0737ORDINANCE NO. 737
AN ORDINANCE AMENDING ORDINANCE NOS. 583 AND 675;
GRANTING CONSENT TO THE TRANSFER OF CONTROL OF A
CABLE TELEVISION SYSTEM AND FRANCHISE FROM MARCUS
CABLE ASSOCIATES, L.L.C. TO PAUL G. ALLEN; AND APPROVING
RELATED AGREEMENTS
WHEREAS, the Ci~ of Southlake granted a cable television franchise to Sammons of
Fort Worth, Inc. ("Sammons") pursuant to Ordinance No. 583, as amended by Ordinance No.
675. and the foregoing Ordinances are hereinafter referred to collectively as the "Franchise");
and
WHEREAS, Marcus Cable Associates, L.L.C., is the current grantee under the Franchise;
and
WHEREAS, Marcus Cable Associates, L.L.C. is a wholly owned indirect subsidiary of
Marcus Cable Company ("MCC"); and
WHEREAS, Charter Communications Holdings, L.L.C., a Delaware limited liabiliD'
company' i"CC Holdings") is or will be the sole owner of MCC; and
k~5tEREAS, CC Holdings is or will be wholly owned by the following entities:
MCPLLC, Vulcan Cable, Inc., a Washington corporation ("Vulcan"), Vulcan Cable II, Inc., a
Washington corporation ("Vulcan II"), and Charter Communications, Inc. ("Charter"); and
WHEREAS, MCPLLC is owned 74.36% by Marcus Cable Properties, Inc., a Delaware
corporation ("MCP Inc.") and 25.64% by Vulcan; and
'~kYtEREAS, Paul G. Allen is the sole owner of MCP Inc., Vulcan and Vulcan II and
owns 93.25% of Charter, and Allen thereby controls Marcus Cable Associates, L.L.C., the
grantee under the Franchise; and
WHEREAS, Vulcan is the Manager of MCC pursuant to First Amendment to Operating
Agreement dated as of August 25, 1998; and
~¥~-tEREAS, Charter is managing Marcus Cable Associates, L.L.C. pursuant to a
Management Consulting Agreement dated as of October 6, 1998; and
WHEREAS, the ownership and control structure as it will exist after the transfer of
control is shown in Exhibit A; and
WHEREAS, the transfer of control of Marcus Cable Associates, L.L.C. to Allen, the
restructuring of the Marcus and Charter cable businesses, and the management of Marcus Cable
Associates, L.L.C. b'y' Charter are hereinafter referred to collectively as the "Transaction"; and
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WHEREAS, MCPLLC and Vulcan submitted an Application for Franchise Authority
Consent on FCC Form 394 providing certain information with respect to the parties and the
proposed transfer; and
WHEREAS. MCPLLC, Chaaer amd Vulcan submitted additional information and
documents relating to the Transaction and its effect on the provision of cable television service
within the City in response to requests of the City; and
WHEREAS, the City is relying upon the foregoing information and documents in acting
upon the Application for Franchising Authority Consent; and
WHEREAS, the City intends to consent to the Transaction, subject to acceptance by
Marcus Cable Associates, L.L.C., MCP Inc., CC Holdings, Charter, Vulcan and Vulcan II of the
terms and conditions set forth herein, having determined that such consent is in the best interest
of and consistent with the public necessity and convenience of the City;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF SOUTHLAKE, TEXAS:
Section I. The City does hereby consent to the Transaction, including the transfer of
control of the Franchise and the cable television system from Marcus Cable Associates, L.L.C. to
Paul G. Allen, subject to execution by Marcus Cable Associates, L.L.C., MCP Inc., CC
Holdings, Charter, Vulcan and Vulcan II of an Acceptance Agreement in the form attached
hereto and incorporated herein as Exhibit 1, and subject to execution by Paul G. Allen of an
A=on-eement in the form attached hereto and incorporated herein as Exhibit 2, both agreements of
which are hereby approved.
Section 2. To the extent that this ordinance or the attached Acceptance Agreement
and Agreement modify any of the terms and conditions of Ordinance Nos. 583 and 675, said
ordinances are hereby amended. Except as hereby amended, the provisions of Ordinance Nos.
583 and 675 shall remain unchanged.
Section 3. This ordinance shall be in full force and effect from and afl:er its passage,
publication and ~vritten acceptance as above specified; provided however, that this ordinance
shall expire and be of no further force and effect on October 31, 1999 if the entire Transaction
has not been consummated by that date.
PASSED AND APPROVED on the 1st reading the c2' day of ~t~/.J~ , 199_q.~
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APPROVED AS TO FORM AND LEGALITY:
CiTY ATTORNEY
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SOUTHLAKE
OFFICIAL RECOiRD
ACCEPTANCE OF TERMS
AND CONDITIONS TO TRANSFER OF CONTROL OF A
CABLE TELEVISION SYSTEM AND FRANCHISE
("ACCEPTANCE AGREEMENT")
This Acceptance Agreement dated as of~,6ff4z,~¢ 1999 relates to a cable television
franchise granted by the City of Southlake ("City") in Ordinance No. 583, as amended by
Ordinance No. 675. The foregoing Ordinances are hereinafter referred to collectively as the
"Franchise." Marcus Cable Associates, L.L.C., formerly Marcus Cable Associates, L.P., is the
current grantee under the Franchise and is referred to herein as "Company".
Company is a wholly owned subsidiary of Marcus Cable Operating Company, L.L.C.
Marcus Cable Operating Company, L.L.C. is a wholly owned subsidiary of Marcus Cable
Company, L.L.C. Marcus Cable Company, L.L.C. is in turn wholly owned, directly or
indirectly, by Marcus Cable Properties, Inc. ("MCP') and Vulcan Cable, Inc., a Washington
corporation ("Vulcan"). MCP and Vulcan are wholly owned by Paul G. Allen ("Allen").
The following matters are the subject of this Acceptance Agreement:
Vulcan will become the Manager of Marcus Cable Company, L.L.C. pursuant to
First Amendment to Operating Agreement dated August 25, 1998.
Allen has acquired 93.25% ownership of Charter Communications, Inc.,
("Charter"), a Delaware corporation that indirectly owns all of the Charter cable
television operating entities. Charter has been conducting the day-to-day
operations of Company pursuant to a Management Consulting Agreement dated
as of October 6, 1998.
Charter Communications Holdings, L.L.C. ("CC Holdings"), a Delaware limited
liability company, owns or will own 100% of Marcus Cable Company, which will
continue to own 100% of Marcus Cable Operating Company, L.L.C., which in
turn owns 100% of Company and 100% of all other Marcus cable television
operating entities. CC Holdings will also have indirect 100% ownership of all
Charter cable television operating entities.
CC Holdings will be 100% owned directly or indirectly by MCP, Vulcan, Charter
and Vulcan Cable II, Inc. ("Vulcan II"), a Washington corporation. Allen owns
100% of Vulcan II in addition to his ownership of 100% of MCP and Vulcan and
93.25% of Charter.
Vulcan, Vulcan II, Cha~er, CC Holdings, MCP and Marcus Cable Associates, L.L.C.
make this agreement for the purpose of accepting an Ordinance of the City consenting to the
transfer of control of the franchise to Allen and the restructuring set forth above, including
management of Company by Charter.
The structure of ownership and control as it will exist after the transfer of control and the
restructuring is set forth in Exhibit A attached hereto. The transfer of control of Company to
Allen and the foregoing restructuring, including Charter's management of Company, are referred
to collectively herein as the Transaction.
Covenants Binding: The promises, covenants, and conditions contained herein
inure to the benefit of the City and are binding on MCP, Charter, Vulcan, Vulcan
1i, CC Holdings and Company.
Acknowledgment: CC Holdings, MCP, Charter and Vulcan acknowledge that the
transfer of control and restructuring are expressly subordinate to and ~vill not
affect the binding nature of the Franchise and the obligations provided therein,
and that the consent of the City to the Transaction does not constitute a waiver or
release of any rights of the City.
Reliance: Company, CC Holdings, MCP, Charter and Vulcan acknowledge that
the City has consented to the Transaction in reliance upon the representations,
documents and information provided by Company, Charter and Vulcan, all of
which are incorporated herein by reference.
Customer Service. Company will comply with the customer service and
consumer protection provisions set forth in Exhibit B.
Prior Defaults. Company, MCP, Charter, Vulcan and CC Holdings agree that
they will not contend directly or indirectly that any defaults or failures to comply
with the franchise or other matters set forth in 47 USC § 546(c)(1)(A)
(Communications Act of 1934, Section 626(c)(1)(A) (collectively "Defaults")
occurring prior to the Transaction are waived, including but not limited to the
folloxving:
5.1
The ability of the City to obtain redress for prior Defaults, such as
recovery of any underpayment of franchise fees or obtain refunds for
periods prior to the Transaction.
5.2
The ability of the City to enforce in the future any Franchise terms which
may not have been enforced in the past.
2
5.3
The ability of the City to consider Defaults occurring prior to the
Transaction in connection with any renewal or nonrenewal of the
Franchise.
