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HomeMy Public PortalAbout1980_04_09_O006 Amending the Town Code to Add Cable Franchises,% TOWN OF LEESBURG IN LOUDOUN COUNTY, VIRGINIA PRESENTED April 9, 1980 ORDINANCE NO. 80-0-6 ADOPTED April 9, 1980 AN ORDINANCE: ADDING A NEW CHAPTER TO THE TOWN CODE ESTABLISHING REGULATIONS AND PROCEDURES FOR AND CONTROL OF CABLE TELEVISION SYSTEMS AND THE GRANTING OF FRANCHISES ~ ORDAINED by the Council of the Town of Leesburg, Virginia, as follows: SECTION I. The Town cOde is her~b~ 'amended bY adding a new chapter, to be numbered Chapter 5.1, which shall read as follows: Chapter 5.1 CABL~ TELEVISION REGULATION. Article I. General Provisions. Sec. 5.1-1. This Chapter shall be known and may be cited as the "Cable Television Regulations" of the town. Sec. 5.1-2. Purpose. The purpose of this chapter is to provide for regulation and control of any cable television system operating in the town. Sec. 5.1-3. Definitions. Where used within this chapter, unless the context clearly indicates otherwise, the following words and terms shall have the meaning indicated below: (a) "FCC" shall mean the Federal Communications Commission or its successor. (b) "Franchise" shall mean an authorization granted pursuant to this chapter and applicable state law in terms of a privilege, permit and license to construct, operate and maintain a cable television system within the town. Any such authorization,in whatever form granted, shall not include any license or permit required for the privilege of transacting (2) and carrying on a business within the town as required by other ordinances and laws of the town. (c) "Franchisee" shall mean the person, firm or cor- poration granted a franchise by the town under the provisions of this chapter, and the lawful successor, transferee or assignee of said person, firm or cOrporation. (d) "Property of Franchisee" shall mean all property owned, installed or used within the town by a franchisee in the conduct of a cable television system business under the authority of a franchise granted pursuant to this chapter. (e) "Subscriber" shall mean any person or entity receiving for any purpose any service of the cable television system including, but not limited to, the conven- tional cable television system service or retransmission of television broadcast, radio signals, franchisee's original cablecasting and the local government, education and public access channels and other services including, but not limited to, leasing of channels, data and facsimile transmission, pay television and police, fire and similar public service communication. (f) "Cable Television system or systems" shall mean any facility which is operated to perform for hire, either in whole or in part, the service of receiving, amplifying, modifying or originating television, radio or other electrical signals for the purpose of transmitting or distributing such signals by wire, cable or other means to subscribing members of the public, except that this definition shall not include (1) any system which serves fewer than 20 subscribers or (2) any system which serves only residents of one or more contiguous apartment dwellings under common ownership, control or management, and commercial establishments located on the premises of such dwellings. (g) "Signal~" whether distant, local radio, television ~r kinds of channels such as Class I, II, III and IV, shall be _§iven _the m~aninEs foUnd .......... in applicable FCC Rules and Regui~tionS~ (h) "Converter" shall mean an electronic device, which converts signals to a frequency not susceptible to interference within the television receiver of a subscriber an~ by an appropriate channel selector, also permits a subscriber to view all signals delivered at designated dial locations. (i) "Monitoring" shall mean observing a one-way communi- cati0ns~ signal, or the absence of a signal,wh~ther the signal is observed by visual or electronic means for any purpose whatsoever. (3) (j) "Pay Television" shall mean the delivery over the Cable Television System of video signals to subscribers for a fee or charge (over and above charge for basic service) on a per program, per channel or other subscription basis. (k) "Local origination channel" shall mean a channel which is programmed by the cable system and subject to its exclusive control. (1) "Cable~asting" shall mean originating programming over a cable television system. (m) "Town Manager" shall mean the manager of the town or an official authorized by him to administer the terms, provisions and regulations of this chapter. (n) "Earth Station" shall mean the electronic equipment and hardware necessary to receive signals from satellites. (o) "Franchise territory" shall mean all the area within the corporate limits of the Town of Leesburg and any future extension thereof by annexation. Article II. General Franchise Provisions. Sec. 5.1-4. Grant of Franchise. Operation of a Cable Television System within the town shall be permitted only upon the application for and subse- quent grant of a franchise under the terms of this chapter. Sec. 5.1-5. Length of ~ranchise. The initial term of any franchise granted under this chapter shall be for a period of 15 years. An extension of the initial franchise term may be granted in accordance with Section 5.1-15 of this chapter. Sec. 5.1-6. Franchise not Exclusive. The right to use and occupy town streets for a cable television system shall not be exclusive, and the town reserves the right to grant a similar use of said streets to any person, company, corporation or other entity at any time during the initial or subsequent period of any cable television franchise. Article III. Transfer or Assignment of a Franchise. Sec. 5.1-7. Certain Transfers or Assignment~0hibite~. No transfer or assignment of a franchise shall be approved (4) or considered by the Town Council within two years of the effective date of the initial term of a franchise. Sec. 5.1-8. Transfer or Assignments. (a) Except as otherwise provided, no franchise granted pur- suant to this chapter shall be assigned or transferred, either in whole or in