Chapter 10

Cable Communications

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* Editors Note: This chapter is subject to the regulations of the Federal Communications Commission.
State Law References: Franchises and limitations thereon, G.S. 160A-319.
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Sec. 10-1. Short title.
Sec. 10-2. Definitions.
Sec. 10-3. Grant of authority; rights nonexclusive.
Sec. 10-4. Compliance with laws, regulations, ordinances.
Sec. 10-5. Company liability; indemnification of town.
Sec. 10-6. Conditions on use of roads, system construction.
Sec. 10-7. Number of channels.
Sec. 10-8. Public service and educational service.
Sec. 10-9. Service standards.
Sec. 10-10. Company rules.
Sec. 10-11. Right of town to adopt additional regulations.
Sec. 10-12. Occupational license, taxes.
Sec. 10-13. Rates to customers.
Sec. 10-14. Franchise fee.
Sec. 10-15. Records and reports.
Sec. 10-16. Term, renewal, renegotiation, and transfer of franchise.
Sec. 10-17. Assignment for financing.
Sec. 10-18. Renegotiation.
Sec. 10-19. Necessity of franchise.

Sec. 10-1. Short title.

This chapter shall be known and may be cited as the town community antenna television chapter or the town CATV chapter.
(Code 1981, § 6-3001)

Sec. 10-2. Definitions.

The following words, terms and phrases, when used in this chapter, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:

Company means the person, firm or corporation to whom a franchise is granted pursuant to this chapter.

FCC means the Federal Communications Commission or any federal regulatory agency having regulatory jurisdiction over cable television.

Franchise means authorization granted pursuant to this chapter to construct, operate and maintain a cable television system in the town.

Gross subscriber revenue means total revenue and receipts received by the company from monthly service charges within the limits of the town before any expenses or deductions whatsoever are made.

System means the lines, fixtures, equipment, attachments and all appurtenances thereto which are used in the construction, operation and maintenance of the community antenna television system authorized in this chapter.
(Code 1981, § 6-3002)
Cross References: Definitions generally, § 1-2.

Sec. 10-3. Grant of authority; rights nonexclusive.

(a) The council is authorized to grant any qualified applicant a nonexclusive right and privilege to construct, erect, operate and maintain in the town or any part thereof, wires, poles, cables, underground conduits, conductors and fixtures necessary for the maintenance and operation of a community antenna television system for the reception and distribution of television signals and energy, frequently modulated radio signals, and noncommercial visual and aural signals which are not otherwise prohibited. The right granted in any franchise shall be subject to the terms of this chapter (as may be amended from time to time).

(b) The company shall have the right to enter into arrangements for the attachment onto and the use of facilities owned and operated by public utilities operating within the town whereby the company shall strictly comply with the terms, provisions and restrictions of the agreements, and copies of all agreements made with other public utilities operating in the town shall be placed on file in the office of the town clerk immediately upon their execution.
(Code 1981, § 6-3003)

Sec. 10-4. Compliance with laws, regulations, ordinances.

The company shall at all times during the terms of this chapter and a franchise thereby granted, be subject to all lawful exercise of the power of the town and to such other reasonable regulation as the town shall hereafter by resolution or ordinance provide. The construction, operation and maintenance of the system by the company shall be in full compliance with the National Electrical Code as from time to time amended and revised, and in full compliance with all other applicable rules and regulations now in effect or hereafter adopted by the FCC, the town, the state, and the United States government. Any modification of FCC rules which affect a franchise granted pursuant to this chapter shall be incorporated into the franchise within one year of adoption by the FCC or at the time of franchise renewal, whichever occurs first.
(Code 1981, § 6-3004)

Sec. 10-5. Company liability; indemnification of town.

(a) Liability coverage.The company shall save the town harmless from all loss sustained by the town on account of any suit, judgment, execution, claim or demand whatsoever arising out of the construction, operation and maintenance of the system by the company. The company shall agree to maintain and keep in full force and effect at all times during the term of the franchise during any operation by it of the system sufficient liability insurance coverage to protect the town against any such claims, suits, judgments, executions, demands in a sum not less than $500,000.00 per person in any one claim, $1,000,000.00 as to any one accident or occurrence and not less than $300,000.00 for property damage as to any one accident or occurrence.

