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HomeMy WebLinkAboutO-2657 - Grants Cable Television FranchiseCITY OF MARYSVILLE Marysville,Washington ORDINANCE NO.2,,57 AN ORDINANCE OF THE CITY OF MARYSVILLE GRANTING A FRANCHISE TO WAVEDIVISION I, LLC TO OPERATE A CABLE TELEVISION SYSTEM IN CITY RIGHTS-OF-WAY. This Cable Television Franchise ("Franchise") is entered into in Marysville, Washington, this '2+1\1 day of :r,'-'1 '2006, by and between the City of Marys..~l1e,Washington a municipal corporation, (hereinafter "City") and WaveDivision I, LLC (hereinafter "Grantee"). City and Grantee are sometimes referred to hereinafter collectively as the "parties." WHEREAS,Grantee has applied to the City for a nonexclusive franchise to construct, maintain, operate, replace and repair a Cable System in, on, across, -over, along, under or through Rights-of-Way within the Franchise Area; and WHEREAS,the City has considered the financial,technical and legal qualifications of Grantee, and has determined that Grantee's plans for constructing,<operating and maintaining its Cable System are adequate, in a full public proceeding affording due process to all concerned; and WHEREAS,the public has had adequate notice and opportunity to comment on Grantee's proposal to provide cable television service within the Franchise Area;.and WHEREAS, the City has a legitimate and necessary regailatory role in ensuring the availability of state-of-the-art cable communications service, the high technical capability and reliability of cable systems, the availability of local programming (including educational and governmental access programming) and quality customer service; and WHEREAS,diversity in cable service and local and non-local programming is an important policy goal and the Grantee's Cable System should offer a broad rarage of programming services; and WHEREAS,flexibility to respond to changes in technology and subscriber interests within the cable service market should be an essential characteristic ofthis F.ranchise and the Grantee will take advantage of new technology to benefit subscribers and citizens; as such technology becomes available; and WHEREAS,the City is authorized by applicable law to gremt one or more nonexclusive franchises to construct, operate and maintain a cable system or systerrss within the boundaries ofthe City. 1 -~~----------------- NOW,THEREFORE,THE CITY COUNCIL OF THE CITY OF MARYSVILLE, WASHINGTON DO ORDAIN AS FOLLOWS: SECTION 1.DEFINITIONS For the purposes of this Franchise the following terms, phrases, words and their derivations shall have the meanings given herein. When not inconsistent with the context, words used in the present tense include the future, words in the plural include the singular, and words in the singular include the plural. Words not defined shall be given their common and ordinarymeaning. The word "shall" is alwaysmandatory and not merely directory. 1.1 "Access"means the availability for noncommercial use by various governmental and educational agencies, institutions, organizations, and other groups and individuals in the community, including the City and its designees,of particular channels on the Cable System to receive and distribute progranuning to Subscribers,as permitted under applicable law. (A) "Educational Access" means Access where Schools are the primary users having editorial control over progranuning and services. (B)"Government Access" means Access where governmental institutions or their designees are the primaryusers havingeditorial control over progranuning and services. 1.2 "Access Channel"means any channel, or portion thereof, designated for Access purposes or otherwise made available to facilitateor transmitAccess programming. 1.3 "Activation"or "Activated"means the status of any capacity on or part of the Cable System wherein the use of that capacity or part thereof may be made available without further installation of system equipment other than Subscriber premise equipment, whether hardware or software. 1.4 "Affiliate"when used in connectionwith Grantee means any Person who owns or controls, is owned or controlled by, or is under common ownership or controlwith, Grantee. 1.5 "Bad Debt"means amounts lawfully owed by a Subscriber and accrued as revenues on the books ofGrantee, but not collected afterreasonableefforts by Grantee. 1.6 "Basic Service"means the Cable Service tier which includes, at a minimum, the retransmission oflocal television broadcastsignals and Access progranuning. 1.7 "Broadcast Signal"means a television or radio signal transmitted over the air to a wide geographic audience, and received by an antenna,microwave, satellite dishes or any other means. 2 - - - ------------------------------_....... 1.8 "Cable Act" means the Cable Communications Policy Act of 1984, as amended by the Cable Television Consumer Protection and Competition Act of 1992,3FIId the Telecommunications Act of 1996,and any future amendments thereto. 1.9 "Cable Internet Service"means any service offered by Grantee whereby Persons receive access to the Intemet through the Cable System. 1.10 "Cable Operator"means any Person or groups of Persons,including Grantee, who provides Cable Service over the Cable System and directly or through oae or more Affiliates owns a significant interest in such Cable System or who otherwise oontrol(s)or is(are) responsible for, through any arrangement, the management and operation ofsuch a CableSystem. 1.11 "Cable Service"means the one-way transmission to Subscribers of Video Programming, or other programming service and Subscriber interaction,ifany,which is required for the selection or use ofsuch Video Programming or other programming service. 1.12 "Channel"means a portion of the frequency band capable of carrying a Video Programming Service, an audio service or a combination of Video l!"JFogramming Services and audio services, whether delivered in an analog or digital format,on a twenty-four (24) hour per day basis or a portion thereof. 1.13 "City"means the City ofMarysville,Washington,a municipal cerporation. 1.14 "Connection",with regard to connections to public buildings,means installation of fiber optic or coaxial cable or other System related facilities through the outer wall of the building leaving adequate excess space to permit further connection to other facilities,plant or cable within the building. 1.15 "Designated Access Provider"means the entity or entities <designated by the City to manage or co-manage Access Channels and facilities. The City may be a Designated Access Provider. 1.16 "Downstream"means carrying a transmission from the Headead to remote points on the System or to interconnection points on the System. 1.17 "Dwelling Unit"means any residential building,Of"each portion thereof that has independent living facilities, including provisions for cooking,sanitatien and sleeping and that is designed for residential occupancy. 1.18 "Expanded Basic Service"means cable programming services not included in the Basic Service and excluding, for example, premium or pay-per-view services, 1.19 "FCC"means the Federal Communications Commission or its lI:awful successor. 3 oJ, 1.20 "Fiber Optic"means a transmission medium of optical fiber cable, along with all associated electronics and equipment capable of carrying Cable Service by means of electric light wave impulses. 1.21 "Franchise"means the document in which this definition appears, which is executed between the City and Grantee, containing the specific provisions of the authorization granted and the contractual agreement created hereby. 1.22 "Franchise Area"means the depicted area on Exhibit A (the "Initial Area"), including any areas immediately adjacent to the InitialArea annexed by the Cityduring the term ofthis Franchise. 1.23 "Gross Revenues"means anyand all revenue derived directly or indirectly by the Grantee, .or by Grantee's Affiliates, from the operation ofGrantee's Cable System to provide Cable Services in the Franchise Area. Gross Revenues include, by way of illustration and not limitation, monthly fees charged Subscribers for Cable Services including Basic Service, any expanded tiers of Cable Service, other tiers ofCable Service, Premium Services; Cable Service installation, disconnection, reconnection and change-in-service fees, Leased Access Channel fees, Cable Service lease payments to the Cable System, late fees and administrative fees; payments or other consideration receivedby the Grantee from programmers for carriage of Cable Services on the Cable System and accounted for as revenue under GAAP; revenues from rentals of converters or other Cable System equipment, advertising sales revenues; the fair market value of consideration received by the Grantee for use of the Cable System to provide Cable Service and accounted for as revenue under GAAP; rvenues from program guides, revenue from Cable Internet Service to the extent that service is considered a Cable Service under federal or State law, additional outlet fees, Franchise Fees, revenue from interactive services to the extent they are considered Cable Services under federal or State law, revenue from the sale or carriage ofother Cable Services, and revenues from home shopping. Gross Revenues shall not include (i) Bad Debt, provided, however, that all or part of any such Bad Debt that is written off but subsequently collected shall be included in Gross Revenues in the period collected; (ii) the capital advances and Capital Contribution referenced in Sections 9.6 and 9.7; or (iii) any taxes on services furnished by the Grantee which are imposed directly on any Subscriber or user by the State, City or other governmental unit and which are collected by the Grantee on behalf of said governmental unit. The Franchise Fees are not such a tax, and are therefore included in GrossRevenues. 1.24 "Headend"means any facility for signal reception and dissemination on the System, including cables, antennas, wires, satellite dishes, monitors, switchers, modulators, processors and other related equipment. 1.25 "Interconnect"or "Interconnection"means the linking of the System with another contiguous cable system, including technical, engineering, physical, financial and other necessary components to accomplish, complete and adequately maintain such linking, in a manner to permit the transmission and receiving of Access programming between the System and other cable systems. 4 1.26 "Leased Access Channel"means any Channel or portion of a Channel commercially available forprogramming in accordancewith Section 612 ofthe CableAct. 1.27 "Noncommercial"means, in the context ofAccess Channels, that particular products and services are not promoted or sold. This shall not be interpreted to prohibit an Access Channel operator or programmer from soliciting and receiving financial support (i.e., fundraising) to produce and transmit programmingon an Access Channel, or from acknowledging a contribution. 1.28 "Pay-Per-View Service"or "Premium Service"means Video Programming or other progranuning service choices (such as movie channels) offered to Subscribers on a per-channel, per-program or per-event basis. 1.29 "Person"means any individual,sole proprietorship, partnership,joint venture, association, corporation or limited liabilityentity,or anyother form ofentityor organization. 1.30 "Right-of-Way"or "Rights-of-Way"means land acquired or dedicated to the public or hereafter dedicated to the public for public streets or roads, highways, avenues, lanes, alleys, bridges, sidewalks, easements andothersimilar public property locatedwithin the Franchise Area. 1.31 "School"means any state accredited public educational institution including, for example, primary and secondaryschools (K.-12). 1.32 "State"means the State ofWashington. 1.33 "Subscriber"means any Personwho lawfully receives Cable Service provided by Grantee by means ofthe System with Grantee'sexpress permission. 1.34 "System"or "Cable System"means a facility, consisting of a set of closed transmission paths and associated signal generation,reception and control equipment that is designed to provide Cable Service which includes video programming and which is provided to multiple Subscribers within a community, but such term does not include (1) a facility that serves only to retransmit the television signals ofone or more televisionbroadcast stations; (2) a facility that serves Subscribers without using any public Right-of-Way;(3) a facility of a common carrier which is subject, in whole or in part, to the provisions ofTitle II ofthe federal Communications Act (47 U.S.C. 201 et seq.), except that such facility shall be considered a cable system (other than for purposes of 47 U.S.C. 541(c)) to the extent such facilityis used in the transmission ofvideo programming directly to Subscribers, unless the extent ofsuchuse is solely to provide interactive on-demand services; (4) an open video system that complieswith47 U.S.C. 573 and federal regulations; or (5) any facilities of any electric utility used solely for operating its electric utility systems. When used herein, System or Cable System refers to Grantee'sCable System in the Franchise Area. 1.35 "Telecommunications"means the transmission, between or among points specified by the user,ofinformation ofthe user'schoosing,without change in the formor content ofthe information as sent and received (as provided in 47 U.S.C. 153(43)). 5 -.'.1, 1-36 "Telecommunications Service"means the offering of Telecommunications for a fee directly to the public,or to such classes ofusers as to be effectively available directly to the public, regardless ofthe facilities used (as provided in 47 U.S.C.153(46». 1.37 "Tier"means a category of Cable Services provided by the Grantee for which a separate periodic rate is charged. 1. 39 "Upstream"means carrying a transmission to the headend from remote points on the System or from Interconnection points on the System. 