part, or leased, sublet, or mortgaged in any manner, nor shall title thereto, either legal or equitable, or any right, interest or property therein, pass to or vest in any person, either by the act of the company or by operation of law without the consent of the Town Council, which consent shall not unreasonably be withheld. The granting, giving or waivin~ of any one or more of such consents shall not render unnecessary any subsequent consent or consents. (b) The town specifically reserves the right, in determinin~ whether or n~t to authorize a transfer under this s~ction,..to consider~the entire price and/or consideration to be pa~d by any proposed transferee, including the allocation of value for the franchise as it actually or potentially affects the rates to subscribers at that time or in the future. The town may also take into account the extent to which a proposed transfer may potentially cause, require or justify (in whole or in part), a rate increase or request for rate increase. The town is specific- ally authorized to deny, restrict or condition its authorization of any transfer on the grounds mentioned hereinabove or on any related grouqds under which the town.~ay at~s_~ql~49ptio~__d~te~mine (c) The franchisee may pledge, mortgage, hypothecate or otherwise transfer, as may be required, an interest in the cable 'television system to any lender in order to obtain financing for the Cable Television System. Such transfer, pledge, mortgage or hypothecation may, if required by the lender, in- clude the authority to sell the Cable Television System, sub- ject to consent of the town council, upon mortgage default by the franchisee. Such approval shall not be unreasonably with- held. In this event, any such sale approved will require the new owner to comply with all terms and conditions of this chapter as well as the original franchise agreement and franchise ordinance. Sec. 5.1-9. Sale or Transfer of Stock or other Ownership. One or more sales or transfers of stock or other ~wnership, by operation of iaw or b~h~se, or creation of new stock, by which an aggregate of more than 10 ~_r~ent of franchisee stock or other for~-of interest' shall b~-~§~ed -'~in a party- or part/eS Who are non~§tockholders or non-Qwners as -~ -~of the'~ effective date of the franchis~ shall be an .assignment within the meaning of this article. For the purpose of this section, stock ownership shall be determined in accordance with the principles set forth in Section 5.4-4 of the Internal Revenue Code of 1954 as the same existed on August 16, 1954. (5) Sec. 5.1-10. Notice of Transfer or Assignment. A franchisee shall promptly notify the Town Manager of any proposed change in, or transfer of, or acquisition by any other party of control of the franchise. For the purpose of determining whether it shall consent to such change, trans- fer or acquisition of control, the town may inquire into the qualifications of the prospective controlling party, and the franchisee shall assist the town in any such inquiry. In the event that the Town Council adopts a resolution denying its consent and such change, transfer or acquisition of control has been effected, the Town Council may cancel the franchise unless control of the franchise is restored within 30 days to its status prior to the change, or to a status acceptable to the Town Council. Any mortgage, pledge or lease shall be subject and subordinate to the rights of the town under this chapter or other applicable law. Article IV. Termination and Renewal. Sec. 5.1-11. Revocation. The Town Council reserves the right to revoke the franchise, and all rights and privileges pertaining thereto, in the event the franchisee violates any of the material pro- visions of this chapter, or is found to have practiced any fraud or deceit upon the town or the public; provided, however, that complaints by the public shall be considered pursuant to the provisions of Section 5.1-44 of this chapter. Prior to any revocation proceedings under this section, the franchisee shall be given 60 days' notice in writing by certified mai% which notice shall state in detail the grounds upon which the town seeks revocation. If the material violation has not been remedied to the satisfaction of the town, the Town Council shall have the right to revoke said franchise, and all rights, privi- leges and license derived therefrom, forthwith by resolution. At the time any franchise has been so revoked, the Town Council may require the former franchisee to remove all wires, cables and all other equipment associated with.the cable television franch~se.i'at its eXpen~e. sec. 5.1-12. Foreclosure. Upon notice of the prospective foreclosure or other judicial sale of all or a substantial part of the system, or upon the termination of any lease covering all or a sub- stantial part of the system, the franchisee shall notify the Town Manager of such fact, and such notification shall be treated as a notification that a change in control of the franchisee has taken place, and the provisions of Article III of this chapter entitled "Transfer or Assignment of the Franchise" shall apply. (6) Sec. 5.1-13. Reserved Sec. 5.1-14. Expiration. Twelve months preceding the expiration of the initial term of a franchise granted pursuant to this chapter, the town shall have the right, at its election, to: (a) renew or extend the franchise as provided in Section 5.1-15 (b) invite new applicants for the franchise or (c) purchase the system. Sec. 5.1-15. Renewal or extension. A franchise may be renewed or extended at the sole option of the town for a period of five years. Renewal con- sideration shall include but not be limited to the reports prepared throughout the life of the franchise reviewing the system's technical performance, the development of cable services, the cost of said services and a comparison of similar cable systems in other communities. The town retains the right to modify the terms of a franchise within the then applicable provisions of state law as a condition of any such renewal or extension. Sec. 5.1-16. Town'purchase of system upon revocation or expiration. In the event