§ 13-5. Regulation by franchising authority and fees.

(a)

Franchise fee.

(1)

Grantee will remit to grantor a franchise fee equal to one percent of gross revenue effective 60 days after the effective date of this agreement.

(2)

The franchising authority shall give grantee six months prior written notice of any such change in the franchise fee after the implementation of this agreement;

(3)

The franchising authority agrees that all amounts paid by the grantee as franchise fees may be added to the price of cable services and collected from the grantee's customers as "external costs" as such term is used in 47 C.F.R. 76.922. In addition, all amounts paid as franchise fees may be separately stated on customers' bills as permitted in 47 C.F.R. 76.985.

For the purpose of this section franchise fees shall be paid monthly.

(b)

Access equipment and facilities.

(1)

The city may require the grantee to pay up to $1.00 per subscriber, per month as a grant for the community's telecommunications-related capital needs. Such charge may be itemized as a "PEG Fee" and passed-through on subscriber's bills.

(2)

The city may adopt or modify the "PEG Fee," up to the amount provided in paragraph (b)(1) above, by adopting a resolution identifying the amount thereof. The city shall provide written notice of any modification or adoption of the PEG fee to grantee within 60 days of the proposed effective change. An equivalent fee shall be required of all other franchised video service providers.

(3)

The city, or its designee, may implement rules for use of any access channel(s).

(c)

Rates and charges. A schedule of the current subscriber charges, as well as the form of residential subscriber contract, specifying the current length and term of subscriber contracts shall be kept on file and available for public inspection during normal office hours at the local office of grantee.

(d)

Renewal of franchise. The franchising authority and the grantee agree that any proceedings undertaken by the franchising authority that relate to the renewal of the grantee's franchise shall be governed by and comply with the provisions of Section 626 of the Cable Act (as such existed as of the effective date of the Cable Act), unless the procedures and substantive protections set forth therein shall be deemed to be preempted and superseded by the provisions of any subsequent provision of federal or state law.

In addition to the procedures set forth in said Section 626(a), the franchising authority agrees to notify grantee of its preliminary assessments regarding the identity of future cable-related community needs and interests, as well as the past performance of grantee under the then current franchise term. The franchising authority further agrees that such a preliminary assessment shall be provided to the grantee prior to the time that the four-month period referred to in Subsection (c) of Section 626 is considered to begin. Notwithstanding anything to the contrary set forth in this section, the grantee and franchising authority agree that at any time during the term of the then current franchise, while affording the public appropriate notice and opportunity to comment, the franchising authority and grantee may agree to undertake and finalize negotiations regarding renewal of the then current franchise and the franchising authority may grant a renewal thereof. The grantee and the franchising authority consider the terms set forth in this section to be consistent with the express provisions of Section 626 of the Cable Act.

(e)

Abandonment. The grantee shall not abandon any portion of its cable system without giving three months prior written notice to the franchising authority. Grantee shall compensate the franchising authority for any damages resulting to it from the abandonment.

(f)

Conditions of sale. Except to the extent expressly required by federal or state law, if a renewal or extension of grantee's franchise is denied or the franchise is lawfully terminated, and the franchising authority either lawfully acquires ownership of the cable system or by its actions lawfully effects a transfer of ownership of the cable system to another party, any such acquisition or transfer shall be at a fair market value, determined on the basis of the cable system valued as a going concern.

If the franchise or cable system is offered for sale, the franchising authority shall also have the right to purchase the system at its fair market value.

Grantee and franchising authority agree that in the case of a lawful revocation of the franchise, at grantee's request, which shall be made in its sole discretion, grantee shall be given a reasonable opportunity to effectuate a transfer of its cable system to a qualified third party. The franchising authority further agrees that during such a period of time, it shall authorize the grantee to continue to operate pursuant to the terms of its prior franchise; however, in no event shall such authorization exceed a period of time greater than six months from the effective date of such revocation. If, at the end of that time, grantee is unsuccessful in procuring a qualified transferee or assignee of its cable system which is reasonably acceptable to the franchising authority, grantee and franchising authority may avail themselves of any rights they may have pursuant to federal or state law; it being further agreed that grantee's continued operation of its cable system during the six-month period shall not be deemed to be a waiver, nor an extinguishment of, any rights of either the franchising authority or the grantee. Notwithstanding anything to the contrary set forth in this section, neither franchising authority nor grantee shall be required to violate federal or state law.

(g)

Removal of property. Upon termination or forfeiture of this franchise, grantee shall, if the franchising authority so requests, remove all of its cables, wires and appliances from the streets, alleys, and other public places, with the exception of those portions of said cables, wires and appliances as are then being utilized and operated by grantee under any other lawful and effective governmental permit or license. If the same are not so removed, the franchising authority may cause the same to be removed and recover the reasonable costs thereof from grantee.

(h)

Transfer of franchise. Any transfer of this franchise shall be completed pursuant to Minn. Stat. § 238.083 and applicable federal law, and approval shall not be unreasonably withheld. No such consent shall be required, however, for a transfer in trust, by mortgage, by other hypothecation, or by assignment of any rights, title, or interest of grantee in the franchise or cable system in order to secure indebtedness.

(i)

Continuing administration responsibility. The office of the city administrator shall be responsible for the continuing administration of this franchise in cooperation with the city's cable commission.

(Ord. No. 12, 5th Series, § 2(5.1—5.9), 6-4-14)