under subsection (3)a), the grantee shall be afforded notice and the grantee and the city, or its designee, shall be afforded fair opportunity for full participation, including the right to introduce evidence (including evidence related to issues raised in the proceeding under subsection (1)), to require the production of evidence, and to question witnesses. A transcript shall be made of any such proceeding.

c) At the completion of a proceeding under this subsection, the city shall issue a written decision granting or denying the proposal for renewal based upon the record of such proceeding, and transmit a copy of such decision to the grantee. Such decision shall state the reasons therefor.

(4) Any denial of a proposal for renewal shall be based on one or more adverse findings made with respect to the factors described in subparagraphs 1) through 4) of subsection (3)a), pursuant to the record of the proceeding under subsection (3).

(5) If the grantee's proposal for renewal has been denied by a final decision of the city made pursuant to this section, or has been adversely affected by a failure of the city to act in accordance with the procedural requirements of this section, the grantee may appeal such final decision or failure pursuant to the provisions of section 635 of the Federal Cable Communications Policy Act of 1984.

(6) Notwithstanding the provisions of subsections (1) through (5) of this section, the grantee may submit a proposal for the renewal of the franchise pursuant to this subsection at any time, and the city may, after affording the public adequate notice and opportunity for comment, grant or deny such proposal at any time (including after proceedings pursuant to this section have commenced). The provisions of subsections (1) through (5) of this section shall not apply to a decision to grant or deny a proposal under this subsection. The denial of a renewal pursuant to this subsection shall not affect action on a renewal proposal that is submitted in accordance with subsections (1) through (5).

(7) The grantee shall pay all costs incurred by the city considering and processing a proposal for renewal as described in subsections (1), (3)a), (3)c), and (6).

A franchise is for the present territorial limits of the City of Bellaire and for any area henceforth added thereto during the franchise term.

The grantee shall provide cable services throughout the entire franchise area pursuant to the provisions of this chapter and franchise agreement and shall keep a current file of all requests for service received by the grantee for at least the three most recent years. This record shall be maintained during the entire life of the franchise and be available for public inspection at the local office of the grantee during regular office hours.

Construction map and schedule.

(1) Map and plan. Grantee shall submit a construction plan or reconstruction plan which shall be incorporated by reference and made a part of the franchise agreement. The plan shall consist of a map of the entire franchise area and shall clearly delineate the following:

a) The areas within the franchise area where the cable system will be initially available to subscribers including a schedule of construction for each year that construction or reconstruction is proposed.

b) Areas within the franchise area where extension of the cable system cannot reasonably be done due to lack of present or planned development or other similar reasons, with the areas and the reasons for not serving them clearly identified on the map.

(2) Early construction and extension. Nothing in this section shall prevent the grantee from constructing or reconstructing the system earlier than planned. However, any delay in the system construction beyond the times specified in the plan report timetable shall require application to and consent by the council.

(3) Delay in construction timetable. Any material delay beyond the terms of construction or reconstruction timetable, unless approved by the council, will be considered a violation of this chapter for which the provisions of either sections 32-28 or 32-29 shall apply, as determined by the council.

(4) Commencement of construction or reconstruction. Construction or reconstruction in accordance with the plan submitted by grantee shall commence as soon after the grant and acceptance of a franchise as is reasonably possible. Failure to proceed expeditiously, shall be grounds for revocation of a franchise. Failure to proceed expeditiously shall be presumed in the event construction or reconstruction is not commenced within 12 months of the grant and acceptable of a franchise.

(5) Underground and overhead construction. In all sections of the city where all the cables, wires, or other like facilities of public utilities are placed underground, the grantee shall place its cables, wires or other like facilities underground to the maximum extent that the existing technology reasonably permits the grantee to do so. If at any time the city determines that existing wires, cable or other like facilities of public utilities anywhere in the city shall be changed from an overhead to an underground installation, the grantee shall also, at grantee's sole expense, convert its system to an underground installation.

In areas of the city where electrical/telephone systems are installed on poles above ground, the grantee shall have the option of installing the system in like manner above or underground.

(6) Additional mandatory extension. Extension of the system into any areas not specifically treated in the plan, shall nonetheless be required if the terms of any of the following conditions are met:

a) Mandatory extension rule. Grantee shall extend system upon request to any contiguous area not designated for initial service in the plan when potential subscribers can be served by extension of system past dwelling units equivalent to a density of 50 homes per mile of street. Extension shall be at grantee's cost. If undergrounding is required by regulation, grantee must make installation at grantee's expense. Where aerial extension is allowed by regulation but underground installation is requested by benefited subscribers, the cost of undergrounding that exceeds estimated aerial extension cost may be charged to benefited subscribers.

b) Early extension. In areas not meeting the requirements for mandatory extension of service, grantee shall provide, upon the request of five or more potential subscribers desiring service, an estimate of the costs required to extend service to said subscribers. Grantee shall then extend service upon request of said potential subscribers according to the rate schedule. Grantee may require advance payment or assurance of payment satisfactory to grantee. The amount paid by subscribers for early extension shall be non-refundable, and in the event the area subsequently reaches the density required for mandatory extension, such payments shall be treated as consideration for early extension.

c) New development undergrounding. In cases of new construction or property development where utilities are to be placed underground, the developer/property owner shall give grantee reasonable notice of such construction or development, and of the date desired for grantee's installation of conduit, and/or cable. If owner fails to give such notice, the owner shall be responsible for additional cost.

Costs of easements required to bring service to the development shall be borne by the developer/property owner.

d) Special agreements. Nothing herein shall be construed to prevent grantee from serving areas not covered under this section upon agreement with developers, property owners or residents.

(7) Aerial drops exceeding 300 feet. With respect to requests for connection requiring an aerial drop line in excess of 300 feet, the grantee must extend and make available cable television service to such residents at a connection charge not to exceed the actual installation costs incurred by the grantee for the distance exceeding 300 aerial feet.

(8) Underground drops exceeding 150 feet. All areas required to be underground construction shall require all underground drop installations of not more than 150 feet at the cost of the grantee. Connections in excess of 150 feet shall be at the expense of a subscriber at grantee's actual cost.

(a) Any wires, cable lines, conduits, or other properties of the grantee to be constructed or installed in streets shall be so constructed or installed only at such locations and in such manner as shall be approved by the public works director, acting in the exercise of his reasonable discretion.

(b) The grantee shall not install any facilities or apparatus in or on other public property, places, easements, or rights-of-way, or within any privately-owned area within the city which has not yet become a public street but is designated or delineated as a proposed public street on any tentative subdivision map approved by the city, except those installed in or on public utility facilities now existing, without obtaining the prior written approval of the public works director and the building official.

(c) The grantee shall cause a key map and detailed plat maps of the entire system, showing materials of construction and horizontal and vertical locations with respect to property lines and grade lines, to be prepared by a registered professional civil engineer or a licensed land surveyor and filed in the office of the building official prior to the issuance of a permit for construction, or within 90 days after the granting of a franchise to operate and maintain facilities existing prior to the adoption of this section. Prior to requesting the issuance of a permit for the installation of any facility or apparatus in accordance with the provisions of this section, the grantee shall file such key map and detailed plat maps with all utility companies and public agencies whose facilities are affected by such installation and obtain a statement signed by a responsible official thereof that such utility or public agency has no objection to the proposed location of such facility. Such utility companies and public agencies shall act upon a request made to them by a grantee in accordance with the foregoing provisions within 30 days after such request has been made to such utility or public agency.

(d) The grantee, upon the request of any person or agency who has contracted to perform work on a public right-of-way, shall provide accurate detailed information to such person or agency regarding the location of any of the grantee's facilities in such right-of-way. Such information, if requested, shall include sending a representative familiar with the installation of CATV facilities to the site of the work to mark or designate the location of the facilities of the grantee.

(e) In order that the provisions of sections 32-9 and 32-10 of this chapter may be reasonably applied in instances where extreme or unnecessary hardship would result from carrying out the provisions, the council shall have the power to vary the mandatory provisions of these sections in any specific case in such a manner that substantial justice is done upon a showing by the grantee of good cause therefor.

(a) Compliance with construction and technical standards. Grantee shall construct, install, operate and maintain its system in a manner consistent with all laws, ordinances, construction standards, of the City of Bellaire, The Standards of Good Engineering Practices for Measurements on Cable Television Systems, published by the National Cable Television Association 1983, and detailed standards submitted by grantee as part of its application, which standards are incorporated by reference in the Franchise Agreement. In addition, grantee shall provide the city, upon request, with a written report of the results of an annual proof of performance tests. Grantee shall pay the costs incurred by the city for any technical assistance deemed necessary by the city for obtaining independent verification of technical compliance with all standards.

