Town of New Castle, NY Article II Grant of Franchise; Regulations

§ 49-4 Construal with other provisions.

A. In the event that the town shall grant to the grantee a nonexclusive, revocable franchise to construct, operate and maintain a cable communications system within the town, said franchise shall constitute both a right and an obligation to provide the services of a cable communications system as regulated by the provisions of this chapter and the franchise. The franchise shall include by reference those provisions of the grantee's application for franchise that are finally negotiated and accepted by the town and the grantee.

B. The franchise shall be granted under the terms and conditions contained herein, consistent with the town's Code and/or other applicable statutory requirements. In the event of conflict between the terms and conditions of this chapter, the franchise or the terms and conditions on which the town can grant a franchise, the Code and/or statutory requirements shall control.

C. Any franchise granted by the town is hereby made subject to the generally applicable local law provisions now in effect and hereafter made effective; provided, however, that any amendment to this chapter that is binding on any franchisee shall be confined to changes which do not materially alter the rights of the franchisee under a franchise. Nothing in the franchise shall be deemed to waive the requirements of the various codes and local laws of the town regarding permits, fees to be paid or manner of construction.

§ 49-5 Franchise area.

The franchise area shall be the entire town or portions thereof for which a franchise is granted.

§ 49-6 Use of public rights-of-way.

For the purpose of operating and maintaining a cable communications system in the town, the grantee may erect, install, construct, repair, replace, reconstruct and retain in, on, over, under, upon, across and along the public streets and ways within the town such wires, cables, conductors, ducts, conduits, vaults, manholes, amplifiers, appliances, pedestals, attachments and other property and equipment as are necessary to the operation of the cable communications systems; provided, however, that the grantee complies with all design, construction, safety and performance provisions contained in this chapter, the franchise agreement and other applicable local laws.

§ 49-7 Use of town facilities.

At the town's option, the town may require a grantee to utilize town-owned conduit or other facilities for any portion of its cable communications system during the initial construction of the system, provided that the cost of construction is not materially increased due to the use of town-owned facilities. The consideration for the use of town conduit or other facilities shall be as stated in the franchise. A reasonable fee for the use of town facilities shall be established in the franchise and may be adjusted at the periodic performance evaluations.

§ 49-8 Use of grantee facilities.

No poles shall be erected by the grantee without prior approval of the town with regard to location, height, type and any other pertinent aspect. However, no location of any pole of the grantee shall be a vested right, and such poles shall be removed or modified by the grantee at its own expense whenever the town determines that the public convenience would be enhanced thereby. The grantee shall utilize existing poles and conduits, where possible. The town shall have the right during the life of the franchise to install and maintain, free of charge, upon the poles owned by the grantee, any wire and pole fixtures that do not unreasonably interfere with the cable system operations of the grantee.

§ 49-9 Franchise required.

No cable communications system shall be allowed to occupy or use the streets of the town or be allowed to operate without a franchise.

§ 49-10 Term of franchise.

The term of any franchise granted pursuant to this chapter shall be stated in the franchise.

§ 49-11 Franchise nonexclusive.

Any franchise granted pursuant to this chapter shall be nonexclusive. The town specifically reserves the right to grant at any time such additional franchises for a cable communication system as it deems appropriate and/or build, operate and own such cable communication system or systems as it deems appropriate.

§ 49-12 Acts to be performed on schedule.

Whenever the agreement shall establish a separate schedule of specific acts by or on behalf of the grantee, these shall be deemed of the essence, and any failure of the grantee to perform within the time allotted shall always be sufficient ground for the town to invoke an appropriate penalty including possible revocation of the franchise.

§ 49-13 Statute to prevail.

In any controversy or dispute under this chapter, the law of the State of New York shall apply.

§ 49-14 Severability.

If any section, subsection, sentence, clause, phrase or portion of this chapter or the franchise is for any reason held invalid or unconstitutional by any court of competent jurisdiction or by any federal, state or local statute or regulation, such portion shall be deemed a separate, distinct and independent provision and such holding shall not affect the validity of the remaining portions thereof.

§ 49-15 Transfer of ownership or control.

A. Any franchise granted hereunder shall not be transferred without the prior consent of the town, which consent shall not be unreasonably withheld.

