Section 10-16 Term, Renewal, Renegotiation
(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.
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:
- 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.
- 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:
- 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
- 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)