Article 5. DESIGN PROVISIONS  

1.

System Design. Grantee shall continue to operate two (2) functionally separate Cable Systems: The Home Subscriber Network ("HSN") and the Institutional Communications Network ("ICN"). Both Systems shall remain two-way capable and shall be capable of transmitting audio, video, and data signals. The two networks shall be fully interconnected and, upon approval of Grantor, may be functionally combined so as to provide both HSN Services and ICN Services over one network.

2.

Home Subscriber Network. The HSN shall pass by every single-family dwelling unit and multiple-family dwelling unit within the Franchise Area in accordance with the line extension policies set forth in the Franchise. Service shall be provided to Subscribers in accordance with the schedules and line extension policies specified in this Franchise.

3.

Home Subscriber Network Drops to Public Buildings. Grantee shall provide installation of one (1) cable Drop, one (1) cable outlet, provide monthly Basic Cable Service and the most widely subscribed to cable programming service tier, without charge, to the buildings receiving such Service on the Effective Date, and such other public or educational institutions passed by the System which the Commission may designate. Drops and outlets in addition to the one (1) free drop and outlet required by this section 5.3 to any of the buildings described in this section shall be provided by Grantee at the cost of Grantee's time and material. Alternatively, at the institution's request, said institution may add outlets at its own expense, as long as such installation meets Grantee's standards. Following Grantor's designation of additional buildings(s) to receive Cable Service, the Grantee shall complete construction of the Drop and outlet within thirty (30) days for existing facilities passed by the System, if Grantor requests construction on such schedule.

4.

Upgrade of Home Subscriber Network.

1.

Grantee shall upgrade the HSN (herein referred to as the "System Upgrade") as set forth below. The System Upgrade shall incorporate a new design that will provide for bandwidth capacity equivalent of 750 MHz.

2.

The System Upgrade shall also be completed with the following minimum specifications:

A.

A Hybrid fiber optic coaxial ("HFC") "fiber to the node" design that is capable of being immediately activated to provide two-way interactive voice, video and data services. Each node shall be activated so as to be able to provide Service to two thousand (2,000) homes upon completion of the System Upgrade and with the capability to migrate to five hundred (500) home nodes as Grantee determines marketplace need dictates.

B.

The upgraded HSN shall be capable of interconnecting with other Cable Systems operating in cities immediately adjacent to the Franchise Area.

5.

Construction Timetable. Grantee's construction timetable for the System Upgrade is as follows:

A.

By December 31, 1998, Grantee shall complete a full system walkout of 1,354 strand mile of cable plant, complete digitization of as-built maps, and commence permitting and construction of the fiber upgrade.

B.

By December 31, 1999, Grantee shall complete fiber optic design and head end upgrade.

C.

By December 31, 2000, Grantee shall begin activating 2,000 home nodes resulting in reduced amplifier cascades, improved picture quality, and enhanced System reliability.

D.

By December 31, 2001, Grantee shall complete the required fiber optic construction phase of the upgrade.

E.

By December 31, 2002, Grantee shall complete all 450 MHz electronics changeout and all activation.

F.

If Grantee fails to meet the deadline set forth in subparagraph E of this section, Grantor may impose penalties pursuant to section 10 of this Franchise. Penalties under section 10 of this Franchise shall not be imposed by Grantor because of Grantee's failure to meet the deadlines set forth in subparagraphs A through D of this section. For any schedule delay that may occur, the burden of proof shall be on the Grantee to demonstrate that such delay was beyond its reasonable control or was not reasonably foreseeable.

G.

Grantee shall provide a System Upgrade progress report at every regularly scheduled Commission meeting until completion of the System Upgrade. Grantee shall notify the Commission in writing within ten (10) days of completion of the System Upgrade.

6.

Institutional Communications Network or "ICN".

A.

Grantee shall operate a totally separate ICN with 400 MHz capacity. By September 1, 1998, all audio and video signals transmitted on the ICN shall comply with the technical performance standards set forth in section 7.2 of this Franchise. The ICN shall be fully interconnected with the "HSN". In addition, the ICN shall have equipment redundancy as required to meet its performance standards.

B.

Grantee shall allocate twenty percent (20%) of its total ICN transmission capacity to educational use, and an additional twenty percent (20%) of its total ICN transmission capacity for the use of non-profit and governmental institutions, including public libraries, City halls, police and fire stations and hospitals.

C.

To the extent not being utilized by Grantee, all sixty percent (60%) of ICN capacity set aside for commercial use shall be available for use by educational and governmental institutions.

D.

All educational and governmental institutions utilizing any portion of the sixty percent (60%) of ICN capacity set aside for commercial use and receiving free ICN service on the Effective Date of this Franchise shall be allowed to continue utilizing such ICN capacity to that extent and receive such ICN services to that extent free of charge.

E.

After the Effective Date of this Franchise, and upon the request of Grantor, Grantee shall provide ICN Drops to all public buildings in the Franchise Area, provided that the first 250 feet of such ICN Drops shall be provided free of charge by Grantee. To the extent that any ICN Drops exceed 250 feet, or require plant extensions, such excess Drop footage or plant extensions shall be provided by Grantee at its cost of time and materials.