HomeMy WebLinkAbout9.a. Franchise for cable television service by Frontier CommunicationsEXECUTIVE SUMMARY
City Council Regular Meeting: September 20, 2016
AGENDA ITEM: Franchise for cable television service by
Frontier Communications
AGENDA SECTION:
New Business
PREPARED BY: Emmy Foster, Assistant City
Administrator AGENDA NO. 9.a.
ATTACHMENTS: Legal memo regarding Frontier Franchise
Application; Resolution approving
franchise; Franchise ordinance;
Resolution approving summary
publication of franchise ordinance
APPROVED BY: ddj
RECOMMENDED ACTION: Approve the following three motions:
Motion to approve resolution approving application for franchise for cable television service
for Frontier Communications
Motion to approve ordinance with franchise for cable television service for Frontier
Communications
Motion to approve summary publication of franchise ordinance for cable television service
to Frontier Communications
After seven months of discussions, staff of the City and the Apple Valley-Farmington-Rosemount Cable
Commission have negotiated with Frontier Communications to draft a proposed franchise to offer video
service in Rosemount.
BACKGROUND
In February 2016, Frontier Communications requested informal discussions with the staffs of Rosemount
and its partners in the Cable Commission. Frontier indicated the company was interested in obtaining a
franchise to offer cable television service in each of the three cities. The Rosemount City Council in April
approved updates to relevant policies and authorized staff to enter negotiations for the terms of a
franchise with Frontier. The franchise would be non-exclusive to comply with state and federal law.
Portions of Rosemount are already served by Charter Communications and Gigabit Minnesota. Additional
applicants are free to come forward to request a franchise to serve the City.
Negotiations with Frontier began shortly after the Council’s action and were concluded before a meeting
of the Cable Commission on September 7. The Commission’s attorney, Robert Vose (who is scheduled to
be present for tonight’s Council meeting), provided the Commission in advance with a brief summary of
important negotiating points resolved in the proposed franchises:
Service Area
Frontier proposed a “market success” build out. We urged Frontier to accept Minnesota’s statutory
build out requirements.
2
•Franchise incorporates MS § 238.084 which provides: “construction throughout the authorized
franchise area must be substantially completed within five years of granting…”
•To ensure compliance, term is 5 yrs. Cities can evaluate deployment and renew or not.
•Franchise(s) provides: “[a]s the Cable System is constructed and made capable of providing Cable
Service, Grantee shall activate and offer Cable Service to Qualified Living Units within a
reasonable period of time.” QLU means any location capable of receiving cable service. Service in
less than 5 years is anticipated.
•To track deployment, Frontier meets with the commission/cities annually to report on progress of
construction/service activation. Provides current service area maps.
System
•“Grantee shall operate a Cable System with the functional equivalent of a 750 MHz Cable System
(in terms of video offerings and functionality).”
•System must comply, at minimum, with applicable FCC standards
•Cities may test System if there are problems or unresolved technical complaints.
•Results of all FCC-required testing shall also be copied to City within ten (10) Days of filing such
report with the FCC.
PEG Access
•Same number of PEG channels (4 channels + Regional Ch. 6)
•Same channel #s (184, 187, 188 and 189)
•Simulcast PEG channels in HD and SD.
•Cooperate re: facilities for live orig. of programming from institutional sites as necessary.
•Must meet appropriate PEG technical quality standards.
•PEG support in an amount calculated as up to $.75 per subscriber, per month. Not required to
itemize this on invoices. Parity with incumbent required.
NOTE: If Charter agreed to same, possible funding (based on current sub count, and assuming a
10-year term) is $1.53M. Modestly exceeds $1.2-$1.4M identified in needs report. In
negotiations, Charter reps have indicated that cable subs falling and will in the future. So cap is
appropriate to meet identified needs.
NOTE 2: Prior franchises (1999) required Charter’s predecessor to pay a $90k equipment grant. Grant
recouped by co. retaining $.25 from the PEG fee.
Franchise Fees
•Frontier will pay a 5% franchise fee
•Calculation (including definition of “gross revenues”) mirrors Charter’s prior franchises
•Several beneficial additions. Example, clarification where cable is bundled with telephone and
internet and discounted. Discount allocated fairly and proportionately
Free Service
•Frontier will provide free service (lowest cost level) to City Hall
•Within 1 year, such institutional buildings as are listed in Exhibit A, and
•Additional institutions identified that are QLU [Qualified Living Units, as explained above] and not
served by other operator.
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Institutional Network
Prior franchises referred to ‘98 Marcus/Lakeville agreement. No actual I-Net usage. Not included in
Frontier franchise.
Security/Enforcement.
•$10k LOC, with specified sanctions for various potential franchise violations
•$25k bond
•Umbrella liability policy in the amount of at least $3,000,000.00, and;
•Indemnify the cities from suits or liabilities of any kind “based upon or in any way connected with
the grant of [the] Franchise,” system operations, or a franchise breach.
NOTE: Frontier currently has full rights to access ROW for its telephone system
Customer Service
•Incorporates FCC customer service standards; equivalent to prior franchises
•Reporting required
•Cities retain rights to adopt additional requirements in the future
During its September 7 meeting, the Cable Commission voted 3-0 to endorse the proposed franchises and
recommend their approval by the respective city councils. The franchise would run for five years and in
Rosemount would be effective October 1.
ADDITIONAL LEGAL ISSUES
At the time of the Council’s action in April, representatives of Charter raised several legal issues
questioning the adequacy of the information disclosed by Frontier and the proposed process the City
would follow. Commission Attorney Vose has provided an extensive analysis of the issues, which is
attached to this memo. His analysis concludes, “We see no legal impediment to approving Frontier’s
application and issuing the negotiated franchises.”
PROPOSED COUNCIL ACTIONS
Included with this memo are three documents resulting from the negotiations with Frontier. Substantially
the same documents will be considered by the city councils of Apple Valley and Farmington. They are:
•A resolution approving Frontier’s cable franchise application
•A resolution approving an ordinance granting a franchise to Frontier
•A resolution approving summary publication of the ordinance
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Kennedy 470 US Bank Plaza
200 South Sixth Street
Minneapolis MN 55402
&
Graven Robert J.V. Vose
(612) 337-9275 telephone
(612) 337-9310 fax
rvose@kennedy-graven.com
C H A R T E R E D
MEMORANDUM
DATE: August 24, 2016
TO: Apple Valley, Farmington, Rosemount Cable Commission
FROM: Bob Vose
RE: Frontier Franchise Applications
INTRODUCTION
This Memorandum addresses the cable television franchise applications submitted by Frontier
Communications of Minnesota, Inc. (“Frontier”). Frontier is a large local exchange telephone
service provider in Minnesota. Frontier is a wholly-owned subsidiary of Frontier
Communications Corporation, a publicly-traded, S&P 500 company providing
telecommunications services in 29 states.
Background
In early 2016, Frontier approached the commission’s member cities seeking franchises to
provide cable service.1 Minnesota Statutes, Chapter 238 (“Chapter 238”), establishes the process
for considering issuance of cable franchises authorizing such service.2
In response to Frontier’s inquiries, the cities each published notices of intent to consider
franchises as required by Chapter 238. On April 22nd, Frontier filed timely applications and
application fees with Apple Valley and Farmington. On May 12th, Frontier timely filed an
application and fee with Rosemount. Frontier’s applications respond to all application questions.
No other companies filed applications.
Public Hearings
Chapter 238 requires a public hearing affording reasonable notice and an opportunity for all
1 A franchise is required under applicable federal and state law to provide cable service in a municipality. A cable
franchise grants a valuable privilege to use the public rights-of-way to provide cable service for profit.
2 The member cities also have competitive franchising policies that closely track applicable state law.
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interested parties to be heard regarding any franchise application.3 Further, any franchise that is
ultimately issued must include:
a provision that the franchisee’s technical ability, financial condition, and legal
qualification were considered and approved by the franchising authority in a full public
proceeding that afforded reasonable notice and a reasonable opportunity to be heard;4
The public hearing requirement is significant because cable franchising is a “quasi-judicial”
process.5 Among other things, the public hearing affords an incumbent cable operator the
opportunity to present evidence and argument concerning its existing franchise that may be
relevant in evaluating a competitive franchise application.
Each of the cities gave the required notice and subsequently conducted the statutorily-required
public hearing. At the hearings, representatives for Frontier gave a power-point presentation
describing the company’s qualifications and its plans to offer video service marketed as
“Vantage TV.” Representatives for the incumbent cable provider, Charter, also presented at the
hearings.
Farmington’s public hearing was held first. Immediately prior to the hearing, Charter submitted
a letter to the city council containing questions and concerns regarding Frontier’s application.
Simultaneously, Charter’s outside legal counsel provided a letter to me, as the commission’s
legal counsel, raising legal issues associated with Frontier’s application to Farmington. At the
hearing, Charter’s representative summarized the issues raised in the letters.
At the subsequent hearings in Apple Valley and Rosemount, Charter’s representative
summarized the same issues but no letters were submitted. All three cities left the written record
open for 30 days following their public hearings. The cities directed staff to review the
applications, prepare a report addressing, among other issues, Frontier’s application and the
issues raised by Charter, and proceed with franchise negotiations with Frontier representatives.
During the 30-day comment period, Charter and its legal counsel submitted letters to Apple
Valley and Rosemount that are substantively identical to those provided to Farmington. The
cable commission submitted letters to each city requesting that certain commission minutes,
Charter’s prior franchises, the ordinances extending Charter’s franchises to December 31, 2015,
and other official documents be made part of the “record” regarding Frontier’s franchise
3 Minn. Stat. § 238.081, Subd. 6.
4 Minn. Stat. § 238.084, Subd. 1(l).
5 In re Application of Dakota Telecommunications Group, 590 N.W.2d 644, 647-8 (Minn. App. 1999) (citing, Honn
v.City of Coon Rapids, 313 N.W.2d 409, 414-15 (Minn. 1981).
Quasi-judicial proceedings involve an investigation into a disputed claim that weighs evidentiary
facts, applies those facts to a prescribed standard, and results in a binding decision. In granting a
cable television franchise, the Cable Act requires that franchise proposals contain specific
information and a public hearing be held affording reasonable notice and opportunity to be heard.
Minn. Stat. § 238.081, subds. 4, 6. This procedure involves testimonial and documentary
evidence, and results in a binding decision.
Id. (case citations omitted).
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applications. Frontier supplied no additional information or comments. No other comments
were received.
Current Status
We have completed review of Frontier’s application and franchise negotiations with the
company. At this point, the commission may wish to provide recommendations to its member
cities. Specifically, as explained below, the commission may recommend approval of Frontier’s
application and adoption of the proposed franchises.
ISSUES RAISED
1. Level Playing Field Law
Frontier’s application and Charter’s responsive letters largely focus on Minnesota’s level playing
field law, Minn. Stat. § 238.08 (“LPF law”). The LPF law provides:
[n]o municipality shall grant an additional franchise for cable service for an area included
in an existing franchise on terms and conditions more favorable or less burdensome than
those in the existing franchise pertaining to: (1) the area served; (2) public, educational,
or governmental access requirements; or (3) franchise fees.6
A 2010 amendment to the LPF law clarified that it is “not more favorable or less burdensome” to
allow a telephone company to only provide cable service in the area of a municipality in which it
offers local exchange service.7
A. Frontier
Frontier’s application includes a multi-page discussion about federal preemption of the LPF
law.8 Frontier asserts that the LPF law is preempted by orders issued by the Federal
Communications Commission (FCC).
In 2007, the FCC issued an Order and Notice of Proposed Rulemaking addressing competitive
cable franchising.9 The 621 Order addresses the implementation of Section 621(a)(1) of the
federal Cable Act.10 Among other things, Section 621 prohibits franchising authorities from
unreasonably refusing to award competitive cable franchises.11 The 621 Order was challenged
and upheld.12 In January 2015, the FCC reaffirmed the 621 Order on reconsideration.
6 Minn. Stat. § 238.08, Subd. 1(b). 7 Minn. Stat. § 238.08, Subd. 1(c). 8 Charter also points to language in its prior franchises that any additional franchises be on “substantially similar
terms and conditions.” Frontier claims any such language is also preempted. 9 In the Matter of Section 621(a)(1) of the Cable Communications Policy Act of 1984, MB Docket No. 05-311, (rel.
