Sec. 10-80. - Intent.

(a)

The town council of Chapel Hill, pursuant to applicable federal and state law, is authorized to grant one (1) or more non-exclusive franchises to construct, operate, maintain and reconstruct cable television systems within the town limits.

(b)

The town council finds that the development of cable television systems has the potential of having great benefit and impact upon the residents of Chapel Hill. Because of the complex and rapidly changing technology associated with cable television, the town council further finds that the public convenience, safety, and general welfare and necessity can best be served by establishing franchise powers which should be vested in the town or such persons as the town shall designate. It is the intent of this article and subsequent amendments to provide for and specify the means to attain the best possible cable television service to the public and any franchises issued pursuant to this article shall be deemed to include this finding as an integral part thereof.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-81. - Definitions.

For the purpose of this article, the following terms, phrases, words and their derivations shall have the meaning given herein. Words used in the present tense include the future, words in the plural number include the singular number, and words in the singular number include the plural number. All capitalized terms used in the definition of any other term shall have their meaning as otherwise defined in this section 10-81. The words "shall" and "will" are mandatory and "may" is permissive. Words not defined shall be given their common and ordinary meaning.

Addressable means the method by which changes may be made in an authorized subscriber's programs, tiers, and channel selections via electronic commands transmitted from the system headend or hub site to the authorized subscriber's receiving equipment.

Basic cable service means any service tier which includes the retransmission of local television broadcast signals. This definition will be deemed to change consistent with any changes in the definition of this term by the Federal Communications Commission.

Cable Act means the Cable Communications Policy Act of 1984, Pub. L. No. 98-549, 98 Stat. 2779 (1984) (codified at 47 U.S.C. §§ 521—611 as amended by the Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102-385 and by the Telecommunications Act of 1996, Pub. L. No. 104-104, 100 Stat. 56 (1996) and as may, from time to time, be amended.)

Cable television system, system or cable 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 television service which includes video programming and other lawful communications services and which is provided to multiple subscribers within the town. Such term does not include:

(1)

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

(2)

A facility that serves subscribers without using any public rights-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—226, except that such facility shall be considered a cable system (other than for purposes of 47 U.S.C. § 541) to the extent such facility is used in the transmission of video programming directly to subscribers; or

(4)

Any facilities of any electric utility used solely for operating its electric utility system.

Channel or cable channel means a six (6) MHz portion of the electromagnetic frequency spectrum which is used in a cable system.

Council means the town council of the Town of Chapel Hill.

Franchise or franchise agreement means an initial authorization, or renewal thereof, issued by the town, whether such authorization is designated as a franchise, permit, license, ordinance, contract, certificate, agreement, or otherwise, which authorizes the construction or operation of a cable system.

Franchise agreement ordinance means a franchise granted pursuant to this article, containing the specific provisions of the franchise granted, including references, specifications, requirements and other related matters.

Franchise fee means any tax, fee or assessment of any kind imposed by the town or other governmental entity on a grantee or subscriber, or both, solely because of their status as such. The term "franchise fee" does not include:

(1)

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 cable subscribers);

(2)

Capital costs which are required by the franchise agreement ordinance to be incurred by the cable operator for public, educational, or governmental access facilities;

(3)

Requirements or charges incidental to the awarding or enforcing of the franchise, including payments for bonds, security funds, letters of credit, insurance, indemnification, penalties, or liquidated damages; or

(4)

Any fee imposed under Title 17 of the United States Code.

Grantee means any person receiving a franchise pursuant to this article and its agents, employees, officers, designees, or any lawful successor, transferee or assignee.

Grantor or town means the Town of Chapel Hill as represented by the council or any delete acting within the scope of the town's jurisdiction.

Gross revenues means all revenue received by the grantee, arising from or attributable to the sale of cable television video or audio program services, videotext services and video games provided by the grantee within the town or derived from the operation within the town of its system, including, but not limited to:

Monthly fees charged to subscribers for basic cable service;

Monthly fees charged to subscribers for any optional video or audio program service;

Monthly fees charged to subscribers for any tier of video or audio program service other than basic cable service;

Installation disconnection and reconnection fees for the provision of video or audio program services;

Leased channel fees;

Video or audio program service equipment rentals;

Advertising revenue received by grantee from video or audio program services;

Revenues received by grantee from home shopping channels; and

Revenues received by grantee from the provision of data transmission, point to point telecommunications, telephone or telephony services.

This sum shall be the basis for computing the fee imposed pursuant to section 10-98 hereof. This term does not include:

Converter or other equipment deposits;

Bad debts;

Franchise fees;

Supplemental public access rate charges;

Any sales, excise, or any other taxes collected by grantee on behalf of any state, city, or other governmental unit;

Refunds to subscribers by grantee;

Commissions paid to others; reimbursement for expenses (including returned check fees, copy expenses and similar items); or

Items prohibited by local, state, or federal law.

Notwithstanding the foregoing, revenues received by grantee for the provision of data transmission, point to point telecommunications, telephone or telephony services shall be included in gross revenues:

(1)

Only to the extent permitted by law; and

(2)

Only if all other providers of such similar services in the town are subject to an equivalent franchise fee and other compensation requirements for use of the public rights-of-way in the town.

Where advertising or other revenue arising from or attributable to the sale of cable services by grantee is received by unrelated third parties not under control of grantee, and some portion of that revenue is remitted to grantee, only the portion of such revenues paid grantee shall be included in the calculation of gross revenues.

Each payment of franchise fees to the town shall be accompanied by a brief report showing the basis for the computation in a format agreed upon by the town and the grantee as set forth in the franchise.