1-40 "Video Programming"means programming provided by, or generally considered comparable to progranuning provided by, a television broadcast station. SECTION 2.GRANT OFFRANCmSE 2.1 Grant (A)The City hereby grants to Grantee a nonexclusive and revocable authorization to make reasonable and lawful use of the Rights-of-Way within the Franchise Area to construct, operate,maintain,reconstruct and upgrade a System for the purpose of providing Cable Services, subject to the terms and conditions set forth in this Franchise.This Franchise shall constitute both a right and an obligation to provide the Cable Services required by, and to fulfill the obligations set forth in, the provisions ofthis Franchise. (B)Grantee,through this Franchise, is granted the right to operate its System using the Rights-of-Way within the Franchise Area in compliance with all lawfully enacted City Codes and procedures.In the event ofa conflict between the City Code and this Franchise,the Franchise shall control.Additionally,nothing in this Franchise shall be deemed to waive the requirements of ordinances of general applicability lawfully enacted, or hereafter lawfully enacted,by the City. Grantee reserves the right to challenge provisions of any ordinance or other enactment of the City that conflicts with its contractual rights hereunder. (C)This Franchise shall not be interpreted to prevent the City from lawfully imposing additional conditions,including additional compensation conditions for use of the Rights-of-Way, should Grantee provide service other than Cable Service. (D)Grantee promises and guarantees,as a condition ofexercising the privileges granted by this Franchise,that any Affiliate of the Grantee offering Cable Service in the Franchise Area, or directly involved in the management or operation of the System in the Franchise Area, will also comply with the terms and conditions ofthis Franchise. (E)No rights shall pass to Grantee by implication.Without limiting the foregoing, by way ofexample and not limitation, this Franchise shall not include or be a substitute for: 6 (I)Any other permit or authorization required for the privilege of transacting and carrying on a business within the City that may be required by the ordinances and laws ofthe City; (2) Any permit, agreement or authorization required by the City for Rights-of- Way users in connection with operations on or in Rights-of-Way or public property including, by wayofexample and not limitation, street cutpermits; or (3) Any permits or agreements for occupying any other property ofthe City or private entities to which access is not specifically granted by this Franchise including, without limitation,permits and agreements for placing devices on poles, in conduits or in or on other structures. (F) This Franchise is intended to convey limited rights and interests only as to those Rights-of-Ways in which the City has an actual interest. It is not a warranty of title or interest in any Rights-of-Way; it does not provide the Grantee with any interest in any particular location within the Rights-of-Way; and it does not confer rights other than as expressly provided in the grant hereof. (G) This Franchise expressly authorizes Grantee to provide only Cable Services, and to construct,operate or maintain Cable Service facilities. This Franchise is not a bar to imposition of any lawful conditions on Grantee with respect to non-Cable services,Telecommunications Services or information services, whether similar, different or the same as the conditions specified herein. This Franchise does not relieve Grantee of any obligation it may have to obtain from the City an authorization to provide non-Cable services, Telecommunications Services or information services or relieve Grantee of its obligation to comply with any such authorization(s) that may be lawfully required. However, this Franchise shall not be read as a concession by Grantee that it needs authorization to providenon-Cable,Telecommunications or information services. 2.2 Use ofRights-of-Way (A) Subject to the City's supervision and control, Grantee may erect, install, construct, repair, replace, reconstruct, and retain in,on,over, under, upon, across, and along the Rights-of- Way within the FranchiseArea, such wires, cables (both coaxial and fiber optic), conductors, ducts, conduit, vaults, manholes, amplifiers, pedestals, attachments and other property and equipment as are necessary and appurtenant to the operation of the System for the provision of Cable Services within the Franchise Area. (B)Grantee must follow City-established requirements for placement of System facilities in the Rights-of-Way, and must install System facilities in a manner that minimizes interference with the use of the Right-of-Way by others, including others that may be installing communications facilities. Within parameters reasonably related to the City's role in protecting the public health, safety and welfare, the City may require that System facilities be installed at a particular time, at a specific place or in a particular manner as a condition of access to a particular Right-of-Way; may deny access if Grantee is not willing to comply with the City's requirements; and, subject to giving Grantee prior written notice and an opportunity to take the requisite 7 ,.j)'." corrective action,may remove, or require removal of, any facilityithat is not installed in compliance with the requirements established by the City,or which is installed without prior City approval and charge Grantee for all of the costs associated with removal; and may require Grantee to cooperate with others to minimize adverse impacts on the Rights-of-Way through joint trenching and other arrangements. 2.3 Duration The term of this Franchise and all rights, privileges,obligations and restrictions pertaining thereto shall be eight (8) years from the effective date of this Franchise,unless terminated,reduced or extended as hereinafter provided. 2.4 Effective Date (A)This Franchise and the rights, privileges, and authority granted hereunder and the contractual relationship established hereby shall take effect and be in force from and after the effective date ofthis Franchise. (B)The effective date of this Franchise shall be the date on which it is accepted in writing by Grantee. 2.5 Franchise Nonexclusive, This Franchise shall be nonexclusive, and subject to all prior rights,interests,easements,permits or licenses granted by the City to any Person to use any property for any purpose whatsoever, Including the right of the City to use same for any purpose it deems fit,including the same or similar purposes allowed Grantee hereunder.The City may at any time grant authorization to use tJ:!!;Rights-of-Way for any purpose not incompatible with Grantee's authority under this Franchise and for such additional franchises for cable systems as the City deems appropriate. 2.6 Grant ofOther Franchises In the event the City enters into a franchise, permit, license,authorization or other agreement ofany kind with any other Person or entity other than the Grantee to use the Rights-of-Way for the purpose of constructing or operating a System or providing Cable Service to any part of the Franchise Area in which the Grantee is providing Cable Service under the terms and conditions of this Franchise or is required to extend Cable Service to under the provisions of this Franchise, the terms and conditions thereof, taken as a whole, shall be neither more favorable nor less burdensome to such Person than those contained herein in order that one cable operator not be granted an unfair competitive advantage over another. 2.7 Familiarity with Franchise Grantee acknowledges and warrants by acceptance ofthe rights,privileges and agreement granted herein, that it has carefully read and fully comprehends the terms and conditions of this Franchise and is willing to and does accept all lawful and reasonable risks ofthe meaning ofthe provisions, terms and conditions herein. The Grantee further acknowledges and states that it has fully studied and considered all requirements and provisions of this Franchise,and finds that the same are commercially practicable at this time. 8 . ,•:ii •"l• 2.8 Effect ofAcceptance By accepting the Franchise, the Grantee: (1) acknowledges and accepts the City's legal right to issue and enforce the Franchise; (2) accepts and agrees to comply with each and every provision of this Franchise,subject to applicable law; and (3) agrees that the Franchise was granted pursuant to processes and procedures consistent with applicable law, and that it will not raise any claim to the contrary. 2.9 Police Powers Grantee's rights hereunder are subject to the police powers of the City to adopt and enforce ordinances necessary for the safety, health and welfare ofthe public, and Grantee agrees to comply with all such applicable laws, ordinances and regulations lawfully enacted pursuant to the police powers of the City, or hereafter enacted in accordance therewith, by the City. Any conflict between the provisions of this Franchise and any other present or future lawful exercise ofthe City's police powers shall be resolved in favor of the latter, provided that such ordinances shall be reasonable and not destructive of the rights' granted in this Franchise. Grantee shall pay those costs (in accordance with applicable law) associated with moving its System within the Right-of-Way as a result ofthe City's lawful exercise ofits police powers. SECTION 3.FRANCHISE FEES AND FINANCIAL CONTROLS 3.1 Franchise Fees As compensation for the use ofthe Rights-of-Way, Grantee shall payas a Franchise Fee to the City, throughout the duration ofthis Franchise, an amount equal to five percent (5%)of Grantee's Gross Revenues. Accrual of such Franchise Fees shall commence as of the effective date of this Franchise. 3.2 Payments Grantee's Franchise Fee payments to the City shall be computed quarterly for the preceding quarter. Each payment shall be due and payable no later than thirty (30) days after the end ofthe preceding quarter. 3.3 Acceptance of Payment No acceptance ofany payment shall be construed as an accord by the City that the amount paid is, in fact, the correct amount, nor shall any acceptance ofpayments be construed as a release of any claim the City may have for further or additional sums payable or for the performance ofany other obligation of Grantee. However, the period for recovery of franchise fees payable hereunder is limited to six (6) years from the date on which payment by the Grantee was due. 3.4 Franchise Fee Reports Each payment shall be accompaniedby a written report to the City on a form approved by the City, verified by an authorized representative of Grantee, containing an accurate statement in summarized form, as well as in detail,of Grantee's Gross Revenues and the computation of the payment amount. 3.5 Audits 9 • •Jl •'.1• On an annual basis, upon thirty (30) days'prior written notice, the City shall have the right to conduct an independent audit of Grantee's records reasonably related to the enforcement of this Franchise and to recompute any amounts determined to be payable under this Franchise.IfGrantee cooperates in making all relevant records available to the City, the City will attempt to complete each audit within six (6)months,and the audit period shall not be any greater than the previous six (6) years.Any additional amounts due to the City as a result ofthe audit shall be paid within forty- five (45)days following written notice to the Grantee by the City,which notice shall include a copy of the audit findings.If the audit shows that Franchise Fees have been underpaid,by five percent (5%) in a calendar year or more,Grantee shall pay the cost ofthe audit up to ten thousand dollars ($10,000)for each year of the audit period.Grantee's obligation to retain records related to a franchise fee audit shall expire six (6) years after each Franchise Fee payment has been made, or should have been made,to the City. 3.6 Financial Records Grantee agrees to meet with a representative of the City upon request to review Grantee's methodologyofrecord-keeping,financial reporting,the computing ofFranchise Fee obligations and other procedures,the understanding of which the City deems necessary for reviewing reports and records that are relevant to the enforcement ofthis Franchise. 3.7 Late Payments In the event any payment due the City is not timely made,Grantee shall pay, in addition to the amount due,interest at the rate established for judgments by the Snohomish County Superior Court, -.until the date the Cityreceives the payment. 3.8 Underpayments If a Franchise Fee underpayment is discovered as the result of an audit,Grantee shall pay, in addition to the amount due, interest at the rate established for judgments by the Snohomish County Superior Court,compounded daily,calculated from the date the underpayment was originally due until the date the City receives the payment. 3.9 Maximum Franchise Fees The parties acknowledge that, at present,applicable federal law limits the City to collection of a Franchise Fee of five percent (5%)of Gross Revenues in a 12-month period.In the event that at any time throughout the term ofthis Franchise,the City is authorized to collect an amount in excess of five percent (5%)of Gross Revenues and the City elects to do so, then this Franchise shall be amended by the parties consistent with such change to provide that such excess amount shall be added to the franchise fee payments to be paid by Grantee to the City hereunder.Conversely,in the event that at any time throughout the term ofthis Franchise,the City may only collect an amount which is less than five percent (5%)ofGross Revenues for franchise fees due to a change in federal law,then this Franchise shall be amended by the parties consistent with such change to provide for such lesser percentage. 3.10 Additional Commitments Not Franchise Fees No term or condition in this Franchise shall in any way modify or affect Grantee's obligation to pay Franchise Fees.Although the total sum ofFranchise Fee payments and additional commitments set 10 .---------------------------------------------- •,71 -,.'l forth elsewhere in this Franchise may total more than five percent (5%)of Grantee's Gross Revenues in any l2-month period, Grantee agrees that the additional commitments herein are not Franchise Fees, nor are they to be offset or credited against any Franchise Fee payments due to the City, nor do they represent an increase in Franchise Fees to be passed through to Subscribers. 3.11 Alternative Compensation In the event the obligation of Grantee to compensate the City through Franchise Fee payments is lawfully suspended or eliminated, in whole or part, then Grantee shall pay to the City compensation equivalent to the compensation paid to the City by other similarly situated users ofthe Rights-of- Way for Grantee's use of the Rights-of-Way,provided that in no event shall such payments exceed the equivalent of five percent (5%)of Grantee's Gross Revenues (subject to the other provisions contained in this Franchise). 3.12 Payment on Termination If this Franchise terminates for any reason, the Grantee shall file with the City within ninety (90) calendar days of the date of the termination, a financial statement,certified by an independent certified public accountant,showing the Gross Revenues received by the Grantee since the end of the previous fiscal year.Within thirty (30) days ofthe filing ofthe certified statement with the City, Grantee shall pay any unpaid amounts as indicated.If the Grantee fails to pay its remaining financial obligations as required in this Franchise,the City may satisfy the same by utilizing the funds available in a surety bond,ifany, or other security provided by the Grantee. 