that the town revokes a franchise, pursuant to appropriate provisions of this chapter, or upon the expir- ation of a franchise, the town shall have the right to purchase the cable system at a price not to exceed its then fair market value. The fair market value shall be determined by an.indepen- dent accounting firm, selected by the franchisee and the to.wn~ in accordance with generally accepted appraisal and accounting principles, except that any value attributable to the actual franchise right itself or to good will of the cable system shall be specifically excluded. The cost of such appraisal sh~ll be shared equally by the franchisee and the town. (7) Sec. 5.1-17. Continuity of service mandatory. A franchisee shall be required to provide continuous service to all subscribers in return for payment of the established fee. If a franchisee overbuilds, rebuilds, modifies, sells the system or the town revokes, fails to renew a franchise or the franchise becomes void, a franchisee is required as part of its franchise to continue to operate the system until an orderly and lawful change of operation is effectuated. Under no circumstances shall this period of operation exceed six months from the date of occurrence of any of the above events. In the event a franchisee fails to operate the system for five consecutive days without prior approval of the Town Manager or the franchisee fails to continue operation on the occurrence of any of the events given in this section, the town or its agent shall have the right to operate the system until such time that a new operator is selected. If the town is required to fulfill this obligation for the franchisee, the franchisee shall reimburse the town for any costs or damages that result from the franchisee's failure to operate the system as required. Sec. 5.1-18. Eminent domain. Nothing herein shall be deemed or construed to impair or affect, in any way or to any extent, the right of the town to acquire the property of the franchisee through the exercise of the right of eminent domain, and nothing herein contained shall be construed to contract away or to modify or abridge, either for a term or in perpetuity, the town's right of eminent domain with respect to any public utility or franchise. Article Franchise Territory; Construction Timetable; Extension of Service. Sec. 5.1-19. Franchise Territory (a) The franchisee shall construct and operate at a minimum the initial Cable Television System so as to provide service through all parts of the franchise territory having a density of at least 60 residential dwelling units per mile of plant, or at the density submitted in the franchisee's cable television application, whichever is lower. The "initial" Cable Television System will be considered as all of the system included on the map submitted with the franchisee's application. (b) Extensions to the initial system and any. extensions in any annexed areas shall be subject to the same density stan- dards. At a minimum, the franchisee shall construct one mile of cable plant per year upon receipt of a notice to proceed from the manager. Notwithstanding the above, the franchisee shall not be required to commence construction in these areas until the initial Cable Television System is constructed. {8) Sec. 5.1-20. Construction Timetable. (a) The franchisee shall construct the necessary facili- ties to permit basic service reception capabilit~ including construction of 20 percent of the cable distribution plan~ within 18months of the date of the franchise agre.ement. Within 90 days of the date of the franchise agreement, the franchisee shall submit a construction timetable detailing the location and geographic sequence of the construction of the head-end and distribution plant leading to basic service and special service capability for every dwelling unit within the town, subject to aforementioned density standards. (b) Within four years of the date of the franchise agreement, the franchisee shall have completely installed and have under operation a cable television system providing basic service and special service capability to all dwelling units within the franchise territory, subject to density limitations provided herein. Capability shall be defined as the providing of basic services or special services to subscribers within sixty days of an application for either or both services, including sa~ei~i~e ~iS~r~Su~e~ progr'ams. (c) Failure on the part of a franchisee to meet any of the requirements of this section shall be deemed a material violation of this chapter and subject franchisee to revoca- tion procedures established in Section 5.1-~ herein, unless said time is extended by the Town Council. Such extensions may or may not relieve the franchisee of the payment of penalties set out in Section 5.1-49 at the sole option of the Town Council. (d) A franchisee shall register with the FCC and comply with all other filing requirements of Federal and State law within 60 days of its acceptance of the franchise. Sec. 5.1-21. Interconnection. A franchisee may interconnect the system with any or all other cable television systems in the area if otherwise lawful and provided such other system agrees to the interconnection. Interconnec~ion of systems may be done by direct cable con- nection, microwave link, satellite or other appropriate method. (a) Upon receiving the directive of the town to inter- connect, the franchisee shall immediately initiate negotiations with the other affected cable television system or systems in order that costs may be shared equally for both constructiOn and operation of the interconnection link. (9) (b) The Town Council may grant reasonable extensions of time to interconnect or rescind its request to interconnect upon petition by the franchisee to the Town Council. The Town Council shall grant the request if it finds that the franchisee has negotiated in good faith and the cost of interconnection would cause an unreasonable increase in sub- scriber rates. (c) No interconnection shall take place without prior approval of the Town Manager. A franchisee, in seeking approval for interconnection, shall