This Section 5 is without prejudice to Company, MCP, Vulcan or CC
Holdings contending that the default or failure to comply has been cured.
Validity of Franchise. Charter, MCP, CC Holdings and Vulcan accept and agree
to be bound by the terms and conditions of the City Charter, the Franchise and all
ordinances applicable to Company's operations after the transfer. Charier, MCP,
CC Holdings, Vulcan and Company do not contend that any provision of the
Franchise is unlawful or unenforceable, nor are they aware of any ordinance or
any provision in the City Charter which they contend is unlawful or
unenforceable. The City acknowledges that the Franchise is in full force and
effect.
Franchise for Cable Only. Company, MCP, CC Holdings, Charter and Vulcan
acknowledge that the Franchise is granted solely for the provision of Cable
Service including services described in Section 12.
Service and Equipment for Public Facilities.
8.1
Following the transfer of control, Charter, MCP, CC Holdings and Vulcan
will cause Company to continue to provide the same installations and
service without charge to public facilities being provided at the present
time, but in all events no less than is required by the Franchise, this
Acceptance Agreement or any applicable city ordinance.
8.1.1
Company will provide funds toward the cost of new character
generators or similar equipment in accordance with Schedule 8.1.1
attached hereto. Company's total obligation under this Section
8.1.1 for the City and all other municipalities which have acted
with the City in the consent process shall not exceed $75,000.
Access to Records: The records and reports of the franchise grantee which are
to be submitted to the City or otherwise made available for the City (such as for
inspection by the City) pursuant to the Franchise or other ordinance or charter
provisions of the City shall include records maintained by Charter, Vulcan, CC
Holdings and their Affiliates to the extent necessary for the City to discharge its
10.
11.
12.
13.
responsibilities under the Franchise, FCC rules or state or local law, or to insure
compliance with the Franchise or this Acceptance Agreement.
Transaction Transparent to Rates: CC Holdings, Charter, MCP, Company and
Vulcan acknowledge that unless expressly provided elsewhere in this Acceptance
Agreement (a) the transfer, the consent process, the City's action granting
consent, and this Acceptance Agreement and the terms hereof (other than Section
18.2.) do not provide any basis for increasing the amounts paid by subscribers
through cost pass-through as so-called "external costs" or as new franchise
requirements, (b) the consent process, action, and this Acceptance Agreement do
not provide any basis for increasing the amounts paid by subscribers in any other
manner, and (c) Company will not separately itemize costs or franchise
requirements arising from this Acceptance Agreement on subscriber bills.
This Section left blank.
.Cable Modem, High-Speed Data and Internet Services. The Federal
Telecommunications Act of 1996 modified the definition of"cable services" in
thc Federal Cable Act (Title VI of the Communications Act of 1934, 47 USC
Section 115 and following). The change addresses cable companies' ability to
provide Enhanced, Advanced Cable Services over a Cable System as a cable
service (and not as a telephone service, with accompanying telephone regulation.)
The Franchise predates and does not reflect this legislative change. Company
intends to provide Enhanced, Advanced Cable Services where economically
feasible.
12.1
To remove any uncertainty on Company' authority to provide Enhanced,
Advanced Cable Setwices the parties agree that Company has the authority
to provide Enhanced, Advanced Cable Services under the Franchise and
that the revenues therefrom shall be included in gross revenues for the
purpose of computing and paying cable franchise fees.
If Company provides any Enhanced, Advanced Cable Services to
residential subscribers within the City, then without any initial or ongoing
charge it shall provide the City cable modems and associated access to the
lnternet with a speed of up to 250 kbs. Such modems and service shall be
provided to each City library located within City and to three (3)
additional locations specified by the City in City buildings.
System Up~ade. If Company has scheduled an upgrade of Company's
facilities in the City that has not yet been completed, the estimated completion
14.
15.
date is shown on Schedule 13. Company, CC Holdings, MCP, Charter and
Vulcan agree that the Transaction will not adversely affect the scope or timing of
the upgTade.
Continuity,' of Management. Company, CC Holdings, MCP, Charter and Vulcan
acknowledge that (a) at the time of submission of the Form 394 subscribers
residing in the City were experiencing serious and on-going deficiencies in
service, (b) the provisions of Exhibit B are in response to these problems, and (c)
the City is approving the Transaction and the transfer of control in reliance on the
actions taken by Allen and Charter in the interim to improve customer service and
in the expectation of continuity of Charter's management to assure that the
problems will not recur. Allen and Charter have informed the City' that they
intend to keep the present Charter management team in place. Until the
Transaction is completed, Charter will continue to manage Company and the
cable television system in the City.
?requency of Rate Increases. Company will not file a submission to increase its
rates for basic cable service, equipment, or service calls regulated by the City
more than once in each calendar year.
10. Other Matters.
16.1
Conflict: In the event of any conflict between the temps of this Acceptance
Agreement and the Franchise or any City Ordinance, that provision which
provides the greatest benefit to the City, in the opinion of the City
Council, shall prevail.
16.2
Waivers: The parties hereto will join the City in obtaining from the FCC
any waivers or other relief from time to time necessary to effectuate the
provisions of this Acceptance Agreement.
16.3
Null and Void: At the City's option this Acceptance Agreement and the
City's consent to the Transaction shall become null and void in either of
the following circumstances. Such option may be exercised prior to
completion of the Transaction by the City giving written notice to
Company and Vulcan at the addresses designated in the Form 394.
16.3.1
If the transfer of control of the Franchise or any other part
of the Transaction is not completed on or before October
31, 1999.
5
16.3.2 If the Management Consulting Agreement dated as of October 6,
1998 pursuant to which Charter is directing the
management of Company is terminated or if Charter's
control over Company's operations is materially reduced.
16.4
Costs: Vulcan will cause the City to be reimbursed for its reasonable
expenses in connection with the consent process including publication
costs and fees of consultants and attorneys. Such reimbursement shall not
exceed the aggregate amount of $275,000 plus publication costs for the
City and the other municipalities which have acted with the City in
connection with the consent process. Reimbursement of costs and fees
under this provision shall not be considered a payment of franchise fees,
shall not be passed through to subscribers and is subject to the provisions
of Section 10.
16.5
Venue and Choice of Law: Venue of any suit under or arising out of this
Acceptance Agreement shall be exclusively in Tan'ant County, Texas or
in the United States District Court for the Northern District of Texas. This
Acceptance A~eement shall be construed in accordance with the laws of
the State of Texas.
16.6
Treatment of Liquidated Damages: Company, CC Holdings, MCP and
Vulcan acknowledge and agree that liquidated damages under this
Acceptance Agreement (including its Exhibits) and the Franchise do not
constitute franchise fees, do not reduce the amounts otherwise payable as
franchise fees, and will not be passed through to subscribers.
16.7
Y2K Compliance: By September 30, 1999 Company will become Y2K
compliant and will establish and provide the City with a copy of a
contingency plan to prevent disruption of mission critical components
including customer service matters.
16.8
Wire Maintenance Fee: Company has announced its intention to
discontinue the 99¢ optional wire maintenance fee program that Company
first implemented in 1998 ("Current Fee") and offer in its place an
optional program covering maintenance of both telephone and cable wires
for a monthly fee of approximately 99 ¢ ("New Program").
16.8.1 If this occurs during or before March 1999: (a) the City will not
seek to obtain refunds of amounts collected under the Current Fee;
(b) if the City. has adopted a Rate Order with respect to the Current
6
Fee, the Rate Order will be deemed to be withdrawn; and (c) if
there is a proceeding pending before the FCC with respect to such
a Rate Order Company and the City xvill jointly request
termination of the proceeding.
16.8.2 The City will not challenge the New Program during 1999 if the
monthly charge remains under $1.00.
16.9
Rate Orders: Unless a final order of the FCC (affirmed on appeal if an
appeal is taken) determines that franchise authority rate orders are
automatically stayed by the filing of an appeal to the FCC, Company will
implement each rate order adopted by the City unless and until Company
obtains an order of the FCC or a court of competent jurisdiction staying
the effectiveness of the rate order. Company will reimburse all attorneys
fees and other expenses incurred by the City as a result of a violation of
this Section 16.9.
16.10
Franchise Fee Calculation: Company will comply ~vith the decision of the
United States Court of Appeals for the Fifth Circuit in Cie)' of Dallas v
FCC, 118 F3d 393 (1997).
16.10.1
Company will pay the additional franchise fees due under
the Fifth Circuit decision with interest and without pass-
through to subscribers for the time period from September
1997 until Company implemented the decision.
16.10.2
Company will also pay the additional franchise fees due
under the Fifth Circuit decision for the period of time from
the FCC's decision in United Artists Cable of Baltimore, 10
FCC Rcd. 7250 (1995) to September 1997 together with
interest thereon. Company may pass through payments
under this Section 16.10.2 to subscribers (other than
interest) if and to the extent Company reduced its charges
to subscribers as a result of the FCC's decision.
1'7.
