SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2000
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 0-14505
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Enstar Income Program II-2, L.P.
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(Exact name of Registrant as specified in its charter)
Georgia 58-1628872
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(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
12444 Powerscourt Dr., Suite 100
St. Louis, Missouri 63131
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area (314) 965-0555
code: --------------
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Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Exhibit Index located at Page E-1.
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PART I - FINANCIAL INFORMATION
ENSTAR INCOME PROGRAM II-2, L.P.
CONDENSED BALANCE SHEETS
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December 31, March 31,
1999* 2000
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(Unaudited)
ASSETS:
<S> <C> <C>
Cash $ 5,752,700 $ 6,202,400
Accounts receivable, less allowance of $2,200 and
$6,300 for possible losses 74,600 26,400
Prepaid expenses and other assets 107,200 113,300
Property, plant and equipment, less accumulated
depreciation and amortization of $7,943,000 and $8,043,000 2,883,000 2,799,300
Franchise cost, net of accumulated
amortization of $1,329,300 and $1,350,500 72,500 51,300
Deferred charges, net 700 500
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$ 8,890,700 $ 9,193,200
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LIABILITIES AND PARTNERSHIP CAPITAL
LIABILITIES:
Accounts payable $ 239,600 $ 164,300
Due to affiliates 257,200 245,100
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TOTAL LIABILITIES 496,800 409,400
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COMMITMENTS AND CONTINGENCIES
PARTNERSHIP CAPITAL (DEFICIT):
General partners 10,200 14,100
Limited partners 8,383,700 8,769,700
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TOTAL PARTNERSHIP CAPITAL 8,393,900 8,783,800
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$ 8,890,700 $ 9,193,200
================= =================
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*As presented in the audited financial statements.
See accompanying notes to condensed financial statements.
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ENSTAR INCOME PROGRAM II-2, L.P.
CONDENSED STATEMENTS OF OPERATIONS
======================================
Unaudited
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Three months ended
March 31,
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1999 2000
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<S> <C> <C>
REVENUES $ 969,000 $ 984,300
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OPERATING EXPENSES:
Service costs 330,700 314,000
General and administrative expenses 116,600 103,000
General Partner management fees
and reimbursed expenses 130,100 118,700
Depreciation and amortization 155,800 129,100
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733,200 664,800
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OPERATING INCOME 235,800 319,500
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OTHER INCOME (EXPENSE):
Interest income 49,000 74,600
Interest expense (3,600) (4,200)
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45,400 70,400
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NET INCOME $ 281,200 $ 389,900
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Net income allocated to General Partners $ 2,800 $ 3,900
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Net income allocated to Limited Partners $ 278,400 $ 386,000
================ =================
NET INCOME PER UNIT OF LIMITED
PARTNERSHIP INTEREST $ 9.32 $ 12.92
================ =================
AVERAGE LIMITED PARTNERSHIP
UNITS OUTSTANDING DURING PERIOD 29,880 29,880
================ =================
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See accompanying notes to condensed financial statements.
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ENSTAR INCOME PROGRAM II-2, L.P.
STATEMENTS OF CASH FLOWS
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Unaudited
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Three months ended
March 31,
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1999 2000
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CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 281,200 $ 389,900
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 155,800 129,100
Increase (decrease) from changes in:
Accounts receivable, prepaid expenses and other assets (109,100) 42,100
Accounts payable and due to affiliates 90,400 (87,400)
---------------- -----------------
Net cash provided by operating activities 418,300 473,700
---------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (17,600) (24,000)
---------------- -----------------
INCREASE IN CASH 400,700 449,700
CASH AT BEGINNING OF PERIOD 4,468,300 5,752,700
---------------- -----------------
CASH AT END OF PERIOD $ 4,869,000 $ 6,202,400
================ =================
</TABLE>
See accompanying notes to condensed financial statements.
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<PAGE>
ENSTAR INCOME PROGRAM II-2, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
======================================
1. INTERIM FINANCIAL STATEMENTS
The accompanying condensed interim financial statements for the three
months ended March 31, 2000 and 1999 are unaudited. These condensed interim
financial statements should be read in conjunction with the audited financial
statements and notes thereto included in our latest Annual Report on Form 10-K.
In the opinion of management, such statements reflect all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation of the results of such periods. The results of operations for the
three months ended March 31, 2000 are not necessarily indicative of results for
the entire year.
2. TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES
The partnership has a management and service agreement with a wholly
owned subsidiary of our corporate general partner for a monthly management fee
of 5% of revenues, excluding revenues from the sale of cable television systems
or franchises. Management fee expense approximated $49,200 for the three months
ended March 31, 2000.
In addition to the monthly management fee described above, we
reimburse the manager for direct expenses incurred on behalf of the partnership
and for the partnership's allocable share of operational costs associated with
services provided by the manager. All cable television properties managed by the
corporate general partner and its subsidiary are charged a proportionate share
of these expenses. Charter Communications Holding Company, LLC and its
affiliates provide other management services for the partnership that were
provided by Falcon Communications, L.P. and its affiliates prior to November 12,
1999. Corporate office allocations and district office expenses are charged to
the properties served based primarily on the respective percentage of basic
subscribers or homes passed (dwelling units within a system) within the
designated service areas. The total amount charged to the partnership for these
services approximated $69,500 for the three months ended March 31, 2000.
Management fees and reimbursed expenses due the corporate general partner are
non-interest bearing.
We also receive certain system operating management services from
Charter and other affiliates of the corporate general partner in addition to the
manager, due to the fact that there are no such employees directly employed by
the partnership's cable systems. We reimburse the affiliates for our allocable
share of the affiliates' operational costs. The total amount charged to the
partnership for these costs approximated $45,300 for the three months ended
March 31, 2000. No management fee is payable to the affiliates by the
partnership and there is no duplication of reimbursed expenses and costs paid to
the manager.
Substantially all programming services have been purchased through
Charter since November 12, 1999. Before that time, substantially all programming
services were provided through Falcon Communications. Falcon Communications
charged the partnership for these costs based on an estimate of what the
corporate general partner could negotiate for such programming services for the
15 partnerships managed by the corporate general partner as a group. Charter
charges the partnership
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<PAGE>
ENSTAR INCOME PROGRAM II-2, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
======================================
2. TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES (Continued)
for these costs based on its costs. Programming fee expense was $199,400 for the
three months ended March 31, 2000. Programming fees are included in service
costs in the statements of operations.
The cable system in one of the partnership's franchise areas does not
have head-end equipment to receive and retransmit its cable television signal.
The system relies on another partnership managed by the corporate general
partner with systems located in neighboring communities to provide its cable
television signal. The partnership is not charged a fee for this service.
3. EARNINGS PER UNIT OF LIMITED PARTNERSHIP INTEREST
Earnings and losses have been allocated 99% to the limited partners
and 1% to the general partners. Earnings and losses per unit of limited
partnership interest is based on the weighted average number of units
outstanding during the year. The general partners do not own units of
partnership interest in the partnership, but rather hold a participation
interest in the income, losses and distributions of the partnership.
