HomeMy WebLinkAboutReso. 1986 - 222 - Approving a non-exclusive franchise agreement between the city of redding and viacom cablevision 111
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RESOLUTION NO. 4. a?
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING
APPROVING A NON-EXCLUSIVE FRANCHISE AGREEMENT BETWEEN THE
CITY OF REDDING AND VIACOM CABLEVISION, AND AUTHORIZING THE
MAYOR TO SIGN SAME.
WHEREAS, Viacom Cablevision has requested a new cable
franchise with the City of Redding; and
WHEREAS, the City Council, pursuant to Section 6. 40. 040 of
the Redding Municipal Code, has held a public hearing concerning
the requested franchise;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the
City of Redding as follows:
1 . That the City Council of the City of Redding hereby
approves the attached Franchise Agreement between the City of
Redding and Viacom Cablevision, a wholly-owned subsidiary of
Viacom International Inc. , and finds that the applicant' s
proposed service area would serve the public interest; and
2. That the Mayor of the City of Redding is hereby
authorized and directed to sign all necessary documents on behalf
of the City of Redding, and the City Clerk is hereby authorized
and directed to attest the signature of the Mayor and to impress
the official seal of the City of Redding on the aforesaid
documents, when appropriate.
3. That a true copy of said Franchise Agreement is attached
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hereto and incorporated herein by reference.
I HEREBY CERTIFY that the foregoing Resolution was
introduced and read at a regular meeting of the City Council of
the City of Redding on the 2nd day of September, 1986 , and was
duly adopted at said meeting by the following vote:
AYES: COUNCIL MEMBERS: Carter, Dahl , Gard, Johannessen, & Fulton
NOES: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: None
ABSTAIN: COUNCIL MEMBERS: None
LEE D. FULTON, M.D. , Mayor
City of Redding
ATTEST:� a 2
ETHEL A. NICHOLS, City Clerk
FOR APPROVED:
RAI'DALL A. HAYS, City Attorney
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AGREEMENT
THIS AGREEMENT, made and entered into this day of4.114EWL /9,4
at , by and between the City
of Redding, a nicipal corporation of the State of California,
( "Grantor" ) , and Viacom Cablevision, a wholly-owned subsidiary of
Viacom International, Inc. , hereinafter known as "Grantee" ,
"Viacom Cablevision" or "Viacom" .
WITNESSETH
WHEREAS, the City of Redding, pursuant to Ordinance No. 1717 , is
authorized to grant ana/or renew one or more nonexclusive
revocable franchises to operate, construct, maintain and
reconstruct a cable television system within the City;
WHEREAS, after public hearings, the City has determined that it
is in the best interest of the City and its residents to renew
the franchise previously granted to Viacom Cablevision; and
NOW, THEREFORE, the City (hereinafter also known as the Grantor)
hereby grants to Viacom Cablevision a cable television franchise
renewal in accordance with the provisions of Ordinance) No. 1717,
and this Agreement.
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1. 0 GRANT OF FRANCHISE RENEWAL
1.1 Grant
Viacom Cablevision, a wholly-owned subsidiary uf . Viacom
International Inc. , a corporation with its principal place of
business located at 1211 Avenue of the Americas, New York, New
York, 10026 , is hereby granted for itself, its successors and
assigns, subject to the terms and conditions of this Agreement
and Ordinance No. 1717 the franchise, authority, right and
privilege, for a fifteen ( 15) year period from and after the
effective date hereof, to operate, maintain and reconstruct a
cable television system within the streets and public ways within
the City of Redding.
1.2 Right of Grantor to Issue Franchise
Grantee acknowledges and accepts the right of Grantor to issue
cable television franchises and Grantee agrees it shall not
during the term of this franchise challenge this right in any way
or in any City, State or Federal Court.
1. 3 Effective Date of Franchise
The effective date of the franchise renewal shall be
subject to the conditions of Section 3 .3 of this Agreement and
Section 6 . 40. 040I of Ordinance No. 1717.
1.4 Duration
The term of the franchise shall be fifteen (15) years from the
effective date hereof at which time it shall expire and be of no
force and effect. Consideration of Renewal shall be in
accordance with applicable law.
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1.5 Franchise Not Exclusive
This franchise shall not be construed as any limitation upon the
right of Grantor, through its proper officers, to grant to other
persons or corporations rights or authority similar to or
different from the rights, privileges and authority therein set
forth, in the same or other streets and public ways) or public
places by franchise, permit or otherwise, provided, however, that
such additional grants shall not operate to materially modify,
revoke or terminate any rights granted to grantee herein.
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1.6 Franchise Acceptance
The Grantee, by executing this Agreement in accordance with
Section 6. 40. 040(I ) (2) of Ordinance No. 1717, guarantees
performance by Grantee of all of Grantee' s obligations hereunder
imposed by the Ordinance and this Agreement.
2. DEFINITIONS
For the purpose of this Agreement, the following words, terms,
phrases, and their derivations shall have the meanings give
herein. When not inconsistent with the context, worlds used in
the present tense include the future tense, words in the singular
number include the plural number. The word "shall"j is always
mandatory and not merely directory. The definitions contained in
Ordinance No. 1717 are incorporated herein as if fully set forth.
2. 1 "Cable Television Service Channel" means a channel that
carries programming 80 percent of the time between 6 a.m. and 12
a.m. Any designated government, public or educational channel or
any channel consisting of text information available to all
subscribers shall also be considered a Cable Television Service
channel.
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2.2 "Agreement" or "Franchise Agreement" means this agreement and
any amendments, or renewals, or extensions thereof.
2.3 "Grantee" means Viacom Cablevision, or any person or entity
who or which succeeds Viacom Cablevision in accordance with the
provisions of this franchise.
2.4 "Grantor" or "City" means the City of Redding.
2. 5 "Institutional Network" means the mid-split cable
communication system described in Exhibit C and designed to
provide video, audio or data transmission to or between
businesses, public agencies and community institutions.
2.6 "Ordinance" means the provisions, in their entirety, of
Ordinance No. 1717 and amendments, which is an ordinance of the
City Council of Redding amending Chapter 6. 40 of the Redding
Municipal Code, pertaining to the granting of franchises for
cable communications systems,
2. 7 "Program" means to place a Cable Television Service on a
channel. •
2.8 "Residential System" means the sub-split cable communication
system serving residential subscribers in the City of Redding.
2. 9 "Section" means any section, subsection, or provision of
this franchise agreement.
2. 10 "System Upgrade" means the renovation of the cable system to
increase channel capacity to 35 channels which may include the
replacement of active and passive electronics as required.
2. 11 "System Rebuild" means the renovation of the cable system to
increase channel capacity which shall include the replacement
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of the entire system including strand, hardware, cable, and
active and passive electronics as necessary to meet minimum
technical standards and to be able to deliver 62 cable television
channels to all residential subscribers. It is understood by
Grantor and Grantee that all replacement or new parts or
equipment for the distribution system installed after the
effective date of the franchise will be 450 MHz capable.
2. 12 "Upgraded Service" means the level of service provided to
subscribers subsequent to the upgrading and/or expansion of the
system.
3. 0 GENERAL REQUIREMENTS
3.1 Governing Requirements
Grantee shall comply with the requirements of this Agreement and
the Ordinance.
3.2 Franchise Fee
The Grantee shall pay to the Grantor an annual franchise fee of
five percent (5%) of Gross Annual Receipts in accordance with
Section 6, 40 . 090(A) of the Ordinance.