B. The grantee shall promptly notify the town of any actual or proposed transfer.

C. Every transfer shall make the franchise subject to cancellation unless the town shall have consented thereto. For the purpose of determining whether it shall consent to such transfer, the town may inquire into the legal, technical and financial qualifications of the proposed controlling party, consistent with Federal Communications Commission rules, and the grantee shall assist the town in any such inquiry.

D. The town agrees that any financial institution having a pledge of the franchise or its assets for the advancement of money for the construction and/or operation of the franchise shall have the right to notify the town that it or its designees satisfactory to the town will take control and operate the cable television system. Further, said financial institution shall also submit a plan for such operation that will ensure continued service and compliance with all franchise obligations during the term the financial institution exercises control over the system. The financial institution shall not exercise control over the system for a period exceeding one year, unless extended by the town at its discretion, and during said period of time, it shall have the right to petition for transfer of the franchise to another grantee. If the town finds that such transfer, after considering the legal, financial, character, technical and other public interest qualifications of the applicant, is satisfactory, the town will transfer and assign the rights and obligations of such franchise as in the public interest. The consent of the town to such transfer shall not be unreasonably withheld.

E. The consent or approval of the town to any transfer of the grantee shall not constitute a waiver or release of the rights of the town in and to the streets, and any transfer shall, by its terms, be expressly subject to the terms and conditions of this chapter and the franchise.

F. In the absence of extraordinary circumstances, the town will not approve any transfer or assignment of the franchise prior to completion of construction of the proposed system.

G. The town shall have 120 days from the time specified under federal law to act upon any request for approval of such sale or transfer that contains or is accompanied by such information as is required in accordance with Federal Communications Commission regulations and by the town. If the town fails to render a final decision on the request within 120 days, such request shall be deemed granted, unless the requesting party and the town agree to an extension of time. In the event that the town refuses to grant the aforementioned request, it shall set forth specific reasons for its decision, in writing, by municipal resolution.

H. In determining whether to approve said request, the town may consider the following:

(1) The experience of the proposed assignee or transferee (including conducting an investigation of the proposed assignee's or transferee's service record in other communities).

(2) The qualifications of the proposed assignee or transferee.

(3) The legal integrity of the proposed assignee or transferee.

(4) The financial ability and stability of the proposed assignee or transferee.

(5) The ability and express commitment of the proposed assignee or transferee to fully comply with the provisions of this agreement.

I. A copy of the completed sales agreement, or a functionally equivalent instrument, between the grantee and proposed transferee or assignee shall be available to the town for inspection at the grantee's local office, upon request of the latter.

J. The town may approve said petition contingent on compliance with additional standards, terms or conditions within its legal authority and consistent with findings resulting from its review of the aforementioned petition.

§ 49-16 Franchise renewal discretionary.

Upon completion of the term of any franchise granted under this chapter, the town may, in its sole discretion, grant or deny renewal of the franchise of the grantee in accordance with the provisions of the Cable Act. The grantee shall own the cable communication system but shall have no property right in the public rights-of-way upon the completion of the franchise term.

§ 49-17 Police powers.

A. In accepting the franchise, the grantee acknowledges that its rights hereunder are subject to the police power of the town to adopt and enforce general local laws necessary to the safety and welfare of the public, and it agrees to comply with all applicable general laws and local laws enacted by the town pursuant to such power.

B. Any conflict between the provisions of this chapter or the franchise and any other present or future lawful exercise of the town's police powers shall be resolved in favor of the latter, except that any such exercise that is not of general application in the jurisdiction or applies exclusively to the grantee or cable communications systems which contain provisions inconsistent with this chapter shall prevail only if, upon such exercise, the town finds an emergency exists constituting a danger to health, safety, property or general welfare and such exercise is mandated by law.

§ 49-18 Franchise fees.

A. Establishment. Because the town finds that the streets of the county, state and town to be used by the grantee in the operation of its system within the boundaries of the franchise area are valuable public properties acquired and maintained by the county, state and town at great expense to its taxpayers; the grant to the grantee to said streets is a valuable property right without which the grantee would be required to invest substantial capital in right-of-way costs and acquisitions; and the administration of this chapter and the franchise imposes upon the town additional regulatory responsibility and expense, a grantee of any franchise hereunder shall pay to the town a franchise fee in an amount as designated in the franchise but in no event less than 5% of the gross annual revenues or the maximum amount permitted under applicable federal, state or local law, if such maximum is greater than 5% less the annual assessment paid by the grantee to the New York State Commission on Cable Television. The annual franchise payment shall be in addition to any other fee and shall commence as of the effective date of the franchise. The town shall be furnished a statement of said payment by a certified public accountant reflecting the total amounts of annual gross revenues and the above charges and computations for the period covered by the payment.

