Ordinance No. 768


Section 1. Purpose.

The City of Newport finds that it is the purpose of this Ordinance and subsequent amendments to provide for regulation and administration and granting of a franchise for cable television.

Section 2. Short Title.

This Ordinance shall be known and may be cited as the “Newport Cable Communications Ordinance.”

Section 3. Definitions.

For the purposes of this Ordinance the following terms, phrases, words, and their derivations shall have the meaning given herein. When not inconsistent with the context, words used in the present tense include the future, words in the plural number include the singular number, words in the singular number include the plural number, and the use of any gender shall be applicable to all genders whenever the sense requires. The words “shall” and “will” are mandatory and the word “may” is permissive. Words not defined shall be given their common and ordinary meaning. The definitions in this Ordinance shall control, for interpretation purposes, when in conflict with the general definitions in the Newport Municipal Code.

(1) “City” shall mean the City of Newport of the State of Washington and all the territory within its present and future boundaries and including any area over which the City exercises jurisdiction.

(2) “Council” shall mean the present legislative governing body of the City or any future body constituting the legislative body of the City.

(3) “Grantee” shall mean Pend Oreille Cable TV Limited Partnership, a Washington limited partnership, d/b/a Northland Cable T.V., and any lawful successor or transferee, assignee or employee of said partnership.

(4) “Cable Communications System” or “System,” also referred to as “Cable Television System,” “Cable System,” “CATV System,” or “Community Antenna TV System” shall mean a system of antennae, cables, wires, lines, towers, waveguides, or other conductors, converters, amplifiers, head end equipment, master controls, each earth station, equipment and facilities designed and constructed for the purpose of producing, receiving, transmitting, amplifying and distributing audio, video and other forms of electronic or electrical signals within the City.

(5) “Franchise” shall mean the right granted through a contractual agreement between the City and a person by which the City authorizes such person to erect, construct, reconstruct, operate, dismantle, test, use and maintain a cable communications system in the City. Any franchise awarded by an agreement in accordance herewith shall be a nonexclusive franchise.

(6) “Franchise Area” shall be everything within the boundaries of the City of Newport, Washington, plus all future annexations.

(7) “Grantor” or “City” means the City of Newport or any delegate acting within the scope of its jurisdiction.

(8) “Franchise fees” means any tax, fee or assessment of any kind imposed by a franchising authority or other governmental entity on a Grantee solely because of its status as such. The term “franchise fee” does not include:

(a) Any tax, fee, or assessment of general applicability (including any such tax, fee, or assessment imposed on both utilities and cable operators or their services but not including a tax, fee or assessment which is unduly discriminatory against Grantee);

(b) Capital costs which are required by the franchise to be incurred by Grantee for public, educational or governmental access facilities;

(c) Requirements or charges incidental to the awarding or enforcing of the franchise, including payments for bonds, security funds, letters of credit, insurance, indemnification, penalties, or liquidated damages; or

(d) Any fee imposed under Title 17, United States Code.

(e) Any other fee not required to be so included by 47 USC 542(g)(1).

(9) “Gross Revenues” shall mean all operating revenue without deduction from the cable communications system paid directly or indirectly to a Grantee, its affiliates, subsidiaries, parent, and any person in which a Grantee has a financial interest in association with the provisions of cable communications services within the City, including, but not limited to, basic service monthly fees, premium service fees, institutional service fees, service transfer fees, and leased channel fees, converter rentals, studio rental, production equipment and personnel fees, advertising revenues and copyright fees; provided, however, this shall not include any revenues from sale of capital assets or lease of property for purposes unrelated to cable communications. Gross revenues shall include, valued at retail price levels, the value of any goods, services, or other remuneration in non-monetary form, received by a Grantee or others described above in consideration of performance by the Grantee or others described above of any advertising or other service in connection with the cable system.

(10) “Leased Access” shall mean the use on a fee-for-service basis of the Cable Television System by business enterprises (whether profit, nonprofit or governmental) to tender services to the citizens of the City and shall include without limitation all use pursuant to Section 612 of the Cable Communications Policy Act of 1984 (47 USC 521 et seq.).

(11) “Person” means any individual, corporation, partnership, association, joint venture or organization of any kind and the lawful trustee, successor, assignee, transferee or personal representative thereof.

(12) “Subscriber” means any person who legally receives any one or more of the services provided by the Cable Communications System.

(13) “Street” shall mean the surface of and the space above and below any public street, road, highway, freeway, easement, lane, path, alley, court, sidewalk, parkway, or driveway now or hereafter existing as such within the City.

(14) “Committee” shall mean the CATV Committee of the City Council.

Section 4. Police Powers and Review Standard.

(1) Nothing in this Ordinance awarding a franchise in accordance herewith shall be construed as an abrogation by the City of any of its police powers.

(2) This Franchise and all acts, omissions or decisions by the City, the city administration, City Council or any city official in any way arising out of, regarding or referring to this Franchise or this Ordinance, shall be deemed and presumed to be made within their reasonable discretion and considering factors of public safety, aesthetics or convenience or the health and welfare of the citizens.

Section 5.  Grant of Authority.

There is hereby granted for a period of 15 years by the City to the Grantee, its successors and assigns, a franchise (herein, this “Franchise”) conveying to the Grantee the right, privilege and authority to construct, operate and maintain a cable televisions system within the City for the distribution of television signals, radio, or any other lawful service, subject to the terms, conditions and provisions contained herein, provided the Grantee submits proof of upgrade of the cable system to 400 MHG (approximately equivalent to 50 - 52 channels) with an engineer’s certificate of upgrade completion within 10 years of the signing of this Franchise. If the upgrade is not completed in the 10 years, the Franchise shall terminate at the end of the 10th year and the Grantee shall be required to then timely exercise renewal rights under the Federal Cable Act.

Section 6.  Non-Exclusive Grant.

The Franchise granted herein shall not be exclusive and the City reserves the right to grant a similar right, privilege, and authority to any person, firm or corporation at any time during the period of this Franchise provided, however, that no other franchise will be granted on terms less burdensome than those contained herein.