Institutional Network: Company shall provide, construct, operate and maintain
an Institutional Network (excluding coders/decoders, interface and other terminal
equipment which will be supplied by Users) that will provide the City and other
I-NET Users with Institutional Network Services. The I-NET shall be as set forth
below. Unless the City agrees otherwise in writing, the I-NET, including the
individual fiber optic fibers constituting all or a portion of it, shall be owned and
maintained by Company but provided for the exclusive use of the City and other
'I-NET Users and shall be provided without any charge to the City or I-NET
Users.
17.1 This Section left blank.
17.2
Company shall install and terminate additional fiber optic pairs
("Incremental I-NET Fiber") in Company's furore new and replacement
fiber optic installations for use as an I-NET as follows.
17.2.l
City will inform Company in wq'iting from time to time of the
additional facilities it would like to have served by an I-NET.
Company will use such information in its plans for future fiber
installations, where (for example) one routing will pass a facility
City would like to have setw'ed and another (of comparable cost)
would not.
17.2.2
By January 31 of each year Company will provide City with its
conceptual plans for new and replacement fiber optic construction
for that calendar year.
17.2.3
Company will also provide City from time to time during the year
with written notice of conceptual plans for any additional fiber
optic construction during that year (or January of the following
year). Such notice shall be provided as soon as is feasible.
17.2.4
Upon written request by City., Company will provide City with a
conceptual cost estimate (and other information City may
reasonably require) of installing Incremental I-Net Fiber along all
or a portion of the routes that are a part of such conceptual plans.
Such estimates shall be provided as soon as possible after request
by City in order that City may have time to obtain approval (such
as from its legislative body) to install such Incremental I-Net
Fiber.
17.2.5
As to any route where City has requested a conceptual cost
estimate, Company shall provide City with the final cost of
installing Incremental I-Net Fiber (and such other information as
City may reasonably request) as soon as Company's design of the
fiber for such route is reasonably complete. City will have 30 days
8
after receipt of the final cost figure to notify Company to install
Incremental I-NET Fiber.
17.2.6
The cost of installing Incremental I-NET Fiber shall be computed
on an incremental basis, meaning the difference in cost to
Company of constructing and installing fiber on a given route (a)
with, and (b) without, the Incremental I-NET Fiber.
17.2.7
Company shall be reimbursed by City for the cost of installing I-
NET fibers under this Section 17.2 computed as set forth in
Section 17.2.6.
17.3
1-NET Maintenance. Company shall provide I-NET Users with a reliable
level of service, repair and maintenance that at a minimum, meets the
following performance standards:
17.3.1 Company shall maintain a minimum of 99.5 percent service
availability to I-NET Users measured over a period of one year.
17.3.2
Company shall respond to repair requests from an I-NET User for
circuits identified as critical pursuant to Section 17.3.4 within 2
(two) hours of the request. Company shall respond to other repair
requests within four (4) hours of the request.
17.3.3
Company shall provide ongoing maintenance at its discretion, as
it deems necessary. Company shall provide at least one week
advance notice to any affected I-NET User of any maintenance
requiring temporary interruption of services, except in emergency
situations.
17.3.4
Company and the City shall develop a mutually agreeable priority
listing of critical circuits and their terminal locations. When
notifying Company of service complaints, an I-NET User shall
identify critical circuits requiring priority repair. Company shall
escalate repair of critical circuits to the extent reasonable under the
circumstances.
17.4 Definitions.
17.4.1 Institutional Network or I-NET means the fiber optic
communications network described in Section 17 and Schedule 17
9
to be constructed and operated by Company for the provision to I-
NET Users (but not Cable Service subscribers) of Institutional
Network Services.
17.4.2
Institutional Network Services means the provision of usable
bandwidth capacity' to I-NET Users through fiber optic lines for
applications including but not limited to two-way dedicated
voice, data, video and telephony channels connecting and
interconnecting facilities owned, leased or used by the City,
schools, counties, road comrmssions or other units of state or local
government. Other applications include but are not limited to
computerized traffic control systems for coordinated traffic control
on an area-wide basis; Supervisory Control and Data Acquisition
(SCADA) systems for municipally owned ~vater, sewer, gas and
electric systems (including street lighting systems);
interconnection of facilities serving police, fire and other public
safety systems, video arraignment facilities for local courts;
interconnection of govemment buildings for the two or one-way
interchange of video signals; and local area networks or wide-area
networks connecting governmental buildings, such as for G1S
(Geographical Informational Systems) purposes.
17.4.3
I-NTT User means and is limited to the City and any school or unit
of state or local government designated by the City to receive
Institutional Network Services under this Acceptance Agreement.
18.
HDTV: Broadcast and cable channels are likely to convert in whole or in part to
an HDTV (high definition television) format within the next few years, with
channels likely being delivered in both HDTV and conventional analog formats
during a transition period. The following provisions address the ability of the
City to acquire additional PEG Channels such that one or more Users may have
their signals simultaneously delivered by the Cable System in both an HDTV and
conventional analog 6 MHz NTSC format for the transition period, and provide
funds for Users to convert to an HDTV format.
18.1
Reports: Company shall provide quarterly reports to City on its plans and
progress for HDTV conversion, including the number of channels to be
converted, date, equipment changes, formats to be used and other
information reasonably necessary for the City to be able to plan an
appropriate and potentially concurrent conversion of PEG Channels and
facilities to HDTV format.
10
18.2
Grant: After the date when Company provides at least fifty (50) channels
m one or more of several high definition television (or successor) formats,
as such formats may from time to time be adopted or in effect ("HDTV
Format"), then upon request from City Company shall provide a Capital
Facilities gTant to City sufficient for Users to convert all their facilities
and equipment (including but not limited to studios, vans, video, audio,
lighting, control, storage and editing equipment) to the HDTV Format
selected by City but ~vith the amount of such grant not to exceed 30¢ per
customer per month when amortized over Company's subscribers as of the
end of the calendar quarter preceding the date when the grant is made,
using straight line amortization without interest for the lesser of five (5)
years or the remaining term of the Franchise. City shall allocate the grant
among Users for such purpose as City deems is in the public interest.
Company shall modify the cable system whereby Company receives PEG
signals from each User (for redistribution on its Cable System) so as to be
capable of receiving and accepting the User's signals. City shall co-
ordinate with Company to ensure that the HDTV Format selected by City
~s compatible xvith the format employed by Company.
18.3
Temporary Additional PEG Channels: After the date when Company
provides at least fifty (50) channels in HDTV Format, City may from t/me
to time request, and Company shall provide, one additional PEG Channel
so as to allow, to the extent deemed appropriate by City, PEG Channel
simulcasting in both 6 MHz analog NTSC format and in an HDTV
Format. Company need no longer provide the additional PEG Channel
described in the preceding sentence when Company no longer provides
any channel of programming on the Cable System in 6 MHz NTSC analog
lbrmat.
18.4
Allocation of PEG Channels: As of the effective date of this Acceptance
Agreement City may allocate and reallocate PEG Channels as follows:
City may at any time on six (6) months notice to Company allocate or
reallocate the usage of the PEG Channels among and between different
uses and Users. This expressly may include City removing a User or PEG
Channel, replacing a User or PEG Channel, requiring several different
persons to share or jointly use a given PEG Channel or conversely
allowing one or more persons currently shanng such a channel to have a
channel on which they are the sole User.
11
19.
Leased Access and PEG Channels: The need for a PEG Channel can be removed
by Company providing the User designated by City of such current or
prospective PEG Channel with an otherwise identical leased access channel, so
.long as the leased access rate for such User is One Dollar ($1.00) per year. In the
event the preceding sentence is exercised it shall be applied first to educational
channels and then to public channels. If applied to such channels the channel
number on which they are carried shall not be changed and such channels shall
be included in the basic t/er of service and shall be listed in Company's program
guide or comparable listing with an appropriate description, such as "City of Fort
Worth Channel" or "Fort Worth Public Schools Channel." The need for a PEG
Channel is removed only so long as the User in question in fact is provided with
such leased access channel.
20.
Transfer. City consent in advance shall be required for a transfer of control of
Company, which shall include, but is not limited to, any of the following:
20.1
Any change in limited partnership interests, non-managing limited liability
company interests, or non voting stock representing thirty percent or more
of the equity interests in the entity in question.
20.2
Any option, right of conversion or similar right to acquire interests
constituting control without substantial additional consideration (such as
compared to consideration previously provided).
20.3
Any change in the effective control of Company including that described
in 47 C.F.R. § 76.501 and follo~ving (including the notes thereto but
excluding footnote 2f) as in effect on the date of this Acceptance
Agreement.
20.4
A transfer by Paul G. Allen of any interest in MCP, Vulcan, Vulcan II or
Charter other than to an entity at least 80% owned by him that assumes the
guarantees provided in Section 23.
20.5 Any transfer or transfers such that the direct and indirect ownership of
Allen in CC Holdings is less than 70%.
20.6
Any acquisition of more than 10% o~vnership of CC Holdings by a person
or entity (or a group of persons or entities acting together) other than
Allen or entities wholly or more than 80% owned by Allen.
12
2!.
