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Legislation #: 000449 Introduction Date: 3/30/2000
Type: Ordinance Effective Date: 4/23/2000
Sponsor: COUNCILMEMBER ASJES
Title: Approving a 15-year cable television franchise with Everest Connections Corporation

Legislation History
DateMinutesDescription
3/30/2000

Prepare to Introduce

3/30/2000

Referred Finance and Audit Committee

4/5/2000

Do Pass as a Committee Substitute

4/6/2000

Assigned to Third Read Calendar

4/13/2000

Passed as Substituted


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COMMITTEE SUBSTITUTE FOR ORDINANCE NO. 000449

 

Approving a 15-year cable television franchise with Everest Connections Corporation

 

WHEREAS, Everest Connections Corporation desires to provide telephone service, broadband Internet access, and cable television programming to the people of Kansas City; and

 

WHEREAS, the City does not require a franchise for businesses providing telephone service, although the payment of appropriate occupational license fees and compliance with right of way ordinances is required; and

 

WHEREAS, Chapter 19, Code of Ordinances, the Cable Television Code, requires operators of cable television systems to obtain a non-exclusive franchise before operating within the City; and

 

WHEREAS, the City looks to the nature of the services offered by telecommunications companies in this time of dramatic industry shifts rather than simply an often unusable description of converging technologies to determine appropriate regulatory requirements; and

 

WHEREAS, the video programming aspect of Everest Connections Corporation requires compliance with the Cable Television Code; NOW, THEREFORE

 

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

 

Section 1. That the following Cable Television Franchise is approved:

 

KANSAS CITY, MISSOURI CABLE COMMUNICATIONS FRANCHISE AGREEMENT

EVEREST CONNECTIONS CORPORATION

 

1 Intent

2 Short title

3 Definitions

4 Application of the Cable Television Code


4.01 Cable Television Code applies

4.02 Franchise fee exception

4.03 Bundled services

5 Franchise term

6 Acceptance

6.01 Everest Connections Corporation's acceptance

6.02 Everest Connections Corporation's warranty

(A) Lawful acts of Everest Connections Corporation

(B) Ability to perform

(C) Covenant against contingent fees

(D) No gratuities

(E) Contemporaneous employment

6.03 Recourse by Everest Connections Corporation

6.04 Everest Connections Corporation acknowledgments

6.05 Waiver of contest of validity

7 Sale or transfer of franchise

7.01 Exceptions

7.02 Additional customer service regulation

8 Grant of authority and use of streets

(A) Develop cable communications system

(B) Provide cable services


(C) Use of public streets and property

 

(C) Placement of equipment

(D) Limited to cable communication services.

9 System Specifications

9.01 General requirements

9.02 General description

9.03 Design

9.04 Technical specifications

10 Basic Service to government and public educational facilities

10.01 No_cost basic service

10.02 Description of facilities

11 Low density service

(A) Voluntary extension

(B) Cost_sharing agreement

(1) Developer capital assistance

(2) Individual resident's capital assistance

(3) Agreements private

(C) Downtown service

12 System improvement

13 Bi_annual review

14 Public, educational, government (PEG) access

14.01 Public access

(A) Institution of channel

(B) Future operation of channel

14.02 Educational access

(A) Channels established

(B) Modification of obligations of Everest Connections Corporation

14.03 Government Channel

(A) Channel established

(B) Obligations of Everest Connections Corporation

(C) Exportation of Channel

(D) Elimination of Channel

(E) Everest Connections Corporation held harmless

(1) City obligation

(2) Everest Connections Corporation's negligence or willful misconduct

(3) Notice to City

(4) Payments by City

(F) Modification of obligations of Everest Connections Corporation

14.04 Everest Connections Corporation's costs

15 Institutional Network or other services

16 Limitations on use of PEG channels and institutional network

17 Arbitration

17.01 Procedures

(A) Appointment of arbitrators

(B) Commencement of hearing

(C) Hearing open to the public

(D) Arbitrators' decision

17.02 Judicial review

17.03 Costs of arbitration

18 Less restrictive franchise terms

18.01 Election by Everest Connections Corporation

18.02 All provisions considered

18.03 Procedure

18.04 Non_franchised system

18.05 Actions by the City as a competitor

18.06 Existing providers.

19 Complete agreement

20 Modification

21 Clarification of law

22 Delays and failures beyond control of Everest Connections Corporation or the City

23 Written notice

 

Section 1. Intent.

 

Everest Connections Corporation, doing business as Everest Connections Corporation of the Midwest ("Everest Connections Corporation"), the grantee, requested approval of a cable communications franchise, and agreed to comply with all applicable ordinances, statutes, regulations, rules, and other laws for the construction, maintenance, and operation of a cable communications system. It is, therefore, the intent of this franchise agreement to provide for and specify the means by which the City shall grant to Everest Connections Corporation, and by which Everest Connections Corporation will exercise, authority to provide cable communications service to the residents of the City. Absent a provision in this franchise agreement, or other waiver, neither the City nor Everest Connections Corporation shall be required to forego any rights it may possess under the First Amendment or any other provision of the United States or Missouri Constitutions, or any statute, regulation, rule or decision of any federal, state or local agency or court having jurisdiction.

 

Section 2. Short title.

 

This franchise agreement shall be known as the "Kansas City, Missouri Cable Communications Franchise _ Everest Connections Corporation."

 

Section 3. Definitions.

 

The terms used in this franchise agreement shall be as defined in Chapter 19, Code of General Ordinances, commonly known as the Cable Television Code.

 

Section 4. Application of the Cable Television Code.