(b) Additional specifications. Construction, installation and maintenance of the cable system shall be performed in an orderly and workmanlike manner. All cables and wires shall be installed, where possible, parallel with and in the same manner as electric and telephone lines. Multiple cable configurations shall be arranged in parallel and bundled with due respect for engineering considerations. Underground installations shall be in conformance with applicable codes.

Grantee shall at all times comply with:

(1) National Electrical Safety Code (National Bureau of Standards);

(2) National Electrical Code (National Bureau of Fire Underwriters);

(3) Bell System Code of Pole Line Construction; and

(4) The Standards of Good Engineering Practices for Measurements on Cable Television Systems (National Cable Television Association - 1983).

In any event, the system shall not endanger or interfere with the safety of persons or property in the franchise area or other areas where the grantee may have equipment located.

(a) All transmission and distribution structures, lines, and equipment erected by the grantee within the city shall be so located as to cause minimum interference with the rights and reasonable convenience of property owners who adjoin any of the said streets.

(b) In case of disturbance of any street, easement or paved area or other property the grantee shall, at its own cost and expense and in a manner approved by the city, replace and restore such street, easement or paved area or other property in as good a condition as before the work involving such disturbance was done.

(c) If at any time during the period of a franchise the city shall lawfully elect to alter or change the grade of any street, the grantee, upon reasonable notice by the city, shall remove, relay, and relocate its poles, wires, cables, underground conduits, manholes, and other fixtures at its own expense.

(d) Any poles or other fixtures placed in or adjacent to any street by the grantee shall be placed in such manner as to comply with all requirements of the city. The city shall have the right, during the life of the franchise granted hereby to install and maintain, free of charge, upon the poles and towers of the grantee, any wire and pole fixtures necessary for a police alarm system or other city purposes, on the condition that such wire and pole fixtures do not interfere with the CATV operations of the grantee.

(e) The grantee shall, at the request of any person holding a moving permit issued by the city, temporarily raise or lower its wires to permit the moving of buildings. The expense of such temporary removal or raising or lowering of wires shall be paid by the person requesting the same, and the grantee shall have the authority to require such payment in advance. The grantee shall be given not less than 48 hours notice to arrange for such temporary wire changes.

(f) The grantee shall notify the city regarding the need to trim trees upon and overhanging streets of the city so as to prevent the branches of such trees from coming in contact with the wires and cables of the grantee; at the option of the city, such trimming may be done by the city at the expense of the grantee, or by the grantee under the city's supervision and direction at the expense of the grantee. When authorized, trimming shall be system or other city purposes, on the condition that such wire and pole fix- (sic) limited to the area required for clear cable passage and shall not include major structural branches which materially alter the appearance and natural growth habits of the tree.

(g) At the expiration of the term for which a franchise is granted, or upon its termination and cancellation, as provided for herein, the city shall have the right to require the grantee to remove at its own expense all portions of the cable television system from all streets within the city. The grantee shall promptly, upon being given ten days' written notice, commence removal from the streets or public places all such property of such system other than may reasonably be abandoned. In the event of such removal, the grantee shall promptly restore the street or other area from which such property has been removed to a condition satisfactory to the public works director.

(1) Any property of the grantee remaining in place 60 days after the termination or expiration of the franchise shall be considered permanently abandoned. The public works director may extend such time not to exceed an additional 30 days.

(2) Any property of the grantee to be abandoned in place shall be abandoned in such manner as the public works director shall prescribe. Subject to the provisions of any utility joint attachment agreement, upon permanent abandonment of the property of the grantee in place, the property shall become that of the city, and the grantee shall submit to the public works director an instrument in writing, to be approved by the city attorney, transferring to the city the ownership of such property.

(a) A franchise shall not be sold, assigned or transferred, either in whole or in part, or leased, sublet, or mortgaged in any manner, nor shall title thereto, either legal or equitable or any right, interest or property therein, pass to or vest in any person without the prior written consent of the city. Such consent shall not be withheld unreasonably.

No such consent shall be required for a transfer in trust, mortgage, or other hypothecation as a whole or in part to secure an indebtedness, except that when such hypothecation shall exceed 50 percent of the market value of the property used by the franchisee in conducting the business franchise. Such consent shall not be withheld unreasonably.

The proposed assignee must show technical ability, financial capability, legal qualifications and general character qualifications as determined by the city and must agree to comply with all provisions of the franchise and such conditions as may be prescribed by council expressed by resolution. City shall be deemed to have consented to a proposed transfer or assignment in the event its refusal to consent is not communicated in writing to grantee within 120 days following receipt of written notice of the proposed transfer or assignment.

(b) The grantee shall promptly notify the city of any actual or proposed significant change in, or transfer of, or acquisition by any other party of, control of the grantee. The word "control" as used herein is not limited to major stockholders but includes actual working control in whatever manner exercised.

Every change, transfer, or acquisition of control of the grantee shall make the franchise subject to cancellation unless and until the city shall have consented thereto, which consent will not be unreasonably withheld. For the purpose of determining whether it shall consent to such change, transfer or acquisition of control, the city may inquire into the qualifications of the prospective controlling party and the grantee shall assist the city in any such inquiry.

(c) A rebuttal presumption that a transfer of control has occurred shall arise upon the acquisition or accumulation by any person or group of persons of ten percent of the voting interest of the grantee.

(d) The consent or approval of the city council to any transfer of the franchise shall not constitute a waiver or release of the rights of the city in and to the streets, and any transfer shall by its terms, be expressly subordinate to the terms and conditions of a franchise.

(e) In any absence of extraordinary circumstances, the city will not approve any transfer or assignment of a franchise prior to substantial completion of construction of the proposed system.

(f) The city council reserves the right of "first refusal" to purchase a cable system at the market value price if and when it is placed on the market for sale.

(g) In no event shall a transfer of ownership or control be approved without successor in interest becoming a signatory to the franchise agreement.

(a) Initial rates.

(1) The grantee shall establish initial rates for its services in accordance with the rates contained in grantee's application for a franchise.

(b) Authority to regulate rates. To the extent permitted by federal and state law, the city may regulate the rates for basic cable service in accordance with the following procedures.

(c) Rates subject to regulation. To the extent permitted in subsection (b), the city shall have the authority to regulate the following rates, fees and charges:

(1) Rates for the provision of basic cable service to subscribers, whether residential or commercial, including multiple tiers of basic cable service;

(2) Rates for the initial installation or the rental of one set of the minimum equipment which is necessary for the subscriber's receipt of basic cable service;

(3) Any other rates for services that may become subject to local regulation.

(d) The grantee may petition the council for a change in rates subject to regulation by filing a proposed rate schedule with the city clerk, which petition shall include the justification(s) for the proposed schedule. Said petition shall be filed at least 60 days prior to the requested implementation date of the rate change. One copy of the petition shall remain on file with the city clerk and be open for public inspection.

(e) Within 60 days of the filing of the petition for rate change, the council may hold a public hearing to consider the proposed rate change, at which hearing all persons desiring to be heard, including the grantee, shall be heard on any matter, including but not limited to, the performance on the grantee, the grantee's services and the proposed new rates.

(f) Upon notice of any public hearing as provided in subsection (e), the grantee shall notify its subscribers of the time, place and subject matter of the public hearing by announcement on at least two channels of its system between the hours of 7:00 p.m. and 9:00 p.m., for at least five consecutive days prior to the hearing. In addition, notice of any public hearing shall be published in a newspaper of local general circulation at least once but not less than seven days before the public hearing.

(g) Within 60 days after said hearing, the council shall render a written decision on the grantee's petition, accepting, rejecting, modifying or deferring the same and reciting the basis of its decision. The council may consider, inter alia, the following factors in approving or disapproving the petition:

(1) The ability of the grantee to render all system services and to derive a reasonable profit therefrom under the existing rate schedule and under the proposed rate schedule;

(2) The revenues and profits derived from all system services;

(3) The efficiency of the grantee;

(4) The quality of the service offered by the grantee;

(5) The original cost of the system less depreciation;

(6) A fair rate of return with respect to the cost of borrowing and the rates of return on investments having similar risks to that of cable TV, or pursuant to applicable FCC rules;

(7) The extent to which the grantee has adhered to the terms of this chapter and the franchise agreement.