Initial service area means the area of the town which will receive cable service initially, as set forth in any franchise agreement ordinance.

Installation means the connection of the system to subscribers' terminals, and the provision of cable television service.

Normal business hours means those hours during which most similar businesses in the community 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.

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 system.

Person means any natural person or any association, firm, individual, 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.

Public, educational or government access facilities or PEG access facilities means:

(1)

Channel capacity designated for non-commercial public, educational, or governmental use; and

(2)

Facilities and equipment for the use of such channel capacity.

Section means any section, subsection or provision of this article.

Service area or franchise area means the entire geographic area within the town as it is now constituted or may in the future be constituted, unless otherwise specified in the franchise agreement ordinance.

Service interruption means the loss of picture or sound on one (1) or more cable channels.

State means the State of North Carolina.

Street means each of the following located within the town limits: Streets, roadways, highways, avenues, lanes, alleys, sidewalks, easements, rights-of-way and similar public property to which the public in general has free and open access for purposes of travel.

Subscriber means any person who subscribes to, or lawfully receives, a service provided by the grantee by means of the cable system whether or not a fee is paid for such service.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-82. - Franchise to install and operate.

A franchise granted by the town under the provisions of this article shall encompass the following purposes:

(1)

To engage in the business of providing cable television service and other lawful communication services within the Town of Chapel Hill, subject to applicable laws and regulations.

(2)

To erect, install, construct, repair, rebuild, reconstruct, replace, maintain, retain and operate cable, fiber optic lines, related electronic equipment, supporting structures, appurtenances, and other property in connection with the operation of a cable system in, on, over, under, upon, along and across streets or other public places within the Town of Chapel Hill.

(3)

To set forth the obligations of a grantee under the franchise agreement.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-83. - Franchise required.

It shall be unlawful for any person, other than the town, to construct, install or operate a cable television system in the town within any street without a properly granted franchise awarded pursuant to the provisions of this article.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-84. - Term of the franchise.

(a)

A franchise granted hereunder shall be for a term established in the franchise agreement ordinance, conditioned upon the grantor's adoption of an ordinance or resolution authorizing the franchise and the grantee's acceptance of the franchise.

(b)

Upon acceptance by grantee as required herein, the franchise so granted shall supersede and replace any previous franchise to grantee to own, operate and maintain a system within the town. Provided, however, that the term of grantee's existing franchise shall not be shortened by grant or acceptance of the new franchise and the term of any new franchise granted hereunder shall commence only upon expiration of grantee's existing franchise.

(c)

A franchise granted hereunder may be renewed pursuant to the provisions of applicable state and federal law and of this article.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-85. - Franchise territory.

(a)

Any franchise shall be valid within all the territorial limits of the town, and within any area added to the town during the term of the franchise, unless otherwise specified in the franchise agreement ordinance. Grantee may, but shall not be required to provide service to newly-annexed areas that are not contiguous with the town's existing boundaries prior to the annexation.

(b)

In the event the town annexes an area then served in whole or in part by an operator other than a person who has previously obtained a cable television franchise from the town, such operator shall have the right to continue providing cable television service in the area annexed but shall apply for a new franchise pursuant to this article. Grantee shall be permitted, but not required, to provide service in the area served by another cable operator.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-86. - Applicability of article.

(a)

This article shall be construed in a manner consistent with all applicable federal and state laws.

(b)

Any conflict between this article, or any franchise granted hereunder, and any other provision of law shall be resolved as provided in section 10-114 of this article.

(c)

This article shall apply to all franchises granted or renewed after the effective date of this article. It shall further apply to the extent permitted by applicable federal or state law and with the agreement of the grantee to all existing franchises granted prior to the effective date of this article.

(d)

Grantee's rights are subject to the reasonable police powers of the town to adopt and enforce ordinances as necessary to the health, safety and welfare of the public. Grantee shall comply with all applicable general laws and ordinances enacted by the town pursuant to that power.

(e)

This article and any franchise granted pursuant to this article shall be construed and enforced in accordance with the substantive laws of the State of North Carolina, subject to applicable provisions of federal law.

Sec. 10-87. - Transfer of franchise.

(a)

Grantee shall not sell, transfer, lease, assign, sublet or dispose of, in whole or in part, either by forced or involuntary sale, or by ordinary sale, consolidation or otherwise, the franchise or any of the rights or privileges granted by the franchise, without the prior consent of the council, which consent shall not be unreasonably denied or delayed and shall be denied only upon a good faith finding by the town that the proposed transferee lacks the legal, character, technical or financial qualifications to perform its obligations under the franchise. Any attempt to sell, transfer, lease, assign or otherwise dispose of the franchise without the consent of the council shall be null and void. This provision shall not apply to sales of property or equipment in the normal course of business. No consent from the town shall be required for a transfer in trust, mortgage, or other instrument of hypothecation, in whole or in part, to secure an indebtedness, or for a pro forma transfer to a corporation, partnership or other entity controlling, controlled by or under common control with grantee.

(b)

The following events shall be deemed to be a sale, assignment or other transfer of the franchise requiring compliance with this section:

(1)

The sale, assignment or other transfer of the franchise;

(2)

The sale, assignment or other transfer of capital stock or partnership, membership or other equity interests in grantee by one (1) or more of its existing shareholders, partners, members or other equity owners so as to create a new controlling interest in grantee except a pro forma transfer to an entity controlled by or under common control with grantee;

(3)

The issuance of additional capital stock or partnership, membership or other equity interest by grantee so as to create a new controlling interest in grantee except a pro forma transfer to an entity controlled by or under common control with grantee; and

(4)

The entry by the grantee into an agreement with respect to the management or operation of the grantee and/or the system except management by an entity controlled by or under common control of grantee.