Special Provision: For the years 1999, 2000 and 2001, Company will provide
multiple terminal discounts to Southlake customers at the following rates:
First set-top terminal:
Second set-top terminal:
Third and any additional set-top terminals:
$3.43 / month
$2.43 / month
$1.43 / month
22.
Definitions. The following definitions shall apply for the purpose of this
Acceptance Agreement and its Exhibits.
22. l
Affiliate means any individual, partnership, association, joint stock
company, limited liability company, trust, corporation, or other person or
entity who owns or controls, or is owned or controlled by, or is under
common ownership or control with the entity in question.
22.2
Capital Facilities means PEG Channel and I-NET related facilities and
equipment including fiber lines, studios, production facilities, vans and
cameras or other property having a useful life of more than one year, as
well as any expenditures which increase or add to the value of the
facilities or equipment, adapt the facilities or equipment to new or
different uses, or maintain, restore, extend or prolong the useful life of
such facilities or equipment.
22.3 Cable Service means
22.3.1
The one-way transmission to all subscribers of (i) Video
Programming, or (ii) other programming services, by which is
meant information which Company makes available to all
subscribers generally, such as digital cable radio service, and
22.3.2
Subscriber interaction, if any, including but not limited to that
~vhich is used for the selection or use of such Video Programming
or other pro~arnming services, selecting from various on-screen
options, use of Enhanced, Advanced Cable Services, game
channels, interactive services, downloading programs or data
access, or ordering merchandise, and
22.3.3 Institutional Network Services.
22.4 Cable System or System means a facility consisting of a set of closed
transmission paths and associated signal generation, reception, and control
13
equipment that is designed to provide Cable Services to multiple
subscribers within the franchised area, but such term does not include (i)
a facility that serves only to re-transmit the television signals of one or
more television broadcast stations; (ii) a facility that serves subscribers
without using any public right of way; (iii) a facility of a common can-ier
which is subject, in whole or in part, to the provisions of Title II of the
Communications Act of 1934, as amended, except that such a facility shall
be considered a Cable System (other than for purposes of Section 621 (c)
of such Act) to the extent such facility is used in the transmission of video
programming directly to subscribers, unless the extent of such use is
solely to provide interactive on-demand services; (iv) an open video
system that complies xvith Section 653 of Title VI of the Communications
Act of 1934, as amended; or (v) any facilities of any electric utility used
solely for operating its electric utility system.
22.5
Enhanced, Advanced Cable Services means enhanced services,
information services, lntemet protocol (IP) telephony, high speed data
service, Internet access and Internet service (such as that of an Internet
service provider).
22.6 FCC means the Federal Communications Commission.
22.7 I-NET User has the meaning set forth in Section 17.4.3.
22.8 Institutional Network or I-NET has the meaning set forth in Section
17.4.1.
22.9 Institutional Network Services has the meaning set forth in Section 17.4.2.
22.10
PEG Channels means the public channels, educational channels and
govemment channels provided by Company on the cable system under the
Franchise, this Acceptance Agreement, or applicable ordinance, and shall
include leased access channels provided pursuant to Section 19 herein.
22.11
User means a person authorized to operate or use a PEG Channel (or a
leased access channel provided in lieu of a PEG Channel under Section
19) or the I-NET, and shall include City. If several persons share the
operation of a PEG Channel each person shall be a separate User.
14
22.12 Video Programming means programming provided by, or generally
considered comparable to programming provided by, a television
broadcast station.
23. Guarantee. Properties,Marcus Cable Pro erties Inc., Vulcan Cable, Inc., Vulcan Cable
II, Inc., Charter Communications, Inc. and Charter Communications Holdings,
L.L.C. hereby jointly and severally unconditionally guarantee performance of the
obligations of the Franchise and of this Acceptance Agreement by Company.
Vulcan Ca. -, Inc.
•
By: ' v, c,-1LE_
Tr.di• McC'•llum Foushee
Assista Secretary
Vulcan Cable II, Inc.
By ,1 Gjv
T• di Mc ollum Foushee
ssista Secretary
Marc :. able Associates, . .C.
U
M. Celeste Vossmey-
Vice President-Gov -ment Relations
15
Marcus able Properties, 'c.
/ i
I ,Ad /
By: �.,%
M. Celeste Vossmeyer
Vice President-Governm rnt Relations
Charter ommunica ions, In
By: k_ i 2 /y A-22._
T•udi Mc«ollum Foushee
rice `P e-ident & Senior Counsel
Law & Regulatory Affairs
Charter Counications Hol • s, L.L.C.
By. / / ,1,
M. Celeste Vossaueyer
Vice President-Government Relations
16
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17
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EXHIBIT B TO ACCEPTANCE AGREEMENT
CUSTOMER SERVICE AND CONSUMER PROTECTION
Customer Service Standards: Company shall at all times comply with the
more stringent of the customer service and consumer protection provisions of
this Exhibit B, the Franchise and the FCC. This requirement is in addition to
the specific provisions of subsequent sections set forth below.
1.!
Company shall continue to comply with the National Cable Television
Association's On-Time Customer Service Guarantee, a copy of which
is attached as Exhibit B1. The guarantee promises on-time service calls
or the customer receives $20.00, and on-time installation calls or the
customer receives a free installation. The $20.00 may be in the form of
a credit.
1.2
Company may provide the Customer Bill of Rights of Charter to its
subscribers in the City.
City Monitoring: In addition to free outlets, free cable service or services
otherwise required by the Franchise, Company shall provide one service outlet
(which shall be at the Cable Administrator's office at City Hall, unless
otherwise specified by City) that shall receive without charge all programming
(and any other Cable Services) provided by Company, including services of
a premium, pay per view or other nature. Such service shall be provided in
such a manner that City may monitor the programming and use of the cable
system for compliance with the Franchise, this Acceptance Agreement, FCC
technical standards, and applicable law. The services provided pursuant to this
Section 2 shall be in a secure office location and not in a location open to
public viewing.
Scrambling/Blocking: Upon completion of the planned system upgrade to
860 MHz, Company shall at all times scramble both the audio and video
portions of all channels with predominately adult oriented programming.
3.1
Upon request by a subscriber, Company shall entirely block such
subscriber from receiving both the audio and video portion of any
channel with predominantly adult oriented programming with devices
19
such as a notch filter which prevent the frequencies containing a
specific channel or channels from being transmitted into the
subscriber's premises.
Pay Per View: Subscribers shall be given the options of (a) not having pay per
view or per program service available at all or (b) only having such service
provided upon the subscriber providing a security number selected by an adult
representative of the subscriber.
Notification: Company shall provide written information on at least each of
the following matters (a) at the time of installation or reinstallation of service,
(b) annually to all subscribers, and (c) at any time upon request ufa subscriber
or the City. The information shall be dated with the printing, revision, or
effective date.
5.1 Products and services offered.
5.2 Prices (rates) and options for Cable Services and conditions of
subscription to Cable Service. Prices shall include those for
programming, equipment rental, program guides, installation,
disconnection, processing charges for late payment and other fees
charged by Company.
5.3 Installation and service maintenance policies.
5.4 Instructions on how to use Cable Services, including procedures and
options for pay per view, premium channels and connection to a VCR.
5.5 Channel positions of programming carried on the cable system,
including a listing specific to the City showing the channel names and
numbers actually available to subscribers in the City.
5.6 Billing and complaint procedures with a notice for the subscriber to
initially contact Company with complaints and questions.
5.7 Applicable privacy requirements as set forth in the Franchise or
provided for by law.
20
5.8
The availability of lockout devices and the ability to have a channel
entirely blocked or trapped (Section 3.1).
5.9
The refunds and free service available for violations of Sections 10 and
12 and how to obtain same.
5. l 0The procedure for resolving signal quality problems set forth in Section
20.2.
Notice of Changes: Subscribers and the City shall be notified of any changes
in rates, Cable Services or channel positions as soon as possible through
announcements on the cable system or in writing. Company will notify City
in advance of notifying subscribers and will make every effort to notify City
forth-five (45) days in advance of a change. Unless a longer time period is
required by applicable law or regulation, notice must be given to subscribers
a minimum of thirty (30) days in advance of such changes if the change is
within the control of Company and as soon as possible if not within the control
of Company. in addition, Company shall notify subscribers and the City thirty
(30) days in advance of any significant changes in the matters covered by the
preceding Section 5. Notifications provided pursuant to this Section shall be
dated with the printing, revision or effective date.
Telephone Service Standards:
7.1
Company shall have a local or toll-free telephone number available for
use by subscribers toll-free twenty-four (24) hours per day, seven (7)
days per week.
7.2
The local or toll-flee numbers shall be listed, with appropriate
explanations, in the directory published by each local telephone
company and in any significant directories published by others.
7.3
Trained Company Representatives shall be available to respond to
subscriber telephone inquiries twenty-four (24) hours per day, seven (7)
days per week.
7.3.1
As to video service matters, the term "Trained Company
Representatives" shall mean employees of Company who have
the authority and capability while speaking with a subscriber to,
21
among other things, answer billing questions, adjust bills, and
schedule service and installation calls.