 


 

4.01. Cable Television Code applies. This franchise agreement shall be subject to the Cable Television Code, as it now exists and as it may be properly amended, subject to the limitations of section 20 of this franchise agreement.

 

4.02. Franchise fee exception. Everest Connections Corporation will make a payment of $50,000 as a prepayment toward its first required franchise fee payment upon the effective date of this franchise. Should Everest Connections Corporation fail to commence operations or cease its operations before a franchise fee payment of $50,000 would be due the City, no refund of this prepayment will be made.

 

4.03 Bundled services. It is not the current intention of Everest Connections Corporation to bundle or market its services in such a way to place an unreasonable share of the charges within cable television services. It is Everest Connections Corporations intention to market its bundled services to fairly reflect an appropriate and reasonable division of services among the various services offered. The marketing of bundled services, either together or separately, is relevant to the Citys regulation of telecommunications providers because the appropriate fees and taxes differ among various services. Telephone services are currently regulated under Sections 40-360 and 40-361, Code of Ordinances, imposing certain occupational license fees, and cable television, including broadband Internet access through a cable television system, fees are currently regulated under Section 19-82, Cable Television Code. Whether or not Everest Connections Corporation separates services on a customers bill, it will provide to the City the amounts upon which it will pay the telephone occupational license fee and other taxes or fees based on telephone service, and the amounts upon which it will pay the cable television 5% fee. Should Everest Connections Corporation engage in billing practices that, in the determination of the City, do not fairly reflect an appropriate split of telephone and cable television services the City will notify Everest Connections Corporation in writing of its determination. The parties will meet and discuss in good faith whether the billing practices result in an unfair payment of taxes and fees to the City. If the parties do not agree on an appropriate method of determining which charges are subject to telephone occupational license fees and which are subject to the cable television fee, the parties may subject the dispute to arbitration under the terms of Section 17, or may resort to other methods of dispute resolution, including litigation. Taxes or fees which are not paid on the appropriate division of the bundled bill, when ultimately paid, will be subject to all interest and penalties provided by the applicable ordinances.

 

Section 5. Franchise term.

 

The franchise granted hereby is intended to authorize Everest Connections Corporation's to own, construct, operate and maintain a cable communications system in the City. This franchise agreement, the Kansas City, Missouri, Cable Communications Franchise ) Everest Connections Corporation, serves to grant authority to Everest Connections Corporation to use public property under the terms of this franchise agreement, from the effective date of this franchise agreement until the expiration of fifteen (15) years from the effective date of this franchise agreement, absent modification or revocation of this franchise agreement.

 

Section 6. Acceptance.

 

6.01. Everest Connections Corporation's acceptance. Acceptance of this franchise agreement shall be reflected by the execution of a letter of acceptance by Everest Connections Corporation declaring that it has read, understood and accepted all the terms and conditions of this franchise agreement. Everest Connections Corporation's acceptance or rejection of the continuation of its franchise under the terms of this franchise agreement shall be delivered to the City within 10 days of passage of the ordinance that includes this franchise agreement by the City Council. If Everest Connections Corporation accepts the terms of this franchise agreement, it shall be in full force and effect 10 days after passage of this ordinance by the City Council. It is understood that this franchise agreement provides for actions which may not be completed or capable of being accomplished until the construction of the system is completed. Those items contingent on the completion of the construction of the system are understood by Everest Connections Corporation and the City to be contingent on completion of the construction. Failure to comply with commitments contingent on the completion of the construction are not violations of this franchise, pending completion of the construction.

 

6.02. Everest Connections Corporation's warranty. Everest Connections Corporation represents, warrants and guarantees that neither it, nor any of its representatives or agents, has committed any illegal acts or engaged in any wrongful conduct contrary to, or in violation of, any federal, state or local law or regulation in connection with the passage of this franchise ordinance. Everest Connections Corporation further warrants and represents as follows:

 

(A) Lawful acts of Everest Connections Corporation. That it is a corporation authorized to do business in the State of Missouri, and has full right and authority to enter into and fully perform its obligations under this franchise agreement; that all corporate action required to authorize the acceptance of this franchise agreement and execution and delivery of all other documents to be executed or delivered by Everest Connections Corporation pursuant to the franchise, and to authorize the performance by Everest Connections Corporation of all of its obligations under the franchise, and all such other documents to be executed or delivered by Everest Connections Corporation, have been validly and duly acted on and are in force and effect; and that the franchise agreement and all other documents executed or delivered by Everest Connections Corporation have been duly accepted and executed and the terms of each thereof are fully binding upon and enforceable against Everest Connections Corporation.

 

(B) Ability to perform. Everest Connections Corporation has the fiscal and technical capability to commence, complete, operate and maintain a cable communications system pursuant to the terms of this franchise agreement.

 

(C) Covenant against contingent fees. Everest Connections Corporation has neither employed nor retained any person to solicit or secure the continuation of its franchise upon an agreement or understanding for a commission, percentage, brokerage or other fee contingent on the City's continuation of Everest Connections Corporation's franchise.

 

(D) No gratuities. Everest Connections Corporation has not offered, given, or agreed to give to any employee or official or former employee or official of the City, and has not solicited, demanded, accepted or agreed to accept from any other person or business, a gratuity, offer of employment or anything of pecuniary value in connection with any decision, approval, disapproval, recommendation, or preparation of any part of this franchise agreement.

 

(E) Contemporaneous employment. Everest Connections Corporation warrants and agrees that no employee or official of the City who is participating directly or indirectly in the development of this franchise agreement is or will become, as a condition of the approval of this franchise agreement, an employee of Everest Connections Corporation.

 

6.03. Recourse by Everest Connections Corporation. It is recognized that challenges by Everest Connections Corporation to actions of the City are subject to applicable law.

