APPENDIX B – FRANCHISESAPPENDIX B – FRANCHISES\ORDINANCE NO. 762 (CABLE)

In the review of Allegiance Communications, LLC (“Grantee”), the City of Douglass, Kansas (“Grantor”) makes the following findings:

(1)   The Grantee’s technical ability, financial condition, legal qualifications, and character 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 System were considered and found adequate and feasible in a full public proceeding after due notice and a reasonable opportunity to be heard; and

(3)   The Franchise granted to Grantee by the Grantor complies with the existing applicable laws and regulations.

SECTION 1. SHORT TITLE AND DEFINITIONS

(1)   Short Title. This Franchise Ordinance shall be known and cited as the Cable Communications Ordinance.

(2)   Definitions. For the purposes of this Franchise, the following terms, phrases, words, and their derivations shall have the meaning given herein. When not inconsistent with the context, words in the singular number include the plural number. The word “shall” is always mandatory and not merely directory. The word “may” is directory and discretionary and not mandatory.

(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 not be inconsistent with 47 U.S.C. §543(b) (7).

(b)   “Cable Programming Service” means any Video Programming provided over a Cable System, regardless of service tier, including installation or rental of equipment used for the receipt of such Video Programming, other than:

(1)   Video Programming carried on the Basic Service Tier;

(2)   Video Programming offered on a pay-per-channel or pay-per-program basis; or

(3)   A combination of multiple channels of pay-per-channel or pay-per-program Video Programming offered on a multiplexed or time-shifted basis so long as the combined service: a. consists of commonly-identified Video Programming; and b. is not bundled with any regulated tier of service. Cable Programming Service as defined herein shall not be inconsistent with the definition as set forth in 47 U.S.C. §543(1) (2) and 47 C.F.R. 76.901 (b) (1993).

(c)   “Cable Service” means the one-way transmission to Subscribers of Video Programming, or other programming service, and Subscriber interaction, if any, which is required for the selection of such Video Programming or other programming service.

(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:

(1)   a facility that serves only to retransmit the television signals of one or more television broadcast stations:

(2)   a facility that serves Subscribers without using any public right-of-way;

(3) 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;

(4)   an open video system that complies with 47 U.S.C. §653; or

(5)   any facilities of any electric utility used solely for operating its electric utility systems.

(e)   “City” means City of Douglass, Kansas, acting by and through its City Council.

(f)   “City Council” means the City of Douglass, Kansas City Council.

(g)   “Drop” means the cable that connects the ground block on the Subscriber’s residence to the nearest feeder cable of the System.

(h)   “FCC” means the Federal Communications Commission and any legally appointed, designated or elected agent or successor.

(i)    “Franchise” means an initial authorization, or renewal thereof (including a renewal of an authorization which has been granted subject to 47 U.S.C. §546) issued by a franchising authority, whether such authorization is designated as a franchise, ·permit, license, resolution, contract, certificate, agreement, or otherwise, which authorizes the construction or operation of a Cable System.

(j)    “Franchise Area” means the area within the legal boundaries of the Grant or

(k)   “Grantee” is Allegiance Communications, LLC, its agents and employees, lawful successors, transferees or assignees.

(l)    “Grantor” is the City of Douglass, Kansas.

(m)  “Gross Revenue” means all monthly revenue received from Basic Cable Service, Cable Programming Service, and Pay Television directly by the Grantee from the operation of its System within Franchise Area. The term “Gross Revenues” shall not include Installation fees, disconnection fees, upgrade and downgrade of service fees, fees for telecommunications services, if any, fees for the sale, leasing, or servicing of equipment, franchise fees, advertising revenues, late fees, any fees itemized and passed through as a result of franchise imposed requirements or any taxes or fees on services furnished by Grantee imposed directly on any Subscriber or user by any municipality, state, or other governmental unit and collected by Grantee for such governmental unit.