The term "controlling interest" as used herein means majority equity ownership of the grantee.

(c)

Except as provided below, no grantee may sell or otherwise transfer ownership in a franchise which requires prior approval of the Council within a thirty-six-month period following either the acquisition or initial construction of said system by grantee. In the case of a sale of multiple systems, if the terms of the sale require the buyer to subsequently transfer ownership of one (1) or more such systems to one (1) or more third parties, such transfer shall be considered a part of the initial transaction. The above-described thirty-six-month holding period shall not apply to:

(1)

Any transfer of ownership interest in any franchise which is not subject to federal income tax liability;

(2)

Any sale required by operation of any law or any act of any agency, any state or political subdivision thereof or the town; or

(3)

Any sale, assignment, or transfer, to one (1) or more purchasers, assignees, or transferees controlled by, controlling, or under common control with, the seller, assignor, or transferor.

(d)

In the case of any sale or transfer of ownership of any franchise subject to the approval required above, after the thirty-six-month period following acquisition or initial issuance of the franchise, the town shall have one hundred twenty (120) days to act upon any request for approval of such sale or transfer that contains or is accompanied by such information as is required in accordance with Federal Communications Commission regulations or other applicable state or federal law. If the town fails to render a final decision on the request within one hundred twenty (120) days from receipt by the town of all required information, such request shall be deemed granted unless the requesting party and the town agree to an extension of time.

(e)

Grantee shall notify grantor in writing of any foreclosure or any judicial sale of all or a substantial part of the property of the grantee within the town or upon the termination of any lease or interest covering all or a substantial part of said property. Such notification shall be considered by grantor as notice that a change in control of ownership of the franchise has taken place and the provisions under this section governing the consent of grantor to such change in control of ownership shall apply.

(f)

For the purpose of determining whether it shall consent to such change, transfer, or acquisition of control, grantor may inquire into the qualifications of the prospective transferee or controlling party, and grantee shall assist grantor in any such inquiry. In seeking grantor's consent to any change of ownership or control, grantee shall have the responsibility of ensuring that the transferee completes an application on the required FCC form (or in the event of the elimination of the required federal form, a similar form satisfactory to the grantor), in form and substance reasonably satisfactory to grantor, which application shall include the information required under state and federal law as well as under subsections (b)(1) through (b)(8) of section 10-93 of this article. Unless otherwise agreed to by the council, an application, acceptable to the town, shall be submitted to grantor not less than one hundred twenty (120) days prior to the date of transfer. The transferee shall be required to establish that it possesses the legal, technical, character and financial qualifications to operate and maintain the system and comply with all franchise requirements for the remainder of the term of the franchise. If, after considering the legal, financial, character and technical qualities of the applicant and determining that they are satisfactory, the grantor finds that such transfer is acceptable, the grantor shall permit the transfer and assignment of the rights and obligations of such franchise. Notwithstanding anything to the contrary, no such consent of grantor shall be required for a transfer or assignment to an entity controlling, controlled by or under common control with the grantee. The consent of the grantor to any transfer shall not be unreasonably denied.

(g)

Any financial institution having a pledge of the grantee or its assets for the advancement of money for the construction and/or operation of the system ("pledgee") shall have the right to notify the grantor that the pledgee or its designee satisfactory to the grantor shall take control of and operate the cable television system, in the event of a grantee's default in its financial obligations. Further, the pledgee shall also submit a plan for such operation within thirty (30) days of assuming such control that will ensure continued service and compliance with all franchise requirements during the term the financial institution exercises control over the system. The pledgee shall not exercise control over the system for a period exceeding one(1) year unless extended by the grantor in its discretion. During said period of time it shall have the right to petition the grantor to permit transfer of the franchise to another grantee.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-88. - Purchase by town upon expiration or revocation.

(a)

At the expiration of any franchise, for which grantee has not requested renewal, or upon lawful denial by grantor of grantee's right to renewal and the expiration or exhaustion by grantee of all rights to appeal such denial of renewal, the town may, in a lawful manner and upon the payment of fair market value, determined on the basis of the cable system valued as a going concern exclusive of any value attributable to the franchise itself, lawfully obtain, purchase, condemn, acquire, take over and hold the cable system.

(b)

Upon the lawful revocation of any franchise granted under this article, the town may, in a lawful manner, and upon the payment of an equitable price lawfully obtained, purchase, condemn, acquire, take over and hold the cable system.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-89. - Emergency use.

In the case of any emergency or disaster, grantee shall, upon request of the town, make available its cable system to the town or emergency management personnel, for emergency use during the emergency or disaster.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-90. - Geographical coverage.

(a)

Grantee shall design, construct and maintain the cable television system to have the capability to pass every dwelling unit in the town, subject to any contrary provisions of the franchise agreement ordinance regarding extensions of service.

(b)

After service has been established by activating trunk and/or distribution cables for any service area, grantee shall provide cable television service to any requesting subscriber within that service area within thirty (30) days from the date of request, provided that the grantee is able to secure all rights-of-way necessary to extend service to such subscriber within such thirty-day period on reasonable terms and conditions.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-91. - Non-exclusive franchise.