7.4
Under Normal Operating Conditions, telephone answer time by a
Trained Company Representative, including wait time, shall not exceed
thirty (30) seconds from when the connection is made. If the call needs
to be transferred, the time to complete the transfer time shall not exceed
thirty (30) seconds. These standards shall be met no less than ninety
percent (90%) of the time under Normal Operating Conditions,
measured on a quarterly basis.
7.5
Under Normal Operating Conditions, the subscriber shall receive a
busy signal less than three percent (3%) of the time, measured on a
quarterly basis.
Office/Home Delivery-Pick Up:
8.1
Company shall maintain a "virtual office" within the City consisting of
(a) a toll-free telephone number which ali subscribers in the City can
access twenty-four (24) hours per day, seven (7) days per week to
register complaints or ask questions concerning Cable Service, billing
matters or the cable system, (b) one or more conveniently located bill
payment offices within the City (unless no location within the City is
available) where subscribers can pay their bills, and (c) delivery and
pickup by Company of converter boxes, remotes and similar Company-
provided customer premises equipment at no charge to subscribers
(excluding customer initiated disconnects).
Installation Standards: Under Normal Operating Conditions, installations
located up to one hundred fifty (150) aerial feet from the existing distribution
cable system shall be performed within seven (7) business days after an order
has been placed no less than ninety-five percent (95%) of the time, measured
on a quarterly basis.
10.
Installations/Service Calls: The following shall apply to subscribers (current
or new) requesting installations or service:
22
10. i
10.2
10.3
10.4
Installations and service calls shall be available at a minimum from 8
AM to 7 PM Monday through Saturday. Company shall at the
subscriber's option either (1) schedule the subscriber to be the first call
of the day or last call of the day on a first come, first served basis, (2)
schedule the appointment for a date certain on a "call to meet" basis
where as the service technician finishes his/her prior task, the
technician calls the subscriber and arranges to meet the subscriber
shortly thereafter, or (3) establish an appointment window of no more
than three (3) hours with the subscriber (or adult representative of the
subscriber) or another appointment window mutually agreed upon
between the subscriber and Company.
Company shall respond to the request for service in accordance with the
option selected by the subscriber.
Company shall not cancel an appointment with a subscriber after 5 PM
on the business day prior to the scheduled appointment.
If Company's technician is running late for an appointment with a
subscriber and will not be able to keep the appointment as scheduled,
the subscriber shall promptly be contacted. The appointment shall be
rescheduled, as necessary, at a time which is convenient for the
subscriber.
10.5
10.6
10.7
In the event access to the subscriber's premises is not made available
to Company's technician when the technician arrives during the
established appointment window, the technician shall leave written
notification stating the time of arrival and requesting that Company be
contacted again to establish a new appointment window.
Notwithstanding the foregoing, if Company's technician or service
representative telephones the subscriber during or prior to the
appointment window and is advised that the technician will not be
given access to the subscriber's premises during the appointment
window, then the technician shall not be obliged to travel to the
subscriber's premises or to leave the written notification referred to
above, and the burden shall again be upon the subscriber (or adult
representative of the subscriber) to contact Company to arrange for a
new appointment.
Except as otherwise provided above, Company shall be deemed to have
responded to a service or installation request under the provisions of
23
11.
this section when a technician arrives at the service location or is
advised by telephone no access will be given.
10.8
Company's service technician or service representative shall take
adequate time on each service call to address or correct the problem in
question.
10.9
In the event that Company ceases to provide the NCTA On-Time
Customer Service Guarantee (Exhibit B1) a violation by Company of
the provisions of this Section 10 shall automatically entitle the
subscriber to one month of free basic service and (if currently
purchased by the subscriber) one month of free cable programming
service (as defined in 47 C.F.R. § 76.901).
10.10
Under Normal Operating Conditions, Company shall meet the
standards of Section 10.1 through 10.3 no less than ninety-five percent
(95%) of the time, measured on a quarterly basis.
Service Call Charges: No charge shall be made to the subscriber for any
service call relating to Company owned and Company maintained equipment
after the initial installation of Cable Service unless the problem giving rise to
the service request can be demonstrated by Company to have been:
11.1 Caused by negligence or malicious destruction of cable equipment by
the subscriber, or
11.2 A problem established as having been non-cable in origin.
12. Service Interruptions:
I2.1
Under Normal Operating Conditions, Company shall meet the
standards of Sections 12.2 and 12.4 no less than ninety-five percent
(95%) of the time measured on a quarterly basis.
12.2
Under Normal Operating Conditions, Company shall begin working on
a Service Interruption promptly and in no event later than twenty-four
(24) hours after the interruption becomes known to Company.
12.3 "Service Interruption" means the loss of picture or sound on one or
more cable channels, affecting one or more subscribers.
24
12.4
12.5
Under Normal Operating Conditions, Company shall begin working on
subscriber complaints involving impairment or degradation of signal
quality (other than a Service Interruption) promptly and in no event
later than the next business day after the problem becomes known to
Company.
Company shall be deemed to have begun work under the provisions of
this section when a technician arhves at the service location.
13.
12.6
Company shall provide affected subscribers, upon request by the City
or the subscriber, with one day's free service (equivalent to the service
they were receiving at the time of the interruption) for each day or
portion thereof of Service Interruption.
Log of Complaints: Company shall maintain a written log, or an equivalent
stored in computer memory and capable of access and reproduction in printed
form, of a random sampling of all cable-related customer Complaints within
the City that are referred to Company's Customer Care Group. Such log shall
be in form and substance acceptable to the City and at minimum list the date
and time of each such Complaint, identify the customer to the extent allowed
by law, and describe the nature of the Complaint and when and what actions
were taken by Company in response thereto. The log shall be organized by
City. The log shall be kept at Company's office in or near the City for a
period of at least two (2) years and shall be available for inspection during
regular business hours by the City upon request.
14. Bills: Company shall comply with the following on Cable Service billing:
14.1 Bills shall be issued monthly to each subscriber with a balance due or
change of service.
14.2
Bills shall be clear, concise and understandable. Bills shall be fully
itemized, with itemizations including, but not limited to, basic service,
cable programming service, premium service charges and equipment
charges. Bills shall also clearly delineate all activity during the billing
period, including optional charges, rebates, credits, and late charges.
14.3
Each bill shall prominently display Company's local or toll-free
telephone numbers available for use by subscribers. If a bill has more
than one portion (for example, one portion that is kept by the customer
and one portion that is sent to Company) the numbers shall prominently
25
15.
16.
appear on the front side of the portion of the bill retained by the
customer.
14.4 Company shall respond in writing to all written complaints from
subscribers regarding billing matters within thirty (30) days.
14.5
Company shall not disconnect a subscriber for failure to pay
legitimately contested charges during a billing dispute. However,
during a billing dispute Company may disconnect a subscriber for
failure to pay charges that are not contested.
14.6 The City shall be given thirty (30) days advance notice of any change
in the format of bills.
Refunds and Credits: Refund checks for Cable Service shall be issued
promptly, but no later than either:
15.1 The subscriber's next billing cycle following resolution of the request
or thirty (30) days, whichever is earlier, or
15.2 If service is terminated, 30 days after return of equipment owned by
Company or at the time of the next billing cycle, whichever is earlier.
15.3 Credits for Cable Service shall be issued no later than the subscriber's
next billing cycle following a determination that a credit is warranted.
Late Payment for Cable Service
16.1
Each bill shall specify on its face in a fashion emphasizing same (such
as bold face type, underlined type or a larger font): "For payments
received after [date] a $__ processing fee for late payment may be
charged."
16.2
No processing fees for late payment, however denominated, shall be
added to a subscriber's bill less than twenty-one (21) calendar days
after the mailing of the bill to the subscriber.
16.3
No processing fees for late payment, however denominated, shall be
added to a subscriber's bill by reason of delay in payment other than
those described in this Section 16. All such charges shall be separately
stated on the subscriber's bill and include the word "late" in the
description of them.
26
17.
18.
16.4
There have been negotiations in connection with this Acceptance
Agreement regarding the appropriate amount of fees that may be
charged for late payment. The parties have agreed to withdraw this
issue from consideration without prejudice to any claims and defenses.
Disconnection
17.1
Company shall not disconnect a subscriber for failure to pay until at
least forty-five (45) days have elapsed after the due date for payment
of the subscriber's bill and Company has provided at least ten (10) days
written notice separate from the monthly bill to the subscriber prior to
disconnection, specifying the effective date after which Cable Services
are subject to disconnection.
17.2
Company may disconnect a subscriber at any time if Company in good
faith believes that the subscriber has tampered with or abused
Company's equipment, that there is a signal leakage problem (or other
non-compliance with FCC rules or other standards which poses a risk
to lives or property) on the subscriber's premises, or that the subscriber
is or may be engaged in the theft of Cable Services.