(b) Worker's compensation coverage.The company shall also maintain in full force and effect throughout the term of its franchise and during any operation by it of the system, sufficient worker's compensation insurance coverage to adequately and fully protect its agents and employees as required by law.

(c) Resident company and agent.All insurance policies as are required of the company in its franchise or this chapter shall be written by a company or companies authorized and qualified to do business in the state. Certificate of all coverage shall be promptly filed by the company with the town clerk.
(Code 1981, § 6-3005)

Sec. 10-6. Conditions on use of roads, system construction.

(a) All transmissions and distribution structures, lines and equipment erected by the company in the town shall comply with all rules and regulations of the state department of transportation or any other federal, state or town agency regulating the use of streets in the town.

(b) The town shall not be required to assume any responsibility for the securing of any rights-of-way or easements, nor shall the town be responsible for securing any permits or agreements with other persons or utilities.
(Code 1981, § 6-3006)

Sec. 10-7. Number of channels.

The channels transmitted and services offered shall be governed by the terms of the franchise ordinance.
(Code 1981, § 6-3007)

Sec. 10-8. Public service and educational service.

The company shall provide antenna service without monthly service charge to all town municipal offices and schools, and to all town, fire, rescue and ambulance stations and hospitals, provided the lines of the system pass the facilities in the normal course of business.
(Code 1981, § 6-3008)

Sec. 10-9. Service standards.

(a) The company shall maintain and operate the system and render efficient service so that there will be no interference with television reception, radio reception, telephone communications, or other installations which are now or may hereafter be installed and in use by the town or any person in the town.

(b) The community antenna television system shall conform with the following:

1.   The distribution system shall conform to the requirements of the Federal Communications Commission.
2.   The antenna, receiving and distribution equipment shall be installed and maintained so as to provide pictures on subscriber receivers throughout the system essentially of the same quality as those received at the antenna site.

(c) The company shall be responsible for installation and maintenance of the service wiring from the cable entry point to the TV set in the subscribers' homes.

(d) The company shall investigate and resolve all subscriber complaints regarding the quality of service, equipment malfunctions and similar matters expeditiously and in accordance with the following procedure:

1. The company shall, during normal working hours, have qualified personnel available to investigate and resolve subscriber complaints.
2. Upon notification of a service complaint the company shall dispatch a qualified employee to investigate the complaint and adjust, repair or replace company equipment as necessary to resolve the complaint. The company shall not be responsible for malfunctions in any subscribers radio or television receiver.
3. Complaints shall be investigated and resolved within 24 hours of notification and the company shall maintain a service log in which entries of each complaint, the date received, the nature of the complaint and the means by which it was resolved shall be kept.
4. The company shall maintain a business office or agent in the county for performing services and meeting all requirements provided in this chapter.

(Code 1981, § 6-3009)

Sec. 10-10. Company rules.

The company shall have the authority to promulgate such rules, regulations, terms and conditions governing the conduct of its business as shall be reasonable and necessary to enable the company to exercise its rights and to perform its obligations under this chapter and to ensure an uninterrupted service to each and all of its customers; provided, however, that such rules, regulations, terms and conditions shall not be in conflict with the provisions of this chapter and shall be filed with the town and be approved by the town.
(Code 1981, § 6-3010)

Sec. 10-11. Right of town to adopt additional regulations.

The right is hereby reserved to the town to adopt, in addition to the provisions contained in this chapter and in existing applicable ordinances, such additional regulations and ordinances as the town may find necessary.
(Code 1981, § 6-3011)

Sec. 10-12. Occupational license, taxes.

The company shall pay annually a franchise fee as determined in section 10-14 in lieu of any occupational licenses, fees and service charges as shall be appropriate to this general classification of business as set forth by law. It is herewith noted that the company is classified as a public utility but shall be subject to payment of ad valorem taxes.
(Code 1981, § 6-3012)

Sec. 10-13. Rates to customers.

