Ordinance No. 827



Article 1

Section 1. Short Title.

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

Section 2. Purpose.

The City of Newport finds that it is the purpose of this Ordinance and subsequent amendments to:

(a) Provide for the franchising and regulation of cable communication within the City of Newport;

(b) Provide for a cable communications system that will meet the current needs of the City of Newport and that can be modified to meet future needs;

(c) Provide for the payment of fees and other valuable consideration to the City for the use of the public ways and for the privilege to construct and operate cable communications systems;

(d) Provide, consistent with applicable law, for the regulation by the City of certain rates to be charged to subscribers for certain cable communications services;

(e) Provide for the establishment of construction, maintenance, and operations standards to ensure the safety of the public;

(f) Provide for the development of cable communications as a means to improve communication between and among the members of the public and public institutions of the City;

(g) Provide remedies and prescribe penalties for violation of this Chapter and any franchise granted hereunder; and

(h) Exercise and avail the City of all regulatory powers authorized by federal or state law.

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 wherever 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. These definitions shall not limit nor restrict any regulatory authority now or hereafter granted by federal or state law and regulations.

(1) “Access Channel” shall mean any channel set aside for public use, educational use, or governmental use without a channel usage charge.

(2) “Access user” shall mean any person or entity entitled to make use of an access channel consistent with the intended purpose of the channel.

(3) “Application” shall mean a proposal seeking authority to construct and operate a cable communications system within the City pursuant to this Ordinance. It shall include the initial proposal plus amendments.

(4) “Basic service” shall mean subscriber cable television services which include the delivery of local television broadcast signals, access channels, leased channels and local origination channels, as covered by the regular monthly charge paid by all subscribers to any service tier, excluding premium services, two-way services and FM radio services. This definition shall not limit or restrict any regulatory authority now or hereafter granted by federal or state law.

(5) “Cable Advisory Board” or “CATV Committee” shall mean that board established by the City to handle cable matters. Said board can be, at the discretion of the City Council, the City Council.

(6) “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, wave guides, 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 signal within the City but does not include any facility of any electric utility used solely for operating its electric utility system.

(7) “Cable Television services” shall mean the one-way transmission of video programming and associate nonvideo signals to subscribers together with subscriber interaction, if any, which is provided in connection with the video programming.

(8) “Channel” means 6 MHz of bandwidth in the electromagnetic spectrum capable of carrying any type of transmission which a franchisee of a cable system is authorized to provide to its subscribers.

(9) “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.

(10) “Connection” shall mean the attachment of the drop to the radio or television set or to the communications device of the subscriber.

(11) “Construction,” the terms “construction is completed,” “construction has been completed,” and “construction shall be completed” shall mean that strand has been put up and all necessary cable (including trunk and feeder cable) has been lashed, or for underground construction, that all cable has been laid and trenches refilled, all public ways restored to the City’s approval and except as prevented by weather conditions or delayed because of season, landscaping restored; that all amplifier housings and modules have been installed (including modules for return pather signals if proposed); that power supplies have been installed, energized, and all bonding and grounding has been completed; that all necessary connectors, splitters and taps have been installed; that construction of the headends and/or hubs has been completed and all necessary processing equipment has been installed; and that any and all other construction necessary for the system to be ready to deliver cable services to subscribers in a safe and reliable manner has been completed consistent with the terms of a franchise, industry standards and all FCC standards; and proof that performance tests have been successfully conducted on each otherwise completed segment of the cable system shall be provided to the City. It is expected that segments of less than the entire system will be activated and proofed when completed. Construction of any segment or of the entire system will not be considered complete until proof that successful performance tests have been conducted on such segment (or in the case of the entire system, on all segments of the cable system) has been submitted to the City and any problems found during testing have been corrected. The term “completion of construction” does not include marketing and installation of subscriber service.

(12) “Converter” shall mean an electronic tuning device which converts transmitted signals to a frequency which permits their reception on an ordinary television receiver.

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

(14) “Drop” shall mean the coaxial or fiber optic cable or cables that connects a subscriber’s premises to the nearest feeder line of the cable communications system.

(15) “Easement” shall mean permission to use all public ways, including public utility easements, for the purposes of constructing and operating a cable communications system to serve the public.

(16) “Feeder line” shall mean the coaxial or fiber optic cables running to line extenders and taps for purposes of interconnection to individual subscribers.

(17) “FCC” shall mean the Federal Communications Commission or any legally appointed or designated agent or successor.