17.3
Company shall promptly disconnect any subscriber who so requests
disconnection. No period of notice prior to requested termination of
service shall be required of subscribers by Company. No charge shall
be imposed upon the subscriber for or related to disconnection or for
any Cable Service delivered after the effective date of the disconnect
request (unless there is a delay in returning Company equipment). If
the subscriber fails to specify an effective date for disconnection, the
effective date shall be deemed to be the day following the date the
disconnect request is received by Company provided that Company
equipment has been returned.
17.4
The term "disconnect" shall include customers who elect to cease
receiving Cable Service from Company and to receive Cable Service
or other multi-channel video service from another person or entity.
Truth In Advertising: Company's bills, advertising and communications to its
current or potential subscribers shall be truthful and shall not contain any false
or misleading statement. For the purposes of the preceding, a statement is
false or misleading if it contains an untrue statement of any material fact or
omits to state a material fact necessary in order to make the statements made,
27
19
in the light of the circumstances under which they were made, not misleading.
Reports: Company shall provide reports to the City monthly (by the 15th
business day of the following month) and quarterly (by the 15th business day
of the following quarter) as follows:
19.1
The reports shall include the following forms currently used by Charter
or othenvise in form and substance acceptable to the City, showing on
a consistent basis, fairly applied, Company's compliance with customer
service standards.
19.1.1 System Statistics Report, Exhibit B2, which covers customer
service matters.
19.1.2 Monthly Report of Service Calls by Reason, Exhibit B3, which
shall include an explanation of the categories of reported
reasons.
19.1.3 Monthly Outage Summary by Franchise, Exhibit B4.
19.1.4 Monthly Service Call Availability Analysis and Installation Call
Availability Analysis, Exhibit B5.
19.1.5 Monthly Customer Call Sample Report, Exhibit B6, both by
City and on an overall basis, showing the results of a random
sampling of customer complaints referred to Company's
Customer Care Group.
19.1.6Monthly Call Center Performance Report, Exhibit B7
(excluding the 2% "assumed" adjustment).
19.2
Such reports shall show Company's performance excluding periods that
were not Normal Operating Conditions ("Abnormal Operating
Conditions") and if Company contends any such conditions occurred
during the period in question, it shall also describe the nature and extent
of Abnormal Operating Conditions and show Company's performance
both including and excluding the time periods Company contends such
conditions were in effect.
19.3 At the City's request Company will provide additional information and
existing reports reasonably related to the measurement and evaluation
28
of Company's compliance with the customer service requirements of
the Franchise, the Acceptance Agreement, and this Exhibit B.
19.4
Reports of installations/service calls (Section 10) and service
interruptions (Section 12) shall report matters occurring within the City.
Telephone reports may be for a larger area than the City if Company
can demonstrate that it is, in fact, representative of the phone service
provided within the City, such as where a call center receives calls from
numerous municipalities with no ability to distinguish between or give
preference to calls from one area or City over another.
19.5
The City, by itself or in combination with other municipalities, reserves
the right to audit Company (or any Affiliate of Company) to verify the
accuracy of the reports required under this Section 19. All records
(including those of Affiliates) reasonably necessary to conduct the audit
shall be made available at a convenient location in the Fort Worth area.
If the audit discloses performance that is three (3) percentage points
worse than any of the standards of the referenced sections (such as
compliance 92% of the time versus 95% of the time) Company shall
pay the City's costs in connection with the audit within thirty (30) days
of submission of an invoice.
20.
FCC Technical Standards: The following shall apply to Company's
implementation of and compliance with the rules and regulations relating to
cable television technical standards for signal quality, currently set forth at 47
C.F.R. § 76.601 and following, and subsequent amendments thereto:
20.1
Company shall notify the City in advance of testing for compliance
with FCC standards. The City may have a representative present to
observe such tests and may designate one location to be tested.
Company shall provide the City with a report of testing for compliance
with such standards upon written request (but not more than twice a
year). Such report to City shall state, in pertinent part, that the person
doing the testing has reviewed the applicable rules and regulations of
the FCC, the industry standards and other materials referenced therein,
and that such testing was done fairly and either shows full compliance
with such rules and regulations or sets forth with specificity and in
detail all areas of non-compliance, their actual or likely scope and
causes, and Company's professional recommendation of the best
corrective measures to immediately and permanently correct the non-
compliance.
29
21.
20.2
Company shall establish the following procedure for resolving
complaints from subscribers about the quality of the television signal
delivered to them: All complaints shall go initially to Company. All
matters not resolved by Company shall at Company's or the
subscriber's option be referred to the City for it to resolve. All matters
not resolved by the City may be referred to the FCC for it to resolve.
20.3
The City at its expense (no more than twice per year, barring unusual
circumstances) upon thirty (30) days written notice to Company may
test the cable system for compliance with the FCC technical standards.
Company shall cooperate in such tests and provide access to the cable
system. Company shall reimburse the City for the full expense of any
test which shows a material non-compliance with such standards.
Liquidated Damages - Telephone Service, Installation, Service Calls:
Company acknowledges that non-compliance with the customer service
standards identified above will harm subscribers and the City and the amounts
of actual damages will be difficult or impossible to ascertain. For the second
calendar quarter of 1999 and thereafter, the City may therefore assess the
tbllowing liquidated damages against Company for non-compliance with the
customer service standards set forth in Sections 7.3, 7.4, 7.5, 9, 10.1, 10.2,
10.3, 10.10, 12.1, 12.2 and 12.4 (measured on a quarterly basis). Company
acknowledges that the liquidated damages set forth below are a reasonable
approximation of actual damages and that this Section 21 is intended to
provide compensation and is not a penalty.
21.1
Telephone Standards. The damages for non-compliance with one or
more of the standards in Sections 7.3, 7.4 and 7.5 during a calendar
quarter are:
21.1.1 First non-compliance: $1.00 per subscriber.
21.1.2 Second non-compliance within three (3) consecutive calendar
quarters: $2.00 per subscriber.
21.1.3 Third non-compliance within six (6) consecutive calendar
quarters and (subject to Section 21.4) each subsequent non-
compliance: $3.00 per subscriber.
21.2
Service and Installation Standards. The damages for non-compliance
with one or more of the standards in Sections 9, 10.1, 10.2, 10.3, 10.10,
12.1, 12.2 and 12.4 during a calendar quarter are:
30
21.2.1 First non-compliance: $1.00 per subscriber.
21.2.2 Second non-compliance within three (3) consecutive calendar
quarters: $2.00 per subscriber.
21.2.3 Third non-compliance within six (6) consecutive calendar
quarters and (subject to Section 21.4) each subsequent non-
compliance: $3.00 per subscriber.
21.3
Minimums. The liquidated damages for the first and each subsequent
non-compliance under Section 21.1 or Section 21.2 shall be no less than
$5,000, unless modified as provided in Section 21.4.
21.4
Effect of Extended Periods of Compliance. If Company complies with
all of the standards identified in Sections 21.1 and 21.2 for eight
consecutive calendar quarters, the damages for the first subsequent non-
compliance with any of those standards will be the greater of 25¢ per
subscriber or $3,000.
21.4.1 Following such a non-compliance the damages provided in
Sections 21.1 and 21.2 will again be applicable so that the next
non-compliance within four (4) consecutive calendar quarters
will be subject to Sections 21.1.2 and/or 21.2.2.
21.5
An event of non-compliance will be taken into account in determining
whether a later event of non-compliance is a second, third or
subsequent event without regard to whether City has assessed
liquidated damages or taken any other action with respect to the non-
compliance.
21.6 Company shall report the number of subscribers within the City on the
last day of the quarter by the 15th business day of the following quarter.
22. Liquidated Damages - Other:
22.1
Liquidated damages in the amount set forth in Section 21.1.1 (but not
less than the amount set forth in Section 21.3) may be assessed for
failure to timely submit the quarterly reports required by Section 19.
31
22.2
Liquidated damages may be assessed for violation of the provision of
Section 26.4 for submission of reports within five (5) business days in
the amount of $1,000 per day.
23.
Procedure for Assessment of Liquidated Damages: The procedure for
consideration and assessment of liquidated damages is as follows:
23.1 Liquidated damages shall be assessed by the City Manager or his or her
designee.
23.2
Company may obtain a review of the assessment by the City Council
by making a written request within ten (10) business days after receipt
of notice in writing of the assessment and its basis.
23.3
Company shall have an opportunity to be heard at a meeting of the City
Council or by a person designated by the Council as a hearing officer
prior to action being taken by the Council.
23.4
The City Council may adopt additional procedures, including
appointment ora City official or other person to act as a hearing officer.
The Council's decision may be based upon the record of proceedings
conducted by the hearing officer or a proposal for decision submitted
by the hearing officer.
24.
Payment of Liquidated Damages: Liquidated damages shall be paid on or
before the tenth (10th) business day following assessment or, if Company
requests review by the City Council, on or before the tenth (10th) business day
following issuance of the Council's decision.
5.
Ombudsman: Company will provide a senior employee (at the Vice President
or Director level) as director of government affairs and ombudsman reporting
directly to a regional vice president of CC Holdings. The director of
government affairs will have responsibility for working with the City and other
cities in the area to address problems that may arise under the Franchise and
shall be Company's ombudsman for both the City and subscribers. Company
will give the City an opportunity to comment on the detailed job description
of the director of government affairs before the position is filled.