March 5, 2007) (the “621 Order”). 10 47 U.S.C. § 541(a)(1). 11 47 U.S.C. § 552(a)(2). Federal law also provides that a local franchising authority: “shall allow . . . [an]
applicant’s cable system a reasonable period of time to become capable of providing cable service to all households
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According to the FCC, both traditional cable and phone companies wish to offer customers
“triple play” services-- voice, high-speed Internet access, and video. When a traditional phone
company enters the cable market, the FCC has determined that competition for delivery of
bundled services will benefit consumers by driving down prices and improving the quality of
services. The FCC has also concluded that the circumstances for competitive entry to the cable
market are considerably different than existed when the incumbent cable operators obtained their
franchises. Incumbent cable operators were initially the sole providers of cable and gained a
high percentage of potential subscribers in the local market. A second entrant is less likely, or
even unlikely, to gain the same percentage of subscribers. The competitor faces greater
“financial risk” and “uncertainty” than did the incumbent when it entered the market.13
As a result of these conclusions, the FCC found that system build-out requirements can be an
obstacle to phone companies seeking to deploy competitive video services. Although phone
companies already have facilities deployed, they still must upgrade existing plant to enable the
provision of video service which often requires a significant investment. Thus, the FCC found
that new entrant may seek to begin offering service in a smaller area to determine whether it can
reasonably ensure a return on its investment before expanding.14
Based on this reasoning, the 621 Order prohibited imposition of unreasonable build-out
requirements on competitors. The FCC further found that the imposition of “up-front” PEG and
I-Net support obligations, or obligations that exceed the incumbent’s obligations, are
unreasonable, while pro rata sharing arrangements are reasonable.
B. Charter
Charter offers two legal arguments in response to Frontier’s application(s). First, despite
expiration of its franchises at the end of 2015 15, Charter claims to hold “existing franchises” with
each city under Chapter 238. Second, Charter asserts that the cities cannot accept Frontier’s
preemption argument and must fully apply Minnesota law to Frontier.
C. Proposed Legal Conclusions
Frontier has not shown that Minnesota’s LPF law has been preempted by the 621 Order. The
621 Order did not “preempt state law or state level franchising decisions . . .”16 Rather, the FCC
“expressly limit[ed] . . . [its] findings and regulations in this Order to actions or inactions at the
in the franchise area . . . “ 47 U.S.C. § 541(a)(4). Federal law further prohibits redlining, stating: “[i]n awarding a
franchise or franchises, a franchising authority shall ensure that access to cable service is not denied to any group of
potential residential cable subscribers because of the income of the residents of the local area in which such group
resides.” 47 U.S.C. § 541(a)(3). 12 Alliance for Community Media v. FCC, 529 F.3d 763 (6th Cir. 2008). 13 See generally, 621 Order at ¶ 28. 14 See generally, 621 Order at ¶ 35. 15 At each city’s public hearing, Charter’s representative acknowledged that the franchises had expired.
16 621 Order at ¶ 126.
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local level where a state has not specifically circumscribed the LFA’s authority.”17 Local
requirements, however, are preempted to the extent they conflict with the FCC’s guidance in the
621 Order and are not “specifically authorized by state law.”18
The LPF law is a “state law or state level franchising decision” under the 621 Order. The LPF
law prohibits local action by mandating that municipalities refrain from granting certain more
beneficial terms in “an additional franchise” if there is “an existing franchise.” Frontier has not
explained how the LPF law could be properly viewed as a “local franchising action” that is
preempted rather than a “state law” that is expressly preserved. However, if Charter holds
“existing franchises” that contain independent level playing field obligations, the 621 Order
would preempt such provisions. Such franchise-specific language is not “specifically
authorized” by the LPF law or other state law and is therefore preempted by the 621 Order.
Charter, on the other hand, has failed to demonstrate that it has “existing franchises” entitling it
to the protections of the LPF law. Charter’s franchises expired by their terms at the end of
2015.19 Charter apparently asserts that, to the extent its franchises expired by agreement, the
federal renewal scheme preempts those agreements.
In general, state or local law may be preempted “by express provision, by implication, or by a
conflict between federal and state law.”20 When a court examines a preemption issue, it must do
so “with the starting presumption that Congress does not intend to supplant state law.”21 Charter
does not mention the federal Cable Act’s preemption provision. Accordingly, Charter apparently
does not claim express preemption. Charter also fails to cite any particular provision in the
Cable Act that would implicitly, or by conflict, preempt the franchise expiration date agreed
upon by Charter and the cities.
Instead, Charter’s counsel cites two federal district court decisions for the proposition that a
cable operator can continue to operate under the terms of a prior, expired franchise until the
federal renewal process is completed.22 But Frontier’s franchise application does not put
Charter’s right to operate in question or peril. Neither the cities nor commission have contested
that right.
Charter fails to explain how a continuing right to operate as a matter of federal law constitutes an
“existing franchise” under Minnesota’s LPF law. The City of Walnut Creek decision Charter
17 Id. at ¶ 1, n. 2.
18 Id. at ¶ 126.
19 Charter’s franchises were set to expire in mid-2014. In 2011, as contemplated by applicable federal law, Charter
requested renewal of its franchises approximately 3 years prior to expiration. As part of subsequent settlement
agreements resolving the company’s alleged franchise and PEG fee underpayments, the cities and Charter agreed to
extensions until December 31, 2014 to complete renewal. Charter requested further extensions to December 31,
2015. Both extensions were memorialized in written documents signed by the parties. Charter has not requested
further extensions and neither the cities nor the commission have agreed to any such extensions. 20 N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 654 (1995). 21 Travelers Ins. Co., 514 U.S. at 654. 22 Rolla Cable Systems, Inc., v. City of Rolla, 745 F.Supp. 574, 575-76 (E.D.Mo. 1990); Comcast of California v.
City of Walnut Creek, 371 F.Supp. 1147, 1155 (N.D.Cal. 2005).
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cites indicates to the contrary. That decision indicates that when a franchise expires in the midst
of the federal renewal process:
… there are three possible outcomes: (1) when a franchise expires, it ends without any
continuing vitality whatsoever; (2) when a franchise expires, the operator and the
franchising authority can continue under an arrangement that amounts to a holdover
tenancy-at-will, subject to termination by either side; or (3) the original franchise
agreement remains wholly in effect until renewal procedures pursuant to Section 546 are
completed, as argued by [Comcast].
***
This order holds that both (1) and (2) of the three outcomes posited above are permissible
outcomes but not (3). Termination means termination; i.e., that when a franchise expires
it expires-even if the renewal procedures have not been completed under Section 546.
The cable operator and the franchising authority may, however, enter into temporary
written extensions, as was done by Comcast’s predecessor. Or, they many continue
operations without a formal agreement, i.e., pursuant to a holdover tenancy subject to
termination by either side at will.23
Accordingly, it is unclear how Charter claims to hold “existing franchises” under Chapter 238
and the LPF law despite its express, written agreement that the franchises would expire at the
end of 2015.
Finally, even if Charter has “existing franchises” under Chapter 238, the franchise terms
negotiated with Frontier do not violate the LPF law.24 The terms negotiated with Frontier
regarding: (1) the area served; (2) public, educational, or governmental access requirements; and
(3) franchise fees, are as follows:
Service Area
Frontier’s application refers to a market success-based approach to service deployment
and system expansion requirements. That approach is consistent with the 621 Order
which suggested that it would be reasonable for a local franchising authority to consider
benchmarks requiring a new entrant to increase its build-out after a reasonable time,
taking into account the new entrant’s market success or market penetration.25
23 City of Walnut Creek, 371 F.Supp. at 1154-55 (citing Charter Communications, Inc. v. County of Santa Cruz, 133
F.Supp. 2d 1184, 1188 (N.D.Cal. 2001)(referring to cable operator in same situation as “holdover tenant”), rev’d on
other grounds, 304 F.3d 927 (9th Cir. 2002). 24 The LPF law would likely be interpreted to require “similar,” not identical, franchise obligations. See, WH Link v.
City of Otsego, 664 N.W.2d 390, 396 (Minn. Ct. App. 2003); Cable TV Fund 14A v. City of Naperville, 1997 U.S.
Dist. LEXIS 7336, * 37-38 (N.D. IL 1997); Comcast Cablevision of New Haven, Inc. v. Connecticut Department of
Public Utility Control, 1996 Conn. Super. LEXIS 2927, *7 (1996); and United Cable Television Corporation v.
Connecticut Department of Public Utility Control 1994 Conn. Super. LEXIS 2222 (1994).
25 621 Order, ¶ 89.
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Notwithstanding, in negotiations we urged Frontier to accept Minnesota’s statutory
service area/system construction obligations. Chapter 238 requires that “initial
franchises” include a provision:
identifying the system capacity and technical design and a schedule showing:
(1) that construction … must commence no later than 240 days after the
granting of the franchise;
(2) that construction … must proceed at a reasonable rate of not less than
50 plant miles constructed per year of the franchise term;
(3) that construction throughout the authorized franchise area must be
substantially completed within five years of the granting of the franchise;
and
(4) that the requirement of this section be waived by the franchising
authority only upon occurrence of unforeseen events or acts of God;26
Frontier has agreed and the proposed franchise(s) specifically reference and incorporate
this statutory provision. Moreover, to ensure compliance, the proposed term of the
franchise(s) is five (5) years. This term gives the cities an opportunity to evaluate
Frontier’s cable service deployment and renew the franchise, or not, accordingly.
In addition, the proposed franchise(s) provides: “[a]s the Cable System is constructed and
made capable of providing Cable Service, Grantee shall activate and offer Cable Service
to Qualified Living Units within a reasonable period of time.” This recognizes that
Frontier has already constructed a telephone system to every home and business within
its telephone exchange service territory, and cable service may be activated faster than
within five (5) years. To track this deployment, Frontier will be required to meet with the
commission or cities annually and report on the progress of cable system construction
and service activation. At that time, the company will be required to provide current, up-
to-date service area maps (which may be marked as “Trade Secret”).
Finally, Charter noted that its prior franchises only required the extension of the system
and service where there are at least 30 homes per mile. This limits Charter’s (or its
predecessor’s) obligation to construct a system “throughout the authorized franchise
area” to only those areas with sufficient development density. Charter did not identify
the areas or percentage of each city that this provision obligates it to serve, nor indicated
what areas it actually serves, nor detailed the time period over which its current service
area(s) were achieved. Thus, there is no basis to conclude that Frontier’s proposed
obligations described above will be less burdensome.
PEG Access Requirements
In all material respects, Frontier has agreed to PEG access requirements that equal or
exceed the PEG support provided by Charter under its prior franchises. Frontier will
26 Minn. Stat. § 238.084, Subd. 1(m).
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commit to providing the same number of PEG channels (4 channels) and the same PEG
channel # designations as Charter provides, but Frontier will also commit to simulcasting
all PEG channels in both high definition (HD) and standard definition (SD) digital
format. Frontier will agree to provide facilities permitting live origination of
programming from institutional sites as may be necessary to obtain such programming.
Frontier will also agree to appropriate PEG technical quality standards.
Finally, Frontier has agreed to pay PEG support in an amount calculated as up to $.75 per
subscriber, per month. The commission and cities will specify the payment amount. The
decision whether to actually itemize and pass that amount thru to customers is left to the
company. If this arrangement were entered with both Frontier and Charter, the possible
funding this arrangement would produce (based on current cable subscribership) would
modestly exceed the funding needs identified in the commission’s needs assessment
report prepared for Charter’s renewal. That report identified a need for approximately
$1.2-$1.4 million in PEG funding.27 However, in renewal negotiations with Charter,
company representatives have indicated that cable subscribership has been falling and
should be expected to do so in the future. Thus, the PEG support arrangement negotiated
with Frontier is appropriate to meet the community’s identified PEG funding needs.
Franchise Fees
Frontier will agree to a 5% franchise fee based on language (including the definition of
“gross revenues”) that largely mirrors the language in Charter’s prior franchises but with
several modifications beneficial to the commission and cities. Those modifications
include language to clarify how franchise fees are calculated where cable service
revenues subject to the fee are bundled with telephone or internet access services not
subject to the fee at a discount. The language requires that the discount be allocated
fairly in proportion to the cost for the services individually.
In sum, Frontier has not demonstrated that the 621 Order preempts the LPF law. But Charter has
not demonstrated that it holds “existing franchises” entitling it to the protections of the LPF law;
and even if Charter is entitled to those protections, the franchise terms negotiated with Frontier
do not violate the LPF law.