Section 7. Franchise Agreement.

(1) This Ordinance is a Cable Communications Franchise Agreement and is a contract between the City and the Grantee, binding upon both parties. It is the intent of the parties that the Franchise Agreement (or any renewal hereof) shall be subject to amendment from time to time to allow the Grantee to innovate and implement new services and developments, or to agree to any terms allowed by law and for which each party agrees to bargain in good faith with the other party, upon the initiation of any proposed amendment.

(2) Notwithstanding (1) above, it is understood that nothing in this Franchise shall preclude or prohibit the City from enacting any Ordinance, from time to time, in the interest of public health and safety, which may impact the Grantee in its operation of the cable system, as a proper exercise of City’s police power. Grantee’s rights hereunder are subject to such police power and in the event of any conflict between the provisions of this Ordinance and any present or future exercise of the City’s police power, such conflict shall be resolved in favor of such police power.

(3) In addition to those matters required elsewhere in this Ordinance, Grantee expressly represents as follows:

(a) It recognizes the right of the City, pursuant to the powers delineated in subsection (2) above, to make reasonable amendments to this Ordinance during the term of this Ordinance (or any renewal term) upon sixty (60) days notice to the Grantee, except that no prior notice shall be required with respect to an emergency amendment; provided, however, that the City’s judgment as to reasonability shall be presumed subject to rebuttal by Grantee. This Franchise creates no right of renewal provided that both parties acknowledge the renewal process by the Cable Act. Any renewal proceedings shall be undertaken in accordance with the Cable Act and all applicable laws and regulations.

Section 8. Construction of Cable System.

(1) It shall be a violation of this Ordinance for the Grantee or any other person acting on its behalf to obstruct, open, or otherwise disturb the surface of any street, sidewalk, driveway, public way or other public place for any purpose whatsoever without obtaining City approval to do so, in writing from the Mayor or his designee, except for emergency repairs, which approval shall not be unreasonably withheld and shall be granted or denied in a timely manner. Such violation shall be deemed a material breach of this Franchise and shall subject the Grantee to all measures and remedies which are available to the City.

(2) Any obstruction, opening, or disturbance of any street, sidewalk, driveway, public way or other public place shall be properly guarded by adequate barriers, lights, signals and warnings to prevent danger to any person or vehicle. Grantee shall at its own cost and expense and liability, restore and replace any other property disturbed, damaged or in any way injured by or on account of its activities to as good condition as such property was in immediately prior to the disturbance, damage, or injury. If Grantee fails to comply with the requirements of the preceding sentence within ten (10) days following written demand by the City, the City may cause such work to be done and shall charge Grantee for such.

(3) The Grantee shall, at its own cost, expense and liability, protect, support, temporarily disconnect, relocate in the same street or other public place, or remove from said street or other public place, any of its property when required to do so by the City because of: Street or other public excavation; construction; repair; regrading or grading; traffic conditions; installation of sewers, drains or water pipes; city-owned power or signal lines; tracks, vacation or relocation of streets or any other type of structure or improvement of a public agency, or any other type of improvement necessary for the public health, safety or welfare. City will give 10 days written notice except in case of emergency.

(4) The Grantee shall maintain all wires, conduits, cables, and other real and personal property and facilities in good condition, order and repair.

(5) The Grantee shall keep reasonably accurate, complete and current maps and records of its system and facilities. Grantee shall furnish two complete sets of “as built” maps and records to the City upon request by City. Such maps and records shall be available for inspection by the public during normal business hours at the office of the City Clerk.

(6) Any interruption in service shall be done, as far as is practicable, outside of prime time which is 7:00 p.m. to 11:00 p.m. local time.

(7) The City shall have the right, during the term of this Franchise, to install and maintain free of charge upon the poles, towers and other fixed facilities of the Grantee, any wire and pole fixtures that do not unreasonably interfere with the cable system operations of the Grantee.

(8) Location within the easements and rights of way of the City of any of Grantee’s equipment, wires or other property is subject to the approval of the Mayor, which approval will not be unreasonably withheld and shall be granted or denied in a timely fashion.

(9) Construction, installation and maintenance of the Cable Television System shall be performed in an orderly and workmanlike manner, and in close coordination with public and private utilities serving the City following accepted construction procedures and practices and working through existing committees and organizations consistent with local trade and industry practice except to the extent City is preempted by federal law.

Section 9. System Configuration.

(1) The cable system shall have the capacity to carry twenty-two (22) video channels (two hundred twenty (220) MHz). Grantee shall activate at least eleven (11) channels. One (1) such channel shall be designated for public, educational and governmental access programming.

(2) Grantee shall maintain the technical performance, audio and picture quality at F.C.C. standards. City reserves the right to enact such standards if at any time in the future it is allowed to do so.

(3) Grantee shall notify the City prior to making any substantial technical modification to this cable system. All construction work shall be undertaken in accordance with this Ordinance.

(4) City may require, in writing, biannual reviews which Grantee shall conduct, at Grantee’s expense, as part of its commitment to operate the cable system and to satisfy the future cable related needs and interests of the community, taking into account the cost of doing so. The City’s written request shall provide Grantee at least three months to prepare such report, and shall specify what topics should be addressed. Such request may include an analysis of the technological and economic feasibility and viability of new uses of the cable system, such as water meter reading, traffic signal controls, alarm systems and health monitoring signal devices. Within two months after receipt of the City’s written request, Grantee shall provide City with a draft of such report to allow City to comment. Grantee shall provide the final report no later than June 15th in odd-numbered years for the term of this franchise.

Section 10. Parental Control.

(1) Grantee shall provide subscriber controlled “lockout” devices to subscribers upon their request. Such devices shall be capable of blocking out the sound and video signal of any premium channel offered by Grantee.

(2) Upon the introduction of addressable cable services as to any program which is transmitted on a channel offered on a per channel or per program basis, Grantee shall, as to any premium service which Grantee elects to offer on a coded or “scrambled” basis, code or scramble such service, sound and video in a manner standard at that time to the cable industry.