The council shall not consider any valuation based upon a franchise or the grantee's goodwill and these items of value shall neither be amortized as an expense nor shall a return be paid on them.

Any reasonable expenses incurred by the city in the rate review process will be paid by the grantee.

(h) If no final decision on the grantee's petition has been rendered by the council within 180 days after filing of grantee's petition, the grantee's petition will be deemed approved, unless the 180 day period is extended by mutual agreement of the grantee and the city.

(i) The grantee's petition for a rate increase shall include, but not be limited to, the following financial reports:

(1) Balance sheet,

(2) Income statement,

(3) Cash flow statement,

(4) Statement of sources and applications of funds,

(5) Detailed supporting schedules of expenses, Income, Assets and other items as may be required,

(6) Statement of current and projected subscribers and penetration.

The grantee's accounting records applicable to this system shall be available for inspection by the city at all reasonable times. The city shall have access to records of financial transactions for the purpose of verifying burden rates or other indirect costs pro-rated to this particular operation. The documents listed above shall include sufficient detail and/or footnotes as may be necessary to provide the city with the information needed to make accurate determinations as to the financial condition of the system. All financial statements shall be certified as accurate by an officer of grantee.

(a) For the reason that the streets to be used by the grantee in the operation of its system within the boundaries of the city are valuable public properties acquired and maintained by the city at great expense to its taxpayers, and that the grant to the grantee to the said streets is a valuable property right without which the grantee would be required to invest substantial capital in right-of-way costs and acquisitions, and because the city will incur costs in regulating and administering the franchise, and at the option of the council, the city may make available a portion of the franchise fee to further the development of public and community uses of cable TV, the grantee shall pay to the city a franchise fee as stated in the franchise agreement as a percentage of grantee's gross annual revenue from all sources attributable to the operations of the grantee within the confines of the City of Bellaire as defined in section 32-1(k).

(b) The franchise fee and any other cost or penalties assessed shall be payable quarterly to the office of the city treasurer. The grantee shall file a complete and accurate verified statement of all collected gross revenue within the city during the period for which said quarterly payment is made, and said payment shall be made to the city not later than 30 days after the expiration of the quarter for which payment is due.

(c) The city shall have the right to inspect the grantee's income records and the right to audit and to recompute any amounts determined to be payable under this chapter; provided, however, that such audit shall take place within 36 months following the close of each of the grantee's fiscal years. Any additional amount due to the city as a result of the audit shall be paid within 30 days following written notice to the grantee by the city which notice shall include a copy of the audit report.

(d) In the event that any franchise payment or recomputed amount, cost or penalty, is not made on or before the applicable dates heretofore specified, interest shall be charged daily from such date at the annual rate equivalent to the then existing prime rate of local banking institutions in Bellaire, Texas.

(a) A franchise application shall include a description of the grantee's system design and a description of programming and services being offered, including optional premium services, a description of facilities being proposed for local origination programming, and facilities being offered to various community institutions. The offer of programming and services contained within a grantee's application shall be deemed a binding offer of such grantee for and to the benefit of the city. In the event a program originator ceases to provide a service, or in the event the grantee determines that other programming or cable services may be of greater benefit to subscribers, the grantee may, subject to subsections (b) and (c) substitute services.

(b) The system, after the incorporation of such substitute services, shall satisfy the assurances made by grantee to subscribers and potential subscribers in its application for a franchise. The city council, on behalf of system subscribers, shall have the right to review any substitution of service that the grantee has made and may order a change therein if it determines, after due hearing on notice, that the assurances have been substantially violated, or that certain broad categories of video or other information programs that were committed by grantee in its proposal are not being delivered. Any such order shall issue only after a public hearing has been scheduled and held; and written notice of such hearing shall have been provided to the grantee and to the public at least 30 days prior to such hearing. Any such order may be enforced by an appropriate action in the Courts of Texas or of the United States. A grantee shall not, in relation to this section, be deemed to have waived any right accorded to a franchised cable television operator arising under the Constitution of the United States or any law or regulation.

(c) Notwithstanding subsections (a) and (b), a grantee may, in accordance with the Cable Communications Policy Act of 1984, upon 30 days' advance notice to the city, rearrange, replace, or remove a particular cable service required by the franchise if:

(1) Such service is no longer available to the grantee; or

(2) Such service is available to the grantee only upon the payment of a royalty required under section 801(b)(2) of Title 17, United States Code, which the grantee can document:

a) Is substantially in excess of the amount of such payment required on the date of the grantee's offer to provide such service, and

b) Has not been specifically compensated for through a rate increase or other adjustment.

Notwithstanding subsections (a) and (b), a grantee may take such actions to rearrange a particular service from one service tier to another, or otherwise offer, change or delete the service, if the rates for all of the service tiers involved in such actions are not subject to regulation.

(a) It shall be expressly understood and agreed by and between the City and any grantee that the grantee shall save the city and its agents and employees harmless from and against all claims, damages, losses, and expenses, including attorney's fees sustained by the city on account of any lawsuit, judgment, execution of judgment, claim, or demand by other individual, corporation or entity whatsoever arising out of but not limited to copy right infringements and all other damages arising out of the implementation or terms of this chapter, the award of any franchise or the installation, operation or maintenance of a cable system and not due to the negligence or intentional acts of the city or its employees or agents whether or not any act or omission complained of is authorized, allowed or prohibited by this chapter and/or any franchise agreement granted.

(b) The grantee shall maintain and by its acceptance of a franchise specifically agrees that it will maintain throughout the term of the franchise the following insurance, with limits not less than the amount set forth in the franchise agreement:

(1) Workers' compensation Insurance as required by state law.

(2) Comprehensive general and automobile liability insurance, including bodily injury, property damage, personal injury, broadcaster's liability, and coverage for copyright infringement.

Insurance shall be written with companies acceptable to the city attorney, and with a best rating of not less than A:X. In addition, all liability insurance shall include an endorsement in the following form:

It is hereby understood and agreed that the City of Bellaire, its city council and each member thereof and every officer and employee of the city shall be named as joint and several and additional assured with respect to all claims arising out of the operation and maintenance of cable television services under franchise.

It is further agreed that the following indemnity agreement between the City of Bellaire and the named insured is covered under this policy. The grantee agrees to indemnify, hold harmless and defend the city, its city council and each member thereof every officer and employee of the city from any and all liability of financial loss arising from any suits, claims, losses or actions including cost of defending such actions which may be brought against the city which results directly or indirectly from the wrongful or negligent action of grantee's officers, employees, agents or others employed by grantee while engaged in operations in any way relating to the franchise granted by the city.

It is further agreed that the inclusion of more than one assured shall not operate to increase the limit of the company's liability and that insurer waives any right on contribution with insurance which may be available to the City of Bellaire.

In event of cancellation or material change in the above coverage, the company will give 45 days written notice of cancellation or material change to the City of Bellaire.

(a) Within 30 days after the award of a franchise, a grantee shall deposit with the city an irrevocable letter of credit in the amount of $25,000.00 issued by a federally insured commercial lending institution. The form and substance of said letter of credit are subject to the approval of the city attorney. The letter of credit shall be used to insure the faithful performance by a grantee of all provisions of this chapter and resulting franchise agreement; and compliance with all orders, permits and directions of any agency, commission, board, department, division or office of the city having jurisdiction over its acts or defaults under a franchise and the payment by the grantee of any penalties, liquidated damages, claims, liens and taxes due the city which arose by reason of the construction, operation or maintenance of the system, including cost of removal or abandonment of any property of grantee.

(b) The letter of credit may be drawn upon by the city by presentation of a draft at sight on the lending institution, accompanied by a written certificate signed by the city manager certifying that the grantee has failed to comply with chapter 32 of the Bellaire Code, its franchise or franchise agreement, stating the specific reasons therefor, and stating the basis for the amount being drawn. Examples of a basis for drawing upon the letter of credit include, but are not limited to the following:

(1) Failure of the grantee to pay to the city any taxes after ten days written notice of delinquency;

(2) Failure of the grantee to pay to the city after ten days written notice, any amounts due and owing the city by reason of the indemnity provisions of section 32-17 of this chapter;

(3) Failure by the grantee to pay to the city, any liquidated damages due and owing to the city pursuant to section 32-29 of this chapter;

(4) Failure by the grantee to pay to the city any amounts due pursuant to section 32-6(b)(7) of this chapter;

(5) Failure by the grantee to pay, upon ten days written notice, any amounts owing as franchise fees pursuant to section 32-15 of this chapter.