(n)   “Installation” means the connection of the System from feeder cable to the point of connection, including Standard Installations and custom installations.

(o)   “Lockout Device” means an optional mechanical or electrical accessory to a Subscriber’s terminal which inhibits the viewing of a certain program, certain channel, or certain channels provided by way of the Cable System.

(p)   ‘‘Multichannel Video Program Distributor or MVPD’ means a person such as, but not limited to, a cable operator, a multichannel multipoint distribution service, a direct broadcast satellite service, or a television receive-only satellite program distributor, who makes available for purchase, by subscribers or customers, multiple channels of video programming.

(q)   “Open Video Services” or “OVS” means any video programming Services provided to any person by a Franchisee certified by the FCC to operate an Open Video System pursuant to Section 47 U.S.C. 573, as may be amended, regardless of the Facilities used.

(r)   “Pay Television” means the delivery over the System of premium pay-per channel programming audio-visual signals, to Subscribers for a per month fee or charge, in addition to the per month charge for Basic Cable Service or Cable Programming Services.

(s)   “Person” is any person, firm, partnership, association, corporation, company, or other legal entity.

(t)    “Standard Installation” means any residential installation which can be completed using a Drop of one hundred fifty (150) feet or less.

(u)   “Street” means the surface of, and the space above and below, any public street, road, highway, freeway, lane, alley, path, court, sidewalk, parkway, or drive, or any easement or right-of-way now or hereafter held by Grantor.

(v)   “Subscriber” means any Person who lawfully receives Cable Service.

(w)  “Video Programming” means programming provided by, or generally considered comparable to programming provided by, a television broadcast station.

SECTION 2. GRANT OF AUTHORITY AND GENERAL PROVISIONS

(1)   Franchise Required. It shall be unlawful for any Person to construct, operate or maintain a Cable System or to provide Cable Service or other competing MVPD services, including OVS, in the Grantor without a Franchise in the form of a Franchise Agreement authorizing the same, unless applicable federal or State law prohibits the Grantor’s enforcement of such a requirement.

(2)   Grant of Franchise. This Franchise 1s granted pursuant to the terms and conditions contained herein.

(3)   Grant of Nonexclusive Authority.

(a)   The Grantee shall have the right and privilege to construct, erect, operate, and maintain, in, upon, along, across, above, over and under the Streets, alleys, public ways and public places now laid out or dedicated and all extensions thereof, and additions thereto in Franchise Area, poles, wires, cables, underground conduits, manholes, and other television conductors and fixtures necessary for the maintenance and operation in Franchise Area of a Cable System.

(b)   Grantee shall have the right to conduct direct selling In Franchise Area, including door to door sales, notwithstanding any peddler or solicitor laws or regulations to the contrary.

(c)   This Franchise shall be nonexclusive, and Grantor reserves the right to grant a similar use of said Streets to any MVPD at any time during the period of this Franchise, provided, however, that any additional Franchise shall contain the same substantive terms and conditions as this Franchise in order that one MVPD is not granted a competitive advantage over another. In the event a MVPD commences operation without a Franchise or is granted a Franchise or permit to operate by the Grantor, the terms and conditions of which do not comply with this Ordinance, the Grantee shall have the right either (i) to opt in to the competitor’s franchise by providing ten (10) days prior written notice to the Grantor; or (ii) to petition the Grantor for modifications to Grantee’s Franchise, in which case the Grantor shall work in good faith with a Grantee to review and adopt modifications which the Grantee deems necessary, review and approval by Grantor shall not be unreasonably denied. A MVPD is not an entity that provides direct broadcast satellite services for purposes of this Section. Notwithstanding any provisions of this Section to the contrary, if the Grantor does not possess authority under applicable laws to require a Franchise of a Person, the provisions of this Section shall not apply.

(d)   In the event Grantor grants one or more additional Franchises or one or more non-franchised MVPD’s commence providing Cable Service in the Grantor, Grantee shall have the right to terminate or reduce the term of this Franchise in its sole discretion.

