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o CenturyLink permitted to serve more households than the initial commitment.  Quarterly Meetings. Starting January 1, 2016, CenturyLink must meet with the City [and/or City designee at NSCC] and show to the City’s satisfaction: o Number of households capable of being served and actually served. o Compliance with anti-redlining requirements. o Maps and documentation “showing exactly where within the City the Grantee is currently providing cable service.”  Additional Build-Out Based on Market Success. Starting January 1, 2016, the CenturyLink build-out commitment will increase if its penetration rate is at least 27.5% in the areas that it is offering service. o Example: If CenturyLink is offering service to 60% of a City and CenturyLink has penetration of 30% in that area, then the build-out commitment will increase by 15%, to cover 75% of the City. o Additional build-out commitment continues until all households are served.  Line Extension. No initial mandatory line extension, unless CenturyLink becomes the dominate cable provider. Then the City decides CenturyLink’s build-out schedule, including a density requirement that is the same or similar to Comcast’s density requirement. The City may consider whether the Initial Minimum Build-Out Commitment of 15% of each member city over two years is reasonable. CenturyLink claimed in its application that it initially would be providing service to a greater portion of the City. During negotiations however, CenturyLink was concerned about having too high a commitment in the franchise ordinance and that cities in Minnesota and elsewhere would use a greater commitment as a new standard. CenturyLink refused to increase the Initial Minimum Build-Out Commitment above 15%. However, the provisions related to Quarterly Meetings and Additional Build-Out Based on Market Success are designed to quicken and increase CenturyLink’s initial Build-Out Commitment. The franchise also has provisions requiring that residents of each member city be included in an equitable initial build commitment and that a significant number of households below the medium income of the city also be included in the initial build-out. CenturyLink must also use its best efforts to complete its initial build faster than two years. Another issue related to the reasonable build-out is whether the penetration rate triggering additional build-out is reasonable. CenturyLink claims that it needs a penetration rate of 27.5% in order to commit to an additional mandatory build in the City. This penetration number is based on internal CenturyLink return on investment models. Given Comcast’s penetration rate in the City is around 40-50%, a penetration rate of 27.5% may be difficult to obtain and, therefore, it is possible that CenturyLink may not be required to build-out more than its initial commitment.