B. Franchise fee in addition to other tax or payment. This payment shall be in addition to any other tax or payment owed to the governments or other taxing jurisdiction by the grantee.

C. Acceptance by the town. No acceptance of any payment by the town shall be construed as a release or as an accord and satisfaction of any claim the town may have for further or additional sums payable as a franchise fee under this chapter or for the performance of any other obligation of the grantee.

D. Failure to make required payment. In the event that any franchise payment or recomputed amount is not made on or before the dates specified herein, the grantee shall pay as additional compensation an interest charge, computed from such due date, at the annual rate equal to the commercial prime interest rate of the town's primary depository bank during the period that such unpaid amount is owed.

E. Payments to be made quarterly. The franchise fee and any other cost or damage assessed against the grantee shall be payable quarterly to the Town of New Castle. The grantee shall file a complete and accurate verified statement of all gross revenues within the franchise area during the period for which said quarterly payment is made, and said payment shall be made to the town no later than 45 days following the end of each calendar quarter. Quarterly computation dates are the last day in the months of March, June, September and December.

F. The town's right of inspection. The town shall have the right to inspect the grantee's income records and the right to audit at its own expense determined to be payable under this chapter. However, in the event that the audit concludes that the grantee's payments hereunder were underpaid by an amount greater than 5% of the proper payment, then the grantee shall reimburse the town for the costs of said audit, in addition to making any additional payments required to bring the grantee into compliance with this section. At the sole discretion of the town, the latter may collect interest from the grantee on the underpayment or any other late payment at a rate equal to the prime rate plus 3%.

§ 49-19 Forfeiture and revocation.

A. Grounds for revocation. The town reserves the right to revoke any franchise granted hereunder and rescind all rights and privileges associated with the franchise in the following circumstances, each of which shall represent a default and breach under this chapter and the franchise grant:

(1) If the grantee shall default in the performance of any of the material obligations under this chapter or under such documents, contracts and other terms and provisions entered into by and between the town and the grantee.

(2) If the grantee shall fail to provide or maintain in full force and effect the liability and indemnification coverage or the performance bond as required herein.

(3) If the grantee shall violate any lawful orders or rulings of any regulatory body having jurisdiction over the grantee relative to this chapter or the franchise.

(4) If the grantee evades, as defined in state law, any of the provisions of this chapter or the franchise or practices any fraud or deceit upon the town or cable subscribers.

(5) If the grantee fails to meet the construction schedule contained in the franchise or beyond any extended date set by the town.

(6) If the grantee fails to restore service after 96 consecutive hours of interrupted service, except when approval of such interruption is obtained from the town.

(7) If there is material misrepresentation of fact in the application for or negotiation of the franchise or any extension or renewal thereof.

(8) If the grantee ceases to provide all services for any reason within the control of the grantee over the cable communications system.

B. Effect of circumstances beyond control of grantee. The grantee shall not be declared at fault or be subject to any sanction under any provision of this chapter in any case in which performance of any such provision is prevented for reasons beyond the grantee's control. A fault shall not be deemed to be beyond the grantee's control if committed by a corporation or other business entity in which the grantee holds a controlling interest, whether held directly or indirectly.

C. Pending litigation. Pending litigation or any appeal to any regulatory body or court having jurisdiction over the grantee shall not excuse the grantee from the performance of its obligations under this chapter or the franchise. Failure of the grantee to perform such obligations because of pending litigation or petition may result in forfeiture or revocation pursuant to the provisions of this section.

D. Procedure prior to revocation.

(1) The town shall make written demand that the grantee comply with any such requirement, limitation, term condition, rule or regulation or correct any action deemed cause for revocation. If the failure, refusal or neglect of the grantee continues for a period of 30 days following such written demand, the town shall place its request for termination of the franchise upon a regular Town Board meeting agenda. The town shall cause to be served upon such grantee, at least seven days prior to the date of such Town Board meeting, a written notice of this intent to request such termination and the time and place of the meeting, notice of which shall be published by the Town Clerk at least once, seven days before such meeting, in a newspaper of general circulation within the town.