Section 11. Grantee’s Rules.

The Grantee shall have the authority to promulgate such rules, regulations, terms and conditions governing the conduct of its business as shall be reasonably necessary or convenient to enable Grantee to exercise its rights and perform its obligations under this Franchise to insure reasonably uninterrupted service to all of its customers; provided, however, that such rules, regulations, terms and conditions shall not be in conflict with the provisions hereof, the rules of the Federal Communications Commission or the laws of the State of Washington. It is a condition of this Franchise that Grantee must comply with all applicable federal and state laws and regulations. Nothing in this Franchise is a waiver of police powers by the City.

Section 12. Authority for Use of Streets.

(1) For the purpose of operating and maintaining a Cable Communications System in City, Grantee may erect, install, construct, repair, replace, reconstruct and retain in, on, over, under, upon, across and along the streets, alleys, sidewalks, public ways and other publicly owned or controlled property within City such lines, cables, conductors, ducts, conduits, vaults, manholes, amplifiers, appliances, pedestals, attachments and other property and equipment as are necessary and appurtenant to the operation of the Cable System, provided that all applicable permits are applied for and granted, all fees paid and all other City codes and ordinances are otherwise complied with.

(2) Grantee shall construct and maintain a Cable Communications System so as not to unreasonably interfere with other uses of streets, alleys, sidewalks, public ways and other publicly owned or controlled property. Grantee shall make practicable use of existing poles and other facilities available to Grantee. Grantee shall provide reasonable notice to all residents affected by proposed construction prior to the commencement of that work if construction will result in an outage of more than two hours.

(3) Notwithstanding the above grant to use streets, alleys, sidewalks, public ways and other publicly owned or controlled property, no such street, alleys, sidewalks, public ways and other publicly owned or controlled property shall be used by Grantee if the Mayor or his designee, determines that such use is inconsistent with the terms, conditions or provisions by which such street, alleys, sidewalks, public ways and other publicly owned or controlled property was created or dedicated, or presently used.

Section 13. Conditions on Street Occupancy.

(1) All transmissions and distributions structures, lines, and equipment erected by the Grantee within the City shall be so located as to cause minimum interference with the proper use of streets, alleys, and other public ways and places and to cause minimum interference with the rights and reasonable convenience of property owners who join any of the said streets, alleys or other public ways and places.

(2) In case of disturbance of any street, sidewalk, alley, public way, or paved area, the Grantee shall, at its own cost, expense and liability and in a manner approved by the Mayor or his designee, replace and restore such street, sidewalk, alley, public way, or paved area in as good a condition as before the work involving such disturbance was done.

(3) The Grantee shall have the authority to trim trees upon and overhanging streets, alleys, sidewalks, and public ways any places of the City so as to prevent the branches of such trees from coming in contact with the wires and cables of the Grantee at its sole expense and liability.

Section 14. Erection of Poles.

No Franchise shall be deemed (expressly or implied) to authorize the Grantee to construct or install poles or wire holding structures within streets for the purpose of placing cables, wires, lines or otherwise without the written consent of the City within which the street is situated which shall not be unreasonably withheld and shall be granted or denied in a timely manner. With respect to any poles or wire-holding structures which a Grantee is authorized to construct and install within streets, a public utility, including telephone and electric, or public utility district serving the City may, if denied the privilege of utilizing such poles or wire-holding structures by the Grantee, apply for such permission to the City Council. If the City Council finds that such use would enhance the public convenience and would not unduly interfere with the Grantee’s operations, the City Council may authorize such use subject to such terms and conditions as it deems appropriate. Such authorization shall include the condition that the public utility or public utility district pay to the Grantee any and all actual and necessary costs incurred by the Grantee in permitting such use.

Section 15. Undergrounding.

Wherever deemed appropriate by the Mayor or his designee, acting within his reasonable discretion and considering factors of public safety, aesthetics and convenience, the cable wires and facilities shall be underground at Grantee’s sole expense and liability. Grantee shall not be required to underground cable wires and facilities unless the electrical power service to the same area is also required to be underground, unless the Mayor and City Council, by resolution, upon finding of fact determine a unique public health, safety and welfare hazard requires the Grantee solely to underground. Except as hereinafter provided, in all areas of the City where the cables, wires and other like facilities of a public utility or public utility district are placed underground, each Grantee shall construct and install its cables, wires and other facilities underground. Amplifier boxes and pedestal mounted terminal boxes may be placed above ground if existing technology reasonably requires, but shall be of such size and design and shall be so located as not to be unsightly or unsafe. In any area of the City where there are certain cables, wires and other like facilities of a public utility or public utility district underground and at least one operable cable, wire or like facility of a public utility or public utility district suspended above the ground from poles a Grantee may construct and install its cables, wires and other facilities from the same pole.

With respect to any cables, wires and other like facilities constructed and installed by a Grantee above ground, the Grantee shall, at its sole expense and liability, reconstruct and reinstall such cables, wires or other facilities underground pursuant to any project under which the cables, wires or other like facilities of such utilities are placed underground within an area.

Section 16. Relocation.

If during the term of a franchise the City elects to alter, repair, realign, abandon, improve, vacate, reroute or change the grade of any street, sidewalk, alley, public way or other publicly owned and controlled property, or to replace, repair, install, maintain, or otherwise alter any above ground or underground cable, wire conduit, pipe, line, pole, wire-holding structure, structure, or other facility utilized for the provision of utility or other services or transportation of drainage, sewage or other liquids, the Grantee, shall, except as otherwise hereinafter provided, at its sole expense and liability remove or relocate as necessary its poles, wires, cables, underground conduits, manholes and any other facilities which it has installed. If such removal or relocation is required within the area in which all utility lines, including those for the Cable Television System were installed at the same time, the entities may decide among themselves who is to bear the cost of relocation; provided that the City shall not be liable to a grantee for such costs. Regardless of who bears the costs, a grantee shall take action to remove or relocate at such time or times as are directed by the agency or company undertaking the work. Reasonable advance written notice shall be mailed to the Grantee advising the Grantee of the date or dates removal or relocation is to be undertaken.