(c) Grantee agrees to structure the letter of credit in such a manner so that if the city at any time draws upon the letter of credit, the amount of available credit shall automatically increase to the extent necessary to replenish that portion of the available credit exhausted by the honoring of the city's draft. The intent of this subsection is to make available to the city at all times a letter of credit in the amount specified in this chapter.

(d) The rights reserved to the city with respect to the letter of credit are in addition to all other rights of the city, whether reserved by a franchise or authorized by law, and no action, proceeding or exercise of a right with respect to such letter of credit shall affect any other right the city may have.

(a) Within 30 days after the award or renewal of a franchise, a grantee shall obtain and maintain at its cost and expense, and file with the city clerk, a corporate surety bond in a company authorized to do business in the State of Texas, and found acceptable by the city attorney, in the amount of $500,000.00 to guarantee the timely construction, rebuild or reconstruction and full activation of the CATV system and the safeguarding of damage to private property and restoration of damages incurred with utilities.

The bond shall provide, but not be limited to, the following condition: There shall be recoverable by the city, jointly and severally from the principal and surety, and any and all damages, loss or costs suffered by the city resulting from the failure of a grantee to satisfactorily complete construction, rebuild or reconstruction and fully activate the CATV system throughout the franchise area pursuant to the terms and conditions of this chapter and the franchise agreement.

(b) Any extension to the prescribed construction time limit must be authorized by the council. Such extension shall be authorized only when the council finds that such extension is necessary and appropriate due to cause beyond the control of a grantee.

(c) The construction bond shall be terminated only after the council finds that a grantee has satisfactorily completed initial construction and activation or reconstruction of the CATV system pursuant to the terms and conditions of this chapter and the franchise agreement.

(d) The rights reserved to the city with respect to the construction bond are in addition to all other rights of the city, whether reserved by this chapter or authorized by law, and no action, proceeding or exercise of a right with respect to such construction bond shall affect any other rights the city may have.

(e) The construction bond shall contain the following endorsement:

It is hereby understood and agreed that this bond may not be cancelled by the surety nor the intention not to renew be stated by the surety until 60 days after receipt by the city, by registered mail, of written notice of such intent to cancel or not to renew.

(a) A grantee shall put, keep, and maintain all parts of the system in good condition throughout the entire franchise period.

(b) Upon termination of service to any subscriber, a grantee shall promptly remove all converters from the premises of such subscriber upon subscriber's request.

(c) Grantee shall render efficient service, make repairs promptly, and interrupt service only for good cause and for the shortest time possible. Such interruptions, insofar as possible, shall be preceded by notice and shall occur during periods of minimum system use.

(d) Grantee shall not allow its cable or other operations to interfere with television reception of persons not served by grantee, nor shall the system interfere with, obstruct or hinder in any manner, the operation of the various utilities serving the residents of the city.

(e) A grantee shall continue, through the term of the franchise, to maintain the technical, operational, and maintenance standards and quality of service set forth in this chapter and franchise agreement. Should the city find by resolution, that a grantee has failed to maintain these standards and quality of service and should it by resolution, specifically enumerate improvements to be made to meet such standards, a grantee shall make such improvements. Failure, without cause, to make such improvements within three months of such resolution will constitute a breach of condition for which the remedy of section 32-29 is applicable.

(a) It shall be the right of all subscribers to continue receiving service insofar as their financial and other obligations to a grantee are honored. In the event that a grantee elects to overbuild, rebuild, modify, or sell the system, or the city gives notice of intent to terminate or fails to renew a franchise, the grantee shall act so as to ensure that all subscribers receive continuous, uninterrupted service regardless of the circumstances, but shall have no obligations to provide service upon termination of franchise.

In the event of a change of grantee, or in the event a new operator acquires the system, a grantee shall cooperate with the city, new grantee or operator in maintaining continuity of service to all subscribers. During such period, grantee shall be entitled to the revenues for any period during which it operates the system, and shall be entitled to reasonable costs for its services when it no longer operates the system.

(b) In the event grantee fails to operate the system for 96 consecutive hours without prior approval of the city or without just cause, the city may, at its option, operate the system or designate an operator until such time as grantee restores service under conditions acceptable to the city or a permanent operator is selected. If the city is required to fulfill this obligation for a grantee, the grantee shall reimburse the city for all reasonable costs or damages in excess of revenues from the system received by the city that are the result of the grantee's failure to perform.

(a) Nothing contained in this chapter shall be deemed or construed to impair or affect, in any way, to any extent, the right of the city to acquire the property of the grantee, either by purchase or through the exercise of the right of eminent domain, at a fair and just value, which shall not include any amount for the franchise itself or for any of the rights or privileges granted, and nothing contained in this chapter shall be construed to contract away or to modify or abridge, either for a term or in perpetuity, the city's right of eminent domain.

(b) There is hereby reserved to the city every right and power which is required to be reserved by the provisions of this chapter or by any law of the city, and the grantee, by its acceptance of any franchise, agrees to be bound thereby and to comply with any action or requirements of the city in its exercise of such rights or power heretofore or hereafter enacted or established.

(c) There is hereby reserved to the city the power to amend any section of this chapter so as to require additional or greater standards of construction, operation, maintenance, or otherwise on the part of the grantee.

(d) Neither the granting of any franchise under the provisions of this chapter nor any provision of this chapter shall constitute a waiver or bar to the exercise of any governmental right or police power of the city.

(e) The council may do all things which are necessary and convenient in the exercise of its jurisdiction under the provisions of this chapter and may determine any question of fact which may arise during the existence of any franchise granted under the provisions of this chapter. The city manager is hereby authorized and empowered to adjust, settle, or compromise any controversy or charge arising from the operations of any grantee under the provisions of this chapter, either on behalf of the city, the grantee, or any subscriber, in the best interests of the public. Either the grantee or any member of the public who may be dissatisfied with the decision of the city manager may appeal the matter to the council for hearing and determination. The council may accept, reject, or modify the decision of the city manager, and the council may adjust, settle, or compromise any controversy or cancel any charge arising from the operations of any grantee or from any provision of this chapter.

(a) The city manager or the city manager's designee is specified by the city as having primary responsibility for the continuing administration of a franchise and implementation of complaint procedures.

(b) A grantee shall maintain a business office within or in close proximity to the city, which shall be open during all usual business hours, have a publicly-listed telephone with a toll-free number and sufficient lines; and be so operated that complaints and requests for repairs, billing or adjustments shall be received on a 24 hour basis.

(c) A grantee shall maintain a repair and maintenance crew capable of responding to subscriber complaints or requests for service within 24 hours after receipt of the complaint or request. No charge shall be made to the subscriber for this service unless such maintenance or repair is required as a result of damage caused by subscriber. A grantee may charge for service calls to the subscriber's home that are not the result of cable failure upon approval of a rate and equitable procedure by the city, such rate shall not be greater than the cost actually incurred by the grantee.

(d) A grantee shall establish procedures for receiving, acting upon, and resolving subscriber complaints to the satisfaction of the city manager's office. A grantee shall furnish a notice of such procedures to each subscriber at the time of initial subscription to the system and annually thereafter.

(e) A grantee shall keep a maintenance service log which will indicate the nature of each service complaint, the date and time it was received, the disposition of said complaint and the time and date thereof. This log shall be made available for periodic inspection by representatives of the city manager. All service complaint entries shall be retained on file for a period consisting of the most recent three years.

(f) When there have been similar complaints made or when there exists other evidence, which, in the judgment of the city manager casts doubt on the reliability or quality of cable service, the city manager shall have the right and authority to compel a grantee to test, analyze, and report on the performance of the system. Such report shall be delivered to the city manager no later than 14 days after the city manager formally notifies the grantee and shall include the following information: the nature of the complaints which precipitated the special tests; what system component was tested, the equipment used, and procedures employed in said testing; the results of such tests; and the method in which said complaints were resolved.

(g) The city manager may subsequently, reasonably require that tests and analyses shall be supervised by a professional engineer not on the permanent staff of a grantee. The aforesaid engineer should sign all records of the special tests and forward to the city manager such records with a report interpreting the results of the tests and recommending actions to be taken by a grantee and the city.

(h) The city's right under this section shall be limited to requiring tests, analyses, and reports covering specific subjects and characteristics based on said complaints or other evidence when and under such circumstances as the city has reasonable grounds to believe that the complaints or other evidence requires that tests be performed to protect the public against substandard cable service.