26.
City Liaison: Company shall continue to provide problem solving liaison
services for the City of the type being provided to the City of Fort Worth by
Charter's Customer Care Group in the Fall of 1998. The purpose of this
service is to provide the City with direct access to supervisory level personnel
32
27.
who can obtain prompt action on customer service problems referred by the
City to Company. This service shall include at least the following:
26.1 The personnel providing the service shall be located in Tarrant County.
26.2
The personnel providing the setw'ice shall have sufficient authority and
access to Company facilities and personnel in order to investigate and
take appropriate remedial action without delay.
26.3
The City shall be given a special direct phone number to use (which
may also be used by other cities, but which will not be made available
to the general public) which will generally during normal business
hours be answered by a live person and will provide immediate access
to a person having the authority specified in the preceding section.
26.4
Company shall investigate (including an attempt to contact the
subscriber) and respond to the City on each call, fax or written
complaint or request by the end of the next business day and shall
provide a written report within five (5) business days.
26.5
Company shall give the City notice in writing of changes in the key
contact personnel or material changes in procedures involved in
providing this service.
Definitions: For the purposes of this Exhibit B, the following definitions shall
apply:
27.1 Cable Administrator means the person designated by City as having
principle responsibility for cable matters.
27.2
Complaint means a telephone call or written communication from a
customer notifying Company of a problem relating to Company's
billing or billing practices, Company's equipment, picture quality,
failure to receive one or more channels, a change in Company's
practice or policy, Company advertising or other business practice, the
conduct of a Company employee or contractor, or the failure of
Company or a service representative to comply with customer service
regulations.
27.3
Normal Operating Conditions means those service conditions which are
within the control of Company. Those conditions which are not within
the control of Company include, but are not limited to, natural disasters,
33
civil disturbances, power outages, telephone network outages, and
severe or unusual weather conditions. Those conditions which ar_~e
within the control of Company include, but are not limited to, special
promotions, pay-per-view events, rate increases, regular or seasonal
demand periods, changes in the billing cycle, changes in the form of
bills and other billing matters, changes in channel lineups or services
that are within Company's control and repairs, rebuilds, maintenance
and upgrade of the cable system including computer sof~are and
hardware.
27.3.1
Y2K. Y2K problems involving systems of Company, CC
Holdings, Vulcan, Charter or Affiliates of any of them are not
within the control of Company for purposes of measuring
compliance with customer service standards during the period
January I, 2000 through and including January 14, 2000 but are
within the control of Company before and after that period of
time.
27.3.2
Labor Disputes. Employee strikes, slowdowns and walkouts of
less than 30 days duration are not within the control of
Company.
34
EXHIBIT B 1
: CO NI.M UN ['C~.[~'~ OiN'S~
On-Time Custo,.m..er Service Guarantee Program
Our On-Time Customer Service Guarantee Pro,'am underscores our
commitment to providing our customers with the best service possible. This
program is not about refunds; it is about making customer service a top
priority.
8hnply stated, we pledge the following:
,/ On-time installation appointments or the installation of the primary.
outlet is free
On-time service appointments or the customer receives $20
35
EXHIBIT B2
System Statistics for
Third Quarter 1999
City,
Homes Passed 11,719
Customers 4,937
Penetration 42%
Installations 400
~isconnects 382
Net Gain 18
Technical Performance
Technical Service Calls 124
Technical Service Call Rate 2.5%
Service Ir~terru]>tion~onse < 24 hrs. 98.7%
Servlcd Call Availability for Next Business Day 96.5%
l~nstaltatlon Schedules 57 days 99.0%
~y_stem Reliability 99.927%
Telephone Performance
Calls Received 110,000
Calls Answered < 30 seconds 101,000
Percentage answered <30 seconds (unadjusted) 91.8%
Percentage answered < 30 Seconds (adjusted) * 93.7%
Reasons for adjustment: *
ice storm 12/17/98
City power outage 12/25/98
Calls to City Referred to Cltarter 10
On-Time Per{ormance
Service calls - 05% next business day 99.8%
installations - 95% within 7 business days 98.7%
- Service disruption - 95% within 2q hours
Trained Company Representative
available to respond to telephone
inquiries 2tl hrs/day, 7 days/week
Percentage calls receiving busy signal
Total outages reported
Adjustments are for Abnormal Operatin9 Conditions as
defined in Sections 19.3 and 27.3 of Exhibit g.
Acceptance. Arjreemen t_ 36
I~XItlBIT B4
t~age I ol'2
' I
38
EXItIBIT B4
Page 2 of 2
39
EXHIBIT B$
Page I of 2
Se~ice CallA~ilabilRy Analysis
Month of J. au~
Date No~tl~ .... Sooth i Southlnk¢ ]
Availability A.y~ilabi. i!ty Tro~..yCJub. I
011'01/99 0 0 0
01/02/~9 0 0 0
01/03/99 0 0 0
01/13t/99 0 0 0
01/05/99 ! I 1
01/06/99 0 0 0
01/07/99 1 0 I
01/D8/99 0 1 1
01/09/99 0 0 0
O1110/99 0 0 0
01/11199 0 0 0
01112/99 I 0 0
01/13/99 I 0 0
01114/99 1 0 0
01/15/99 0 0 0
01/16/99 0 0 0
o1/17/99 0 0 0
01118/99 0 0 0
01119/99 I 0 0
01/'20/99 0 0 0
01/21/99 0 I 0
01F22/99 0 0 I
01/23/99 0 0 0
01/24/99 0 0 0
01/25/99 o 0 0
01/26/99 I 0 0
01/25//99 I 0 0
01/28/99 0 ! 0
01/29/99 0 0 0
01/30/99 0 0 0
01/31/99 0 0 0
Tsotal 8 4 '",{' {
tanaa~a 95%. 95% 9.5~o
0 = SAME DAY < 12
1 = Next Day
2 = Two Days Out
EXltlBIT B5
Page 2 of 2
l. nstallati~ A vat [ab[li/v_/~n alxsis
/vlanth of Ian~arE
Date Availability
01/01/99 0
01/02/99 0
01/03499 I
01/04/99 0
01/05/99 I
01/06199 0
01/0'7/99 0
01/08/99 0
01/09/99 0
01/10./99 0
OL/I 1/99 0
01/i 2d'99 0
01 Il 3/~9 0
01/14/':Z:)
Ol/l 5/99 0
01116/99
01117/99 0
01/18/99 0
01/19F)9 0
O1 F20/99 0
01/'21,/99 0
01/22/99 0
01/23/99 0
01/24/99 0
01~5/99 0
01/26/99 0
01/27/99 0
01/28/99 0
01/29/99 I
01~ 1
· 01/31/99 0
Slandard 95%
[Sra~adard Met'/ YES--[
0 - SAME DAY < 12 firs
1 = Next Day
2 = Two Days Out
EXHIBIT B6
Cust~.mer Cpll Sample - January
Sampled 111
Call
Typff ....
Numberer Pucen~ag~ I
_~_c.atl, ........... [
TOTAL
42
EXHIBIT B7
43
Schedule 8.1.1
Character Generators
Company will provide Character Generators (CGs) as set forth below in accordance with
specifications provided by each City. Each City will reimburse Company for the amount by which
the cost of each CG exceeds $3,570. If the Cities agree on a different number of CGs, Company's
share of the cost of each CG will be calculated by dividing the total number of CGs into $75,000.
City Number of Character Generators
Benbrook 0
Burleson 3
Crowley 1
Denton 0
Duncanville 2
Edgecliff Village 1
Everman 1
Forest Hill 1
Fort Worth 0
Haltom City 0
Hurst 0
Keller 1
Kennedale 1
Lake Worth 2
Mansfield 1
North Richland Hills 3
Saginaw 1
Southlake l
Watauga l
White Settlement 1
Total 21
44
SOUTHLAKE
AGREEMENT
Paul G. Allen, as transferee of ultimate control of Marcus Cable Associates, L.L.C.,
makes the following agreement for the purpose of accepting an ordinance of the City of
Southlake ("City") consenting to the transfer of control of the cable televisioB franchise in
the City and the restructuring described in an Acceptance Agreement dated~f3'"~c
1999. Capitalized words and phrases in this Agreement have the meaning set forth in the
Acceptance Agreement.
Covenants Binding. The promises, covenants, and conditions
contained herein inure to the benefit of the City and are binding on
Allen.
Acknowledgment: Allen acknowledges that the transfer of control and
restructuring are expressly subordinate to and will not affect the
binding nature of the Franchise and the obligations provided therein,
and that the consent of the City to the Transaction does not constitute
a waiver or release of any fights of the City.
Reliance: Allen acknowledges that the City has consented to the
Transaction in reliance upon the representations, documents and
information provided by Company, Charter, Vulcan and Allen, all of
which are incorporated herein by reference.