demonstrate that all signals to be interconnected will comply with FCC technical standards for all classes of signals and will result in a low level of distortion. (d) The franchisee shall cooperate with any intercon- nection corporation, regional interconnection authority, state or federal regulatory agency which may be hereafter established for the purpose of regulating, facilitating, financing or otherwise providing for the interconnection of cable television systems beyond the boundaries of the town. Article VI, Service Provisions Sec. 5.1-22. Basic Subscriber Service. (a) At the time housedrop connections are available, the franchisee shall provide all subscribers who request basic service with the minimum television signals established in Section 5.1-28 of this chapter and one local origination channel designated for public access on a first come, nondiscriminatory basis. The public access channel will.be available to public, educational, governmental and any other users. (b) The franchisee at its expense shall furnish upon request one connection for each public school, county and municipal office which is within the franchise territory and not more than 250 feet from the franchisee's existing service facilities. Sec. 5.1-23. Special Services. At such time as subscriber service is first available, the franchisee,in addition to basic service, shall offer special services available at higher rate~ which shall in- clude one or more channels offering pay TV and additional commercial satellite delivered channels. (10) Sec. 5.1-24. Virginia Public Telecommunications Council. A franchisee shall also comply with all current and future requirements of the Virginia Public Telecommunica- tions Council. Sec. 5.1-25. Reserved. Sec. 5.1-26. Local Origination Programming. Within 24 months from the date of a franchise agreement, a franchisee shall provide at its expense facilities and equip- ment necessary to originate local programming, providing one local origination channel for that purpose. The franchisee of a Cable Television System with a minimum of 3000 subscribers shall cablecast a minimum of four hours of non-automated program- ming within every 24 hour period, unless a franchisee receives a waiver to this provision on an annual basis from the Town Council. Sec. 5.1-27. Studio Facilities. A franchisee shall provide a full color studio located within a five mile radius of the Town of Leesburg. The studio will be available to access cablecasters along with the services of technical and production staff to be provided by the franchisee. A franchisee shall also provide mobile color equipment for its own use and that of local access users. The franchisee may lease a studio and facilities from others to comply with this section. Franchise applicants will be evaluated on the basis of plans and rate schedules for production facilities which are most in the public interest. Rate schedules may include different rates for various classes of users. Article VII. Design and Construction Standards Sec. 5.1-28. Channel Capacity. A franchisee shall construct a Cable Television System that shall have not less than 24 video channels or an equivalent amount of band width capacity, including any local origination franchisee ~perated station which may also serve as the public access channel required by Section 5.1-22 of this chapter. Sec. 5.1-29. (11) Overhead and Underground Construction. Construction of trunk, feeder and drop cable may be con- structed overhead where utility poles now exist and electric or telephone lines or both are now overhead but, where no overhead poles exist,all trunk, feeder and drop cable shall be constructed underground. Any installation above ground shall be considered as a special exception to Section 13-39 of the Town Code. Where present overhead utility poles, electric lines and telephone lines are moved from overhead to underground placement, all cable television distribution system cables located aboveground within the affected area shall be similarly moved and located underground at the same time and the cost of the movement of the cable shall be solely the obligation of the franchisee. Sec. 5.1-30. Two-way Capacity. The franchisee shall install a cable television system with a technical capacity for non-voice return communications. The franchisee's development of Class IV uses shall coincide with the schedule submitted in the franchise application. Sec. 5.1-31. Emergency Requirements. The franchisee shall design and construct the cable television system to provide for an audio override of all channels simultaneously (except those involved in retransmission of television broadcast programming), in case of public emergencies. ''Sec.''5'.l'-32.~''sys'tem Uesign. ~Applicants for a franchise under this chapter will be required to submit the cable system design as a part of the franchise application process. The system design will be one 9f the factors evaluated during consideration of any franchise awarded. Sec. 5.1-33. Construction Requirements and Safety Standards. (a) Methods of construction, installation and maintenance of the town's cable television system shall comply with the National Electric Code 1975 (ANSI CI-1975) to the extent that such code is consistent with local law affecting the con- struction, installation and maintenance of electric supply and communications lines. (12) (b) Any tower constructed for use in the cable television system shall comply with the standards contained in Structural Standards for Steel Antenna Towers and Antenna Supporting Structures, EIA Standards RS-222-A, as published by the Engineering Department of the Electronic Industries Association, 2001 Eye Street, N.W., Washington, D.C. 20006. (c) Installation and physical dimensions of any tower con- structed for use in any cable television system shall comply with all appropriate Federal Aviation Agency regulations. Sec. 5.1-34. Construction, Supervision and Alteration after Construction.