 

6.04. Everest Connections Corporation acknowledgments. Everest Connections Corporation expressly acknowledges that, upon accepting this franchise agreement, it did so relying upon its own investigation and understanding of the power and authority of the City to grant and to continue the franchise. Everest Connections Corporation, by acceptance of this franchise agreement, acknowledges that it has not been induced to enter into this franchise agreement by any understanding or promise or other statement, whether verbal or written, by or on behalf of the City or by any other third person concerning any term or condition of the franchise not expressed in this franchise agreement. Everest Connections Corporation further acknowledges by the acceptance of this franchise agreement that it has carefully read its terms and conditions. Everest Connections Corporation acknowledges that the terms of this franchise were drafted in conjunction with the City.

 

6.05. Waiver of contest of validity. Except as set forth in Section 21, Everest Connections Corporation agrees by the acceptance of this franchise agreement that it will not at any time set up against the City in any claim or proceeding that any condition or term of this franchise agreement is unreasonable, arbitrary or void, or that the City had no power or authority to make such term or condition, and Everest Connections Corporation shall be required to accept the validity of the terms and conditions of this franchise agreement in their entirety.

 

 

 

 

Section 7. Sale or transfer of franchise.

 

7.01. Exceptions. The restriction established by Section 19.24, Cable Television Code, shall be interpreted to not apply to the transfer of the franchise to any affiliate of Everest Connections Corporation so long as such sale, assignment, transfer, lease or sublease does not result in a change in control of Everest Connections Corporation's operations within the City.

 

7.02. Additional customer service regulation. Any transfer not excepted by Section 7.01 _ Exceptions, shall include as a part of the franchise agreement to be accepted the following new provision:

Penalties. Should information provided by Everest Connections Corporation's successor in its annual report reveal any area of noncompliance with customer service requirements, or should it be found by the franchise administrator upon notice to Everest Connections Corporation's successor and hearing, if requested by Everest Connections Corporation's successor, that there is an area of noncompliance with customer service requirements, the City may require a new report showing Everest Connections Corporation's successor's attempts at compliance with the identified area of noncompliance. This new report shall be due 180 days after a written request by the City, and shall cover at least the first 150 days after the City's written request. If compliance is not established by the intermediate report, Everest Connections Corporation's successor shall pay to the City as a penalty for its failure to comply with all customer service requirements, the sum of $100.00 per day, until compliance is established by Everest Connections Corporation's successor.

 

Section 8. Grant of authority and use of streets.

 

Everest Connections Corporation is authorized to own, operate, construct and maintain a cable communications system in the City under the provisions of this franchise agreement and to perform the following activities:

 

(A) Develop cable communications system. To establish, acquire, maintain and operate a cable communications system within the City;

 

(B) Provide cable services. To furnish, render and sell cable service and additional service to the residents of the City;

 

(C) Use of public streets and property. To use and occupy the streets and other public property for its system;

 


 

(D) Placement of equipment. To use and attach to any City_owned utility poles, and to enter and construct, erect, locate, repair and rebuild on, in, under, along, over and across the streets and other public property, all towers, poles, cables, amplifiers, conduits and other facilities owned, leased and otherwise used by Everest Connections Corporation for a cable communications system. It is understood that access to poles and other facilities will be consistent with the Citys general policy, applicable to all users of the rights of way, prohibiting above-ground wires where underground services are required, and where the Citys poles are not used for above-ground services, such as non-wood poles.

(E) Limited to cable communications services. It is understood that Everest Connections Corporation intends to provide a variety of services, only one of which is video programming through a cable television operation. Other services, such as local exchange service and other non-cable services, are controlled by regulations applicable to the specific technology or service provided by Everest Connections Corporation.

 

Section 9. System Specifications.

 

9.01. General requirements. Subject to negotiation of commercially acceptable pole attachment and right-of-way access agreements, and to the availability of qualified construction contractors, Everest Connections Corporation shall use its best efforts to complete construction of its system no later than 36 months after the passage of the ordinance containing this franchise agreement. Everest Connections Corporation shall use equipment used in high_quality, reliable, modern cable communications systems of similar design. Prior to the commencement of construction, Everest Connections Corporation shall provide to the City a plan indicating, at least, the construction schedule, a plan for including minority and women owned business enterprises in the business dealings of Everest Connections Corporation, and a plan for training and hiring minority persons.

 

9.02. General description. The system shall provide residents with a technically advanced and reliable cable communications system. The system shall operate with 860 Mhz of bandwidth, capable of delivering a minimum of over 300 channels of programming. It will have a return capacity of 5_40 Mhz. The design will provide the benefits of proven Hybrid Fiber Coaxial (HFC) technology while positioning the system for expansion of bandwidth and channel capacity as technology and future services develop.

 

9.03. Design. The design of the system shall be based upon a "Fiber to the Feeder" architecture. This architecture will deliver the signals by fiber optics directly to each neighborhood group. With a neighborhood group maximum of only 250 homes, the resulting system will be reliable while delivering a high quality picture. Everest Connections Corporation will place fiber optic cables throughout the City, delivering the signals to an optical node placed in each neighborhood area. There shall be no more than an average of 4 active components in a cascade between the headend and the subscriber, and an average of no more than 2 active components in a cascade from any node. The longest coaxial cascade from a node shall not be longer than 3,500 feet. The headends will be interconnected to the hubs by a redundant fiber ring, and the hubs will then feed the nodes. Should any equipment failures occur at a node, the number of homes that could be affected would total no more than the number of homes fed from that node. The incorporation of standby power supplies, strategically placed throughout the system, will further reduce the likelihood of service interruptions.