(a) Subscribers not satisfied that services have been provided as outlined in this chapter and the franchise agreement shall be encouraged to notify the system manager. The grantee shall work with the subscriber to resolve the problem within 48 hours, and upon request by a subscriber, the grantee shall credit the subscriber's account on a pro-rata basis for loss of service commencing 48 hours after notification of the grantee.

(b) A grantee shall, at the time of the initial subscription to the system and annually thereafter, furnish a notice to subscribers of their right to a refund for any loss or interruption of service for 48 hours or more.

A grantee shall fully cooperate in making available at reasonable times, and the city manager or his designee shall have the right to inspect the books, records, maps, plans and other like material of the grantee applicable to the CATV system, at any time during normal business hours; provided where volume and convenience necessitate, grantee may require inspection to take place on grantee's premises.

Copies of all petitions, applications, communications and reports submitted by a grantee to the Federal Communications Commission, Securities and Exchange Commission, or any other federal or state regulatory commission or agency having jurisdiction in respect to any matters affecting cable television operations authorized pursuant to the franchise, shall be provided promptly to the city.

The grantee shall file annually with the office of the city clerk, no later than 120 days after the end of the grantee's fiscal year, a copy of a financial report applicable to the CATV system serving the City of Bellaire, including an income statement applicable to its operations during the preceding 12 month period, a balance sheet and a statement of its properties devoted to CATV system operations, by categories, giving its investment in such properties on the basis of original cost, less applicable depreciation. Included in this report shall be the following information specific to the City of Bellaire: number of homes passed, number of cable plant miles, number of subscribers for each type of service offered and the gross revenues from all sources attributable to the operations of grantee from within the City of Bellaire. These reports shall be audited by an independent CPA and certified as correct by an authorized officer of grantee and there shall be submitted along with them such other reasonable information as the council shall request.

(a) In addition to all other rights and powers retained by the city under this chapter or otherwise, the city reserves the right after due process to forfeit and terminate a franchise and all rights and privileges of a grantee in the event of a material breach of its terms and conditions. In interpreting this chapter, material provisions shall include all labeled as such and all others, which, under all the facts and circumstances indicated, are a significant provision of the franchise agreement. A material breach by grantee shall include, but shall not be limited to the following:

(1) Violation of any material provision of this chapter, the franchise or any material rule, order, regulation or determination of the city made pursuant to the franchise;

(2) Attempt to evade any material provision of this chapter, or the franchise or practices any fraud or deceit upon the city or its subscribers or customers;

(3) Failure to begin or complete system construction, reconstruction or system extension as provided under the franchise;

(4) Failure to provide the types of services promised; assuming grantee has unsuccessfully pursued whatever recourse is available under Section 625 of the Cable Communications Policy Act of 1984;

(5) Failure to restore service after 96 consecutive hours of interrupted service, except when approval of such interruption is obtained from the city; or

(6) Material misrepresentation of facts in the application for or negotiation of the franchise.

(b) The foregoing shall not constitute a material breach if the violation occurs but it is without fault of a grantee or occurs as a result of circumstances beyond its control. Grantee shall not be excused by mere economic hardship nor by misfeasance or malfeasance of its shareholders, directors, officers, or employees.

(c) The city may make a written demand that a grantee comply with any such provision, rules, order, or determination under or pursuant to this chapter and franchise agreement. If the violation by the grantee continues for a period of 30 days following such written demand without written proof that the corrective action has been taken or is being actively and expeditiously pursued, the city may place the issue of termination of a franchise before the city council. The city shall cause to be served upon grantee, at least 20 days prior to the date of such a council meeting, a written notice of intent to request such termination and the time and place of the meeting. Public notice shall be given of the meeting and issue which the council is to consider.

(d) The city council shall hear and consider the issue and shall hear any person interested therein, and shall determine in its discretion, whether or not any violation by the grantee has occurred.

(e) If the city council shall determine that the violation by a grantee was the fault of grantee and within its control, the council may, by resolution, declare that the franchise of the grantee shall be forfeited and terminated unless there is compliance within such period as the city council may fix, such period not to be less than 60 days, provided no opportunity for compliance need be granted for fraud or misrepresentation.

(f) The issue of forfeiture and termination shall automatically be placed upon the council agenda at the expiration of the time set by it for compliance. The council then may terminate a franchise forthwith upon finding that grantee has failed to achieve compliance or may further extend the period, in its discretion.

By acceptance of the franchise granted by the city, a grantee understands and shall agree that failure to comply with any time and performance requirements as stipulated in this chapter and franchise agreement will result in damage to the city, and that it is and will be impracticable to determine the actual amount of such damage in the event of delay or non-performance; the franchise agreement shall include provisions for liquidated damages to be paid by the grantee, in amounts set forth in the franchise agreement and chargeable to the letter of credit for the following concerns:

(1) Failure to substantially complete system construction or reconstruction in accordance with sections 32-9, 32-10 and 32-11, unless the council specifically approves the delay by motion or resolution, due to the occurrence of conditions beyond grantee's control, a grantee shall pay $500.00 per day for each day, or part thereof, the deficiency continues.

(2) Substantial failure to provide upon written request, data, documents, reports, information or to cooperate with city during an application process or CATV system review, a grantee shall pay $50.00 per day, or part thereof, each violation occurs or continues.

(3) Substantial failure to test, analyze and report on the performance of the system following a written request pursuant to this chapter, a grantee shall pay to the city $100.00 per day for each day, or part thereof, that such noncompliance continues.

(4) For failure to provide in a continuing manner the types of services proposed in the accepted franchise agreement, unless the council specifically approves grantee a delay or change, or the grantee has obtained modification of its obligation under section 625 of the Cable Communications Policy Act of 1984; grantee shall pay to the city $500.00 per day for each day, or part thereof, that each noncompliance continues.

(5) Forty-five days following adoption of a resolution by the city council in accordance with section 32-20(e) determining a failure of grantee to comply with operational, maintenance or technical standards, grantee shall pay to the city $500.00 for each day, or part thereof, that such noncompliance continues.

(6) Any other action or nonaction by the grantee, as agreed upon between the city and the grantee, and set forth in the franchise agreement. Nothing in this section shall preclude further liquidated damages as agreed upon by the parties in the franchise agreement.

(7) If the city manager concludes that a grantee is liable for liquidated damages pursuant to this section 32-29, he shall issue to grantee by certified mail a notice of intention to assess liquidated damages. The notice shall set forth the basis for the assessment, and shall inform the grantee that liquidated damages will be assessed from the date of the notice unless the assessment notice is appealed for hearing before the city council and the city council rules: (1) that the violation has been corrected, or (2) that an extension of time or other relief should be granted. A grantee desiring a hearing before the city council shall send a written notice of appeal by certified mail to the city manager within 15 days of the date on which the city manager sent by certified mail the notice of intention to assess liquidated damages. The hearing on the grantee's appeal shall be within 30 days of the date on which the city sent the notice of intention to assess liquidated damages. After hearing, if the city council sustains in whole or in part the city manager's assessment of liquidated damages, the city manager may at any time thereafter, draw upon the letter of credit required by section 32-18. Unless the city council indicates to the contrary, said liquidated damages shall be assessed beginning with the date on which the city sent the notice of the intention to assess liquidated damages and continuing thereafter until such time as the violation ceases, as determined by the city manager.

(a) A grantee shall not deny service, deny access, or otherwise discriminate against subscribers, channel users, or general citizens on the basis of race, color, religion, national origin, sex, age, or disability. A grantee shall comply at all times with all other applicable federal, state and local laws and regulations relating to nondiscrimination.

(b) A grantee shall strictly adhere to applicable equal employment opportunity requirements of federal, state and local regulations, and as amended from time to time.

(a) The city and a grantee may hold scheduled performance evaluation sessions within 30 days of the third, sixth, ninth, and twelfth anniversary dates of a grantee's award of the franchise and as may be required by federal and state law.

(b) Special evaluation sessions may be held at any time during the term of a franchise at the request of the city or the grantee.

(c) All evaluation sessions shall be open to the public and announced in a newspaper of general circulation in accordance with legal notice. Grantee shall upon notification of evaluation, notify its subscribers of all evaluation sessions by announcement on at least two channels of its system between the hours of 7:00 p.m. and 9:00 p.m., for five consecutive days preceding each session.