(2) The Town Board shall hear any persons interested therein and shall determine, in its discretion, whether or not any failure, refusal or neglect by the grantee was with just cause.

(3) If such failure, refusal or neglect by the grantee was with just cause, as defined by the town, the Town Board shall direct the grantee to comply within such time and manner and upon such terms and conditions as are reasonable.

(4) If the Town Board shall determine such failure, refusal or neglect by the grantee was without just cause, then the Town Board shall, by resolution, declare that the franchise of the grantee shall be terminated and the performance bond forfeited, unless there is compliance by the grantee within a specified period of time not to exceed 90 days or such longer period as is reasonably necessary to comply as approved by the Board, which approval shall not be reasonably withheld.

E. Disposition of facilities. In the event that a franchise is not renewed and/or revoked, the town may, in its sole discretion, do any of the following:

(1) Purchase the system under the procedures set forth in § 49-24 of this chapter.

(2) Effect a transfer of ownership of the system to another party.

(3) Order the removal of the system facilities required by public necessity from the town within a reasonable period of time, as determined by the town, or require the original grantee to maintain and operate its system for a period of six months or until such further time as is mutually agreed upon. The grantee may convey its ownership or interest in the facilities constituting the cable system to a successor grantee approved by the town. Any such facilities that are not so conveyed shall be considered to be abandoned to the ownership and use of the town, subject to the right of the grantee to remove any such facilities or any portion of such facilities that may be salvageable.

F. Restoration of property. In removing its plant, structures and equipment, the grantee shall refill, at its own expense, any excavation that shall be made by it and shall leave all public ways and places in as good a condition or better as that prevailing prior to the grantee's removal of its equipment and appliances without affecting the electrical or telephone cable wires or attachments. The town shall inspect and approve the condition of the public ways and public places and cables, wires, attachments and poles after removal. The liability, indemnity, insurance and performance bond, as provided herein, shall continue in full force and effect during the period of removal and until full compliance by the grantee with the terms and conditions of this subsection, this chapter and the franchise.

G. Restoration by town; reimbursement of costs. In the event of a failure by the grantee to complete any work required by §§ 49-6 and 49-8 and/or Subsection F above or any other work required by town law or local law within the time as may be established and to the satisfaction of the town, the town may cause such work to be done, and the grantee shall reimburse the town the cost thereof within 30 days after receipt of an itemized list of such costs, or the town may recover such costs through the performance bond provided by the grantee. The town shall be permitted to seek legal and equitable relief to enforce the provisions of this section.

H. Extended operation. Upon either the expiration or revocation of a franchise, the town may require the grantee to continue to operate the system for a period of six months from the date of such expiration or revocation or until such time as is mutually agreed upon. The grantee shall, as trustee for its successor in interest, continue to operate the cable communications system under the terms and conditions of this chapter and the franchise and to provide the regular subscriber service and any and all of the services that may be provided at the time. The town shall be permitted to seek legal and equitable relief to enforce the provisions of this section.

I. Recourse. The grantee may seek recourse as available by law or regulation.

§ 49-20 Receivership and foreclosure.

A. Termination by insolvency. To the extent permitted under federal bankruptcy law, the franchise granted hereunder shall, at the option of the town, cease and terminate 120 days after the appointment of a receiver or receivers or trustee or trustees to take over and conduct the business of the grantee whether in a receivership, reorganization, bankruptcy or other action or proceeding, unless such receivership or trusteeship shall have been vacated prior to the expiration of said 120 days or unless:

(1) Such receivers or trustees shall have, within 120 days after their election or appointment, fully complied with all the terms and provisions of this chapter and the franchise granted pursuant hereto, and the receivers or trustees, within said 120 days, shall have remedied all defaults under the franchise; and

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

B. Termination by judicial action. In the case of a foreclosure or other judicial sale of the plant, property and equipment of the grantee or any part thereof, including or excluding the franchise, the town may serve notice of termination upon the grantee and the successful bidder at such sale, in which event the franchise and all rights and privileges of the grantee granted hereunder shall cease and terminate 30 days after service of such notice, unless:

(1) The town shall have approved the transfer of the franchise, in the manner this chapter provides; and

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

§ 49-21 Equal opportunity policy.