(4)   Franchise Term and Renewal. This Franchise shall be in effect for a period of five (5) years from the date of acceptance by Grantee, unless renewed, revoked, or terminated sooner as herein provided. This Franchise may be extended for an additional five (5) years if the Grantee has substantially complied with the material terms of the Franchise and with applicable law. The renewal of the Franchise shall be in accordance with the provisions under Section 626 of the Cable Act (47 U.S.C. Section 546).

(5)   Previous Franchises. Upon acceptance by Grantee as required by Section 9 herein, this Franchise shall supersede and replace any previous Ordinance or Agreement granting a Franchise to Grantee to own, operate and maintain a Cable System within the Franchise Area.

(6)   Rules of Grantee. The Grantee shall have the authority to promulgate such rules, 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.

(7)   Franchise Area Involved. This Franchise is granted for the corporate boundaries of Grantor, as it exists from time to time. In the event of annexation by Grantor, or as development occurs, any new territory shall become part of the area covered, provided, however, that Grantee shall not be required to extend service beyond its present System boundaries unless there is a minimum of forty (40) homes per underground cable mile or thirty (30) homes per aerial cable mile as measured from the last fiber node or terminating amplifier and within one hundred fifty (150) feet of the System. Access to Cable Service shall not be denied to any group of potential residential cable Subscribers because of the income of the residents of the area in which such group resides. Grantee shall be given a reasonable period· of time to construct and activate cable plant to service annexed or newly developed areas.

(8)   Written Notice. All notices, reports, or demands required to be given in writing under this Franchise shall be deemed to be given when delivered personally to any officer of Grantee or Grantor’s Administrator of this Franchise or forty-eight (48) hours after it is deposited in the United States mail in a sealed envelope, with registered or certified mail postage prepaid thereon, addressed to the party to whom notice is being given, as follows:

If to Grantee:

Allegiance Communications. LLC

Attn: Contracts Dept.

6125 Paluxy Drive

Tyler, Texas 75703

With a copy to:

Allegiance Communications, LLC

Attn: Government Relations

707 W. Saratoga

Shawnee, Oklahoma 74801

Such addresses may be changed by either party upon notice to the other party given as provided in this Section.

(9)   Drops to Public Buildings. Grantee shall provide Standard Installation of one (1) cable Drop, one (1) cable outlet, and monthly Basic Cable Service without charge to Grantor-owned buildings used for operating the City, such as City hall, public schools, fire department and police department located in the Franchise Area and within 150 feet of the System, subject to Section 7 herein.

No redistribution of the free Basic Cable Service provided pursuant to this Section shall be allowed. Additional Drops and/or outlets in any of the above locations will be provided by Grantee at the cost of Grantee’s time and material. Alternatively, at the institution’s request, said institution may add outlets at its own expense, as long as such installation meets Grantee’s standards and provided that any fees for Cable Services are paid. Nothing herein shall be construed as requiring Grantee to extend the System to serve additional institutions as may be designated by Grantor; additional buildings may receive service with the mutual consent of Grantor and Grantee.

SECTION 3. CONSTRUCTION STANDARDS

(1)   Construction Codes and Permits.

(a)   Grantee shall obtain all required permits from Grantor before commencing any construction upgrade or extension of the System, including the opening or disturbance of any Street, or private or public property within Franchise Area.

(b)   The Granter shall impose no permit fees upon Grantee.

(c)   The Grantor shall have the right to inspect all construction or installation work performed pursuant to the provisions of the Franchise and to make such tests at its own expense as it shall find necessary to ensure compliance with the terms of the Franchise and applicable provisions of local, state and federal law.

(2)   Repair of Streets and Property. Any and all Streets or public property or private property, which are 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, to a condition as good as that prevailing prior to Grantee’s work.

(3)   Conditions on Street use.