(18) “File” shall mean the delivery, by mail or otherwise, to the appropriate office, officer, or agent of the City of any document or other thing which this Ordinance or a franchise requires a franchisee to file with the City. The date of receipt by the City shall be considered the file date. Unless specified to the contrary, the filing shall be with the City Clerk.

(19) “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.

(20) “Franchisor”, “Grantor” or “City” means the City of Newport, Washington or any delegate acting within the scope of its jurisdiction.

(21) “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 or 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, as amended.

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

(22) “Franchisee” or “Grantee” shall mean an entity authorized to construct and/or operate a cable communications system within the City pursuant to this Ordinance, including any lawful successor, transferee or assignee of an original franchisee.

(23) “Gross Revenues” shall mean all operating revenue and monies collected or accruing 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.

(24) “Installation” shall mean the connection of the system at the subscriber’s premises.

(25) “Institutional services” shall mean one- and two-way non-entertainment transmission services for businesses, public agencies and community institutions. Such services include but are not limited to, video transmission and voice and data communications.

(26) “Leased Access” “leased channel” or “leased access channel” shall mean the use of a fee-for-service basis of 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 Communication Policy Act of 1984 (47 USC 521 et Seq.) and as amended.

(27) “Maintain” or “maintenance” shall mean the repair, restoration, replacement, renovation and testing of the cable communications system or components thereof so as to ensure that it operates in a safe and reliable manner and as required by a franchise FCC standards and requirements and this Ordinance.

(28) “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.

(29) “Premium service” shall mean pay television offered on a per channel or per program basis.

(30) “Service tier” shall mean a specific set of cable supervisor services which are made available as, and only as, a group for purchase by subscribers at a separate rate for the group.

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

(32) “Street” or “public way” 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.

(33) “User” shall mean a party utilizing a cable communications system’s facilities for purposes of production or transmission of material or information to subscribers.

Article 2

Section 1. Requirement of a Franchise.

It shall be unlawful to construct, install, maintain or operate a cable communications system or part of a cable communications system within the City without a valid franchise obtained pursuant to the provisions of this ordinance.

Section 2. General Franchise Characteristics.

Any franchise issued pursuant to the provisions of this Ordinance shall be deemed to:

(a) Authorize use of the public ways for installing cables, wires, lines, and other facilities in order to operate a cable communications system, but shall neither expressly nor impliedly be deemed to authorize a franchisee to provide service to or install cables, wires, lines, or any other equipment or facilities upon, private property without the owners consent, or to utilize publicly or privately owned utility poles or conduits without a separate agreement with the owners thereof; provided, no grant of use by the City shall be interpreted inconsistent with the Revised Code of Washington Title 35A or extended permission or use outside a purpose, dedication, or reservation granted to or held by the City; provided further, nothing herein shall prohibit a franchisee from exercising its rights under the Revised Code of Washington.

(b) Be nonexclusive, and shall neither expressly nor impliedly be deemed to preclude the issuance of subsequent franchises to operate one or move other cable communications systems within the City or the ownership or operation of a cable communications system by the City; and

(c) Convey no property right to a franchisee or right to renewal, except as otherwise provided by applicable law.

Section 3. Franchise as a Contract.

A franchise issued pursuant to the provisions of this ordinance shall be deemed to constitute a contract between a franchisee and the City. A franchisee shall be deemed to have contractually committed itself to comply with the terms, conditions and provisions of a franchise, and with all written rules, orders and regulations applicable to a franchise which are issued, promulgated, or made pursuant to the provisions of this ordinance. All requirements in this Ordinance not directly mentioned in a franchise shall be deemed a pact of the franchise and binding on the franchisee. Notwithstanding its contract status, the City reserves all regulatory powers now or hereafter granted or authorized by state or federal law.

Section 4. Subject Authority.

A franchisee shall, at all times during the life of a franchise, be subject to all lawful exercise of the police power by the City and to such lawful regulations as the City shall hereafter enact. The construction, operation and maintenance of the system shall also be in full compliance with all other applicable rules and regulations now in effect or hereafter adopted by the United States, the State of Washington, the City or any agency of said governments.

Section 5. No Waiver of Terms.

A franchisee shall not be excused from complying with any of the terms and conditions of this Ordinance by a failure of the City upon any one or more occasions to insist upon or to seek compliance with any such terms or conditions.

Section 6. Police Powers and Review Standard.