4. SUBSEQUENT EVENT
On April 20, 2000, the corporate general partner signed a non-binding
letter of intent to sell all of the partnership's cable television systems. The
sale of the partnership's assets is subject to approval by a majority of the
limited partners and other standard closing conditions, such as obtaining
regulatory approvals. The prospective buyer seeks to purchase a large group of
cable television systems, which includes all of the partnership's systems as
well as certain systems owned by other partnerships under the common control of
the partnership's corporate general partner. There is no assurance that a
definitive sale agreement will be executed, and if so, whether the proposed sale
will be consummated. Even if the limited partners do approve the sale,
consummation of the sale is subject to certain factors beyond the partnership's
control, including receipt of regulatory approvals and approval of the sale by
other selling partnerships.
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<PAGE>
ENSTAR INCOME PROGRAM II-2, L.P.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
INTRODUCTION
The 1992 Cable Act required the Federal Communications Commission to,
among other things, implement extensive regulation of the rates charged by cable
television systems for basic and programming service tiers, installation, and
customer premises equipment leasing. Compliance with those rate regulations has
had a negative impact on our revenues and cash flow. The 1996 Telecommunications
Act substantially changed the competitive and regulatory environment for cable
television and telecommunications service providers. Among other changes, the
1996 Telecommunications Act ended the regulation of cable programming service
tier rates on March 31, 1999. There can be no assurance as to what, if any,
further action may be taken by the FCC, Congress or any other regulatory
authority or court, or their effect on our business. Accordingly, our historical
financial results as described below are not necessarily indicative of future
performance.
This report includes certain forward-looking statements regarding,
among other things, our future results of operations, regulatory requirements,
competition, capital needs and general business conditions applicable to the
partnership. Such forward-looking statements involve risks and uncertainties
including, without limitation, the uncertainty of legislative and regulatory
changes and the rapid developments in the competitive environment facing cable
television operators such as the partnership, as discussed more fully elsewhere
in this report.
RESULTS OF OPERATIONS
Our revenues increased from $969,000 to $984,300, or by 1.6%, for the
three months ended March 31, 2000 as compared to the first three months of 1999.
Of the $15,300 increase, $38,400 was due to increases in regulated service rates
that we implemented in 1999. The increase was partially offset by a $21,900
decrease due to decreases in the number of subscriptions for basic, premium,
tier and equipment rental services and a $1,200 decrease in other revenue
producing items. As of March 31, 2000, the partnership had approximately 8,700
basic subscribers and 1,500 premium service units.
Our service costs decreased from $330,700 to $314,000, or by 5.0%, for
the three months ended March 31, 2000 as compared to the corresponding quarter
in 1999. Service costs represent costs directly attributable to providing cable
services to customers. The decrease was primarily due to decreases in
programming fees resulting from lower rates that Charter has extended to the
partnership.
Our general and administrative expenses decreased from $116,600 to
$103,000, or by 11.7%, for the three months ended March 31, 2000 as compared to
the first quarter of 1999, primarily due to lower insurance premiums and
marketing expenses.
Management fees and reimbursed expenses decreased from $130,100 to
$118,700, or by 8.8%, for the three months ended March 31, 2000 as compared to
the first quarter of 1999. Management fees increased in direct relation to
increased revenues as described above. Reimbursed expenses decreased primarily
due to lower allocated personnel costs and telephone expense.
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<PAGE>
ENSTAR INCOME PROGRAM II-2, L.P.
RESULTS OF OPERATIONS (Continued)
Our depreciation and amortization expense decreased from $155,800 to
$129,100, or by 17.1%, for the three months ended March 31, 2000 as compared to
the equivalent period of 1999 due to certain plant assets becoming fully
depreciated.
Our operating income increased from $235,800 to $319,500, or by 35.5%,
for the three months ended March 31, 2000 as compared to the first quarter of
1999, primarily due to decreased programming fees and depreciation and
amortization as described above.
Our interest income, net of interest expense, increased from $45,400
to $70,400, or by 55.1%, for the three months ended March 31, 2000 as compared
to the first quarter of 1999, primarily due to higher average cash balances
available for investment during 1999.
Due to the factors described above, our net income increased from
$281,200 to $389,900 or by 38.7%, for the three months ended March 31, 2000 as
compared to the corresponding period in 1999.
Based on our experience in the cable television industry, we believe
that operating income before depreciation and amortization, or EBITDA, and
related measures of cash flow serve as important financial analysis tools for
measuring and comparing cable television companies in several areas, such as
liquidity, operating performance and leverage. EBITDA is not a measurement
determined under generally accepted accounting principles, or GAAP, and does not
represent cash generated from operating activities in accordance with GAAP.
EBITDA should not be considered by the reader as an alternative to net income as
an indicator of financial performance or as an alternative to cash flows as a
measure of liquidity. In addition, the definition of EBITDA may not be identical
to similarly titled measures used by other companies. EBITDA as a percentage of
revenues increased from 40.4% to 45.6% during the three months ended March 31,
2000, as compared to the corresponding period in 1999. The increase was
primarily due to lower programming fees, marketing expenses and insurance
premiums as described above. EBITDA increased from $391,600 to $448,600, or by
14.6%, as a result.
LIQUIDITY AND CAPITAL RESOURCES
Our primary objective, having invested our net offering proceeds in
cable television systems, is to distribute to our partners all available cash
flow from operations and proceeds from the sale of cable systems, if any, after
providing for expenses, debt service and capital requirements relating to the
expansion, improvement and upgrade of our cable systems.
In accordance with the partnership agreement, the corporate general
partner has implemented a plan for liquidating the partnership. In connection
with that strategy, the corporate general partner has entered into an agreement
with a cable broker to market the partnership's cable systems to third parties.
Should the partnership receive offers from third parties for such assets and
should the corporate general partner enter into an agreement to sell such
assets, the corporate general partner will prepare a proxy or written consent
solicitation for submission to the limited partners for the purpose of approving
or disapproving such sale. If all of the partnership's assets are sold, the
corporate general partner will proceed to liquidate the partnership following
the settlement of all final liabilities of the partnership. We can give no
assurance, however, that we will be able to generate a sale of the partnership's
cable assets.
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<PAGE>
ENSTAR INCOME PROGRAM II-2, L.P.
LIQUIDITY AND CAPITAL RESOURCES (Continued)
On April 20, 2000, the corporate general partner signed a non-binding
letter of intent to sell all of the partnership's cable television systems. The
sale of the partnership's assets is subject to approval by a majority of the
limited partners and other standard closing conditions, such as obtaining
regulatory approvals. The prospective buyer seeks to purchase a large group of
cable television systems, which includes all of the partnership's systems as
well as certain systems owned by other partnerships under the common control of
the partnership's corporate general partner. There is no assurance that a
definitive sale agreement will be executed, and if so, whether the proposed sale
will be consummated. Even if the limited partners do approve the sale,
consummation of the sale is subject to certain factors beyond the partnership's
control, including receipt of regulatory approvals and approval of the sale by
other selling partnerships.
At March 31, 2000, we had no debt outstanding. We rely upon the
availability of cash generated from operations to fund our ongoing expenses and
capital requirements. We are budgeted to spend approximately $561,200 in 2000
for replacement and upgrade of plant assets. Such expenditures approximated
$24,000 as of March 31, 2000. In the event we are not able to sell our cable
television systems to third parties, we expect to upgrade our cable plant in
Campbell, Missouri at an estimated cost of approximately $1.6 million. In
addition, we are required by a provision of the franchise agreement to upgrade
our cable system in Malden, Missouri at an approximate cost of $1.8 million by
March 2003.
