§ 1-5-104. Grant of franchise.

(a)

Grant.

(1)

In the event that county shall grant to the grantee a nonexclusive franchise to construct, operate, and maintain a cable communications system within the county, said franchise shall constitute both a right and an obligation to provide the services of a cable communications system as regulated by the provisions of this article and the franchise.

(2)

The franchise shall be granted under the terms and conditions contained herein, consistent with applicable statutory requirements. In the event of conflict between the terms and conditions of this article, the franchise, or applicable statutory requirements, statutory requirements shall control. In the event of conflict between this article and franchise, franchise shall prevail.

(3)

Any franchise granted by the county is hereby made subject to the generally applicable ordinance provisions now in effect and hereafter made effective, not inconsistent with the franchise agreement. Nothing in the franchise shall be deemed to waive the requirements of the various codes and ordinances of the county regarding permits, fees to be paid, or manner of construction.

(b)

Franchise area. The franchise area shall be the entire county, or portions thereof, as defined in the franchise agreement.

(c)

Use of grantee facilities. No cable transmission poles shall be erected by the grantee without prior approval of the county with regard to location, height, type and any other pertinent aspect. However, no location of any pole of the grantee shall be a vested right and such poles shall be removed or modified by the grantee at its own expense whenever the county determines that the public convenience would be enhanced thereby. Grantee shall utilize existing poles and conduits, where possible.

(d)

Franchise required. It shall be unlawful to operate a cable communications system without a Franchise. Violation of this section shall constitute a misdemeanor and shall be punishable by a fine not to exceed fifty dollars ($50.00) or by imprisonment not to exceed thirty (30) days, or both fine and imprisonment. Each day's violation shall constitute a separate and distinct offense.

(e)

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

(f)

Franchise nonexclusive. Any franchise granted pursuant to this article shall be nonexclusive. The county specifically reserves the right to (1) grant at any time such additional franchises for a cable communication system as it deems appropriate, and/or (2) build, operate, and own such cable community system or systems as it deems appropriate.

(g)

Time is of the essence to this article. Whenever the franchise agreement shall set forth any time for an act to be performed by or on behalf of the grantee, such time shall be deemed of the essence and any failure of the grantee to perform within the time allotted shall be sufficient grounds for the county to invoke an appropriate penalty including revocation of the franchise, subject to the provisions of subsection 1-5-104(m) hereunder.

(h)

Law governing. In any controversy or dispute under this article, the laws of the State of North Carolina shall apply.

(i)

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

(j)

Transfer of ownership or control.

(1)

Transfer of franchise. Any franchise granted hereunder shall not be sold, transferred, leased, assigned, or disposed of, including but not limited to, transfer by force of voluntary sale, merger, consolidation, receivership or other means, nor shall the control of the grantee be changed, without the prior consent of the county, and then only under such reasonable conditions as the county may establish in accordance with this article. Consent shall not be unreasonably withheld.

(2)

The county has one hundred twenty (120) days to act upon any request for approval of such sale or transfer that contains or is accompanied by such information as is required in accordance with FCC regulations and by the county. If the county fails to render a final decision on the request within one hundred twenty (120) days, such request shall be deemed granted unless the requesting party and the county agree to an extension of time.

(3)

The grantee shall promptly notify the county of any actual or proposed change in, or transfer of, or acquisition by any other party of, control of the grantee. The word "control" as used herein is not limited to major stockholders but includes actual working control in whatever manner exercised. A franchise will be considered to be transferred based on parameters defined in the franchise agreement.

(4)

If the grantee decides to sell, transfer, lease, assign, or dispose of the franchise by any means or method or change the control of the grantee, it shall first give written notice to the county of the proposed change, transfer or acquisition, including the name and address of the prospective transferee or controlling party and shall furnish such additional information as the county may reasonably request regarding the legal, financial, character and technical qualifications of such party.