The rates for installation fees and monthly rentals charged to the users of the system shall be governed by the terms of the franchise ordinance.
(Code 1981, § 6-3013)

Sec. 10-14. Franchise fee.

(a) The company shall pay to the town a franchise fee of three percent of the gross subscriber revenue per year. All payments as required by the company to the town shall be made semiannually and shall be due within 60 days after the close of the preceding six-month period.

(b) Should the FCC regulations be amended or a court decision in the future allow the town to receive a fee from its franchise of more than three percent of gross subscriber revenues, the franchise shall immediately begin making such increased payments to the town as are authorized to the full extent of such authorization.
(Code 1981, § 6-3014)

Sec. 10-15. Records and reports.

The town shall have access at all reasonable hours to all the company's plans, contracts, engineering, accounting, financial, statistical, customer and service records relating to the property and operation of the system by the company and to such other records as may be required by the town. An annual summary report showing gross revenue received by the company from the operation the preceding 12-month period and such other information as the town may require in support of the report shall be given to the town by the company.
(Code 1981, § 6-3015)

Sec. 10-16. Term, renewal, renegotiation, and transfer of franchise.

(a) The franchise and rights therein granted shall take effect and be in force for a period not to exceed 15 years from and after the grant and acceptance date of the franchise, which shall be effected by the execution of the franchise agreement.

(b) Upon termination of the franchise for whatever reason, including expiration or revocation, the town shall have the right to determine whether the company shall be eligible to continue to operate and maintain the CATV system in the town franchise area.

(c) Upon the expiration of the term of the franchise, subject to approval by the council, the company may negotiate renewal of its franchise for an additional period not inconsistent with FCC rules and regulations. In addition:

1. The company shall notify the town in writing no less than one year in advance of the expiration date of its desire to renew or not renew the franchise. The town may propose certain franchise modifications to the company and make any given renewal contingent upon acceptance of such modification. Renewal shall be preceded by a public hearing held at least 30 days in advance of decision by the council. A renewal may be granted not more than two years prior to the expiration of any existing term. The council may determine whether or not the company has performed its obligations satisfactorily under the franchise by reviewing the following:
   • a. Technical developments and performance of the system.
   • b. Programming.
   • c. Other services offered.
   • d. Cost of service.
   • e. Compliance with any requirement in the ordinance or in FCC regulations.
   • f. Annual and other reports made to the town or the FCC.
   • g. Extension of service.
   • h. And other matters of concern.
2. If the company is determined by the council to have performed unsatisfactorily, new applicants shall be sought and evaluated by the council and a franchise award may be made according to application and award procedures set forth in this chapter.
3. Upon failure to renew the franchise following expiration of the term of the franchise, the town shall have the right of first refusal to purchase the CATV system. Should the town decide to purchase the system, it shall do so at a price not to exceed its then fair market value. In determining the fair value of the system, the original cost of all tangible and intangible property, as well as the salvage value, the book value, the replacement cost, cash flow and other factors, may be considered. Under no circumstances shall any valuation be made for good will or any right or privilege granted by this chapter. Should a dispute arise over the determination of the fair value of the system, the dispute shall be resolved by arbitration as provided in subsection (d) of this section.

(d) The council may terminate the franchise conferred under this chapter at any time prior to a date of expiration upon a finding that the company has failed to cure one or more of the following defects: material breach, whether by act or omission, of any terms or conditions of this franchise ordinance, or franchise agreement; material misrepresentation of fact in the application for or negotiation of the franchise; insolvency of the company, or inability or unwillingness of the company to pay its just debts when they accrue, or application of the company for adjudication as a bankrupt; or failure to provide subscribers or users with adequate service in the best interest of the public convenience and welfare. In that case:

1. The company shall have 60 days to remedy defects following written notice by the council to the company of such a defect. If any defect continues beyond the 60 days (or any extension thereof granted by the council) without written proof that corrective action has been taken or is being actively and expeditiously pursued, the council shall call a public hearing on the termination of the franchise. Immediately following the public hearing, the council may, by resolution, declare that the franchise be terminated. At least ten days prior to the council meeting at which the public hearing will be held, the council shall cause to be served upon the company a written notice of the public hearing on the question of termination. The notice shall state the time and place of the meeting. If the town revokes the franchise, the town shall have the right of first refusal to purchase the CATV system at its then fair market value. The fair market value shall be determined by the town in accordance with generally accepted appraisal and accounting principles. Under no circumstances shall any valuation be made for good will or any right or privilege granted by this permit. Should a dispute arise over the determination of the fair value of the system, the dispute shall be resolved by a panel of three appraisers: one to be selected by the council; one to be selected by the company and the third to be selected by the other two appraisers. Should the town and the company fail to agree on the third appraiser, the choice shall be made by the senior resident judge of the superior court of the judicial district in which the town is located.
2. Should the town revoke the franchise and the town fail to purchase the system, new applicants shall be sought and evaluated by the council and a franchise award may be made according to application and award procedures set forth in this chapter.

(e) Upon the foreclosure or other judicial sale of all or a part of the system, or upon the termination of any lease covering all or a substantial part of the system, the company shall notify the council of such fact, and such notification shall be treated as a notification that a transfer in control of the franchise has taken place, but no such transfer of title can be made absolute or become effective without prior approval of the council and such successor in interest shall own and operate the CATV system subject to all provisions of this chapter and franchise agreement.

(f) The council shall have the right to cancel the franchise 120 days after the appointment of a receiver, or trustee, to take over and conduct the business of the company, whether in receivership, reorganization, bankruptcy or other action or proceeding, unless such receivership or trusteeship shall have vacated prior to the expiration of the 120 days, or unless:

1. Within 120 days after his election or appointment, the receiver or trustee shall have fully complied with all the provisions of this chapter and remedied all defaults thereunder; and
2. The receiver or trustee, within the 120 days, shall have executed an agreement, duly approved by the court having jurisdiction in the premises, whereby such receiver or trustee assumes and agrees to be bound by each and every provision of this chapter and the certificate granted to the company.

(g) The company may hypothecate its interest under this chapter and the franchise agreement and in the CATV system to be constructed pursuant thereto for the purpose of securing a loan, the entire proceeds of which will be utilized in construction and operation of its CATV system in the town franchise area.

(h) If the town elects to revoke the franchise or fails to renew the franchise and providing the town elects not to purchase the system, the town may require that the system be sold to the company designated by the council at a purchase price that shall be equivalent to the fair market value determined in the same manner described in subsection (c) of this section.
(Code 1981, § 6-3016)

Sec. 10-17. Assignment for financing.

The company may assign or hypothecate its interest in the franchise to a financial institution for the purpose of obtaining financing, provided however, that funds obtained from such financing shall be utilized in the construction and operation of a cable television system.
(Code 1981, § 6-3017)

Sec. 10-18. Renegotiation.

The field of cable communications is a relatively new and rapidly changing field which shall no doubt see many regulatory, technical, financial, marketing, and legal changes during the term of a franchise period. Therefore, in order to provide for a maximum degree of flexibility in a franchise and to help achieve a continued advanced and modern system for the town, the company shall be subject to the following renegotiation provisions:

1. The town and the company shall hold renegotiation sessions at the request of either within 30 days of such request, provided that there shall be no obligation to hold such a session more frequently than every two years.
2. The following topics shall be discussed at such renegotiation sessions: service rate structure, free or discounted services; application of new technologies; system performances; services provided; programming offered; customer complaints; privacy in human rights; judicial and FCC rulings; and other topics as may be deemed appropriate.

(Code 1981, § 6-3018)

Sec. 10-19. Necessity of franchise.

It shall be unlawful for any person to own, operate or construct a cable television system in the town, except pursuant to a franchise agreement granting the right to do so between the town and the company, which agreement shall be subject to the terms of this chapter, as amended from time to time.
(Code 1981, § 6-3019)