The corporate general partner believes that cash flow from operations
will be adequate to meet our current liquidity requirements, including the
funding for capital expenditures discussed above. However, as a result of such
liquidity requirements, the corporate general partner has concluded that it is
not prudent for us to resume paying distributions at this time.
Falcon Communications purchased insurance coverage for all of the
cable television properties owned or managed by it to cover damage to cable
distribution plant and subscriber connections and against business interruptions
resulting from such damage. This coverage is subject to a significant annual
deductible which applies to all of the cable television properties owned or
formerly managed by Falcon Communications through November 12, 1999, and
currently managed by Charter, including those of the partnership.
Approximately 73% of our subscribers are served by our system in
Hillsboro, Illinois and neighboring communities. Significant damage to the
system due to seasonal weather conditions or other events could have a material
adverse effect on our liquidity and cash flows. We continue to purchase
insurance coverage in amounts our management views as appropriate for all other
property, liability, automobile, workers' compensation and other types of
insurable risks.
We have not experienced any system failures or other disruptions
caused by Year 2000 problems since January 1, 2000 through the date of this
report, and do not anticipate that we will encounter any Year 2000 problems
going forward. We did not incur expense in the first three months of 2000
related to the Year 2000 date change.
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<PAGE>
ENSTAR INCOME PROGRAM II-2, L.P.
LIQUIDITY AND CAPITAL RESOURCES (Continued)
Three months ended March 31, 2000 and 1999
------------------------------------------
Our operating activities provided $55,400 more cash in the three
months ended March 31, 2000 than in the corresponding period of 1999. Changes in
accounts receivable, prepaid expenses and other assets used $151,200 less cash
in the March quarter of 2000 than in the first three months of 1999 due to
differences in the timing of receivable collections and the payment of prepaid
expenses. We used $177,800 more cash to pay liabilities owed to affiliates and
third-party creditors in the first quarter of 2000 due to differences in the
timing of payments.
We used $6,400 more cash in investing activities during the three
months ended March 31, 2000 than in the corresponding three months of 1999 due
to a $6,400 increase in expenditures for tangible assets.
INFLATION
Certain of our expenses, such as those for wages and benefits,
equipment repair and replacement, and billing and marketing generally increase
with inflation. However, we do not believe that our financial results have been,
or will be, adversely affected by inflation in a material way, provided that we
are able to increase our service rates periodically, of which there can be no
assurance.
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<PAGE>
PART II. OTHER INFORMATION
ITEMS 1-4. Not applicable.
ITEM 5. Other Information.
On April 20, 2000, the corporate general partner signed a
non-binding letter of intent to sell all of the partnership's
cable television systems. The sale of the partnership's assets
is subject to approval by a majority of the limited partners
and other standard closing conditions, such as obtaining
regulatory approvals. The prospective buyer seeks to purchase
a large group of cable television systems, which includes all
of the partnership's systems as well as certain systems owned
by other partnerships under the common control of the
partnership's corporate general partner. There is no assurance
that a definitive sale agreement will be executed, and if so,
whether the proposed sale will be consummated. Even if the
limited partners do approve the sale, consummation of the sale
is subject to certain factors beyond the partnership's
control, including receipt of regulatory approvals and
approval of the sale by other selling partnerships.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibit 10.17 - Franchise Ordinance granting
a non-exclusive community antenna television
system franchise for the City of Malden,
Missouri.
Exhibit 27.1 - Financial Data Schedule.
(b) No reports on Form 8-K were filed during the
quarter for which this report is filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ENSTAR INCOME PROGRAM II-2, L.P.
a GEORGIA LIMITED PARTNERSHIP
-----------------------------
(Registrant)
By: ENSTAR COMMUNICATIONS CORPORATION
General Partner
Date: May 12, 2000 By: /s/ Kent D. Kalkwarf
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Kent D. Kalkwarf
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer
and Principal Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
10.17 Franchise Ordinance granting a non-exclusive community antenna
television system franchise for the City of Malden, Missouri.
27.1 Financial Data Schedule.
E-1
EXHIBIT 10.17
Malden, MO
Cable Television Franchise Ordinance
An Ordinance Setting Forth Regulations, Terms and Conditions
Under Which Cable Television Systems Shall Operate in Malden,
MO and Granting to Enstar Income Program II-2 a Franchise to
Construct, Operate and Maintain a Cable Television System
Within the City.
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TABLE OF CONTENTS
<S> <C>
TITLE AND PURPOSES OF ORDINANCE.......................................................................................1
DEFINITIONS...........................................................................................................1
FRANCHISE TO OPERATE REQUIRED.........................................................................................3
GRANT OF FRANCHISE....................................................................................................3
FRANCHISE FEES........................................................................................................3
SUBSCRIBER RATES......................................................................................................4
CUSTOMER SERVICE AND CONSUMER PROTECTION..............................................................................5
INFORMATION PROVIDED BY GRANTEE TO SUBSCRIBERS........................................................................6
TECHNICAL STANDARDS...................................................................................................7
EXTENSION OF CABLE SERVICE............................................................................................7
FREE BASIC CABLE SERVICE TO PUBLIC BUILDINGS..........................................................................8
SYSTEM IMPROVEMENTS...................................................................................................9
INSURANCE.............................................................................................................9
INDEMNIFICATION.......................................................................................................10
FRANCHISE VIOLATIONS: PROCEDURES, NOTICE, AND CURE....................................................................10
FRANCHISE TERMINATION AND CONTINUITY OF SERVICE.......................................................................11
FORCE MAJEUR..........................................................................................................11
GRANT OF ADDITIONAL FRANCHISE AND COMPETING SERVICE PROVIDERS.........................................................12
TRANSFER OR ASSIGNMENT OF FRANCHISE...................................................................................14
COMPLIANCE WITH STATE AND FEDERAL LAW.................................................................................15
NOTICE TO THE GRANTEE.................................................................................................15
STREET OCCUPANCY......................................................................................................15
<PAGE>
ACCESS TO PUBLIC AND PRIVATE PROPERTY.................................................................................16
NONDISCRIMINATION IN EMPLOYMENT.......................................................................................16
GRANTEE MAY ISSUE RULES...............................................................................................17
SEVERABILITY OF ORDINANCE PROVISIONS..................................................................................17
EFFECTIVE DATE........................................................................................................17
</TABLE>
<PAGE>
An Ordinance Setting Forth the Regulations, Terms and Conditions Under Which
Cable Television Systems Shall Operate in Malden, MO and Granting A Franchise
to Enstar Income Program II-2, Its Successors and Assigns to Construct,
Operate and Maintain a Cable Television System in the City
BE IT ORDAINED by the City of Malden, MO as follows:
1 TITLE AND PURPOSES OF ORDINANCE
This Ordinance shall be known as the Malden Cable Television Franchise
Ordinance. The purposes of this Ordinance are: a) to establish the terms and
conditions under which a cable television system must operate within Malden, MO
(which may hereafter be referred to as "City", "Franchising Authority", or
"Grantor"); b) to provide for the payment of a franchise fee to the City for
costs associated with administering and regulating the system; and c) to grant a
cable television franchise to Enstar Income Program II-2 (hereafter referred to
as "Falcon" or "Grantee").
2 DEFINITIONS
For the purposes of this Ordinance the following terms, phrases, words and their
derivations shall have the meaning defined herein, unless the context clearly
indicates that another meaning is intended. Words used in the present tense
include the future, words in the plural number include the singular number, and
words in the singular number include the plural number.