Any franchise granted shall be non-exclusive. The grantor specifically reserves the right to grant, at any time, such additional franchises for a cable television system or any component thereof as it deems appropriate, subject to applicable state and federal law. Any such additional franchises shall be granted on substantially equivalent terms and conditions to those granted hereunder and shall not be in any material provision more favorable or less burdensome than any other franchise granted hereunder.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-92. - Multiple franchises.

Grantor may grant one (1) or more franchises for a service area. Grantor may, in its sole discretion, limit the number of franchises granted, based upon, but not necessarily limited to, the requirements of applicable law and specific local considerations; such as:

(1)

The capacity of the public rights-of-way to accommodate multiple coaxial cables in addition to the cables, conduits and pipes of the utility systems, such as electrical power, telephone, gas and sewerage.

(2)

The impact on the community of having multiple franchises.

(3)

The disadvantages that may result from cable system competition, such as the requirement for multiple pedestals on residents' property, and the disruption arising from numerous excavations of the rights-of-way.

(4)

The financial capabilities of the applicant and its guaranteed commitment to make necessary investment to erect, maintain and operate the proposed system for the duration of the franchise term.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-93. - Franchise applications.

(a)

Any person desiring an initial franchise for a cable television system shall file an application with the town. A reasonable non-refundable application fee established by the town shall accompany the application. Such application fee shall not be deemed to be a "franchise fee" within the meaning of Section 622 of the Cable Act (47 U.S.C. § 542), and such payments shall not be deemed to be:

(1)

"Payments in kind" or any involuntary payments chargeable against the compensation to be paid to the town by grantee pursuant to section 10-98 hereof and applicable provisions of a franchise agreement ordinance, or

(2)

Part of the compensation to be paid to the town by grantee pursuant to section 10-98 hereof and applicable provisions of a franchise agreement ordinance.

(b)

An application for an initial franchise for a cable television system shall contain, where applicable:

(1)

A statement as to the proposed franchise and service area.

(2)

Resume of prior history of applicant, including the legal, character, technical and financial expertise and management, customer service, franchise and other regulatory compliance of applicant in the cable television field.

(3)

List of the partners, general and limited, of the applicant, if a partnership, or the percentage of stock owned or controlled by each holder of five (5) per cent or more of the shares of stock, if a corporation.

(4)

List of officers, directors and managing employees of applicant, together with a description of the background of each such person.

(5)

The names and addresses of any parent or subsidiary of applicant or any other business entity owning or controlling applicant in whole or in part, or owned or controlled in whole or in part by applicant.

(6)

A current financial statement of applicant verified by a CPA audit or otherwise certified to be true, complete and correct to the reasonable satisfaction of the town.

(7)

Proposed construction and service schedule.

(8)

Additional information relevant to the regulatory issue to be determined by the town.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-94. - Consideration of initial applications.

(a)

Upon receipt of any application for an initial franchise, the town manager shall prepare a report and make recommendations respecting such application to the town council.

(b)

A public hearing shall be set prior to any initial franchise grant, at a time and date approved by the council. Within one hundred twenty (120) days after the close of the hearing, the council shall make a decision based upon the evidence received at the hearing as to whether or not the franchise(s) should be granted, and if granted subject to what conditions. The council may grant one (1) or more initial franchises, or may decline to grant any franchise.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-95. - Franchise renewal.

Franchise renewals shall be in accordance with applicable local, state and federal law. Grantor and grantee, by mutual consent, may enter into renewal negotiations at any time during the term of the franchise.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-96. - Consumer protection and service standards.

(a)

Except as otherwise provided in the franchise agreement ordinance, grantee shall maintain a local office or offices to provide the necessary facilities, equipment and personnel to comply with the following consumer protection standards under normal operating conditions:

(1)

Cable system office hours and telephone availability.

a.

Grantee will maintain a local, toll-free or collect call telephone access line which will be available to its subscribers twenty-four (24) hours a day, seven (7) days a week.

1.

Trained grantee representatives will be available to respond to customer telephone inquiries during normal business hours.

2.

After normal business hours, the access line may be answered by a service or an automated response system, including an answering machine. Inquiries received after normal business hours must be responded to by a trained grantee representative on the next business day.

b.

Under normal operating conditions, telephone answer time by a customer representative, including wait time, shall not exceed thirty (30) seconds from when the connection is made. If the call needs to be transferred, transfer time shall not exceed thirty (30) seconds. These standards shall be met no less then ninety (90) per cent of the time under normal operating conditions, measured on a quarterly basis.

c.

The grantee will not be required to acquire equipment or perform surveys to measure compliance with the telephone answering standards above unless an historical record of complaints indicates a clear failure to comply.

d.

Under normal operating conditions, the customer will receive a busy signal less than three (3) per cent of the time.

e.

Customer service center and bill payment locations will be open at least during normal business hours and will be conveniently located.

(2)

Installations, outages and service calls. Under normal operating conditions, each of the following four (4) standards will be met no less than ninety-five (95) per cent of the time measured on a quarterly basis:

a.

Standard installations will be performed within seven (7) business days after an order has been placed. Standard installations are those that are located up to one hundred twenty-five (125) feet from the existing distribution system (as provided in federal standards).

b.

Excluding conditions beyond the control of grantee, grantee will begin working on service interruptions promptly and in no event later than twenty-four (24) hours after the interruption becomes known. The grantee must begin actions to correct other service problems the next business day after notification of the service problem.

c.

The appointment window alternatives for installations, service calls, and other installation activities will be either a specific time or, at maximum, a four-hour time block during normal business hours. (The grantee may schedule service calls and other installation activities outside of normal business hours for the express convenience of the customer)

d.