3. 3 Effective Date of Agreement
This Agreement shall only become effective when the requirements
of Section 3 . 4, 3.5 and 3 . 6 of this agreement and Section
6.40. 040(I ) of Ordinance No. 1717 , have been met and completed.
In the event the requirements are not met and completed in the
time and manner required, the Council may declare the franchise
null and void.
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3. 4 Franchise Processing Fee
As provided for in Section 6. 40.090(B) of the Ordinance, the
Grantee shall reimburse the City for reasonable costs which have
been incurred in the franchise renewal process, not exceeding
$70,000.
3. 5 Liability Insurance and Indemnification
The Grantee shall furnish proof that the liability insurance
policies required under Section 6.40. 090(C) of the Ordinance are
in force.
3.6 Letter of Credit
As provided for in Section 6. 40. 090(E) of the Ordinance, the
Grantee shall deposit with the City an irrevocable letter of
credit from a bank with an AAA rating approved by the City in the
amount of Fifty Thousand and 00/100 Dollars ($50, 000. 00) . The
form and content of such letter of credit shall be approved by
the City Attorney which approval shall not be unreasonably
withheld. e
3.7 Performance Bond
The City waives any requirement for construction or performance
bonds related to the system upgrade to thirty-five ( 35) channels.
However, within sixty (60) days of a direction by the City to
rebuild the system to a capacity of sixty-two ( 62 ) channels in
accordance with Section 4. 4 of this Agreement, the Grantee shall
furnish proof of the posting of a faithful performance bond,
which may be a corporate surety bond, running to the Grantor, in
the penal sum of $300 , 000. The faithful performance bond shall
be in a form approved by the City Attorney which approval shall
not be unreasonably withheld. Upon demonstration by the Grantee
to the satisfaction of the City that the system rebuild has in
fact been completed and the new system is fully operational, the
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Grantee shall be relieved of the requirement for the performance
bond.
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4.0 CONSTRUCTION AND SERVICE REQUIREMENTS
4.1 Initial Service Area
The Grantor will provide service to all areas of the City
identified in Exhibit A on the same terms and conditions and at
the same rate as other Redding subscribers within one (1) year of
the effective date of this Agreement. Other dwelling units
located within the City boundaries as they exist on the effective
date of this Agreement shall be provided service ink accordance
with Section 6. 40. 050(A) of the Ordinance.
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4.2 Residential System Upgrade: Construction Requirements and
Schedule
Within eighteen ( 1V= months of the effective date of this
Agreement, the Grantee shall upgrade the system to a minimum of
thirty-five ( 35) activated Cable Television Service channels.
4.3 Residential System Upgrade: Service Requirements
Within eighteen (18 ) months of the effective date of this
Agreement, the Grantee shall program thirty-five ( 35) Cable
Television channels and offer upgraded service to all residential
subscribers. Once the system is programmed for thirty-five ( 35 )
Cable Television Service channels, the operator shall use
reasonable business efforts to program the channels, to avoid
duplication, to replace program service that may Igo out of
business and to provide a wide variety of services. Pursuant to
this section, any channel without programming that is blank for a
period of three months shall be considered in violation of this
section excluding all public, educational, or government
channels.
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4.4 Residential System Rebuild: Construction Requirements
The City may, upon the fourth, eighth, and twelfth anniversary of
the effective date of this Agreement direct the Grantee to
rebuild the system to a capacity of sixty-two (62) channels, if
the conditions set forth in Exhibit B are met. Said system shall
provide the capability for bidirectional service and +ovide the
Cable Television Service Channels required by Exhibit B.
4.5 Residential System Rebuild: Construction Schedule;
The Grantee shall file for any pole make ready permits which may
be required and contract for pole rearrangement work within three
(3) months of written notification by the City that a rebuild is
required. The Grantee shall commence construction within nine
(9) months of said notification and complete construction within
three (3 ) years of the notification. Failure to meet these time
lines shall be arounds for revocation as the willingness of the
City to accept the offer of 35 channels at this time is
predicated upon the future willingness of the Grantee to expand
the system to 62 channels.
4.6 Residential System: Service Requirements
Upon rebuild of the system to sixty two ( 62) channels, the
Grantee shall program no less than the average number of channels
available in comparable systems as defined in Exhibit 'B and offer
the expanded service to all residential cable subscribers. It is
the assumption of this agreement that, after the rebuild, the
Grantee can provide a number of Cable Television Service channels
equal to the number available in the comparable systems and shall
make all reasonable efforts to provide a comparable level of
service to Redding subscribers as is available in comparable
communities.
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4.7 Institutional Network: Construction Schedule
The Grantee will provide a 300 MHz, mid-split institutional
network (I-NET) as described in Exhibit C. Within eighteen ( 18 )
months of the effective date of this Agreement, the ystem will
be completed and fully activated to provide interactive services
in the downtown area.
Within twenty ( 20) months of the effective date of this
Agreement, the Grantee will survey the businesses in the Hilltop
area to determine telecommunications needs and submit the results
to the City in the form of a market study. Within thirty ( 30 )
months of the effective date of this Agreement, the Grantee will
extend the I-NET to the Hilltop area, provided that market
conditions support the extension of the network.
4.8 Institutional Network: Service Requirements
The Grantee will survey the business community and iIistitution s
every even numbered year to determine telecommunications needs.
The Grantee will then make available and actively market services
. to meet the telecommunications needs identified.
The results of periodic surveys and a report on the Grantee ' s
activities in developing and marketing services on the
institutional network shall be included in the Grantee' s annual
report, required under Section 6. 40.080(D) of the Ordinance.
4.9 Penalties for Delay in Construction
The City may, at its sole option, apply any of the following
penalties in connection with delays in the system construction
related to the upgrade or the rebuild due to causes which are
within Grantee' s reasonable control and/or which are reasonably
foreseeable.
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(a) Reduction in the duration of the franchise on a
month-to-month basis for each month of inexcusable delay
exceeding six ( 6) months.
(b) Forfeiture of performance bonds
(c) Imposition of financial penalties not to exceed $500. 00 per
day in accordance with Section 6. 40. 100(A) of the Ordinance.
(d) Termination of the franchise in accordance with Section
6.40. 110(A) of the Ordinance.
For any schedule delay that may occur, the burden of proof shall
be on the Grantee to demonstrate that such delay was beyond its
reasonable control or was not reasonably foreseeable. The
imposition by Grantor of any such penalties shall be in
accordance with the procedures set forth in Section u6. 40.100 (B)
of the Ordinance.
4. 10 Right of Inspection of Construction
The City shall have the right to inspect all construction or
installation work performed subject to the provisions of the
franchise and to make such tests as it shall find necessary to
ensure compliance with the terms of the franchise and other
pertinent provisions of law.
4. 11 Construction Progress Reports
The Grantee shall provide bi-monthly construction progress
reports to the City during the eighteen (18) month construction
period for the system upgrade and the three ( 3 ) year construction
period for the system rebuild. Such reports shall include
information on the progress of construction related activities,
percentage of construction completed, and the target date for
project completion.
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4. 12 Technical Standards
The cable system shall conform to the standards of FCC Rules of
paragraph 76-605 using test methods described in paragraphs
76-601 and 76-609 .
The system shall meet or exceed the following measures at any
point in the system;
(a) signal to noise ratio for the entire cable system shall be a
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minimum of 43 dB;
(b) hum modulation shall be less than one percent ( 1%) ;
(c) cross modulation shall be at least 52dB below carrier level;
(d) levels of radiation shall comply with FCC paragraph
76.605(a) ( 12) ;
(e) composite triple beat shall be at least 50dB below carrier
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(f) gain versus frequency response shall be less than 3 dB; and
(g) second order beats shall be less than 55 dB.