2.Application Completeness
In addition to its preemption arguments, Charter claims that the Frontier’s applications are
incomplete. However, Frontier’s application is substantially complete and includes information
addressing the financial, technical, and legal qualifications of Frontier and its corporate parent,
Frontier Communications Corporation.28
27 The needs assessment report addressed a 10-year period starting from the then-anticipated franchise expiration in
mid-2014. 28 Each city prepared “Application Instructions” which are consistent with the “franchising proposal” requirements
of Chapter 238. See, Minn. Stat. § 238.081, subd. 4.
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As in Minnesota, municipalities across the country generally focus review of a cable franchise
applicant on financial, technical and legal qualifications. In the 621 Ordrer, the FCC indicated
that where a local exchange telephone company that has received the required telephone
authority from the relevant state agency is seeking a cable franchise, municipalities are cautioned
not spend a significant time evaluating the fitness of such applicant to access public rights-of-
way to provide cable service.29 Frontier has received a certificate of public convenience and
necessity from the Minnesota Public Utilities Commission. Thus, Frontier has demonstrated its
qualifications and fitness to the state’s telephone regulatory body.
Frontier’s application generally reflects what might be expected—Frontier’s parent is a large,
publicly-traded company. The company is very experienced in the telecommunications industry
generally and has experience in the video/cable business specifically. Chapter 238 does not
establish any standards for reviewing information submitted in relation to a cable franchise
applicant’s qualifications. Rather, as noted above, a franchise is simply required to contain a
provision that the franchising authority has considered and approved the qualifications after a
public hearing.
Any deficiencies Charter perceived in Frontier’s applications may be addressed via the proposed
franchise negotiated with Frontier, as discussed below.
Legal
Frontier is authorized to do business in the state of Minnesota.30 Frontier represents that it will
make all appropriate filings and preparations prior to offering cable service. No challenge to
Frontier’s legal qualifications was raised.
Technical
Frontier’s application represents that the company is certificated by the MPUC to provide
telephone service in Minnesota, and that it is “one of Minnesota’s largest incumbent local
exchange carriers….”31 The application represents that Frontier or its affiliates are authorized to
operate cable systems in 35 markets including the entire state of Indiana. The application
identifies an experienced management team for Frontier’s cable operations, and describes a state-
of-the-art IPTV-based delivery platform that will be utilized. No challenge to Frontier’s
technical qualifications was raised.
Financial
29 See, 621 Order at ¶ 23. 30 A summary of Frontier’s filings with the Minnesota Secretary of State can be viewed at:
https://mblsportal.sos.state.mn.us/Business/SearchDetails?filingGuid=c4841e37-bad4-e011-a886-001ec94ffe7f. 31 The application purports to include a copy of Frontier’s certificate of authority as Exhibit D. However, the MPUC
order that was erroneously included is not Frontier’s certificate and only indirectly confirms Frontier’s certification.
I independently reconfirmed that Frontier is a certificated telephone provide in Minnesota.
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Frontier Communications Corporation, the parent company of Frontier, is a large publicly-traded
telecommunications company. The application refers to the most recent 10-K for the fiscal year
ended December 31, 2015. This and other SEC filings are publicly available on-line.
The application represents that Frontier Communications Corporation is an S&P 500 company
with fourth quarter revenue of $1.4 billion and operating income of $182 million. The
application further represents that Frontier will not require any unique funding sources or
borrowing to deploy its cable service in this and other markets. These representations are not
challenged by Charter.
In addition to this application information concerning the company’s financial wherewithal, the
proposed franchise will require Frontier to:
• pay a 5% franchise fee and provide PEG support in amounts specified by the
commission/cities;
• post a $10,000 letter of credit and be subject to specified sanctions for various
potential franchise violations;
• post a $25,000 bond;
• provide an umbrella liability policy in the amount of at least $3,000,000.00, and;
• indemnify the cities from suits or liabilities of any kind “based upon or in any way
connected with the grant of [the] Franchise,” system operations, or a franchise breach.
Frontier currently has full rights to access rights-of-way in each city to construct and maintain its
telephone system and provide telephone and internet access services. It is difficult to conceive of
a scenario in which granting cable franchises to Frontier with these requirements could increase
risks to the cities or public resources.
Charter does not specifically challenge Frontier’s financial qualifications. The letter from
Charter’s counsel acknowledges that Frontier has “substantial resources and existing plant” in
each of the cities.
CONCLUSION
As required by Chapter 238, Frontier provided complete applications per the cities’ application
instructions. The applications, subsequent hearings, and negotiated franchise terms adequately
address Frontier’s qualifications to receive cable franchises. We see no legal impediment to
approving Frontier’s application and issuing the negotiated franchises.
The commission may wish to provide a corresponding recommendation to its member cities.
486270v1 RJV AP155-5
1
CITY OF ROSEMOUNT
DAKOTA COUNTY, MINNESOTA
RESOLUTION 2016 - ______
RESOLUTION APPROVING FRONTIER
CABLE FRANCHISE APPLICATION
WHEREAS, the City is a member of the Apple Valley, Farmington, Rosemount Cable
Commission (“Commission”);
WHEREAS, the City has initiated the process for considering issuance of an initial
competitive cable franchise under Minnesota law, Minnesota Statutes, Chapter 238;
WHEREAS, the City received a timely franchise application from Frontier
Communications of Minnesota, Inc. (“Frontier”) dated May 12, 2016;
WHEREAS, the application was considered by the City Council at a duly-noticed
public hearing;
WHEREAS, at the public hearing, Frontier representatives described the company’s
application and plans for delivery of cable services in the City;
WHEREAS, Charter Cable Partners, LLC (“Charter”) is the incumbent cable operator
in the City;
WHEREAS, Charter provided written comments regarding Frontier’s application and,
at the public hearing, a Charter representative commented on the application;
WHEREAS, the Commission’s legal counsel submitted a letter requesting that certain
records and documents be included in the record concerning Frontier’s application;
WHEREAS, the Commission’s legal counsel provided a memorandum dated August 24,
2016 addressing the issues raised by the application, public hearing testimony and written
comments (“Memorandum”);
WHEREAS, the Commission’s legal counsel negotiated proposed franchise terms with
Frontier;
WHEREAS, the Commission considered the Memorandum and proposed franchise
terms at special meetings on August 29, 2016 and September 7, 2016;
WHEREAS, Frontier and Charter representatives attended and actively participated in
the Commission’s meetings;
WHEREAS, the Commission unanimously recommended approval of the Frontier’s
RESOLUTION 2016 - _____
486270v1 RJV AP155-5 2
franchise applications and adoption of the proposed franchises;
WHEREAS, in accordance with Minn. Stat. § 238.081 and the City’s application
instructions, Frontier’s application included information addressing financial, legal, and
technical qualifications;
WHEREAS, the application and public hearing testimony describe the company’s
proposal to operate a state-of-the-art network to provide competitive cable services in those
portions of the City in which Frontier operates as the incumbent telephone company;
WHEREAS, Minn. Stat. § 238.08, Subd. 1(b) provides for franchising of a competitive
provider within an area already served;
WHEREAS, Minn. Stat. § 238.084, Subd. 1(d) provides that cable franchises must be
non-exclusive;
WHEREAS, Minn. Stat., § 238.08, subd. 1 states that grant of “an additional franchise
for cable service for an area included in an existing franchise” must not be “on terms and
conditions more favorable or less burdensome than those in the existing franchise pertaining to:
(1) the area served; (2) public, educational, or governmental access requirements; or (3)
franchise fees.”
WHEREAS, 47 U.S.C. § 541(a)(1) provides that a franchising authority may not grant
an exclusive cable franchise and “may not unreasonably refuse to award an additional
competitive franchise;”
WHEREAS, in 2007, the Federal Communications Commission (“FCC”) adopted a
Report and Order in its “Video Franchising” proceeding (MB Docket No. 05-311)(“Order”)
concluding that “level playing field” requirements may result in unreasonable refusals to grant
competitive franchises;
WHEREAS, the Order preempts certain “level playing field” requirements applicable to
cable competitors;
NOW THEREFORE, BE IT RESOLVED by the City Council of the City of
Rosemount that the Frontier franchise application is approved upon the following findings:
1. Frontier’s application substantially complies with the City’s application instructions
and requirements and provides the information necessary to make a decision.
2. As explained in the Memorandum, Frontier has not demonstrated that the Order
preempts the “level playing field” requirements of Minn. Stat. § 238.08, Subd. 1.
3. As explained in the Memorandum, Charter has not demonstrated that it holds an
“existing franchise” entitling it to the protections of Minn. Stat., § 238.08, subd. 1,
and, even if Charter is entitled to such protections, the franchise terms negotiated
with Frontier do not violate the statute.
RESOLUTION 2016 - _____
486270v1 RJV AP155-5 3
4. As explained in the Memorandum, no legally sufficient basis to find Frontier legally,
technically, or financially unqualified for a franchise has been presented.
BE IT RESOLVED FURTHER, that the franchise negotiated with Frontier shall be
adopted and enacted as Ordinance No. 2016 - 03.
ADOPTED this 20th day of September, 2016, with the following vote: Aye _______; No
_______; Absent _______.
_________________________________
William H. Droste, Mayor
Attest:
_________________________________
Clarissa Hadler, City Clerk
Ordinance 2016 - 03 | Page 1 of 31
CITY OF ROSEMOUNT
COUNTY OF DAKOTA
STATE OF MINNESOTA
ORDINANCE NO. 2016 - 03
AN ORDINANCE GRANTING A FRANCHISE TO FRONTIER COMMUNICATIONS OF
MINNESOTA, INC. TO CONSTRUCT, OPERATE, AND MAINTAIN A CABLE SYSTEM IN
THE CITY OF ROSEMOUNT, SETTING FORTH CONDITIONS ACCOMPANYING THE
GRANT OF THE FRANCHISE; PROVIDING FOR REGULATION AND USE OF THE
SYSTEM; AND PRESCRIBING PENALTIES FOR THE VIOLATION OF ITS PROVISIONS
The City Council of Rosemount (City) ordains:
STATEMENT OF INTENT AND PURPOSES
The City intends, by the adoption of this Franchise, to authorize the operation of a Cable System
in competition with an incumbent franchised cable operator. Such competition can contribute
significantly to the cable communications needs and desires of the residents and citizens of the
City and the public generally.
FINDINGS
In the review of the request for a Franchise by Grantee and negotiations related thereto, and as a
result of a public hearing, the City Council makes the following findings:
1.Grantee’s technical ability, financial condition and legal qualifications were considered
and approved in a full public proceeding after due notice and a reasonable opportunity to be
heard;
2. Grantee’s plans for operating the Cable System were considered and found adequate and
feasible in a full public proceeding after due notice and a reasonable opportunity to be heard;
3. The Franchise granted to Grantee by City complies with the existing applicable State
statutes, federal laws and regulations; and
4.The Franchise granted to Grantee is nonexclusive.
SECTION 1
SHORT TITLE AND DEFINITIONS
1.1 Short Title. This Franchise shall be known and cited as the Cable Television
Franchise Ordinance.
1.2 Definitions. For purposes of this Franchise, the following terms, phrases, words
and their derivations shall have the meaning ascribed to them by the Cable Communications
Policy Act of 1984, as amended from time to time (the “Cable Act”), unless otherwise defined
herein. Words used in the present tense include the future, words in the plural number include
Ordinance 2016 - 03 | Page 2 of 31
the singular number, and words in the singular number include the plural number. All
capitalized terms used in the definition of any other term shall have their meaning as otherwise
defined in this section. The words “shall” and “will” are mandatory and “may” is permissive.
Words not defined shall be given their common and ordinary meaning.
(a) “Basic Cable Service” means any service tier which includes the lawful
retransmission of local television broadcast signals and any public,
educational, and governmental access programming required by the
franchise to be carried on the basic tier. Basic Cable Service as defined
herein shall be the definition set forth in 47 U.S.C. § 522(3).