 

 

 

9.04. Technical specifications.

 

The system shall meet or exceed Federal Communications Commission requirements. In no event shall the system fall below the following standards:

 

(A) The system shall be capable of meeting the following distortion parameters:

 

1. Carrier to RMS Noise 51 dB

2. Carrier to Second Order 56 dB

3. Carrier to Cross Modulation 56 dB

4. Carrier to Composite Beat 56 dB

 

(B) The frequency versus gain response of a single channel as measured across any 6 MHz spectrum shall not exceed +/_ 2 dB.

 

(C) The frequency versus gain response of the entire passband shall not exceed n/10+ 2 dB for the entire system where N is the number of amplifiers in cascade.

 

(D) The system shall be designed such that at a minimum all technical specifications of this franchise agreement are met.

 

(E) The system shall be designed such that no noticeable degradation in signal quality will appear at the subscriber terminal.

 

(F) Should the City establish or appoint a committee, board or other entity to review the state of the technology offered by Everest Connections Corporation, Everest Connections Corporation shall cooperate with that entity as it assesses the level of advancement in technology offered by Everest Connections Corporation.

 

Section 10. Basic Service to government and public educational facilities.

 

10.01. No_cost basic service. There will be no monthly charge for one basic service drop for each governmental facility or public educational facility to be served. Everest Connections Corporation shall install one drop to other governmental or public educational facilities identified in Section 10.02 upon the request of the franchise administrator. There will be no monthly charge for one basic service drop at all such facilities, but Everest Connections Corporation may charge its standard monthly additional outlet charge for additional basic service outlets. Additional outlets shall be installed or existing outlets shall be relocated for a predetermined fee for each additional outlet, including the costs of amplification equipment required for adequate signals. At City Hall, 12 drops shall be provided at no cost to the City at locations designated by the franchise administrator. Such drops at City Hall shall be relocated for a predetermined fee.

 

10.02. Description of facilities. Drops and cable service will be provided by Everest Connections Corporation, in accordance with the terms and conditions of Section 10.01, to all the following buildings located in the City, whether now existing or constructed or obtained after the commencement of this franchise, owned or leased by:

 

(A) the City, or any of its departments;

 

(B) the Kansas City, Missouri Police Department;

 

(C) the Kansas City, Missouri Fire Department;

 

(D) accredited colleges and universities;

 

(E) all elementary and secondary public schools; and

 

(F) all public libraries, including the Kansas City Public Library and its branches, and the Mid_Continent Public Library branches.

 

Section 11. Low density service.

 

Under Section 19.56 of the Code, for the purpose of providing cable service to residents on an accelerated basis, the City, through its franchise administrator, and Everest Connections Corporation may mutually agree to any other alternative methods of extending cable service into areas of the City where the minimum occupied density does not meet the requirements described in Section 19.55 of the Code. Such circumstances may include, but are not limited to, the following:

 

(A) Voluntary extension. Everest Connections Corporation may extend its system into any such "low density" areas of the City at its own discretion.

 

(B) Cost_sharing agreement. In any unserved developing area having a minimum occupied density which is lower than the minimum density requirements required by this franchise agreement, Everest Connections Corporation may negotiate a cost_sharing agreement with the area's developer or any of the area's residents to allow residents of low_density areas to receive cable service, according to the following general guidelines:

 

(1) Developer capital assistance. Upon the request of the developer of a newly planned or developing subdivision, or of the developing phase of an existing subdivision, within the City, where the current average occupied density of residential dwelling units per cable mile and per street mile is less than that required for mandatory extension of service, Everest Connections Corporation may:

 

(a) Coordinate with the developer to obtain a current plat of the area, determine the growth plan of the subdivision and acquire any other information which may assist Everest Connections Corporation in surveying the area.

 

(b) Conduct a site survey of the area and prepare an engineering and investment analysis to determine the technical requirements and cost of extending Everest Connections Corporation's system to each existing and planned residential dwelling unit in the area, from the closest point where available quality signals exist.

 

(c) Coordinate with the developer to determine a capital cost sharing plan to finance the initial extension of Everest Connections Corporation's system into the area. The plan would ensure that any "up_front" monetary contribution by the developer would cause Everest Connections Corporation's remaining share of the extension investment to be economically feasible, as compared to the feasibility assumed by the applicable density ratios of this franchise agreement.

 

(d) Upon agreement of a capital cost sharing plan, Everest Connections Corporation and the developer may also agree to a reimbursement plan where Everest Connections Corporation would reimburse the developer's share of the extension investment should the minimum occupied density of residential dwelling units in the area ever reach the applicable density ratios of this franchise agreement.

 

(e) In addition, Everest Connections Corporation and area developers may coordinate any other mutually agreeable and economically acceptable capital cost sharing plans which allow cable service to be extended to residents in low density areas.

 

(2) Individual resident's capital assistance. Everest Connections Corporation may also enter into any other mutually agreeable and economically acceptable capital cost sharing arrangements with individual residents, or an organized group of residents, within any low_density area requesting cable service.

 

(3) Agreements private. The City recognizes that any capital cost sharing agreement coordinated between Everest Connections Corporation and a developer, a group of residents or an individual resident, shall be private and the City shall not interfere with either the coordination or eventual execution of such agreements, except to encourage both parties to negotiate such agreements, where applicable, in order to facilitate the extension of cable service to the residents of low_density areas. Likewise, such private agreements shall not involve the City in any way nor expose the City to any claim for damages or liability as the result of any dispute that may arise between Everest Connections Corporation and any other party to a capital cost sharing agreement. Everest Connections Corporation shall indemnify and hold harmless the City from the terms and conditions of any such agreements, according to the provisions of the Code and this franchise agreement.