Visual picture quality shall be undistorted, free from ghost
images, and picture impairment due to noise, beats, hum, or cross
modulation. The picture shall be accompanied by undistorted
sound.
It is recognized that those specifications listed above may be in
excess of FCC minimums and compliance therewith is voluntary on
the part of the Grantee unless the City is legally authorized to
require such higher levels of technical performance whereupon
the higher levels of technical performance will be required by
the City. These standards shall be enforced as permitted by the
FCC and applicable law.
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When required by the level of growth in the system, the Grantee
will introduce AML microwave or a superior technology in order to
ensure that the technical standards enumerated above are met.
4. 13 System Performance Tests
System performance tests shall be conducted on an annual basis no
earlier than thirty ( 30) days prior to the review meeting
required under Section 6 . 40 . 080 of the Ordinance. The purpose of
such tests shall be to demonstrate to the satisfaction of the
city that the system is operating properly and fully complies
with the minimum technical standards of the FCC and the technical
standards of the City.
5.0 PROGRAMMING AND SERVICES
5. 1 Programming and Services
Grantee shall initially provide the programming alfa services
shown in Exhibit D. The Grantee may obtain modificaition of the
requirements for the programming and services specified if the
Grantee demonstrates that the mix, quality and level Ilf services
will be maintained after such modifications, in accordance with
the Cable Communications and Policy Act of 1984 . Additionally,
the Grantee shall offer to carry and maintain programming in the
following broad categories:
Sports Family
News Music
Movies Public Affairs
Religion Broadcast
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5.2 Non-Duplication of Programming
Other than Showtime which must be carried on two channels for
technical reasons, Grantee warrants that it will make every
possible effort to not have two channels on the system with
duplicate programming. Duplicate programming shall mean
identical programming sixteen or more hours per day, and shall
not refer to broadcast channels from different cities with the _
same network affiliation or public broadcast system affiliates .
The physical configuration of the plant shall not be considered
grounds for providing the same satellite service or the same
broadcast station on two or more channels.
5. 3 Leased Channels
The Grantee shall make channels available for leased access
consistent with federal requirements. Prior to activation of
leased channels, Viacom will develop and submit to the City a
plan for publicizing the availability of and administration of
said channels. Iii the event that. federal law is amcnacd to
eliminate or reduce the requirement for leased access channels,
the Grantee and the City will meet to evaluate the need to
continue the availability of the channels. If la need is
identified, based upon the level of usage of existing leased
channels, the Grantee shall negotiate in good faith with the City
to maintain existing leased channels.
5. 4 Service to Public Buildings
The Grantee shall provide one ( 1) free drop activated for basic
subscriber service to City offices, schools and other public
buildings in accordance with Section 6. 40. 050(I ) of the
Ordinance.
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5.5 Emergency Alert
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The Grantee shall install an emergency alert override system
within (one) 1 year of the effective date of thislAgreement.
Said system shall permit the City to interrupt and cablecast an
audio message on all channels simultaneously in the event of
disaster or public emergency.
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5.6 Free Remote Controls for the Disabled
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The Grantee shall provide permanently disabled non-ambulatory
residents with free remote controls.
6. 0 SUPPORT FOR LOCAL CABLE USAGE
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6. 1 Public Cable Usage Management
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Grantor may delegate to an independent non-profit entity, such as
a Commission, Board or nonprofit corporation the authority to
manage any resources and other considerations provided by the
Grantee and/or others, designed to promote and develop
public-benefit usage of the cable system.
6. 2 Cablecasting Equipment Facilities
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(a) The Grantee shall provide approximately 680 square feet of
space in its facility located at Eastside Drive fir use as a
public access studio, office and work area. All costs for
remodeling shall be the responsibility of the Grantee and no
rent shall be charged once the space is made available. The
Grantee will provide all utilities except telephone and
shall provide office furniture as required. The remodeled
facilities shall be completed and available for1use within
12 months of the effective date of this agreement. Until
such time as the remodeled facilities are available for use,
the Grantee shall provide work space for public access
staff. 1
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(b) The Grantee shall provide an initial capital grant
contribution of $60, 000 for public access equipment as
described in Exhibit F. Funds for the portapaA (Item C)
and editing package (Item E) shall be provided by1January 1 ,
1987. Funds for all other equipment shall be provided no
later than March 31, 1987.
(c) On March 31, 1989 and continuing every alternate year for
the duration of the franchise, the Grantee shall provide the
sum of $10, 000 or public access equipment if the access
operation has met two of the following three criteria during
the previous year:
1. Each portapack must be in use by staff or access users
at least 70% of the time it is available for use.
2. Each editing system must be in use by staff or access
users at least 70% of the time it is available for use.
3. The studio equipment must be in use at least 200 hours
per year. Tho number of hc,•rs of uoo required shall be
reduced by four (4 ) hours per week for each week that
any of the studio equipment (cameras, VCR, switchers ,
intercom, etc. ) is unusable.
(d) The Grantee shall provide an initial capital grant
contribution of $15,000 for educational access equipment as
described in Exhibit G. The funds shall be provided by
March 31 , 1987.
(e) On March 31 , 1989, the Grantee shall provide up to $10 ,000
to replace education access studio equipment that is more
than five ( 5) years old. Beginning on March 31, 1991 of the
franchise and continuing every alternate year for the
duration of the franchise, the cable operator shall provide
the sum of $5 ,000 for the replacement of education access
equipment if the access operation has met the following
criteria during the previous year.
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1. Each portapack must be in use by staff or access users
at least 35% of the time it is available fort use.
2. Each editing system must be in use by staff or access
users at least 35% of the time it is available for use.
3. The studio equipment must be in use at least 200 hours
per year. The number of hours of use requirded shall be
reduced by four (4) hours per week for each week that
any of the studio equipment (cameras, VCR, switchers ,
intercom, etc. ) is unusable.
f The Grantee shallprovide a capital contribution in the
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amount of $27,000 for the purchase of three ( 3 ) cablecasting
modules (modulator, tuner, character generator and 3/4"
videocassette recorder) . Said modules shall be provided to
City Hall, the Convention and Visitors Bureau andq the County
Schools Office by March 31, 1987 . These shall be in
addition to the cablecasting module provided at the public
access studio as per Exhibit F.
(g) The Grantee shall replace the four (4) cablecasting modules
described in (f) above with new equivalent equipment upon
request by the City after Year 7 of the franchise if the
City determines they need to be replaced.
(h) Any capital contribution provided to the City pursuant to
this Section shall not be chargeable to franchile fees, in
accordance with the provisions of the Cable Communications
Policy Act of 1984 . The City shall have the option of
providing equipment specifications to the Grantee and
requesting the Grantee to purchase the access equipment
directly. Grantee shall not order access equipment unless
the equipment list is approved in advance by the 'City.
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(i) The Grantee shall provide return lines to permit program
origination from the following locations:
County Schools Office on Magnolia Avenue 1
(return line already in place)
Public Access Studio
(return line required if studio is relocated from Viacom' s
facility)
Convention and Visitor Bureau on Auditorium Drive
City Hall on Parkview Avenue
The Grantee shall initiate construction of the return lines
from the Convention and Visitor Bureau and City Hall
immediately. Specifically, the Grantee shall develop plans
for said return lines within thirty ( 30) days of the
effective date of this Agreement, submit appiicat?.ons for
any permits and easements which may be required within the
following thirty ( 30) days and complete construction within
four ( 4) months of receipt of the required permits and
approvals. Said return lines shall be completed no later
than nine ( 9 ) months after the effective date of this
Agreement.