3.13 Tax Liability The Franchise Fees shall be in addition to any and all taxes or other levies or assessments which are now or hereafter required to be paid by businesses in general by any law ofthe City, the State or the United States including, without limitation, sales, use and other taxes,business license fees or other payments.Payment of the Franchise Fees under this Franchise shall not exempt Grantee from the payment ofany other license fee, permit fee,tax or charge on the business, occupation, property or income of Grantee that may be lawfully imposed by the City. Any other license fees, taxes or charges shall be of general applicability in nature and shall not be levied against Grantee solely because of its status as a Cable Operator, or against Subscribers, solely because oftheir status as such. SECTION 4.ADMINISTRATION AND REGULATION 4.1 Authority The City shall be vested with the power and right to administer and enforce the requirements ofthis Franchise and the regulations and requirements ofapplicable law,including the Cable Acts, or to delegate that power and right, or any part thereof, to the extent permitted under law, to any agent in the sole discretion ofthe City. Nothing in this Franchise shall expand or limit the City's right ofeminent domain under State law. The Grantee and the City shall be entitled to all rights and be bound by all changes in local, State and federal law that occur subsequent to the effective date of this Franchise. The Grantee and the 11 "'J.,p , City acknowledge that their rights and obligations under this Franchise are explicitly subject to all such changes, 4,2 Charges All of Grantee's rates and charges related to or regarding Cable Services shall be subject to regulation by the City to the full extent authorized by applicable federal,State and local laws. 4.3 Cross Subsidization Grantee shall comply with all applicable laws regarding rates for Cable Services and all applicable laws covering issues ofcross subsidization. 4,4 No Rate Discrimination All ofGrantee's rates and charges shall be published (in the form of a publicly-available rate card), and shall be nondiscriminatory for all Persons ofsimilar classes,under similar circumstances and conditions.Grantee shall permit Subscribers to make any in-residence connections the Subscriber chooses without additional charge and without penalizing the Subscriber therefor.However,ifany in-home connection requires service from Grantee due to poor signal quality, signal leakage or other factors, caused by improper iristallation ofsuch in-home wiring or faulty materials ofsuch in- home wiring, the Subscriber may be charged appropriate service charges by Grantee.Nothing herein shall be construed to prohibit: (A) The temporary reduction or waiving of rates or charges in conjunction with valid promotional campaigns; (B) The offering ofreasonable discounts to similarlysituated Persons; (C)The offering of rate discounts for Cable Service to government agencies or educational institutions;or (D) The offering ofbulk discounts for Multiple Dwelling Units. The Grantee shall offer a discount to those individuals who are low income (determine according to City guidelines consistently applied to other City discounts)and who are also either permanently disabled or 62 years of age or older and who are the legal owner and resident ofthe dwelling unit. Such discounts will consist of at least thirty percent (30%)off of Basic Service (whether it is Basic Service only or combined with Expanded Basic Service or with a premium service), and Grantee is also encouraged to waive standard installation charges. 4.5 Rates Upon request,Grantee shall provide a complete schedule of current rates and charges for any and all Leased Access Channels,or portions ofsuch Channels,provided by Grantee. The schedule shall include a description of the price,terms and conditions established by Grantee for Leased Access Channels. 4,6 Late Fees 12 (A) For purposes ofthis subsection, any assessment,charge,cost, fee or sum, however characterized, that the Grantee imposes upon a Subscriber solely for late payment of a bill is a late fee and shall be applied in accordancewith applicablelocal, state and federal laws. (B) The Grantee's late fee and disconnection policies and practices shall be nondiscriminatory, and such policies and practices, and any fees imposed pursuant to this subsection, shall applyequally in all parts ofthe Franchise Area without regard to the neighborhood or income level ofthe Subscribers. 4.7 Reserved Authority The City reserves all rights and authority arising from the Cable Act and any other relevant provisions offederal, state or local laws. .4.8 Time Limits Strictly Construed Whenever this Franchise sets forth a time for any act to be performed by Grantee or the City, such time shall be deemed to be ofthe essence, and any failure ofGrantee to perform within the allotted time maybe considered a material breach ofthis Franchise. 4.9 Performance Evaluations (A) Evaluation sessions may be held upon request by the City, but no more frequently than once a year, throughout the term ofthis Franchise. (B) All evaluation sessions shall be open to the public and shall be announced by the City at least two (2) weeks in advance, in a newspaper ofgeneral circulation in the City. (C)Topics of discussion at any evaluation session may include, but are not limited to, Cable Service rates; Franchise Fees; liquidated damages; free or discounted Cable Services; application of new technologies; system performance; Cable Services provided; programming offered; customer complaints; privacy; amendments to this Franchise; judicial and FCC rulings; line extension policies; and the City's or Grantee's rules; provided that nothing in this subsection shall be construed as requiringthe renegotiation ofthis Franchise. (D) During evaluations under this Franchise, Grantee shall fully cooperate with the City and shall provide such information and documents as the City may reasonably require to perform the evaluation. SECTION 5.INDEMNIFICATION AND INSURANCE REQUIREMENTS 5.1 Indemnification (A) General Indemnification. Grantee shall indemnify, defend and hold harmless the City, its officers, officials, boards, commissions, agents and employees from any action or claim, damage, loss, liability, cost or expense, including court and appeal costs and attorneys' fees and expenses, arising from any death, or injury, casualtyor accident to a Person, equipment or property or arising out of or by reason of, the presence of or any construction, excavation, operation, maintenance, repair, reconstruction,upgrade, rebuild,upkeep or removal ofthe Cable System,by or 13 •.11'".., for Grantee, its agents or its employees, or by reason of any neglect or omission of Grantee, its agents or its employees. Grantee shall consult and cooperate with the City while conducting its defense ofthe City. (B)Procedures and Defense. The City shall give the Grantee timely written notice of anyclaim or ofthe commencement ofany action, suitor other proceedingcovered by the indemnity in this Section. If a claim or action arises, the City or anyother indemnified party shall then tender the defense of the claim to Grantee, which defense shall be at Grantee's expense. The City may participate in the defense ofa claim and, in any event, Grantee may not agree to any settlement of claims financially affecting the City without the City'sprior written approval, which approval shall not be unreasonablywithheld. (C)Grantee's Duties. The fact that Grantee carries out any activities under this Franchise through independent contractors shall not constitute an avoidance of or defense to Grantee's duties ofdefense and indemnification under this Section. (0)Expenses. If separate representation to fully protect the interests ofboth parties is necessary, such as a conflict of interest between the City and the counsel selected by Grantee to represent the City, Granteeshall pay expenses incurred by the Cityin defending itselfwith regard to any action,suit or proceedingindenmified by Grantee. The City'sexpenses shall include all out-of- pocket expenses, such as consultants' fees, and shall also include the reasonable value of any services rendered by the City Attorney or hislher assistants or any employees of the City or its agents but shall not include outside attorneys' fees forservicesthat are unnecessarily duplicative of servicesprovided the City by Grantee. 5.2 Insurance Requirements (A) General Requirement. Grantee must have adequateinsurance during the entire term of this Franchise to protect the City against claims for death or injuries to Persons or damages to property or equipment which in any way relate to, arise from or are connected with this Franchise, or involve Grantee, its agents,representatives, contractors,subcontractorsand theiremployees. (B) Minimum Insurance Limits. Grantee must keep insurance in effect in accordance with theminimum insurancelimits herein set forth: (I)Commercial General Liability: Two million dollars ($2,000,000) aggregate limit per occurrence forbodily injury, personal injuryand propertydamage; (2) Automobile Liability: Two ntillion dollars ($2,000,000) combined single limit per accident forbodilyinjury and propertydamage;and (3) Employer'sLiability: One milliondollars ($1,000,000). (4) Excess Liabilityor Umbrella Coverage:Five million dollars ($5,000,000). (C)Endorsements. 14 • I ", (I)All policies shall contain,or shall be endorsed so that: (a) The City shall be designated as an additional insured; (b)·The Grantee's insurance coverage shall be primary insurance with respect to the City, its officers,officials,boards,commissions,employees and agents.Any insurance or self-insurance maintained by the City, its officers, officials,boards,commissions,employees and agents shall be in excess of the Grantee's insurance and shall not contribute to it; and (c) The policy shall contain a severability of interests provision.Grantee's insurance shall apply separately to each insured against whom a claim is made or lawsuit is brought,except with respect to the limits ofthe insurer's liability. (2)The insurance provided herein shall not be cancelled or the limits reduced so as to be out of compliance with the requirements ofthis Section without forty-five (45) days'written notice first being given to the City. If the insurance is cancelled Grantee shall provide a replacement policy.Grantee agrees to maintain continuous uninterrupted insurance coverage,in the amounts required,for the duration ofthis Franchise. (D)Acceptability of Insurers.The insurance obtained by Grantee shall be placed with insurers with a Best's rating ofno less than "A VII". (E)Verification of Coverage.The Grantee shall furnish the City with a certificate or certificates of insurance.The certificate for each insurance policy is to be signed by a person authorized by that insurer to bind coverage on its behalf.The certificate for each insurance policy must be on standard forms or on such forms as are consistent with standard industry practices,and are to be provided to the City upon acceptance ofthis Franchise. The Grantee hereby warrants that its insurance policies satisfy the requirements ofthis Franchise. 5.3 Surety Bond (A)If there is an uncured breach by Grantee ofa material provision ofthis Franchise or a pattern ofrepeated violations ofany provision(s)ofthis Franchise,then the City may request and Grantee shall establish and provide to the City,as security for the faithful performance by Grantee ofall ofthe provisions ofthis Franchise, a surety bond from a financial institution satisfactory to the City in the amount often thousand dollars ($10,000). (B)Ifa surety bond is required pursuant to subsection (A), the surety bond shall then be maintained at that same amount throughout the remainder ofthe term ofthis Franchise. (C)After the giving of notice to Grantee and expiration of any applicable cure period, the surety bond may be drawn upon by the City for purposes including,but not limited to, the following: 15 (1) Franchise; Failure of Grantee to pay the City sums due under the terms of this (2) Reimbursement ofcosts borne by the City to correct Franchise violations not corrected by Grantee; (3) Franchise. Monetary remedies or damages assessed against Grantee as provided in this (D) The City shall give Grantee written notice ofits intent to withdraw from the surety bond pursuant to this subsection.Within thirty (30)days following notice that such withdrawal has occurred, Grantee shall restore the surety bond to the full amount required by subsection (A). Grantee's maintenance of the surety bond shall not be construed to excuse unfaithful performance by Grantee or limit the liability of Grantee to the amount ofthe surety bond or otherwise limit the City's recourse to any other remedy available at law or in equity. (E) Grantee shall have the right to appeal to the City Council for reimbursement in the event Grantee believes that the surety bond was drawn upon improperly. Grantee shall also have the right ofjudicial appeal ifGrantee believes the surety bond has not been properly drawn upon in accordance with this Franchise. Any funds the City erroneously or wrongfully withdraws from the surety bond shall be returned to Grantee with interest,from the date of withdrawal at the rate established for judgments by the Snohomish County Superior Court. 5.4 Bonds (A) Grantee shall comply with the bonding requirements provided for in the Marysville Municipal Code. Grantee may be required to obtain other additional bonds in accordance with the City's ordinary practices. (B) Grantee's maintenance of the bond(s) shall not be construed to excuse unfaithful performance by Grantee or limit the liability ofGrantee to the amount ofthe bond(s) or otherwise limit the City's recourse to any other remedy available at lawor in equity. SECTION 6.CUSTOMER SERVICE 6.1 Customer Service Standards Grantee shall comply with Customer Service Standards as the same may be adopted and amended from time to time by the City Council.Grantee reserves the right to challenge any customer service standards which it believes are inconsistent with its contractual rights granted under this Franchise. 6.2 Subscriber Privacy Grantee will comply with privacy rights ofSubscribers in accordance with federal, State and local laws. 16 ••J \1- SECTION 7.REPORTS AND RECORDS 7.1 Open Records The City shall have access to, and the right to inspect, any books and records of Grantee and its Affiliates which are necessary for the enforcement of the provisions of this Franchise. Grantee shall not deny the City access to any of Grantee's records on the basis that Grantee's records are under the control ofany Affiliate or a third Person. The Citymay, in writing, request copies of any such records or books, and Grantee shall provide such copies within thirty (30)· days of the transmittal of such request. One copy of all reports and records required under this or any other Section shall be furnished to the City at the sole expense of Grantee.If the requested books and records are too voluminous, or for security reasons cannot be copied or removed, then Grantee may request that the City inspect them at Grantee's local office.Ifany books or records ofGrantee are not kept in a local office and not made available in copies to the City upon written request as set forth above, and if the City determines that an examination of such records is necessary for the enforcement of this Franchise, then all reasonable travel expenses incurred in making such examination shall be paid by Grantee. 