 

(C) Downtown service. Everest Connections Corporation shall build its system to the exterior of the following facilities:

 

(1) existing or proposed hotels between 14th and 12th Streets / Wyandotte and Baltimore; and

 

(2) Civic Mall (between 13th and 8th Streets / Oak and Locust).

 

Upon completion of the system or on the fourth anniversary of the effective date of the ordinance containing the franchise agreement, whichever occurs first, and every three years thereafter, the City and Everest Connections Corporation will mutually determine whether further extension of the system in the downtown area is required. If extension of the system is economically feasible, the City and Everest Connections Corporation will mutually agree to a construction schedule. The costs of extension of the system pursuant to this provision shall be treated as "external costs" under FCC rate regulations or otherwise passed through to subscribers.

 

Section 12. System improvement.

 

Upon completion of the system or on the fourth anniversary of the effective date of the ordinance containing this franchise agreement, whichever occurs first, and every three years thereafter, Everest Connections Corporation shall make such improvements to the system as are necessary to maintain the system at the modern level of technical performance which has been implemented in a majority of cable television systems, provided that such improvements can be instituted through technology which has been demonstrated to be feasible for its intended purpose, in an operationally workable manner, and in a manner which is profitable with respect to each such improvement.

 

Section 13. Bi_annual review.

 

Everest Connections Corporation shall cooperate with the City every two years in a review of compliance with this franchise agreement and the Cable Television Code. The review shall specifically include issues involved in the provision of service by Everest Connections Corporation.

 

Section 14. Public, educational, government (PEG) access.

 

14.01. Public access.

 

(A) Institution of channel. The City reserves the right to require the operation of a non_commercial public access channel at such time as the City determines that there exists a need for such channel. The City shall provide six months notice to Everest Connections Corporation of the City's requirement that a public access channel be provided. Once required, the public access channel shall not be eliminated by Everest Connections Corporation absent written authorization by the City.

 

(B) Future operation of channel. Should the City elect to require a public access channel, facilities and equipment necessary to operate a public access channel shall be provided by Everest Connections Corporation, with the understanding that all costs of such facilities and equipment may be passed through to subscribers as an itemized portion of the rates charged by Everest Connections Corporation, to the extent not prohibited by applicable federal or state law and regulations. Everest Connections Corporation shall establish rules it deems necessary to administer the production facility, to schedule use of equipment, and to train persons wishing to utilize the public access channel. The City may extend the Community Video Advisory Board's authority for the purpose of reviewing the operation of any public access channel so long as such authority is not inconsistent with the terms of this franchise agreement.

 

14.02. Educational access.

 

(A) Channels established. Upon completion of the system specified in this franchise agreement, Everest Connections Corporation shall provide three channels for the use of the City or its designee to provide non_commercial, educational programming and opportunities for subscribers. At least one channel shall be dedicated for the use of Kansas City area accredited colleges and universities, and at least one channel shall be dedicated for the use of the public school districts within the City organized pursuant to Chapter 162, Revised Statutes of Missouri and for the use of accredited private schools. When space permits, programming developed for these channels may be cablecast on any educational access channel. Everest Connections Corporation and the City shall agree to one or more appropriate designees to oversee the educational channels. Should the City determine that a designee is no longer an appropriate designee, it shall designate an appropriate replacement. Schedules of forthcoming programming shall be submitted to the Community Video Advisory Board by the City or its designee prior to each semester, including summer sessions. Once required, educational channels shall not be eliminated by Everest Connections Corporation absent written authorization by the City. In recognition of the investment of the Citys educational institutions in developing higher education and elementary/secondary education access programming, and the placement of these channels on the current cable television system operated by Time Warner Cable on Channel 17 and Channel 18, Everest Connections Corporation will provide the higher education access channel on Channel 17 and the elementary / secondary education access programming at Channel 18.

 

(B) Modification of obligations of Everest Connections Corporation. The City and Everest Connections Corporation may agree that Everest Connections Corporation may use an unused educational channel for other programming. The City shall not consider the nature of the programming proposed by Everest Connections Corporation when approving or disapproving such temporary use of an unused educational access channel. The City shall not unreasonably deny Everest Connections Corporation access to an unused educational access channel. The City shall give Everest Connections Corporation no less than 180 days notice should the educational access channel being temporarily used by Everest Connections Corporation be required for educational use.

 

14.03. Government Channel.

 

(A) Channel established. Everest Connections Corporation shall provide one channel for use by the City to present non_commercial local community information of interest to subscribers in the City. The City may provide this service itself, or may designate another agency or person to provide this service for the City. In recognition of the investment of the City in publicizing its Government Channel as KCCG-2, and its placement on the current cable television system operated by Time Warner Cable on Channel 2, Everest Connections Corporation will provide the Government Channel to its subscribers at channel 2.

 


 

(B) Obligations of Everest Connections Corporation. Everest Connections Corporation will cooperate with the City in reviewing equipment needs and obtaining equipment at competitive prices or providing other appropriate assistance to the Citys video programming efforts through its government access channel. It is recognized that the City is enjoying interest by several new telecommunications providers, each desiring to compete with the current cable provider and current telephone services providers, as well as with each other. Based on current understandings of market conditions in the City now, it may be unreasonable to expect all new and potential providers to accomplish construction and operation of their systems as will be authorized by separate franchise agreements. Because this franchise agreement between the City and Everest Connections Corporation must be considered in light of possible changing conditions before completion of the system, the City and Everest Connections will not establish specific levels or types of support for the Citys government access channel until 12 months following passage of the ordinance approving this franchise.