~ (a) A franchisee shall construct, operate and maintain the cable television system subject to the supervision of the town and in strict compliance with all laws, ordinances, rules and regulations affecting the system. (b) The cable television system, and all parts thereof, shall be subject to periodic inspection by the town. (c) No construction, reconstruction or relocation of the cable television system, or any part thereof, within the streets shall commence until written permits have been obtained from the town. In any permit so issued, the town Director of Engineering or other officials authorized by the Town Manager may impose such conditions and regulations as a condition of the granting of the same as are necessary for the purpose of protecting any structures in the streets and for the proper restoration of such streets and structures, and for the pro- tection of the public and continuity of pedestrian and vehicular traffic. (d) The Town Council may, from time to time, issue such reasonable rules and regulations concerning the construction, operation and maintenance of the cable television system as are consistent with the provisions of this chapter and the franchise issued pursuant to this chapter. (e) The Town Council may require that any part or all of the cable television system should be improved or upgraded by the franchisee within a reasonable time thereafter (including, without limitation, the increasing of channel capacity, the furnishing of improved equipment and the institution of two- way transmission); provided such improvement or upgrading of the system is found to be economically feasible. For the pur- pose of this subsection, a finding of economic feasibility shall mean a finding that the capital costs to the franchisee of such improvement or upgrading can reasonably be amortized over the then remaining life of the franchise without sub- stantially affecting the franchisees~,rate of return, or other measure of profitability agreed to by franchisee and the town. Sec. 5.1-35. (13) Use of Public Property. (a) Should the grades or lines of the streets which the franchisee is hereby authorized to use and occupy be changed at any time during the term of the franchise, the franchisee shall, if necessary, at its own cost and expense, relocate or change its system so as to conform with such new grades or lines. (b) Any alteration to the water mains, sanitary sewerage or storm drainage system or to any 'town,state or other public facilities in the streets required on account of the presence of the cable television system in the streets shall be made at the sole expense of the franchisee. During any work on con- structing, operating or maintaining of the system, the franchisee shall also, at its own expense, protect any and all existing structures belonging to the town or any other person. All work performed by the franchisee pursuant to this section shall be done in the manner prescribed by the Town. Sec. 5.1-3'6. Interference with Public Projects. Nothing in this ordinance shall be in preference or hindrance to the right of the town to perform any public works or public improvements of any description, and should the system in any way interfere with the construction, maintenance or repair of such public works or public improvements, a franchisee shall, at its own cost and expense, protect or relocate its system, or part thereof, as reasonably directed by the town. Sec. 5.1-37. Technical Standards. The franchisee shall oc~ply with all existing and future rec~r~ments of the FCC or its successor's governing technical standards. The town reserves the right to adopt its own technical standards when permitted to do so. Article VIII. Maintenance, Operations and Accounting Records Sec. 5.1-38. Books and Records. (a) The franchisee shall maintain separate accounting records, in accordance with generally accepted accounting practices, of all its operations and transactions within the town. The town shall have the right to inspect during normal business hours, all books, records, maps, plans, financial statements and other like materials of the franchise which relate to its operation within the tow~ including expenses attributed to the franchisee by any parent corporation. All such information received by the town shall remain confidential insofar as permitted by the Virginia Freedom of Information Act, as now or hereinafter amended. The requirements of this section shall be considered a material provision of this chapter. (14) (b) The franchisee shall maintain a file of.records open to public inspection in accordance with applicable FCC rules and regulations or, if none exis~ in accordance with rules and regulations adopted by the Town Council. Sec. 5.1-39. Reports. (a) Annual Report. Within 90 days of the close of its fiscal year, the franchisee shall submit a written report the Town Council, which shall include: (1) A summary of the previous year's activities and development of the cable television syste~.including but not limited to services begun or dropped and subscribers gained or lost; (2) A summary of complaints, identifying both number and nature of the complaints received and an explanation of the disposition; [3) A financial statement including balance sheet, statement of income and expenditures~ and statement of changes in financial position, which the town manager may require to be an audited statement by giving notice to the franchisee 60 days prior to the deadline for submittal of the written report; (4) A projected financial statement including all of the above information, along with a capital program and projected new services for the next two years; (5) A reconciliation between previously pro- jected estimates and actual audited figures; (6) A list of all stockholders with a three percent or more interest in the franchise, or ,if applicable, its parent corporation, during the fiscal year and a list of all officers and members of the Board of Directors of the ~anchisee and, if applicable, a list of all officers of the parent corporation of the franchisee, and (7) Such other information as the Town Manager or the Town Council may reasonably direct. (b) Annual Plant Survey Report. A franchisee shall prepare and submit, by August 31 of each year, a complete survey