7.2 Confidentiality The City agrees to keep confidential any proprietary or confidential books or records ofGrantee to the extent permitted by law. Grantee shall be responsible for clearly and conspicuously identifying the records as confidential or proprietary, and shall provide a brief written explanation as to why such information is confidential or proprietary and how it may be treated as such under State or federal law.If the City receives a demand from any Person for disclosure of any information designated by Grantee as confidential, the City shall, so far as consistent with applicable law, advise Grantee and provide Grantee with a copy of any written request by the Person demanding access to such information within a reasonable time. 73 Records Required Grantee shall provide to the City,upon request: (A) A complete set of route maps showing the location ofCable System facilities in the Franchise Area; (B)A copy of all FCC filings issued by Grantee or its Affiliates which relate to the operation ofthe System in the Franchise Area; (C)A list ofGrantee's Cable Services, rates and Channel line-up; arid (D) A compilation of Subscriber complaints, actions taken and resolution, and a log of service calls. Grantee shall make available, at Grantee's local office, for inspection, plans and as-built maps ofthe Cable System. 17 7.4 Submittal of Documents Upon written request,Grantee shall submit to the City copies of any applications, notifications, communications and documents ofany kind,submitted by Grantee or its Affiliates to any federal, State or local courts, regulatory agencies and other government bodies if such documents directly relate to the operations ofGrantee's System within the Franchise Area.Grantee shall submit such documents to the City no later than forty-five (45) days after receipt ofthe City's request. Grantee shall not claim confidential, privileged or proprietary rights to such documents unless under federal, State, or local law such documents have been determined to be confidential by a court ofcompetent jurisdiction,ora federal or State agency.. 7.5 Annual Reports Within ninety (90) days of the end ofthe calendar year, Grantee shall submit to the City a written report, which shall include, but not necessarily be limited to, the following information: (A) A Gross Revenue statement for the preceding year and all deductions and computations for the period, and such statement shall be reviewed by a certified public accountant, who may also be the chieffinancial officer or controller ofGrantee, prior to submission to the City; (B) A summary ofthe previous year's activities regarding the development ofthe Cable System,including,but not limited to,beginning and ending plant miles, any technological changes occurring in the Cable System and the number ofSubscribers for each class ofCable Service (i.e., Basic, Expanded Basic Service, Premium, etc.); (C) A description ofplanned construction,ifany,for the current year; and (D) An executive summary ofSubscriber complaints received in the previous year. 7.6 False Statements Any intentional false or misleading statement or representation in any report required by this Franchise shall be a material breach ofthis Franchise and may subject Grantee to all remedies, legal or equitable, which are available to the City under this Franchise or otherwise. 7.7 Failure to Report .The failure or neglect of Grantee to file any ofthe information required under this Franchise (not including clerical errors or errors made in good faith) may, at the City's option, be deemed a breach ofthis Franchise. SECTION 8.PROGRAMMING 8.1 Broad Programming Categories Grantee shall provide at least the following initial broad categories of programming to the extent such categories are reasonably available: 18 , I ,;\'f (A)Educational programming; (B)Washington news,weather and information; (C)Sports; (D)General entertainment including movies; (E)Children,family oriented; (F)Arts,culture and performing arts; (G)Foreign language programming; (H)Science/documentary; (I)National news,weather and information;and (l)Access programming. 8.2 Deletion of Broad Programming Categories (A)Grantee shall not delete or so limit as to effectively delete any broad category of programming within its control without prior written notice to the City. (B)In the event ofa modification proceeding under federal law,the mix and quality of Cable Services provided by Grantee on the effective date ofthis Franchise must be maintained after any such modification. 8.3 Surveys Upon request ofthe City, but not more frequently than once every two (2) years, the Grantee shall provide to the City written questions that it intends to use in upcoming surveys of customer satisfaction.The City may suggest new or modified questions,which the Grantee,in the reasonable exercise of its discretion,may add to the customer survey it conducts.Upon completion of the customer survey of Subscribers in the Franchise Area,Grantee shall provide the results thereof to the City.Nothing herein shall be construed to limit the right ofthe City to conduct its own surveys at its own expense. 8.4 Continuity of Service Mandatory (A) It shall be the right of all Subscribers to continue to receive Cable Service from Grantee insofar as their financial and other obligations to Grantee are honored.The Grantee shall use reasonable efforts so as to ensure that all Subscribers receive continuous,uninterrupted Cable Service.For the purposes ofthis subsection,"uninterrupted"does not include short-term outages of the Cable System for upgrade construction,maintenance or testing. 19 ,J ...J (B)In the event a new Cable Operator acquires the Cable System in accordance with this Franchise, Grantee shall reasonably cooperate with the City and the new Cable Operator to maintain continuity ofCable Service to all Subscribers.During any transition period, Grantee shall be entitled to the revenues for any period during which it operates the Cable System, and shall be entitled to reasonable costs for its services,if such services are requested by the City, when it no longer operates the Cable System. 8.5 Obscenity Grantee shall not transmit, or permit to be transmitted, over any Channel subject to its editorial control any programming which is obscene under applicable federal, State or local laws, statutes, regulations or standards now existing or hereafter adopted. 8.6 Parental Control Device Upon request by any Subscriber, Grantee shall make available a parental control or lockout device, traps or filters to enable a Subscriber to control access to both the audio and video portions ofany or all Channels. Grantee shall inform its Subscribers ofthe availability ofthe lockout device at the time oftheir initial subscription and periodically thereafter. 8.7 New Technology If there is a new technology which in the City's opinion would enhance substantially the quality or quantity ofprograrnming available to Subscribers on the System, Grantee shall, at the request ofthe City, investigate the feasibility ofimplementing said technology and report to the City the results of such investigation. 8.8 Services for the Disabled Grantee shall comply with the Americans With Disabilities Act and any amendments or successor legislation thereto. SECTION 9.ACCESS 9.1 Access Channels Upon the effective date of this Franchise and throughout the term hereof, Grantee shall make available at its expense: One Governmental Access Channel for use by the City; and One Educational Access Channel for use by the Lakewood School District. Any Access Channels provided via digital or compressed video technology shall have at least the same transmission quality as is used to carry any of the commercial Channels that deliver programming on the System. The provision of Access Channels via digital or compressed video technologywill not reduce the total number ofAccess Channels required herein. If Grantee makes a change in its Cable System and related equipment and facilities, or in its signal delivery technology, which directly or indirectly affects the signal quality or transmission ofAccess 20 ---, ,).""J programming,Grantee shall at its own expense take necessary technical steps and provide necessary technical assistance,including the acquisition ofall necessary equipment and full training of Access personnel,to ensure that the capabilities of Access Channels are not diminished or adversely affected by such change.For example,this provision shall apply ifBasic Service on the Cable System is converted from an analog to a digital format, such that the Access Channels must also be converted to a digital format in order to be received by Subscribers. 9.2 Management and Control ofAccess Channels (A)The City may authorize Designated Access Providers to control,operate and manage the use ofany and all Access facilities provided by Grantee under this Franchise,including, without limitation,the operation ofAccess Channels.The City or its designee may formulate rules for the operation of the Access Channels,consistent with this Franchise.Nothing herein shall prohibit the City from authorizing itselfto be a Designated Access Provider. (B)Grantee shall cooperate with the City and Designated Access Providers in the use of the System and Access facilities for the provision of Access Channels.To the extent allowed by law, the City agrees to indemnify.-savc and hold harmless Grantee from and against any and all liability resulting from the City's use ofthe Governmental Access Channel. 9.3 Additional Access Channels In addition to the Access Channels referenced in Section 9.1 above, the City may require Grantee to make available at no charge additional Access Channels, as established by the triggers set forth below. One additional channel shall be made available for each Access category when either ofthe initial channels required above respectively isused for original Educational Access or Governmental Access programming (excluding character generated and filler programming,e.g., AM/FM radio programming)during fifty percent (50%)of the hours between 10:00 AM and 10:00 PM,during any consecutive ten (10) week period.Except for character generated announcements,the programming shall be distinct and non-repetitive ofthe previous channel. Based upon this criteria, the Grantee shall,within six (6)months following a written request by the City, provide another respective designated Access Channel. 9.4 Location ofAccess Channels Subject to must carry requirements,Grantee will carry the City's programming on Channel 21. Grantee shall use its best efforts to provide ninety (90) days advance written notice to the City and at least thirty (30) days advance written notice to the City prior to any relocation ofAccess Channel 21. In connection with the movement of the City's Government Access Channel to another Channel number,Grantee shall provide, at its expense,a bill message on Subscribers'bills, and the City may provide,at its expense, a bill insert. 9.5 Access Interconnections Grantee shall Interconnect the Access Channels ofthe Cable System with the Access Channels of any other contiguous cable system not owned or operated by Grantee or an Affiliate of Grantee if technically feasible and not financially burdensome to Grantee.Interconnection of Access 21 .•I 1 Channels may be accomplished by a direct fiber optic or cable connection or by other appropriate methods. Grantee shall not be required to Interconnect with the other cable system unless the cable operator of that system is willing to do so and such cable operator shall pay for its own costs of constructing and maintaining the Interconnect up to the connection point. 9.6 Access Capital Advance No later than forty-five (45)days after the adoption ofthis Franchise, Grantee shall pay to the City a capital advance in the amount of $3,000. Additionally, at the beginning of year two of this Franchise, Grantee shall pay to the City another capital advance in the amount of$3,000. These are advance payments ofthe Capital Contribution set forth in subsection 9.7.These support grants may be used by the City for capital expenditures related to Access construction, renovation, equipment or facilities.These grants shall in no way be considered in lieu of Franchise Fees and shall not reduce in any way Franchise Fees owed to the City under this Franchise. To the extent allowed by federal law, these capital advances may be treated as an external cost by Grantee and itemized on Subscribers' bills. 9.7 Capital Contribution Commencing with the effective date of this Franchise, Grantee shall provide a capital contribution to the City for Access capital costs ("Capital Contribution") in an amount not to exceed $1.00 per Subscriber per month throughout the term of this Franchise. As of the effective date of this Franchise, that figure shall be $1.00 per Subscriber per month. The monthly amount may be reduced, as determined by the City Council. Grantee shall be entitled to retain the Capital Contribution up to the amounts advanced in subsection 9.6. Thereafter, the Capital Contribution shall be paid quarterly to the City. Grantee shall not be responsible for paying the Capital Contribution with respect to gratis or bad debt accounts. Within ninety (90) days after the end of each year, Grantee shall provide a report to the City regarding such gratis or bad debt accounts, which report may be included as part ofanother report. The City can inquire as to the status ofany such accounts, and the Grantee agrees to meet with the City, upon request, to discuss such matters as necessary.To the extent allowed by federal law, the Capital Contribution may be treated as an external cost by Grantee and itemized on Subscribers' bills. The City shall have discretion to allocate the Capital Contribution in accordance with applicable law,provided the City submits a summary of capital expenditures from the Capital Contribution to Grantee within ninety (90) days ofthe end ofeach calendar year. To the extent the City makes Access investments using City funds prior to receiving necessary capital advances or Capital Contribution funds, the City is entitled to apply subsequent capital advances or Capital Contribution payments from Grantee toward such City capital investments. The City and Grantee agree that any Capital Contribution shall be referred to on Subscribers' bills as an "EG fee", or language substantially similarthereto. Grantee shall not change such reference on the Subscribers' bills without the prior written consent of the City, which consent shall not be unreasonably withheld. 9.8 Access Channels On Lowest Tier All Access Channels provided to Subscribers under this Franchise shall be included by Grantee as a partofthe Basic Service Tier. 22 .