2.1 "Cable Act" means The Cable Communications Policy Act of 1984 as
---------
modified by The Cable Television Consumer Protection and Competition
Act of 1992, and the Telecommunications Act of 1996.
2.2 "Cable Television System" means any non-broadcast facility
-------------------------
consisting of a set of transmission paths and associated signal
reception, transmission and control equipment, that is designed to
distribute to subscribers or other users audio, video and other forms
of communications services via electronic or electrical signals.
2.3 "Channel" is a band of frequencies in the electromagnetic
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spectrum, capable of carrying one audio-visual television signal.
Malden, MO Cable TV Franchise Ordinance
March 19, 1999
Page 1
<PAGE>
2.4 "City" means Malden, MO in its present form or in any later
----
reorganized, consolidated, enlarged or reincorporated form, which is
legally authorized to grant a cable television franchise under state
and federal law. The City may also be referred to as "Franchising
Authority" or "Grantor".
2.5 "Falcon" means Enstar Income Program II-2, which may also be
------
referred to as "Grantee".
2.6 "FCC" means the Federal Communications Commission.
---
2.7 "Franchise" means the rights granted pursuant to this Ordinance to
---------
construct, own and operate a cable television system along the public
ways in the City, or within specified areas in the City.
2.8 "Franchise Area" means that portion of the City for which a
---------------
franchise is granted under the authority of this Ordinance. If not
otherwise stated in an exhibit to this Ordinance, the Franchise Area
shall be the legal and geographic limits of the City, including all
territory which may be hereafter annexed to the City.
2.9 "Franchising Authority" means Malden, MO, its duly elected
----------------------
governing body, its lawful successor or such other person or body duly
authorized by the City to grant a cable television franchise.
2.10 "Grantee" means a person or business entity, or its lawful
-------
successor or Assignee, which has been granted a franchise by the City
pursuant to this Ordinance.
2.11 "Gross Subscriber Receipts" as the term is used in calculating
---------------------------
franchise fees means revenues actually received by the Grantee from
television services it provides to its subscribers in Malden after
deducting the following: a) any fees or assessments levied on
subscribers or users of the system which are collected by the Grantee
for payment to a governmental entity; b) franchise fees paid by the
Grantee to the City; c) state or local sales or property taxes imposed
on the Grantee and paid to a governmental entity; and d) federal
copyright fees paid by the Grantee to the Copyright Tribunal in
Washington, DC.
2.12 "Normal Business Hours" means those hours during which most
----------------------
similar businesses in the community are open to serve customers.
2.13 "Normal Operating Conditions" means those service conditions
-----------------------------
which are within the control of the Grantee. Those conditions which
are not within the control of the Grantee include, but are not limited
to, natural disasters, civil disturbances, power outages, telephone
network outages, and severe or unusual weather conditions. Those
conditions which are ordinarily within the control of the Grantee
include, but are not limited to, special promotions, pay-per-view
events rate increases, regular peak or seasonal demand periods, and
maintenance or upgrade of the cable system.
Malden, MO Cable TV Franchise Ordinance
March 19, 1999
Page 2
<PAGE>
2.14 "Public Way" or "Right-of-Way" means the surface, the air space
----------------------------
above the surface and the area below the surface of any public street,
highway, lane, path, alley, sidewalk, boulevard, drive, bridge,
tunnel, park, parkways, waterways, or other public right-of-way
including public utility easements or rights-of-way and any temporary
or permanent fixtures or improvements located thereon now or hereafter
held by the City which shall entitle the City and the Grantee to the
use thereof for the purpose of installing and maintaining the
Grantee's cable television system.
2.15 "School" means any public elementary or secondary school.
------
2.16 "Service Interruption" means the loss of picture or sound on one
---------------------
or more cable channels.
2.17 "Subscriber" means any person who receives monthly cable
----------
television service provided by the Grantee's cable television system.
3 FRANCHISE TO OPERATE REQUIRED
It shall be unlawful to operate a cable television system within the City unless
a valid franchise has first been obtained from the City pursuant to the terms of
this Ordinance. A franchise granted pursuant to this Ordinance shall authorize
the Grantee to provide cable television services within the City and to charge
subscribers for such services. It shall also authorize and permit the Grantee to
traverse any portion of the City in order to provide service outside the City.
Unless otherwise specified, the Franchise Area shall be the legal boundaries of
the City.
4 GRANT OF FRANCHISE
A franchise is hereby granted to Enstar Income Program II-2 (which may be
referred to herein as "Falcon" or "Grantee") to operate and maintain a cable
television system in the City for a period of ten (10) years commencing on the
date of adoption of this ordinance. Falcon has the option to renew this
franchise for an additional term of five (5) years, provided that it is in
substantial compliance with the material terms of this ordinance at the time of
its experience.
5 FRANCHISE FEES
5.1 The Grantee shall pay a franchise fee which is intended to
compensate the City for all costs which may be associated with
administering or regulating Grantee's cable system. The amount of the
franchise fee shall be three (3%) percent of the Grantee's annual
Gross Subscriber Receipts, as defined herein. Such fee shall be paid
on a annual basis. Grantee shall be entitled to list the franchise fee
as a separate line item on monthly bills.
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5.2 Due to federal and local regulations requiring that Grantee notify
cable subscribers at least thirty (30) days prior to the effective
date of any increases in monthly charges on subscriber bills, any
increased franchise fee amounts which may be due to the City shall
begin accruing sixty (60) days following the effective date of this
Ordinance. If the City requires more than thirty (30) days notice to
subscribers of increased rates, then any increased franchise fee
amounts which may be due to the City shall begin accruing sixty (60)
days after the City's required notice period.
5.3 At the City's request, the Grantee shall file a report showing
Grantee's Gross Subscriber Receipts for the calendar year and the
amount of franchise fees due to the City. Such reports may be
requested once per calendar year. The Grantee shall have an obligation
to maintain financial records of its Gross Subscriber Receipts and
Grantee fee payments for audit purposes for a period of three years,
and the City shall have the right to audit the Grantee's books at the
offices where such books are maintained.
6 SUBSCRIBER RATES
6.1 All charges to subscribers shall be consistent with a schedule of
fees for services offered and established by the Grantee. Rates shall
be nondiscriminatory in nature and uniform to persons of like classes
under similar circumstances and conditions.
6.2 The Grantee will provide the City with thirty (30) days advance
written notice of any change in rates and charges whenever possible.
6.3 Grantee may offer different or discounted rates at its discretion
for promotional purposes and may establish different rates for
different classes of subscribers where appropriate, such as offering
discounted rates to low income individuals or groups or bulk rates to
multiple unit dwellings.
6.4 Grantee shall inform each new subscriber of all applicable fees
and charges for providing cable television service.
6.5 Grantee may, at its own discretion and in a non-discriminatory
manner, waive, reduce or suspend connection fees, monthly service fees
or other charges on a one time or monthly basis for promotional
purposes.
6.6 Grantee may refuse to provide service to any person because a
prior account with that person remains due and owing.
6.7 A Grantee may offer service which requires advance payment of
periodic service charges.
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6.8 The Grantee shall provide refunds to subscribers in the following
cases:
6.8(a) If the Grantee fails within a reasonable time to commence
service requested by a subscriber, it will refund all deposits or
advance charges that the subscriber has paid in connection with
the request for such service at the request of the subscriber.