Grantee may not cancel an appointment with a customer after the close of business on the business day prior to the scheduled appointment.

e.

If grantee's representative is running late for an appointment with a customer and will not be able to keep the appointment as scheduled, the customer will be contacted. The appointment will be rescheduled, as necessary, at a time which is convenient for the customer.

(3)

Communications between grantee and cable subscribers.

a.

Notifications to subscribers.

1.

The grantee shall provide written information on each of the following areas at the time of installation of service, at least annually to all subscribers, and at any time upon request:

(i)

Products and services offered;

(ii)

Prices and options for programming services and conditions of subscription to programming and other services;

(iii)

Installation and service maintenance policies;

(iv)

Instructions on how to use the cable service;

(v)

Channel positions of programming carried on the system; and

(vi)

Billing and complaint procedures, including the address and telephone number of the town's cable office.

2.

Customers will be notified of any changes in rates, programming services or channel position as soon as possible through announcements on the cable system and in writing. Notice must be given to subscribers a minimum of thirty (30) days in advance of such changes if the change is within the control of the grantee. In addition, the grantee shall notify subscribers within (30) days in advance of any significant changes in the other information required by the preceding paragraph.

b.

Billing.

1.

Bills will be clear, concise and understandable. Bills must be fully itemized, with itemizations including, but not limited to, basic and premium service charges and equipment charges. Bills will also clearly delineate all activity during the billing period, including optional charges, rebates and credits.

2.

In case of a billing dispute, the grantee must respond to a written complaint from a subscriber within thirty (30) days.

c.

Refunds. Refund checks will be issued promptly, but no later than either:

1.

The customer's next billing cycle following resolution of the request or thirty (30) days, whichever is earlier, or

2.

The return of the equipment supplied by the grantee if service is terminated.

d.

Credits. Credits for service interruption will be issued no later than the customer's next billing cycle following the determination that a credit is warranted.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-97. - Rate regulation.

The town reserves the right to regulate rates for basic cable service and any other services to subscribers offered over the cable system, to the extent the town is granted such regulatory authority by federal or state law in addition to its power to issue franchises. The grantee shall be subject to the rate regulation provisions provided for herein, and those of the Federal Communications Commission (FCC) at 47 C.F.R., Part 76.900, Subpart N. The town shall follow the rules relating to cable rate regulation promulgated by the FCC at 47 C.F.R., Part 76.900, Subpart N. The town's authority to regulate rates pursuant to franchise shall be as specified in the franchise agreement ordinance. If the town determines that town regulation of rates is appropriate for services by grantee provided to subscribers over the cable system that were initially unregulated, the town may invoke the periodic review procedures provided in the franchise agreement ordinance and may propose an appropriate modification of the franchise. The town shall not assert regulatory authority over rates for service by grantee where such services are provided in the town by other service providers not subject to the same restrictions on rates.

Unregulated prices, adjustments in prices permitted under federal law or FCC rules and reductions in price shall become effective as permitted under federal law or the FCC rules. Grantee shall maintain on file with the town at all times a current schedule of all rates and charges for subscribers.

The procedures and standards for grantor's review of rates shall be as set forth in Article VA of this chapter as may be amended subject to applicable law.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-98. - Franchise fee.

(a)

Following the issuance and acceptance of a franchise, the grantee shall pay to the grantor a franchise fee in the amount set forth in the franchise agreement ordinance.

(b)

The grantor, on an annual basis, shall be furnished a statement within sixty (60) days of the close of the calendar year, certified by an official of grantee responsible for the system's financial statements, reflecting the total amounts of gross revenues and all payments, and computations for the previous calendar year. Upon ten (10) days prior written notice, grantor shall have the right to conduct an independent audit of grantee's records, in accordance with generally accepted accounting principles. If, after resolving any dispute arising from such audit, grantee has made a franchise fee underpayment of five (5) per cent or more, the grantee shall assume all reasonable costs of such audit. In all other events, grantor shall bear all costs associated with such audit.

(c)

Except as otherwise provided by law, no acceptance of any payment by the grantor shall be construed as a release or as an accord and satisfaction of any claim the grantor may have for further or additional sums payable as a franchise fee under this article or any franchise agreement ordinance or for the performance of any other obligation of the grantee.

(d)

Franchise fee payments shall be made in accordance with the schedule indicated in the franchise agreement ordinance.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-99. - Design and construction requirements.

(a)

Grantee shall not construct any cable system facilities until grantee has secured any necessary permits from grantor, or other public agencies having authority over such construction.

(b)

In those areas of the town where transmission or distribution facilities of all of the public utilities providing telephone and electric power service are underground, the grantee likewise shall construct, operate and maintain its transmission and distribution facilities therein underground.

(c)

In those areas of the town where grantee's cables are located on the above-ground transmission or distribution facilities of the public utility providing telephone or electric power service, and in the event that the facilities of both such public utilities subsequently are placed underground, then the grantee likewise shall construct, operate and maintain its transmission and distribution facilities underground, at grantee's cost subject to the provisions in the line extension policy and requirements of subsection 10-99(d) regarding conduit installation by developers. 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.

(d)

In new residential developments in which all the electric power and telephone utilities are underground the following procedures shall apply with respect to access to and utilization of underground easements: The developer shall be responsible for installing cable television plant and facilities constructed in accordance with the technical specifications of the system provided by the grantee pursuant to its franchise and for contacting the grantee and arranging for cable television service to the development. The final development map shall certify that the developer has provided cable television facilities and that cable television service is available to the development. Developers of new residential housing with underground utilities shall provide conduit and underground cable television facilities in accordance with the provisions of the Chapel Hill Land Use Management Ordinance. The final development map shall certify that the developer has provided cable television facilities and that cable television service is available to the development.