A. Equal opportunity employment shall be afforded by all operators of cable television systems to all qualified persons, and no person shall be discriminated against in employment because of race, color, religion, age, national origin, sex or physical handicap. The grantee shall comply with all equal opportunity provisions enacted by federal, state and local authorities, as well as all such provisions contained in this chapter and the franchise. It is agreed that Continental's compliance with Federal Communications Commission rules constitutes compliance with this section.

B. Local employment and procurement practices. Whenever reasonably possible, all services, personnel, hardware and supplies for the construction, maintenance and operation of the system shall be procured locally. The grantee shall describe in detail plans and policies for each year of the term of the agreement for utilizing and contracting with local construction contractors, subcontractors, suppliers, vendors and other business enterprises and persons for services, supplies, equipment, consultation, banking, financial accounting and legal services, insurance and other necessary facilities and services that will be used in establishing, operating, marketing, programming and maintaining the cable communications system.

§ 49-22 Notices.

All notices from the grantee to the town pursuant to this chapter and the franchise shall be to the Town Supervisor or his/her designee. The grantee shall maintain with the town, throughout the term of the franchise, an address for the service of notices by mail. The grantee shall also maintain with the town a local office and telephone number for the conduct of matters related to the franchise during normal business hours. The grantee shall be required to advise the town of such address(es) and telephone numbers and any changes thereof.

§ 49-23 Failure to enforce provisions.

The grantee shall not be excused from complying with any of the terms and conditions of this chapter or the franchise by any failure of the town upon any one or more occasions to insist upon or to seek compliance with any such terms or conditions.

§ 49-24 Rights reserved to the grantor.

A. Renewal. If a renewal of a franchise held by a cable operator is denied and the franchising authority acquires ownership of the cable system or effects a transfer of ownership of the system to another person, any such acquisition or transfer shall be:

(1) At fair market value, determined on the basis of the cable system valued as a going concern but with no value allocated to the franchise itself; or

(2) In the case of any franchise existing on the effective date of this chapter, at a price determined in accordance with the franchise if such franchise contains provisions applicable to such an acquisition or transfer.

B. Revocation. If a franchise held by a cable operator is revoked for cause and the franchising authority acquires ownership of the cable system or effects a transfer of ownership of the system to another person, any such acquisition or transfer shall be:

(1) At an equitable price; or

(2) In the case of any franchise existing on the effective date of this chapter, at a price determined in accordance with the franchise if such franchise contains provisions applicable to such an acquisition or transfer.

C. Right of inspection of records. The town shall have the right to inspect all books, records, reports, maps, plans, financial statements and other like materials of the grantee, at any time upon reasonable notice during normal business hours, necessary to the enforcement of this chapter and the franchise. The grantee shall provide such information in such form as may be required by the town for said records. To the extent allowed by law, the town agrees to treat as proprietary any information identified as such by the grantee and shall not intentionally divulge any such information publicly or to actual or potential competitors of the grantee, except as may be required in a legal proceeding or ordered by a court of competent jurisdiction. If any such maps or records are not kept in the town or if, upon notice, the grantee is unable to provide the records in the town and if the town shall determine that an examination of such maps or records is necessary or appropriate to the performance of the town's responsibilities under this franchise, then all travel and maintenance expenses necessarily incurred in making such examination shall be paid by the grantee.

D. Right of inspection of construction. The town shall have the right to inspect all construction or installation work performed subject to the provisions of the franchise and to make such tests as it shall find necessary to ensure compliance with the terms of this chapter and other pertinent provisions of the law.

E. Right of inspection of property. At all reasonable times, the grantee shall permit examination by any duly authorized representative of the town of system facilities, together with any appurtenant property of the grantee situated within or without the town.

F. Right of intervention. The town shall have the right of intervention in any suit or proceeding to which the grantee is a party.

G. Right to require tests. The town shall have the right and authority to test the performance of the cable communications system. The town may require that any tests performed at the town's request be supervised or conducted by a town designee, not an employee or agent of the grantee. The grantee shall reimburse the town for the costs of such designee if the test performed shows that the quality of service is below the standards set forth in this franchise. The grantee shall cooperate fully with the town in performing such testing.