(b) “Cable Act” means the Cable Communications Act of 1984 as amended,
47 U.S.C. §521 et. seq.
(c) “Cable Service” or “Service” means:
(i) The one-way transmission to Subscribers of (i) Video
Programming, or (ii) Other Programming Service; and
(ii) Subscriber interaction, if any, which is required for the
selection or use of such Video Programming or Other Programming
Service. Cable Service as defined herein shall be the definition set forth in
47 U.S.C. § 522(6).
(d) “Cable System,” or “System” means 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:
(i) A facility that serves only to retransmit the television
signals of one (1) or more television broadcast stations;
(ii) A facility that serves Subscribers without using any public
Rights-of-Way;
(iii) A facility of a common carrier which is subject, in whole or
in part, to the provisions of 47 U.S.C. § 201 et. seq., except that such
facility shall be considered a Cable System (other than for purposes of 47
U.S.C. § 541(c)) to the extent such facility is used in the transmission of
Video Programming directly to Subscribers; unless the extent of such use
is solely to provide interactive on-demand services;
(iv) An open video system that complies with 47 U.S.C. § 573;
or
(v) Any facilities of any electric utility used solely for
operating its electric utility system.
Ordinance 2016 - 03 | Page 3 of 31
Cable System as defined herein shall be the definition set forth in 47
U.S.C. § 522(7).
(e) “Channel” or “Cable Channel” means a portion of the electromagnetic
frequency spectrum which is used in a Cable System and which is capable of
delivering a television channel.
(f) “City” means the City of [Apple Valley, Farmington or Rosemount,
Minnesota].
(g) “City Code” means the Municipal Code of the City of Rosemount, as may
be amended from time to time.
(h) “Converter” means an electronic device which converts signals to a
frequency acceptable to a television receiver of a Subscriber.
(i) “Council” means the City Council of the City of Rosemount, Minnesota.
(j) “Day” unless otherwise specified shall mean a calendar Day.
(k) “Demarcation Point” means a point agreed upon by Grantee and the City
up to twelve inches outside the building wall consistent with 47 CFR §76.5
(mm) as may be amended.
(l) “Drop” means the cable that connects the ground block on the
Subscriber’s residence to the nearest distribution point of the System.
(m) “Effective Date” shall mean October 1, 2016.
(n) “FCC” means the Federal Communications Commission and any legally
appointed, designated or elected agent or successor.
(o) “Franchise” means this franchise and the regulatory and contractual
relationship established hereby.
(p) “Franchise Fee” means, in accordance with 47 U.S.C. § 542(g), any tax,
fee, or assessment of any kind imposed by the City or other Governmental
Authority on Grantee or cable Subscriber, or both, solely because of their status
as such. The term "Franchise Fee" does not include: (i) any tax, fee, or
assessment of general applicability (including any such tax, fee, or assessment
imposed on both utilities and cable operators or their services but not including
a tax, fee, or assessment which is unduly discriminatory against cable operators
or Subscribers); (ii) capital costs which are required by the Franchise to be
incurred by Grantee for PEG Access facilities; (iii) requirements or charges
incidental to the award or enforcement of the Franchise, including payments for
bonds, security funds, letters of credit, insurance, indemnification, penalties, or
liquidated damages; or (iv) any fee imposed under Title 17 of the United States
Code.
Ordinance 2016 - 03 | Page 4 of 31
(q) “Governmental Authority” means any court or other federal, State, county,
municipal or other governmental department, commission, board, agency or
instrumentality.
(r) “Grantee” is Frontier Communications of Minnesota, Inc., a Minnesota
Corporation, its lawful successors, transferees or assignees.
(s) Gross Revenues” means any and all revenues actually received by the
Grantee, as determined in accordance with generally accepted accounting
principles (“GAAP”), from the operation of the Cable System to provide Cable
Services in the Service Area. Gross Revenues shall not include any taxes, fees
or assessments of general applicability imposed or assessed by any
Governmental Authority, launch fees, tower rent, network capacity and facilities
rent for the provision of non-cable services (including but not limited to voice or
data services), investment income, bad debt, credits, refunds, any amounts
collected from Subscribers for deposits, FCC Fees or PEG Fees. A Franchise
Fee is not such a tax, fee or assessment. The City acknowledges and accepts
that Grantee shall maintain its books and records in accordance with GAAP.
The parties acknowledge that the Grantee may offer a bundle or package of
Cable Services and non-Cable Services at a discounted rate. In order to
calculate Gross Revenues, the Grantee will allocate revenues between Cable
Services (which are subject to the Franchise Fee) and non-Cable Services
(which are not subject to the Franchise Fee but may be subject to other fees
and/or taxes) included in the bundle or package of services. Nothing in this
section shall have any effect on Grantee’s rates for other services that are rate
regulated by the Minnesota Public Utilities Commission or Federal Communications
Commission. The Grantee shall apportion the revenues generated from bundled
or packaged services on a proportionate pro rata basis among the services
offered unless such allocation methodology is directly in conflict with GAAP,
in which case Grantee shall allocate bundled revenues in accordance with
GAAP, and in no event shall the Grantee allocate the revenues to evade its
Franchise Fee obligations under this Franchise or disproportionately reduce
Gross Revenues.
(t) “Installation” means the connection of the System from distribution cable
to the point of connection, including Standard Installations and custom
Installations.
(u) “Normal Business Hours” means those hours during which most similar
businesses in the City are open to serve customers. In all cases, “Normal
Business Hours” must include some evening hours at least one (1) night per
week and/or some weekend hours. Cable System Normal Business Hours as
defined herein shall be the definition set forth in 47 C.F.R. § 76.309(d).
Ordinance 2016 - 03 | Page 5 of 31
(v) “Normal Operating Conditions” means those service conditions which are
within the control of the Grantee. Those conditions which are not within the
control of the Grantee include, but are not limited to, natural disasters, civil
disturbances, power outages, telephone network outages, and severe or unusual
weather conditions. Those conditions which are ordinarily within the control
of the Grantee include, but are not limited to, special promotions, pay-per-view
events, rate increases, regular peak or seasonal demand periods, and
maintenance or upgrade of the Cable System. Normal Operating Conditions as
defined herein shall be the definition set forth in 47 C.F.R. § 76.309(d).
(w) “Other Programming Service” means information that a cable operator
makes available to all Subscribers generally. Other Programming Services as
defined herein shall be the definition set forth in 47 U.S.C. § 522 (14).
(x) “PEG” means public, educational and governmental.
(y) “Person” means any individual or any association, firm, general
partnership, limited partnership, joint stock company, joint venture, trust,
corporation, limited liability company or other legally recognized entity,
private or public, whether for-profit or not-for-profit.
(z) “Qualified Living Unit” means a l iving u nit capable of receiving Cable Service.
(aa) “Service Area” means that portion of the City, as it is now constituted or
may in the future be constituted, in which Grantee is authorized to provide
local exchange telephone service as the incumbent local exchange carrier,
unless otherwise specified in this Franchise.
(bb) “Service Interruption” means the loss of picture or sound on one (1) or
more Cable Channels. Service Interruption as defined herein shall be the
definition set forth in 47 C.F.R. § 76.309.
(cc) “Standard Installation” means any residential Installation to a Qualified
Living Unit.
(dd) “State” means the State of Minnesota.
(ee) “Right of Way” or “Rights-of-Way” means the area on, below, or above a
public roadway, highway, street, cartway, bicycle lane, and public sidewalk in
which the City has an interest, including other dedicated rights-of-way for
travel purposes and utility easements of local government units including the
City.
(ff) “Subscriber” means any Person who lawfully elects to subscribe to Cable
Service via the System. Subscriber as defined herein shall be the definition set
forth in 47 C.F.R. § 76.5(ee).
Ordinance 2016 - 03 | Page 6 of 31
(gg) “Video Programming” means programming provided by, or generally
considered comparable to programming provided by, a television broadcast
station. Video Programming as defined herein shall be the definition set forth
in 47 U.S.C. § 522(20).
1.3 Written Notice. All notices, reports or demands required or permitted to
be given under this Franchise shall be in writing and shall be deemed to be given when delivered
personally to the party designated below, or when five (5) Days have elapsed after it has been
deposited in the United States mail in a sealed envelope, with registered or certified mail,
postage prepaid thereon, or on the next business Day if sent by express mail or nationally
recognized overnight air courier addressed to the party to which notice, report or demand is
being given, as follows:
If to City: City Clerk
City of Rosemount
2875 145th Street West
Rosemount, MN 55068
If to Grantee: Jack Phillips
Frontier Communications
14450 Burnhaven Drive
Burnsville, MN 55306
Such addresses may be changed by either party upon notice to the other party given as provided
in this section.
SECTION 2
GRANT OF AUTHORITY AND GENERAL PROVISIONS
2.1 Franchise Required. It shall be unlawful for any Person to construct, install,
operate or maintain a Cable System or to offer Cable Service in the City unless such Person or
the Person for whom such action is being taken shall have first obtained and shall currently hold
a valid cable television franchise. The City shall at all times comply with the level playing field
statute at Minnesota Statutes Section 238.08 and any other applicable state or federal level
playing field requirements.
2.2 Grant of Franchise.
(a) This nonexclusive Franchise is granted pursuant to the terms and conditions
contained herein. The City hereby authorizes Grantee to occupy or use the City’s Rights-
of-Ways subject to: 1) the provisions of this non-exclusive Franchise to provide Cable
Service within the City; and 2) all generally applicable nondiscriminatory and
competitively neutral provisions of the City Code. Nothing in this Franchise shall be
construed to prohibit Grantee from: (1) providing services other than Cable Services; or
(2) challenging any exercise of the City’s legislative or regulatory authority in an
Ordinance 2016 - 03 | Page 7 of 31
appropriate forum. The City hereby reserves all of its rights to regulate such other
services to the extent not prohibited by applicable law and no provision herein shall be
construed to limit or give up any City right to regulate.
(b) The City shall endeavor to require developers of future subdivisions to allow and
accommodate the construction of the System as part of any provisions for utilities to
serve such subdivisions.
(c) The Grantee agrees to comply with the terms of any lawfully adopted generally
applicable local ordinance related to the safety, health, and welfare of the public or use of
Rights-of-Way, to the extent that the provisions of the ordinance do not conflict with this
Franchise. This Franchise is a contract and except as to those changes which are the
result of the City’s lawful exercise of its general police power, the City may not take any
unilateral action which materially changes the explicit mutual promises in this contract.
Any changes to this Franchise must be made in writing signed by the Grantee and the
City. In the event of any conflict between this Franchise and any City ordinance or
regulation that is not generally applicable, this Franchise shall control. Grantee reserves
all rights it may have to challenge any modifications to the City Code whether arising in
contract or at law. The City reserves all of its rights and defenses to such challenges
whether arising in contract or at law.
(d) Nothing in this Franchise shall (a) abrogate the right of the City to perform any
public works or public improvements of any description, (b) be construed as a waiver of
any codes or ordinances promulgated by the City, or (c) be construed as a waiver or
release of the rights of the City in and to the Rights-of-Way, or (d) be construed as a
waiver or release of rights of the Grantee.
(e) This Franchise complies with the Minnesota franchise standards set forth in
Minnesota Statutes Section 238.084. The City and the Grantee shall conform to
Minnesota laws promulgated subsequent to the date of this Franchise. The City and the
Grantee shall conform to federal laws and regulations as they become effective.
2.3 Additional Providers
(a) The Franchise granted herein shall be nonexclusive.
(b) In the event City initiates the franchising process pursuant to Minn. Stat.
§238.081, the City shall notify Grantee in writing or by publication of notice of its intent
to initiate the franchising process at least twenty (20) days prior to doing so.
(c) Grantee shall have the right to terminate this Franchise and operate the Cable
System to the extent provided in any future amendment to applicable state or federal law.
2.4 Term. The initial term of this Franchise shall be for the period of five (5) years
from the Effective Date unless renewed, revoked or, terminated sooner as herein provided
(“Initial Term”). The Initial Term may be extended by mutual agreement of the parties.
Ordinance 2016 - 03 | Page 8 of 31
2.5 Rules of Grantee. The Grantee shall have the authority to promulgate such rules,
regulations, terms and conditions governing the conduct of its business as shall be reasonably
necessary to enable said Grantee to exercise its rights and perform its obligation under this
Franchise and to assure uninterrupted service to each and all of its Subscribers; provided that
such rules, regulations, terms and conditions shall not be in conflict with provisions hereto, the
City Code or applicable law.
2.6 Service Area and Service Activation.
(a) This Franchise is granted for the Service Area. Grantee shall design, construct
and maintain the Cable System in the Service Area in accordance with Minn. Stat.