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

(b) This ordinance and any franchise granted under it 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 ordinance or any franchise granted under it 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.

Article 3

Section 1. Filing of Applications.

Applications for a cable television franchise will be considered pursuant to the following procedures:

(a) An application must be filed in writing with the City Clerk.

(b) The City may request any additional information from an applicant at any time.

(c) All application to be acceptable for filing must be accompanied by a nonrefundable filing fee of not less than $2000.00 or such greater amount as may from time to time be set by the City Council.

(d) The City may advertise a request for proposals.

Section 2. Content of Applications.

To be acceptable for filing an application must conform to any applicable Request for Proposals and all the information specified therein. Where an application is not filed pursuant to an RFP, it shall contain, at minimum, the following information:

(a) Identification of the ownership of the applicant, if not a natural person, including names and addresses of all persons with one (1) percent or more ownership interest and the ultimate controlling natural person and identification of all offices and directors and any other primary business affiliation of each.

(b) An indication of whether the applicant, or any entity controlling the applicant, or any affiliate of said controlling entity including any officer of a corporation or major stockholder thereof, has voluntarily filed for relief under any provision of the bankruptcy laws of the United States, had an involuntary petition against it pursuant to the bankruptcy code, been the subject of any state law insolvency proceeding such as a transfer for the benefit of creditors, had a cable franchise revoked, or has been found guilty by any court or administrative agency in the United States of (1) a violation of a security or antitrust law; or (2) a felony or any other crime involving moral turpitude. If so, the application shall identify any such person or entity and fully explain the circumstances.

(c) A demonstration of the applicant’s technical, legal, and financial ability to construct and operate the proposed cable facility.

(d) A description of any physical facility proposed, how any construction will be implemented, services to be provided, proposed rates for each service tier and charges for installation, converters and other services, financial projections for each year of the franchise term, and a list of all other cable communication systems owned by the applicant.

(e) An affidavit of the applicant or duly authorized officer thereof, certifying in a form acceptable to the City, the truth and accuracy of the information contained in the application and acknowledging the enforceability of application commitments.

(f) In the case of an application by an existing franchisee for a renewed franchise, a demonstration that said franchisee has substantially compiled with the material terms of the existing franchise and with applicable law.

(g) Any other information that the city or its agents, may request of the applicant.

Section 3. Applicant Representative.

Any person who files an application with the City for a cable television franchise shall at all times disclose to the City in writing, the names, addresses, and occupations of all persons who are authorized to represent or act on behalf of the applicant in those matters pertaining to the application.

Article 4

Section 1. Contract and Acceptance.

(a) The franchise ordinance will constitute a contract, freely entered into, between the City and the franchisee. A franchise and its terms and conditions shall be accepted by a franchisee by written instrument, in a form acceptable to the City Clerk, and filed with the City within thirty (30) days after the granting of the franchise by the City.

(b) A franchise granted pursuant to this Ordinance shall not take effect until the applicant pays a filing fee to the City. The filing fee shall be as specified in a franchise agreement, but it shall not exceed the City’s costs in the franchising process, including any costs associated with the publication of this ordinance and a franchise ordinance, the cost of services provided by the City staff, and the costs of outside consultants, less the application filing fees received. The City shall provide to a franchisee a statement summarizing such costs prior to the execution of the franchise.

Section 2. Publication Cost.

A franchisee shall be responsible for all costs of publication of the franchise. Such costs shall include, but are not limited to the cost of publication in any newspaper including but not limited to any notice of public hearing which shall be in addition to the filing fee.

Section 3. Insurance, Bonds, Indemnity.

Any franchise issued under this ordinance shall require the franchisee to obtain and pay all premiums for and deliver to the City, written evidence of payment of premiums for and a certificate of insurance for the following:

(a) Comprehensive commercial or general liability insurance.

(b) Comprehensive automobile liability insurance policy or policies.

(c) An irrevocable letter of credit or acceptable alternative for 110% of the costs of any construction undertaken by the franchisee.

(d) And an agreement indemnifying and holding harmless City from any loss or liability for bodily injury or property damage arising out of or in connection with franchisee’s enjoyment of franchise privileges.

(e) All insurance policies of Grantee shall name City as an additional insured, in an amount no less than one million per occurrence with a one million aggregate, but the amount shall never be less than the City’s insurance coverage.

Section 4. Forfeiture and Termination.