(a)   If at any time during the period of this Franchise Grantor shall elect to alter, or change the grade or location of any Street, alley or other public way, the Grantee shall, at its own expense, upon reasonable notice by Grantor, remove and relocate its poles, wires, cables conduits, manholes and other fixtures of the System, and in each instance comply with the standards and specifications of Grantor. If Grantor reimburses other occupants of the Street, Grantee shall be likewise reimbursed.

(b)   The Grantee shall, on request of any Person holding a moving permit issued by Grantor, 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.

(c)   The Grantee shall have the authority to trim any trees upon and overhanging the Streets, alleys, sidewalks, or public easements of Grantor so as to prevent the branches of such trees from coming in contact with the wires and cables of the Grantee.

(d)   Nothing contained in this Franchise shall relieve any Person from liability arising out of the failure to exercise reasonable care to avoid injuring Grantee’s facilities.

(4)   Undergrounding of Cable.

(a)   In areas where all other utility lines are placed underground, Grantee shall construct and install its cables, wires and other facilities underground.

(b)   In any area where one or more public utilities are aerial, Grantee may construct and install its cables, wires and other facilities from the same pole with the consent of the owner of the pole.

(5)   Safety Requirements. The Grantee shall at all times employ ordinary and reasonable care and shall install and maintain in use nothing less than commonly accepted methods and devices for preventing failures and accidents which are likely to cause damage, injuries, or nuisances to the public.

SECTION 4. SYSTEM PROVISIONS

(1)   Operation and Maintenance of System. The Grantee shall render effective service, make repairs promptly and interrupt service only for good cause and for the shortest time possible.

(2)   Technical Standards. The System shall comply, at minimum, with the technical standards promulgated by the FCC found in Title 47, Section 76.601 to 76.617, as maybe amended or modified from time to time.

(3)   Lockout Device. Upon the request of a Subscriber, Grantee shall provide by sale or lease a Lockout Device.

SECTION 5. SERVICES PROVISIONS

(1)   Subscriber Inquiry and Complaint Procedures. Grantee shall have a publicly listed toll-free telephone number and be operated so as to receive Subscriber complaints and requests on a twenty-four (24) hour-a-day, seven (7) days-a-week basis.

(2)   Refund Policy. In the event a Subscriber terminates Cable Service and receives less than a full month’s service, Grantee shall prorate the monthly rate on the basis of the number of days in the period for which service was rendered to the number of days in the billing.

SECTION 6. OPERATION AND ADMINISTRATION PROVISIONS

(1)   Indemnification of Grantor.

(a)   Grantee shall indemnify, defend, and hold harmless Grantor, its officers, boards, committees, commissions, elected officials, employees and agents, from and against all liability, damages, and penalties which they may legally be required to pay as a result of the exercise of the Franchise, except claims covered by worker’s compensation insurance.

(b)   Nothing in this Franchise relieves a Person from liability arising out of the failure to exercise reasonable care to avoid injuring the Grantee’s facilities while performing work connected with grading, regarding, or changing the line of a Street or public place or with the construction or reconstruction of a sewer or water system.

(c)   In order for Gran tor to assert its rights to be indemnified, defended, and held harmless, Grantor must with respect to each claim:

(1)   Promptly notify Grantee in writing of any claim or legal proceeding which gives rise to such right;

(2)   Afford Grantee the opportunity to participate in and fully control any compromise, settlement or other resolution or disposition of any claim or proceeding; and

(3)   Fully cooperate with reasonable requests of Grantee, at Grantee’s expense, in its participation in, and control, compromise, settlement or resolution or other disposition of such claim or proceeding subject to paragraph two (2) above.

(2)   Insurance.