6.8(b) If a subscriber terminates any service at any time and has
a credit balance for deposits or unused services, upon request
from the subscriber and upon return of all of Grantee's
equipment, the Grantee will refund the appropriate credit balance
to the subscriber. The subscriber will be responsible for
furnishing the Grantee a proper address to which to mail the
refund.
6.8(c) If any subscriber's cable service is out of order for more
than 48 consecutive hours during the month due to technical
failure, damage, or circumstances within the control of the
Grantee, the Grantee will credit the account of that subscriber
on a pro rata basis upon the subscriber's written request. The
credit will be calculated using the number of twenty-four (24)
hour periods that service is impaired and the number of channels
on which service is impaired as a fraction of the total number of
days in the month that the service impairment occurs and the
total number of channels provided by the system in the absence of
an impairment.
7 CUSTOMER SERVICE AND CONSUMER PROTECTION
7.1 Cable System Office Hours and Telephone Availability
----------------------------------------------------
The Grantee will maintain a local, toll-free or collect call telephone
access line which will be available to its subscribers 24 hours per
day, seven days per week. Trained company representatives will be
available to respond to customer telephone inquiries during normal
business hours. After normal business hours, the access line may be
answered by a service or an automated response system, including an
answering machine. Inquiries received after normal business hours must
be responded to by a trained company representative on the next
business day. Customer service center and bill payment locations will
be open at least during normal business hours.
7.2 Installation, Outages and Service Calls
---------------------------------------
7.2(a) Standard installations will be performed within seven (7)
business days after an order has been placed. "Standard"
installations are those that are located up to 125 feet from the
existing distribution system.
7.2(b) Excluding conditions beyond the control of the Grantee,
the Grantee will begin working on "service interruptions"
promptly and in no event later than 24 hours after the
interruption becomes known. The Grantee must begin actions to
correct other service problems the next business day after
notification of the service problem.
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7.2(c) The "appointment window" alternatives for installations,
service calls, and other installation activities will be either a
specific time or a four-hour time block during normal business
hours. The Grantee may schedule service calls and other
installation activities outside of normal business hours for the
express convenience of the customer.
7.2(d) If Grantee's representative is running late for an
appointment with a customer and will not be able to keep the
appointment as scheduled, the customer will be contacted. The
appointment will be rescheduled, as necessary, at a time which is
convenient for the customer.
7.2(e) If the Grantee's service representative appears for an
appointment scheduled by a customer within the time period
promised and no one is present at the customer's dwelling to
permit necessary physical access to the dwelling unit, then
Grantee may charge the customer for the service call, up to a
maximum of $25.
8 INFORMATION PROVIDED BY GRANTEE TO SUBSCRIBERS
8.1 The Grantee shall provide written information on each of the
following areas at the time of installation of service, at least
annually to all subscribers, and at any time upon request: products
and services offered; prices and options for programming services and
conditions of subscription to programming and other services;
installation and services maintenance policies; instructions on how to
use the cable service; channel positions of programming carried on the
system; and billing and complaint procedures, including the address
and telephone number of the local franchise authority's cable office.
8.2 Customers will be notified of any changes in rates, programming
services or channel positions thirty (30) days in advance of such
changes if the change is within the control of the Grantee. In
addition, the Grantee shall notify subscribers thirty (30) days in
advance of any significant changes in the other information required
by the preceding paragraph. Notwithstanding any other provision of
Part 76, Grantee shall not be required to provide prior notice of any
rate change that is the result of a regulatory fee, franchise fee, or
any other fee, tax, assessment, or charge of any kind imposed by any
Federal agency, State, or Franchising Authority on the transaction
between the Grantee and the subscriber.
8.3 Bills will be clear, concise and understandable. Bills will be
itemized, with itemizations including basic and premium service
charges and equipment charges. Bills will also clearly delineate all
activity during the billing period, including optional charges,
rebates and credits. In case of a billing dispute, the Grantee must
respond to a written complaint from a subscriber within thirty (30)
days.
8.4 Refund checks will be issued promptly, but no later than either:
the customer's next billing cycle following resolution of the request
or sixty (60) days, or the return of the equipment supplied by the
Grantee if service is terminated.
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8.5 Credits for services will be issued no later than the customer's
next billing cycle following the determination that a credit is
warranted.
9 TECHNICAL STANDARDS
9.1 Grantee shall be responsible for insuring that the cable system is
designed, installed, and operated in a manner that fully complies with
Federal Communications Commission (FCC) rules regarding cable
television technical standards. Grantee shall be prepared to show, on
request by an authorized representative of the Commission or the
Franchising Authority, that the system does, in fact, comply with the
rules.
9.2 Grantee shall conduct complete performance tests of the system at
least twice each calendar year (at intervals not to exceed seven
months), and shall maintain the resulting test data on file at the
Grantee's local business office for at least five (5) years. The test
data shall be made available for inspection by the Commission or the
local franchiser, upon request. The performance test shall be directed
at determining the extent to which the system complies with all the
technical standards set forth in ss.76.605(a) of the Commission's
rules.
10 EXTENSION OF CABLE SERVICE
10.1 A Grantee which is not already serving the entire franchise area
shall provide service to all portions of the franchise area reaching a
minimum density of thirty (30) dwelling units per linear strand mile,
as measured from the nearest coaxial cable line, within twelve (12)
months after the grant of a franchise.
10.2 Grantee shall provide aerial or buried drop lines to new
subdivisions within the franchise area at the request of the developer
provided that the developer contracts and agrees with the Grantee to
pay the cost of the extension of the service.
10.3 Grantee shall extend and make cable television service available
to any resident within the franchise area who requests connection at
the standard connection charge if the connection to the resident would
require no more than a standard one hundred and fifty (150) foot
aerial drop or a seventy-five (75) foot buried drop line or extension
from the nearest coaxial feeder cable. With respect to requests for
connection requiring an aerial or buried drop line in excess of the
maximum standard distance, Grantee shall extend and make available
cable television service to such residents at a connection charge not
to exceed its actual costs for the distance exceeding the standard one
hundred and fifty (150) feet of aerial or seventy-five (75) feet of
underground cable respectively.
10.4 In areas with fewer than thirty (30) residential units per
proposed cable bearing strand mile, Grantee shall offer a cost-sharing
arrangement with residents. A dwelling unit will be counted for this
purpose if its lot fronts a street. The cost-sharing arrangement shall
consist of the following:
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10.4(a) At the request of a resident desiring service, Grantee
shall determine the cost of the plant extension required to
provide service to the potential subscriber from the closest
point on the cable system where it is technically feasible. The
cost of construction shall be allocated based on the following
formula:
10.4(a)(1) If a request for extension of service into a
residential area requires the construction of cable plant
which does not pass at least thirty (30) potential
subscribers per proposed cable bearing strand mile, Grantee
and residents who agree to subscribe to cable service will
each bear their proportionate share of construction costs.
For example, if there are five (5) dwelling units per
proposed cable bearing strand mile, Grantee's share will
equal 5/30ths or one sixth (1/6) of the construction cost.
The remaining cost will be shared equally by each
subscriber.