of its plant and a full report thereon to the Town Council. The purpose of the report shall be to assure the tn~n that the technical standards of the FCC and other applicable standards established herein are being maintained. The plant survey shall include appropriate electronic measurements and shall be conducted in conformance with such requirements, in- cluding supervision, as the Town M~nager may require. (15) (c) Income Tax Reports. In addition, a franchisee shall furnish to the Town Manager, within ten days after filing, a true copy of its federal income tax return. Sec. 5.1-40. Service Requirements. (a) A franchisee shall comply with all technical standards and specifications established by the FCC through- out the entire period of its franchise. (b) A franchisee shall render efficient service, make repairs promptly and interrupt the service only for good cause and for the shortest time possible. Such interruptions, inso- far as possible, will be preceded by notice and shall occur during periods of minimum use of the system. (c) A franchisee shall maintain its principal office in the town, which shall be open during all usual business hours, have a publicly listed telephone and be so.operated that complaints and requests for repairs or adjustments may be received and acted upon on a 24-hour basis. Article IX. Rates; Complain~;Proceedings. Sec. 5.1-41. Filing and Publication of Rates, Rules and Regulations. A franchisee shall publish and file with the Town M~anager schedules of all rates and charges for all services offered to the subscribing public. Such schedules shall plainly state the cost of each Particular service or combina- tion of services, together with all rules, regulations and requirements affecting the installation, maintenance and provision of service or which otherwise affect the quality or cost of such service to the subscriber. The manner and form by which such schedules are published shall be reviewed and approved by the Town Manager. Copies of all such schedules shall be available to the public upon payment of a reasonable fee equal to the cost of reproduction. Sec. 5.1-42. Discriminatory or Preferential Practices Pro- ~hibited. ' The franchisee shall not, in its rates or charges, or in making available the' services or facilities of its system, or in its rules or regulations, or in any other respect, make or grant a preference or advantage to any subscriber or potent~alsub- $c~r of the cable television system, or to any user or potential user of the cable television system; and shall not subject any such person, to any prejudice or disadvantaqe. _ _ (16) This provision shall not be deemed to prohibit promoti6nal campaigns to stimulate subscriptions to the cable television system or other l~gitimate uses thereof. Notwithstanding the aforementioned, this provision shall not prohibit the franchisee's establishment of special rates or charges for subscribers eligible and participating in the town's real estate tax relief for the elderly program or handicapped persons, as defined in Section 46.1-104.1 (al) of the Code of Virginia. Sec. 5.1-43 Rates. (a) A franchisee's initial rates for both basic sub- scriber service and special services shall not exceed the rates submitted in the franchisee's application as a part of its pro- posal for a Cable Television System franchise for a minimum period of one year. Thereafter, future rate increases throughout the term of the franchise shall be governed by the procedures set out in the franchise agreement between the town and franchisee. Cal- culation of the time period that initial rates are valid will begin following the first subscriber connection. (b) Notwithstanding the above, the town reserves the right to regulate cable installation and service fees for all cable services upon the finding that monthly service charges for one or more services or one or more installation charges exceeds by ten percent the average charges in use by cable firms in other juris- dictions within a 50 mile radius of Leesburg. Upon notice of this finding to the franchisee, the franchisee shall reduce the offending charges to within the ten percent limit prescribed within 30 days from said notice, or the town shall implement permanent rate regu- lation procedures for the life of the franchise. The town shall have the sole authority to develop procedures and methodology for rate regulation to insure reasonable rate regulation and a fair return on investment by the franchisee in the cable system. In determining a franchisee's rate base for reviewing proposed rate increases, the town shall not in any event take into account any value beyond the net book value of a cable plant then in existence and devoted to cable television service. The regulation prodedure at a minimum shall include hearings and 60 days'notice from the effec- tive date of any rate increase requested. Sec. '5.'1'-'44. ~compl'ai'nts. (~ Complaints by any subscriber may be filed with the franchisee in writing or delivered to the franchisee orally in person or by telephone. (b) Any complaints received from subscribers shall be investigated by the franchisee and acted upon as soon as possible, within one business day of the receipt. (17) (¢) The franchisee shall keep a maintenance service log that will indicate the nature of each complaint, the name of the employee of the franchisee receiving the complaint, the date and time it was received, the disposition of the complaint and time and date thereof. The log shall also indicate specific steps taken by the franchisee to remedy the complaint. This log shall be made available for inspection upon request by the Town Manager. (~) Notwithstanding the above, the franchisee shall advise the Town Manager in writing on a quarterly basis of all unresolved complaints. The nature and number of unresolved complaints shall be considered by the Town Council during any subsequent renegotiations for extension of any cable television system franchise. Article X. General Financial and Insurance Provisions Sec. 5.1-45. Franchise Fee. (a) As compensation for any franchise granted pursuant to this chapter