6. 3 Residential Network: Access Channels
(a) The existing public access channel shall be retained and
used for public, educational and governmental +cess under
the oversight of the City Council. The Council may delegate
programming responsibility to a Cable Television Committee
appointed by the Mayor or an independent non-profit entity.
(b) The Grantee shall provide a second access channel to be used
by the Convention and Visitors Bureau as soon as the return
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line from the Convention and Visitors Bureau is made
available. Said channel shall be on the channel 8.
(c) Upon completion of the system upgrade within eighteen (18)
months of franchise renewal, a third access channel shall be
provided for public, educational and governmental access
use.
(d) In the event that a system rebuild to sixty-two (62)
channels takes place, a fourth access channel shall be made
available for public, educational and governmental access
use.
The channels listed in above are under the oversight of the
Redding City Council when activated. The City Council may
delegate programming responsibility as noted.
6. 4 Institutional Network: Access Channels
The Grantee shall provide two ( 2) downstream channels and one( 1)
upstream channel on the institutional network for municipal
government use.
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6. 5 Grantee Support for Public Cable System Usage
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The Grantee shall assist the City or the entity designated to
manage public access in conducting a promotional campaign to
familiarize residents with the cable system' s access facilities.
7 . 0 REGULATION
7.1 Franchise Regulation
The franchise granted under this Agreement shall be subject to
regulation by the City in accordance with the provisions of the
Ordinance, this Agreement and applicable law.
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7. 2 Annual Financial Report Requirements
All annual financial reports submitted to the City Pursuant to
Section 6 . 40. 080(I ) of the Ordinance shall follow the format used
in Exhibit H.
8.0 SEPARABILITY
If a material provision of this Agreement is affected by any
subsequent action of the state or federal government, the City
Council shall have the right to consider said provision severed
from the franchise so as to continue the franchise' s
effectiveness or, upon written notice to the Grantee, to commence
good faith negotiations with the Grantee to agree upon a
substitute provision of the franchise that concerns the subject
matter of the original provision and complies with current state
and federal law. Should Viacom fail to negotiate in good faith,
the City may terminate the franchise pursuant to Section
6. 40 . 100(B) of the Ordinance.
9.0 HOLD HARMLESS
The Grantee on behalf of itself, its successors and assigns,
shall defend, indemnify and hold harmless the Grantor, its
officers, boards , commissions, agents and employees , and each of
them, against and from any and all claims, demands, actions,
suits, liabilities and judgements of every kind and nature and
regardless of the merits of the same, arising out of or related
to the exercise or enjoyment of the franchise granted pursuant to
this Agreement and to the Ordinance, including costs of
investigations , attorneys' fees arid court costs in the
defense of
any actions, to the extent that such claims or demands are
alleged to be the result of the error, omission, intentional act
or negligent act of Grantee or any persons employed �by Grantee,
even if that Grantee employee is in error or by misinformation by
a person alleged to be a Grantor employee.
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IN WITNESS WHEREOF, Grantor and Grantee have executed this
Agreement the date and year first above written.
APPROVED AS TO FORM: CITY OF REDDING
A Municipal Corporation
By
City Attorney Mayor
Date:
ATTEST:
City Clerk
(SEAL)
Corporate Seal By
President Date
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EXHIBIT A
LETTER FROM GERALD BROWN IDENTIFYING AREAS
NOT SERVED BY THE CABLE SYSTEM
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F
.1-, Viacom Cablevision I,- `
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. I March 1 , 1984 �'
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• qtr^/.�-.,..•T _
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L- CATV Committee Members
CITY OF REDDING
760 Parkview Avenue
Redding, CA 96001
Re: Areas Not Served by Cable
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i# . Dear Committee Members:
II would like to respond to Janice Maurer ' s letter
_ to the CATV Committee dated February 17 , 1984 . I am
e
enclosing Jan ' s letter of February 24th and my letter of
February 28th, so that the committee can better understan
;.,_ • the issue.
i ; My letter to the City of Redding' s CATV Committee
a? dated June 1 , 1982 is also enclosed. The formula stays •
;t the same but the franchise-wide ratio changes from year
to Nlear as t-he _ost of conctruct.i=-- : :.c_3asc s.
The formula is as follows :
Cost of project
' Number of customers franchise-wide ratio (160. 00) = constructi.
cost ter
cus=mer
The following shows the calculation as to those areas
described in Jan ' s letter dated February 17 , 1984 .
A
College •View Dr. $12 , 400 = 827 - 160 = • $667 . 00
• 15
1.
• Palisades Ave. $25 , 000 = 1136 - 160 = . $976 . 00
{' • 22
• Branstetter Lane $29 , 400 = 516 - 160 = •
$356 . 00
57
Airport Area $47 , 500 = 380 - 160 = • $220 . 00
125 ,
Lawrence Road $3 ,800 = 760 - 160 = $600. 00
5 ,.
22
. .
411
CATV Committee -2- •rch 1 , 1984
; :1 North Enterprise $14 ,700 = 507 - 160 = $347 . 00
29
Buckeye $13 ,600 = 486 - 160 = $326 . 00
28
Cascade Blvd. $10 , 170
= - 160 = $1 , 111 . 00
:1
Sincerely,
Gera 'd rown l
Ge eral Manager
GLB:bfl •
cc: Jan Maurer
7
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1
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23
• •
EXHIBIT B
CONSTRUCTION AND SERVICE SCHEDULE
24
• •
CONSTRUCTION AND SERVICE SCHEDULE
Within 18 months of the effective date of this Agreement, the
Grantee shall upgrade the system to a minimum of 35 programmable
video channels and activate all 35 channels.
The City may, upon the fourth, eight and twelfth anniversary of
the effective date of this Agreement, direct the 1Grantee to
rebuild the system to 62 channels within a 3 year period, if any
of the following conditions are met:
1. If the average channel capacity in comparable systems is 40
channels or more as identified in Cable File pCblished by
International Thomson Communications Inc. , 600 Grant Street,
Denver, Colorado, for years 1990 , 1994, and 1998.
2. If the majority of comparable systems provide a service or
type of service desired by the City upon motion of the City
Council which cannot be provided in Redding as a result of
technical limitations other than channel availability. Inab
this case, the rebuild shall incorporate the capility for
this service. In the event the system can be modified to
provide the desired system service without loss of cable
television service channels or existing services, then
Grantee may modify the system within ten months of the
effective date of the anniversary of this agreement to
provide the additicnal desired service without rebuilding
the system. If the condition 2 occurs in conjunction with
either conditions 1 or 3 occurring, then theladditional
desired service shall be incorporated into the rebuild.
3. If the average number of activated channels in the
comparable systems exceed the number of activated channels
being provided in Redding by Grantee, including any public,
educational, or governmental channels, but not including any
institutional network channels provided than if the
technology exists in the future for Grantee to add
additional activated channels, then Grantee may have the
option to match the average number of activated channels in
the comparable systems within ten months of the effective
date of the anniversary of this agreement providing the
minimum technical standards are met for the system.
As used in this agreement, the comparable systems shall be
determined by the following criteria:
1. The system is listed in Cable File.
•
2. The system is in Arbitron Television' s Areas cif Dominant
Influence (ADI ) bracket of ±50 on either! side of
Chico/Redding market for the year of the review as published
in a Cable Industry Trade Publication for 1990, 1994 , and
1998.
25•
•
3. The principal city served by the system has a population of
±25,000 of that shown for Redding by the U.S. Census. The
most recently published U. S. census data will be used for
each review.
4. The system has ±.15,000 of the homes passed in the Grantee
system serving Redding and adjoining areas.