Section 17. Movement of Buildings.

Grantee shall, upon request by any person holding a building moving permit, franchise or other approval issued by the City or State of Washington, temporarily remove, raise or lower its wire to permit the movement of buildings. The expense of such removal, raising or lowering shall be paid by the person requesting same, and Grantee shall be authorized to require such payment in advance. The Grantee shall be given not less than forty-eight (48) hours oral or written notice to arrange for such temporary wire changes.

Section 18. Cable Service and Standards.

(1) Grantee shall provide equal and uniform cable television service 24 hours a day, to all within the corporate limits of the City of Newport, the Franchise Area defined, whose contour, so far as is possible, shall follow streets. Within the perimeter of the contour, no dwelling units, commercial, industrial, governmental, electrical or other buildings, shall be excluded from service provided to the Franchise Area.

(2) Grantee shall construct, install and maintain its Cable Television System in a manner consistent and in compliance with all applicable laws, Ordinances, construction standards, governmental requirements, and technical standards equivalent to those established by the FCC. City reserves the right to regulate to the extent allowed by law if the federal preemption is lifted.

(3) In any event, the Cable Television System shall not endanger or interfere with the safety of persons or property within the City or other areas where the Grantee may have equipment located.

Section 19. Public, Educational and Governmental Access.

Grantee shall provide reasonable access for public, education and governmental use pursuant to the provisions of the Cable Communications Policy Act of 1984, Section 611 (47 USC 531) upon request. City reserves the right to reasonable public educational and governmental access but does not create an obligation to exercise that right which will be exercised if at all in the sole discretion of the City Council. In case of dispute, the City Council reserves the right to decide what shall comprise reasonable access after a public hearing guided by the spirit and purpose of the Cable Communications Policy Act of 1984. Any reasonable cost of capital equipment shall be paid by the Grantee incurred in helping the City.

Use of facilities for public, education and governmental access upon the Cable Television System shall be made available, without rental, deposits, or any other charge whatsoever, provided Grantee may require a reasonable security deposit and a demonstration of reasonable competence to run the equipment (and Grantee will provide training) for twenty-four (24) hours per day, seven (7) days a week in connection with the production of public, education and/or governmental access programming cablecast upon the Cable Television System. Consistent with City rules and regulations, Grantee shall:

(1) Allow person and entities desiring to cablecast public, education and/or governmental access programming to produce programming upon and electronically interface directly with Cable Television System of Grantee so as to effectively cablecast the public, education and/or governmental access programming, or, in the alternative,

(2) A Grantee shall make all reasonable efforts to coordinate the cablecasting of public, education and/or governmental access programming upon the Cable Television System at the same time and upon the same channel designations as such programming is cablecast upon other cable television systems within the community.

Section 20. Service to Public Bodies.

The Grantee shall, at is own expense and liability, install one cable connection at each public school located within the City. The Grantee may, at its option, provide similar free service to other private, parochial and religious schools.

Section 21. Approval of Construction by City; Inspection; Correction of Defects in System; Breach or Default By Grantee.

(1) The City shall have and maintain the right to inspect the construction, operation and maintenance of the system by the Grantee to insure the proper performance of the terms of this Ordinance.

(2) In the event the Grantee should violate any of the terms of this Ordinance or any federal, State or local law or regulation, or any of the rules and regulations as may hereafter be from time to time lawfully adopted, or any provision of the Franchise Agreement, the City shall promptly give the Grantee sixty (60) days written notice of the violation, breach, default or noncompliance. The Grantee shall within sixty (60) days of transmission of written notice from the City substantially undertake and promptly correct such default, breach, violation or noncompliance and certify the same to the City. In the event that the Grantee fails to substantially undertake such corrective action within sixty (60) days of transmission of such written notice and promptly complete the corrective action, the City may:

(a) Make such correction itself and charge the cost of the same to the Grantee; and/or

(b) In the case of a material breach of this Franchise, declare the Grantee in default and terminate the franchise and rights granted under this Franchise in accord with the procedures in Section 25, Procedures for Remedying Franchise Violations.

(c) In addition to all other rights and powers retained by the City under this Franchise, the Council reserves the right to forfeit and terminate the Franchise and all rights and privileges of Grantee in the event of a substantial violation or breach of its terms and conditions. A substantial violation or breach by Grantee shall include, but shall not be limited to the following:

(i) An uncured violation of any material provision of this Franchise or any material rule, order, regulation or determination of the City made pursuant to its power to protect the public health, safety and welfare;

(ii) An attempt to evade any material provision of the Franchise or practice of any fraud or deceit upon the cable communications system customers and subscribers or upon the City;

(iii) Failure to begin or substantially complete any system construction or system extension as set forth in the Franchise;

(iv) A failure to provide the services promised in the application or specified in the Franchise, or a reasonable substitute therefor;

(v) Failure to restore service after ten (10) consecutive days of interrupted service, except when approval of such interruption is obtained from the City;

(vi) Material misrepresentation of fact in the application for, or during negotiations relating to the Franchise;

(vii) Failure to provide insurance, construction bond, letter of credit or indemnity as required by the Franchise.

(3) None of the foregoing shall constitute a substantial violation or breach if a violation or breach occurs which is without fault of Grantee or occurs as a result of circumstances beyond Grantee’s control. Grantee shall not be excused by economic hardship nor by nonfeasance or malfeasance of its directors, officers, agency or employees; provided, however, that damage to equipment causing service interruption shall be deemed to be the result of circumstances beyond Grantee’s control if it is caused by any negligent act or unintended omission of its employees (assuming proper training) or agents (assuming reasonable diligence in their selection), or sabotage or vandalism or malicious mischief by its employees or agents. Grantee shall bear the burden of proof in establishing the existence of such conditions.

(4) Should the Council determine, following the public hearing at which Grantee may present evidence, argument and question witnesses in accord with Section 25, Procedures for Remedying Franchise Violations, that the violation or breach by Grantee was the fault of Grantee and within the Grantee’s control, the Council may, by resolution, declare that the Franchise be forfeited and terminated; provided, however, the Council may, in its discretion, provide an opportunity for the Grantee to remedy the violation or breach and come into compliance with the Franchise and this Ordinance so as to avoid the termination.

Grantee shall be afforded due process in such procedures provided Grantee shall seasonably state any violation of this Section in writing in time to give the City reasonable opportunity to correct the said violation of due process.

(5) Upon any termination of the franchise by the City or the City’s refusal to renew the same pursuant to applicable federal law, the Grantee shall after receipt of Notice of Termination or refusal to renew franchise, remove its facilities and equipment in accord with Section 43, Removal, and in the event that the Grantee does not remove its facilities and equipment within the time provided in this Section, the City may do so, the removal cost to be borne in any event by the Grantee. Any enforcement action or remedy provided by this Section or this Ordinance or by the Franchise Agreement shall not be deemed exclusive but shall be alternative or cumulative in nature.

(6) In all respects herein, time is of the essence.

Section 22. Hold Harmless.

(1) The Grantee shall at all times fully defend, indemnify and hold the City, its agencies, boards, officers, agents, officials and employees, harmless from any and all claims, accidents, losses, charges, damages and liabilities arising from or by reason of any intentional or negligent act, occurrence, or omission of the Grantee, in law or in equity of any and every kind and nature whatsoever, whether caused by or arising out of an act or omission or any negligence of Grantee, singularly or jointly with others, its representatives, permittees, or employees or contractors, in the construction, operation, use or maintenance of any of the Grantee’s Cable Television System and/or enjoyment of any privileges granted by this Franchise, or because of Grantee’s performance of franchise obligations. Such indemnity shall include costs of negotiation or defense and other costs incurred, and reasonable attorney’s fees.

(2) Grantee shall not be responsible for damages determined to arise out of the City’s sole negligence or, in the case where damages are determined to arise out of concurrent negligence of the parties, Grantee’s liability shall extend to damages determined to arise beyond the extent of Grantee’s concurrent negligence only so far as permitted by law.

(3) Grantee hereby waives immunity under Title 51 R.C.W. The City and the Grantee have specifically negotiated this provision, as required by R.C.W. 4.24.115, to the extent it may apply.

(4) Whenever any judgment is recovered against the City or any other indemnitee for any such liability, costs or expenses, such judgment shall be conclusive against the Grantee, not only as to the amount of such damage, but as to its liability, provided the Grantee has reasonable notice or actually knew, or of the pendency of such suit.

(5) Grantee waives all claims for loss, liability and/or damage against the City of Newport, its agencies, officers, agents, officials or employees, arising out of or in connection with the Grantee’s enjoyment of franchise rights and privileges, or because of Grantee’s performance or franchise obligations. No action, error or omission, or failure to act by the City in connection with administering its rights, duties related to this Franchise shall be asserted by the Grantee, directly, indirectly or by way of seeking indemnification, against the City, its agencies, boards, officers, agents, officials or employees, except where required by law.

(6) It is not the intent of this Franchise to acknowledge, create, imply or expand any duty or liability of the City without respect to its role as franchising authority, in the exercise of its police power or for any other purpose. Any City duty, nonetheless deemed created, shall be a duty to the general public and not to any specific party, group or entity.

(7) Failure to comply with this Section shall be considered a material breach.

Section 23. Grantee Insurance.

As a part of the indemnification provided by Section 22, but without limiting the foregoing, Grantee shall file with the City, and at all times thereafter maintain in full force and effect at its sole expense, an acceptable policy or policies of liability insurance, including comprehensive general liability insurance, personal injury liability, owners and contractors personal injury liability, broad form property damage, contractual liability, automobile liability (owned; nonowned and hired automobiles), workers compensation and employer liability. The policy or policies shall name as primary insured the Grantee and their capacity as such, their officers, agents and employees. The City and said city and officers, agents and employees shall be named as coinsureds, and the policy or policies shall be of no less than one million dollars ($1,000,000.00) per occurrence with a one million dollar ($1,000,000.00) aggregate, but shall never be less than the city’s insurance coverage. The insurance policy or policies shall contain contractual liability insurance naming the Grantee and City, and shall insure against the types of liabilities covered by the indemnification and hold harmless provisions of Section 22.

The policy or policies of insurance shall be maintained by the Grantee in full force and effect during the entire term of this Franchise. Each policy of insurance shall contain a statement on its face that the insuror will not cancel the policy or fail to renew the policy, whether at the request of the Grantee or for other reasons, except after thirty (30) calendar days advance written notice mailed by the insuror to the City Clerk.

Section 24. CATV Committee – Authorization – Duties.

(1) There is hereby created and established a CATV Committee for the purpose of performing such duties as the Mayor or Council may direct, which may consist of Council members, Council members and residents of City or the Council as a whole, at the Council’s option, and making recommendations to the City regarding the operations of the Grantee and the Grantee’s performance under this franchise.

(2) The number and qualifications of the membership of the CATV Committee shall be determined by motion of the Council, and its members shall serve for such term as may be established.

(3) The CATV Committee shall be charged with the performance of the following duties:

(a) Qualifications of Grantee. The Committee shall if directed by the Council, review the legal, financial, technical, and other qualifications of a proposed transferee under Section 40, Transfer of Rights, in the Ordinance, and the adequacy, and feasibility of construction arrangements to determine that the Grantee is fully capable to satisfy all of the provisions, terms and conditions of the Franchise for expansion or substitution as set forth in this Ordinance, and any other reasonable condition, limitation or restriction the City may deem necessary to enact in connection with this Franchise. In the course of performing these duties, the Committee shall report its findings to the Council during regularly scheduled public meetings of the Council.

(b) Settlement of Complaints. The Committee is hereby authorized and empowered to adjust, settle or compromise any non-material complaint, controversy or charges regarding the quality of service, equipment malfunctions or similar matters arising from the operations of the Grantee under this Franchise, or any other area reserved for municipal content under the Federal Cable Act or any preemption by federal or state, either on behalf of any subscriber of the Cable System, the Grantee or the City, in the best interest of the public.

Section 25. Procedures for Remedying Franchise Violations.

In the event that the City determines the Grantee has violated any material provision of this Franchise, the City may make a written demand on Grantee that it remedy such violation. If the violation is not remedied, or in the process of being remedied, to the satisfaction of the City within sixty (60) days following such demands, the City shall determine whether or not such violation by Grantee was excusable or inexcusable, in accordance with the following procedure:

(1) At a meeting with the Mayor or his designee within fifteen (15) days of receipt of Notice of Violation to establish the table for corrective action and corrective action to be taken.

(3) If the meeting with Mayor or designee does not result in a satisfactory resolution, or if corrective action is not promptly completed, then an appeal or referral may be made by to the City Council.

If the hearing is conducted by the City Council, upon conclusion of the hearing, the City Council shall adopt a decision which includes findings of fact and conclusions.

If the decisions by the City Council is that there are grounds for termination of the franchise and that the franchise shall be terminated, the Council may adopt a resolution which terminates the franchise and includes its decision. The effective date of termination shall be such date as is prescribed by the City Council, within its sole discretion, in the resolution.

Section 26. Alternative Remedies.

No provision of this Ordinance shall be deemed to bar the right of the City to seek or obtain judicial relief from a violation of any provision of this Franchise or any rule, regulation, requirement or directive promulgated thereunder. Neither the existence of other remedies identified in said Franchise nor the exercise thereof shall be deemed to bar or otherwise limit the right of the City to recover monetary damages for such violation by the Grantee, or judicial enforcement of the Grantee’s obligations by means of specific performance, injunction relief or mandate, or any other judicial remedy at law or in equity.

Section 27. Non Enforcement.

A Grantee shall not be relieved of any obligation to comply with any of the provisions of this Franchise or any rule, regulation, requirement or directive promulgated thereunder by reason of any failure of the City or its officers, agents, or employees to enforce prompt compliance.

Section 28. Amount and Payment of Franchise Fees.

During the term of each franchise, each Grantee shall pay to the City Council an amount equal to five (5%) percent per year of the Grantee’s annual Gross Revenue.

Said fees shall be paid yearly, no later than ninety (90) days following the last day of December of each year this Franchise is in effect. Not later than the date of each payment, the Grantee shall file with the City Clerk/ Treasurer, a written statement signed under penalty of perjury by an officer of the Grantee, which identifies in detail the sources and amounts of Gross Revenues received by a Grantee during the payment period for which payment is made.

Not less than annually, the Grantee shall provide the City Council with a certification without qualifications of a certified public accountant certifying the accuracy of the yearly franchise fee payments. Said certification shall be prepared in accordance with generally accepted accounting principles as established by the Financial Accounting Standards Board (FASB).

No acceptance of any payment shall be construed as an accord that the amount paid is, in fact, the correct amount, nor shall such acceptance of payment be construed as a release of any claim which the City may have for further or additional sums payable under the provisions of this Section.

Section 29. Interest on Delinquent Franchise Fees.

Any Franchise Fees which remain unpaid after the dates specified in Section 28 above shall be delinquent and shall thereafter accrue interest at the maximum legal rate until paid.

Section 30. Auditing and Financial Records.

During the term of each franchise, the City may conduct audits of the books, records and accounts of the Grantee for the purpose of determining whether the Grantee has paid franchise fees in the amounts prescribed by Section 29 above. The audit may be conducted by the Clerk/Treasurer of the City or by an independent certified public accounting firm retained by the City, and shall be conducted at the sole expense of the City. The party conducting the audit shall prepare a written report containing its findings, and the report shall be filed with the City, and mailed to the City and Grantee.

The Grantee shall make available for inspection by authorized representatives of the City, its books, accounts, and all other financial records at reasonable times and upon reasonable advance notice for the purpose of permitting exercise of the authorities conferred by this Section.

Section 31. Rates.

City reserves the right to impose rate regulations and procedures if at any time in the future it should be allowed to do so.

Section 32. Costs.

(1) The city accepts the restrictions of the Federal Cable Act, Section 622 (47 USC 542(g) (2)) with respect to allowable municipal taxes, fees or assessments in excess of the permissible franchise fee, reserving the right to amend this Section if such federal restrictions should be eliminated or relaxed.

(2) The Grantee agrees to pay, no later than thirty (30) days from the date of this Franchise, any municipal tax, fee or assessment lawfully imposed by the City, in addition to the franchise fee as provided herein. Such fees may include, but are not limited to municipal requirements or charges incidental to the awarding or enforcing of the franchise, including payments for bonds, security, funds, letters of credit, insurance, indemnification, penalties or liquidated damages.

(3) In the event of Grantee’s failure to make timely payment of any sum identified in this or any other Section of this Franchise or other lawful municipal billing, Grantee shall, in addition, pay to the City the sum of $250.00 per day as and for liquidated damages to the City until all sums due and owing are paid in full.

(4) Grantee, within sixty (60) days after receipt from the City of written itemization, shall reimburse the City for the cost of all outside consultants incurred during the franchise process to the extent not recovered by application fees. Such payment shall be deemed to be a charge incidental to the award of a franchise and shall not be subject to the limitation on franchise fees contained in the Federal Cable Act.

(5) Grantee shall, within thirty (30) days after receipt from the City of written itemization, reimburse the City for all costs of publication in connection with the adoption of this Franchise Ordinance.

(6) After the effective date of this Agreement, as necessary in the analysis of all matters relative to this Franchise, City shall be entitled to employ the services of technical, financial or legal consultants and advisors. Except as otherwise expressly provided herein, all reasonable fees of any such consultants or advisors incurred by City in this regard shall be borne by the Grantee, regardless of the outcome of any specific matter under consideration. Such payment shall be deemed to be a charge incidental to the enforcement of a franchise and shall not be subject to the limitations on franchise fees contained in the Federal Cable Act.

(7) No acceptance by the City of any payment from Grantee shall be construed as a release of any claim the City may have for further or additional sums payable under the provisions of this Franchise. All amounts paid shall be subject to auditing and recomputation by City.

(8) Failure to comply with this Section shall constitute a material breach of the Franchise and shall subject the Grantee to all measures, legal or equitable, whether available to the City under this Franchise or otherwise.

(9) Grantee shall maintain in full force and effect, an acceptable corporate surety bond issued by a surety licensed therefore by the State of Washington in an amount equal to ($5,000.00) Five Thousand Dollars.

Neither the provisions of this Section, any bond accepted pursuant thereto, nor any damages recovered thereunder shall be construed to excuse faithful performance by the Grantee or to limit the liability of the Grantee under the Franchise for damages, either to the full amount of the cancellation by the surety during the term of the Franchise, whether for failure to pay a premium or otherwise. The form of the bond and surety shall be subject to the approval by the City Council.

Section 33. Previous Rights Abandoned.

This Agreement is in lieu of any and all other rights, privileges, powers, immunities, and authorities owned, possessed, controlled, or exercisable by Grantee or any successor pertaining to the construction, operation, modification or maintenance of a cable system in the City. The acceptance of this Agreement shall operate as between Grantee and City as an abandonment of any and all such rights, privileges, powers, immunities, and authorities within the City. All construction, operation, modification, and maintenance by the Grantee of any cable system in the City shall be under this Franchise and not under any other right, privilege, power, immunity or authority.

Section 34. Time is of the Essence.

Whenever this Agreement shall set forth any time for an act to be performed by or on behalf of Grantee, such time shall be deemed of the essence. Any failure of Grantee to perform within the time allotted shall always be sufficient grounds for the City to invoke any appropriate remedy, including, without limitation, termination of this Franchise pursuant to Section 25.

Section 35. City’s Approvals, Consents and Exercise of Discretion.

In any provision of this Franchise requiring that City not withhold its consent or approval unreasonably or requiring that the City exercise its discretion reasonably, City’s withholding of its consent or approval and City’s exercising of its discretion shall be based on City’s determination that its action lawfully and reasonably serves the public interest. In any dispute between the parties on such issue the burden shall be upon Grantee to establish, by clear and convincing evidence, that the City has acted arbitrarily and capriciously.

Section 36. Interpretation of Franchise.

The administration and interpretation of this Franchise shall be vested in the City. Grantee agrees that all interpretations and decisions regarding administration of the Franchise, as determined by the City, are final, binding and conclusive unless that interpretation is found to be arbitrary and capricious by a court of competent jurisdiction.

Section 37. Remedies Cumulative.

The rights and remedies reserved to the City by this Franchise are cumulative and shall be in addition to, and not in derogation of, any other rights or remedies which the City may have with the respective subject matter of this Franchise. A waiver of rights or remedies shall not affect any other rights or times.

Section 38. Guarantee.

In consideration of the grant of this Franchise to Grantee and the benefit to them, Grantee’s parent, owner or partner shall guarantee, absolutely and unconditionally, the performance by Grantee of all the obligations of Grantee pursuant to and in accordance with all of the terms, provisions and conditions of the Franchise. This guarantee shall continue in full force and effect until all obligations of the Grantee under this Franchise shall have been fully satisfied and discharged.

Section 39. Taxes.

Subject to the provisions of Federal Cable Act, nothing contained in this Franchise shall be construed to except the Grantee from any tax, liability or assessment authorized by law or from provisions of the Newport Municipal Code.

Section 40. Transfer of Rights.

(1) The Franchise shall not be sold, assigned or transferred, either in whole or in part, or leased, or sublet, nor shall title thereto, either legal or equitable or any right, interest or property therein, pass to or vest in any person without the prior written consent of the City which consent will not be unreasonably withheld.

No such consent shall be required for a transfer in trust, mortgage or other hypothecation as a whole or in part to secure an indebtedness.

The proposed assignee must show technical ability, financial capability, legal qualifications and general character qualifications as determined by the City and must agree to comply with all provisions of the Franchise and such conditions as may be prescribed by Council expressed by resolution. City shall be deemed to have denied a proposed transfer or assignment in the event that its consent is not communicated in writing to Grantee within one hundred twenty (120) days following receipt of written notice of the proposed transfer or assignment.

(2) The consent or approval of the City Council to any transfer of the Franchise shall not constitute a waiver or release of the right of the City in and to the streets, and any transfer shall by its terms, be expressly subordinate to the terms and conditions of a franchise.

(3) In no event shall a transfer or ownership of control be approved without successor in interest becoming a signatory to the Franchise Agreement.

(4) Any unauthorized transfer in violation of this Franchise shall be deemed a material breach in default of this Franchise and shall subject the Grantee to all penalties and remedies prescribed in this Franchise and to all other remedies, legal and equitable, which are available to the City, including, but not limited to cumulatively and/or in the alternative:

(a) The immediate entry of an ex parte order by a court of competent jurisdiction:

(i) Enjoining Grantee, its officers, agents, employees and all others acting in concert with them, from transferring or assigning or otherwise disposing of any interest in the cable system,

(ii) Appointing a receiver, acceptable to the City, who shall forthwith assume the management of the cable system in accordance with the terms and conditions of this Franchise, and

(iii) Requiring all subscription fees, installation fees and all other fees payable to Grantee to be paid into an escrow account which shall be subject to release to Grantee only on order of the court.

(b) The immediate termination of this Franchise and acceleration of all the obligations and rights thereunder, including but not limited to those described in Section 25 of this Franchise.

(c) The right of immediate exercise by the City of its right to purchase the system from Grantee under the provisions of this Franchise.

(8) Grantee shall notify the City of any occurrence which constitutes a transfer not in accordance with the provisions of this Franchise.