---------------------------------------------, •,J '"., 9.9 Use of Educational and Governmental Access Channels Access Charmels shall be placed under the authority ofthe City for use related to governmental and educational purposes.Access Channel use shall include sponsorships and underwriting.Grantee shall not exercise editorial control over programming ofany Access Charmel made available to the City or the Lakewood School District for their use. Grantee will not interrupt at its headend or hub site, the signal provided on any Access Channel,except during an upgrade, or during circumstances beyond Grantee's control or ifnecessary for testing or planned system maintenance purposes. 9.10 Technical Quality The Grantee shall, at its expense,maintain all Access services,Channels and Interconnections at the same level oftechnical quality and reliability as that for the rest ofits System.The Grantee shall, at its expense,provide routine maintenance and repair and replace,if necessary,any of Grantee's equipment required to carry a quality signal to and from the City's (and Designated Access Providers')and the Grantee's facilities for the Access Channels. 9.11 Underutilized AccessChannels Grantee and the City agree that it is their mutual goal to fully and efficiently use the Channel capacity ofthe Cable System,which may include allowing the Grantee to use underutilized time on the dedicated Access Channels.If Grantee believes that any Access Charmel has underutilized time,Grantee may file a request with the City to use that time.In response to the request, the City will consider a combination of factors, including, but not limited to, the community's needs and interests, and the source, quantity, type and schedule of the programming carried on the Access Channel.The City will also consider, taking into account the mission of Access programming, whether it is feasible for the Designated Access Providers to cluster Access programming into blocks of time such that the Channel space can be compatibly shared between the Designated Access Provider and the Grantee and/or ifseveral Designated Access Providers can combine their programming onto a single Access Channel. The City shall render its decision regarding the matter within sixty (60) days ofreceiving the request. Should the City find that the Access Channel or a portion ofthe Access Channel may be used by the Grantee, then Grantee maybegin using such time ninety (90) days after receipt of the decision.The Grantee's request shall not be unreasonably denied. Any permission granted pursuant to this subsection for use of an Access Channel or a portion thereofshall be considered temporary. At such time as a Designated Access Provider believes that it has the resources and ability to utilize the Access Channel time currently used by the Grantee pursuant to this subsection,a Designated Access Provider may request that the City return such Channel or portion ofthe Channel for Access purposes. In response to the request, the City will consider a combination offactors, including, but not limited to, the community's needs and interests,and the source,quantity,type and schedule of the programming proposed to be carried on the Access Channel as well the applicant's ability and resources to acquire or produce the proposed Access programming.The City will also consider, taking into account the mission of the Access programming,whether it is feasible for the Designated Access Providers to cluster Access programming into blocks of time such that the Channel space can be compatibly shared between the Designated Access Provider and the Grantee and/or ifseveral Designated Access Providers can combine their programming onto a single Access 23 •,,4 '." Channel. The City shall render its decision regarding the matter within sixty (60) days ofreceiving the request. Should the City find that the evidence exists to support the return of the Access Channel or a portion of the Access Channel to the Designated Access Provider, then Grantee shall surrender the Access Channel or the requested time on the Access Channel, as applicable, within ninety (90) days ofreceiving the decision. The Designated Access Provider's request shall not be unreasonably denied. 9.12 Information about Access Programming Grantee shall include information about Access programming in the installation packet provided to Subscribers.The City shall supply the materials, for insertion in the packet, in a format consistent with Grantee's requirements. SECTION 10.GENERAL RIGHT-OF-WAY USE AND CONSTRUCTION 10.1 Right to Construct Subject to generally applicable laws, regulations, rules, resolutions and ordinances of the City and the provisions ofthis Franchise, Grantee may perform all construction in the Rights-of-Way for any facilityneeded for themaintenance,upgrade or extension ofGrantee's Cable System. 10.2 Right-of-Way Meetings Subject to receiving advance notice,Grantee shall make reasonable efforts to attend and participate in meetings ofthe Cityregarding Right-of-Way issues that may impact the Cable System. 10.3 General Standard All work authorized and required hereunder shall be done in a safe, thorough and workmanlike manner. All installations of equipment shall be durable and installed in accordance with good engineeringpractices. 10.4 Joint TrenchingIBoring Whenever it is possible and reasonably and financially practicable to joint trench or share bores or cuts, Grantee shall work with other providers (such as, but not limited to, telecommunications, gas and electric companies), licensees,pennitees and frarichisees so as to reduce so far as possible the number ofRight-of-Way cuts within the Franchise Area. 10.5 Movement of Facilities During Emergencies During emergencies, the Citymay move Grantee's facilities without prior notice. 10.6 OneeaU Grantee will maintain membership in good standing with the Utility Coordinating Councilor other similar or successor organization which is designated to coordinate underground equipment locations and installations. Grantee shall abide by the State's "Underground Utilities" statutes and will further comply with and adhere to local procedures, customs and practices relating to the one call locator service program.. 10.7 Permits Required for Construction 24 ------------------------" Prior to doing any work in the Right-ofWay or other public property,Grantee shall apply for,and obtain,appropriate permits from the City. As part of the permitting process,the City may impose such conditions and regulations as are necessary for the purpose ofprotecting any structures in such Rights-of-Way,and in providing for the proper restoration ofsuch Rights-of-Way and to protect the public and the continuity of pedestrian or vehicular traffic.Grantee shall pay all generally applicable fees for the requisite City permits. 10.8 Emergency Permits In the event that emergency repairs are necessary,Grantee shall immediately notify the City ofthe need for such repairs. Grantee may initiate such emergency repairs, and shall apply for appropriate permits within forty-eight (48) hours after discovery ofthe emergency. 10.9 Compliance with Applicable Codes (A)City Codes. Grantee shall comply with all applicable City codes, including,without limitation,construction codes,building codes, the Fire Code and zoning codes and regulations. (B)Regulations and Safety Codes. Grantee shall comply with all applicable federal, State and City safety requirements,rules,regulations,laws and practices.By way ofillustration and not limitation,Grantee shall comply with the National Electric Code,National Electrical Safety Code and Occupational Safety and Health Administration (OSHA)Standards. 10.10 GIS Mapping Grantee shall comply with any generally applicable ordinances, rules and regulations of the City regarding geographic information systems mapping for users ofthe Rights-of-Way. 10.11 Least Interference Work in the Right-of-Way,or on other public or private property,shall be done in a manner that causes the least interference with the rights and reasonable convenience of property owners and residents.Grantee's Cable System shall be constructed and maintained in such a manner as not to interfere with sewers,water pipes or any other property ofthe City,or with any other pipes,wires, conduits,pedestals,structures or other facilities that may have been laid in the Rights-of-Way by,or under, the City's authority. The Grantee's Cable System shall be located,erected and maintained so as not to endanger or interfere with the lives of persons, or to unreasonably interfere with new improvements the City may deem proper to make or to unnecessarily hinder or obstruct the free use ofthe Rights-of-Way or other public property,and shall not interfere with travel and use ofpublic places by persons during the construction,repair,operation or removal thereof, and shall not obstruct or impede traffic.In the event ofsuch unreasonable interference,the City may require the removal or relocation of Grantee's lines, cables,equipment and other appurtenances from the property in question at Grantee's expense. 10.12 Prevent Injury/Safety Grantee shall provide and use any equipment and facilities necessary to control and carryGrantee's signals so as to prevent injury to the City's property or property belonging to any Person.Grantee. at its own expense,shall repair,renew,change and improve its facilities to keep them in good 25 _.-----------------------------------------------' repair,and safe and presentable condition. All excavations made by Grantee in the Rights-of-Way shall be properly safeguarded for the prevention ofaccidents. 10.13 Notice to Private Property Owners Except in the case ofan emergency involving public safetyor an outage, or service interruption to a large number of Subscribers, Grantee shall give reasonable advance notice to private property owners or tenants ofwork on or adjacent to such private property. 10.14 Underground Construction and Use of Poles (A) The Grantee shall utilize existing poles and conduit wherever possible. (B)In areas where either electric or telephone utility wiring is aerial, the Grantee may install aerial cable, except when a property owner or resident requests underground installation and agrees to bear the additional cost in excess ofaerial installation. (C)Where electric and telephone lines are underground at the time of Cable System construction or upgrade, or when such wiring is subsequently placed underground, all Cable System lines shall also be placed underground with other wireline service at no expense to the City or Subscribers.Related Cable System equipment,such as pedestals or power supplies, must be placed in accordance with the City's applicable code and permit requirements and rules. (0)This Franchise does not grant, give or convey to the Grantee the right or privilege to install its facilities in any manner on specific utility poles or equipment ofthe City or ofany other Person. (E)The Grantee and the City recognize that situations may occur in the future where the City may desire to place its own fiber optic cable in trenches or bores opened by the Grantee. The Grantee agrees to cooperate with the City in any construction that involves trenching or boring, provided that the City has first provided reasonable notice to the Grantee in some manner that it is interested In sharing the trenches or bores in the area where the Grantee's construction is occurring.. The Grantee shall allow the City to lay City conduit and fiber optic cable in the Grantee's trenches and bores, provided the City shares pro rata in the cost of the trenching and boring with Grantee. The City shall be responsible for maintaining its respective conduit and fiber optic cable, which is buried in the Grantee's trenches and bores. 10.15 Restoration of Property (A) The Grantee shall protect public and private property from damage.If damage occurs, the Grantee shall promptly notify the property owner within twenty-four (24) hours. (B)Whenever Grantee disturbs or damages any Right-of-Way, other public property or any private property, Grantee shall promptly restore the Right-of-Way or property to at least its prior condition,normal wear and tear excepted, at its own expense. (C)Grantee shall warrant any restoration work performed by or for Grantee in the Right-of-Way or on other public property or private property for one (1) year, unless a longer period 26 --_.._---------------------_...._------------- is.required by the City Code or any generally applicable ordinance or resolution of the City.If restoration is not satisfactorily performed by the Grantee within a reasonable time, the City may, after prior notice to the Grantee, or without notice where the disturbance or damage may create a risk to public health or safety, cause the repairs to be made and recover the reasonable cost of those repairs from the Grantee.Within thirty (30) days of receipt of an itemized list of those costs, including the costs oflabor,materials and equipment,the Grantee shall pay the City. (D)Upon completion of the work that caused any disturbance or damage, Grantee shall promptly commence restoration of private property,and will use its best efforts to complete the restoration within twenty-four (24)hours,considering the nature of the work that must be performed. 10.16 Discontinuing Use Whenever Grantee intends to discontinue using any facility within the Rights-of-Way,Grantee shall notify the City ofits intention. Grantee may remove the facility or request that the City permit it to remain in place.Notwithstanding Grantee's request that any such facility remain in place, the City may require Grantee to remove the facility from the Right-of-Way or modify the facility to protect.. the public health,welfare, safety, or convenience,or otherwise serve the public interest. The City may require Grantee to perform a reasonable combination of modification and removal of the facility.Grantee shall complete such removal and/or modification respectively in accordance with a schedule reasonably set by the City. Until such time as Grantee removes or modifies the facility as reasonably directed by the City, or until the rights to and responsibility for the facility are accepted by another Person having authority to use, construct and/or maintain such facility, Grantee shall retain all liability for such facility and be responsible for all necessary repairs and relocations ofthe facility, as well as maintenance ofthe Right-of-Way,in the same manner and degree as ifthe facility were in active use. 10.17 Movement ofCable System Facilities For City Purposes The City shall have the right to require Grantee to relocate, remove,replace,modify or disconnect Grantee's facilities and equipment located in the Rights-of-Way or on any other property ofthe City in the event ofan emergency or when necessary to protect or further the health,safety or welfare of the general public,and such work shall be performed at Grantee's expense.Except during an emergency,the City shall provide reasonable notice to Grantee, not to be less than ten (10)business days, and allow Grantee the opportunity to perform such action.In the event of any capital improvement project exceeding $150,000 in expenditures by the City which requires the removal, replacement,modification or disconnection of Grantee's facilities or equipment,the City shall provide at least sixty (60) days written notice to Grantee.Following notice by the City, Grantee shall relocate,remove,replace,modify or disconnect any ofits facilities or equipment within any Right-of-Way,or on any other property of the City.If the City requires Grantee to relocate its facilities located within the Rights-of-Way,the City shall make a reasonable effort to provide Grantee with an alternate location within the Rights-of-Way.Iffunds are generally made available to users ofthe Rights-of-Way for such relocation,Grantee shall be entitled to its pro rata share of such funds. 