Section 238.084. As the Cable System is constructed and made capable of providing
Cable Service, Grantee shall activate and offer Cable Service to Qualified Living Units
within a reasonable period of time. No Person shall be refused Service arbitrarily.
(b) Throughout the term of the Franchise, Grantee shall annually meet with City
representatives to report on the progress of Cable System construction and Service
activation and, at such annual meetings, shall provide current Service Area maps.
Grantee’s annually updated maps may be marked as “Trade Secret” in which case the
City shall maintain them accordingly under the Minnesota Data Practices Act, Minn. Stat.
Ch. 13.
SECTION 3
CONSTRUCTION STANDARDS
3.1 Permits. Grantee shall not construct any Cable System facilities until Grantee has
secured the permits from City required by applicable law.
3.2 Grantee’s Facilities and Equipment.
(a) In those areas of the City where transmission or distribution facilities of all
the utilities providing telephone and electric power service are underground, the Grantee
likewise shall construct, operate and maintain its transmission and distribution facilities
therein underground.
(b) Grantee shall be granted access to any easements granted to a public
utility, municipal utility or utility district in any areas annexed by City or new
developments.
(c) In those areas of the City where Grantee’s cables are located on the above-
ground transmission or distribution facilities of the utility providing telephone or electric
power service, and in the event that the facilities of both such utilities subsequently are
placed underground, then the Grantee likewise shall construct, operate and maintain its
transmission and distribution facilities underground.
Ordinance 2016 - 03 | Page 9 of 31
(d) Certain of Grantee’s equipment, such as pedestals, amplifiers and power
supplies, which normally are placed above ground, may continue to remain in
above-ground closures.
3.3 Conditions on Right-of-Way Use.
(a) Nothing in this Franchise shall be construed to prevent City from
constructing, maintaining, repairing or relocating sewers; grading, paving, maintaining,
repairing, relocating and/or altering any Right-of-Way; constructing, laying down,
repairing, maintaining or relocating any water mains; or constructing, maintaining,
relocating, or repairing any sidewalk or other public work consistent with applicable law.
(b) Relocation for the City. The Grantee shall, upon receipt of reasonable
advance written notice, temporarily disconnect, relocate, or remove any property of
Grantee when lawfully required by the City pursuant to its police powers. Grantee shall
be responsible for any costs associated with these obligations to the same extent all other
users of the City rights-of-way are responsible for the costs related to the relocation of
their facilities.
(c) Relocation for a Third Party. The Grantee shall, on the request of any
Person holding a lawful permit issued by the City, protect, support, raise, lower,
temporarily disconnect, relocate in or remove from the Right-of-Way as necessary any
property of the Grantee, provided that the expense of such is paid by any such Person
benefiting from the relocation prior to Grantee commencing the work required and the
Grantee is give reasonable advance written notice to prepare for such changes. The
Grantee may require such payment in advance. For purposes of this subsection,
“reasonable advance written notice” shall be no less than ten (10) business days in the
event of a temporary relocation and no less than one hundred twenty (120) days for a
permanent relocation.
(d) Reimbursement of Costs. If funds are available to any Person using the
Rights-of-Way for the purpose of defraying the cost of any of the foregoing, the City
shall reimburse the Grantee in the same manner in which other Persons affected by the
requirement are reimbursed. If the funds are controlled by another governmental entity,
the City shall make application for such funds on behalf of the Grantee.
(e) The Grantee shall, on request of any Person holding a moving permit
issued by City, temporarily move its wires or fixtures to permit the moving of buildings
with the expense of such temporary removal to be paid by the Person requesting the
same, and the Grantee shall be given not less than ten (10) Days advance notice to
arrange for such temporary changes.
(f) Nothing in this Franchise shall be construed to prevent the City from adopting and
enforcing requirements for the usage of Rights-of-Way, or from constructing, maintaining,
repairing or relocating utility facilities, streets or sidewalks, or from grading, paving,
maintaining, repairing, relocating and/or altering any Right-of-Way.
Ordinance 2016 - 03 | Page 10 of 31
(g) All System facilities shall be located so as not to obstruct or interfere with the
use of Right-of-Way and public utility installations, and so as not to unnecessarily interfere
with the usual and customary trade, traffic, or travel upon the streets and public places in the
franchise area or endanger the life of property of any Person.
3.4 Tree Trimming. Grantee shall have the authority to trim trees, in accordance with
applicable law.
3.5 Protection of Facilities. Nothing contained in this section shall relieve any Person
from liability arising out of the failure to exercise reasonable care to avoid damaging Grantee’s
facilities while performing any work connected with grading, regrading or changing the line of
any Rights -of-Way or public place or the construction or reconstruction of any sewer or water
system.
3.6 Safety requirements. The Grantee shall at all times keep and maintain the System
in good condition, order, and repair so as to avoid endangering the life or property of any Person;
employ ordinary and reasonable care and common industry practices to avoid causing damage,
injuries, or nuisances to the public, and; keep and maintain the System in accordance with all
federal, state and local laws and regulations including the National Electric Safety Code.
3.7 Drop burial. Grantee shall bury all drops in a reasonable time period which shall
not exceed ten (10) business days, subject to weather conditions and the completion of required
utility locates. In the event the ground is frozen, Grantee shall be permitted to delay burial until
the ground is suitable for burial which in no event shall be later than June 30th.
3.8 Repair of Rights-of-Way and property. Any and all Rights-of-Way or public
property disturbed or damaged during the construction, repair, replacement, relocation, operation,
maintenance or reconstruction of the System shall be promptly and fully restored by Grantee at its
expense in accordance with any applicable ordinance governing Rights-of-Way.
SECTION 4
DESIGN PROVISION
4.1 Cable System Design and Functionality. The Grantee shall operate a Cable
System with the functional equivalent of a 750 MHz Cable System (in terms of video offerings
and functionality).
4.2 Programming Decisions.
(a) Grantee shall carry broad categories of video programming, including
local news, sports, and entertainment. Any change in the broad categories of video
programming or other information services shall require City approval consistent
with 47 U.S.C. § 544(b), which approval shall not be unreasonably withheld.
Ordinance 2016 - 03 | Page 11 of 31
(b) Grantee shall comply with federal law regarding notice to the City and
Subscribers prior to any Channel additions, deletions, or realignments.
4.3 Technical Standards. The technical standards used in the operation of the Cable
System shall comply, at minimum, with applicable technical standards promulgated by the FCC
relating to Cable Systems including, the extent applicable, Title 47, Section 76, Subpart K of the
Code of Federal Regulations, as may be amended or modified from time to time, which
regulations are expressly incorporated herein by reference.
4.4 Special Testing. City may reasonably require special testing of a location or
locations within the System if there is a particular matter of controversy or unresolved
complaints pertaining to such location(s). Demand for such special tests may be made on the
basis of complaints received or other evidence indicating an unresolved controversy or
noncompliance. Such tests shall be limited to the particular matter in controversy or unresolved
complaints. The City shall arrange its request for such special testing so as to minimize hardship
or inconvenience to Grantee or to the Subscribers caused by such testing. Before ordering such
tests, Grantee shall be afforded thirty (30) Days to correct problems or complaints upon which
tests were ordered. The City shall meet with Grantee prior to requiring special tests to discuss
the need for such and, if possible, visually inspect those locations which are the focus of concern.
If, after such meetings and inspections, City wishes to commence special tests and the thirty (30)
Days have elapsed without correction of the matter in controversy or unresolved complaints, the
tests shall be conducted by a qualified engineer mutually selected by City and Grantee based on a
mutually agreed upon scope of work. The parties shall bear their respective costs for the testing.
4.5 FCC Reports. The results of tests required to be filed by Grantee with the FCC
shall also be copied to City within ten (10) Days of filing such report with the FCC.
4.6 Emergency Alert Capability. At all times during the term of this Franchise,
Grantee shall provide and maintain an Emergency Alert System (EAS) consistent with applicable
federal law and regulations including 47 C.F.R., Part 11, and any Minnesota State Emergency
Alert System requirements. The City may identify authorized emergency officials for activating
the EAS consistent with the Minnesota State Emergency Statewide Plan (“EAS Plan”).
4.7 Parental Control Lock. Grantee shall provide, for sale or lease, to Subscribers,
upon request, a parental control locking device or digital code that permits inhibiting the video
and audio portions of any Channels offered by Grantee.
SECTION 5
SERVICE PROVISIONS
5.1 Rate Regulation. The City reserves the right to regulate rates for Basic Cable
Service (hereinafter referred to as “the lowest cost level of Service”) and any other services
offered over the Cable System, to the extent authorized by applicable law.
5.2 Leased Channel Service. Grantee shall offer leased channel service on reasonable
terms and conditions and in accordance with applicable law.
5.3 Service to Public Buildings. Subject to applicable law, the Grantee shall provide,
Ordinance 2016 - 03 | Page 12 of 31
free of charge, the lowest cost level of Service, and any Converter or other device necessary to
receive such Service, to one (1) Drop at City Hall and, within one (1) year of the Effective Date,
such institutional buildings as are listed in Exhibit A, and such additional institutional buildings
that may be identified by the City and are a Qualified Living Unit, so long as such building is not
currently served by another Cable Operator.
5.4 Consumer Protection and Service Standards. Grantee shall comply with the FCC
Customer Service Rules at 47 CFR §76.309, and the following:
(a) Complaint records. Subject to Grantee's need to maintain the privacy
of certain information, the Grantee shall at all times maintain a record of all written
complaints received regarding interruptions or degradation of Cable Service and the
resolution of such complaints, which shall be maintained for one (1) year. Upon
request, Grantee shall make available for the City’s review a written summary of such
complaints and their resolution in accordance with Sections 7.3 and 7.4 herein. Upon
request, Grantee will also make reports available with respect to the objectively
measurable service standards established at 47 CFR §76.309.
(b) Additional customer service requirements. The City expressly reserves
authority to adopt additional or modified customer service requirements to address Subscriber
concerns or complaints in accordance with law and Sections 7.3 and 7.4. herein.
5.5 Standard Installations. The Grantee shall provide Standard Installations without
charge to every Qualified Living Unit.
5.6 Sales Procedures. Grantee shall have the right to market door-to-door during
reasonable hours consistent with local ordinances and regulation.
5.7 Subscriber Contracts. Grantee shall, upon written request, provide the City with
any standard form residential Subscriber contract utilized by Grantee. If no such written contract
exists, Grantee shall file with the City a document completely and concisely stating the length
and terms of the Subscriber contract offered to customers. The length and terms of any standard
form Subscriber contract(s) shall be available for public inspection during Normal Business
Hours. A list of Grantee’s current Subscriber rates and charges for Cable Service shall be
maintained on file with City and shall be available for public inspection. For purposes of this
section, the availability of this information on Grantee’s website shall constitute compliance.
5.8 Refund Policy. If a Subscriber’s Cable Service is interrupted or discontinued,
without cause, for twenty-four (24) or more consecutive hours, Grantee shall, upon request by
the Subscriber, credit such Subscriber pro rata for such interruption. For this purpose, every
month will be assumed to have thirty (30) Days.
5.9 Late Fees. Grantee shall comply with all applicable laws with respect to any
assessment, charge, cost, fee or sum, however characterized, that Grantee imposes upon a
Subscriber for late payment of a bill.
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5.10 Disputes. All Subscribers and members of the general public may direct
complaints, regarding Grantee’s Service or performance to the chief administrative officer of the
City or the chief administrative officer’s designee, which may be a board or Commission of the
City. Grantee shall endeavor to resolve Subscriber complaints within thirty (30) days.
5.11 Customer Bills. Customer bills shall be designed in such a way as to present the
information contained therein clearly and comprehensibly to Customers, and in a way that (a) is
not misleading and (b) does not omit material information. Notwithstanding anything to the
contrary in Section 5.4(d), above, Grantee may, in its sole discretion, consolidate costs on
Customer bills as may otherwise be permitted by Section 622(c) of the Cable Act (47 U.S.C.
§542(c)).
5.12 Local Offices and Repair Phone Line. Grantee shall provide a conveniently
located customer service office which shall be staffed and open during Normal Business Hours.
Grantee shall also maintain a local or toll-free telephone Subscriber repair line, available to its
Subscribers twenty-four (24) hours per Day, seven (7) Days a week.