(5)

Grantee shall have no right to change the control of grantee, or sell, transfer, lease, assign, or dispose of the system by any means unless and until the county shall have consented thereto, which consent will not be unreasonably withheld. For the purpose of determining whether it shall consent to such change, transfer, or acquisition of control, the county may inquire into the legal, financial, technical, and character qualifications of the prospective controlling party or owner of the system, and the grantee shall assist the county in any such inquiry. Failure to provide all information requested by the county as a part of said inquiry shall be grounds for denial of the proposed change, transfer, or acquisition of control.

(6)

Assumption of control. No consent of the county shall be required for the grantee to hypothecate or pledge the franchise for the purpose of obtaining financing. However, the county agrees that any financial institution having a pledge of the franchise or its assets for the advancement of money for the construction and/or operation of the franchise shall have the right to notify the county that it or its designees satisfactory to the county will take control and operate the cable television system. Further, said financial institution shall also submit a plan for such operation that will insure continued service and compliance with all franchise obligations during the term the financial institution exercises control over the system. The financial institution shall not exercise control over the system for a period exceeding one year, unless extended by the county at its discretion and during said period of time it shall have the right to petition for transfer of the franchise to another grantee. If the county finds that such transfer, after considering the legal, financial, character and technical qualifications of the applicant are satisfactory, the county will transfer and assign the rights and obligations of such franchise. The consent of the county to such transfer shall not be unreasonably withheld.

(7)

The consent or approval of the county to any transfer of the grantee shall by its terms, be expressly subject to the terms and conditions of this article and the franchise.

(8)

Any approval by the county of transfer of ownership or control shall be contingent upon the prospective controlling party becoming a signatory to the franchise.

(9)

Notwithstanding anything to the contrary, no such consent shall be required for any transfer or assignment of the franchise to any entity controlling, controlled by, or under the same control as grantee, so long as grantee is not in any way relieved of its obligations under this article or the franchise agreement.

(k)

Police powers.

(1)

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

(2)

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

(l)

Franchise fees.

(1)

Fee imposed. Because the county finds that the grant to the grantee of a franchise is a valuable property right, and the administration of this article and the franchise imposes upon the county additional regulatory responsibility and expense, a grantee of any franchise hereunder shall pay to the county a franchise fee in an amount as designated in the franchise, but in no event less than five (5) percent of the gross annual revenues, or such amount as may be set from time to time by the board and in accordance with applicable law. The annual franchise payment shall be in addition to any other fee and shall commence as of the effective date of the franchise. The county shall be furnished a statement of said payment reflecting the total amounts of annual gross revenues and the above charges and computations for the period covered by the payment.

(2)

Franchise fee in addition to other tax or payment. This payment shall be in addition to any other tax or payment of general applicability (including any such payment assessed on both utilities and cable operators or their services) owed to the governments or other taxing jurisdiction by the grantee. Payment of the franchise fee made by grantee to the county shall be in addition to any and all taxes of general applicability which are now or may be required hereafter to be paid by any federal, state, or local law.

(3)

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

(4)

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

(5)

Payments to be made as stipulated in the franchise agreement. The franchise fee shall be payable to Brunswick County. The grantee shall file a complete and accurate verified statement of all gross annual revenues within the franchise area during the period for which said payment period is made, and said payment shall be made to the county no later than sixty (60) days following the end of each payment period. Penalties for late payments shall be defined in the franchise agreement.

(6)

The county's right of inspection. The county shall have the right to inspect the grantee's income records relating to the franchise and the right to audit and to recompute any amounts determined to be payable under this article. Audits shall be at the expense of the grantee if the grantee is found to be in arrears by five (5) percent or more. Any additional amount due the county as a result of the audit shall be paid within thirty (30) days following written notice to the grantee by the county which notice shall include a copy of the audit report.

(m)

Forfeiture or revocation.

(1)

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

a.