27 •,oJ If the Grantee fails to complete theabove work within the time prescribed and to the City's reasonable satisfaction, the City may cause such work to be done and bill the reasonable cost ofthe work to the Grantee, including all reasonable costs and expenses incurred by the City due to Grantee's delay.In such event, the City shall not be liable for any damage to any portion of Grantee's Cable System. Within thirty (30) days ofreceipt of an itemized list of those costs, the Grantee shall pay the City. 10.18 Movement of Cable System Facilities for Other Franchise Holders If any removal, replacement, modification or disconnection of the Cable System is required to accommodate the construction, operation or repair of the facilities or equipment of another City franchise holder, Grantee shall, after at least thirty (30) days advance written notice, take action to effect the necessary changes requested by the responsible entity.Grantee may require that the costs associated with the removal, replacement, modification or disconnection of the Cable System be paid by the benefited party, and Grantee may require a reasonable deposit ofthe estimated payment in advance. 10.19 Temporary Changes for Other Permitees At the request of any Person holding a valid permit and upon reasonable advance notice, Grantee shall temporarily raise, lower or remove its wires as necessary to permit the moving of a building, vehicle, equipment or other item. The expense of such temporary changes must be paid by the permit holder, and Grantee may require a reasonable deposit ofthe estimated payment in advance. 10.20 Reservation of City Use of Right-of-Way Nothing in this Franchise shall prevent the City from constructing sewers; grading, paving, repairing or altering any Right-of-Way; laying down, repairing or removing water mains; or constructing or establishing any other public work or improvement. All such work shall be done, insofar as practicable, so as not to obstruct, injure or prevent the use and operation of Grantee's Cable System. 10.21 Tree Trimming Grantee may prune or cause to be pruned, using proper pruning practices, any tree in the Rights-of- Way which interferes with Grantee's Cable System. Grantee shall comply with any general ordinance or regulations ofthe City regarding tree trimming. Except in emergencies, Grantee may not prune trees at a point below thirty (30) feet above sidewalk grade until one (1) week written notice has been given to the owner or occupant of the premises abutting the Right-of-Way in or over which the tree is growing. The owner or occupant of the abutting premises may prune such tree at his or her own expense during this one (I)week period.Ifthe owner or occupant fails to do so, Grantee may prune such tree at its own expense. For purposes ofthis subsection, emergencies exist when it is necessary to prune to protect the public or Grantee's facilities from imminent danger only. 10.22 Inspection ofConstruction and Facilities The City may inspect any of Grantee's facilities, equipment or construction within the Rights-of- Way and on other public property upon at least twenty-four (24)hours notice, or, in case of an emergency, upon demand without prior notice. If an unsafe condition is found to exist, the City, in 28 ,------------------------------------------------ .'<,)',J addition to taking any other action permitted under applicable law,may order Grantee,in writing, to make the necessary repairs and alterations specified therein forthwith to correct the unsafe condition by a time the City establishes.The City has the right to inspect,repair and correct the unsafe condition ifGrantee fails to do so, and to reasonably charge Grantee therefor. 10.23 Stop Work (A)On notice from the City that any work is being performed contrary to the provisions ofthis Franchise,or in an unsafe or dangerous manner as reasonably determined by the City, or in violation ofthe terms ofany applicable permit,laws,regulations,ordinances or standards,the work may immediatelybe stopped bythe City. (B)The stop work order shan: (1) Be in writing; (2) Be given to the person doing the work, or be posted on the work site; (3) Be sent to Grantee by overnight delivery at the address given herein; (4) Indicate the nature ofthe alleged violation or unsafe condition;and (5)Establish conditions under which work may be resumed. 10.24 Work of Contractors and Subcontractors Grantee's contractors and subcontractors shall be licensed and bonded in accordance with the City's generally applicable ordinances,regulations and requirements.Work by contractors and subcontractors is subject to the same restrictions,limitations and conditions as if the work were performed by Grantee.Grantee shan be responsible for all work performed by its contractors and subcontractors and others performing work on its behalf as if the work were performed by it, and shall ensure that all such work is performed in compliance with this Franchise and applicable laws, and shall be jointly and severally liable for all damages and correcting all damage caused by them. It is Grantee's responsibility to ensure that contractors,subcontractors or other Persons performing work on Grantee's behalf are familiar with the requirements ofthis Franchise and applicable laws governing the work performed by them. SECTION 11.SYSTEM TECHNICAL STANDARDS 11.1 Subscriber Network (A)Grantee's current Cable System is an operational hybrid fiber coaxial Cable System with a minimum capacity of two hundred (200)Channels of Video Programming,and the Cable System has two-way capability throughout the Franchise Area. The Cable System shall be capable ofsupporting the fun range ofCable Services offered by Grantee. (B)Equipment must be installed so that all closed captioned programming received by the Cable System shall include the closed caption signal, so long as the closed caption signal is 29 provided consistent with FCC standards.Equipment must also be installed so that all signals received in stereo are retransmitted in stereo. (C)Grantee will take prompt corrective action ifit finds that any facilities or equipment on the Cable System are not operating as expected, or ifit finds that facilities and equipment do not comply with the requirements ofthis Franchise or applicable law. (D)Grantee's construction decisions shall be based solely upon legitimate engineering decisions and shall not take into consideration the income level of any particular part of the Franchise Area. 11.2 Cable Services in Comparable Communities Upon request,Grantee shall, every two (2) years following the effective date of this Franchise, provide detailed information to the City about Cable Services offered on a non-test basis in "similarly situated"cable systems in the region.If such Cable Services are not also being offered on Grantee's Cable System in the Franchise Area, Grantee shall provide information on why such Cable Services are not being offered in the Franchise Area and an estimated cost to supply such Cable Services.If economically feasible and technically available,Grantee shall deploy such services in a reasonable timeframe, provided that Grantee shall have the capability to recover its capital expenditures related thereto during the remaining time period left on this Franchise. 11.3 Standby Power Grantee shall provide standby power generating capacity at the Cable System headend capable of providing twelve (12)hours ofemergency operation.Grantee shall maintain standby power system supplies that will supply back-up power ofat least two (2) hours duration throughout the trunk and distribution networks,and four (4) hours duration at all nodes and hubs.In addition,throughout the term of this Franchise,Grantee shall have a plan in place, along with all resources necessary for implementing such plan,for dealing with outages ofmore than two (2) hours. This outage plan and evidence of requisite implementation resources shall be presented to the City no later than thirty (30) days following receipt ofa request therefor. 11.4 Emergency Alert Capability (A)Emergency Alert System ("EAS") activation will be accomplished in compliance with all federal,state and local laws. (B)The City shall allow only appropriately trained and authorized persons to operate the EAS equipment provided pursuant to this subsection and shall take reasonable precautions to prevent any use of the Grantee's Cable System that in any marmer results in an inappropriate use thereof. To the extent allowed by law, the City shall hold the Grantee,its employees and officers harmless from any claims arising out of the emergency use of the EAS facilities by the City, including,but not limited to, reasonable attorneys' fees and costs. (C)Grantee shall ensure that the EAS is functioning properly at all times.It will test the EAS periodically,in accordance with applicable law. Upon request,Grantee will advise the City of the testing schedule so that the City may be present for the tests. 30 L-. _ 11.5 Technical Performance The technical performance ofthe Cable System shall meet or exceed all applicable federal technical standards, as they may be amended from time to time, regardless ofthe transmission technology utilized. The City shall have the full authority permitted by applicable law to enforce compliance with these technical standards. 11.6 Cable System Performance Testing (A) Grantee shall, at Grantee's expense, perform the followingtests on its Cable System: (1) All tests required by the FCC; (2) All other tests reasonably necessary to determine compliance with technical standards adopted by theFCC at any time during the term ofthis Franchise; and (3) All other tests as otherwise specified in this Franchise. (B)At a minimum,Grantee's tests shall include: (I)Cumulative leakage index testing; (2) Semi-annual compliance and proof of performance tests in conformance with generally accepted industry guidelines; (3) Tests in response to Subscriber complaints; and (4) Periodic monitoring tests, at intervals not to exceed six (6) months,of Subscriber (field) test points, the headend, and the condition ofstandby power supplies. Upon request, all required technical performance tests may be witnessed by representatives ofthe City. (C)Grantee shall maintain written records of all results of its Cable System tests, performed by or for Grantee. Copies ofsuch test results will be provided to the Cityupon request. (D) Grantee shall promptly take such corrective measures as are necessary to correct any performance deficiencies fully and to prevent their recurrence as far as possible. Grantee's failureto correct deficiencies identified through this testing process shall be a violation of this Franchise. Sites shallbe re-tested following correction. 11.7 Additional Tests Where there exists other evidence which in the judgment ofthe Citycasts doubt upon the reliability or technical quality ofthe Cable System, the City shall have the right and authority, upon thirty(30) days notice, to require Grantee to test, analyze and report on the performance ofthe Cable System. 31 .---------------------------------------------------' Grantee shall fully cooperate with the City in performing such testing and shall prepare a report,if requested,within thirty (30)days after testing.Such report shall include the following information: (A) the nature ofthe complaint or problem which precipitated the special tests; (B)the Cable System component tested; (C)the equipment used and procedures employed in testing; (D) the method,ifany, in which such complaint or problem was resolved;and (E)any other information pertinent to said tests and analysis,which may be required. SECTION 12.SERVICE EXTENSION AND SERVICE TO PUBLIC BUILDINGS 12.1 Service Availability (A)In General.Subject to the density provisions described in Section 13.1(D) below, Grantee shall provide Cable Service within seven (7) days ofa request by any potential Residential Subscriber within the Franchise Area. For purposes of this subsection,a request shall be deemed made on the date ofsigning a service agreement,receipt of funds by Grantee,receipt of a written request by Grantee or receipt by Grantee of a verified verbal request.Grantee shall provide such service: (1)With no line extension charge except as specifically authorized elsewhere in this Section. (2) At a nondiscriminatory installation charge for a standard installation, consisting of a one hundred twenty-five (125) foot aerial drop connecting to the exterior demarcation point for Residential Subscribers,with additional charges for non-standard installations computed according to a nondiscriminatory methodology for such installations. (3) At nondiscriminatory monthlyrates in accordance with applicable laws. (B)Provision of Cable Service.Grantee shall not arbitrarily refuse to provide Cable Service to any Person within the Franchise Area.Notwithstanding the foregoing,Grantee may introduce new or expanded Cable Services on a phased basis,where such services require an upgrade ofthe Cable System. (C)Service to Multiple Dwelling Units.The Grantee shall provide cable service to Multiple Dwelling Units in accordance with an agreement with the property owner or owners,this Franchise and all applicable laws. (D)Customer Charges for Extensions of Service. For unusual circumstances,such as the existence of more than one hundred twenty-five (125) feet ofaerial distance from distribution 32 cable to connection ofservice to customers, or a density ofless than twenty-five (25) residences per 5280 cable-bearing strand feet of trunk or distribution cable, service may be made available on the basis of a capital contribution in aid of construction,including the cost of material, labor and easements. For the purpose ofdetermining the amount ofcapital contribution in aid ofconstruction to be borne by the Grantee and customers in the area in which service may be expanded, the Grantee will contribute an amount equal to the construction and other costs per mile, multiplied by a fraction whose numerator equals the actual number ofresidences per 5280 cable-bearing strand feet of its trunk or distribution cable and whose denominator equals twenty-five (25). Potential customers who request service hereunder will bear the remainder ofthe construction and other costs on a pro rata basis. The Grantee may require that the payment ofthe capital contribution in aid of construction borne by such potential customersbe paid in advance. 