5.13 Notification of Complaint Procedure. Grantee shall have printed clearly and
prominently on each Subscriber bill and in the customer service agreement provided for in
Section 5.3(e), the twenty-four (24) hour Grantee phone number for Subscriber complaints.
Additionally, Grantee shall provide information to customers concerning the procedures to follow
when they are unsatisfied with measures taken by Grantee to remedy their complaint. This
information will include the phone number of the City office or Person designated to handle
complaints. Additionally, Grantee shall state that complaints should be made to Grantee prior to
contacting the City.
5.14 Subscriber Privacy. To the extent required by Minn. Stat. §238.084 Subd. 1(s)
Grantee shall comply with the following:
(a) No signals including signals of a Class IV Channel may be transmitted
from a Subscriber terminal for purposes of monitoring individual viewing patterns or
practices without the express 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 its provisions. Such written
permission shall be for a limited period of time not to exceed one (1) year which may be
renewed at the option of the Subscriber. No penalty shall be invoked for a Subscriber’s
failure to provide or renew such permission. The permission shall be revocable at any
time by the Subscriber without penalty of any kind whatsoever. For purposes of this
provision, a "class IV cable communications channel" means a signaling path provided
by the System to transmit signals of any type from a Subscriber terminal to another point
in the System.
(b) No information or data obtained by monitoring transmission of a signal
from a Subscriber terminal, including but not limited to lists of the names and addresses
of Subscribers or any lists that identify the viewing habits of Subscribers shall be sold or
otherwise made available to any party other than to Grantee or its agents for Grantee’s
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business use, and also to the Subscriber subject of that information, unless Grantee has
received specific written permission from the Subscriber to make such data available.
(c) Written permission from the Subscriber shall not be required for the
conducting of system wide or individually addressed electronic sweeps for the purpose of
verifying System integrity or monitoring for the purpose of billing. Confidentiality of
such information shall be subject to the provision set forth in subparagraph (b) of this
section.
5.15 Grantee Identification. Grantee shall provide all customer service technicians and
all other Grantee employees entering private property with appropriate picture identification so
that Grantee employees may be easily identified by the property owners and Subscribers.
SECTION 6
PUBLIC ACCESS PROVISIONS
6.1 Public, Educational and Government Access Facilities. City or its designee is
hereby designated to operate, administer, promote, and manage the PEG programming
(hereinafter “PEG Access”) to the Cable System established pursuant to this Section 6. Grantee
is responsible for PEG Access only as set forth in this Section 6 and Exhibit B.
6.2 Grantee Support for PEG Usage. In accordance with the provisions of the Cable
Act and Minnesota Statutes Section 238.084, Grantee shall provide and make available for PEG
Access usage within the Service Area the following:
(a) Provision and use of the funds and Channels designated in Exhibit B of
this Franchise for local educational and governmental programming and access use in
accordance with the requirements of Exhibit B.
(b) Maintenance of the PEG Access Facilities and Channels, and support of
educational and governmental programming to the extent specified in Exhibit B.
(c) PEG Access Facilities shall be operated by the City and PEG Channels
shall be programmed by the City or its lawful designee.
SECTION 7.
OPERATION AND ADMINISTRATION PROVISIONS
7.1 Franchise Fee.
(a) During the term of the Franchise, Grantee shall pay quarterly to the City a
Franchise Fee of five percent (5%) of Gross Revenues. In no event shall the definition of
Gross Revenues be different for any franchised cable operator in the City.
(b) Each Franchise Fee payment shall be paid quarterly not later than forty-
five (45) Days following the end of a given quarter and shall be accompanied by a
Franchise Fee Payment Worksheet substantially in the form attached hereto as Exhibit
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C. Any Franchise Fees owing pursuant to this Franchise which remain unpaid more than
forty-five (45) Days after the dates specified herein shall be past due and subject to
interest at an annual rate of the prime interest rate, as published by the Wall Street
Journal, during the period of underpayment plus 1%.
(c) Except as otherwise provided by law, no acceptance of any payment by
the City shall be construed as a release or as an accord and satisfaction of any claim the
City may have for further or additional sums payable as a Franchise Fee under this
Franchise or for the performance of any other obligation of the Grantee.
(d) No more than once every three (3) years and upon thirty (30) Days prior
written notice, City shall have the right to conduct an independent review/audit of
Grantee’s records solely for the purpose of assessing Grantee’s compliance with the
Franchise Fee obligation herein. In the event an audit reveals an underpayment of five
percent (5%) or more of the Franchise Fee amounts due during the period audited, the
Grantee shall reimburse the City’s audit fees and expenses in full up to a maximum of
$5,000.
7.2 Reports.
(a) Grantee shall provide City with an annual statement, within ninety (90)
Days of the close of each calendar year end, reflecting the total amounts of Gross
Revenues and all payments, and computations of the Franchise Fee for the previous
calendar year.
(b) Upon request, Grantee shall provide City with a summary of service calls,
identifying the number, general nature and disposition of such calls shall be submitted to
the City within thirty (30) Days following its request in a form reasonably acceptable to
the City.
(c) All reports and records required under this Franchise shall be furnished at
the sole expense of Grantee, except as otherwise provided in this Franchise.
7.3 Records Required and City’s Right to Inspect.
(a) Grantee shall at all times maintain a full and complete set of plans, records
and “as-built” drawings and/or maps showing the location of the Cable System installed
or in use in the City, exclusive of Subscriber service Drops and equipment provided in
Subscribers’ homes.
(b) Subject to the privacy provisions of the Cable Act and “Trade Secret”
designation of certain records under the Minnesota Data Practices Act, Minn. Stat. Ch.
13, throughout the term of this Franchise, the Grantee agrees that the City, upon
reasonable prior written notice of thirty (30) Days to the Grantee, and no more than once
per calendar year, may review such of the Grantee’s books and records regarding the
operation of the Cable System and the provision of Cable Service in the Franchise Area
which are reasonably necessary to monitor and enforce Grantee’s compliance with the
provisions of this Franchise (“Records”). Such notice shall specifically reference the
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section(s) of the Franchise that are under review so that the Grantee may organize the
necessary Records for easy access by the City. Grantee shall make available for review
such Records as soon as possible and in no event more than thirty (30) Days unless
Grantee explains that it is not feasible to meet this timeline and provides a written
explanation for the delay and an estimated reasonable date for when such information
will be provided. All such Records pertaining to financial matters that may be the subject
of an inspection by the City shall be retained by the Grantee for a period of six (6) years,
pursuant to Minnesota Statutes Section 541.05. The Grantee shall not deny the City
access to Records on the basis that they are under the control of any parent corporation,
affiliated entity or a third party. Grantee shall provide all Records requested by the City
or City’s agent in the following manner: 1) at a conference room in City Hall; or 2) at
Grantee’s office located in or near the City; or 3) via mail or electronic communication
acceptable to the City and Grantee. All Records shall be subject to the provisions of this
Franchise and applicable law regarding confidentiality.
7.4 Confidential Information.
(a) Subject to applicable law, and except as otherwise expressly provided
herein, Grantee may provide confidential Records that it is obligated to make available to
the City pursuant to this Franchise, by allowing the City, or its designated
representative(s), to view the Records at a mutually agreeable location and without City
obtaining its own copies of such Records. Grantee may also choose to provide any
confidential or proprietary Records pursuant to a mutually acceptable non-disclosure
agreement with a City designated agent. The intent of the parties is to work cooperatively
to insure that Records reasonably necessary for City’s monitoring and enforcement of
Franchise obligations are available to City while protecting Grantee’s confidential
information all in accordance with applicable law. To the extent that Grantee does
provide Records directly to the City, City agrees to not disclose Records except as
required by applicable law. Grantee shall be responsible for clearly and conspicuously
identifying the Records as “Trade Secret.” Grantee acknowledges that the Minnesota
Data Practices Act, Minn. Stat. Ch. 13, limits the City’s ability to refuse public disclosure
unless data or information constitutes “Trade Secrets” or otherwise is protected from
disclosure under the Act.
(b) If the City believes it must release any confidential or proprietary Records
in the course of enforcing this Franchise, or for any other reason including compliance
with the Minnesota Data Practices Act, Minn. Stat. Ch. 13, it shall advise Grantee in
advance so that Grantee may take appropriate steps to protect its interests. The City
agrees that, to the extent permitted by the Minnesota Data Practices Act, Minn. Stat. Ch.
13 and other applicable law, it shall deny access to any of Grantee’s Records marked
confidential or “Trade Secret,” as set forth above, to any Person and that it shall furnish
only that portion of the Grantee’s Records required under the Minnesota Data Practices
Act, Minn. Stat. Ch. 13, and other applicable law.
SECTION 8
GENERAL FINANCIAL AND INSURANCE PROVISIONS
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8.1 Letter of Credit.
(a) At the time of acceptance of this franchise, Grantee shall deliver to the City and
thereafter maintain an irrevocable and unconditional letter of credit in the amount of Ten
Thousand Dollars ($10,000.00).
(b) In addition to recovery of any monies owed by Grantee to City or damages to
City as a result of any acts or omissions by Grantee pursuant to the Franchise, City in
compliance with this section may charge to and collect from the letter of credit the
following liquidated damages:
1. For failure to provide data, documents, reports or information required
herein, the penalty shall be Fifty Dollars ($50.00) per day for each day, or part
thereof, such failure occurs or continues.
2. For failure to comply with construction, operation, customer service, or
maintenance standards, the penalty shall be One Hundred Dollars ($100.00)
per day for each day, or part thereof, such failure occurs or continues.
3. For failure to meet the PEG access requirements set forth in Section 6 of
this Franchise, the penalty shall be One Hundred Dollars ($100.00) per day
for each day, or part thereof, such failure occurs or continues.
4. For failure to comply with any of the provisions of this Franchise, the
penalty shall be Fifty Dollars ($50.00) per day for each day, or part thereof,
such violation continues.
Each violation of any provision of this Franchise shall be considered a separate violation for
which a separate penalty can be imposed.
8.2 Procedure for Franchise Enforcement. Whenever the City finds that Grantee has
allegedly violated one (1) or more terms, conditions or provisions of this Franchise, a written
notice shall be given to Grantee. The written notice shall describe in reasonable detail the
alleged violation so as to afford Grantee an opportunity to remedy the violation. Grantee shall
have thirty (30) Days subsequent to receipt of the notice in which to correct the violation.
Grantee may, within thirty (30) Days of receipt of notice, notify the City that there is a dispute as
to whether a violation or failure has, in fact, occurred. Such notice by Grantee shall specify with
particularity the matters disputed by Grantee and shall stay the running of the above-described
time and the accrual of penalties.
(a) City shall hear Grantee’s dispute at a mutually agreed upon time. Grantee
shall have the right to speak and introduce evidence. The City shall determine if Grantee
has committed a violation and shall make written findings of fact relative to its
determination. If a violation is found, Grantee may petition for reconsideration.
Ordinance 2016 - 03 | Page 18 of 31
(b) If after hearing the dispute, the claim is upheld by the City, then Grantee
shall have thirty (30) Days within which to remedy the violation before the City may seek
to draw on the letter of credit.
(c) Grantee may appeal any adverse decision by the City which shall stay the
City’s right to draw on the letter of credit until such time as the action has been finally
adjudicated by a court of competent jurisdiction.
8.3 Time for Correction of Violation. The time for Grantee to correct any alleged
violation may be extended by the City if the necessary action to correct the alleged violation is of
such a nature or character as to require more than thirty (30) Days within which to perform
provided Grantee commences corrective action within fifteen (15) Days and thereafter uses
reasonable diligence, as determined by the City, to correct the violation.
8.4 Letter of Credit Cap. If City draws upon the letter of credit or any subsequent
letter of credit delivered pursuant hereto, in whole or in part, Grantee shall replace or replenish to
its full amount up the maximum provided by this Section 8.4 the same within ten (10) Days and
shall deliver to City a like replacement letter of credit or certification of replenishment for the
full amount stated in Section 8.1(a) as a substitution of the previous letter of credit. This shall be
a continuing obligation for any draws upon the letter of credit up to an aggregate total of
Twenty-Five Thousand and No/100 Dollars ($25,000.00) over the Franchise term.
