§ A230-15. Payment of fees and costs.

A. 

Franchise fee. Following the issuance and acceptance of the franchise, Comcast shall pay to the Town a franchise fee in an amount equal to 5% of all gross revenues, derived by Comcast from the operation of the cable system to provide cable services within the Town of Elsmere for each twelve-month period thereafter and without credit for taxes or fees paid to the state.

(1) 

Gross revenues shall include:

(a) 

Any and all cash, credits, property, or other consideration of any kind or nature that constitute revenue as determined in accordance with generally accepted accounting principles [GAAP] and that arise from or are attributable to, or in any way derived directly or indirectly by Comcast from, the operation of the cable system to provide cable service (except as hereinafter specifically excluded). Gross revenues shall include all items permitted to be included in gross revenues for the calculation of franchise fees under applicable law, including, without limitation:

[1] 

Any fees collected from subscribers for cable service, including expanded services and premium services, pay-per-view service and other per-channel or per-program service;

[2] 

Installation, disconnection, reconnection, and change-in-service fees;

[3] 

Fees for rental or sale of converters, remote controls, or other subscriber equipment;

[4] 

Late fees and administrative fees collected by the grantee, including any fees passed on to and collected from subscribers such as cable franchise fees and FCC regulatory fees;

[5] 

Fees from programmers for leased access programming;

[6] 

Local, regional and national advertising revenues attributable on a pro rata basis to the cable system; and

[7] 

Revenues for sales of any products or services on the cable system, such as "home shopping" or a similar channel.

(b) 

Revenues which are not directly attributable to specific customers, such as advertising revenue and home shopping commissions, shall be allocated to systems and jurisdictions on a per-subscriber basis measured in a consistent manner from period to period. To that extent, said revenue amounts shall be calculated on a pro rata basis by the dividing of the total number of subscribers within the Town to the total number of subscribers in the cable system area that includes the Town.

(2) 

Gross revenues does not include:

(a) 

Any taxes on services furnished by grantee that are imposed directly on any subscriber by the Town or another governmental unit and that are collected by the grantee on behalf of said governmental unit. A franchise fee is not such a tax.

(b) 

Any receipts written off as uncollectable (i.e., "bad debt"), provided, however, that all or any part of any such actual bad debt that is written off but subsequently collected shall be included in gross revenues in the period collected, provided the grantee maintains its books consistently, year to year, in accordance with generally accepted accounting principles.

(c) 

Gross revenues shall not include revenue derived from investment income, refundable deposits, sales of capital equipment or assets, program launch fees, or any forgone revenue that Comcast chooses not to receive in exchange for its provision of free or reduced-cost cable or other communications services to any person, including without limitation employees of Comcast and public institutions or other institutions designated in the franchise.

B. 

Payments to Town. No acceptance of any payment shall be construed as an accord that the amount paid is in fact the correct amount, nor shall such acceptance of payment be construed as a release of any claim the Town may have for further or additional sums payable under the provisions of this agreement. Upon 20 business days' prior written notice and subject to § 631 of the Cable Act, the Town shall have the right to inspect the books and records of Comcast during the normal business hours and the right to audit and recompute any amounts determined to be payable under this agreement; provided, however, that such audit shall take place within three years following the close of Comcast's fiscal year after which period any such payment shall be considered final. Any additional amount due to the Town as a result of such audit shall be paid within 30 days following written notice to Comcast by the Town which notice shall include a copy of the audit report.

C. 

Comcast shall have 30 days from the receipt of the statement regarding an alleged underpayment to provide the Town with any written objection to the results of the franchise fee review, including any substantiating documentation. Based on this exchange of information, the Town shall make a final determination of the underpayment(s), if any, within 30 days of Comcast's objection and shall provide Comcast with written notice of the determination. If Comcast disputes the Town's final determination, it may submit the dispute to mediation or arbitration within 30 days of receiving the Township's written notice of determination. In the event that Comcast fails to submit the matter to mediation or arbitration within the required time period, the Town's final determination shall be binding on Comcast. If Comcast submits the matter to mediation and an agreement is not reached, either party may bring an action to have the dispute determined by a court of competent jurisdiction.

D. 

Other requirements not franchise fees. Except where expressly provided herein, or required by federal law, Comcast's satisfaction of its obligations in other sections of this agreement deemed incidental to the awarding or enforcing of the franchise (e.g., bond payments, insurance, indemnification, fines or penalties) and/or other minor expenses shall not be considered payment of a franchise fee or taken as a credit against the franchise fee obligation.