 

It is clearly understood that the City wishes to treat all providers of similar services who are in similar circumstances fairly. Also, the City wishes to insure that it receives the maximum benefit for its government access efforts without unnecessary duplication of services from a variety of providers. Until economic conditions clearly establish those companies that will become a viable participant in the Citys telecommunications industry, the City cannot rationally determine the types of services required of Everest Connections Corporation. The parties agree to negotiate in good faith commitments within 12 months of the effective date of this franchise, to achieve the goal of fairness among franchisees.

 

It is further understood that the obligations of Everest Connections Corporation will be comparable to those obligations incurred by the incumbent cable communications provider when it secured renewal of its franchise in 1994 in total, although the provision of equipment, financial support, or other services agreed upon will be paid to the City under different time schedules. The City agrees it will not require support of its government access channel to begin until at least three months after Everest Connections Corporation first provides video programming to subscribers. However, Everest Connections Corporation will make a payment of $50,000 as a prepayment toward required support of the Citys cable communications efforts upon the effective date of this franchise. Should Everest Connections Corporation fail to commence operations or cease its operations before the time provided by this franchise for the first installation of support of at least $50,000 would be due the City, no refund of this prepayment will be made.

 

(C) Exportation of Channel. Without written permission from the City, Everest Connections Corporation may not export the government channel. However, should Everest Connections Corporation interconnect the system to cable communications systems operated by Everest Connections Corporation in other municipalities in the Kansas City area, Everest Connections Corporation may carry on such other cable communications systems the public access channel, educational access channels and government channel provided under the terms of this franchise agreement.

 

(D) Elimination of Channel. The government channel shall not be eliminated by Everest Connections Corporation absent written authorization by the City.

 

(E) Everest Connections Corporation held harmless.

 

(1) City obligation. The City shall indemnify, defend and forever hold harmless Everest Connections Corporation, its officers, employees, agents, licensees and affiliates from and against any and all claims, judgments, costs, liabilities, damages, and expenses (including reasonable attorney's fees) arising out of or in connection with the use of the government channel, including, but not limited to, the presentation of programming on the government channel.

 

(2) Everest Connections Corporation's negligence or willful misconduct. Notwithstanding anything to the contrary contained in this section, Everest Connections Corporation shall not be so indemnified or reimbursed in relation to any matter, in any action, suit or proceeding in which Everest Connections Corporation is negligent in the performance of its obligations under this franchise agreement, or has engaged in willful misconduct or criminal acts. The City shall, however, if requested by Everest Connections Corporation, provide a defense even though, in good faith, it believes at the commencement of any action, that Everest Connections Corporation may have engaged in the above_described conduct.

 

(3) Notice to City. Everest Connections Corporation shall immediately notify the City, with a copy of all written notifications to the City Attorney, of any potential claim, demand, or other legal action for which Everest Connections Corporation shall demand to be held harmless pursuant to this section.

 

(4) Payments by City. Should payments be due and owing Everest Connections Corporation pursuant to this section, payment shall be made solely and exclusively from franchise fees to be paid to the City, in the next fiscal year of the City for which a budget has not yet been adopted by the City Council and continuing until all payments due and owing Everest Connections Corporation have been satisfied. The City shall pay an interest charge, computed from the date such payments became due and owing Everest Connections Corporation, at the annual rate equal to the commercial prime interest rate in effect upon the due date plus two percentage points. The prime rate will be determined by the Bank of New York, or its successor, on the effective date on which interest becomes due. If there exists a dispute whether the City is obligated to hold harmless Everest Connections Corporation, that dispute may be, at the agreement of the parties, submitted to a panel of arbitrators pursuant to the terms of Section 16 _Arbitration, or Everest Connections Corporation may bring an action in a court of competent jurisdiction. Pending resolution of any disputed obligation, Everest Connections Corporation shall not set off any amount from its franchise fee payments. The amount in which the City is obligated to indemnify Everest Connections Corporation shall not exceed the amount permitted by law.

 

(F) Modification of obligations of Everest Connections Corporation. The City and Everest Connections Corporation may agree that Everest Connections Corporation may use an unused government channel for other programming. The City shall not consider the nature of the programming proposed by Everest Connections Corporation when approving or disapproving such temporary use of an unused government channel. The City shall not unreasonably deny Everest Connections Corporation access to an unused government channel. The City shall give Everest Connections Corporation no less than 180 days notice should the government channel being temporarily used by Everest Connections Corporation be required for the City's use.

 

Section 14.04. Everest Connections Corporation's costs. The amount of all costs and expenses incurred by Everest Connections Corporation under the requirements of this Section 14, other than capital costs, may be deducted by Everest Connections Corporation from the franchise fees payable to the City hereunder, in accordance with the Act, and to the extent the total fee paid to the City pursuant to the Cable Television Code and this franchise agreement would exceed the maximum allowed by the Act.

 

Section 15. Institutional Network or other services.

 

As with the provision of support for the Citys government access channel, it is unreasonable to provide duplicate, triplicate or even more relatively identical services as an institutional network. Because this franchise agreement between the City and Everest Connections Corporation must be considered in light of possible changing conditions before completion of the system, the City and Everest Connections will not establish specific levels or types of support for an institutional network or other possible services until 12 months following passage of the ordinance approving this franchise.

 

It is clearly understood that the City wishes to treat all providers of similar services who are in similar circumstances fairly. Also, the City wishes to insure that it receives the maximum benefit from its cable communications franchising efforts without unnecessary duplication of services from a variety of providers. Until economic conditions clearly establish those companies that will become a viable participant in the Citys telecommunications industry, the City cannot rationally determine the types of services required of Everest Connections Corporation. The parties agree to negotiate in good faith commitments within 12 months of the effective date of this franchise, to achieve the goal of fairness among franchisees.