If the grantee shall default in the performance of any of the material obligations under this article or the franchise under such documents, contracts and other terms and provisions entered into by and between the county and the grantee.

b.

If the grantee shall fail to provide or maintain in full force and effect the liability and indemnification coverage or the performance bond as required in the franchise agreement.

c.

If the grantee shall violate any orders or rulings of the county relative to this article or the franchise.

d.

If the grantee is found by a court of competent jurisdiction to have practiced or engaged in any unfair or deceptive act or practice upon the county or cable subscribers under Chapter 75-1.1 of the consumer protection laws of the State of North Carolina.

e.

If the grantee fails to substantially comply with terms of the franchise agreement.

f.

The grantee becomes insolvent, unable or unwilling to pay its debts or is adjudged bankrupt.

g.

Failure to restore service after ninety-six (96) consecutive hours of interrupted service, except when excused under subsection 12-5-104(m)(2) or when approval of such interruption is obtained from the county.

h.

Material misrepresentation of fact in the application for or negotiation of the franchise or any extension or renewal thereof.

i.

If the grantee willfully, arbitrarily, or without just cause, ceases to provide services over the cable communications system.

j.

Failure to provide service to potential subscribers as provided for in the franchise agreement.

(2)

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

(3)

Pending litigation or appeals. Pending litigation or any appeal to any regulatory body or court having jurisdiction over the grantee shall not excuse the grantee from the performance of its obligations under this article or the franchise unless permitted by order or judgement of a court of competent jurisdiction. Failure of the grantee to perform such obligations because of pending litigation or petition may result in forfeiture or revocation pursuant to the provisions of this section unless permitted by order or judgement of a court of competent jurisdiction.

(4)

Procedure prior to revocation.

a.

The county shall make written demand that the grantee comply with any such requirement, limitation, term, condition, rule or regulation or correct any action deemed cause for revocation. If the failure, refusal or neglect of the grantee continues for a period of thirty (30) days following such written demand, or such longer period of time as may be set by the county, the county may place its request for termination of the franchise upon a regular board meeting agenda. The county shall cause to be served upon such grantee at least seven (7) days prior to the date of such board meeting, a written notice of this intent to request such termination, the reason therefore, and the time and place of the meeting, notice of which shall be published by the clerk to the board at least once, seven (7) days before such meeting in a newspaper of general circulation within the county.

b.

At such meeting, the board shall hear any persons interested therein, and shall determine in its discretion, whether or not any failure, refusal or neglect by the grantee to comply within such time was without just cause.

c.

If the board shall determine such failure, refusal, or neglect by the grantee was without just cause, then the board may, by resolution, declare that the franchise of the grantee shall be terminated and any required performance bond forfeited unless there is compliance by the grantee within a specified period of time not to exceed ninety (90) days.

(5)

Disposition of facilities. In the event a franchise expires without renewal, is revoked or otherwise terminated, the county may in its sole discretion, order the removal of the system facilities required by public necessity from the county within a reasonable period of time as determined by the county or extended operation as set out in subsection 1-5-104(m)(8).

(6)

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

(7)

Restoration by county; reimbursement of costs. In the event of a failure by the grantee to complete any work required hereunder, or any other work required by state law or county ordinance within the time as may be established and to the satisfaction of the county, the county may, after proper notice to grantee, cause such work to be done and the grantee shall reimburse the county the cost thereof within thirty (30) days after receipt of an itemized list of such costs or the county may recover such costs through the performance bond or letter of credit provided by grantee. The county shall be permitted to seek legal and equitable relief to enforce the provisions of this section.

(8)

Extended operation. Upon either the expiration or revocation of a franchise, the county may require the grantee to continue to operate the system for a period of six (6) months from the date of such expiration or revocation, or until such time as is mutually agreed upon. The grantee shall, as trustee for its successor in interest, continue to operate the cable communications system under the terms and conditions of this article and the franchise and to provide the regular subscriber service and any and all of the services that may be provided at the time. Grantee shall be entitled to revenues generated during the entire time they provide service. The county shall be permitted to seek legal and equitable relief to enforce the provisions of this section.