(d) Topics which may be discussed at any scheduled or special evaluation session may include, but not be limited to, service rate structures; franchise fee; liquidated damages; free or discounted services; application of new technologies; system performance; services provided; programming offered; customer complaints; privacy; amendments to this chapter; judicial and FCC rulings; line extension policies; and grantee or city rules.

(a) Subsequent to each performance evaluation session, as set forth in section 32-31, the city council shall have the authority to order a public hearing on the provision of additional channel capacity by grantee or on the inclusion in the grantee's CATV system of "state-of-the-art" technology or upgraded facilities. Notice of such hearing shall be provided to grantee and the public not later than 30 days prior to such hearing.

(b) If after such hearing, the city council determines that: (1) there exists a reasonable need and demand for additional channel capacity and/or state of the art technology or upgraded facilities, and (2) provision has been made or will be made for adequate rates which will allow grantee a fair rate of return on its investment (including the investment required to provide the additional channels and/or the state-of-the-art technology or upgraded facilities), and (3) will not result in economic waste for the grantee, the city council may order grantee to provide a specified number of additional channels and/or specified state-of-the-art technology or upgraded facilities. Without implying any limitations as to other provisions of this chapter, this section is deemed a material provision within the meaning of section 32-28 of this chapter.

(a) Each cable system franchised by the city shall provide at least one governmental/public access channel dedicated to the exclusive use of the City of Bellaire and for public access programming; and one educational access channel, both channels to be utilized in accordance with rules and regulations established by the city council.

(b) If any governmental/public or educational access channel is being utilized more than ten hours per day, five days a week between the hours of 6:00 a.m. and 11:00 p.m. for 12 consecutive weeks, grantee shall, upon receipt of written notice from city make new channel(s) available for the same purpose(s); provided, however, that nothing in this paragraph shall require grantee to construct additional channel capacity to the cable system for the sole purpose of providing additional access channel capacity. Such requirement may be met by making available, on a part-time basis, one or more other under-utilized channels, or on a full- or part-time basis one or more other unused access channels until such time as such under-utilized or unused channels are needed for the uses to which they have been dedicated.

(c) Whenever any access channel, other than the basic access channels, required in subsection (a) for governmental/public and educational access is utilized less than four hours per day for six days per week for a continuous period of not less than 12 consecutive weeks, the city may permit different or additional uses for said channel. The grantee may be permitted to utilize unused access channel capacity under rules and procedures established by the city, however no access capacity shall be utilized by the grantee until all other channel capacity on the cable system has been programmed.

(d) Access channels permitted by the city for "interim" use by a cable operator are to be restored to governmental, educational or public access use whenever the criteria in paragraph (b) are exceeded for any one of the existing access channel uses or whenever the demand for use as demonstrated by records of each access channel indicate that an excessive number of people or programs are being turned away by lack of channel capacity available.

(a) Interconnection required. A grantee shall interconnect access channels of the cable system with any or all other CATV systems in adjacent areas, upon the directive of the city. Interconnection of systems may be done by direct cable connection, microwave link, satellite, or other appropriate method.

(b) Interconnection procedure. Upon receiving the directive of the city to interconnect, a grantee shall immediately initiate negotiations with the other affected system or systems in order that all costs may be shared equally among cable companies for construction and operation of the interconnection link.

(c) Relief. A grantee may be granted reasonable extensions of time to interconnect or the city may rescind its order to interconnect upon petition by the grantee to the city. The city shall grant said request if it finds that a grantee has negotiated in good faith and has failed to obtain an approval from the system or systems of the proposed interconnection, or that the cost of the interconnection would cause an unreasonable or unacceptable increase in subscriber rates.

(d) Cooperation required. A grantee shall cooperate with any interconnection corporation, regional interconnection authority or city, county, state and federal regulatory agency which may be hereafter established for the purpose of regulating, financing, or otherwise providing for the interconnection of cable systems beyond the boundaries of the city.

(a) As used in this section, "valid authorization" means written approval from the subscriber, subject to revocation pursuant to subsection (f).

(b) Each grantee shall strictly observe and protect the right of privacy and of property of subscribers and users at all times. Information on individual subscribers, individual subscriber preferences of any kind, viewing habits, political, social or economic philosophies, beliefs, creeds, religions or names, addresses or telephone numbers shall not be revealed to any person, mailing service, investigating agency or department, company, other agency or entity, unless upon the authority of a court of law or upon prior written permission of the subscriber. The request for permission must be contained in a separate document with a prominent statement that the subscriber is authorizing the permission in full knowledge of it provision. Such authorization shall not in any event be required as a condition of receiving service.

(c) A grantee may release the number of its subscribers but only as a total number and as a percentage of the potential subscribers throughout the city. When indicating the number of subscribers viewing a particular channel at a particular time, grantee shall indicate only the total number of subscribers viewing during the relevant time and the percentage of all subscribers which they represent, but never the identity of a particular subscriber.

(d) A grantee may maintain such information as is necessary to bill subscribers for the purchase of any system service. A grantee may contract for billing services, with the consent of the city provided that such contractor agrees to be bound by the provisions of this section and the penalties thereto pertaining.

(e) Neither a grantee nor any other person shall initiate in any form, the discovery of any information on or about a subscriber's premises without prior valid authorization from the subscriber potentially affected.

(f) A subscriber may at any time revoke any authorization previously made, by delivering to grantee in writing by mail or otherwise, his/her decision to so revoke. Any such revocation shall be effective upon receipt by franchisee.

(g) No monitoring of any subscriber terminal shall take place without specific prior valid authorization by the user of the terminal in question; provided, however, the grantee may conduct systemwide or individually addressed "sweeps" for the purpose of verifying system integrity. Grantee shall not indicate a subscriber response mechanism without a finding by the city manager that the system can operate effectively and yet give protection against any invasion of privacy.

(h) A grantee shall not tabulate any test results, nor permit the use of the system for such tabulation, which would reveal the commercial product preferences or opinions of individual subscribers, members of their families or their invitees, licensees or employees without prior valid written authorization of the subscriber.

(i) Each compilation, publication, tabulation or other dissemination of each piece of information made or permitted to be made in violation of this section shall be considered a separate violation.

(a) No franchise granted pursuant to the provisions of this chapter shall become effective unless and until this chapter has become effective and, in addition, unless and until all things required in this section are done and completed, all of such things being hereby declared to be conditions precedent to the effectiveness of any such franchise granted hereunder. In the event any of such things are not done and completed in the time and manner required, the council may declare the franchise null and void.

(b) Within 30 days after the effective date of an ordinance awarding a franchise or within such extended period of time as the city council in its discretion may authorize, a grantee shall file with the city clerk its written acceptance, in a form satisfactory to the city attorney, of the franchise agreement, together with the insurance policies, security fund and construction bond required by sections 32-17, 32-18 and 32-19, respectively, and its agreement to be bound by and to comply with and to do all things required of him by the provisions of this chapter. Such acceptance and agreement shall be acknowledged by the grantee before a notary public and shall in form and content be satisfactory to and approved by the city attorney.

(a) From and after the effective date of this chapter, it shall be unlawful for any person to establish, operate or to carry on the business of operating a cable television system unless a franchise therefor has first been obtained pursuant to the provisions of this chapter.

(b) It shall be unlawful for any person, firm or corporation to make any unauthorized connection, whether physically, electrically, acoustically, inductively or otherwise, with any part of a franchised CATV system within this city for the purpose of enabling himself or others to receive any cable television service, without payment to the owner of said system.

(c) It shall be unlawful for any person, without the consent of the owner, to willfully tamper with, remove or injure any cables, wires or equipment used for distribution of cable television services.

Upon award of a franchise pursuant to this chapter, a grantee shall agree to be bound by all the terms and conditions contained herein.

A grantee also agrees to provide all services specifically set forth in its proposal, or as revised in the franchise agreement, to provide cable television service within the confines of the City of Bellaire and by its acceptance of the franchise, the grantee specifically grants and agrees that its proposal is thereby incorporated by reference and made a part of the franchise agreement. Failure to provide services as promised in the franchise agreement shall be deemed a breach of this chapter to which the provisions of section 32-28 of this chapter shall apply.

Whenever a franchise or contract shall set forth any time for an act to be performed by or on behalf of the grantee, such time shall be deemed of the essence and any failure of the grantee to perform within time allotted shall always be sufficient ground for the city to invoke liquidated damages or revocation of a franchise.

A grantee shall not be excused from complying with any of the terms and conditions of a franchise or this chapter by any failure of the city upon any one or more occasions to insist upon or to seek compliance with any such terms or conditions.