in consideration of permission to use the streets and public ways of the town for the construction, operation, maintenance and reconstruction of the cable television system, the franchisee shall pay to the town an amount equal to three percent of the franchisee's gross annual receipts from all sources attributal to the operations of the franchise within the town, including but not limited to pay cable, advertising, leased access and any lump sum connection fees. (b) Notwithstanding any other provision of this article, should FCC regulations be amended in the future to allow the town to receive a fee greater than that provided for herei~ the percentage of gross receipts established in Subsection 5.1- 44(a) above shall increase to five percent effective January 1 in any year in which the cable television system has 3;000 subscriber connections. (c) Payments to the town under this provision shall be computed quarterly, for the preceding quarter as of March 31, June. 30, September 30 and December 31. Each quarterly pay- ment shall be due and payable no later than 30 days after the applicable computation date. Each payment shall be accompanied by a report showing the basis for the computation and such other relevant material as required by the Town Manager. (d) Acceptance of any payment by the town should not be construed as agreement ~hat the amount paid is in fact the correct amount, nor shall such acceptance of payment be con- strued as release of any claim for additional amounts payable (18) tO the town. Ail amounts paid shall be subject to audit and recomputation by the town. In the event any such audit or recomputation results in additional revenue payable to the town, such amounts will be subject to a ten percent simple interest charge. (e) Nothing in this section shall be interpreted as relieving a franchisee of local taxes. Sec. 5.1-'46.' A'pplication Fee. Each applicant for a franchise under this chapter shall submit a non-refundable filing fee in the amount of $1,000 which shall be payable to the Town of Leesburg, Virginia. All such fees shall be credited to the general fund of the town for the purpose of investigation of franchise applications and enforcement and administration of the provisions of this N°~e~W ~ chapter, ithstanding the above,the full amount of the franchise f shall be returned to all applicants if no franchise is awarded. Sec. 5.1-47. Liability, Indemnification and Bonding. (a) Upon acceptance of any franchise under this chapter, the franchisee shall pay all damages and penalties which the town may legally be required to pay as a result of granting the franchise. These damages or penalties shall include, but shall not be limited to, damages arising out of the installation, operation or maintenance of the cable television system, whether or not any act or omission complained of is authorized, allowed or prohibited by this chapter. (b) Franchisee shall provide and pay for any legal defense of the town with regard to all actions mentioned above. (c) Franchisee shall maintain,, throughout the term of its franchise, liability insurance in companies acceptable to the town sufficient to cover such indemnification, and naming a~ ~n~ur~d ~h~ ~wn and the franchisee with minimum limits of $500,000 on account of bodily injuries to or death of one person, $1,000,000 on account of bodily injuries to or death of more than one person as a result of any one accident or disaster, and $500,000 on account of damage to property, and it will further deposit the policy or policies of such insurance along with certificates therefor with the town within 30 days of execution of any franchise agreement. (d) Within 30 days of execution of a franchise agreement, a franchisee shall provide and maintai~ as herein provided, a faithful performance corporate surety bond or other performance guarantee in a form approved by the town attorney, running to the town, in the penal sum of $100,00~ payable to the town. The bond shall be released by the town in full upon the. franchisee meeting the requirements of subsection 5.1-20(b) herein. (19) Sec. 5.1-48. Security Fund. Prior to execution of a franChise agreement, a franchisee shall deposit $ 5,000 in an escrow account with the town Director of Finance, to be held by the town and invested in.accordance to Sec. 2-84 (b) of the Town Code, through__out the initial an~ any subsequent ter~ of a -~n~hise.-- This fund wii% PrOvide cash as security for the ~aithful-Performance by the franchisee of the provisions of this chapter and of its franchise relating to construction andcompliance with all orders, permits and directions of any department of the town having jurisdiction over its acts or defaults. Within 30 days after notice to it that any amount has been withdrawn from the security fund deposit as provided herein, the franchisee shall deposit in such account a sum of money equal to the amount withdrawn. Sec. 5.1-49. Penalties. For violation of the provisions of this chapter, penalties shall be chargeable by the manager to the security fund unless corrected within 10 days of written notice thereof by certified mail to the franchisee as follows: (a) (b) For failure to submit plans indicating expected dates of installation of various~ parts of the system; 'i $25/day For failure to commence operations in accordance with requirements herein~ $50/day (c) For failure to complete construction and installation of system as required; $50/day (d) For failure to supply data requested by town in connection with installation, construction, customers or financial reports; $25/day (e) For failure to restore the security fund as required within the specified thirty days, the entire cash deposit remaining(if any) and the full amount of the performance bond shall be forfeited. The franchisee may request the manager exclude from the 10 day correction perio~ delays equal to the time lost for acts of · God, labor disputes, abnormal weathe~ c~n~itions, fires or ot]~er causes outside its control. (20) Article XI. Administration Sec. 5.1- 50. Administration by Manager. The day to day regulation, enforcement and administration of