5. That for the purpose of comparable review, there1will be 35
cities selected with Redding selecting eighteen and the
Grantee selecting seventeen.
6. Comparable cities for each review will be selected from the
list in Exhibit B( 1) that meet the ADI , homes passed, and
population criteria set forth herein.
7. For purposes of the review, the Grantee system serving
Redding, Anderson, and Shasta County is treated as a single
system for comparative purposes to published information in
Cable File or an equivalent publication.
8. Other systems owned or operated by Grantee shall not be used
for comparative responses.
The 62 channel system shall be capable of bidirectional service.
However, the system need not be two-way active initially unless
two way service is required to fulfill the condition set forth
above.
Upon rebuild of the system to 62 channels, the number of Cable
Television channels shall be no less than the average number of
channels in comparable cities based on a review every two years
after the capacity expansion. Grantee shall add d additional
channels as necessary to equal the average within six months of
the effective date of the anniversary of this agreement.
The burden of proof shall be upon the Grantee to demonstrate that
a rebuild required by the City, under the terms of this Agreement
would not be feasible. In the absence of such proof , the City
may find that a material breach of the franchise will occur if
the Grantee refuses to expand the system capacity aVccordingly.
Feasibility shall be based upon the financial condition of the
cable system in Redding as determined by annuals financial
statements for elapsed years of the franchise as required by
Exhibit H and financial projections for the remaining years of
the franchise, equipment being available to construct 62 or
greater channel cable system, and whether or not it is
commercially impracticable. Such information must be submitted
within thirty ( 30) days of the City' s notification that a rebuild
is required unless an extension of time is granted by the City.
26
• •
In the event that the Grantee exercises its options under this
provision, the construction schedule set forth in Section 4. 5 of
this Agreement shall commence upon final action by the City
Council on this matter rather than the City' s notification to the
Grantee that a rebuild is required.
For purposes of this Agreement, comparable systems , regardless of
ownership of the systems, shall be used to compute an average of
the following for comparison to Redding:
1. Total channel capacity
2. System features including but not limited to pay-per view,
two-way capability, addressable, leased channels,
interconnect, etc.
3. Activated channels carrying Cable Television Service
27
.
1
• 0
,
EXHIBIT 81
Comparable Cities
1986 1986 4986
1980 ADI Homes Channel
Population Rating Passed Capacity
Alabama
Gadsen 47,565 193 19,00054
Decatur 42,002 89 15,300 21
Dothan 48,750 160 16,500 I 22
Florence 37,029 89 30,000 21
Anniston 29,523 193 31,425 30
Arizona
Yuma 42,433 182 29,900 35
Arkansas
Fort Smith 71,384 149 35,727 54
El Dorado 26,685 114 11 ,480 21
California
Palm Springs 32,271 183 28,957 22
Redding 41,955 140 33,400 26
Chico 26,601 140 36,000 30
Eureka 24,153 184 24,147 40
Salinas 80,479 110 -- 35
Monterey 27,558 110 80,000 35
San Luis Obispo 34,252 113 11 ,462 35
Santa Barbara 74,542 113 72,210 35
Santa Maria 39,685 113 25,000 31
Visalia 49,724 64 27,000 35
Santa Cruz 41 ,483 110 48,000 35
Hillcrest Center 30,000 148 -- --
Colorado
Grand Junction 28,144 177 35,000 24
Florida
Panama City 33,346 175 22,500 23
Gainesville 81 ,371 174 51,967 12
Pensacola 57,619 57 7,600 30
Fort Myers 36,638 107 50,000 25
Ocala 37,170 174 30,000 36
Tallahassee 81 ,548 130 -- --
Fort Pierce 33,802 -- 27,305 35
Sarasota 48,868 157 75,896 30 •
Georgia
Augusta 47,532 105 70,000 20
Valosta 37,596 130 18,000 21
Albany 73,934 150 74,268 21.
Warner Robbins 39,893 132 21,500 36
28
• 0
1986 1986 1986
1980 ADI Homes Channel
Population Rating Passed Capacity
Idaho
Idaho Falls 39,950 159 24,450 36
Pocatello 46,340 159 19,480 54
Twin Falls 26,209 202 15,983 24
Illinois
Freeport 26,406 112 13,422 64
Rock Island 47,036 74 27,000 28
Quincy 42,352 152 21,000 53
Champaign 58,133 69 44,200 35
Danville 38,985 69 17,000 35
Moline 45,709 74 82,169 28
Bloomington 44,189 100 31,500 22
Indiana
Lafayette 43,011 191 38,000 54
Kokomo 47,808 23 28,000 23
Anderson 64,695 23 32,300 30
Terre Haute 61,125 131 34,000 40
New Albany 37,103 49 15,200 30
Mishawaka 40,224 84 125,000 30
Elkhart 41 ,305 84 18,454 30
Iowa
Sioux City 82,003 129 30,799 35
Council Bluffs 56,449 70 22,300 35
Mason City 30,144 142 14,750 22
Dubuque 62,321 73 32,2.00 35
Waterloo 75,985 73 38,500 j 35
Iowa City 50,508 73 26,000 35
Ottumwa 27,381 204 11 ,832 18
Burlington 29,529 74 14,750 35
Kentucky
Paducah 29,315 75 -- --
Bowling Green 40,050 196 20,210 35
Owensburo 54,450 88 27,000 29
Frankfort 25,973 77 13,000 25
Louisania
Alexandria 51 ,565 163 34,700 35
Monroe 57,597 114 6,000 36
Lake Charles 75,051 171 30,000 15
Lafayette 81,961 111 49,000 25
Maine
Bangor 31 ,643 153 31,000 21
Lewiston 40,481 76 25,000 30
Portland 61 ,572 76 45,600 38
29
I •
1986 1986 1986
1980 ADI Homes Channel
Population Rating Passed Capacity
Maryland
Hagerstown 34,132 194 22,000 50
Cumberland 25,933 -- 26,400 20
Massachusetts
Holyoke 44,687 103 60,090 30
Chicopee 55,112 103 22,500 35
Michigan
Jackson 39,739 100 19,300 21
Bay City 41 ,593 54 52,000 32
Midland 37,250 54 17,500 36
Muskegon 40,823 41 47,143 30
Minnesotta
Rochester 57,608 142 28,531 54
Winona 25,075 127 10,712 28
Austin 23,020 142 8,442 25
Moorhead 29,998 102 10,581 27
Mankato 28,651 209 15,700 21
Mississippi
Coiumous 27,303 135 12,000 35
Meridian 46,577 174 19,635 35
Hattiesburg 40,829 164 25,000 26
Biloxi 49,311 180 31,000 35
Pascagoula 29,318 180 24,000 32
Greenville 40,613 168 16,500 30
Gulfpost 39,676 180 17,100 35
Vicksburg 25,434 85 12,956 35
Missouri
Joplin 38,893 119 21 ,472 35
Columbia 62,061 137 3,500 56
Cape Girardeau 34,361 75 12,500 30
Jefferson City 33,619 137 14,470 26
St. Joseph 76,691 188 31 ,000 33
Fort Leonard Wood 21,262 83 -- 35
Montana
Great Falls 56,725 178 25,000 24
Butte 37,205 189 15,181 12
Billings 66,788 165 30,000 24
Missoula 33,388 176 19,000 28
Nebraska
Grand Island 33,180 90 1,200 j 35
Nevada