 

It is further understood that the obligations of Everest Connections Corporation will be comparable to those obligations incurred by the incumbent cable communications provider when it secured renewal of its franchise in 1994 in total, although under different time schedules. The City agrees it will not require institutional network support or other services until at least three months after Everest Connections Corporation first provides video programming to subscribers.

 

Section 16. Limitations on use of PEG channels and institutional network.

The channels provided pursuant to Section 14 and the facilities and capacity or other services provided pursuant to Section 15 shall be used only for non_commercial public, educational and governmental purposes.

 

Section 17. Arbitration.

 

17.01. Procedures. When any part of this franchise agreement, including the scope of required performance by the City or Everest Connections Corporation under this franchise agreement, is in dispute, the City and Everest Connections Corporation may mutually agree, but are not otherwise required, to submit the dispute to the arbitration of disinterested parties for hearing and determination. Such arbitration shall be conducted as follows:

 

(A) Appointment of arbitrators. If the City and Everest Connections Corporation agree to arbitration, then each shall, within 15 Days of a written request by either party to the other to proceed with arbitration, appoint one arbitrator. The panel of two arbitrators shall agree upon the selection of a third member, similarly qualified, within 15 days after appointment of the second arbitrator.

 

(B) Commencement of hearing. Within 30 days after appointment of all arbitrators and upon 10 days advance written notice to the City and Everest Connections Corporation, the arbitrators shall commence a hearing of the dispute.

 

(C) Hearing open to the public. All hearings, debates and deliberations shall be open to the public, but the public shall not participate in such hearings unless duly called as individual witnesses. The times and places of the hearings shall be announced by public notice or as thereafter publicly stated in the order to adjourn. Each hearing shall be recorded and may be transcribed at the request of either Everest Connections Corporation or the City.

 

(D) Arbitrators' decision. At the close of the hearings the arbitrators shall prepare written findings and make a written decision within 30 days of their final adjournment. Their decision shall be a majority agreement, and shall be served by mail upon the City and Everest Connections Corporation.

 

17.02. Judicial review. Either the City or Everest Connections Corporation may seek judicial review of the decision of the arbitrators to the extent authorized under applicable law. Additionally, it is recognized that judicial review may be sought if: (1) the City or Everest Connections Corporation fails to select an arbitrator; (2) the arbitrators fail to select a third member; (3) one or more arbitrator is unqualified; (4) the designated time limits have been exceeded; or (5) the arbitrators have not proceeded expeditiously. In the event a court determines the arbitrators abused their discretion, or otherwise acted unlawfully, it may order the arbitration to be repeated and issue findings, orders and directions.

 

17.03. Costs of arbitration. The costs of arbitration shall be borne equally unless otherwise ordered by the arbitrators or a reviewing court of competent jurisdiction.

 

Section 18. Less restrictive franchise terms.

 

18.01. Election by Everest Connections Corporation. If the City grants a franchise to another cable operator on terms and conditions which are less burdensome or more favorable to another operator of a cable communications system than the terms and conditions of this franchise agreement, then Everest Connections Corporation may elect to modify this franchise agreement pursuant to the procedures set forth in this Section 18.

 

18.02. All provisions considered. In considering whether the terms and conditions of another franchise are less burdensome or more favorable than the terms and conditions of this franchise agreement, the reasonable value of the requirements of each franchise shall be taken as a whole.

 

18.03. Procedure. If the terms and conditions of another franchise are less burdensome or more favorable, then Everest Connections Corporation may propose modifications of the requirements in this franchise agreement to the extent that such modifications cure the disparity between the two franchises. Everest Connections Corporation shall provide the City with written notice of any proposed modifications under this section, and the City shall accept or reject such proposed modifications within 45 days of receipt of such notice. If the City rejects such proposed modifications, Everest Connections Corporation and the City may mutually agree to submit the dispute to arbitration pursuant to Section 17 or either party may seek relief regarding the terms of this franchise in a court of competent jurisdiction. In either case, the terms and conditions of this franchise agreement shall remain in effect during the resolution of this dispute. The City shall not unreasonably reject proposed modifications.

 

18.04. Non_franchised system. If any cable communications system is constructed and/or operated within the City, and the operator of such cable communications system is not required to obtain a franchise for the operation of that cable communications system, then Everest Connections Corporation shall not be required to comply with any terms contained herein that are more burdensome or less favorable than any requirements imposed on the operator of such other cable communications system governing the construction, operation or repair of such other cable communications system. The provisions of Sections 18.02 and 18.03 shall also apply to actions taken pursuant to this Section 18.04.

 

18.05. Actions by the City as a competitor. If the City or any affiliate of the City shall make a decision to commence construction and operation of a cable communications system in the City, or should construction of a cable communications system by the City or any affiliate of the City commence without an identifiable final decision, then this franchise agreement automatically shall be amended as of the date of the final decision to commence construction and operation, or at the commencement of construction if it begins without an identifiable final decision, in the manner described below:

 

(A) Notwithstanding any provision to the contrary contained in this franchise agreement, Everest Connections Corporation shall not be required to provide the City with proprietary information or to respond to requests for information that require it to release proprietary information where it reasonably believes that the release of such information would provide the City or affiliate of the City a competitive advantage, except as required by federal law or regulations;

 

(B) Any audits of franchise fees must be conducted by an independent auditor who has agreed in advance in writing not to disclose any portion of Everest Connections Corporation's books and records or other proprietary information to the City, other than the aggregate amount of gross revenues (without disclosing the amounts of underlying categories of gross revenues) used to calculate the franchise fees payable hereunder; and

 

(C) If Everest Connections Corporation shall be required to move, relay, or relocate any of its facilities in connection with the construction or preparation for construction of a cable communications system by the City or any affiliate of the City (regardless of whether any such removal, relaying, or relocation is required under the terms of this franchise agreement or under any applicable pole attachment agreement to which Everest Connections Corporation is a party), then the City shall be obligated to pay all of Everest Connections Corporation's reasonable costs for labor and materials to effect such work.