10.4(a)(2) Should additional residents actually subscribe to
cable television service in areas where subscribers have
already paid a proportionate share under the extension cost
sharing formula, subscribers who have previously paid a
proportionate share under the extension formula shall be
reimbursed pro rata for their contribution or a proportional
share thereof. In such case, the pro rata shares shall be
recalculated and each new subscriber shall pay the new pro
rata share, and all subscribers who previously paid a
proportionate share shall receive pro rata refunds. In the
event such subscribers (or prior subscribers) have been
disconnected or have moved and owe the Grantee money which
has not been recovered, Grantee shall have the right to
first apply the refund to amounts owed the Grantee and give
the balance, if any to the subscriber. At such time as there
are thirty (30) potential subscribers per cable bearing
strand mile, the subscribers shall receive their pro rata
share of construction costs. In any event, one (1) year
after the completion of a project, subscribers who have paid
a share of line extension costs are no longer eligible for
refunds, and the amounts paid in construction costs will be
credited to the plant account of Grantee.
10.4(a)(3) Where the density of residential dwelling and
occupied commercial or industrial structures, adverse
terrain, or other factors render extension of the system and
offering of cable service impractical, technically
infeasible or would create an economic hardship, the City
may, upon petition of the Grantee, either waive the
extension of the system into such areas, or allow the
extension and offer of service on special terms or
conditions which are reasonable and fair to the City , the
Grantee and potential subscribers in such areas.
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11 FREE BASIC CABLE SERVICE TO PUBLIC BUILDINGS
Grantee shall provide, without charge, one service outlet activated for basic
subscriber service to each police station, fire station, public school, public
library and the City office. If it is necessary to extend Grantee's trunk or
feeder lines more than two hundred (200) feet solely to provide service to any
such school or public building, the City or the building owner or occupants
shall have the option of either paying Grantee's direct costs for line
extensions in excess of two hundred (200) feet or releasing the Grantee from the
obligation to provide service to such building. Furthermore, Grantee shall be
permitted to recover the direct cost of installing cable service, when requested
to do so, in order to provide: a) more than one outlet, b) inside wiring, or c)
a service outlet requiring more than two hundred (200) feet of drop cable to any
public building.
12 SYSTEM IMPROVEMENTS
12.1 Grantee agrees to upgrade the existing Malden cable TV system
within thirty-six (36) months of the adoption of this Franchise
Agreement. The upgraded system will have have the technical capability
to offer a minimum of 83 channels on an analog and/or digital basis
through its trunk or feeder lines.
12.2 Falcon will provide the City with a minimum of two "access"
channels - one each for government and educational access use. The
City will be the entity responsible for operating these channels,
shall have full editorial control and may program these channels in
any manner they deem fit, provided such programming is non-commercial
and non-profit. Falcon will activate these channels within 30 days of
the completion of the system upgrade.
13 INSURANCE
Within ninety (90) days following the grant of a franchise the Grantee shall
obtain the following insurance policies:
13.1 A general comprehensive liability policy indemnifying, defending
and saving harmless the City, its officers, boards, commissions,
agents or employees from any and all claims by any person whatsoever
on account of injury to or death of a person or persons occasioned by
the operations of the Grantee under the franchise herein granted, or
alleged to have been so caused or occurred, with a minimum liability
of Five Hundred thousand Dollars ($500,000) per personal injury, death
of any one person or damage to property and One Million Dollars
($1,000,000) for personal injury, death of any two or more persons in
any one occurrence or damage to property.
13.2 All insurance policies called for herein shall be in a form
satisfactory to the City and shall require thirty (30) days written
notice of any cancellation to both the City and the Grantee. The
Grantee shall, in the event of any such cancellation notice, obtain,
pay all premiums for, and file with the City , written evidence of the
issuance of replacement policies within thirty (30) days following
receipt by the City or the Grantee of any notice of cancellation. In
recognition of the foregoing each party agrees to cause their
respective insurance carriers to waive any rights of subrogation.
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14 INDEMNIFICATION
The Grantee, by its acceptance of a franchise granted pursuant to this
Ordinance, shall indemnify and hold harmless the City, its officials, boards,
commissions and employees against any and all claims, suits, causes of action,
proceedings, and judgments for damage arising out of the award of a franchise to
the Grantee and its operation of the cable television system under the
franchise. These damages shall include, but not be limited to, penalties arising
out of copyright infringements and damages arising out of any failure by Grantee
to secure consents from the owners, authorized distributors or licensees of
programs to be delivered by the Grantee's cable television system whether or not
any act or omission complained of is authorized, allowed, or prohibited by the
franchise.
15 FRANCHISE VIOLATIONS: PROCEDURES, NOTICE, AND CURE
Before exercising any right of redress available to it under the terms
of this Ordinance, including determination of any penalty assessable
under applicable law, the City shall follow the procedures set forth
in this Section.
15.1 The City shall notify Grantee in writing, by Certified Mail, of
any alleged violation, ("Violation Notice") which notice shall include
a detailed description of any alleged violation and a request for cure
of such violation.
15.2 Grantee shall have thirty (30) days from the date of receipt of
such notice to respond in writing, indicating: (1) that Grantee has
cured the alleged violation, providing reasonable documentation
demonstrating that the alleged violation has been cured; (2) that
Grantee has commenced or will commence actions to cure the alleged
violation, but that the alleged violation cannot reasonably be cured
immediately, describing the steps to be taken to cure the alleged
violation; or (3) that Grantee disagrees with the allegation that a
violation has occurred and contests the Violation Notice, stating the
reasons therefor. If a violation is cured by Grantee within sixty (60)
days of receipt of notice, then no penalty shall be imposed.
15.3 Upon receipt of Grantee's response to the Violation Notice, the
City may either accept Grantee's proposed cure and/or explanation, or
if it believes that the violation will not be cured within a
reasonable period of time, the City may schedule an administrative
hearing, providing Grantee no less than fifteen (15) days written
notice of the hearing which shall afford Grantee due process including
an opportunity to present evidence.
15.4 Within fifteen (15) days following an administrative hearing on
an alleged violation, the City shall issue a written report stating
its findings and the reasons therefor. The City may determine (a) that
the alleged violation has been corrected, or is in the process of
being corrected by Grantee, and that no further action is required;
(b) that an extension of the time or other appropriate relief should
be granted until the cure for the problem can be completed by Grantee;
(c) that the problem is beyond Grantee's direct control and that
Grantee is not at fault; or, (d) that other appropriate action should
be taken.
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15.5 In cases involving construction codes or technical standards, if
the alleged violation does not pose a substantial and immediate safety
hazard, Grantee shall be allowed a reasonable and sufficient time to
complete any required corrections or repairs to the system to remedy
any alleged noncompliance. So long as Grantee is making a good faith
effort to correct the alleged noncompliance, no penalties shall be
assessed. A "substantial and immediate safety hazard" shall be defined
as one posing an imminent likelihood of injury to persons if not
repaired immediately. Grantee shall not be penalized for other minor
violations of the Franchise or applicable codes, so long as it
demonstrates it is making good faith efforts to correct any problem or
violation within a reasonable period of time of the discovery of
alleged violation.
16 FRANCHISE TERMINATION AND CONTINUITY OF SERVICE
16.1 In the event of a formal denial of renewal or revocation of a
franchise, which denial or revocation is upheld by final judicial
adjudication of any appeal(s) which may be filed, the Grantee shall
have a period of one (1) year from such final adjudication within
which to transfer or convey the assets of the cable system to another
owner. Approval of such proposed transfer or assignment shall not be
unreasonably withheld by the City.