Grantee shall maintain in full force and effect at its sole expense, a comprehensive general liability insurance policy, including contractual liability coverage, in protection of Grantor in its capacity as such. The policies of insurance shall be in the sum of not less than Three Hundred Thousand Dollars ($300,000) for personal injury or death of any one Person, and One Million Dollars ($1,000,000) for personal injury or death of two or more Persons in any one occurrence, Three Hundred Thousand Dollars ($300,000) for property damage to any one Person and One Million Dollars ($1,000,000) for property damage resulting from any one act or occurrence.

(3)   Franchise Fee.

(a)   Grantee will pay Grantor an annual franchise fee in the amount of three percent (3%) of Grantee’s annual Gross Revenues.

(b)   The franchise fee shall be payable annually. The payment shall be made within ninety (90) days of the end of Grantee’s fiscal year, together with a brief report showing the basis for the computation.

SECTION 7. REVOCATION, ABANDONMENT, AND SALE OR TRANSFER

(1)   Grantor’s Right to Revoke. In addition to all other rights which Grantor has pursuant to law or equity, Grantor reserves the right to revoke, terminate or cancel this Franchise, and all rights and privileges pertaining thereto, if after strictly following the procedures required by Section 7.2 herein, it is determined that Grantee has violated any material provision of this Franchise and has failed to substantially cure said violation.

(2)   Procedures for Revocation.

(a)   Grantor shall provide Grantee with written notice of a cause for revocation and the intent to revoke and shall allow Grantee sixty (60) days subsequent to receipt of the notice in which to substantially cure the violation or to provide adequate assurance of performance. Together with the notice required herein, Grantor shall provide Grantee with written findings of fact which are the basis of the revocation.

(b)   Grantee shall be provided the right to a public hearing affording due process before the Grantor City Council prior to revocation, which public hearing shall follow the sixty (60) day notice provided in paragraph (a) above. Grantor shall provide Grantee with written notice of its decision together with written findings of fact supplementing said decision.

(c)   After the public hearing and upon written determination by Grantor to revoke the Franchise. Grantee may appeal said decision with an appropriate state or federal court or agency.

(d)   During the appeal period, the Franchise shall remain in full force and effect unless the term thereof sooner expires.

(e)   Upon satisfactory correction by Grantee of the violation upon which said notice was given, the initial notice shall become void.

(3)   Sale or Transfer of Franchise. No sale or transfer of this Franchise shall take place without the written approval of the Grantor, which approval shall not be unreasonably withheld. All of the rights, privileges, obligations, duties, and liabilities created by this Franchise shall pass to and be binding upon the successor or assign of Grantee. Said approval shall not be required where Grantee grants a security interest in its Franchise and assets to secure indebtedness.

SECTION 8. MISCELLANEOUS PROVISIONS

(1)   Franchise Renewal. Any renewal of this Franchise shall be done in accordance with applicable federal, state and local laws and regulations.

(2)   Amendment of Franchise Ordinance. Grantee and Grantor may agree, from time to time, to amend this Franchise. Such written amendments may be made at any time if Grantor and Grantee agree that such an amendment will be in the public interest or if such an amendment is required due to changes in federal, state or local laws. Grantor shall act pursuant to local law pertaining to the ordinance amendment process.

(3)   Subscriber Privacy. Grantee shall comply with the terms of 47 U.S.C. §551 relating to the protection of Subscriber privacy.

SECTION 9. PUBLICATION, EFFECTIVE DATE AND ACCEPTANCE.

(1)   Publication: Effective Date. If applicable, this Franchise shall be published in accordance with law. The effective date of this Franchise shall be the date of acceptance by Grantee in accordance with the provisions of Section 9.2.

(2)   Acceptance.

(a)   Grantee shall accept this Franchise by executing same. Such acceptance by the Grantee shall be deemed the grant of this Franchise for all purposes. With its acceptance. Grantee shall also deliver any insurance certificates required herein that have not been previously delivered.

(b)   Upon acceptance of this Franchise, Grantee shall be bound by all the terms and conditions contained herein.

(02-26-2008)