(n)

Receivership and foreclosure.

(1)

Termination by insolvency. The franchise granted hereunder shall, at the option of the county, cease and terminate one hundred twenty (120) days after the appointment of a receiver or receivers or trustee or trustees to take over and conduct the business of the grantee whether in a receivership, reorganization, bankruptcy or other action or proceeding unless such receivership or trusteeship shall have been vacated prior to the expiration of said one hundred twenty (120) days, or unless:

a.

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

b.

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

(2)

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

a.

The county shall have approved the transfer of the franchise, in the manner this article provides, and

b.

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

(o)

Equal opportunity policy. Equal opportunity employment shall be afforded by all operators of cable television systems to all qualified persons, and no person shall be discriminated against in employment because of race, color, religion, age, national origin, sex, or physical disability. Grantee shall comply with all equal opportunity provisions enacted by federal, state and local authorities, as well as all such provisions contained in this article and the franchise.

(p)

Notices. All notices from grantee to the county pursuant to this article and the franchise shall be to the county manager or his/her designee. All written notices shall be by certified mail. Grantee shall maintain with the county, throughout the term of the franchise, an address for service of notices by mail. If required by the franchise agreement, grantee shall also maintain within the county, a local office and telephone number for the conduct of matters related to the franchise during normal business hours. The grantee shall be required to advise the county of such address(es) and telephone numbers and any changes thereof.

(q)

Failure of county to enforce this article, no waiver of the terms thereof. The grantee shall not be excused from complying with any of the terms and conditions of this article or the franchise by any failure of the county upon any one or more occasions to insist upon or to seek compliance with any such terms or conditions.

(r)

Rights reserved to the grantor.

(1)

Right of inspection of records. Upon reasonable notice, the county shall have the right to inspect all books, records, reports, maps, plans, financial statements, and other like materials of the grantee pertaining to its operations in the county where necessary in regard to enforcement of this article and the franchise, at any time during normal business hours. Grantee shall provide such information as may be required by the county for said records and in a form the grantee is reasonably able to provide.

(2)

Right of inspection of construction. The county 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 terms of this article and other pertinent provision of the law.

(3)

Right of inspection of property. At all reasonable times where necessary in regard to enforcement of this article and the franchise, grantee shall permit examination by any duly authorized representative of the county, of system facilities, together with any appurtenant property of grantee situated within or without the county.

(4)

Right of intervention. The county shall have the right of intervention in any suit or proceeding to which the grantee is party and in which the county shall have legal standing to intervene and a material interest, and the grantee shall not oppose such intervention by the county.

(5)

Right to require removal of property. Upon denial of renewal of this article or the franchise, or upon its revocation or expiration, as provided for herein, the county shall have the right to require the grantee to remove, at its own expense, all portions of the cable communications system required by public necessity from all streets and public ways within the county.

(s)

No recourse against the grantor. The grantee shall have no recourse whatsoever against the county or its officials, boards, commissions, agents, or employees for any loss, cost, expense or damage arising out of any provision or requirements of the franchise or because of the lawful enforcement of this article except as may be provided in the franchise regarding usage of the emergency alert system.

(t)

Renewal of existing franchises. Upon the expiration of the term of the franchise and subject to approval by the board of commissioners, grantee may negotiate renewal of the franchise for an additional period not inconsistent with any federal laws including FCC rules and regulations.

Grantee shall notify county in writing no less than one (1) year in advance of the expiration date of the franchise of its desire to renew or not renew the franchise. County may propose certain modifications to grantee and make any given renewal contingent upon acceptance of such modifications. A renewal may be granted not more than two (2) years prior to the expiration of any existing term.

(Ord. of 6-5-96, § IV)