16.2 In the event the franchise term expires prior to formal action
being taken by the City either to renew the franchise or deny renewal,
the term of this franchise shall automatically be extended until such
time as formal action to renew or deny renewal is taken by the City.
The renewal procedures and criteria contained in Section 626(c) of the
Cable Communications Policy Act of 1984, as amended, shall be followed
by the City and the Grantee.
17 FORCE MAJEUR
In the event the Grantee is prevented or delayed in the performance of any of
its obligations under this Ordinance by reason of flood, fires, hurricanes,
tornadoes, earthquakes or other acts of God, unavoidable casualty,
insurrections, war, riot, sabotage, unavailability of materials or supplies,
vandalism, strikes, boycotts, lockouts, labor disputes, shortage of labor,
unusually severe weather conditions, acts or omissions or delays by utility
companies upon whom Grantee is dependent for pole attachments or easement use,
Grantee is unable to obtain necessary financing or any other event which is
beyond the reasonable control of the Grantee, the Grantee shall have a
reasonable time under the circumstances to perform its obligations under this
Ordinance or to procure a reasonable and comparable substitute for such
obligations. Under such circumstances the Grantee shall not be held in default
or noncompliance with the provisions of the Ordinance nor shall it suffer any
penalty relating thereto.
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18 GRANT OF ADDITIONAL FRANCHISE AND COMPETING SERVICE PROVIDERS
18.1 Application Procedures
----------------------
18.1(a) An application for a new cable television franchise shall
be submitted to the City in a form specified by or acceptable to
the City, and in accordance with procedures and schedules
established by the City. The City may request such facts and
information as it deems appropriate.
18.1(b) Upon request, any applicant shall furnish to the City a
map of suitable scale, showing all roads and public buildings,
which indicates the areas to be served and the proposed dates of
commencement of service for each area. The proposed service area
shall be subject to approval by the City. If approved, the
service area shall be incorporated into any franchise granted
pursuant to this Ordinance. If no service area is specifically
delineated in a franchise, it shall be considered to be
coterminous with the boundaries of the City.
18.1(c) After receiving an application for a franchise, the City
shall examine the legal, financial, technical and character
qualifications of the applicant. The City may grant one or more
non-exclusive franchises creating a right to construct and
operate a cable television system within the public ways of the
City, subject to the provisions of this Section.
18.1(d) In the event an application is filed proposing to serve a
franchise area which overlaps, in whole or in part, an existing
Grantee's franchise area, a copy of such application shall be
served upon any existing Grantee by the City by registered or
certified mail. Such notice shall be considered a condition
precedent to consideration of the application for a franchise by
the City.
18.2 Competing Service Providers
---------------------------
18.2(a) Any franchise granted by the City shall be non-exclusive.
However, nothing in this ordinance shall be construed to require
it to grant more than one franchise if the City determines
pursuant to the procedures established in this Ordinance, that
granting additional franchises would be detrimental to the public
interest.
18.2(b) In the event a competing service provider commences
operation of a communications facility which offers services
similar to those offered by Grantee, the City shall not require
Grantee to operate under terms or conditions otherwise required
by this Ordinance which are either less favorable or more
burdensome than those under which the competing service provider
must operate. Any franchise which may be granted by the City to a
competing service provider shall require the new Grantee to
provide cable service to the entire franchise area then served by
the existing Grantee. An existing Grantee may, at its discretion,
comply with the most favorable terms contained in any subsequent
franchise granted by the City.
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18.2(c) Since competing or overlapping franchises may have an
adverse impact on the public rights-of-way, on the quality and
availability of communications services to the public and may
adversely affect the existing operator's ability to continue to
provide the services and facilities it is presently providing
under this Ordinance, the City may issue a franchise in an area
where another Grantee is operating only following a public
hearing to consider the potential impact which the grant of an
additional franchise may have on the community. In considering
whether to grant one or more additional franchises, the City
shall specifically consider, and address in a written report the
following issues:
18.2(c)(1) The positive and/or negative impact of an
additional franchise on the community.
18.2(c)(2) The ability and willingness of the specific
applicant in question to provide cable television service to
the entire franchise area which is served by the existing
cable operator. The purpose of this subsection is to ensure
that any competition which may occur among Grantees will be
on equal terms and conditions so as not to give a
competitive advantage to one Grantee over another.
18.2(c)(3) The amount of time it will take the applicant to
complete construction of the proposed system and activate
service in the entire franchise area; and, whether the
applicant can complete construction and activation of its
system in a timely manner.
18.2(c)(4) The financial capabilities of the applicant and
its guaranteed commitment to make the necessary investment
to erect, maintain and operate the proposed cable TV system
for the duration of the franchise term. In order to ensure
that any prospective Grantee does have the requisite current
financial capabilities, the City may request equity and debt
financing commitment letters' current financial statements,
bonds, letters of credit or other documentation to
demonstrate to the City 's satisfaction that the requisite
funds to construct and operate the proposed system are
available.
18.2(c)(5) The quality and technical reliability of the
proposed system, based upon the applicant's plan of
construction and the method of distribution of signals, and
the applicant's technical qualifications to construct and
operate such system.
18.2(c)(6) The experience of the applicant in the erection,
maintenance and operation of a cable television system.
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18.2(c)(7) The capacity of the public rights-of-way to
accommodate one or more additional cable systems and the
potential disruption of those public rights-of-way and
private property that may occur if one or more additional
franchises are granted.
18.2(c)(8) The disruption of existing cable television
service and the potential that the proposed franchise would
adversely affect the residents of the City.
18.2(c)(9) The likelihood and ability of the applicant to
continue to provide competing cable television service to
subscribers within the entire franchise area for the
duration of the franchise.
18.2(c)(10) Such other information as the City may deem
appropriate to be considered prior to granting any competing
or overlapping franchise.
18.3 Permits for Non-Franchised Entities
-----------------------------------
The City may issue a license, easement or other permit to a person
other than the Grantee to permit that person to traverse any portion
of the Grantee's franchise area within the City in order to provide
service outside, but not within the City. Such license or easement,
absent a grant of a franchise in accordance with this Ordinance, shall
not authorize nor permit said person to provide cable television
service of any type to any home or place of business within the City
nor render any other service within the City.
19 TRANSFER OR ASSIGNMENT OF FRANCHISE
19.1 A Grantee may transfer or assign its franchise to another entity
(the "Assignee") upon thirty (30) days notice to the City . The
Grantee shall provide to the City a reasonable showing that the
proposed Assignee or Transferee possesses the technical and financial
qualifications to operate the cable TV system properly. The proposed
Transferee or Assignee shall provide the City with a written statement
that it agrees to comply with all material terms of the franchise to
be transferred. The City shall not unreasonably delay or deny the
assignment or transfer of a franchise. The reasonableness of the
City's actions shall be subject to judicial review by a court of
appropriate jurisdiction. The proposed transfer or assignment shall be
deemed approved if no action is taken by the City within sixty (60)
days of the written request for transfer by the Grantee.
19.2 The Grantee may secure financing or an indebtedness by trust,
mortgage, or other instrument of hypothecation of the franchise, in
whole or in part, without requiring the consent of the City. Consent
shall not be required to assign a franchise from one business entity
to another which is operated or managed by the Grantee or any
affiliated entity. In addition, so long as the manager and/or general
partner of the Grantee remains the same, consent shall not be required
to transfer the interests of any limited partner of the Grantee, who
has no day to day operational control of the Grantee or the system.