(a) Any provision of this chapter may be waived at the sole discretion of the City of Bellaire by resolution of the city council of the City of Bellaire.

(b) Grantee may submit a request for waiver to the city council of the City of Bellaire at any time during the franchise term. Such request for waiver may, at the sole discretion of the city council of the City of Bellaire, be set for public hearing and a decision shall be made within 120 days following the submission. Procedures for modification of franchise obligations shall be in compliance with section 625 of the Cable Communications Policy Act of 1984.

(c) The city council may authorize the economic, technical or legal evaluation of such waiver request and grantee shall be required to reimburse the city for any expenditures incurred by the city in connection with such evaluation.

(d) This section is enacted solely for the convenience and benefit of the grantor and shall not be construed in such a manner as to create any right or entitlement for the grantee.

(a) To the extent that any cable television systems lawfully existed in the city on May 1, 1985, this chapter shall not alter or abridge the contractual rights of such system to operate in a manner and to the extent such system existed and operated as of such date.

(b) Notwithstanding the provision in subsection (a), which intends only to validate a cable company's existing right to serve the city for a specific term and to provide services as originally proposed or as subsequently modified by existing ordinances, the provisions of this chapter are of a regulatory nature and codify and clarify existing regulatory requirements and expand upon the city's authority to require a cable company to meet its original contractual obligations; and to further provide a uniform procedure for the regulation of any and all cable television systems desiring to operate now or in the future in the City of Bellaire.

(c) To the extent there is any conflict in regulatory provisions between this chapter and other cable television franchise ordinances or agreements the more restrictive provision shall apply.

(a) The City of Bellaire will follow the FCC Rate Regulations in its regulation of the basic service rates and charges of all franchise cable television companies and any other cable television system operating in the City of Bellaire, notwithstanding any different or inconsistent provisions in any franchise previously adopted or which will be subsequently adopted by the city council of the City of Bellaire. In connection with such regulation, the City of Bellaire will ensure a reasonable opportunity for consideration of the views of interested parties.

(b) The city manager or the city attorney, or his or her designee, are each authorized to execute on behalf of the City of Bellaire and file with the FCC such certification forms or other instruments as are now or may hereafter be required by the FCC Rate Regulations in order to enable the City of Bellaire to regulate basic service rates and charges.

The following words, terms and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:

Basic cable rates means the monthly charges for a subscription to the basic service tier and the associated equipment.

Basic service tier means a separately available service tier to which subscription is required for access to any other tier of service, including as a minimum, but not limited to, all must-carry signals, all PEG channels, and all domestic television signals other than superstations.

Benchmark means a per channel rate of charge for cable service and associated equipment which the FCC has determined is reasonable.

Cable Act of 1992 means the Cable Television Consumer Protection and Competition Act of 1992.

Cable operator means any person or group of persons:

(A) Who provide cable service over a cable system and directly or through one or more affiliates owns a significant interest in such a cable system; or

(B) Who otherwise controls or is responsible for, through any arrangement, the management and operation of such a cable system.

Channel means a unit of cable service identified and selected by a channel number or similar designation.

Cost of service showing means a filing in which the cable operator attempts to show that the benchmark rate or the price cap is not sufficient to allow the cable operator to fully recover the costs of providing the basic service tier and to continue to attract capital.

FCC means the Federal Communications Commission.

Initial basic cable rates means the rates that the cable operator is charging for the basic service tier, including charges for associated equipment, at the time the City notifies the cable operator of the City's qualification and intent to regulate basic cable rates.

Must-carry signal means the signal of any local broadcast station (except superstations which is required to be carried on the basic service tier).

PEG Channel means the channel capacity designated for public, educational, or governmental use, and facilities and equipment for the use of that channel capacity.

Price cap means the ceiling set by the FCC on future increases in basic cable rates regulated by the City, based on a formula using the GNP fixed weight price index, reflecting general increases in the cost of doing business and changes in overall inflation.

Reasonable rate standard means a per channel rate that is at, or below, the benchmark or price cap level.

Superstation means any non-local broadcast signal secondarily transmitted by satellite.

(a) Notice. Upon the adoption of this ordinance and the certification of the city by the FCC, the city shall immediately notify all cable operators in the city, by certified mail, return receipt requested, that the city intends to regulate subscriber rates charged for the basic service tier and associated equipment as authorized by the Cable Act of 1992.

(b) Cable operator response. Within 30 days of receiving notice from the city, a cable operator shall file with the city, its current rates for the basic service tier and associated equipment and any supporting material concerning the reasonableness of its rates.

(c) Expedited determination and public hearing.

(1) If the city council is able to expeditiously determine that the cable operator's rates for the basic service tier and associated equipment are within the FCC's reasonable rate standard, as determined by the applicable benchmark, the city council shall:

(A) Hold a public hearing at which interested persons may express their views; and

(B) Act to approve the rates within 30 days from the date the cable operator filed its basic cable rates with the city.

(2) If the city council takes no action within 30 days from the date the cable operator filed its basic cable rates with the city, the proposed rates will continue in effect.

(d) Extended review period.

(1) If the city council is unable to determine whether the rates in issue are within the FCC's reasonable rate standard based on the material before it, or if the cable operator submits a cost-of-service showing, the city council shall, within 30 days from the date the cable operator filed its basic cable rates with the city and by adoption of a formal resolution, invoke the following additional periods of time, as applicable, to make a final determination:

(A) Ninety days if the city council needs more time to ensure that a rate is within the FCC's reasonable rate standard; or

(B) One hundred and fifty days if the cable operator has submitted a cost-of-service showing seeking to justify a rate above the applicable benchmark.

(2) If the city council has not made a decision within the 90 or 150 day period, the city council shall issue a brief written order at the end of the period requesting the cable operator to keep accurate account of all amounts received by reason of the proposed rate and on whose behalf the amounts are paid.

(e) Public hearing. During the extended review period and before taking action on the proposed rate, the city council shall hold at least one public hearing at which interested persons may express their views and record objections.

(f) Objections. An interested person who wishes to make an objection to the proposed initial basic rate may request the city clerk to record the objection during the public hearing or may submit the objection in writing anytime before the decision resolution is adopted. In order for an objection to be made part of the record, the objector must provide the city clerk with the objector's name and address.

(g) Benchmark analysis. If a cable operator submits its current basic cable rate schedule as being in compliance with the FCC's reasonable rate standard, the city council shall review the rates using the benchmark analysis in accordance with the standard form authorized by the FCC. Based on the city council's findings, the initial basic cable rates shall be established as follows:

(1) If the current basic cable rates are below the benchmark, those rates shall become the initial basic cable rates and the cable operator's rates will be capped at that level.

(2) If the current basic cable rates exceed the benchmark, the rates shall be the greater of the cable operator's per channel rate on September 30, 1992, reduced by 10 percent, or the applicable benchmark, adjusted for inflation and any change in the number of channels occurring between September 30, 1992 and the initial date of regulation.

(3) If the current basic cable rates exceed the benchmark, but the cable operator's per channel rate was below the benchmark on September 30, 1992, the initial basic cable rate shall be the benchmark, adjusted for inflation.

(h) Cost-of-service showings. If a cable operator does not wish to reduce the rates to the permitted level, the cable operator shall have the opportunity to submit a cost-of-service showing in an attempt to justify initial basic cable rates above the FCC's reasonable rate standard. The city council will review a cost-of-service submission pursuant to FCC standards for cost-of-service review. The city council may approve initial basic cable rates above the benchmark if the cable operator makes the necessary showing; however, a cost-of-service determination resulting in rates below the benchmark or below the cable operator's September 30, 1992 rates minus ten percent, will prescribe the cable operator's new rates.

(i) Decision.

(1) By formal resolution. After completion of its review of the cable operator's proposed rates, the city council shall adopt its decision by formal resolution. The decision shall include one of the following:

(A) If the proposal is within the FCC's reasonable rate standard or is justified by a cost-of-service analysis, the city council shall approve the initial basic cable rates proposed by the cable operator; or

(B) If the proposal is not within the FCC's reasonable rate standard and the cost-of-service analysis, if any, does not justify the proposed rates, the city council shall establish initial basic cable rates that are within the FCC's reasonable rate standard or that are justified by a cost-of-service analysis.