 

18.06. Existing providers

 

It is recognized by Everest Connections Corporation and the City that two cable television operators currently provide service to the City, Comcast, formerly Jones Intercable, and Time Warner Cable, formerly American Cablevision. Time Warner Cable operates under a franchise granted to American Cablevision by Committee Substitute for Ordinance 930358, effective September 4, 1994. Comcast, as successor to Jones Intercable, serves without a franchise a small number of residents under the terms of Section 2 of Committee Substitute for Ordinance 930358, although it is obligated to pay the appropriate 5% fee of gross revenue obtained from subscribers within the City. Agreements between the City, American Cablevision, now Time Warner Cable, and Jones Intercable, now Comcast, allowed an expansion of the number of subscribers served by Jones Intercable, now Comcast, without implicating the threshold of 300 subscribers under which Jones Intercable, now Comcast, may operate without a franchise.. Those agreements are recognized as excusing the requirement that Jones Intercable, now Comcast, obtain a franchise from the City, and the number of subscribers now served by Comcast does not excuse any obligation incurred by Everest Connections Corporation.

 

Section 19. Complete agreement.

 

It is the intent of the City and Everest Connections Corporation that the terms, conditions and obligations set forth in this franchise agreement shall govern their relationship for the full term of the franchise. In the event that any court, agency, commission, or other authority of competent jurisdiction (1) declares this franchise agreement invalid, in whole or in part, or (2) requires Everest Connections Corporation either to: (a) perform any act which is inconsistent with any provision of this franchise agreement, or (b) cease performing any act required by any provision of this franchise agreement, then Everest Connections Corporation shall not be required to comply with any term declared invalid and shall comply with any such requirement. Notwithstanding the foregoing, if any such declaration or requirement affects Everest Connections Corporation's obligations with respect to the educational channel described in Section 14.02 _ Educational access, the government channel described in Section 14.03 _ Government channel, or the institutional network or other services described in Section 15 _ Institutional network, then Everest Connections Corporation expressly agrees nevertheless to comply with the terms of Section 14.02 _ Educational access, Section 14.03 _ Government channel and Section 15 _ Institutional network or other services to the maximum extent permitted by law and expressly waives, to the maximum extent permitted by law, any claim it may have as to the invalidity or unenforceability of Section 14.02 _Educational access, Section 14.03 _ Government channel and Section 15 _ Institutional network or other services of this franchise agreement.

 

Section 20. Modification.

 

Except as otherwise expressly provided in this franchise agreement, or by applicable law, no provision of this franchise agreement shall be amended or otherwise modified, including by modification of the Code, in whole or in part, except by an instrument in writing duly executed by the City and Everest Connections Corporation. If inconsistent with the terms of the Code, the specific provisions of this franchise agreement shall control. This shall not be a restriction on the City's authority to exercise its police power to the extent consistent with applicable law.

 

Section 21. Clarification of law.

 

The City and Everest Connections Corporation agree that either party may seek a ruling as to the applicability of any court determination, federal or state law or regulation to the terms of this franchise agreement.

 

Section 22. Delays and failures beyond control of Everest Connections Corporation or the City.

 

Notwithstanding any other provisions of this franchise agreement, Everest Connections Corporation or the City shall not be liable for delay in performance of, or failure to perform, in whole or in part, its obligations pursuant to this franchise agreement due to strike, war or act of war (whether an actual declaration of war is made or not), insurrection, riot, act of public enemy, accident, fire, flood or other act of God, unpreventable technical failure, unavailability of materials or equipment, sabotage or vandalism, subscriber tampering or interference, or other events, where Everest Connections Corporation or the City has exercised all due care in the prevention thereof to the extent that such causes or other events are beyond the control of Everest Connections Corporation or the City. In the event that any such delay in performance or failure to perform affects only part of Everest Connections Corporation's or the City's capacity to perform, Everest Connections Corporation or the City shall perform to the maximum extent it is able to do so and shall take all steps within its power to correct such cause(s). Everest Connections Corporation and the City agree that in correcting such cause(s), they shall take all reasonable steps to do so in as expeditious a manner as possible. Everest Connections Corporation or the City shall notify the other party in writing of the occurrence of an event covered by this section within a reasonable period of time after Everest Connections Corporation or the City learns of its occurrence.

Section 23. Written notice.

 

All notices, reports or demands required to be given under this franchise agreement shall be given in writing and shall be deemed to be given when delivered personally to Everest Connections Corporation's chief executive officer or to the franchise administrator and the City Attorney, whichever is appropriate, or when 48 hours have elapsed after it is deposited in the United States mail in a sealed envelope, with registered or certified mail postage prepaid thereon, addressed to the party to which notice is being given. Such addresses may be changed by either party upon notice to the other party given as provided in this section. At the time of this continuation of Everest Connections Corporation's franchise by the City Council, the addresses of the parties are as follows:

 

Everest Connections Corporation: City of Kansas City:

 

Everest Connections Corporation of City of Kansas City, Missouri

the Midwest 2800 City Hall

414 East 12th Street

Kansas City, MO 64106

ATTN: Michael B. Roddy ATTN: City Manager

Chief Operating Officer ATTN: City Attorney

 

 

Approved as to form and legality:

 

 

 

 

____________________________________

Assistant City Attorney