8.5 Liability Insurance.
(a) Grantee shall with its acceptance of this Franchise, and at its sole expense,
take out and maintain during the term of this Franchise commercial general liability
insurance with a company authorized to do business in the State of Minnesota that shall
protect the Grantee, the City and their officials, officers, directors, employees and agents
from claims which may arise from operations under this Franchise, whether such
operations be by the Grantee, its officials, officers, directors, employees and agents or
any subcontractors of Grantee. This liability insurance shall include, but shall not be
limited to, protection against claims arising from bodily and personal injury and damage
to property, resulting from Grantee’s vehicles, products and operations. The amount of
insurance for single limit coverage applying to bodily and personal injury and property
damage shall not be less than Three Million Dollars ($3,000,000.00) which may be
satisfied by an umbrella liability policy. The following shall be included in the liability
policy:
1. The policy shall provide coverage on an “occurrence” basis.
2. The policy shall cover personal injury as well as bodily injury.
3. The policy shall cover blanket contractual liability subject to the
standard universal exclusions of contractual liability included in
the carrier’s standard endorsement as to bodily injuries, personal
injuries and property damage.
Ordinance 2016 - 03 | Page 19 of 31
4. Property damage liability shall be afforded.
5. The City shall be named as an additional insured on the policy.
6. An endorsement shall be provided which states that the coverage is
primary insurance and that no other insurance maintained by the
City will be called upon to contribute to a loss under this coverage.
7. Standard form of cross-liability shall be afforded.
(b) Cancellation notice will be provided for any reason other than non-
payment of premium and material alteration and requires the City provide Grantee a
valid contact name and e-mail address (with any changes to the contact name or e-mail
address being the responsibility of the City)
(c) Grantee shall submit to City documentation of the required insurance,
including a certificate of insurance evidencing these requirements.
8.6 Indemnification.
(a) Grantee shall indemnify, defend and hold City, its officers, boards, commissions,
agents and employees (collectively the “Indemnified Parties”) harmless from and against
any and all lawsuits, claims, causes of action, actions, liabilities, demands, damages,
judgments, settlements, disability, losses, expenses (including attorney’s fees and
disbursements of counsel) and costs of any nature that any of the Indemnified Parties may
at any time suffer, sustain or incur arising out of, based upon or in any way connected
with the grant of this Franchise, the operation of Grantee’s System, the breach by Grantee
of its obligations under this Franchise and/or the activities of Grantee, its subcontractor,
employees and agents hereunder. Grantee shall be solely responsible for and shall
indemnify, defend and hold the Indemnified Parties harmless from and against any and
all matters relative to payment of Grantee’s employees, including compliance with Social
Security and withholdings.
(b) The indemnification obligations of Grantee set forth in this Franchise are not
limited in any way by the amount or type of damages or compensation payable by or for
Grantee under Workers’ Compensation, disability or other employee benefit acts,
acceptance of insurance certificates required under this Franchise, or the terms,
applicability or limitations of any insurance held by Grantee.
(c) City does not, and shall not, waive any rights against Grantee which it may have
by reason of the indemnification provided for in this Franchise, because of the acceptance
by City, or the deposit with City by Grantee, of any of the insurance policies described in
this Franchise.
(d) The indemnification of City by Grantee provided for in this Franchise shall apply
to all damages and claims for damages of any kind suffered by reason of any of the
Grantee’s operations referred to in this Franchise, regardless of whether or not such
Ordinance 2016 - 03 | Page 20 of 31
insurance policies shall have been determined to be applicable to any such damages or
claims for damages.
(e) Grantee shall not be required to indemnify City for negligence or misconduct on
the part of City or its officials, boards, commissions, agents, or employees. City shall
hold Grantee harmless, subject to the limitations in Minnesota Statutes Chapter 466, for
any damage resulting from the negligence or misconduct of the City or its officials,
boards, commissions, agents, or employees in utilizing any PEG Channels, equipment, or
facilities and for any such negligence or misconduct by City in connection with work
performed by City and permitted by this Franchise, on or adjacent to the Cable System.
8.7 Process. In order for City to assert its rights to be indemnified, defended, and
held harmless, City must, with respect to each claim:
i. Promptly notify Grantee in writing of any claim or legal
proceeding which gives rise to such right;
ii. Afford Grantee the opportunity to participate in any compromise,
settlement or other resolution or disposition of any claim or proceeding;
and
iii. Fully cooperate with reasonable requests of Grantee, at Grantee's
expense, in its participation in any compromise, settlement or resolution or
other disposition of such claim or proceeding subject to subparagraph (ii)
above.
8.8 Grantee’s Insurance. Grantee shall not commence any Cable System
construction work or permit any subcontractor to commence work until all insurance required
under this Franchise has been obtained. Said insurance shall be maintained in full force and
effect until the expiration of this Franchise.
8.9 Workers’ Compensation Insurance. Grantee shall obtain and maintain Workers’
Compensation Insurance for all of Grantee’s employees, and in case any work is sublet, Grantee
shall require any subcontractor similarly to provide Workers’ Compensation Insurance for all of
their employees, all in compliance with State laws. Grantee shall provide the City with a
certificate of insurance indicating Workers’ Compensation coverage upon its acceptance of this
Franchise.
SECTION 9
SALE, ABANDONMENT, TRANSFER AND REVOCATION
9.1 Abandonment of Service. Grantee may only abandon the System or any portion
thereof in accordance with Minn. Stat. Section 238.084, Subd. 1(w).
9.2 Removal After Termination or Forfeiture.
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(a) In the event of termination or forfeiture of the Franchise, City shall have
the right to require Grantee to remove all or any portion of the System from all Rights-of-
Way and public property within City associated solely with the provision of Cable
Service; provided, however, that if Grantee is providing services other than Cable
Services or pursuant to Minnesota Statutes, Section 237.01 et seq., City shall not require
the removal of the System. Nothing in this section shall be deemed either to grant or to
preclude the provision of services other than Cable Services.
(b) If Grantee has failed to commence removal of System, or such part thereof
as was designated by City, within one hundred twenty (120) Days after written notice of
City’s demand for removal is given, or if Grantee has failed to complete such removal
within twelve (12) months after written notice of City’s demand for removal is given,
City shall have the right to declare all right, title, and interest to the System to be in City
with all rights of ownership including, but not limited to, the right to operate the System
or transfer the System to another for operation by it pursuant to the provisions of 47
U.S.C. § 547 (1989).
9.3 Sale or Transfer of Franchise.
(a) No sale, transfer, or assignment of this Franchise, or “fundamental
corporate change”, as defined in Minnesota Statutes, Section 238.083, in Grantee, shall
take place until a written request is filed with City for its approval, provided, however,
that said approval shall not be required where Grantee grants a security interest in its
Franchise and assets to secure an indebtedness.
(b) City shall have thirty (30) Days from the time of the request to reply in
writing and indicate its determination that a public hearing is necessary due to
potential adverse effect on Grantee’s Subscribers resulting from the sale or transfer.
Such determination shall be expressed in writing.
(c) If a public hearing is deemed necessary pursuant to subparagraph (b)
above, such hearing shall be commenced within thirty (30) Days of such determination
and notice of any such hearing shall be given in accordance with local law or fourteen
(14) Days prior to the hearing by publishing notice thereof once in a newspaper of
general circulation in City. The notice shall contain the date, time and place of the
hearing and shall briefly state the substance of the action to be considered by City.
(d) Thereafter, City shall approve or deny in writing the sale or transfer
request. City shall set forth in writing its reason(s) for denying approval. City shall
not unreasonably withhold its approval.
(e) The parties to the sale or transfer of the Franchise only, without the
inclusion of the System in which substantial construction has commenced, shall
establish that the sale or transfer of only the Franchise will be in the public interest.
(f) Any sale or transfer of stock in Grantee so as to create a new controlling
interest in the System shall be subject to the requirements of this Section 9.3. The
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term “controlling interest” as used herein is not limited to majority stock ownership,
but includes actual working control in whatever manner exercised.
(g) In no event shall a transfer or assignment of ownership or control be
approved without the transferee becoming a signatory to this Franchise and assuming
all rights and obligations there under, and assuming all other rights and obligations of
the transferor to the City.
9.4 Reservation of Rights. City and Grantee reserve all rights that they may possess
under applicable laws unless expressly waived herein.
SECTION 10
MISCELLANEOUS PROVISIONS
10.1 Franchise Renewal. Any renewal of this Franchise shall be in accordance with
applicable laws. The term of any renewed Franchise shall be limited to a period as provided in
Minn. Stat. Section 238.084, Subd. 1(c).
10.2 Work of Contractors and Subcontractors. All provisions of this Franchise shall
apply to any subcontractor or others performing any work or services on Grantee’s behalf
pursuant to the provisions of this Franchise. Grantee shall be responsible for ensuring that the
work of contractors and subcontractors is performed consistent with the Franchise and applicable
laws and shall indemnify the City pursuant to Section 8.5
10.3 Governing Law. This Franchise shall be deemed to be executed in the State of
Minnesota, and shall be governed in all respects, including validity, interpretation and effect, and
construed in accordance with, the Cable Act and the laws of the State of Minnesota, as applicable
to contracts entered into and performed entirely within the State.
10.4 Non-Enforcement by City. Grantee shall not be relieved of its obligation to
comply with any of the provisions of this Franchise by reason of any failure of the City to
enforce prompt compliance.
10.5 Captions. The paragraph captions and headings in this Franchise are for
convenience and reference purposes only and shall not affect in any way the meaning of
interpretation of this Franchise.
10.6 Calculation of Time. Where the performance or doing of any act, duty, matter,
payment or thing is required hereunder and the period of time or duration for the performance is
prescribed and fixed herein, the time shall be computed so as to exclude the first and include the
last Day of the prescribed or fixed period or duration of time. When the last Day of the period
falls on Saturday, Sunday or a legal holiday, that Day shall be omitted from the computation and
the next business Day shall be the last Day of the period.
10.7 Survival of Terms. Upon the termination or forfeiture of the Franchise, Grantee
shall no longer have the right to occupy the Rights-of-Way for the purpose of providing Cable
Service. However, Grantee’s obligations to the City shall survive according to their terms.
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10.8 Severability. If any provision of this Franchise is held by any Governmental
Authority of competent jurisdiction, to be invalid as conflicting with any applicable laws now or
hereafter in effect, or is held by such Governmental Authority to be modified in any way in order
to conform to the requirements of any such applicable laws, such provision shall be considered a
separate, distinct, and independent part of this Franchise, and such holding shall not affect the
validity and enforceability of all other provisions hereof. In the event that such applicable laws
are subsequently repealed, rescinded, amended or otherwise changed, so that the provision
hereof which had been held invalid or modified is no longer in conflict with such laws, said
provision shall thereupon return to full force and effect and shall thereafter be binding on City
and Grantee, provided that City shall give Grantee thirty (30) Days written notice of such change
before requiring compliance with said provision or such longer period of time as may be
reasonably required for Grantee to comply with such provision.
10.9 Force Majeure. In the event Grantee’s performance of any of the terms,
conditions, obligations or requirements of this Franchise is prevented or impaired due to any
cause beyond its reasonable control, such inability to perform shall be deemed to be excused for
the period of such inability and no penalties or sanctions shall be imposed as a result thereof.
Such causes beyond Grantee’s reasonable control shall include, but shall not be limited to, acts
of God, civil emergencies and labor unrest or strikes, untimely delivery of equipment, inability
of Grantee to obtain access to an individual’s property and inability of Grantee to secure all
necessary permits to utilize utility poles and conduit so long as Grantee utilizes due diligence to
timely obtain said permits.
SECTION 11
PUBLICATION EFFECTIVE DATE; ACCEPTANCE AND EXHIBITS
11.1 Publication; Effective Date. This Franchise shall be published in accordance with
applicable law. The Effective Date of this Franchise shall be the date specified in Section 1.2 -
Definitions.
11.2 Acceptance. Grantee shall accept this Franchise within thirty (30) of its
enactment by the City Council, unless the time for acceptance is extended by City. Such
acceptance by the Grantee shall be deemed the grant of this Franchise for all purposes. In the
event acceptance does not take place, this Franchise and any and all rights previously granted to
Grantee shall be null and void.
(a) Upon acceptance of this Franchise, Grantee shall be bound by all the terms
and conditions contained herein.
(b) Grantee shall accept this Franchise in the following manner:
1. This Franchise will be properly executed and acknowledged by
Grantee and delivered to City.
2.With its acceptance, Grantee shall also deliver any performance
bond and insurance certificates required herein that have not previously
been delivered.