any franchise granted under this chapter shall be the responsibility of the Town Manager. Sec. 5.1- 51. Functions of the Town Manager. The Town Manager's authority and responsibilities with respect to a franchise granted pursuant to this chapter shall include the following: (a) To assist in the preparation of the invitation to bid for cable television system franchises; to establish criteria for review and ranking of franchise applications; to review and screen applications for franchises and to make selection recommendations to the Council. (b) To monitor and enforce all aspects of the franchisee's performance in meeting all terms, provisions, requirements and construction schedules established in this chapter. - (c) To advise and make reCommendations ~o the COuncil on matters which may constitute grounds for revocation of a franchise in accordance with this chapter. (d) To monitor and investigate where appropriate complaints against the franchisee by any person. Article XII Rights of Individuals Protected. Sec. 5.1-52. Discriminatory Employment Practices Prohibited. Franchisees shall not deny service, access or otherwise discriminate against subscribers, channel users or general citizens on the basis of race, color, religion, national origin or sex. Franchisees shall strictly adhere to any equal employment opportunity requirements of the FCC. Franchisees shall comply with all other applicable federal, state and town laws, and all executive and administrative orders relating to nondiscrimination. Sec. 5.1-53. Restrictions on'Cabl'e Monitoring..' Except as otherwise provided by this section, the franchisee shall not monitor, or arrange for the monitoring, (21) or permit any person, either expressed or implied through their knowledge, to monitor any subscriber outlet or receiver for any purpose whatsoever, without the specific written authorization of the subscriber being monitored, and other than to the extent so authorized by such sub- scriber. Any information gathered by such monitoring shall not be sold, given or otherwise transferred to any person not in the employ of the franchisee or the person supplying the service involved, provided that the franchisee may conduct such monitoring as may be reasonably necessary for (1) the maintenance and operation of the cable television system; and (2) the collection of data for the purpose of ascertaining viewer response to programming. Any data collected for the purpose of ascertaining viewer response to programming may be disseminated on an aggregate basis only and may not in any way reveal or indicate any information on individual subscribers. Sec.. 5.1-54. Privacy and Other Human Rights. The franchisee and the town shall maintain constant vigil- ance with regard to possible abuses of the right and privacy of other human rights of any subscriber, programmer or general citizen resulting from any device or signal associated with the system. Sec. 5.1-55. Permission of' Property Owner Required. No cable, line, wire, amplifier, converter or other piece of equipment owned by a franchisee shall be installed by a franchisee without first securing the permission of the owner of any property or easement involved. If such permission is later revoked, whether by the original or a subsequent owner, the franchisee shall remove forthwith any of its equipment which is both visible and movable and promptly restore the pro- perty to its original condition at the franchisee's expense. Sec. 5.1-56. 'Sale o'f Subscriber Lists Prohibited. A franchisee shall not sell, or otherwise make available, lists of the names and addresses of its subscribers, without permission of the subscribers, to anyone other than authorized town officials for purposes of enforcing franchise provisions. Article XII~ Miscellaneous Provisions Sec. '5.1-57. Fraud. It shall be unlawful for any person to defraud or attempt to defraud any cable television system franchisee by attempting to obtain any service therefrom without payment as described in Sec. 18.2-187.1 of the Code of Virginia. Any person who violates this provision, if the value of service, (22) cr~it or benefit procuredl is $100 or more, shall be guilty of { Class 6 Felony; or if the value be less than $100 shall be guilty of a Class 1 Misdemeanor,. as.penalties for sucf are set out in the Code of Virginia.' Sec. 5.1- 58. No Recourse Against the Town. The franchisee shall have no recourse whatsoever against the town or its officials, boards, co~missions, agents or employees for any loss, cost, expense or damage arising out of any provision or requirement of this chapter or because of the enforcement of this chapter, unless the same shall be caused by criminal acts or by willful or gross negligence. Sec. 5.1- 59. Official Name 'of Franchise. Any franchisee licensed to operate a cable television system within the town shall include the word "Leesburg" in the official name of the said firm or corporation so authorized, upon the request of the town. Sec. 5.1-60. Extensions Outside Corporate limits. (a) The franchisee shall not extend cable television' se~¢ice to residents outside the franchise territory until it has met the requirements of Section 5.1-20(b) of this chapter. Where extensions of the Cable Television System are made out- side the corporate limits of the town and connect to the Cable Television System's headend, the monthly rate for basic service and special service, ltQ customers outside of town shall contain a $1.Q0 surcharge_which the franchisee sha~l P~S directly _ through to the town on a quarterly basis. This fee reimburses the town for costs of administration and regulation of the Cable Television Syst~.The franc]~see's receipts frc~cableservices outside the corporate limits of the town shall be excluded from the gross annual receipts used to calculate the franchise fee. (b) For the purpose of determining the number of subscribers with respect to Sec. 5.1-26 of this chapter, subscribers residing outside the town shall be included. Section II. This ordinance shall be in full force and effect from and after its passage. PASSED this 9th day of April , 1980. Attest: