HomeMy WebLinkAboutO-3132 - Consents to change of control of cable system franchise (Special)CITY OF MARYSVILLE
Marysville, Washington
ORDINANCE NO. -----
AN ORDINANCE OF THE CITY OF MARYSVILLE, WASHINGTON,
CONSENTING TO CHANGE OF CONTROL OF FRONTIER
COMMUNICATIONS NORTHWEST, INC. TO NORTHWEST FIBER,
LLC.
WHEREAS, Frontier Communications Northwest, Inc. ("Franchisee") is the duly
authorized holder of a franchise (the "Franchise"), authorizing Franchisee to operate and maintain
a cable system in the City of Marysville (the "City"); and
WHEREAS, the Franchise (a copy of which is attached hereto as Exhibit A) was originally
granted to Verizon Northwest, Inc. which was later acquired by Franchisee, and the City approved
the transfer of control of Verizon Northwest to Franchisee in 2009; and
WHEREAS, on May 28, 2019, Northwest Fiber LLC ("Northwest Fiber") entered into an
agreement (the "Agreement") with Frontier Communications Corporation and its wholly-owned
subsidiary Frontier Communications ILEC Holdings, LLC (together "Frontier") in order to acquire
control of the Franchisee, among other Frontier entities (the "Transaction"); and
WHEREAS, pursuant to that Agreement, Franchisee will become a direct, wholly-owned
subsidiary of Northwest Fiber; and
WHEREAS, ultimate control of Franchisee will transfer to Northwest Fiber; and
WHEREAS, Northwest Fiber has filed an FCC Form 394 with the City (the "Application");
and
WHEREAS, the City has reviewed the Application and materials provided by Northwest
Fiber.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MARYSVILLE,
WASHINGTON, DO ORDAIN AS FOLLOWS:
SECTION 1. The City consents to the Transaction.
SECTION 2. The City confirms that the Franchise is valid and outstanding and in full
force and effect and there are no defaults under the Franchise. Subject to compliance with
the terms of this Ordinance, all action necessary to approve the change of control of the
Franchisee to Northwest Fiber has been duly and validly taken.
SECTION 3. No1ihwest Fiber or Franchisee may (a) assign, transfer, or transfer control
of its assets, including the Franchise or change the name or legal form of the Franchisee,
Page I of 2
provided that such assignment, transfer, or transfer of control is to an entity directly or
indirectly controlling, controlled by, or under common control with Northwest Fiber; (b)
restructure debt or change the ownership interests among existing equity participants in
Northwest Fiber; (c) pledge or grant a security interest to any lender(s) of Northwest
Fiber's assets, including, but not limited to, the Franchise, or of interest in Northwest Fiber,
for purposes of securing any indebtedness; and ( d) sell equity interests in Northwest Fiber
or any of Northwest Fiber's affiliates.
SECTION 4. Upon closing of the Transaction, Franchisee shall remain bound by the
lawful terms and conditions of the Franchise.
SECTION 5. The City will not amend, revoke, or otherwise alter this Ordinance without
the consent of the Franchisee and Northwest Fiber.
SECTION 6. If any section, subsection, sentence, clause, phrase or word of this ordinance
should be held to be invalid or unconstitutional by a court of competent jurisdiction, such
invalidity or unconstitutionality thereof shall not affect the validity or constitutionality of
any other section, subsection, sentence, clause, phrase or word of this ordinance.
SECTION 7. This ordinance shall become effective five days after the date of its
publication by summary.
PASSED by the City Council and APPROVED by the Mayor this Z7~ay of
auto~ ,2019.
CITY OF MARYSVILLE
Attest: ~ By~-+--+--~~~~~~~~~~~~~
TA BROCK, DEPUTY CITY CLERK
Approved as to from:
By ~TORNE'Y
Date of publication: \ d OZ,. I 1 Pf )
Effective Date (5 days after publication): l I { 01 11
Page 2of2
'.
Seattle-3418707 .9 0010932-00119
CABLE FRANCHISE AGREEMENT
BETWEEN
THE CITY OF MARYSVILLE, WASHINGTON
AND
VERIZON NORTHWEST INC.
ORIGINAL
TABLE OF CONTENTS
ARTICLE PAGE
1. DEFINITIONS ................................................................................................................... 2
2. GRANT OF AUTHORITY; LIMITS AND RESERVATIONS ....................................... 7
3. PROVISION OF CABLE SERVICE ................................................................................. 9
4. FTTP NETWORK OPERATION .................................................................................... 11
5. SYSTEM FACILITIES ................................................................................................... 11
6. EG SERVICES ................................................................................................................. 11
7. FRANCHISE FEES ......................................................................................................... 14
8. CUSTOMER SERVICE .................................................................................................. 15
9. REPORTS AND RECORDS ........................................................................................... 15
10. INSURANCE AND INDEMNIFICATION .................................................................... 17
11. TRANSFER OF FRANCHISE ........................................... , ............................................ 18
12. RENEWAL OF FRANCHISE ......................................................................................... 18
13. ENFORCEMENT AND TERMINATION OF FRANCHISE ........................................ 19
14. MISCELLANEOUS PROVISIONS ................................................................................ 22
EXHIBIT A -SERVICE AREAS
EXHIBIT B -MUNICIPAL BUILDING TO BE PROVIDED FREE CABLE SERVICE
EXHIBIT C -EG ORIGINATION SITES
EXHIBIT D-SAMPLE REMITTANCE FORM
EXBIBIT E -CUSTOMER SERVICE STANDARDS
Marysville FINAL 7-21-2008
Seattle-3418707.9 0010932-00119
-ii-
THIS CABLE FRANCHISE AGREEMENT (the "Franchise" or "Agreement") is entered
into by and between the City of Marysville, a duly organized municipal corporation under the
applicable laws of the State of Washington (the "City") and Verizon Northwest Inc., a
corporation duly organized under the applicable laws of the State of Washington (the
"Franchisee").
WHEREAS, the City wishes to grant Franchisee a nonexclusive franchise to construct,
install, maintain, extend and operate a cable communications system in the Franchise Area as
designated in this Franchise;
WHEREAS, the City is a "franchising authority" in accordance with Title VI of the
Communications Act (see 47 U.S.C. §522(10)) and is authorized to grant one or more
nonexclusive cable franchises pursuant to federal and Washington state law;
WHEREAS, Franchisee is in the process of installing a Fiber to the Premise
Telecommunications Network ("FTTP Network") in the Franchise Area for the transmission of
Non-Cable Services pursuant to authority granted by the State of Washington and federal law;
WHEREAS, the FTTP Network will occupy the Public Rights-of-Way within the City,
and Franchisee desires to use portions of the FTTP Network once installed to provide Cable
Services (as hereinafter defined) in the Franchise Area;
WHEREAS, the City has identified the future cable-related needs and interests of the
City and its community, has considered the financial, technical and legal qualifications of
Franchisee, and has determined that Franchisee's plans for its Cable System are adequate, in a
full public proceeding affording due process to all parties;
WHEREAS, the City has found Franchisee to be financially, technically and legally
qualified to operate the Cable System;
WHEREAS, the City has determined that the grant of a nonexclusive franchise to
Franchisee is consistent with the public interest; and
WHEREAS, the City and Franchisee have reached agreement on the terms and
conditions set forth herein and the parties have agreed to be bound by those terms and
conditions.
NOW, THEREFORE, in consideration of the City's grant of a franchise to Franchisee,
Franchisee's promise to provide Cable Service to residents of the Franchise Area of the City
pursuant to and consistent with the Communications Act (as hereinafter defined), pursuant to the
terms and conditions set forth herein, the promises and undertakings herein, and other good and
valuable consideration, the receipt and the adequacy of which are hereby acknowledged,
THE PARTIES DO HEREBY AGREE AS FOLLOWS:
Seattle-3418707.9 0010932-00119 1
1. DEFINITIONS
Except as otherwise provided herein, the definitions and word usages set forth in the
Communications Act (as hereinafter defined) are incorporated herein and shall apply in this
Agreement. In addition, the following definitions shall apply:
1.1. Access Channel: A video Channel, which Franchisee shall make available to
the City without charge for non-commercial Educational or Governmental use for the transmission
of video programming as directed by the City, or its designees, as applicable.
1.2. Additional Service Area: Shall mean any such'portion of the Service Area
·added pursuant to Section 3 .1.3 of this Agreement. ·
1.3. Affiliate: Any Person who, directly or indirectly, owns or controls, is owned or
controlled by, or is under common ownership or control with, the Franchisee.
1.4. Basic Service: Any service tier, which includes the retransmission oflocal
television broadcast signals as well as the EG Channels required by this Franchise.
1.5. Cable Operator: Shall be defined herein as it is defined under Section 602 of
the Communications Act, 47 U.S.C. § 522(5), but does not include direct broadcast satellite
providers.
1.6. Cable Service or Cable Services: Shall be defined herein as it is defined under
Section 602 of the Communications Act, 47 U.S.C. § 522(6).
1.7. Cable System or System: Shall be defmed herein as it is defined under Section
602 of the Communications Act, 47 U.S.C. § 522(7). The Cable System shall be limited to the
optical spectrum wavelength(s), bandwidth or future technological capacity that is used for the
transmission of Cable Services directly to Subscribers within the Franchise Area and shall not
include the tangible network facilities of a common carrier subject in whole or in part to Title II of
the Communications Act or of an Information Services provider.
1.8. Channel: Shall be defined herein as it is defined wider Section 602 of the
Communications Act, 47 U.S.C. § 522(4).
1.9. City: The City of Marysville or the lawful successor, transferee, or assignee
thereof.
1.10. Communications Act: The Communications Act of 1934, as amended by,
among other things, the Cable Communications Policy Act of 1984, the Cable Consumer Protection
and Competition Act of 1992 and the Telecommunications Act of 1996 as it may be further
amended from time to time.
1.1 l. Control: The ability to exercise de facto or de jure control over day-to-day
policies and operations or the management of Franchisee's affairs.
Seattle-3418707.90010932-00119 2
1.12. Educational Access Channel: An Access Channel available for the use solely
of the local public schools in the Franchise Area.
1.13. EG: Educational and Governmental.
1.14. Extended Service Area: The portion of the Franchise Area as outlined in
Exhibit A.
1.15. FCC: The United States Federal Communications Commission or successor
governmental entity thereto.
1.16. Force Majeure: Force Majeure is an event or events reasonably beyond the
ability of Franchisee to anticipate and control, such as:
(a) severe or unusual weather conditions, fire, flood, or other acts of God,, strikes,
labor disturbances, lockouts, war or act of war (whether an actual declaration of war is made or
not), insurrection, riots, act of public enemy;
(b) actions or inactions of any government instrumentality or public utility including
condemnation, accidents for which the Franchisee is not primarily responsible or work delays
caused by waiting for other utility providers to service or monitor utility poles to which
Franchisee's FTTP Network is attached, and unavailability of materials and/or qualified labor to
perform the work necessary; and
(c) telephone network outages only when such outages are outside the control of
Franchisee.
1.17. Franchise Area: The incorporated area (entire existing territorial limits) of
the City and such additional areas as may be included in the corporate (territorial) limits of the City
during the term of this Franchise.
1.18. Franchisee: Verizon Northwest Inc., and its lawful and permitted successors,
assigns and transferees.
1.19. Government Access Channel: An Access Channel available for the use solely
of the City.
1.20. Gross Revenue: All revenue, including any and all cash, credits, property, or
consideration of any kind, as determined in accordance with generally accepted accounting
principles, which is earned or derived by Franchisee and/or its Affiliates, received :from
Franchisee's provision of Cable Service over the Cable System in the Franchise Area. Gross
Revenue shall be reported to the City using the "accrual method'' of accounting. Gross Revenue
shall include, but may not be limited to, the following items so long as all other Cable Operators in
the Service Area include the same in Gross Revenues for purposes of calculating :franchise fees:
(a) fees charged for Basic Service;
(b) fees charged to Subscribers for any service tier other than Basic Service;
Seattle-3418707.9 0010932-00119 3
(c) fees charged for premium Channel(s), e.g. HBO, Cinemax, or Showtime;
( d) fees charged to Subscribers for any optional, per-channel, or per-program services;
( e) charges for installation, additional outlets, relocation, disconnection, reconnection,
and change-in-service fees for video or audio programming;
(f) fees for downgrading any level of Cable Service programming;
(g) fees for service calls;
(h) fees for leasing of Channels;
(i) rental of customer equipment, including converters (e.g. set top boxes, high definition
converters, and digital video recorders) and remote control devices;
(j) advertising revenue as set forth herein;
(k) revenue from t~e sale or lease of access Channel(s) or Channel capacity;
(l) revenue from the sale or rental of Subscriber lists;
(m) revenues or commissions received from the carriage of home shopping channels;
(n) fees for any and all music services that are deemed to be a Cable Service over a
Cable System;
( o) revenue from the sale of program guides;
(p) late payment fees;
( q) forgone revenue that Franchisee chooses not to receive in exchange for trades,
barters, services, or other items of value;
(r) revenue from NSF check charges;
(s) revenue received from programmers as payment for programming content cablecast
on the Cable System; and
(t) Franchise fees hereunder.
Advertising commissions paid to independent third parties shall not be deducted from
advertising revenue included in Gross Revenue. Advertising revenue is based upon the ratio of
the number of Subscribers as of the last day of the period for which Gross Revenue is being
calculated to the number of Franchisee's Subscribers within all areas covered by the particular
advertising source as of the last day of such period, e.g., Franchisee sells two ads: Ad "A" is
broadcast nationwide; Ad "B" is broadcast only within Washington. Franchisee has 100
Subscribers in the Franchise Area, 500 Subscribers in Washington, and 1,000 Subscribers
nationwide. Gross Revenue as to the City from Ad "A" is 10% of Franchisee's revenue
Seattle-3418707 .9 00 l 0932-00119 4
therefrom. Gross Revenue as to the City from Ad "B" is 20% of Franchisee's revenue
therefrom.
Notwithstanding the foregoing, Gross Revenue shall not include:
1.20.1. Revenues received by any Affiliate or other Person from
Franchisee in exchange for supplying goods or services used by Franchisee to provide Cable
Service over the Cable System in the Franchise Area;
1.20.2. Bad debts written off by Franchisee in the normal course of its
business, provided, however, that bad debt recoveries shall be included in Gross Revenue during
the period collected;
1.20.3. Refunds, rebates, or discounts made to Subscribers or other third
parties;
1.20.4. Any revenues classified, in whole or in part, as Non-Cable
Services revenue under federal or state law including, without limitation, revenue received from:
Telecommunications Services; Information Services, including without limitation Internet
Access services; and ariy other revenues attributed to Non-Cable Services in accordance with
applicable federal and state laws or regulations;
1.20.5. Any revenue of Franchisee or any Person that is received directly
from the sale of merchandise through any Cable Service distributed over the Cable System,
except for home shopping commissions paid to Franchisee;
1.20.6. The sale of Cable Services on the Cable System for resale in
which the purchaser is required to collect cable franchise fees from purchaser's customer;
1.20.7. The imputed value of the provision of Cable Services to customers
on a complimentary basis including, without limitation, the provision of Cable Services to public
buildings as required or permitted herein;
1.20.8. Any tax of general applicability imposed upon Franchisee or upon
Subscribers by a city, state, federal, or any other governmental entity and required to be collected
by Franchisee and remitted to the taxing entity (including, but not limited to, sales/use tax, gross
receipts tax, excise tax, utility users tax, public service tax, communication taxes, and non-cable
franchise fees and revenue);
1.20.9. Any forgone revenue that Franchisee chooses not to receive in
exchange for its provision of free or reduced cost cable services to any Person, including without
limitation, the City, employees of Franchisee and any public institutions or other institutions
designated in the Agreement; provided, however, that such forgone revenue that Franchisee
chooses not to receive in exchange for trades, barters, services, or other items of value in place of
cash consideration shall be included in Gross Revenue;
1.20.10. Sales of capital assets or sales of surplus equipment;
Seattle-3418707.9 0010932-00119 5
1.20.11. Reimbursement by programmers of marketing costs incurred by
Franchisee for the introduction of new programming pursuant to a written marketing agreement;
1.20.12. Directory or Internet advertising revenue including, but not
limited to, yellow page, white page, banner advertisement, and electronic publishing; or
1.20.13. Any fees or charges collected from Subscribers or other third
parties for the EG Grant.
l .211nformation Service: Shall be defined herein as it is defined under Title I
Section 3 of the Communications Act, 47 U.S.C. §153(20).
1.22. Initial Service Area: The portion of the Franchise Area as outlined in Exhibit
A.
1.23. Internet Access: Dial-up or broadband access service that enables Subscribers
to access the Internet.
1.24. Non-Cable Services: Any service that does not constitute the provision of
Video Programming directly to multiple Subscribers in the Franchise Area including, but not
limited to, Information Services and Telecommunications Services.
1.25. Person: An individual, partnership, association, joint stock company, trust,
corporation, or governmental entity (excluding the City).
1.26. Public Rights-of-Way: The surface and the area across, in, over, along, upon
and below the surface of the public streets, roads, bridges, sidewalks, lanes, courts, ways, alleys,
and boulevards, including, public utility easements and public lands and waterways used as Public
Rights-of-Way, as the same now or may thereafter exist, which are under the jurisdiction or control
of the City. Public Rights-of-Way do not include the airwaves above a right-of-way with regard to
cellular or other nonwire communications or broadcast services.
1.27. Service Area: All portions of the Franchise Area where Cable Service is
being offered, including the Initial Service Area, Extended Service Area, and any Additional
Service areas .
. 1.28. Service Date: The date that the Franchisee first provides Cable Service on a
commercial basis directly to multiple Subscribers in the Franchise Area. The Franchisee shall
memorialize the Service Date by notifying the City in writing of the same, which notification shall
become a part of this Franchise.
1.29. Service Interruption: The loss of picture or sound on one or more cable
channels.
1.30. Subscriber: A Person, or the City, who lawfully receives Cable Service over
the Cable System with Franchisee's express permission.
Seattle-3418707.90010932-00119 6
1.31. Telecommunications Facilities: Franchisee's existing Teleconnnunications
Service and Information Service facilities and its FTTP Network facilities.
1.32. Telecommunications Service: Shall be defined herein as it is defined under
Title I Section 3 of the Communications Act, 47 U.S.C. § 153(46).
1.33. Title II: Title II of the Communications Act.
1.34. Title VI: Title VI of the Communications Act.
1.35. Transfer of the Franchise:
1. 3 5 .1. Any transaction in which:
1.35.1.1. an ownership or other interest in Franchisee is
transferred, directly or indirectly, from one Person or group of Persons to another Person or
group of Persons, so that Control of Franchisee is transferred; or
1.3 5 .1.2. the rights held by Franchisee under the Franchise are
transferred or assigned to another Person or group of Persons.
1.35.2. However, notwithstanding Sub-subsections 1.35.1.1and1.35.1.2
above, a Transfer of the Franchise shall not include transfer of an ownership or other interest in
Franchisee to the parent of Franchisee or to another Affiliate of Franchisee; transfer of an interest
in the Franchise or the rights held by the Franchisee under the Franchise to the parent of
Franchisee or to another Affiliate of Franchisee; any action which is the result of a merger of the
parent of the Franchisee; or any action which is the result of a merger of another Affiliate of the
Franchisee.
1.36. Video Programming: Shall be defined herein as it is defined under Section
602 of the Communications Act, 47 U.S.C. § 522(20).
2. GRANT OF AUTHORITY; LIMITS AND RESERVATIONS
2.1. Grant of Authority: Subject to the terms and conditions of this Agreement and
the Communications Act, the City hereby grants the Franchisee the right to own, construct, operate
and maintain a Cable System along the Public Rights-of-Way within the Franchise Area, in order to
provide Cable Service. No privilege or power of eminent domain is bestowed by this grant; nor is
such a privilege or power bestowed by this Agreement.
2.2. City Does Not Regulate Telecommunications Under This Franchise: The City's
regulatory authority under Title VI of the Communications Act is not applicable to the
construction, installation, maintenance or operation of the Franchisee's FTTP Network to the extent
the FTTP Network is constructed, installed, maintained or operated for the purpose of upgrading
and/or extending Verizon's existing Telecommunications Facilities for the provision ofNon-Cable
Services. Nothing in this Agreement shall affect any City authority to adopt and enforce lawful
regulations with respect to Franchisee's Telecommunications Facilities in the Public Rights of
Way.
Seattle-3418707.9 0010932-00119 7
2.3. Term: This Franchise shall become effective on/d«51Ad :f, 2008 (the
"Effective Date"). The term of this Franchise shall be twelve (12) years from the Effective Date
unless the Franchise is earlier revoked as provided herein.
2.4. Grant Not Exclusive: The Franchise and the rights granted herein to use and
occupy the Public Rights-of-Way to provide Cable Services shall not be exclusive, and the City
reserves the right to grant other franchises for similar uses or for other uses of the Public Rights-of-
Way, or any portions thereof, to any Person, or to make any such use themselves, at any time
during the term of this Franchise. Any such rights which are granted shall not adversely impact the
authority as.granted under this Franchise.
2.5. Franchise Subject to Federal and State Law: Notwithstanding any provision to
the contrary herein, this Franchise is subject to and shall be governed by all applicable provisions
of federal and state law as they may be amended, including but not limited to the Communications
Act.
2.6. No Waiver:
2.6.1. The failure of the City on one or more occasions to exercise a right
or to require compliance or performance under this Franchise, the Communications Act or any
other applicable State or Federal law shall not be deemed to constitute a waiver of such right or a
waiver of compliance or performance by the City nor to excuse Franchisee from complying or
performing, unless such right or such compliance or performance has been specifically waived in
writing.
2.6.2. The failure of the Franchisee on one or more occasions to exercise
a right under this Franchise or applicable law, or to require performance under this Franchise,
shall not be deemed to constitute a waiver of such right or of performance of this Agreement, nor
shall it excuse the City from performance, unless such right or performance has been specifically
waived in writing.
2.7. Construction of Agreement:
2. 7 .1. The provisions of this Franchise shall be liberally construed to
effectuate their objectives.
2.7.2. Nothing herein shall be construed to limit the scope or applicability
of Section 625 of the Communications Act, 47 U.S.C. § 545.
2.8. Police Powers: In executing this Franchise, the Franchisee acknowledges that
its rights hereunder are subject to the lawful police powers of the City. Franchisee agrees to
comply with all lawful and applicable general laws and ordinances enacted by the City pursuant to
such power. Nothing in the Franchise shall be construed to prohibit the reasonable, necessary and
lawful exercise of the City's police powers. However, if the reasonable, necessary and lawful
exercise of the City's police power results in any material alteration of the terms and conditions of
this Franchise, then the parties shall modify this Franchise to the mutual satisfaction of both parties
to ameliorate the negative effects on the Franchisee of the material alteration. Any modifications
shall be in writing and signed by both parties. If the parties cannot reach agreement on the above-
Seattle-3418707.9 0010932-00119 8
referenced modification to the Franchise, the parties agree to submit the matter to mediation. The
matter submitted to mediation shall be limited to what effect, if any, the City's exercise of police
powers has on the terms of the Franchise. In the event mediation does not result in an agreement,
then the Franchisee may terminate this Agreement without further obligation to the City or, at
Franchisee's option, the parties agree to submit the matter to binding arbitration in accordance with
the commercial arbitration rules of the American Arbitration Association (but not necessarily
administered by the American Arbitration Association) or as otherwise mutually agreed by the
parties. ·
3. PROVISION OF CABLE SERVICE
3 .1. Service Area:
3 .1.1. Initial Service Area: Franchisee shall offer Cable Service to
significant numbers of Subscribers in residential areas of the Initial Service Area and may make
Cable Service available to businesses in the Initial Service Area, within twelve (12) months of
the Service Date of this Franchise, and shall offer Cable Service to all residential areas in the
Initial Service Area within thirty (30) months of the Service Date of the Franchise, except: (A)
for periods of Force Majeure; (B) for periods of delay caused by City; (C) for periods of delay
resulting from Franchisee's inability to obtain authority to access rights-of-way in the Service
Area; (D) in areas where developments or buildings are subject to claimed exclusive
arrangements with other providers; (E) in areas, developments or buildings where Franchisee
cannot access under reasonable terms and conditions after good faith negotiation, as determined
by Franchisee; and (F) in developments or buildings that Franchisee is unable to provide Cable
Service for technical reasons or which require non-standard facilities which are not available on
a commercially reasonable basis; and (G) in areas where the occupied residential household
density does not meet the density requirements set forth in Sub-section 3 .1.1.1.
3.1.1.1. Density Requirement: Franchisee shall make Cable
Services available to habitable residential dwelling units in all areas of the Service Area where
the average density is equal to or greater than 25 habitable residential dwelling units per mile as
measured in strand footage from the nearest technically feasible point on the active FTTP
Network trunk or feeder line. Should, through new construction, an area within the Initial
Service Area or Extended Service Area meet the density requirements after the time stated for
providing Cable Service as set forth in Subsections 3 .1.1 and 3 .1.2 respectively, Franchisee shall
provide Cable Service to such area within twelve (12) months of receiving notice from City that
the density requirements have been met.
3.1.2. Extended Service Area: Within sixty (60) months following the
Service Date, Franchisee shall begin providing Cable Service in the Extended Service Area
subject to the conditions of Subsection 3.1.1 above and the other terms set forth herein; provided,
however, that the Extended Service Area may be modified in whole or in part by Franchisee on
30 days notice to City.
3.1.3. Additional Service Areas: Except for the Initial Service Area, and
any Extended Service Area, Franchisee shall not be required to extend its Cable System or to
provide Cable Services to any other areas within the Franchise Area during the term of this
Seattle-3418707.9 0010932-00119 9
Franchise or any renewals thereof. If Franchisee desires to add Additional Service Areas within
the Franchise Area, Franchisee shall notify City in writing of such Additional Service Area at
least ten (10) days prior to providing Cable Services in such areas.
3.2. Availability of Cable Service: Franchisee shall make Cable Service available to
all residential dwelling units and may make Cable Service available to businesses within the
Service Area in conformance with Section 3.1 and Franchisee shall not discriminate between or
among any indi\riduals in the availability of Cable Service. Franchisee shall not deny access to
Cable Services to any group of potential residential Subscribers because of the income of the
residents of the local area in which the group resides. In the areas in which Franchisee shall
provide Cable Service, Franchisee shall be required to connect, at Franchisee's expense, other than
a standard installation charge, all residential dwelling units that are within one hundred twenty five
(125) feet of trunk or feeder lines not otherwise already served by Franchisee's FTTP Network.
Franchisee shall be allowed to recover, from a Subscriber that requests such connection, actual
costs incurred for residential dwelling unit connections that exceed one hundred twenty five (125)
feet and actual costs incurred to connect any non-residential Subscriber.
3.3. Cable Service to Municipal and Public Buildings: Subject to 3.1, Franchisee
shall provide, without charge within the Service Area, one service outlet activated for Basic Service
to City Hall at 1049 State A venue. Franchisee shall be entitled to recover the direct cost of
installing, if requested to do so, more than one outlet, or concealed inside wiring, or a service outlet
requiring more than one hundred twenty five (125) feet of drop cable; provided, however, that
Franchisee shall not charge for the provision of Basic Service to the additional service outlets once
installed. Cable Service may not be resold or otherwise used in contravention of Franchisee's
rights with third parties respecting programming. Equipment provided by Franchisee, under this
Subsection, if any, shall be replaced at retail rates iflost, stolen or damaged due to the negligence,
or other wrongful acts, of the City.
3.3.1. In addition to the location designated in Exhibit B, Franchisee
shall provide, without charge, within the Service Area, one (I) service outlet activated for
Basic Service to three (3) additional public schools and public libraries, and such other
buildings used for municipal purposes over the life of the contract at a location as mutually
agreed upon by the parties subject to all conditions set forth in this Section 3.3.
3.3.2.Notwithstanding the foregoing, Franchisee shall not be required
to provide Cable Service to any building set forth in Exhibit B until a reasonable period of
time after Franchisee serves the applicable portion of the Service Area with its Title II FTTP
Network, and the applicable wire center serving such building is video enabled.
4. FTTP NETWORK OPERATION
The parties recognize that Franchisee's FTTP Network is being constructed and will be
operated and maintained as an upgrade to and/or extension of its existing Telecommunications
Facilities. The jurisdiction of the_ City over such Telecommunications Facilities is restricted by
federal and state law, and the City does not and will not assert jurisdiction over Franchisee's
FTTP Network in contravention of those limitations.
Seattle-3418707.9 0010932-00119 IO
5. SYSTEM FACILITIES i
5.1. System Characteristics: Franchisee's Cable System shall be designed to be an
active two-way plant for subscriber interaction, if any, required for selec.tion or use of Cable
Service.
5.2. Interconnection: The Franchisee shall design its Cable System so that it may be
interconnected with other cable systems in the Franchise Area. Interconnection of systems may be
made by direct cable connection, microwave link, satellite, or other appropriate methods.
5.3. Emergency Alert System: Franchisee shall comply with the Emergency Alert
System ("EAS") requirements of applicable federal or state laws or regulations in order that
emergency messages may be distributed over the System.
6. EG SERVICES
6.1. EG Set Aside:
6.1.1. In order to ensure local availability of educational and government
programming, Franchisee shall provide on the Basic Service Tier a total of two channels
dedicated to Educational and Governmental Access (collectively, "EG Channels").
6.1.2. The type of programming to be carried on each of the EO Channels
set aside by Franchisee is reflected in Exhibit C. City hereby authorizes Franchisee to transmit
such programming within and without City jurisdictional boundaries. Franchisee specifically
reserves its right to make or change channel assignments in its sole discretion. If an EG Channel
provided under this Article is not being utilized by the City, Franchisee may utilize such EG
Channel, in its sole discretion, until such time as City elects to utilize the EG Channel for its
intended purpose.
6.1.3. Reserve Access Channel: The City may require Franchisee to
provide one (1) additional Access Channel when either Access Channel meets the criteria set
forth below and such additional Access Channel is carried by all other Cable Operators in the
Service Area. Upon Franchisee's request, a public hearing will be conducted regarding the need
for additional capacity. The City may activate the reserved Access Channel subject to the
following conditions:
6.1.3 .1. The City may activate the Reserve Channel during the
Term by providing the Franchisee with written notice of the need for additional Access Channel
capacity at least one hundred eighty (180) days prior to the date it intends to activate the Reserve
Channel, demonstrated by a programming schedule for EG programming on the existing
Government or Educational Access Channel, as applicable, consisting of at least six (6) hours per
day, which programming for purposes of this calculation shall not include repeat or character-
generated programming. Such written notice shall authorize the Franchisee to transmit the
Reserve Channel within and outside of the City.
Seattle-3418707.9 00I0932-00119 11
6.1.3.2. The City shall require all Cable Operators within the
Franchise Area to .provide a similar additional Access Channel; and
6.1.3 .3. In the event the origination point is one of the EG
Origination Sites as defined below, Franchisee will provide the reserved Access Channel within
one hundred eighty (180) days following the City's written request and verification of
compliance with each of the foregoing conditions and those specified in Section 6.2. If the
originat_ion point is not one of the EG Origination Sites, the timing of the availability and other
conditions will be by mutual agreement of the parties. In no event shall the origination point be
a new one located outside of the Service Area.
6.1.4. The City shall require all local producers and users of any of the
EG facilities or Channels to agiee in writing to authorize Franchisee to transmit programming
consistent with this Agreement and to defend and hold harmless Franchisee and the City, from
and against any and all liability or other injury, including the reasonable cost of defending claims
or litigation, arising from or in connection with claims for failure to comply with applicable
federal laws, rules, regulations or other requirements oflocal, state or federal authorities; for
claims of libel, slander, invasion of privacy, or the infringement of common law or statutory
copyright; for unauthorized use of any trademark, trade name or service mark; for breach of
contractual or other obligations owing to third parties by the producer or user; and for any other
injury or damage in law or equity, which result from the use of an EG facility or Channel. City
shall establish rules and regulations for use ofEG facilities, consistent with, and as required by,
47 u.s.c. §531.
6.2. EG Connections:
6.2.1. The City shall provide and ensure a suitable video signal for the EG
Channels to Franchisee at the locations set forth in Exhibit C (the "EG Origination Sites"). The
Franchisee's obligations under this Article 6, including its obligation to provide upstream
equipment and facilities necessary to transmit signals, shall be subject to the provision by the
City, without charge to the Franchisee, of: (1) access to the EG Origination Site facilities; (2)
access to any required EG equipment within the EG Origination Site facilities and suitable
required space, environmental conditions, electrical power supply, access, and pathways within
the EG Origination Site facilities; (3) video signals in a mutually agreed upon format suitable for
EG Access Channel programming; ( 4) any third-party consent that may. be necessary to transmit
EG signals (including, without limitation, any consent that may be required with respect to third-
party facilities, including the facilities of the incumbent cable provider, used to transmit EG
content to the EG Origination Sites from auxiliary locations); and (5) any other cooperation and
access to facilities as are reasonably necessary for the Franchisee to fulfill the obligations stated
herein. To the extent a suitable video signal is provided to Franchisee and the foregoing
conditions are met, Franchisee shall, within one hundred eighty (180) days of the Service Date or
provision of a suitable video signal, whichever is later, provide, install, and maintain in good
working order the equipment necessary for transmitting the EG signal to Subscribers.
6.3. EG Grant
Seattle-3418707.9 0010932-00119 12
6.3. I. Franchisee shall provide a grant to the City to be used in support of
the production oflocal EG programming (the "EG Grant"). Such grant shall be used by the City,
for EG access equipment, including, but not limited to, studio and portable production
equipment, editing equipment and program playback equipment, or for renovation or
construction ofEG access facilities. Franchisee agrees that the EG Grant shall in no way modify
or otherwise affect the Franchisee's obligation to pay franchise fees.
6.3.2. The EG Grant provided by Franchisee hereunder shall be the sum
of $0.75, per month, per Subscriber in the Service Area to Franchisee's Basic Service Tier, so
long as all other cable operators provide the same amount. The per subscriber amount of the EG
Grant may be reduced by actions of the City. The City will give Franchisee 60 days notice of
such a reduction. The EG Grant payment, along with a brief summary of the information upon
which it is based, shall be delivered to the City in quarterly installments no later than thirty (30)
days following the end of each calendar quarter during the Franchise Term. Calculation of the
EG Grant will commence with the first calendar month during which Franchisee obtains its first
Subscriber in the Service Area.
6.3.3. The City shall provide Franchisee with a complete accounting
annually of the distribution of funds granted pursuant to this Section 6.3.
6.3.4. Interest Charge on Late Payments. If any quarterly EG Grant
payment due under this Franchise remains unpaid after the due date ("EG Grant Past Due
Amounts"), Franchisee shall pay the City interest on such EG Grant Past Due Amounts in
addition to the EG Grant Past Due Amounts. The interest shall accrue on the EG Grant Past Due
Amounts from the due date until it is paid in full ("EG Grant Period of Delinquency").
Franchisee shall pay the City interest at a rate per annum equal to the highest Bank Prime Rate
plus one percent (1 %) during the EG Grant Period of Delinquency. The "Bank Prime Rate" shall
mean the prime lending rate as it appears in The Wall Street Journal during the EG Grant Period
of Delinquency. The City's acceptance of payment shall not be construed as an agreement that
the amount paid was correct.
6.4. To the extent permitted by federal law, the Franchisee shall be allowed to
recover the costs of the EG Grant, and any other costs arising from the provision of EG services
from Subscribers and to include such costs as a separately billed line item on each Subscriber's bill.
Without limiting the forgoing, if allowed under state and federal laws, Franchisee may externalize,
line-item, or otherwise pass-through interconnection costs to Subscribers.
7. FRANCHISE FEES
7 .1. Payment to City: Franchisee shall pay to the City a Franchise fee of five
percent (5%) of annual Gross Revenue. In accordance with Title VI of the Communications Act,
the twelve (12) month period applicable under the Franchise for the computation of the Franchise
fee shall be a calendar year. Such payments shall be made no later than thirty (30) days following
the end of each calendar quarter. Franchisee shall be allowed to submit or correct any payments
that were incorrectly omitted, and shall be refunded any payments that were incorrectly submitted,
in connection with the quarterly Franchise fee remittances within 90 days following the close of the
calendar year for which such payments were applicable.
Seattle-3418707 .9 0010932-00119 13
7 .2. Supporting Information: Each Franchise fee payment shall be accompanied by
a brief report prepared by a representative of Franchisee showing the basis for the computation, an
example of which is provided in Exhibit D. No later than one hundred twenty (120) days after the
end of each calendar year, Franchisee shall furnish to the City an annual summary of Franchise fee
calculations.
7.3. Limitation on Franchise Fee Actions: The parties agree that the period of
limitation for recovery of any Franchise fee payable hereunder shall be six ( 6) years from the date
on which payment by Franchisee is due.
7.4. Bundled Services: If Cable Services subject to the Franchise fee required under
this Article 7 are provided to Subscribers in conjunction with Non"Cable Services, the Franchise
fee shall be applied only to the value of the Cable Services, as reflected on the books and records of
Franchisee in accordance with applicable federal or state laws, rules, regulations, or public utility
regulation commission, regulations, standards or orders.
7.5. Interest Charge on Late Payments. If any quarterly Franchise fee payment due
under this Franchise remains unpaid after the due date ("Franchise Fee Past Due Amounts"),
Franchisee shall pay the City interest on such Franchise Fee Past Due Amounts in addition to the
Franchise Fee Past Due Amounts. The interest shall accrue on the Franchise Fee Past Due
Amounts from the due date until it is paid in full ("Franchise Fee Period of Delinquency").
Franchisee shall pay the City interest at a rate per annum equal to the highest Bank Prime Rate plus
one percent (1 %) during the Franchise Fee Period of Delinquency. The "Bank Prime Rate" shall
mean the prime lending rate as it appears in The Wall Street Journal during the Franchise Fee
Period of Delinquency. The City's acceptance of payment shall not be construed as an agreement
that the amount paid was correct, nor shall acceptance be construed as a release of any claim which
the City may have for additional sums due under provisions of this Section 7.
7.6. Alternative Fees: In the event that Franchise Fees are prohibited by any law or
regulation, Franchisee agrees to pay any substitute fee or amount allowed by law up to a maximum
amount of five percent (5%) of Gross Revenues, so long as the substitute fee is imposed on all
other Cable Operators in the Franchise Area and Franchisee is given thirty (30) days notice of the
substitute fee by the City.
7.7. EG Grant amd Franchise Grant Not Franchise Fees: Franchisee agrees that
the EG Grant and Franchise Grant set forth in Sections 6 and 14 respectively, shall in no way
modify or otherwise affect Franchisee's obligation to pay Franchise Fees to the City. Franchisee
agrees that although the sum of Franchise Fees and the EG Grant and Franchise Grant may total
more than five percent of Franchisee's Gross Revenues in any twelve-month period, the additional
commitments are not to be offset or otherwise credited in any way against any Franchise Fee
payments under this Franchise.
7.8. No Limitation on Taxing Authority: Nothing in this Franchise shall be
construed to limit any authority of the City to impose any tax, fee, or assessment of general
applicability. Nothing in this Franchise is intended to preclude Franchisee from exercising any
right it may have to challenge the lawfulness of any tax, fee, or assessment imposed by the City or
Seattle-3418707.9 0010932-00119 14
any state or federal agency or authority, or intended to waive any rights the Franchisee may have
under 47 U.S.C. § 542.
8. CUSTOMER SERVICE
Customer Service Standards are set forth in Exhibit E, which shall be binding unless
amended by written consent of the parties.
9. REPORTS AND RECORDS
9.1. Open Books and Records: Upon no less than thirty (30) business days written
notice to the Franchisee, the City shall have the right to inspect Franchisee's books and records
pertaining to Franchisee's provision of Cable Service in the Franchise Area at any time during
normal business hours and on a nondisruptive basis, as are reasonably necessary to ensure
compliance with the terms of this Franchise. Such notice shall specifically reference the section or
subsection of the Franchise which is under review, so that Franchisee may organize the necessary
books and records for appropriate access by the City. Franchisee shall not be required to maintain
any books and records for Franchise compliance purposes longer than six (6) years.
Notwithstanding anything to the contrary set forth herein, Franchisee shall not be required to
disclose information that it reasonably deems to be proprietary or confidential in nature, nor
disclose any of its or an Affiliate's books and records not relating to the provision of Cable Service
in the Service Area. The City shall treat any information disclosed by Franchisee as confidential
and only disclose it to employees, representatives, and agents thereof that have a need to know, or
in order to enforce the provisions hereof, or to comply with state law requirements. Franchisee
shall not be required to provide Subscriber information in violation of Section 631 of the
Communications Act, 47 U.S.C. §551.
9.2. Audit of Franchise Fee Payments.
9.2.1. City may audit or conduct a franchise fee review of Franchisee's books and
records no more than once every three (3) years during the Term. All records reasonably
necessary for any such audit shall be made available by Franchisee to City.
9 .2.2. Each party shall bear its own costs of an audit; provided, however, that if
the results of any audit indicate that Franchisee underpaid the franchise fees by five percent (5%)
or more, then Franchisee shall pay the reasonable, documented, out~of-pocket costs of the audit
up to ten thousand dollars ($10,000).
9.2.3. If the results of an audit indicate an underpayment or overpayment of
franchise fees, the parties agree that any undisputed underpayment or overpayment shall be paid
or offset against future payments if applicable, to the proper party within forty~five ( 45) days.
9.2.4. Any audit shall be conducted by an independent third party. Any entity
employed by the City that performs the audit or franchise fee review shall not be permitted to be
compensated on a success based formula e.g. payment based on an underpayment of fees, if any.
Seattle-3418707.9OOJ0932-00I19 15
9.2.5. Notwithstanding the provisions in Subsection 9.2, City shall not be entitled
to audit Franchisee unless all other cable operators in the Service Area are also subject to an
audit requirement or Franchise fee review.
9 .3. Records Required: Franchisee shall at all times maintain:
9 .3 .1. Records of all written complaints for a period of three (3) years
after receipt by Franchisee. The term "complaint" as used herein refers to complaints about any
aspect of the Cable System or Franchisee's cable operations, including, without limitation,
complaints about employee courtesy. Complaints recorded will not be limited to complaints
requiring an employee service call;
9.3.2. Records of outages for a period of three (3) years after occurrence,
indicating date, duration, area, and the number of Subscribers affected, type of outage, and
cause;
9.3.3. Records of service calls for repair and maintenance for a period of
three (3) years after resolution by Franchisee, indicating the date and time service was required,
the date of acknowledgment and date and time service was scheduled (if it was scheduled), and
the date and time service was provided, and (if different) the date and time the problem was
resolved;
9.3.4. Records of installation/reconnection and requests for service
extension for a period of three years after the request was fulfilled by Franchisee, indicating the
date of request, date of acknowledgment, and the date and time service was extended; and
9 .3 .5. A map showing the area of coverage for the provisioning of Cable
Services and estimated timetable to commence providing Cable Service.
10. INSURANCE AND INDEMNIFICATION
10.1. Insurance:
10 .1.1. Franchisee shall maintain in full force and effect, at its own cost
and expense, during the Franchise term, the following insurance coverage:
10 .1.1.1. Commercial General Liability Insurance in the amount
of two million dollars ($2,000,000) combined single limit for property damage and bodily injury.
Such insurance shall cover the construction, operation and maintenance of the Cable System and
the conduct of Franchisee's Cable Service business in the City.
10.1.1.2. Automobile Liability Insurance in the amount of two
million dollars ($2,000,000) combined single limit for bodily injury and property damage.
10 .1.1.3. Workers' Compensation Insurance meeting all legal
requirements of the State of Washington.
Seattle·3418707.9 0010932-00119 16
10.1.1.4. Employers' Liability Insurance in the following
amounts: (A) Bodily Injury by Accident: $100,000; and (B) Bodily Injury by Disease:
$100,000 employee limit; and C) Bodily Injury by Disease; $500,000 policy limit.
10.1.1.5. Umbrella/Excess Liability Insurance in the amount of
five million dollars ($5,000,000) combined single limit.
10.1.2. The City shall be included as additional insured under each of the
insurance policies required in thls Article IO except Worker's Compensation and Employer's
Liability Insurance.
10.1.3. Franchisee shall not cancel any required insurance policy without
obtaining alternative insurance in conformance with thls Agreement.
10.1.4. Each of the required insurance policies shall be with insurers
qualified to do business in the State of Washington, with an AM. Best Financial Strength rating
of A-or better.·
10.1.5. Franchisee shall deliver to City Certificates of Insurance showing
evidence of the required coverage.
10.1.6. The limits required above may be satisfied with a combination of
primary and excess coverage.
10.2. Indemnification:
10.2.1. Franchisee agrees to indemnify, save and hold harmless, and
defend the City, its elected officials, officers, agents, boards and employees, from and against
any liability, damages or Claims, settlements approved by Franchisee pursuant to Subsection
10.2.2 or judgments, arising out of, or resulting from, the Franchisee's activities pursuant to this
Franchise, provided that the City shall give Franchisee timely written notice of its obligation to
indemnify the City so as to cause no material prejudice to Franchisee's defense of such claims.
Notwithstanding the foregoing, Franchisee shall not indemnify the City, for any damages,
liability or claims resulting from the willful misconduct, negligence, or breach of obligation of
the City, its officers, agents, employees, attorneys, consultants, or independent contractors, for
which the City is legally responsible, or for any activity or function conducted by any Person
other than Franchisee in connection with EG Access or EAS.
10.2.2. With respect to Franchisee's indemnity obligations set forth in
Subsection 10.2.1, Franchisee shall provide the defense of any claims or actions brought against
the City by selecting counsel of.Franchisee's choice to defend the claim, subject to the consent of
the City, which shall not unreasonably be withheld. Nothing herein shall be deemed to prevent
the City from cooperating with the Franchisee and participating in the defense of any litigation
by its own counsel at its own cost and expense, provided however, that after consultation with
the City, Franchisee shall have the right to defend, settle or compromise any claim or action
arising hereunder, and Franchisee shall have the authority to decide the appropriateness and the
amount of any such settlement. In the event that the terms of any such proposed settlement
includes the release of the City, and the thlrd party is willing to accept the settlement, but the
Seattle-3418707.9 0010932-00119 17
City does not consent to the terms of any such settlement or compromise, Franchisee shall not
settle the claim or action but its obligation to indemnify the City shall in no event exceed the
amount of such settlement.
11. TRANSFER OF FRANCHISE
Subject to Section 617 of the Communications Act, 47 U.S.C. § 537, no Transfer
of the Franchise shall occur without the prior written consent of the City, provided that such
consent shall not be unreasonably withheld, delayed or conditioned. No such consent shall be
required, however, for a transfer in trust, by mortgage, by other hypothecation, by assignment of
any rights, title, or interest of the Franchisee in the Franchise or Cable System in order to secure
indebtedness, or otherwise for transactions otherwise excluded under Section 1.35 above.
12. RENEWALOFFRANCHISE
12.1. The City and Franchisee agree that any proceedings undertaken by the City
that relate to the renewal of this Franchise shall be governed by and comply with the provisions of
Section 626 of the Communications Act, 47 U.S.C. § 546.
12.2. In addition to the procedures set forth in said Section 626 of the
Communications Act, the City shall notify Franchisee of all of its assessments regarding the
identity of future cable-related commwiity needs and interests, as well as the past performance of
Franchisee under the then current Franchise term. The City further agrees that such assessments
shall be provided to Franchisee promptly so that Franchisee has adequate time to submit a proposal
under 47 U.S.C § 546 and pursue renewal of the Franchise prior to expiration of its term.
12.3. Notwithstanding anything to the contrary set forth herein, Franchisee and the
City agree that at any time during the term of the then current Franchise, while affording the public
appropriate notice and opportwiity to comment, the City and Franchisee may agree to undertake
and finalize informal negotiations regarding renewal of the then current Franchise and the City may
grant a renewal thereof.
12.4. Franchisee and the City consider the terms set forth in this Article 12 to be
consistent with the express provisions of 47 U.S.C. § 546.
13. ENFORCEMENT AND TERMINATION OF FRANCHISE
13.1. Creation a/Security Fund: Within sixty (60) days following the Effective
Date of this Agreement, Franchisee shall establish and provide to City a security fund ("Security
Fund") as security for the faithful performance by Franchisee of all material provisions of this
Agreement. The Security Fund shall be in the amount of Ten Thousand Dollars ($10,000) and shall
be in the form of an irrevocable letter of credit, with any interest distributable to Franchisee.
13.2. Amount of Security Fund: Franchisee shall maintain the Security Fund at the
Ten Thousand Dollar ($10,000) level throughout the term of this Agreement; provided that
Franchisee .shall replenish the Security Fund no more often than once annually.
Seattle-3418707.9 0010932-00119 18
13.3. Notice of Violation: If at any time the City believes that Franchisee has not
complied with the terms of the Franchise, the City shall informally discuss the matter with
Franchisee. If these discussions do not lead to resolution of the problem in a reasonable time, the
City shall then notify Franchisee in writing of the exact nature of the alleged noncompliance in a
reasonable time (for purposes of this Article, the "Noncompliance Notice").
13.4. Franchisee's Right to Cure or Respond: Franchisee shall have thirty (30)
days from receipt of the Noncompliance Notice to: (i) respond to the City, if Franchisee contests (in
whole or in part) the assertion of noncompliance; (ii) cure such noncompliance; or (iii) in the event
that, by its nature, such noncompliance cannot be cured within such thirty (30) day period, initiate
reasonable steps to remedy such noncompliance and notify the City of the steps being taken and the
date by which the cure is projected to be completed. Upon cure of any noncompliance, City shall
provide written confirmation that such cure has been effected.
13.5. Public Hearing. The City shall schedule a public hearing ifthe City seeks to
continue its investigation into the alleged noncompliance in the event that: ( 1) Franchisee fails to
respond to the Noncompliance Notice pursuant to the procedures required by this Article, or (2) in
the event that Franchisee has not remedied the alleged noncompliance within thirty (30) days. The
City shall provide Franchisee at least thirty (30) business days prior written notice of such public
hearing, which will specify the time, place and purpose of such public hearing, and provide
Franchisee the opportunity to be heard.
13.6. Eriforcement: Subject to applicable federal and state law, in the event the
City, after the public hearing set forth in Section 13.5, determines that Franchisee is in default of
any provision of this Franchise, the City may:
13.6.1. Seek specific performance of any provision, which reasonably
lends itself to such remedy, as an alternative to damages; or
13.6.2. Commence an action at law for monetary damages or seek other
equitable relief; or
13.6.3. In the case of a substantial material default of the Franchise, seek
to revoke the Franchise in accordance with Section 13.8.
13.7. Liquidated Damages: In the event that the City finds that an alleged violation
continues to exist and that Franchisee has not corrected the same in a satisfactory manner or has not
diligently pursued correction of such violation, Franchisee agrees that the City may recover
liquidated damages from Franchisee in the amounts set forth below following the notice and
opportunity to cure provisions set forth in Section 13.4 above. Notwithstanding the foregoing, if
Franchisee disputes the assessment of any liquidated damages hereunder, Franchisee may request
and the City agrees to schedule a public hearing with regard to such dispute. The City shall provide
Franchisee with written notice that it intends to elect the liquidated damage remedies set forth
herein. Notwithstanding the foregoing, if the City elects to assess liquidated damages pursuant to
this Section, such election shall constitute the City's exclusive remedy for the violation for which
the liquidated damages were assessed for a period of sixty ( 60) days; provided, however, once the
Seattle-3418707.9 0010932-00119 19
City has ceased to assess its liquidated damages remedy as set forth in this Section 13.7, it may
pursue other available remedies.
The following liquidated damages shall apply:
For failure to comply with any applicable FCC
technical performance staridards
For failure to provide EG Services or Channels
to the community as specified in Section 6
For failure to provide the City with any reports or
records required by the Agreement
within the time period required
For violations of the customer service
requirements as set forth in Exhibit E
For other material breaches or defaults of
the terms and conditions of this Franchise
$250 per day for each day the
violation continues;
$100 per day for each day the
violation continues;
$50 per day for each day the
violation continues;
$100 per day for each day the
violation continues; and
up to $100 per day for each day the
violation continues.
The amount of all liquidated damages per annum shall not exceed fifteen thousand dollars
($15,000) in the aggregate. All similar violations or failures arising from the same factual events
affecting multiple subscribers shall be assessed as a single violation, and a violation or a failure
may only be assessed under any one of the above-referenced categories. Violations or failures
shall not be deemed to have occurred or commenced until they are not cured as provided in
Section 13.4.
13. 7 .1. Interest Charge on Late Payments. If any liquidated damages
payment due under this Franchise remains unpaid after the due date ("Liquidated Damages Past
Due Amounts"), Franchisee shall pay the City interest on such Liquidated Damages Past Due
Amounts in addition to the Liquidated Damages Past Due Amounts. The interest shall accrue on
the Liquidated Damages Past Due Amounts from the due date until it is paid in full ("Liquidated
Damages Period of Delinquency"). Franchisee shall pay the City interest at a rate per annum
equal to the highest Bank Prime Rate plus one percent (1 %) during the Liquidated Damages
Period of Delinquency. The "Bank Prime Rate" shall mean the prime lending rate as it appears
in The Wall Street Journal during the Liquidated Damages Period of Delinquency. The City's
acceptance of payment shall not be construed as an agreement that the amount paid was correct.
13.8. Revocation: Should the City seek to revoke this Franchise after following the
procedures set forth above in this Article, including the public hearing described in Section 13.5,
Seattle-3418707.9 0010932-00119 20
the City shall give written notice to Franchisee of such intent. The notice shall set forth the specific
nature of the noncompliance. The Franchisee shall have ninety (90) days from receipt of such
notice to object in writing and to state its reasons for such objection. In the event the City has not
received a satisfactory response from Franchisee, it may then seek termination of the Franchise at a
second public hearing. The City shall cause to be served upon the Franchisee, at least thirty (30)
business days prior to such public hearing, a written notice specifying the time and place of such
hearing and stating its intent to revoke the Franchise.
13.8.1. At the designated hearing, Franchisee shall be provided a fair
opportunity for full participation, including the right to be represented by legal counsel, to
introduce relevant evidence, to require the production of evidence, to compel the testimony of
persons as permitted by law, and to question and/or cross examine witnesses. A complete
verbatim record and transcript shall be made of such hearing, with the costs of the preparation of
the verbatim record and transcript to be shared equally by the parties.
13.8.2. Following the public hearing, Franchisee shall be provided up to
thirty (30) days to submit its proposed findings and conclusions in writing and thereafter the City
shall determine (i) whether an event of default has occurred; (ii) whether such event of default is
excusable; and (iii) whether such event of default has been cured or will be cured by the
Franchisee. The City shall also determine whether to revoke the Franchise based on the
information presented, or, where applicable, grant additional time to the Franchisee to affect any
cure. If the City determines that the Franchise shall be revoked, the City shall promptly provide
Franchisee with a written decision setting forth its reasoning. Franchisee may appeal such
determination of the City to an appropriate court. Franchisee shall be entitled to such relief as
the court finds appropriate. Such appeal must be taken within thirty (30) days of Franchisee's
receipt of the determination of the franchising authority.
13.8.3. The City may, at its sole discretion, take any lawful action which
it deems appropriate to enforce the City's rights under the Franchise in lieu of revocation of the
Franchise.
13.9. Franchisee Termination: Franchisee shall have the right to terminate this
Franchise and all obligations hereunder within ninety (90) days after the end of three (3) years from
the Service Date of this Franchise, if at the end of such three (3) year period Franchisee does not
then in good faith believe it has achieved a commercially reasonable level of Subscriber penetration
on its Cable System. Franchisee may consider subscriber penetration levels outside the Franchise
Area, but within the greater Puget Sound metropolitan area ,in this determination. Notice to
terminate under this Section 13.9 shall be given to the City in writing, with such termination to take
effect no sooner than one hundred and twenty (120) days after giving such notice. Franchisee shall
also be required to give its then current Subscribers not less than ninety (90) days prior written
notice of its intent to cease Cable Service operations.
13.10. Immunities: The City does not waive any of its immunities under Section
635A of the Communications Act or state law.
Seattle-3418707.9 0010932-00119 21
14. MISCELLANEOUS PROVISIONS
14.1. Franchise Grant: Franchisee shall pay City thirty-two thousand dollars
($32,000) (the "Franchise Grant"). The Franchise Grant shall be payable sixty (60) days from the
Effective Date. To the extent permitted by federal law, Franchisee shall be allowed to recover all
or part of this amount from Subscribers and may line-item or otherwise pass-through such amount
to Subscribers.
14.2. Actions of Parties: In any action by the City or Franchisee that is mandated or
permitted under the terms hereof, such party 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, delayed or conditioned.
14.3. Binding Acceptance: This Agreement shall bind and benefit the parties hereto
and their respective successors and assigns, and the promises and obligations herein shall smvive
the expiration date hereof.
14.4. Preemption: In the event that federal or state law, rules, or regulations
preempt a provision or limit the enforceability of a provision of this Agreement, the provision shall
be read to be preempted to the extent, and for the time, but only to the extent and for the time,
required by law. In the event such federal or state law, rule or regulation is subsequently repealed,
rescinded, amended or otherwise changed so that the provision hereof that had been preempted is
no longer preempted, such provision shall thereupon return to full force and effect, and shall
thereafter be binding on the parties hereto, without the requirement of further action on the part of
the City or the Franchisee.
14.5. Force Majeure: Franchisee shall not be held in default under, or in
noncompliance with, the provisions of the Franchise, nor suffer any enforcement relating to
noncompliance or default, where such noncompliance or alleged defaults occurred or were caused
by a Force Majeure.
14.6. Notices: Unless otherwise expressly stated herein, notices required under the
Franchise shall be mailed first class, postage prepaid, to the addressees below. Each party may
change its designee or address by providing written notice to the other party.
14.6.1. Notices to Franchisee shall be mailed to:
Verizon Northwest Inc.
Attn: Tim McCallion, President
112 Lakeview Canyon Road, CASO 1 GA
Thousand Oaks, CA 91362
14.6.2. with a copy to:
Seattle-3418707.9 0010932-00119
Mr. Jack H. White
Se:riior Vice President & General Counsel -Verizon Telecom
One Verizon Way
Room VC43E010
22
Basking Ridge, NJ 07920-1097
14.6.3. Notices to the City shall be mailed to:
City of Marysville
Attn: Doug Buell, Community Information Officer
1049 State Avenue
Marysville, WA 98270
14.7. Entire Agreement: This Franchise and the Exhibits hereto constitute the entire
agreement between Franchisee and the City, and they supersede all prior or contemporaneous
agreements, representations or understandings (whether written or oral) of the parties regarding the
subject matter hereof. Any ordinances or parts of ordinances that conflict with the provisions of
this Agreement are superseded by this Agreement.
14.8. Amendments: Amendments or modifications to this Franchise shall be
mutually agreed to in writing by the parties.
14.9. Captions: The.captions and headings of articles and sections throughout this
Agreement are intended solely to facilitate reading and reference to the sections and provisions of
this Agreement. Such captions shall not affect the meaning or interpretation of this Agreement.
14.10. Severability: If any section, subsection, sentence, paragraph, term, or
provision hereof is determined to be illegal, invalid, or unconstitutional, by any court of competent
jurisdiction or by any state or federal regulatory authority having jurisdiction thereof, such
determination shall have no effect on the validity of any other section, subsection, sentence,
paragraph, term or provision hereof, all of which will remain in full force and effect for the term of
the Franchise.
14.11. Recitals: The recitals set forth in this Agreement are incorporated into the
body of this Agreement as if they had been originally set forth herein.
14.12. F1TP Network Transfer Prohibition: Under no circumstance including,
without limitation, upon expiration, revocation, termination, denial of renewal of the Franchise or
. any other action to forl?id or disallow Franchisee from providing Cable Services, shall Franchisee
or its assignees be required to sell any right, title, interest, use or control of any portion of
Franchisee's FTTP Network including, without limitation, the cable system and any capacity used
for cable service or otherwise, to the City or any third party. Franchisee shall not be required to
remove the FTTP Network or to relocate the FTTP Network or any portion thereof as a result of
revocation, expiration, termination, denial of renewal or any other action to forbid or disallow
Franchisee from providing Cable Services.
14.13. 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 any manner which would indicate any such
relationship with the other.
Seattle-3418707.9 0010932-00119 23
14.14. Independent Review: City and Franchisee each acknowledge that they have
received independent legal advice in entering into this Agreement. In the event that a dispute arises
over the meaning or application of any term(s) of this Agreement, such term(s) shall not be
construed by the reference to any doctrine calling for ambiguities to be construed against the drafter
of the Agreement.
14.15. Venue: The venue for any dispute related to this Franchise shall be in the
United States District Court for the Western District of Washington in Seattle, provided it has
subject matter jurisdiction; if no jurisdiction exists, then venue shall be in the Superior Court for
Snohomish County.
14.16. Attorneys' Fees: If any action or suit arises between Franchisee and City for
breach of this Franchise, the prevailing party, either the City or Franchisee, as the case may be,
shall be entitled to recover all of its reasonable attorneys' fees, costs and expenses in connection
therewith along with such other relief as the court deems proper.
14.17. Singular and Plural: Except where the context indicates otherwise, words
used herein, regardless of the number specifically used, shall be deemed and construed to include
any other number, singular or plural as is reasonable in the context.
14.18. Acceptance: The signing and return of this Agreement to the City by the
Franchisee shall constitute an unconditional accep1.f111Ce of all the terms and conditions of this
Franchise.
SIGNATURE PAGE FOLLOWS
Seattle-3418707.9 0010932-00119 24
AGREED TO THIS _1_ DAY OF k\ «11lAtsf '2008.
City
By:~;tA4//
Mayor
Verizon Northwest Inc.
By~l/IL~
Tim MccaiiI:President
EXHIBITS
Exhibit A: Service Areas
Exhibit B: Municipal Building to be Provided Free Cable Service
Exhibit C: EG Origination Sites
Exhibit D: Sample Remittance Form
Exhibit E: Customer Service Standards
Seattle-3418707.9 0010932-00119 25
EXHIBIT A
Seattle-3418707.9 0010932-00119 26
EXHIBITB
MUNICIPAL BIDLDING TO BE PROVIDED FREE CABLE SERVICE
Monitoring location:
1049 State Avenue
Marysville, WA 98270
Seattle-3418707.9 0010932-00119 · 27
EXHIBITC
EG ORIGINATION SITES
Marysville Government Access Channel
Origination Address: (Free drop location for EG channel monitoring purposes)
1049 State Avenue
Marysville, Washington 98270
Marysville School District Educational Access Channel
Origination Address:
Marysville-Pilchuck High School
5611 108th St. NE
Marysville, WA. 98271-8898
Seattle-3418707.9 0010932-00119 28
EXHIBITD
SAMPLE REMITTANCE FORM
City of Marysville
Verizon -/GTE
Washington
Franchise Fee Rate: 5.00%
Monthly Recurring Cable $0.00 $0.00 $0.00 $0.00
Service Charges (e.g.
Basic, Enhanced Basic,
Premium and Equipment
Rental)
Usage Based Charges $0.00 $0.00 $0.00 $0.00
(e.g. PayPer View,
Installation)
Advertising $0.00 $0.00 $0.00 $0.00
Home Shopping $0.00 $0.00 $0.00 $0.00
Late Payment $0.00 $0.00 $0.00 $0.00
Other Misc. (leased $0.00 $0.00 $0.00 $0.00
Access & Other Misc.)
Franchise Fee Billed $0.00 $0.00 $0.00 $0.00
Less:
Bad Debt .
Total Receipts Subject to $0.00 $0.00 $0.00 $0.00
Franchise Fee Calculation
Franchise Fee Due $0.00 $0.00 $0.00 $0.00
Verizon Northwest Inc. is hereby requesting that this information be treated as confidential and proprietary commercial trade
secret information and financial statements and not disclosed in accordance with Section XXXX and the Cable Television
Franchise Agreement granted to Verizon Northwest Inc. This information is not otherwise readily ascertainable or publicly
available by proper means by other persons from another source in the same configuration as provided herein, would cause
substantial harm to the competitive position of Verizon in the highly competitive video marketplace if disclosed, is intended to
be proprietary confidential business information and is treated by Verizon as such.
Seattle-3418707.9 0010932-00119 29
EXHIBITE
CUSTOMER SERVICE STANDARDS
These standards shall, starting six (6) months afterthe Service Date, apply to Franchisee to the
extent it is providing Cable Services over the Cable System in the Franchise area. For the first
six ( 6) months after the Service Date, Franchisee shall use best efforts to comply with the
Customer Service Standards provided herein; it being agreed, however, that the City will not
impose liquidated damages during this first six (6) month period if Franchisee using best efforts
fails to meet the Customer Service Standards.
SECTION 1: DEFINITIONS
A. Normal Operating Conditions: Those service conditions which are within the
control of Franchisee, as defined under 47 C.F.R. § 76.309(c)(4)(ii). Those conditions which are
not within the control of Franchisee include, but are not limited to, natural disasters, civil
disturbances, power outages, telephone network outages that are not within the control of the
Franchisee, and severe or unusual weather conditions. Those conditions which are ordinarily
within the control of Franchisee include, but are not limited to, special promotions, pay-per-view
events, rate increases, regular peak or seasonal demand periods, and maintenance or rebuild of
the Cable System.
B. Respond: The start of Franchisee's investigation of a Service Interruption by
receiving a Subscriber call, and opening a trouble ticket, and begin working, if required.
C. Service Call: The action taken by Franchisee to correct a Service Interruption the
effect of which is limited to an individual Subscriber.
D. Service Interruption: The loss of picture or sound on one or more cable channels.
E. Significant Outage: A significant outage of the Cable Service shall mean any
Service Interruption lasting at least four (4) continuous hours that affects at least ten percent
(10%) of the Subscribers in the Service Area.
F. Standard Installation: Installations where the Subscriber is within one hundred
twenty-five (125) feet of trunk or feeder lines.
SECTION 2: TELEPHONE AVAILABILITY
A. Franchisee shall maintain a toll-free number to receive all calls and inquiries from
Subscribers in the Franchise Area and/or residents regarding Cable Service. Franchisee
representatives trained and qualified to answer questions related to Cable Service in the Service
Seattle-3418707.9 0010932-00119 30
Area must be available to receive reports of Service Interruptions twenty-four (24) hours a day,
seven (7) days a week, all other inquiries at least forty-five (45) hours per week. Franchisee
representatives shall identify themselves by name when answering this number.
B. Franchisee's telephone numbers shall be listed, with appropriate description (e.g.
administration, customer service, billing, repair, etc.), in the directory published by the local
telephone company or companies serving the Service Area, beginning with the next publication
cycle after acceptance of this Franchise by Franchisee.
C. Franchisee may use an Automated Response Unit ("ARU") or a Voice Response
Unit ("VRU") to distribute calls. If a foreign language routing option is provided, and the
Subscriber does not enter an option, the menu will default to the first tier menu of English
options.
After the first tier menu (not including a foreign language rollout) has run through three
times, if customers do not select any option, the ARU or VRU will forward the call to a queue
for a live representative. Franchisee may reasonably substitute this requirement with another
method of handling calls from customers who do not have touch-tone telephones.
D. Under Normal Operating Conditions, calls received by the Franchisee shall be
answered within thirty (30) seconds. The Franchisee shall meet this standard for ninety percent
(90%) of the calls it receives at call centers receiving calls from Subscribers, as measured on a
cumulative quarterly calendar basis. Measurement of this standard shall include all calls
received by the Franchisee at all call centers receiving calls from Subscribers, whether they are
answered by a live representative, by an automated attendant, or abandoned after thirty (30)
seconds of call waiting. If the call needs to be transferred, transfer time shall not exceed thirty
(30) seconds.
E. Under Normal Operating Conditions, callers to the Franchisee shall receive a busy
signal no more than three (3%) percent of the time during any calendar quarter.
F. Upon request from the City, but in no event more than once a quarter, forty-five
( 45) days following the end of each quarter, the Franchisee shall report to the City the following
for the applicable call center for the City receiving calls from Subscribers except for temporary
telephone numbers set up for national promotions:
(1) Percentage of calls answered within thirty (30) seconds as set forth in
Subsection 2.D; and
(2) Percentage of time customers received a busy signal when calling the
Franchisee's service center as set forth in Subsection 2.E.
Subject to consumer privacy requirements, underlying activity will be made available to
the City for review upon reasonable request.
G. At the Franchisee's option, the measurements and reporting above may be
changed from calendar quarters to billing or accounting quarters one time during the term of this
Seattle-3418707.9 OOI0932-00l l9 31
~. l ·
Agreement. Franchisee -shall notify the City of such a change not less than thirty (30) days in
advance.
SECTION 3: INSTALLATIONS AND SERVICE APPOINTMENTS
A. All installations will be in accordance with FCC rules, including but not limited
to, appropriate grounding, connection of equipment to ensure reception of Cable Service, and the
provision of required consumer information and literature to adequately inform the Subscriber in
the utilization of Franchisee-supplied equipment and Cable Service.
B. The Standard Installation shall be performed within seven (7) business days after
an order is placed if the Optical Network Terminal ("ONT") is already installed on the
customer's premises. The Standard Installation.shall be performed within fourteen (14) business
days where there is no ONT at the time of service order. Franchisee shall meet this standard for
ninety-five percent (95%) of the Standard Installations it performs, as measured on a calendar
quarter basis, excluding those requested by the customer outside of these time periods.
C. The Franchisee shall provide the City with a report upon request from the City,
but in no event more than once a quarter, noting the percentage of Standard Installations
completed within the time periods provided in Section 3.B. Subject to consumer privacy
requirements, underlying activity will be made available to the City for review upon reasonable
request.
D. At Franchisee's option, the measurements and reporting above may be changed
from calendar quarters to billing or accounting quarters one time during the term of this
Agreement. Franchisee shall notify the City of such a change not less than thirty (30) days in
advance.
E. Franchisee will offer Subscribers "appointment window" alternatives for arrival
to perform installations, Service Calls and other activities of a maximum four (4) hours
scheduled time block during appropriate daylight available hours, usually beginning at 8:00 AM
unless it is deemed appropriate to begin earlier by location exception. At Franchisee's
discretion, Franchisee may offer Subscribers appointment arrival times other than these four (4)
hour time blocks, if agreeable to the Subscriber. These hour restrictions do not apply to
weekends.
(1) Franchisee may not cancel an appointment window with a customer after the
close of business on the business day prior to the scheduled appointment.
(2) If Franchisee's representative is running late for an appointment with a
customer and will not be able to keep the appointment as scheduled, the customer ~11 be
contacted. The appointment will be rescheduled, as necessary, at a time which is convenient for
the customer.
F. Franchisee must provide for the pick up or drop off of equipment free of charge in
one of the following manners: (i) by having a Franchisee representative going to the Subscriber's
residence, (ii) by using a mailer, or (iii) by establishing a local business office within the
Seattle·3418707.90010932-00119 32
'· >
Franchise Area. If requested by a mobility~limited customer, the Franchisee shall arrange for
pickup and/or replacement of converters or other Franchisee equipment at Subscriber's address
or by a satisfactory equivalent.
SECTION 4: SERVICE INTERRUPTIONS AND OUTAGES
A. Franchisee shall promptly notify the City of any Significant Outage of the Cable
Service.
B. Franchisee shall exercise commercially reasonable efforts to limit any Significant
Outage for the purpose of maintaining, repairing, or constructing the Cable System. Except in an
emergency or other situation necessitating a more expedited or alternative notification procedure,
Franchisee may schedule a Significant Outage for a period of more than four (4) hours during
any twenty-four (24) hour period only after the City and each affected Subscriber in the Service
Area have been given fifteen (15) days prior notice of the proposed Significant Outage.
Notwithstanding the foregoing, Franchisee may perform modifications, repairs and upgrades to
the System between 12:01 a.m. and 6 a.m. which may interrupt service, and this Section's notice
obligations respecting such possible interruptions will be satisfied by notice provided to
Subscribers upon installation and in the annual Subscriber notice.
C. Franchisee representatives who are capable of responding to Service Interruptions
must be available to Respond twenty-four (24) hours a day, seven (7) days a week.
D. Under Normal Operating Conditions, Franchisee must Respond to a call from a
Subscriber regarding a Service Interruption or other service problems within the following time
frames:
(1) Within twenty-four (24) hours, including weekends, of receiving
Subscriber calls about Service Interruptions in the Service Area.
(2) Franchisee must begin actions to correct all other Cable Service
problems the next business day after notification by the Subscriber or the City of a Cable Service
problem.
E. Under Normal Operating Conditions, Franchisee shall complete Service
Calls within seventy-two (72) hours of the time Franchisee commences to Respond to the
Service Interruption, not including weekends and situations where the Subscriber is not
reasonably available for a Service Call to correct the Service Interruption within the seventy-two
(72) hour period.
F. Franchisee shall meet the standard in Subsection E. of this Section for ninety
percent (90%) of the Service Calls it completes, as measured on a quarterly basis.
G. Franchisee shall provide the City with a report upon request from the City, but in
no event more than once a quarter, forty-five (45) days following the end of each calendar
quarter, noting the percentage of Service Calls completed within the sevent)'-twO (72) hour
period not including Service Calls where the Subscriber was reasonably unavailable for a Service
Scattle-3418707.9 0010932-00119 33
Call within the seventy-two (72) hour period as set forth in this Section. Subject to consumer
privacy requirements, underlying activity will be made available to the City for review upon
reasonable request. At the Franchisee's option, the above measurements and reporting may be
changed from calendar quarters to billing or accounting quarters one time during the term of this
Agreement. Franchisee shall notify the City of such a change at least thirty (30) days in advance
of any implementation.
H. Under Normal Operating Conditions, Franchisee shall provide a credit upon
Subscriber request when all Channels received by that Subscriber are out of service for a period
of four ( 4) consecutive hours or more. The credit shall equal, at a minimum, a proportionate
amount of the affected Subscriber( s) current monthly bill. In order to qualify for the credit, the
Subscriber must promptly report the problem and allow Franchisee to verify the problem if
requested by Franchisee. If Subscriber availability is required for repair, a credit will not be
provided for such time, if any, that the Subscriber is not reasonably available.
I. Under Normal Operating Conditions, if a Significant Outage affects all Video
Programming Cable Services for more than twenty-four (24) consecutive hours, Franchisee shall
issue an automatic credit to the affected Subscribers in the amount equal to their monthly
recurring charges for the proportionate time the Cable Service was out, or a credit to the affected
Subscribers in the amount equal to the charge for the basic plus enhanced basic level of service
for the proportionate time the Cable Service was out, whichever is technically feasible or, if both
are technically feasible, as determined by Franchisee provided such determination is non-
discriminatory. Such credit shall be reflected on Subscriber billing statements within the next
available billing cycle following the outage.
J. With respect to service issues concerning Cable Services provided to the City
facilities, Franchisee shall Respond to all inquiries from the City within four (4) hours and shall
commence necessary repairs within twenty-four (24) hours under Normal Operating Conditions
and shall diligently pursue to completion. If such repairs cannot be completed within twenty-
four (24) hours, Franchisee shall notify the City in writing as to the reason(s) for the delay and
provide an estimated time of repair.
SECTION 5: CUSTOMER COMPLAINTS REFERRED BY THE CITY
Under Normal Operating Conditions, Franchisee shall begin investigating Subscriber
complaints referred by the City within seventy-two (72) hours. Franchisee shall notify the City
of those matters that necessitate an excess of five (5) business days to resolve, but Franchisee
must make all necessary efforts to resolve those complaints within ten (10) business days of the
initial complaint. The City may require Franchisee to provide reasonable documentation to
substantiate the request for additional time to resolve the problem. Franchisee shall inform the
City in writing, which may be by an electronic mail message, of how and when referred
complaints have been resolved within a reasonable time after resolution. For purposes of this
Section, "resolve" means that Franchisee shall perform those actions, which, in the normal
course of business, are necessary to (a) investigate the Customer's complaint; (b) advise the
Customer of the results of that investigation; and ( c) implement and complete steps to bring
resolution to the matter in question.
Seattlc-3418707 .9 0010932-00119 34
SECTION 6: BILLING
A. Subscriber bills must be itemized to describe Cable Services purchased by
Subscribers and related equipment charges. Bills will comply with applicable federal and state
laws, and shall clearly delineate activity during the billing period, including optional charges,
rebates, credits, and aggregate late charges. Franchisee shall, without limitation as to additional
line items, be allowed to itemize as separate line items, Franchise fees, taxes and/or other
governmental-imposed fees. Franchisee shall maintain records of the date and place of mailing
· ofbills.
B. Every Subscriber with a current account balance sending payment directly to
Franchisee shall be given at least twenty (20) days from the date statements are mailed to the
Subscriber until the payment due date.
C. A specific due date shall be listed on the bill of every Subscriber whose account is
current. Delinquent accounts may receive a bill which lists the due date as upon receipt;
however, the current portion of that bill shall not be considered past due except in accordance
with Subsection 6.B. above.
D. Any Subscriber who, in good faith, disputes all or part of any bill shall have the
option of withholding the disputed amount without disconnect or late fee being assessed until the
dispute is resolved, provided that:
(1) The Subscriber pays all undisputed charges;
(2) The Subscriber provides notification of the dispute to Franchisee within
five (5) days prior to the due date; and
(3) The Subscriber cooperates in determining the accuracy and/or
appropriateness of the charges in dispute.
(4) It shall be within Franchisee's sole discretion to determine when the
dispute has been resolved.
E. Under Normal Operating Conditions, Franchisee shall. initiate investigation and
resolution of all billing complaints received from Subscribers within five (5) business days of
receipt of the complaint. Final resolution shall not be unreasonably delayed.
F. Franchisee shall provide a telephone number and address clearly and prominently
on the bill for Subscribers to contact Franchisee.
G. Franchisee shall forward a copy of any rate-related or customer service-related
billing inserts or other mailings related to Cable Service, but not promotional materials, sent to
Subscribers, to the City.
Seattle-3418707.9 0010932-00119 35
H. Franchisee shall provide all Subscribers with the option of paying for Cable
Service by check or an automatic payment option where the amount of the bill is automatically
deducted from a checking account designated by the Subscriber. Franchisee may in the future, at
its discretion, permit payment by using a major credit card on a preauthorized basis. Based on
credit history, at the option of Franchisee, the payment alternative may be limited.
I. Upon request in writing, the City may request that Franchisee omit the City's
name, address and telephone number from Franchisee's bills as permitted by 47 C.F.R. Section
76.952.
SECTION 7: DEPOSITS, REFUNDS AND CREDITS
A. Franchisee may require refundable deposits from Subscribers 1) with a poor credit
or poor payment history, 2) who refuse to provide credit history information to Franchisee, or 3)
who rent Subscriber equipment from Franchisee, so long as such deposits are applied on a non-
discriminatory basis. The deposit Franchisee may charge Subscribers with poor credit or poor
payment history or who refuse to provide credit information may not exceed an amount equal to
an average Subscriber's monthly charge multiplied by six (6). The maximum deposit Franchisee
may charge for Subscriber equipment is the cost of the equipment which Franchisee would need
to purchase to replace the equipment rented to the Subscriber.
B. Franchisee shall refund or credit the Subscriber for the amount of the deposit
collected for equipment, which is unrelated to poor credit or poor payment history, after one year
and provided the Subscriber has demonstrated good payment history during this period.
Franchisee shall pay interest on deposits if required by law.
C. Under Normal Operating Conditions, refund checks will be issued within the next
available billing cycle following the resolution of the event giving rise to the refund, (e.g.
equipment return and final bill payment).
D. Credits for Cable Service will be issued no later than the Subscriber's next
available billing cycle, following the determination that a credit is warranted, and the credit is
approved and processed. Such approval and processing shall not be unreasonably delayed.
E. Bills shall be considered paid when appropriate payment is received by
Franchisee or its authorized agent. Appropriate time considerations shall be included in
Franchisee's collection procedures to assure that payments due have been received before late
notices or termination notices are sent.
SECTION 8: RATES. FEES AND CHARGES
A. Franchisee shall not, except to the extent expressly permitted by law, impose any
fee or charge for Service Calls to a Subscriber's premises to perform any repair or maintenance
work related to Franchisee equipment necessary to receive Cable Service, except where such
problem is caused by a negligent or wrongful act of the Subscriber (including, but not limited to
a situation in which the Subscriber reconnects Franchisee equipment incorrectly) or by the
Seattle-3418707.9 0010932-00119 36
failure of the Subscriber to take reasonable precautions to protect Franchisee's equipment (for
example, a dog chew).
B. Franchisee shall provide reasonable notice to Subscribers of the possible
assessment of a late fee on bills or by separate notice.
C. All of Franchisee's rates and charges shall comply with applicable federal and
state law. Franchisee shall maintain a complete current schedule of rates and charges for Cable
Services on file with the City throughout the term of this Franchise.
SECTION 9: DISCONNECTION /DENIAL OF SERVICE
A. Franchisee shall not terminate Cable Service for nonpayment of a delinquent
account unless Franchisee mails a notice of the delinquency and impending termination prior to
the proposed final termination. The notice shall be mailed to the Subscriber to whom the Cable
Service is billed. The notice of delinquency and impending termination may be part of a billing
statement.
B. Cable Service terminated in error must be restored without charge within twenty-
four (24) hours of notice. If a Subscriber was billed for the period during which Cable Service
was terminated in error, a credit shall be issued to the Subscriber if the Service Interruption was
reported by the Subscriber.
C. Nothing in these standards shall limit the right of Franchisee to deny Cable
Service for non-payment of previously provided Cable Services, refusal to pay any required
deposit, theft of Cable Service, damage to Franchisee's equipment, abusive and/or threatening
behavior toward Franchisee's employees or representatives, or refusal to provide credit history
info1mation or refusal to allow Franchisee to validate the identity, credit history and credit
worthiness via an external credit agency.
D. Charges for cable service will be discontinued at the time of the requested
termination of service by the Subscriber, except equipment charges may by applied until
equipment has been returned. No period of notice prior to requested termination of service can
be required of Subscribers by Franchisee. No charge shall be imposed upon the Subscriber for or
related to total disconnection of Cable Service or for any Cable Service delivered after the
effective date of the disconnect request, unless there is a delay in returning Franchisee equipment
or early termination charges apply pursuant to the Subscriber's service contract. If the
Subscriber fails to specify an effective date for disconnection, the Subscriber shall not be
responsible for Cable Services received after the day following the date the disconnect request is
received by Franchisee. For purposes of this subsection, the term "disconnect" shall include
Subscribers who elect to cease receiving Cable Service from Franchisee.
SECTION 10: COMMUNICATIONS WITH SUBSCRIBERS
A. Each employee of the Franchisee who routinely comes into contact with members
of the public at their places of residence must wear a picture identification card clearly indicating
Seattle-3418707.9 0010932-00119 37
his or her employment with the Franchisee. The photograph on the identification card shall
prominently show the employee's name and/or identification number. Such employee shall
prominently display such identification card and shall show it to all such members of the public.
Each employee of any contractor or subcontractor of the Franchisee who routinely comes into
contact with members of the public at their places of residence must wear a picture identification
card clearly indicating his or her name, the name of such contractor or subcontractor and the
name of the Franchisee.
B. All contact with a Subscriber or potential Subscriber by a Person representing
Franchisee shall be conducted in a courteous manner.
C. Franchisee shall send annual notices to all Subscribers informing them that any
complaints or inquiries not satisfactorily handled by Franchisee may be referred to the City. A
copy of the annual notice required under this Subsection 1 O.C will be given to the City at least
fifteen (15) days prior to distribution to Subscribers.
D. All notices identified in this Section shall be by either:
(1) A separate document included with a billing statement or included on the
portion of the monthly bill that is to be retained by the Subscriber; or
(2) A separate electronic notification.
E. Franchisee shall provide reasonable notice to Subscribers and the City of any
pricing changes or additional changes (excluding sales discounts, new products or offers) an~
subject to the forgoing, any changes in Cable Services, including channel line-ups. Such notice
must be given to Subscribers a minimum of thirty (30) days in advance of such changes if within
the control of Franchisee. Franchisee shall provide a copy of the notice to the City including
how and where the notice was given to Subscribers.
F. Upon request by any Subscriber, Franchisee shall make available a parental
control or lockout device to enable a Subscriber to control access to both the audio and video
portions of any or all Channels. Franchisee shall inform its Subscribers of the availability of the
lockout device at the time of their initial subscription and periodically thereafter.
G. Franchisee shall provide information to all Subscribers about each of the
following items at the time of installation of Cable Services, annually to all Subscribers, at any
time upon request, and, subject to Subsection 10.E., at least thirty (30) days prior to making
significant changes in the information required by this Section if within the control of
Franchisee:
(1) Products and Cable Service offered;
(2) Prices and options for Cable Services and condition of subscription to
Cable Services. Prices shall include those for Cable Service options, equipment rentals, program
Seattle-3418707.9 0010932-00119 38
guides, installation, downgrades, late fees and other fees charged by Franchisee related to Cable
Service;
(3) Installation and maintenance policies including, when applicable,
information regarding the Subscriber's in-home wiring rights during the period Cable Service is
being provided;
(4) Channel positions of Cable Services offered on the Cable System;
(5) Complaint procedures, including the name, address; and telephone number
of the City, but with a notice advising the Subscriber to initially contact Franchisee about all
complaints and questions;
(6) Procedures for requesting Cable Service credit;
(7) The availability of a parental control device;
(8) Franchisee practices and procedures for protecting against invasion of
privacy; and
(9) The address and telephone number of Franchisee's office to which
complaints may be reported.
A copy of notices required in this Subsection 10.G. will be given to the City at least
fifteen (15) days prior to distribution to Subscribers if the reason for notice is due to a change
that is within the control of Franchisee and as soon as possible if not within the control of
Franchisee.
H. Notices of changes in rates shall indicate the Cable Service new rates and old
rates, if applicable.
I. Notices of changes of Cable Services and/or Channel locations shall include a
description of the new Cable Service, the specific channel location, and the hours of operation of
the Cable Service if the Cable Service is only offered on a part-time basis. In addition, should
the Channel location, hours of operation, or existence of other Cable Services be affected by the
introduction of a new Cable Service, such information must be included in the notice.
J. Every notice of termination of Cable Service shall include the following
information:
(1) The name and address of the Subscriber whose account is delinquent;
(2) The amount of the delinquency for all services billed;
Seattle-3418707.9 0010932-00119 39
·, l \1,. ,f'·,
(3) The date by which payment is required in order to avoid termination of
Cable Service; and
(4) The telephone number for Franchisee where the Subscriber can receive
additional information about their account and discuss the pending termination.
K. Franchisee will comply with privacy rights of Subscribers in accordance with
applicable federal and state law, including 47 U.S.C. §551.
Seattle-3418707.9 0010932-00119 40