(9) Grantee shall notify the City of entry of any judgment against Grantee within seventy-two (72) hours of the occurrence of such event.

(10) Subject to the requirements contained in the Franchise, the Franchise shall be binding on any successors or assigns of Grantee.

(11) All costs to the City of awarding a transfer of this Franchise will be paid by the Grantee.

Section 41. Foreclosure.

Upon the foreclosure or other judicial sale of all or a substantial part of the cable communications system facilities, or upon the termination of any lease covering all or a substantial part of the cable communications system, or upon the occasion of additional events which effectively cause termination of the system’s operation, Grantee shall notify the City of such fact and such notification or the occurrence of such terminating events shall be treated as a notification that a transfer of rights under Section 40, Transfer of Rights, and the provisions of this Ordinance governing the consent of the City to such transfer shall apply.

Section 42. Receivership.

(1) A Grantee shall immediately notify the City in writing if it: (a) files a voluntary petition in bankruptcy, a voluntary petition to reorganize its business, or a voluntary petition to effect a plan or other arrangement with creditors; (2) files an answer admitting the jurisdiction of the Court and the material allegations of an involuntary petition filed pursuant to the Bankruptcy Code, as amended; or (3) is adjudicated bankrupt, makes an assignment for the benefit of creditors or applies for or consents to the appointment of any receiver or trustee of all or any part of its property including all or any part of its cable system.

(2) City reserves all rights under the law after the appointment of a receiver or trustee, whether in receivership, reorganization, bankruptcy or other action or proceeding.

(3) To the fullest extent allowed by law, transfer by the trustee, receiver or debtor in residence to a third party of assets necessary to conduct Cable T.V. business or provide cable service to the Franchise area shall be an event that triggers that right of the City under the provisions of this Ordinance governing the consent of the City including but not limited to Section 40, Transfer of Rights.

Section 43. Removal.

Upon expiration or termination of the Franchise, if the Franchise is not renewed and if neither the City nor an assignee purchases the Cable Television System, the Grantee shall remove any underground cable from the streets which has been installed in such a manner that it can be removed without trenching or other opening of the streets along the extension of cable to be removed. The Grantee shall not remove any underground cable or conduit which requires trenching or other opening of the streets along the extension of cable to be removed, except as hereinafter provided. The Grantee shall remove, at its sole cost, expense and liability, any underground cable or conduit by trenching or opening of the streets along the extension thereof or otherwise which is ordered to be removed by the Mayor based upon a determination, in the sole discretion of the Mayor, that removal is required in order to eliminate or prevent a hazardous condition or promote future utilization of the streets for public purposes. Any order by the Mayor to remove cable or conduit shall be mailed to the Grantee. A Grantee shall file written notice with the City Clerk not later than thirty (30) calendar days following the date of expiration or termination of the Franchise of its intention to remove cable intended to be removed and a schedule for removal by location. The schedule and timing of removal shall be subject to approval and regulation by the Mayor or assignee of the City. Removal shall be completed not later than twelve (12) months following the date of expiration of the Franchise. Underground cable and conduit in the streets which is not removed shall be deemed abandoned and title thereto shall be vested in the City.

Upon expiration or termination of the Franchise, if the Franchise is not renewed and if neither the City or an assignee purchase the System, the Grantee, at its sole expense and liability, shall, unless relieved of the obligation by the City, remove from the streets all above ground elements of the Cable Television System, including but not limited to amplifier boxes, pedestal mounted terminal boxes, and cable attached to or suspended from poles, which are not purchased by the City or its assignee.

The Grantee shall apply for and obtain such encroachment permits, licenses, authorizations or other approvals and pay such fees and deposit such security as required by applicable ordinance of the City, shall conduct and complete the work of removal in compliance with all such applicable ordinances, and shall restore the streets to the same condition they were in before the work of removal commenced. The work of removal shall be completed not later than one (1) year following the date of expiration of the Franchise.

Section 44. Severability.

If any section, subsection, sentence, clause, phrase, or material portion of this Ordinance is for any reason held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and such holding shall not affect the validity of the remaining portions hereof.

Section 45. Ordinances Repealed.

All ordinances or parts of ordinances in conflict with the provisions of this Ordinance are hereby repealed. They are: Ordinance No. 481, adopted March 8, 1972; Ordinance No. 487, adopted September 20, 1972; Ordinance No. 489, adopted December 20, 1972; Ordinance No. 520, adopted June 4, 1975; Ordinance No. 538, adopted November 17, 1976; Ordinance No. 559, adopted May 3, 1978; and Ordinance No. 702, adopted December 16, 1986.

Section 46. Applicable Law.

Notwithstanding anything to the contrary herein, the terms of this Franchise shall be governed in accordance with the terms of the Cable Communications Policy Act of 1984 (the “Cable Act”) Pub.L.No. 98-549, 47, USC Section 521 et seq. (Supp III 1985), as the same may be amended from time to time. In the event of a conflict between terms of this Ordinance, or other ordinances of the City, and the Cable Act, the Cable Act shall control wherever it preempts.

Section 47. Notices.

All notices and other communications hereunder shall be in writing and deemed to have been duly given if delivered by hand or delivery service providing proof of delivery or if mailed (first class or certified, return receipt and postage prepaid) to the following respective addresses:

Pend Oreille Cable TV Limited
ATTN: John S. Whetzell & James A.
1201 Third Avenue, Suite 3600
Seattle, WA 98101

With a copy to:

Pend Oreille Cable TV Limited Partnership

405 North 4th Street PO Box 1488

Sandpoint, ID 83864

to the City:

City of Newport

PO Box 546

Newport, WA 99156

or to such other address(es) as the Grantee or the City may specify in a notice delivered in accordance with the terms hereof.

Section 48. Effective Date.

In the interest of the peace, health and safety of the people of the City, this Ordinance shall be in full force and effect upon its passage by the Council, approval of the Mayor and publication as required by law on June 19, 1990.

Passed by the City Council of the City of Newport, Washington this 5th day of June, 19___.