Sec. 10-100. - Technical standards.

(a)

The grantee shall construct install, operate and maintain its system in a manner consistent with all applicable laws, ordinances, construction standards, governmental requirements, Federal Communications Commission technical standards, and any standards set forth in its franchise agreement. In addition, the grantee shall provide to the grantor, upon request, a written report of the results of the grantee's periodic proof of performance tests conducted pursuant to Federal Communications Commission standards and guidelines.

(b)

Repeated failure to maintain the required technical standards after notice from the town of the deficiencies shall constitute a material breach of the franchise entitling the town to utilize the procedures of section 10-108 hereof.

(c)

All construction practices shall be in accordance with all applicable sections of the Occupational Safety and Health Act of 1970, as amended, as well as all other applicable local, state and federal laws and regulations.

(d)

All installations of electronic equipment shall be of a permanent nature, durable and installed in accordance with the provisions of the National Electrical and Safety Code and National Electrical Code, as amended, and as may from time to time be amended.

(e)

Antennae and their supporting structures (towers) shall be painted, lighted, erected and maintained in accordance with all applicable rules and regulations of the Federal Aviation Administration and all other applicable local, state and federal laws and regulations.

(f)

All of grantee's plant and equipment, including, but not limited to, the antenna site, headend and distribution system, towers, house connections, structures, poles, wire, coaxial cable, fixtures and appurtenances shall be installed, located, erected, constructed, reconstructed, replaced, removed, repaired, maintained and operated in accordance with good engineering practices, performed by experienced maintenance and construction personnel so as not to endanger or interfere with improvements the town may deem appropriate to make, or to unnecessarily hinder or obstruct pedestrian or vehicular traffic.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-101. - Trimming of trees.

Grantee shall have the authority to trim trees, in accordance with all applicable utility restrictions, ordinances and easement restrictions, upon and hanging over streets, alleys, sidewalks, and public places of the town so as to prevent the branches of such trees from coming in contact with the wires and cables of grantee. Town representatives shall have authority to supervise and approve all trimming of trees conducted by grantee.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-102. - Use of grantee facilities.

The town shall have the right, subject to all conditions and restrictions imposed upon grantee by law, regulation or prior contractual, leasehold or property agreement, to install and maintain, free of charge, upon the poles and within the underground pipes and conduits of grantee, any wires and fixtures desired by the town to the extent that such installation and maintenance does not interfere with existing or future operations of grantee. Grantor shall indemnify grantee as provided in section 7.1 of the franchise agreement ordinance against any damage to grantee's property or disruption of its operations.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-103. - Programming decisions.

All programming decisions (other than for public, educational and government access programming provided by others) shall be at the sole discretion of grantee; provided, however, that any significant change made in the mix or level of service required in the franchise shall be consistent with federal law.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-104. - Hold harmless.

(a)

Grantee shall indemnify, hold harmless, release and defend the town, its officers, boards, commissions, agents and employees from and against any and all lawsuits, claims, causes of action, actions, liability, demands, damages, disability, losses, expenses, including reasonable attorneys' fees and costs or liabilities of any nature that may be asserted by any person resulting or in any manner arising from the action or inaction of the grantee in constructing, operating, maintaining, repairing or removing the system, in carrying on grantee's business or operations in the town or in exercising or failing to exercise any right or privilege granted by the franchise. This indemnity shall apply, without limitation, to any action or cause of action for invasion of privacy, defamation, anti-trust, errors and omissions, theft, fire, violation or infringement of any copyright, trademark, trade names, service mark or patent, or any other right of any person, firm or corporation, whether or not any act or omission complained of is authorized, allowed or prohibited by this article or any franchise agreement, but shall not include any claim or action arising out of the actions or omissions of town officers, employees or agents or related to any town programming or other access programming for which the grantee is not legally responsible.

(b)

The town shall promptly notify grantee of any claims subject to indemnification by grantee and shall cooperate with all reasonable requests by grantee for information, documents, testimony or other assistance appropriate to a resolution of such claims. Grantee shall have full responsibility for and control of any action or undertaking directed at resolution of such claims.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-105. - Insurance.

Grantee shall provide insurance as specified in the franchise agreement ordinance.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-106. - Records required and grantor's right to inspect.

(a)

Grantee shall at all times maintain:

(1)

A full and complete set of plans, records and "as-built" maps showing the location of the cable television system installed or in use in the town, exclusive of subscriber service drops and equipment provided in subscribers' homes.

(2)

If requested by grantor, a summary of service calls for the previous twelve (12) months identifying the number, general nature and disposition of such calls, on a monthly basis. A summary of such service calls shall be submitted to the grantor within thirty (30) days following its request in a form reasonably acceptable to the grantor.

(b)

Upon reasonable notice, and during normal business hours, grantee shall permit examination by any duly authorized representative of the grantor, of all system property and facilities, and all records relating to the system or the franchise, provided that such examination is necessary to enable the grantor to carry out its regulatory responsibilities under local, state and federal law, this article and the franchise agreement. Grantee shall have the right to be present at any such examination.

(c)

The town shall also have the right to inspect, upon twenty-four (24) hours written notice, at any time during normal business hours, all books, records, maps, plans, service complaint logs, performance test results, records of request for service, and other like materials of grantee in the office or location where such records are customarily kept, provided that the inspection of such materials by grantor is necessary to carry out its regulatory responsibilities under local, state and federal law, this article and the franchise agreement. Grantee shall have the right to be present at any such inspection.

(d)

Copies of all petitions, applications, communications and reports submitted by grantee or on behalf of or relating to grantee to the Federal Communications Commission, Securities and Exchange Commission, or any other federal or state regulatory commission or agency having jurisdiction with respect to any matters subject to regulation by the council affecting the cable system authorized pursuant to this article and any franchise shall be made available to the town upon request, subject to any legal prohibitions or limitations upon disclosure for reasons of subscriber or employee privacy or other similar prohibitions or limitations. Copies of responses to grantee from the regulatory agencies for such filings shall likewise be furnished to the town within fifteen (15) days of receipt of the response.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-107. - Annual reports.

Grantee shall submit a written end of the year report to grantor with respect to the preceding calendar year in accordance with the provisions of the franchise.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-108. - Franchise violation.

If grantee fails to perform in a timely manner any material obligation required by this article or a franchise granted hereunder, following notice from the grantor and an opportunity to cure such nonperformance, grantor may act to remedy such violation in accordance with the following procedures:

Grantor shall notify grantee of any alleged material violation in writing by personal delivery or registered or certified mail, and demand correction within a reasonable time, which shall not be less than ten (10) days in the case of the failure of the grantee to pay any sum or other amount due the grantor under this article or the grantee's franchise and thirty (30) days in all other cases. If grantee fails either to correct the violation within the time prescribed or to commence correction of the violation within the time prescribed and thereafter diligently pursue correction of such violation, the grantor shall then give written notice of not less than thirty (30) days of a public hearing to be held before the council. Said notice shall specify the violations alleged to have occurred. At the public hearing, the council shall hear and consider relevant evidence and thereafter render findings and its decision. In the event the council finds that a material violation exists and that grantee has not corrected the same in a satisfactory manner or has not diligently commenced correction of such violation after notice thereof from grantor and is not diligently proceeding to fully remedy such violation, the council may revoke the franchise or impose any other penalty permitted by the franchise. After the revocation or other action by the town, the grantee shall have a period of thirty (30) days to appeal or seek judicial or regulatory review of the action by any federal or state agency or court having jurisdiction of such matters. During any such appeal or review, the rights of grantor and grantee under the franchise shall not be affected and the grantee shall have the right to continue to operate in accordance with the terms of the franchise. The franchise shall remain in full force and effect.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-109. - Abandonment or removal of franchise property.

(a)

In the event that the use of any property of grantee within the public rights-of-way, easements or other public property within the franchise area is discontinued for a continuous period of twelve (12) months following notice from grantor that it has declared much property abandoned, grantee shall be deemed to have abandoned that franchise property.

(b)

Grantor, upon such terms as grantor may impose, may give grantee permission to abandon, without removing, any system facility or equipment laid, directly constructed, operated or maintained under the franchise. Unless such permission is granted or unless otherwise provided in this article, the grantee shall remove all abandoned above-ground facilities and equipment upon receipt of written notice from grantor and shall restore any affected street to its former state at the time such facilities and equipment were installed, so as not to impair its usefulness. In removing its plant, structures and equipment, grantee shall refill, at its own expense, any excavation that shall be made by it and shall leave all public ways and places in as good condition as that prevailing prior to such removal without materially interfering with any electrical or telephone cable or other utility wires, poles or attachments. Grantor shall have the right to inspect and approve the condition of the public ways, public places, cables, wires, attachments and poles prior to and after removal. The liability, indemnity and insurance provisions of this article and the security fund as provided herein shall continue in full force and effect during the period of removal and until full compliance by grantee with the terms and conditions of this section.

(c)

Upon abandonment of any franchise property in place, the grantee, if required by the grantor, shall submit to grantor an instrument, satisfactory in form [to] the grantor, transferring to the grantor the ownership of the franchise property abandoned.

(d)

At the expiration of the term for which the franchise is granted, or upon its revocation or earlier expiration, as provided for herein, in any such case without renewal, extension or transfer, the grantor shall have the right to require grantee to remove, at its own expense, all above-ground portions of the cable television system from all streets and public ways within the town within a reasonable period of time, which shall not be less than one hundred eighty (180) days.

(e)

Notwithstanding anything to the contrary set forth in this article, the grantee may abandon any underground franchise property in place so long as it does not materially interfere with the use of the street or public rights-of-way in which such property is located or with the use thereof by any public utility or other cable grantee.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-110. - Extended operation and continuity of service.

Upon either expiration or revocation of the franchise, the grantor shall have discretion to permit and/or require grantee to continue to operate the cable television system for an extended period of time not to exceed six (6) months from the date of such expiration or revocation. Grantee shall continue to operate the system under the terms and conditions of this article and the franchise and to provide the regular subscriber service and any and all of the services that may be provided pursuant to the franchise at that time, and shall be entitled to all revenues or other compensation for such services during such extended term, subject to applicable laws and regulations regarding taxes, franchise fees and similar obligations.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-111. - Receivership and foreclosure.

(a)

A franchise granted hereunder shall, at the option of grantor, cease and terminate one hundred twenty (120) days after appointment of a receiver or receivers, or trustee or trustees, to take over and conduct the business of grantee, whether in a receivership, reorganization, bankruptcy or other action or proceeding, unless such receivership or trusteeship shall have been vacated prior to the expiration of said one hundred twenty (120) days, or unless:

(1)

Such receivers or trustees shall have, within one hundred twenty (120) days after their election or appointment, fully complied with all the terms and provisions of this article and the franchise granted pursuant hereto, and the receivership or trustees within said one hundred twenty (120) days shall have remedied all the faults under the franchise or provided a plan for the remedy of such faults which is satisfactory to the grantor; and

(2)

Such receivers or trustees shall, within said one hundred twenty (120) days, execute an agreement duly approved by the court having jurisdiction in the premises, whereby such receivers or trustees assume and agree to be bound by each and every term, provision and limitation of the franchise granted.

(b)

In the case of a foreclosure or other judicial sale of the franchise property, or any material part thereof, grantor may serve notice of termination upon grantee and the successful bidder at such sale, in which event the franchise granted and all rights and privileges of the grantee hereunder shall cease and terminate thirty (30) days after service of such notice, unless:

(1)

Grantor shall have approved the transfer of the franchise, as and in the manner that this article provides; and

(2)

Such successful bidder shall have covenanted and agreed with grantor to assume and be bound by all terms and conditions of the franchise.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-112. - Rights reserved to grantor.

(a)

In addition to any rights specifically reserved to the grantor by this article, the grantor reserves to itself every right and power which is required to be reserved by a provision of any ordinance or under the franchise.

(b)

The grantor shall have the right to waive any provision of the franchise, except those required by federal or state law, if the grantor, in its sole opinion, determines:

(1)

That it is in the public interest to do so, and

(2)

That the enforcement of such provision will impose an undue hardship on the grantee or the subscribers.

Waiver of any provision in one instance shall not be deemed a waiver of such provision subsequent to such instance nor be deemed a waiver of any other provision of the franchise unless the statement so recites. No such waiver of any provision shall be made without the consent of the grantee.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-113. - Rights of individuals.

(a)

Grantee shall not deny service or otherwise discriminate against subscribers or citizens on the basis of race, color, religion, national origin, age, gender, disability, family status, marital status, veteran status or sexual preference. Grantee shall comply at all times with all other applicable federal, state and local laws and regulations, relating to non-discrimination in the provision of goods and services.

(b)

Grantee shall adhere to the applicable equal employment opportunity requirements of federal, state and local regulations, as now written or as amended from time to time.

(c)

In the conduct of providing its services or other use of the system within the town, grantee shall take reasonable steps to prevent the invasion of a subscriber's right of privacy or other personal rights through the use of the system as such rights are delineated or defined by applicable law.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-114. - Conflict.

The town reserves the right to modify the provisions of this regulatory ordinance in accordance with applicable federal, state and local law. In the event of a conflict between any provision of this regulatory ordinance (or amendment to it) and a franchise agreement, the provisions of the franchise agreement shall control.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-115. - Federal, state and town jurisdiction.

(a)

If any federal, state or local law or regulation requires or permits grantee or the town to perform any service or act or shall prohibit grantee or the town from performing any service or act which may be in conflict with the terms of the franchise, then as soon as possible following knowledge thereof, either party may notify the other party of the point of conflict believed to exist between such law or regulation and the franchise. The town may review such conflict and determine its effect in the same manner described in paragraph (c) of this section and the town shall retain the same rights as outlined in paragraph (c) of this section.

(b)

If any term, condition or provision of this article or the franchise or the application thereof to any person or circumstance shall, to any extent, be rendered invalid or unenforceable as in conflict with any law, rule, or regulation of a superior governmental body, the remainder hereof and the application of such term, condition or provision to persons or circumstances other than those as to whom it shall be held invalid or unenforceable shall not be affected thereby, and this franchise and all the terms, provisions and conditions hereof shall, in all other respects, continue to be effective and to be complied with. In the event that such law, rule or regulation is subsequently repealed, rescinded, amended or otherwise changed so that the provision which had been held invalid or modified is no longer in conflict with the law, rules and regulations then in effect, said provision shall thereupon return to full force and effect and shall thereafter be binding on grantee and the town.

(c)

In the event that any court, agency, commission, legislative body or other authority of competent jurisdiction:

(1)

Declares any section of this article, or any franchise granted hereunder invalid, in whole or in part, or

(2)

Requires grantee either to:

a.

Perform any act which is inconsistent with any of this article or the franchise, or

b.

Cease performing any act required by this article or the franchise,

grantee shall promptly notify the town. Such notice shall state whether grantee intends to exercise its rights pursuant to such declaration or requirement. If the town determines within six (6) months of receiving such notice that said declaration or requirement has a material and adverse effect on the franchise after considering the needs of the community, the town shall notify grantee, and the town and grantee will negotiate in good faith any required changes to this article or to the franchise.

(Ord. No. 96-6-24/O-5.2, § 1)

Sec. 10-116. - Unlawful connections or theft of service.

(a)

It shall be unlawful for any person, firm or corporation to make any unauthorized connection, whether physically, acoustically, inductively or otherwise, with any part of a franchised cable television system within the town for the purpose of taking or receiving television signals, radio signals, pictures, programs or sound or other services.

(b)

It shall be unlawful for any person, firm or corporation to make any unauthorized connection, whether physically, acoustically, inductively or otherwise, with any part of a franchised cable television system within the town for the purpose of enabling himself or others to receive any television signals, radio signals, pictures or program sound or other services, without payment of the proper charges to the owner of said system.

(c)

It shall be unlawful for any person, without the consent of the franchised cable operator, to willfully tamper with, remove or injure any cables, wires, or equipment used by the cable operator for the distribution of television signals, radio signals, pictures, programs or sound or other services.

(Ord. No. 96-6-24/O-5.2, § 1)

Secs. 10-117—10-119. - Reserved.