Ordinance 2016 - 03 | Page 24 of 31
(c) Summary approved. The City Council hereby determines that the text of the
summary marked "Official Summary of Ordinance No. ____", a copy of which is attached
hereto clearly informs the public of the intent and effect of the ordinance. The City Council
further determines that publication of the title and such summary will clearly inform the public
of the intent and effect of the ordinance.
(d) Filing. The City Clerk shall file a copy of this ordinance in her office, which
copy shall be available for inspection by any persons during regular office hours.
(e) Publication. The City Clerk shall publish the title of this ordinance and the
official summary in the official newspaper of the City with notice that a printed copy of the
ordinance is available for inspection by any person during regular office hours at the Office of the
City Clerk.
Adopted by the City Council of the City of Rosemount, Minnesota, the 20th day of September,
2016.
CITY OF ROSEMOUNT
_______________________________
William H. Droste, Mayor
ATTEST:
_______
Clarissa Hadler, City Clerk
Ordinance 2016 - 03 | Page 25 of 31
ACCEPTED: This Franchise is accepted, and we agree to be bound by its terms and conditions.
FRONTIER COMMUNICATIONS OF
MINNESOTA, INC., a Minnesota
Corporation
Dated: , 2016
By:
Its:
SWORN TO BEFORE ME this
day of , 2016
Notary Public
Ordinance 2016 - 03 | Page 26 of 31
EXHIBIT A
DROPS TO PUBLIC BUILDINGS
All sites listed below shall be capable of receiving Service within five (5) years of the
Effective Date.
Rosemount Government Facilities Address Vantage TV
Initially
Capable
City Hall 2875 145th St. W. Y
Community Center 13885 South Robert Trl. Y
Family Resource Center 14521 Cimarron Ave. Y
Fire Station 1 14700 Shannon Pkwy. Y
Fire Station 2 2047 Connemara Trl. W. N
Public Works Building 14425 Brazil Ave. Y
Steeple Center 14375 S. Robert Trl. N
Rosemount Schools: ISD #196 Address Vantage TV
Initially
Capable
Rosemount Elementary 3155 144th St. W. Y
Rosemount Middle School 3135 143rd St. W. Y
Rosemount High School 3335 142nd St. W. Y
Shannon Park Elementary 13501 Shannon Pkwy. N
Other Rosemount Educational Facilities Address Vantage TV
Initially
Capable
Alliance Education Center 14300 Biscayne Ave. W. Y
Dakota County Technical College 1300 145th St. E. N
First Baptist School 14400 Diamond Path W. Y
St. Joseph Catholic School 13900 Biscayne Ave. W. N
Ordinance 2016 - 03 | Page 27 of 31
EXHIBIT B
PEG ACCESS PROVISIONS
1.PEG Channels and Regional Channel.
(a) City or its designee is hereby designated to operate, administer, promote, and
manage PEG access provided over the Cable System. All Subscribers who receive all or
any part of the total services offered on the System shall receive such Channels at no additional
charge.
(b) Except as provided in paragraph c. below, within one hundred twenty (120) days
from the date Grantee begins offering Cable Service in the Service Area, or within one
hundred eighty days after the Effective Date of this Franchise, whichever is later, Grantee
shall dedicate four (4) Channels for PEG access use. Use of the PEG Channels shall be
determined in City’s sole discretion and Grantee shall have no responsibility for the
content, operations or use of the PEG Channels other than as specified herein. The City
may rename, reprogram, or otherwise change the use of these PEG Channels in its sole
discretion. In no event shall one cable operator in the City be required to offer more PEG
channels than any other cable operator.
(c) City may request additional Channel capacity beyond the provisions of Section
1.b. in accordance with applicable law, including Minn. Stat. §238.084 which is expressly
incorporated herein by reference.
(d) The following governs the Grantee’s use of the PEG Channels for other services
if a Channel is not being used for PEG purposes:
(i) If a PEG Channel is not “fully utilized” at any time during the term of this
Agreement, the Grantee may temporarily use the PEG Channel no less than sixty (60)
days after submitting a written notice of such use to the City.
(ii) The PEG Channel shall be considered fully utilized if programming is
delivered over it more than thirty-six (36) hours per week on average over a six (6) month
period.
(iii) If the PEG Channel is being used by the Grantee in accordance with
subsection (ii), and the City has determined in good faith that it or its designated PEG
provider has the ability to fully utilize the Channel again, then the City shall request
return of the PEG Channel by delivering written notice of same to the Grantee. In such
event, the PEG Channel shall be returned to the City for PEG programming within ninety
(90) days after receipt by the Grantee of such written notice.
(e) Grantee shall designate Channel 6 for uniform regional channel usage for so long
as required by Minn. Stat. §238.43.
2.PEG Channel Locations.
Ordinance 2016 - 03 | Page 28 of 31
(a) Grantee shall cablecast the four (4) PEG Channels on the following Channel
designations: Channels 184, 187, 188 and 189. In the event Grantee elects to relocate the
PEG Channels, the Grantee shall give City at least sixty (60) Days prior written notice.
(b) Grantee shall give Subscribers at least sixty (60) Days prior written notice of any
relocation of the PEG Channels to different Channel numbers. Prior to relocation,
Grantee shall inform Subscribers of the new Channel locations through bill messages or
inserts, and shall list the new Channel locations on the on-air program guide. The parties
acknowledge that Grantee contracts with a third party or parties to provide on-screen and
on-line program listings. It shall be the responsibility of the City, or its designee, to
provide such detailed program information to the third-party entity or entities that produce
such listings for Grantee in accordance with each such entity’s normal format and
scheduling requirements and at the City’s cost.
3. HD PEG Carriage Requirements.
(a) Nothing herein precludes the Grantee from charging for any equipment needed to
receive Basic Cable Service.
(b) Grantee shall provide the PEG channels in standard definition (SD), digital
format, and in high definition (HD) provided that the signal received from the
Commission or City is in HD, and provided that the Grantee shall not be required to
provide the PEG channels at a resolution higher than the highest resolution used in
connection with the Grantee’s delivery of other channels.
(c) The City acknowledges that receipt of an HD format Channel may require
Subscribers to buy or lease special equipment, or pay additional HD charges applicable to
all HD services provided by Grantee. The Grantee shall ensure that HD programming on
Channels 180 and 188 may be received and viewed by Subscribers who do not otherwise
receive HD format programming without the need for additional customer premises
equipment.
4. Live Origination Sites. The Grantee is permitted to obtain PEG Channels and
programming from the Commission or City at a mutually agreeable demarcation point or points.
The Grantee shall provide two-way capability permitting origination and transport of PEG
Channels and programming upstream from public institutional sites designated by the
Commission or City to such agreed upon demarcation point(s) to the extent such connection(s)
is/are not duplicative of connection(s) provided by another Cable Operator, and provided that the
requested site is a Qualified Living Unit.
5. PEG Technical Quality.
(a) The PEG Channels shall meet FCC technical standards including those applicable
to the carriage of PEG Channels, provided, however, that the Grantee is not responsible
for the production quality of PEG programming provided to the Demarcation Point.
Grantee shall reasonably monitor the PEG Channels for technical quality to ensure FCC
technical standards are met. The placement of PEG Channels on the System shall not
Ordinance 2016 - 03 | Page 29 of 31
make these PEG Channels more vulnerable to interference or ingress than the primary
signals of local broadcast stations that are delivered using similar transmission
technology in City.
(b) The Grantee will provide all SD PEG Channels to Subscribers at reasonably
equivalent visual and audio quality to that in which the Grantee delivers the SD CSPAN
channel, or its future equivalent. If applicable, the Grantee will provide all HD PEG
Channels to Subscribers at reasonably equivalent visual and audio quality to that in which
the Grantee delivers the HD CSPAN channel, or its future equivalent.
(c) There shall be no significant deterioration in a PEG Channel’s signal from the
point of origination upstream to the point of reception downstream on the Cable System;
provided, however, this subsection shall not apply to the conversion of PEG Access
Channel signals to a different technical format, such as when City delivers a PEG signal
in HD and Grantee converts such signal to SD for cablecasting.
(d) Upon request, throughout the term of the Franchise, Grantee shall provide
updated contact information for a local technical representative with local knowledge of
the City’s PEG operations, who shall be available to the City for consultation on
technical matters as the need may arise. This technical representative shall be accessed
through a direct telephone number available to the City (as opposed to a general public
number). The Grantee shall not impose any unreasonable fees or charges to the City for
this technical consultation. If such consultation is insufficient to diagnose the matter in
question, within twenty-four (24) hours of a written request from City to the Grantee
identifying a technical problem with a PEG Channel signal and requesting assistance,
Grantee will provide, free of charge to City, diagnostic services to determine whether or
not a problem with a PEG signal is the result of matters for which Grantee is responsible)
and if so, Grantee will take prompt corrective action, free of charge to City, subject to the
limitations on Grantee’s responsibilities outlined herein. If the problem persists and there
is a reasonable dispute about the cause, then the parties shall meet with engineering
representation from Grantee and the City in order to mutually determine the course of
action to remedy the problem. Nothing herein shall be construed to obligate Grantee to
correct problems or take any other action caused by City’s signal, City’s network or
internal wiring, City’s equipment, PEG access program content or other issues within
City’s reasonable control.
(e) Grantee shall comply with applicable law regarding the carriage of PEG
Channels.
6. Promotion of PEG Channels.
To the extent permitted by Grantee’s billing process and solely for the purpose of promoting the
PEG Channels, Grantee shall allow the City to place bill stuffers in Subscriber statements at a
cost to the City not to exceed Grantee’s cost, no more frequently than once per year upon the
written request of the City and at such times that the placement of such materials would not
materially and adversely affect Grantee’s cost for the production and mailing of such statements.
Ordinance 2016 - 03 | Page 30 of 31
7.PEG Financial Support.
Grantee shall provide the following financial support for PEG (“PEG Support”):
(a) PEG Fee. Commencing sixty (60) days after the Effective Date of this Franchise
through the end of the Term, Grantee shall remit to the City a payment calculated as a per
Subscriber, per month amount, in an amount not to exceed seventy-five cents ($0.75) per
Subscriber, per month as determined by the City, solely to fund PEG access expenditures
as permitted by applicable law (hereinafter “PEG Fee”). Grantee shall make such
payment quarterly, not later than forty-five (45) Days following the end of a given
quarter, accompanied by a statement indicating Grantee’s Subscriber count for the prior
quarter. Such statement may be marked as a “Trade Secret.” Upon written request, City
will provide documentation to Grantee of the expenditures made with the PEG Fee.
(b) Level Terms. If any franchise issued to another provider Service after the
Effective Date contains a lower PEG Support obligation than required above, Grantee
may reduce its PEG Support to match such lower obligation.
Ordinance 2016 - 03 | Page 31 of 31
EXHIBIT C
FRANCHISE FEE PAYMENT WORKSHEET
486107v1 RJV AP155-5 1
CITY OF ROSEMOUNT
DAKOTA COUNTY, MINNESOTA
RESOLUTION 2016 - ______
RESOLUTION APPROVING SUMMARY
PUBLICATION OF ORDINANCE NO. 2016 - 03
WHEREAS, the City of Rosemount, acting by the City Council, has adopted a lengthy
ordinance granting a cable franchise to Frontier Communications of Minnesota, Inc. to construct,
operate and maintain a cable television system in the City; and
WHEREAS, as authorized by Minnesota Statutes, Section 412.191, subd. 4, the City
Council has determined that publication of the title and summary of the ordinance will clearly
inform the public of the intent and effect of the ordinance; and
WHEREAS, a printed copy of the ordinance and a copy of the entire text of the ordinance is
available for inspection during regular office hours at the office of the city clerk.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL that the
following summary of the ordinance is approved for summary publication:
CITY OF ROSEMOUNT.
ORDINANCE NO. 2016 - 03
The ordinance grants a cable franchise to Frontier Communications of Minnesota,
Inc. to use rights-of-way in the City to construct, operate and maintain a cable
system and provide cable service for a period of five (5) years from the effective
date unless renewed, revoked or terminated sooner. The franchise establishes
requirements for operation of the system and delivery of cable services, imposes a
franchise fee, and generally sets forth the conditions required for cable franchises
under Minnesota Statutes, Chapter 238.
Approved and adopted this 20th day of September, 2016.
_________________________________
William H. Droste, Mayor
Attest:
_________________________________
Clarissa Hadler, City Clerk