Carson City 32,022 125 34,000 16
Sparks 40,780 125 -- --
30 1
• •
1986 1986 1986
1980 ADI Homes Channel
Population Rating Passed Capacity
New Mexico
Clovis 31 ,194 118 14,500 36
Hobbs 28,794 181 16,000 36
Roswell 39,676 181 16,014 21
Las Cruces 45,086 104 26,750 35
New York
Utica 75,632 158 59,000 36
Binghamton 55,860 134 71,000 36
Elmira 35,327 167 27,000 21
Watertown 27,861 169 15,500 30
North Carolina
Rocky Mount 41 ,283 389 22,102 31
Wilmington 44,000 151 47,000 35
Greenville 35,740 97 23,000 30
North Dakota
Minot 32,843 146 12,000 27
Grand Forks 43,765 102 18,000 36
Fargo 61,300 102 26,000 36
Bismark 44,485 146 23,000 35
Ohio
Lima 47,381 195 31,628 36
Springfield 72,563 48 37,335 42
Zanesville 28,655 201 22,531 36
Findley 35,594 65 18,600 54
Oklahoma
Lawton 80,054 126 31,000 35
Enid 50,363 36 23,180 36
Oregon
Medford 39,603 156 40,460 24
Pennsylvania
Altoona 57,078 81 35,120 35
Williamsport 33,401 58 28,230 30
Johnstown 35,496 81 33,475 13
South Carolina
Florence 30,062 145 18,000 35
Anderson 27,313 37 1,500 36
Sumter 24,890 87 12,000 36
Columbia 99,296 87 69,223 30
31
• •
1986 1986 1986
1980 ADT Homes Channel
Population Rating Passed Capacity
South Dakota
Sioux Falls 81,343 95 34,750 30
Rapid City 46,492 161 19,000 36
Aberdeen 25,956 95 10,643 35
Tennessee
Jackson 49,131 190 23,189 21
Johnson City 39,753 86 13,581 30
Texas
Odessa 90,027 144 40,000 54
Midland 70,525 144 39,337 54
Abilene 98,315 155 17,128 31
San Angelo 73,240 192 31,250 30
Laredo 91,449 199 30,000 35
Tyler 70,508 154 35,474 28
Longview 62,762 154 28,015 36
Post Arthur 61 ,195 122 27,000 28
Victoria 50,695 207 22,000 36
Wichita Falls 94,201 126 41 ,000 35
Brownsville 84,997 117 26,061 35
Texarkana 31,271 53 28,000 30
Temple 42,433 94 25,375 36
Bryan 44,337 94 17,965 26
Killeen 46,296 94 36,594 36
San Marcos 23,420 94 9,572 20
Vermont
Burlington 37,712 98 23,000 14
Virginia
Charlottesville 45,010 197 22,500 30
Lynchburg 66,743 72 27,000 22
Danville 45,642 72 27,500 22
Washington
Richland 33,826 123 13,441 13
Yakima 49,826 123 20,000 36
Bellingham 45,794 13 23,000 36
Kennewick 34,397 123 32,611 25
Pullman 23,579 78 6,900 23
West Virginia
Charleston 63,968 43 40,650 23
Huntington 63,684 43 36,000 25
Parkersburg 39,967 - 198 19,208 14
Wheeling 43,070 124 24,000 26
Clarksberg 22,371 162 15,000 19
Morgantown 27,605 162 14,315 12
32
•
•
1986 1986 1 1986
1980 ADI Homes ; Channel
Population Rating Passed Capacity
Wisconsin
Superior 29,571 120 -- 1 --
Wausau 32,426 128 17,648 30
Green .Bay 87,899 68 32,500 36
Fond du Lac 35,863 68 17,301 35
Janesville 51 ,071 112 30,827 23
La Cross 48,347 127 21 ,000 36
Eau Claire 51 ,509 127 28,600 30
Appleton 59,032 68 32,800 30
Oskosh 49,678 68 19,454 35
Wyoming
Caspar 51,016 185 29,000 21
Cheyenne 47,283 202 26,464 36
'II
33
i •
SOURCES:
Population: 1985 Cable and Station Coverage Atlas and Zone Maps,
Television Digest Inc. , 1836 Jefferson Place, N.W.
Washington D. C. 20036
Area of Dominant Influence Rating: Broadcasting Cablecasting Year Book
1986, Broadcasting Publications Inc. , 1735 De Sales Street
N. W. Washington D. C. 20036
Homes Passed and Current Channel Capacity: North American Cable File/1986,
Internation Thorson Communication Inc. , 600 Grant Street,
Denver, Colorado 80203
II
34
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EXHIBIT C
LETTER FROM KENT RASMUSSEN RELATED TO THE PROVISION
OF INSTITUTIONAL SERVICES
3
k i ,
. t
...,...,....„.:,'
•om rs'
. ,. ,„ _.,
4t:
i.. „iacom ale — �_
TO: LYNN YAEGER CC:
•
FROM: Kent Rasmussen
i
DATE: January 3, 1906
SUBJ. Institutional Services
The ten year pro-forma prepared September 5, 1905 by Jim Hill identified ET
institutional loop which was estimated to cost $06,000. The pro-forr..:
stipulated $45,000 in 1906, $31 ,000 in 1907 and $10,000 in 1980. Thereafter,
there is a provision of $10,000 per year through the year 199511
On the attached map please note the two phases this would inyolved. Phase
(outlined in red) is the downtown loop starting from the mall and ending a=
the Viacom headend. It is approximately 5 miles and the estimated cost t_
$33,000.
Phase II (outlined in green) would extend from the hilltop area and hook up
the mall cable. It would be approximately 6 miles and the estimated cos:
would be $41 ,700. While we have budgeted for Phase II in the pro-forma,
will be built as market conditions warrant.
The additional $10,000 '; fcr yet unidentified areas which may have mark-z-:
demand for these services in 1903 and the future.
Summary
Phase I - Downtown $33,000
Phase II - Hilltop 41 ,700
Unidentified 10,000
$85,500
The institutional loop will be a mid-split configuration and comparable to
subscriber network in total channel capacity. It will be fully interacts :
and capable of carrying the following types of transmission:
o high speed computer data (point-to-point and point-to-multipoint)
i � a
o low speed computer data (point-to-point and point-to-multipoint)
o audio (including voice)
o video (including teleconferencing and the ability to interface witl
the subscriber network)
Our national New Business Development Department will survey the business
community and institutions on a periodic basis to determine th -
telecornmunications needs. As these needs develop, the institutional lc':o
designed will be capable of meeting them.
30
I
1 • . H
EXHIBIT D
PROGRAMMING AND SERVICES
37
411 110
PROGRAMMING AND SERVICES
March 1, 1986
Channel
2 KTVU Oakland
3 Showtime
4 KRON San Francisco
5 KPIX San Francisco
6 Movie Channel
7 KRCR Redding
8 KGO San Francisco
• 9 KIXE Redding
10 KTXL Sacramento
11 KHBK San Francisco
12 KHSL Chico
13 Disney
14 MTV
15 Weather Channel
16 Showtime
17 ESPN
18 CNN
19 Lifetime
20 USA
21 CBN
22 KCPM Chico
23 Public Access
24
25 C-Span
26 Community Service
33
•
EXHIBIT E
INITIAL RATES AND CHARGES
39
ft
II
�, •
PRESENT PRICING AND PACKAGING
BASIC
/
�'ADDL. SERVICE PAY PACKAGE A-LA-CARTE
MONTHLY RATE
RATE 9.00
Primary Outlet 9.00
Extra Outlet (ea. ) 2.00
FM Outlet (ea. )
* Remote
* 5.00
Showtime
10.95
The Movie Channel
10.95
Disney Channel
10.95 .50
Parental Control Device (ea. )
tiultivision I - Showtime-TMC-Disney
19.90
tt
ultivision II - Showtime-Disney-genote 19.90
Multivision III - TMC-Disney-Remote
19.90 25.85
Ul travision - Showtime-T11C-Di sney-genote
1 .00 when taken with any a-la-carte pay
*genote controls are discounted $
service.