Alleged Prior Defaults. Allen agrees that he will not contend directly
or indirectly that any defaults or failures to comply with the franchise
or other matters set forth in 47 USC § 546(c)(t)(A) (Communications
Act of 1934, Section 626(c)(1)(A) (collectively "Defaults") which may
have occurred prior to the Transaction are waived, including but not
limited to the following:
4.1,
The ability of the City to obtain redress for alleged prior
Defaults, such as recovery of any underpayment of franchise
fees or obtain refunds for periods prior to the Transaction.
4.2.
The ability of the City to enforce in the future any Franchise
terms which may not have been enforced in the past.
4.3.
The ability of the City to consider alleged Defaults occurring
prior to the Transaction in connection with any renewal or
nonrenewal of the Franchise.
4.4.
This Section 4 is without prejudice to Company contending that
an alleged default or failure to comply either did not occur or
has been cured.
Continui _ty of Management. Allen acknowledges that (a) at the time of
submission of the Form 394 subscribers residing in the City were
experiencing serious and on-going deficiencies in service, (b) the
provisions of Exhibit B are in response to these problems, and (c) the
City is approving the Transaction and the transfer of control in reliance
on the actions taken by Allen and Charter in the interim to improve
customer service and in the expectation of continuity of Charter's
management to assure that the problems will not recur. Allen has
caused the City to be informed that he intends to keep the present
Charter management team in place.
5. l. Allen agrees that if there is any substantial change in Charter's
senior management prior to December 31,200l, then (a) Allen
or William D. Savoy, and (b) a top officer of Charter, upon
request, xvill appear in person in a public forum in Tarrant
County, Texas (to be held jointly with other cities with whom
Allen has made a similar agreement) in advance of the change
for the purpose of explaining the change and answering
questions. "Substantial change" for purposes of this Section
means a change of the CEO of Charter or the senior executive
reporting to him or her who is responsible for the systems in
Texas managed by Charter.
Date:
As of 3/26/99
Paul G. Allen
ODM A pC DOCS'GRR',262056 I
FED. I.D. NO. 22 3148254
Star-Telegram 14789858
AD ORDER NO.
400 W.SEVENTH STREET•FORT WORTH,TEXAS 76102 ACCOUNT NO. C I T 57
THE STATE OF TEXAS
runty of Tarrant
Before me, a Notary Public in and for said County and State, this day
personally appeared TAMMIE BRYANT Billing Specialist for the
Star-Telegram, published by the Star-Telegram Inc. at Fort Worth, in Tarrant County, Texas; and
who, after being duly sworn, did depose and say that the following clipping of an advertisement was
published in the above named paper on the following dates:
DATE AD ORDER NO DESCRIPTION AD SIZE TOTAL RATE AMOUNT
INCH/LINE
3/26ME 14789858 CITY OF SOUTHLAK I358 1x 25L 25 QUOTE 20 . 25
CITY OF SOUTHLAKE, I0 3/2 6-0 3/2 6
TEXAS
ORDINANCE NO.737 --- -
AN ORDINANCE AMENDING
ORDINANCE NOS. 583 AND
675; GRANTING CONSENT
TO THE TRANSFER OF CON-
TROL _....__
OF A CABLE TELEVI-
SION SYSTEM AND FRAN-
CHISE FROM MARCUS CA-
BLE ASSOCIATES,L.L.C.TO
PAUL G. ALLEN- AND AP-
PROVING RELATED AGREE-
MENTS.
PASSED AND APPROVED BY
THE CITY COUNCIL OF THE
CITY OF SOUTHLAKE, TEX-
AS,ON MARCH 23,1999.
MAYOR RICK STACY
ATTEST:SANDRA L.
LEGRAND
'CITY SECRETARY
APPROVED AS TO FORM:
E.ALLEN TAYLOR,JR.,
CITY ATTORNEY
SIG
SUBSCRIBED AND SWORN TO BEFORE ME, THIS THE 29thDAY OF MARCH 1999
�rpr PG°11
RHONDA R. GOKE Notary Public
(P—S-6-tieL
%noN-c r COMMISSION EXPIRES
"a=` +ter SEPTEMBER 8, 1999 TARRANT COUNTY,TEXAS
PLEASE PAY THIS ORIGINAL INVOICE AND RECONCILE WITH MONTHLY STATEMENT. THANK YOU!
TEAR ALONG THIS PERFORATION AND RETURN THE LOWER PORTION WITH YOUR PAYMENT�\
Star-"I'elegram REMIT TO: 400 W.SEVENTH ST. •FORT WORTH.TEXAS 76102
14789858 ACCOUNT CIT57 AMOUNT 20 . 25
NUMBER DUE
PAGE" (4 IF ANY QUESTIONS, PLEASE CALL(817)390-7885
CITY OF SOUTHLAKE
CTY SOUTHLAKE
667 N CARROLL AVE PLEASE PAY
SOUTHLAKE, TX 76092-6412 THIS AMOUNT 20 . 25
PLEASE WRITE IN AMOUNT ENCLOSED
FED I.D. NO. 22-3148254
StarTe1egranhi 14682663
AD ORDER NO.
400 W.SEVENTH STREET•FORT WORTH,TEXAS 76102 ACCOUNT NO. C I T 5 7
THE STATE OF TEXAS
)unty of Tarrant
afore me, a Notary Public in and for said County and State, this day
personally appeared TAMMIE BRYANT Billing Specialist for the
Star-Telegram, published by the Star-Telegram Inc. at Fort Worth, in Tarrant County, Texas; and
who, after being duly sworn, did depose and say that the following clipping of an advertisement was
published in the above named paper on the following dates:
i DATE AD ORDER NO. DESCRIPTION AD SIZE TOTAL RATE AMOUNT
INCH I LINE ,
3/06ME 14682663 CITY OF SOUTHLAK I358 1x 78L 78 QUOTE 104 . 52
SOWHL cETEXAS 0 3/0 6-0 3/0 6
NOTICE is hereby given to all
interested persons that the
City Council of the City of
Southlake, Texas, will be
holding a public hearing dur-
ing -�
the regular city council ,
meeting to be held on March
23,1999,at 6:00 p.m.The
meeting will be held in the_.Cit . ..
City Hall,Council Chambers
667 North Carroll
Avenue, Southlake, Texas.
Purpose of the hearing will
be held regarding the follow- --
ing
ORDINANCE NO.737
AN ORDANCE G
ORDINANCE NOS.583 AND
675• GRANTING CONSENT
TO THE TRANSFER OF CON-
TROL OF A CABLE TELEVI- ,
SION SYSTEM AND FRAN-
ICHISE FROM MARCUS CA-
BLE ASSOCIATES,L.L.C.TO c
PROVING RELATEDA NAGREE- J
MENTS.
LShheebyconsertet City
•WORN TO BEFORE ME THIS THE 8th DAY OF MARCH 1999
action,including the transfer r
of control of the Franchise �,,(��\`
and the cable television sys- ar no
tern from Marcus Cable As- ,2'P''``a�^,� RHONDA R. GOKE# �41�.M�-o_. Aljial.—+
sociates, L.L.C. to Paul G. Notary Public
Allen, subject tob execution i• . COMMISSION EXPIRES 1
by Marcus Cable Associ-
ates, L.L.C. MCP Inc. CC �,r:, A\ 7�:
and Holdings,
Vulcan Charter,
Vulcan # 'g';F•�F•t+=` SEPTEMBER 8, 1999 r
Accep- O TARRANT COUNTY,TEXAS
tance Agreement in the form
attached hereto and incorpo-
rated herein as Exhibit 1,
and subject to execution by
Paul in Allen of as Aghed I
ORIGINAL INVOICE AND RECONCILE WITH MONTHLY STATEMENT. THANK YOU.
11 ment the form attached
hereto and incorporated
herein as Exhibit 2, both
agreements of which are —TEAR ALONG THIS PERFORATION AND RETURN THE LOWER PORTION WITH YOUR PAYMENT
hereby approved.—
---A
Section 2.To the extent that -
this ordinance or the at-
tached Acceptance Agree-
ment and Agreement modify
any of the terms and condi-
tions of Ordinance Nos.583
St and 675,said ordinance are
i hereby amended,Except as ran. REMITi hereby amended.Except as
hereby amended, the provi- TO: III. 400 W.SEVENTH ST. •FORT WORTH,TEXAS 76102
\provi-
sions of Ordinance Nos.583
and 675 shall remain un-
changed.
Section 3. This ordinance ACCOUNT CI T 5 7 AMOUNT 104 . 52
shall be in full force and ef- NUMBER DUE
fect from and after its pas-
sage,publication and written
acceptance as above speci-
fied;provided however,that PAGE1 011 IF ANY QUESTIONS, PLEASE CALL(817)390-7885
this ordinance shall expire
and be of no further force
and effect on October 31,
1999 if the entire Transac-
tion has not been consum-
mated by that date.
Sandra L.LeGrand
City Secretary
CITY OF SOUTHLAKE
CTY SOUTHLAKE
667 N CARROLL AVE
PLEASE PAY
SOUTHLAKE, TX 76092-6412 THIS AMOUNT 104 . 52
PLEASE WRITE IN AMOUNT ENCLOSED