(2) Rollbacks and refunds. If the city council determines that the initial basic cable rates as submitted exceed the reasonable rate standard or that the cable operator's cost-of-service showing justifies lower rates, the city council may order the rates reduced in accordance with subsection (g) or (h) above, as applicable. In addition, the city council may order the cable operator to pay to subscribers, refunds of the excessive portion of the rates with interest (computed at applicable rates published by the Internal Revenue Service for tax refunds and additional tax payments), retroactive to September 1, 1993. The method for paying any refund and the interest rate will be in accordance with FCC regulations as directed in the city council's decision resolution.

(3) Statement of reasons for decision and public notice. If rates proposed by a cable operator are disapproved in whole or in part, or if there were objections made by other parties to the proposed rates, the resolution must state the reasons for the decision and the city council must give public notice of its decision. Public notice will be given by advertisement once in the official newspaper of the city.

(j) Appeal. The city council's decision concerning rates for the basic service tier or associated equipment, may be appealed to the FCC in accordance with applicable federal regulations.

(a) Notice. A cable operator in the city who wishes to increase the rates for the basic service tier or associated equipment shall file a request with the city and notify all subscribers at least 30 days before the cable operator desires the increase to take effect. This notice may not be given more often than annually and not until at least one year after the determination of the initial basic cable rates.

(b) Expedited determination and public hearing.

(1) If the city council is able to expeditiously determine that the cable operator's rate increase request for basic cable service is within the FCC's reasonable rate standard, as determined by the applicable price cap, the city council shall:

(A) Hold a public hearing at which interested persons may express their views; and

(B) Act to approve the rate increase within 30 days from the date the cable operator filed its request with the city.

(2) If the city council takes no action within 30 days from the date the cable operator filed its request with the city, the proposed rates will go into effect.

(c) Extended review period.

(1) If the city council is unable to determine whether the rate increase is within the FCC's reasonable rate standard based on the material before it, or if the cable operator submits a cost-of-service showing, the city council shall, by adoption of a formal resolution, invoke the following additional periods of time, as applicable, to make a final determination:

(A) Ninety days if the city council needs more time to ensure that the requested increase is within the FCC's reasonable rate standard as determined by the applicable price cap; and

(B) One hundred and fifty days if the cable operator has submitted a cost-of-service showing seeking to justify a rate increase above the applicable price cap.

(2) The proposed rate increase is tolled during the extended review period.

(3) If the city council has not made a decision within the 90 or 150 day period, the city council shall issue a brief written order at the end of the period requesting the cable operator to keep accurate account of all amounts received by reason of the proposed rate increase and on whose behalf the amounts are paid.

(d) Public hearing. During the extended review period and before taking action on the requested rate increase, the city council shall hold at least one public hearing at which interested persons may express their views and record objections.

(e) Objections. An interested person who wishes to make an objection to the proposed rate increase may request the city clerk to record the objection during the public hearing or may submit the objection in writing any time before the decision resolution is adopted. In order for an objection to be made part of the record, the objector must provide the city clerk with the objector's name and address.

(f) Delayed determination. If the city council is unable to make a final determination concerning a requested rate increase within the extended time period, the cable operator may put the increase into effect, subject to subsequent refund if the city council later issues a decision disapproving any portion of the increase.

(g) Price cap analysis. If a cable operator presents its request for a rate increase as being in compliance with the FCC's price cap, the city council shall review the rate using the price cap analysis in accordance with the standard form authorized by the FCC. Based on the city council's findings, the basic cable rates shall be established as follows:

(1) If the proposed basic cable rate increase is within the price cap established by the FCC, the proposed rates shall become the new basic cable rates.

(2) If the proposed basic cable rate increase exceeds the price cap established by the FCC, the city council shall disapprove the proposed rate increase and order an increase that is in compliance with the price cap.

(h) Cost-of-service showings. If a cable operator submits a cost-of-service showing in an attempt to justify a rate increase above the price cap, the city council will review the submission pursuant the FCC standards for cost-of-service review. The city council may approve a rate increase above the price cap if the cable operator makes the necessary showing; however, a cost-of-service determination resulting in a rate below the price cap or below the cable operator's then current rate will prescribe the cable operator's new rate.

(i) Decision. The city council's decision concerning the requested rate increase, shall be adopted by formal resolution. If a rate increase proposed by a cable operator is disapproved in whole or in part, or if objections were made by other parties to the proposed rate increase, the resolution must state the reasons for the decision. Objections may be made at the public hearing by a person requesting the city clerk to record the objection or may be submitted in writing at any time before the decision resolution is adopted.

(j) Refunds.

(1) The city council may order refunds of subscribers' rate payments with interest if:

(A) The city council was unable to make a decision within the extended time period as described in subsection (c) above; and

(B) The cable operator implemented the rate increase at the end of the extended review period; and

(C) The city council determines that the rate increase as submitted exceeds the applicable price cap or that the cable operator failed to justify the rate increase by a cost-of-service showing, and the city council disapproves any portion of the rate increase.

(2) The method for paying any refund and the interest rate will be in accordance with FCC regulations as directed in the city council's decision resolution.

(k) Appeal. The city council's decision concerning rates for the basic service tier or associated equipment, may be appealed to the FCC in accordance with applicable federal regulations.

(a) City may require.

(1) In those cases when the cable operator has submitted initial rates or proposed an increase that exceeds the reasonable rate standard, the city council may require the cable operator to produce information in addition to that submitted, including proprietary information, if needed to make a rate determination. In these cases, a cable operator may request the information be kept confidential in accordance with this section.

(2) In cases where initial or proposed rates comply with the reasonable rate standard, the city council may request additional information only in order to document that the cable operator's rates are in accord with the standard.

(b) Request for confidentiality.

(1) A cable operator submitting information to the city council may request in writing that the information not be made routinely available for public inspection. A copy of the request shall be attached to and cover all of the information and all copies of the information to which it applies.

(2) If feasible, the information to which the request applies shall be physically separated from any information to which the request does not apply. If this is not feasible, the portion of the information to which the request applies shall be identified.

(3) Each request shall contain a statement of the reasons for withholding inspection and a statement of the facts upon which those reasons are based.

(4) Casual requests which do not comply with the requirements of this subsection, shall not be considered.

(c) City council action. Requests which comply with the requirements of subsection (b), will be acted upon by the city council. The city council will grant the request if the cable operator presents by a preponderance of the evidence, a case for nondisclosure consistent with applicable federal regulations. If the request is granted, the ruling will be placed in a public file in lieu of the information withheld from public inspection. If the request does not present a case for nondisclosure and the city council denies the request, the city council shall take one of the following actions:

(1) If the information has been submitted voluntarily without any direction from the city, the cable operator may request that the city return the information without considering it. Ordinarily, the city will comply with this request. Only in the unusual instance that the public interest so requires, will the information be made available for public inspection.

(2) If the information was required to be submitted by the city council, the information will be made available for public inspection.

(d) Appeal. If the city council denies the request for confidentiality, the cable operator may seek review of that decision from the FCC within five working days of the city council's decision, and the release of the information will be stayed pending review.

(a) Annual inflation adjustment. In accordance with FCC regulations, the cable operator may adjust its capped base per channel rate for the basic service tier annually by the final GNP-PI index.

(b) Other external costs.

(1) The FCC regulations also allow the cable operator to increase its rate for the basic service tier automatically to reflect certain external cost factors to the extent that the increase in cost of those factors exceeds the GNP-PI. These factors include retransmission consent fees, programming costs, state and local taxes applicable to the provision of cable television service, and costs of franchise requirements. The total cost of an increase in a franchise fee may be automatically added to the base per channel rate, without regard to its relation to the GNP-PI.

(2) For all categories of external costs other than retransmission consent and franchise fees, the starting date for measuring changes in external costs for which the basic service per channel rate may be adjusted will be the date on which the basic service tier becomes subject to regulation or February 28, 1994, whichever occurs first. The permitted per channel charge may not be adjusted for costs of retransmission consent fees or changes in those fees incurred before October 6, 1994.

(c) Notification and review. The cable operator shall notify the city at least 30 days in advance of a rate increase based on automatic adjustment items. The city shall review the increase to determine whether the item or items qualify as automatic adjustments. If the city makes no objection within 30 days of receiving notice of the increase, the increase may go into effect.

The city may order the cable operator to refund to subscribers a portion of previously paid rates under the following circumstances:

(1) A portion of the previously paid rates have been determined to be in excess of the permitted tier charge or above the actual cost of equipment; or

(2) The cable operator has failed to comply with a valid rate order issued by the city.