**Second remote half the a-la-carte price.
40
INSTALLATIOt DMINISTRATIVE AND START-UP S
.i�
New Install Primary Outlet 25.00
Reconnect Primary Outlet 15.0015.00
Reconnect (2 or more outlets)
Additional Outlets 0
Install TV or FM Outlets
15.0
Relocation 10.00
At time of other service 15,00
Relocation only
Chan a TV to Ft1 or Fhi to TV 15.00
Just to change service 5.00
Done at time of other service work
Service calls
No charge - unless troubled caused 15.00
5y customer
Install Basic & fultivision I 19.9519.95
Install Basic & Multivision II .9 5
199 .95
Install Basic & Multivision III 1
Install Basic & Ultravision 5. 5
Install parental control device (ea. )
0
UPGRADES - ADMINISTRATIVE/START-UP COST
95.
Upgrade - Any single pay 12 2.95
Upgrade - Any dual pay 9.6.95
Upgrade - Triple pay
Second outlet for pay services will be $5.00 per serviceper month.
Second pay service for programming must be the same as your first pay
serviceOutlets if
There is not start up or administrative fee on additional pay
not delivered or if done at the time other work is being done.
i' A copy of our service agreementis attached as Exhibit F..
41
•
„ •
EXHIBIT F
PUBLIC ACCESS EQUIPMENT
42
• •
•
PUBLIC ACCESS EQUIPMENT
Capital Expenses
A. Portable studio production package -
Sony SEG 2000A seg/video switcher w/2
industrial color cameras , 2 studio
viewfinders, 2 tripods , 2 dollys, 4
intercoms , 50 meters of camera cable and
a 3/4" video player/recorder. $ 20,000
B. Audio package - mixer, 4 lavalters, 4
635 A' s , 4 mic stands, audio cable and
an audio cassette machine. 1,400
C. Porta-pak (VHS) and camera package - with
4 batteries and one tripod 3, 000
D. Lighting package - 4 instruments with
stand. , barndcors, etc. 1, 200
E. Editing package - 1 VHS to 3/4" editing
system with edit controller and color
monitors 10, 000
F. Production Vehicle (van or station wagon) 15, 000
G. Cablecasting module (modulator, tuner
character generator and 3/4" player 9, 000
H. Parts 400
CAPITAL TOTAL: $ 60, 000
43
I
• •
I
i
EXHIBIT G
EDUCATIONAL ACCESS EQUIPMENT
44
' • •
Educational Access Equipment
Educational Access
Capital Expenses
A. One 3/4" to 3/4" editing system with edit
controller and color monitors $14, 000
B. Telephone call-in interface 1 ,000
TOTAL $15, 000
45
• •
EXHIBIT H
1984 FINANCIAL STATEMENT
FOR REDDING CABLE SYSTEM
46
! ' ';, ' ••• ' t• r' i—./4: .:1. .
e
viAccy CA3L.'/!S1O
-
CITY of RENINS, CALIFORNIA
.
•
ANNUAL FINANCIAL SIAT_N:NT j .
19c,4 •
• April, 15E5
•
•
t
�};
. • • .
• ,� CITY OF REDDtN6 .
e °
. •
, . i
NOTES TO FINANCIAL S1AIECENT - 1924
•
•
DISCUSSION CF CHANGES IN ACCOUNTING PRACTICES FROA 1523 TG 152;
•
The attached financial statesents mere developed using accounting oethods lost rece7.tly recti=E.'.:?,1 ;ad a l=
by V1r;COA's Certified Public Accountants, Coopers and Lybrand. The consistent ',use c; these re:C:seceati=.ns c-
Divisi.nal basis has been adopted to cenfors with practices that would stand such tests cF a ::omit; re:crt.
such other auditing procedures as considered necessary in the circcsstances to assure c,::::eo:e sit1 CzZers_ .
accepted accounting principles.
•
ACCOUNTING TREATrEXT CHANGES:
II
INCGr.E:
Total incce for the f.ranchisp area adds the vffi.:! cf pad 1c*P '- • o,d ri.ht RF_ov?r. ;-e cLc
"
shown as a redoctiu,i to incCna. 13Z; nen
and Adair istrative' where they afe c1acsifie: in the Divisional Chat C: A:counts.
This change in accounting treataent nets to :ero on the °Dteratinc Ircc=a° line.
FRANCHISE TAI_S:
•
1584 Franchise Fees paid to the City cf Fieding includes the perticr of fees c-. pa; rer,,:as fCr the
prier period of ttarch, 1919 through Ceceater, 193'. This retract:•.e P..:se:•t `ad a1 ei:e;t c=
overstating what mould narsally to an efie:tine rate of 31 :n 'Sroc° s.,:;;criter
in calendar year 19x4 as a one-tier adju tee. t.
BAD DEBT AND BAD DEBT RECD1•ER!ES:
General and Adxinistrative Expense has been rercdi to reflect tri i .:cls:or. ci Cet:
tett Recoveries now classified a:1 accc:rtei for 1n this s:'r:e: of ir.ccInts.
•
This char.;? in accounting treita=r.t rets to :iro c^ the °u�c•ro°ir` 1.•... =` lure.
•
•
48
{
lye.prociation/Au ort' �n recorded for the franchise has been r ;,, to include the full effect
• of asset layering, ntly analyzed and revalued for each Divt al entity. These studies Pae
been essential to establish prior adjusteents to asset balances and deprecietien and to assure tee
accuracy of periodic charges of depreciation, by class and year of acquisition, in the future. le
addition, identifi:aticn of classes of assets by year of capitatizeties- provides the aeans for -
reeoval free 'active' status when fully depreciated.
Included in the account structure for 1934 cn the books of each systee is Capitalized Interest,
previously reflected at the Divisional level. This asset account is the eueulative assessee,t c
interest to each entity, based on the net increase in Capital Additions since 1330. The assess:eee
of interest reflects Ccrporate charges to the Division for debt finan;ieg nee capitalizations
irrespective of a systee's operational profit or loss. The life of Cepitalizeo Interest is ter yee s,
• asortizsd on t straight-line basis for this period.
the effect of this changp° in accounting treateent has been to reinstate stiveral items as 'active ;;sets'
previously recorded as fully depreciated and to establish the asset accent 'Capitalized Interese%
INTEREST CNAkSES:
As in tb: case of Capitalized Interest, interest charges have been give *fere treatcent Li vis:wily
and becant effective for each entity in 1454. Corporate interest charges have been deterainei
the annual interest for Corporate debt applied to F'are,t Coepa;y lr,vesteent. .
•
The effect of this change has been to reflect the application of interestIcharges a_sessed by tee :erpeeat
uniforaly for the Division on the basis recon ended by our Certified Public Accc.nta-t;.
C C:,•.3: E:- c54PDcA E :cc TA:ES:
Ccabined taxes for each entity is derivei by using the Corporate effective tan- rate epclied te:hist
earnings before taxes. This treatoent rats the favorable effects of ICs ffas, other tan, hese;nee are:
the effect of less profitable corporate operations cor.tributins .tc a red-Ad overall ta; rate.