12.2 Connectionof Public Facilities Grantee shall, without charge,provide a standard installation and one outlet of Basic Service and Expanded Basic Service to City Hall and all other City owned (or leased) and occupied buildings, including, but not limited to, fire stations andpolice stations, schools and public libraries in the City that are passed by the Cable System if those locations are not receiving free Basic Service and Expanded Basic Service from another cableoperator.In addition, Grantee shall provide, at no cost to the City or other entity, a standard installation and one outlet of Basic Service and Expanded Basic Service to future owned (or leased) and occupied City buildings, fire stations and police stations, schools and public libraries upon request,provided that the drop line from the feeder cable to such building does not exceed one hundred twenty-five (125)aerial feet unless the City or other entity agrees to pay the incremental cost of such drop line in excess of one hundred twenty-five (125)aerial feet, including the cost of excess labor and materials and further provided that the buildings are not receiving free Basic Service and Expanded Basic Service from another cable operator. The Cable Service provided herein shall not be distributed beyond each originally installed outlet without authorization from Grantee. Such Cable Service shall not be used for commercial purposes or for viewing by the general public nor shall it be extended to areas ofCity buildings where the Grantee would normally enter into a commercial contract to provide such Cable Service (e.g.., a golfcourse). Ifadditional outlets are provided by Grantee pursuant to this subsection, the building owner and/or occupant shall pay the usual installation fees associated therewith; however, there shall be no additional charge for the Cable Service. Outlets ofBasic and Expanded Basic Service provided in accordance with this subsection may be used to distribute Cable Services throughout such buildings, provided such distribution canbe accomplished without causing Cable System disruption and general technical standards are maintained. Such outlets may only be used for lawful purposes. The City shall take reasonable precautions to prevent any use of Grantee's Cable System in City buildings that may result in an inappropriate use thereof The standard installations and Cable Service provided pursuant to this subsection are voluntary initiatives of Grantee and will be continued throughout the term ofthis Franchise. SECTION 13.FRANCHISE VIOLATIONS 33 13.1 Procedure for Remedying Non-Material Franchise Violations (A)If the City believes that Grantee has failed to perform any non-material obligation under this Franchise, the City shall notify Grantee in writing, stating with reasonable specificity the nature ofthe alleged default.Grantee shall have thirty (30) days from the receipt ofsuch notice to: (1)respond to the City, contesting the City's assertion that a default has occurred, and requesting a meeting in accordance with subsection (B),below; or (2) cure the default;or (3)notify the City that Grantee cannot cure the default within thirty (30) days, because ofthe nature ofthe default.In the event the default cannot be cured within thirty (30) days,Grantee shall promptly take all reasonable steps to cure the default and notify the City in writing and in detail as to the exact steps that will be taken and the projected completion date.In such case, the City may set a meeting in accordance with subsection (B)below to determine whether additional time beyond the thirty (30) days specified above is indeed needed, and whether Grantee's proposed completion schedule and steps are reasonable. (B)IfGrantee does not cure the alleged default within the cure period stated above, or denies the default and requests a meeting in accordance with subsection (A)(I),or the City orders a meeting in accordance with subsection (A)(3), the City shall set a meeting to investigate said issues and the existence ofthe alleged default. The City shall notify Grantee ofthe meeting in writing and such meeting shall take place no less than thirty (30) days after Grantee's receipt of notice of the meeting. At the meeting;Grantee shall be provided an opportunity to be heard and to present evidence in its defense. (C) If, after the meeting,the City determines that a default exists, Grantee and the City may agree on a plan and schedule to cure the default. Absent such agreement, the City shall order Grantee to correct or remedy the default or breach within fifteen (15) days or within such other reasonable timeframe as the City shall determine.In the event Grantee does not cure the default within such time to the City's reasonable satisfaction, the City may: (1)Recommend the revocation of this Franchise pursuant to the procedures in subsection 14.2; or (2)Recommend any other legal or equitable remedy available under this Franchise or any applicable law. (D) The determination as to whether a non-material violation of this Franchise has occurred shall be within the discretion of the City,provided that any such determination may be subject to appeal to the City Council or review by a court ofcompetent jurisdiction under applicable law. 34 \';;.'~,... 13.2 Revocation (A) The City may revoke this Franchise and rescind all rights and privileges associated with this Franchisein the followingcircumstances: (I)If Grantee fails to perform any material obligation under this Franchise-or under anyother agreement,ordinance or documentregarding theCityand Grantee; (2)If Grantee willfully fails for more than three (3) days to provide continuous anduninterruptedCableService; (3)If Grantee attempts to evade any material provision of this Franchise or to practice anyfraud or deceitupon theCity or Subscribers; (4)IfGrantee becomes insolvent, or ifthere is an assignment for the benefit of Grantee'screditors; (5) If Grantee makes a material misrepresentation offact in the application for or negotiation ofthisFranchise; or (6)IfGranteebreaches amaterial provision ofthe Customer Service Standards. (B)Prior to forfeiture or termination ofthe Franchise, the City shall give written notice to the Grantee ofits intent to revoke the Franchise. The notice shall set forththe exact nature ofthe noncompliance. Grantee shall have thirty (30) days from such notice to object in writing and to state its reasons for such objection and provide any explanation. In the event the City has not received a satisfactoryresponse from Grantee, it may then seek a termination of the Franchise by the City Councilin accordancewith this subsection. (C)Any proceeding regarding revocation shall be conducted by the City Council and open to the public. Grantee shall be afforded at least forty-five (45) days prior written notice of such proceeding. (I)At such proceeding, Grantee shall be provided a fair opportunity for full participation,including the right to be represented by legal counsel, to introduce evidence, and toquestion witnesses. A complete verbatimrecord and transcriptshall be made ofsuch proceedingand the cost shall be shared equallybetween the parties. The City Council shall hear any persons interested in the revocation, and shall allow Grantee, in particular, an opportunityto state itsposition on thematter. (2) Within ninety (90) days after the hearing, the City Council shall determine whether to revoke the Franchise; or if the breach at issue is capable of being cured by Grantee,the City Council shall directGrantee to take appropriateremedialaction within the time and in themanner and on theterms andconditionsthat theCityCouncildetermines are reasonable under the circumstances.If the City Council determinesthat the Franchise is to 35 -------------------------------- be revoked, the City Council shall Set forth the reasons for such a decision and shall transmit a copy ofthe decision to the Grantee. Granteeshall be bound by the City Council's decision to revoke the Franchise unless it appeals the decision to a court of competent jurisdiction within thirty (30) days ofthe date ofthe decision. (3) Grantee shall be entitledto such relief as the courtmay deem appropriate. (4) The City Council may in its sole discretion take any lawful action that it deems appropriate to enforce the City's rights under the Franchise in lieu of revocation of the Franchise. 13.3 Procedures in the Event ofTermination (A) If this Franchise expires without renewal or is otherwise lawfully terminated or revoked, the Citymay,subject to applicablelaw: (I)Require Grantee to maintain and operate its Cable System lIfld I Net on a month-to-monthbasis until anew Cable Operatoris selected;or (2) Purchase Grantee'sCableSystemin accordancewith theprocedures set forth in subsection 14.4, below. (B)The City may order the removal of the above-ground Cable System facilities and such underground facilities from the Franchise Area at Grantee's sole expense within a reasonable period oftime as determined by the City.In removing its plant, structures and equipment, Grantee shall refill, at its own expense, any excavation that is made by it and shall leave all Rights-of-Way, public places and private property in as good a condition as that prevailing prior to Grantee's removal of its equipment and without affecting electrical or telephone wires or attachments. The indemnificationand insurance provisions and the suretybond,ifany, shall remain in full force and effect during the period ofremoval,and Grantee shall not be entitled to, and agrees not to request, compensation ofanysort therefore. (C)If Grantee fails to complete any removal required by subsection 14.3 (B) to the City's satisfaction, after written notice to Grantee, the City may cause the work to be done and Grantee shall reimburse the City for the costs incurred within thirty (30) days after receipt of an itemized list of the costs, or the City may recover the costs through the surety bond,if any,if Grantee has not paidsuch amount within the foregoingthirty(30) daytime period. (D)The City may seek legal and equitable relief to enforce the provisions of this Franchise. 13.4 Purchase of Cable System (A) If at any time this Franchise is lawfully revoked, terminated or not renewed (in accordance with federallaw), the City shallhave the optionto purchasethe Cable System. 36 ----------------------- (B) The City may, at any time after Franchise revocation,termination or non-renewal, offer in writing to purchase Grantee's Cable System.In any case where the City elects to purchase the Cable System, the purchase shall be closed within one hundred twenty (120) days ofthe date of the City's audit ofa balance sheet and current profit and loss statement ofGrantee's Cable System. The City shall, as applicable,pay for the Cable System in cash or certified funds, and Grantee shall deliver appropriate bills ofsale and other instruments ofconveyance. (C)For the pwposes of this subsection,the price for the Cable System shall be determined as follows: (I)In the case ofthe expiration ofthe Franchise without renewal, at fair market value determined on the basis of Grantee's Cable System valued as a going concern,but with no value allocated to the Franchise itself.In order to obtain the fair market value, this valuation shall be reduced by the amount of any lien,encumbrance,or other obligation of Grantee which the City may assume. (2) System. In the case of revocation for cause,the equitable price of Grantee's Cable 13.5 Receivership and Foreclosure (A) At the option ofthe City,subject to applicable law, this Franchise may be revoked after the appointment of a receiver or trustee to take over and conduct the business of Grantee whether in a receivership,reorganization,bankruptcy or other action or proceeding,unless: (I)The receivership or trusteeship is timely vacated; or (2) The receivers or trustees have timely and fully complied with all the terms and provisions of this Franchise,and have remedied all defaults under the Franchise. Additionally,the receivers or trustees shall have executed an agreement duly approved by the court having jurisdiction,by which the receivers or trustees assume and agree to be bound by each and every term,provision and limitation ofthis Franchise. (B)If there is a foreclosure or other involuntary sale of the whole or any part of the plant,property and equipment ofGrantee,the City may serve notice ofrevocation on Grantee and to the purchaser at the sale, and the rights and privileges of Grantee under this Franchise shall be revoked thirty (30) days afterservice ofsuch notice,unless: (I)The City has approved the transfer ofthe Franchise,in accordance with the procedures set forth in this Franchise and as provided by law; and (2) The purchaser has covenanted and agreed with the City to assume and be bound by all ofthe terms and conditions ofthis Franchise. 13.6 Alternative Remedies 37 ·1'.'''.;~I ,.l -------------, No provision of this Franchise shall be deemed to bar the City or the Grantee from seeking appropriatejudicial relief Neither the existence ofother remedies identified in this Franchise nor the exercise thereof shall be deemed to bar or otherwise limit the right of the City to recover monetary damages for violations by Grantee, or to seek and obtain judicial enforcement of .Grantee's obligations by means of specific performance, injunctive relief or mandate, or any other remedy at law or in equity. The City specifically does not, by any provision of this Franchise, waive any right, immunity, limitation or protection (including complete damage immunity) otherwise available to the City, its officers,officials,City Council, Boards, commissions, agents, or employees under federal, State, or local law (including, for example, Section 635A of the Cable Act). 13.7 Assessment of MonetaryDamages The City and Grantee recognize the delays,expenseand unique difficulties involvedin proving in a legal proceeding the actual loss suffered by the City as a result of Grantee's breach of certain provisions of this Franchise. Accordingly, instead of requiring such proof, the City and Grantee agree that Grantee shall pay to the City the sums set forth below for each day or part thereof that Grantee shall be in breach ofspecific provisions of this Franchise. Such amounts are agreed to by both parties as a reasonable estimate of the actual damages the City would suffer in the event of Grantee'sbreach ofsuch provisions ofthis Franchise. Subject to the City's giving written notice to the Grantee and a thirty (30) day right to cure period, the City may assess against Grantee monetary damages up to two hundred fifty dollars ($250.00) per day for material departure from the FCC technical performance standards; one hundred dollars ($100.00) per day for failure to provide the Access Channels or any equipment related thereto which is required hereunder; one hundred dollars ($100.00)per day for each material violation of the Customer Service Standards; fifty dollars ($50.00) per day for failure to provide reports or notices as required by this Franchise; andup to one hundred dollars ($100.00) per day for any other material breachesor defaults under theFranchise;providedhowever, inno event shall the aggregate amount of any such monetary penalties assessed during the term of the franchise exceed fifty thousand dollars ($50,000). 