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March 19, 1999
Page 14
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19.3 A Grantee may transfer or assign its franchise to an affiliated
entity upon thirty (30) days notice to the City. Consent of the City
shall not be required for such an assignment, provided that; a) the
City is provided with a reasonable showing that the proposed Assignee
possesses the technical and financial qualifications to operate the
cable TV system and, b) that the Assignee agrees to comply with the
terms of this Ordinance.
20 COMPLIANCE WITH STATE AND FEDERAL LAW
The Grantee and the City shall at all times comply with all applicable State and
Federal laws and the applicable rules and regulations of administrative
agencies. If the Federal Communications Commission (FCC) or any other federal or
state governmental body or agency enacts any law or regulation or exercises any
paramount jurisdiction over the subject matter of this Ordinance or any
franchise granted hereunder, the jurisdiction of the City shall cease and no
longer exist to the extent such superseding jurisdiction shall preempt or
preclude the exercise of like jurisdiction by the City. The City and the Grantee
reserve all rights they each may possess under law, unless expressly waived
herein.
21 NOTICE TO GRANTEE
Except as otherwise provided in this Ordinance, the City shall not meet to take
any action involving the Grantee's franchise unless the City has notified the
Grantee by certified mail at least thirty (30) days prior to such meeting, as to
its time, place and purpose. The notice provided for in this section shall be in
addition to, and not in lieu of, any other notice to the Grantee provided for in
this Ordinance. All notices, requests, demands and other communications required
or permitted hereunder shall be in writing and shall be deemed to have been duly
given if mailed by certified mail return receipt requested, addressed to the
Grantee's corporate office as follows:
Enstar Income Program II-2
c/o Charter Communications
12444 Powerscourt Dr., Suite 100
St. Louis, Missouri 63131
Attn: Celeste Vossmeyer
22 STREET OCCUPANCY
22.1 Grantee shall utilize existing poles, conduits and other
facilities whenever possible, but may construct or install new,
different, or additional poles, conduits, or other facilities whether
on the public way or on privately-owned property with the written
approval of the appropriate government authority, and, if necessary
the property owner. Such approval shall not be unreasonably withheld
by the governmental agency.
Malden, MO Cable TV Franchise Ordinance
March 19, 1999
Page 15
<PAGE>
22.2 All transmission lines, equipment and structures shall be so
installed and located as to cause minimum interference with the rights
and appearance and reasonable convenience of property owners who
adjoin on any public way and at all times shall be kept and maintained
in a safe condition and in good order and repair. The Grantee shall at
all times employ reasonable care and shall use commonly accepted
methods and devices for preventing failures and accidents which are
likely to cause damage, injuries or nuisances to the public.
22.3 Grantee shall have the authority to trim trees on public property
at its own expense as may be necessary to protect its wires and
facilities, subject to the direction of the City or other appropriate
governmental authority.
23 ACCESS TO PUBLIC AND PRIVATE PROPERTY
23.1 Grantee shall have the right to enter and have access to the
property and premises of the City or that of any subscriber for
purposes of installing cable TV service or recovering and removing
Grantee's property and equipment when a subscriber's service is
terminated and a subscriber refuses to return such equipment to the
Grantee.
23.2 The City shall not permit any person who owns or controls a
residential multiple unit dwelling, trailer park, condominium,
apartment complex, subdivision or other property to interfere with the
right of any tenant, resident or lawful occupant thereof to receive
cable installation, service or maintenance from Grantee, except as
federal or state law shall otherwise require.
23.3 Upon request by Grantee, the City shall promptly exercise any
rights it may have to permit or enable Grantee to obtain or utilize
easements with respect to any residential multiple unit dwelling,
trailer park, condominium, apartment complex, subdivision or other
property as required to facilitate Grantee's use thereof for purposes
of providing system service to the tenants, residents or lawful
occupants thereof. In any such proceeding, the restitution to the
Owner for the amount of space utilized by the system, considering the
enhanced value to the premises resulting from the installation of
cable television facilities, shall be a one-time charge of $1.00 per
dwelling unit.
24 NONDISCRIMINATION IN EMPLOYMENT
The Grantee shall neither refuse to hire nor discharge from employment nor
discriminate against any person in compensation, terms, conditions, or
privileges of employment because of age, sex, race, color, creed, or national
origin. The Grantee shall insure that employees are treated without regard to
their age, sex, race, color, creed or national origin.
Malden, MO Cable TV Franchise Ordinance
March 19, 1999
Page 16
<PAGE>
25 GRANTEE MAY ISSUE RULES
The Grantee shall have the authority to issue such rules, regulations, terms and
conditions of its business as shall be reasonably necessary to enable it to
exercise its rights and perform its services under this Ordinance and the Rules
of the FCC, and to assure uninterrupted service to each and all of its
subscribers. Such rules and regulations shall not be deemed to have the force of
law.
26 SEVERABILITY OF ORDINANCE PROVISIONS
If any section of this Ordinance or the franchise, or any portion thereof, is
held invalid or unconstitutional by any court of competent jurisdiction or
administrative agency, such decision shall not affect the validity of the
remaining portions of the Ordinance or franchise.
27 EFFECTIVE DATE
This ordinance shall become effective upon the date of its adoption by the City.
Any failure by the City to follow proper procedures under state or local law in
adopting this Ordinance or granting a franchise shall not abrogate the rights or
obligations of either the Grantee or the City under this Ordinance. If,
following adoption of this Ordinance it is subsequently determined that proper
legal procedures have not been followed by the City, it shall be the
responsibility of the City to rectify any procedural defects and ratify the
terms of this Ordinance.
PASSED AND APPROVED by the City Council of Malden this 27th day of March, 2000.
BY: /s/ Cecil Week, Jr.
--------------------
Title: Mayor
ATTEST: /s/ Francis J. Nimmo
--------------------
Title: City Clerk
ACCEPTED BY Enstar Income Program II-2.
BY: /s/ Gene O'Kaoslain
--------------------
Title: Senior VP Operational Central Region
Charter Communications
ATTEST: /s/ Deanna S. Porter
--------------------
Title: Executive Assistant
Charter Communications
Malden, MO Cable TV Franchise Ordinance
March 19, 1999
Page 17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AT MARCH 31, 2000, AND THE STATEMENTS OF OPERATIONS FOR THE THREE MONTHS
ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000757597
<NAME> ENSTAR INCOME PROGRAM II-2, L.P.
<MULTIPLIER> 1
<CURRENCY> US$
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 6,202,400
<SECURITIES> 0
<RECEIVABLES> 32,700
<ALLOWANCES> 6,300
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 10,842,300
<DEPRECIATION> 8,043,000
<TOTAL-ASSETS> 9,193,200
<CURRENT-LIABILITIES> 409,400
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 9,193,200
<SALES> 0
<TOTAL-REVENUES> 984,300
<CGS> 0
<TOTAL-COSTS> 664,800
<OTHER-EXPENSES> (74,600)
<LOSS-PROVISION> 9,200
<INTEREST-EXPENSE> 4,200
<INCOME-PRETAX> 389,900
<INCOME-TAX> 0
<INCOME-CONTINUING> 389,900
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 389,900
<EPS-BASIC> 12.92
<EPS-DILUTED> 0
</TABLE>