The issue of tax treatvent has been a ;atter of concern in previous press tatiees to City Staff
the Cable Advisory Cossittee. Again, the 1454 accoentieg tree:tent is asla reeu!t of reAly estze-...seed
criteria recoraene4 by our Certified Public Accounts and edepted for enifore tiv-isienal aprlica:..
in the current and for future accounting periods.
it
•
%
•
•
•
49
. � ; nAXCN1Si^AREA - CITY OF REDDIY6
• . 1i°4 ACTUAL
ACTUAt..
1r.CC.1E STATEr0T3 Dollars in 000'11 -1984-
-1-
• • Franchise Incoae °
• Basic Revenue • 1,945.2
- . Pay Revenue 640.0
• Advertising Revenue
Other Operating Incoae 147.7
Total Inca• 2,732.9
Variable Expense i - -
Product Costs 222.6
francbiss Tax 167.3
Copyright • 46.3
Billing Cott and Other ; 10?.9
Total Variable Expense 546.1
Net Incise • 2,IE6.8
•
• Operating Eipense
Plant Expense 496.2
Benet-al and Adsin. Expense 647.3
Marketing Expense 5 .7
Pr;y; ,..=:;ii 3.4
Other
Total Operating Expense 1,246.6
• Operating Incoae •
90,2
•
Tie?reciatloniAacrtization 32:.5
Interest Expense, (net) • ' 55.5
Earnings Peforx Taxes
Ceatirid Taxes Applicable to Franchise E9T :le.t
After Tax Earnings • 02.1
?ata of 6clurn on Net ,lsszts I••�1:
Rata of Return en Parent Co. Equity
9 'estated; railr to 'Notes to Fi:anc:al tate.Aent°
50 .
• :x r. .'� ��=:; , FRAnCNISE AREA - CITY or REDDIN6
• • 1784 ACTUAL
,,, ACTA
EALLNCE SHEET Dollars in ODO's) •
•
Grrent Assets: ' -S-
Cash • 0.0
Accounts Rec,ivable 105.6
ether Current Assets 9.1
- Total Current Assets 115.7
Depretiable and Other Assets:
Land - 55.1
• Building: 410.2
leasahold Isprcreoects 22.4
Cable Talrvisicn 5ystees - (Plant) 2,051.5
CcnvertersI.escrasblera!?lulticcders 530.9
Equipeent a Other 194.0 •
Inventory 107.0 .
Construction-in-Progress
Capitalized Interest 263.5
• ;inundated Cepreciatioa/Aeortizaticn (9224..) •
TDta1 Net Property, Plant h Equipeent - es loot;) 3,2.5;;.5
11Ti1 ASSETS • 3,379.;
Current liabilities • 193.3
ICTAL LIA.311.111ES 193.3
Ptreat Cos?any lnrestaent 3,125.3
•
101:,: LIAB1LI11E3 AND E?UIJY
4+ INet e) Assets ref'.?ct2d are franchise direct ani allocated Cenral tedc r 'balarces at Cc e: ar
• Year end. In the interest of providing a clear a:..:t trail within systel level 622;5, c:isses ci
fully de!,reciat-d assets »i:1 ccrr2spondicq dzpreciatio:., eAistirq else..--ere on D:fisic,al
and NOT included. Ohne assets hl !- a :oro effect an NEI beck talar.cet.1
Prs_aled; refer to 'Rotes to financial State:ea!'
51
° -
• VJAIUM C13LEV1
SJO)i
. . .
. -.1. OFRANCNISE AREA – CITY OF
REDDIHS 19a1 ACTUAL
IP.
nJ Tu„L
•••
MAT I:DT Cf Cr1APSE3 (Dollars in 000°s) -1431–
AFPtICATIO)i OF FUNDS USED: ti-
• ' (974348.2
`�
Expenditures for Capital Assets – 514.6
Clncr;)/Dxr. is lnrentcry and C.I.P. {'
I625.8). f,
Sub–total
SOURCE DF FUNDS PROVIDED:
402.1
After Tax Earnings !'.
Add !teas not affecting funds: 323.5
(Dcpreciaticr�/Aaortization)
725.6
Sub–total .
•
INCREASE/INCREASE) IN HET OORC1N6 CAPITAL 59.e
1;
F
•
Changes is Cocponents .
of l:orking Capital: .
114.b
Intarcoaoanr Balance .
Accounts Receivable 1 12.2.6 9
Other Current Assets X3.0
Current L;abi,jti,
INCREASE/INCREASE) IN HET UCF►'l'tS Ci,"r1 ice: -------
.
a
. I
• .
52
• VIACOA CAILEVISIDY r Sueplefental Schedule
..'7 FTANCN)SE AREA - CITY CF REDDIN6 \ to Inca,!, Stateliest
•• r1991 and 1481 ACTUAL
ACTUAL
INTEREST, HD ALLOCATIONS AND EFFECTIVE TAX RATES: -19E4-
(Dollars in•000's) . '
INTEREST CONFUTATION: (5ross and Het)
Cost of Corporate Debt 11) 11.701
•
Corp. Debt to Debt F Equity (11 56.30.
Financing Basis:
Average Parent Conpany lnvestaent 3,06.0
Interest Assessed 199.0
Less Interest Capitalized 101.5
GET IXTEREST C R&EABLE TO IY.CC"E 96.5 .
•
1..EA;9L'ARTERS AND CORPORATE DYERNEAD ALLOCMT1CN:
Allocation/Avg. Basic Sub./Year $22.59
Avera:t Di*i: Subscribers IL.;1i
ALLOCATION TO INCLUDE IX 6 1 A EXPENSE (Dollars in OOC's) 3E5.2
CDRSINED EFFECTIVE TAX RATE:
• Corporate E31 (Dollars •in Millions) 37,532.0
Corporate Provision for Taxes (Dollars in Millions) E,55S.0
Ccubined Tax Rate 22.10.
EDT for the Franchise (Dollars in 000's) 520.2
Effective St. b F;d. Taxes (Dollars in 000's) 11°.I
•
53
• • ' ' 7 0
. ' • . •,
s r • '•"
•
VIACOM CABLE DIVISION
• . p' • FINER LIVING SYSTEM
• CITY OF REDOING - FRANCHISE FEE CALCULATION - FIRST WATER, 19C5
The Franchise Fee basis for the City of Redding is 'Gross Subscriber Revenue frc,: ',all s_ur:Ei.
Accordingly, the revenue accounts noted belca reflect first quarter :955 in;c,se, net cf Cs! 4cntr for
the franchise. The franchise fee basis excludes the first $15 connect fee for sar!. neo sbscriier.
Account Description Ouarter!y I;evenues
REVENUES: - 1 -
300100 Basic Revenue 501,9E5.01
• - i..101100- • • Shoatiae Revenue 152,401.83
301107. The Movie Channel Revenue 2,336.31
• 301121 Disney Revenue :1473.39
306100 Remote Revenue 15,109 02
308110 Basic Installation Revenue 3,891.55
• 308115 Pay Installation Revenue 7,443.70
308120 Reconnect Revenue 16,6;2.10
308130 Relocate Revenue 521.35
Total Basic, Pay and Other Income 7031053.96
BAD DEBTS/RECOVERIES:
J0100 p3cir Bad Debt icy ) .11f;6.49�
580200 Pay Bad Debt Expense4,394.92
580300 . Bad Debt Recoveries (2,267.921
Net Bad Debts • 6,216.42
TOTAL REVENUES: $t,9e,B31.54
Less: Nen connect allowance (153 neo subs @ $15.!;6) (2,295.00)
• NET BASIS FOR FRANCHISE FEES: 6941,542.5¢
FRANCHISE FEE RATE: • • 3.007.
FIRST WARIER 1985, FRANCHISE FEES: S20936.2.6
s
•
54