13.8 Effect ofAbandonment If the Grantee abandons its Cable System during the Franchise term, or fails to operate its Cable System in accordancewith its duty to provide continuousservice, theCity, at its option,may obtain an injunction,or operate the Cable System, or designate another entity to operate the Cable System temporarily until the Grantee restores service under conditions acceptable to the City,or until the Franchise is revoked and a new franchisee is selected by the City. If the City operates the Cable System, or designates another entity to operate the Cable System, the Grantee shall reimburse the City or the City's designee, as applicable, for all reasonable costs,expenses and damages incurred. If Grantee permanently abandons any of its facilities then,at the City's sole discretion, such facilitiesmay become the property oftheCity. SECTION 14.FRANCHISE RENEWAL 38 (A) The City and Grantee agree that any proceedings undertaken by the City that relate to the renewal of the Franchise shall be governed by and comply with the provisions ofSection 626 ofthe Cable Act, unless the procedures or substantive protections set forth therein shall be deemed to be preempted and/or superseded by the provisions of any subsequent provision offederal or State law. (B)In addition to the procedures set forth in said Section 626(a), the City agrees to notify Grantee of the completion of its assessments regarding the identification of future cable- related community needs and interests, as well as the past performance of Grantee under the then current Franchise term. Notwithstanding anythingto the contrary set forth herein,Grantee and the City agree that at any time during the term ofthe then current Franchise, while affording the public adequate notice and opportunity for comment, the City and Grantee may agree to undertake and finalize negotiations regarding renewal of the then current Franchise and the City may grant a renewal thereof. Grantee and the City consider the terms set forth in this subsection to be consistent with the express provisions ofSection 626 ofthe Cable Act. SECTION 15.FRANCHISE TRANSFER (A) The Cable System and this Franchise shall not be sold, assigned, transferred, leased or disposed of, either in whole or in part, either by involuntary sale or by voluntary sale,merger or consolidation; nor shall title thereto, either legal or equitable, or any right, interest or property therein pass to or vest in any Person without the prior written consent of the City,which consent shall not be unreasonably withheld. (B)The Grantee shall promptly notify the City ofany actual or proposed change in, or transfer of, or acquisition by any other party ofcontrol ofthe Grantee. The word "control" as used herein is not limited to majority stock ownership but includes actual working control in whatever manner exercised. Every change, transfer or acquisition of control of the Grantee shall make this Franchise subject to cancellation unless and until the City shall have consented thereto. (C)The parties to the sale, transfer or change ofcontrol shall make a written request to the City for its approval of a sale, transfer or change of control and shall furnish all information required by law. (D)In seeking the City's consent to any change in ownership or control, the proposed transferee or controlling party shall indicate whether, as applicable, it: (I)Has ever been convicted or held liable for acts involving deceit including any violation of federal, State or local law or regulations, or is currently under an indictment,investigation or complaint charging such acts; (2) Has ever had a judgment in an action for fraud, deceit, or misrepresentation entered against it by any court ofcompetent jurisdiction; 39 •.L'• ...~,'."'Iii~~"'I 1 (3) Has pending any material legal claim, lawsuit, or administrative proceeding arising out ofor involving a cable system; (4) Is financially solvent, by submitting financial data, including financial statements, that are audited by an independent certified public accountant, along with any other data that the City may reasonably require; and (5) Has the legal, financial and technical capability to enable it to maintain and operate the Cable System for the remainingterm ofthe Franchise. (E)In reviewing a request for sale, transfer or change of control, the City may inquire into the legal, technical and financial qualifications of the prospective controlling party or transferee, and Grantee shall assist the City in so inquiring. The City may condition said sale, transfer or change of control upon such terms and conditions as it deems reasonably appropriate, provided,however,any such terms and conditionsso attached shall be related to the legal, technical and financial qualifications of the prospective controlling party or transferee. Additionally, such Person shall effect changes as promptly as practicable in the operation ofthe Cable System,ifany changes are necessary to cure any violations or defaults presently in effector ongoing. (F)The City shall act by ordinance or resolution on the request within one hundred twenty (120) days ofthe request,provided ithas received all information required by law, such as a complete FCC Form 394. Subject to the foregoing,if the City 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 City agree to an extension oftime. (G) Within thirty (30) days of any transfer, sale or change of control,if approved or deemed granted by the City,Grantee shall file with the City a copy ofthe deed, agreement, lease or other written instrument evidencing such sale or transfer of ownership or control, certified and sworn to as correct by Grantee and the transfereeor new controlling entity.In the case ofa sale or transfer of ownership or change ofcontrol, the transferee or the new controlling entity shall file its written acceptance agreeing to be bound by all of the provisions of this Franchise, subject to applicable law.In the event ofa change in control, in which the Grantee is not replaced by another entity, the Grantee will continue to be bound by all of the provisions of the Franchise and will not be required to file an additional written acceptance. (H)Notwithstanding anything to thecontrary in this subsection, the prior approval ofthe City shall not be required for any sale, assignment or transfer ofthe Franchise or Cable System to an intra-company Affiliate;provided that the proposed assignee or transferee must show legal, technical and financial responsibility as maybe determined necessaryby the City and must agree in writing to comply with all of the provisions of the Franchise, subject to applicable law. Further, Grantee may pledge the assets ofthe CableSystemfor the purpose offinancing without the consent of the City; provided that such pledge of assets shall not impair or mitigate Grantee's responsibilities and capabilities to meet all ofits obligations under theprovisions ofthis Franchise. SECTION 16.MISCELLANEOUS PROVISIONS 40 -------------------' ·..,1'~.''."~ 16.1 Discriminatory Practices Prohibited Throughout the term of this Franchise, Grantee shall fully comply with all equal employment and nondiscrimination provisions and requirements of federal, State and local laws, and rules and regulations relating thereto. 16.2 Local Employment Efforts Grantee shall use reasonable efforts to utilize qualified local contractors, including minority business enterprises and woman business enterprises,whenever the Grantee employs contractors to perform work under this Franchise. . 16.3 Notices Throughout the term of this Franchise, each party shall maintain and file with the other a local address for the service ofnotices by mail. All notices shall be sent to such respective address, and such notices shall be effective upon the date ofmailing. At the effective date ofthis Franchise: Grantee's address shall be: WaveDivision I, LLC 115 South Maple Avenue POBox 1630 LaConner, WA 98257 Attention: General Manager With a copyto: Wave Broadband 401 Kirkland Parkplace, Suite 410 Kirkland, WA 98033 Attention: Steve Weed and Jim Penney City's addressshallbe: City ofMarysville 1049 State Avenue Marysville,Washington 98270 Attention: City Attorney 16.4 Cumulative Rights Subject to applicable law, all rights and remedies given to the City by this Franchise or retained by the City herein shall be in addition to and cumulative with any and all other rights and remedies, existing or implied, now or hereafter available to the City, at law or in equity. 16.5 Costs to be Borne by Grantee 41 ~,",.'\~....'f '.A ------------------------------------------------- Grantee shall reimburse the City for all costs ofpublication ofthis Franchise, and any notices prior to any public hearing regarding this Franchise, contemporaneous with its acceptance of this Franchise. Grantee agrees that the additional commitments herein are not Franchise Fees,nor are they to be offset or credited against any Franchise Feepayments due to the City. 16.6 Binding Effect This Franchise shall be binding upon the parties hereto, their permitted successors and assigns. 16.7 Authority to Amend In addition to certain mandatory amendment provisions ofSection 3.9, this Franchise may also be amended at any time by mutual written agreement between the parties. 16.8 .Venue Venue for any dispute related to this Franchise shall be in Snohomish County Superior Court in Everett, Washington. 16.9 Governing Laws This Franchise shall be governed, construed and enforced in accordance with the laws ofthe State of Washington (as amended), the Cable Act as amended, any applicable rules,regulations and orders of the FCC, and any other applicable local, State and federal laws, rules, regulations, legislation or orders (as such now exist, arelater amended or subsequentlyadopted). 16.10 Guarantee The performance of the Grantee shall be guaranteed in all respects by WaveDivision Holdings, LLC. A signed guarantee shall be filed with the City contemporaneous with Grantee's acceptance ofthis Franchise. 16.11 Captions The captions and headings ofthis Franchise are for convenience and reference purposes only and shall not affect in any way the meaning or interpretation ofany provision ofthis Franchise. 16.12 No Joint Venture Nothing herein shall be deemed to create a joint venture or principal-agent relationship between the parties, and neither party is authorized to, nor shall either party act toward third persons or the public in anymanner which would indicate anysuch relationship with the other. 16.13 Waiver The failure of the City at any time to require performance by Grantee of any provision hereofshall in no way affect the right ofthe City hereafter to enforce the same, nor shall the waiver by the City of any breach ofany provision hereofbe taken or held to be a waiver of any succeeding breach of such provision, or as a waiver oftheprovision itselfor any other provision. 16.14 Severability If any Section, subsection, paragraph or provision of this Franchise is determined to be illegal, invalid or unconstitutional by any court or agency of competent jurisdiction,such determination 42 shallhave no effect on the validity ofany other Section, subsection, paragraph or provision ofthis Franchise, all ofwhich will remain in full forceand effect for the term ofthe Franchise. 16.15 Entire Agreement This Franchise represents the entire understanding and agreement between the parties hereto with respect to the subject matter hereofand supersedes all prior oral and written negotiations between the parties. 16.16 Force Majeure In the event Grantee is prevented or delayed in the performance ofany ofits obligations under this Franchise by a reason beyond the control of Grantee, Grantee shall have a reasonable time, under the circumstances, to perform the affected obligation under this Franchise or to procure a substitute for such obligation which is satisfactory to the City.Those conditions which are not within the control of Grantee include, but are not limited to, natural disasters, civil disturbances,power outages, telephone network.outages, severe or unusual weather conditions which have a direct and substantial impact on the Grantee's ability to provide Cable Services in the Franchise Area and which could not have been avoided by the Grantee which used its best efforts in its operations to avoid such problems, work delays caused by waiting for utility providers to service or perform make-ready services on their utility poles or other facilities to which the Grantee's Cable System is attached, and Grantee's inability to obtain federal, State or railroad permits despite Grantee's best efforts to do so. IfGrantee believesthat a reason beyond its controlhas prevented or delayed its compliance with the provisions of this Franchise, Grantee shall provide documentation as reasonably required by the City to substantiate the Grantee's claim.IfGrantee has not yet cured the deficiency,Grantee shall also provide the City with its proposed plan for remediation,including the timing for such cure. 16.17 Attorneys'Fees If any action or suit arises in connection with this Franchise, the prevailing or substantially prevailing party (either the City or Grantee, as the case may be) shall be entitled to recover all ofits reasonable attorneys' fees, costs and expenses in connection therewith, in addition to such other reliefas the courtmay deem proper. 16.18 Actions of the City or Grantee In any action by the City or Grantee mandated or permitted under the terms hereof, it shall act in a reasonable, expeditious and timely manner. Furthermore, in any instance where approval or consent is required under the terms hereof, such approval or consent shall not be unreasonably withheld. 16.19 Acceptance Within forty-five (45) days after the passage and approval of this Franchise by Ordinance by the City Council, this Franchise shall be accepted by Grantee by filing with the City Clerk an unconditional, written acceptance of all of the terms and conditions of this Franchise.Failure of Grantee to file such an acceptance shall be deemed a rejection by Grantee, and this Franchise shall be voidable at the discretion ofthe City. 43 , t ",J..)..'""~......... -_.---------------------------------, PASSED by the City Council and APPROVED by the Mayor this Ut"day of July, 2006. CITY OF MARYSVILLE By DENNIS KENDALL,Mayor ATTEST: APPROVED AS TO FORM ~tJARD GRANT K.WEED,City Attorney Accepted and approved this ~"day Of.SlEf'iEMBfIj.2006. 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