(a) In addition to all other rights and powers retained by the City under this Ordinance and any franchise issued pursuant thereto, the Council reserves the right to forfeit and terminate a franchise and all rights and privileges of a franchisee in the event of a violation or breach of these terms and conditions. A violation or breach by a franchisee shall include, but shall not be limited to, the following:

(1) An uncured violation of any provision of this ordinance or a franchise issued thereunder, or any rule, order or regulation of the City made pursuant to its power to protect the public health, safety and welfare;

(2) An attempt to evade any provision of a franchise or practice of any fraud or deceit upon the cable communications system customers and subscriber or upon the City;

(3) Failure to begin or complete any system construction or system extension as set forth in the franchise;

(4) Failure to provide the services promised in the application or specified in a franchise, or a reasonable substitute therefor;

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

(6) Failure to provide insurance, construction bond, irrevocable letter of credit or indemnity as required by this ordinance or by the franchise;

(7) A pattern of inadequate service and failure to respond to subscriber complaints;

(8) Misrepresentation of material facts in the application for, or during negotiations relating to, a franchise.

(b) None of the foregoing shall constitute a substantial violation or breach if a violation or breach occurs which is without fault on the Grantee or occurs as a result of circumstances beyond the Grantee’s control; provided Grantee shall not be excused by economic hardship nor by nonfeasance, or malfeasance of its directors, officers, agents or employees, provided further, 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 nonnegligent act or unintended or nonnegligent omission of its employees (assuming proper training, or agents) (assuming reasonable diligence in their selection). Grantee shall bear the burden of proof in establishing the existence of such conditions were beyond its control.

(c) Should the council determine, following the public hearing at which grantee may present evidence, argument and question witnesses in accord with the procedures provided herein, that the violation or breach by the grantee was the fault of the grantee and within the grantees 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 reasonably state any violation of this Section in writing in time to give the City a reasonable opportunity to correct the said violation of due process.

(d) 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, promptly remove its facilities and equipment and restore all property and premises in addition to all provisions of the franchise and this ordinance. In the event that the grantee does not remove its facilities and equipment as requested by the City, the City may do so, the entire removal cost shall 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.

Section 5. Foreclosure.

Upon the foreclosure or other judicial sale of all or a substantial part of the cable communication system facilities, or upon the termination of any lease covering all or a substantial part of the cable communication 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 termination events shall be treated as a notification that a transfer of rights under this ordinance and the provision of this Ordinance governing the consent of the City to such transfer shall apply.

Section 6. 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 make an arrangement with creditors; (b) 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 (c) 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 of 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 the rights of the City under the provisions of this Ordinance governing the consent of the City including but not limited to the section on transfer of rights.

Section 7. Purchase of Cable System by City.

The City reserves the right to negotiate and purchase any cable system should it determine that such a purchase is in the best interest of the City. This section does not place upon any franchisee any obligation to make an offer to the City before selling its cable system to any other party.

Section 8. Removal of Cable Communications System.

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 street 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 restoring all property and premises to the original or better condition. 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, in its discretion. 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, in its discretion.

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 or better 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 9. Transfer of Ownership or Control and 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. In addition, the City reserves all authority permitted by federal or state laws to review assignees’ qualifications and suitability to provide cable service. City shall be deemed to have denied a proposed transferor assignment in the event its consent is not communicated in writing to Grantee within one hundred twenty (120) days following receipt of written notice of the proposed transfer 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 for the franchise and this ordinance.

(3) In no event shall a transfer, of ownership or control be approved without successor in interest becoming a signator 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 the 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 the Franchise and acceleration of all the obligations and rights thereunder, including but not limited to those described in this ordinance.

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

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

(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 and this ordinance the Franchise shall be binding on any successors or assignees of Grantee.

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

Section 10. 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 monthly no later than thirty (30) days following the last day of the month concerned 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 office 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.

If City requires it, 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 11. Interest on Delinquent Franchise Fees.

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

Section 12. 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 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 unless an error is discovered, in which case the Grantee shall pay all expenses. 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 in the City of Newport, at reasonable times and upon reasonable advance notice for the purpose of permitting exercise of the authorities conferred by this Section.

Section 13. Costs.

(1) 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.

(2) 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.

(3) 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.

(4) 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.

(5) 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.

(6) 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.

(7) 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.

(8) 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 to be set by the Council if Council so sets. Alternately, the City may accept an approved letter of credit or cash deposit with the City Treasurer.

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.

Article 5

Section 1. Subscriber Fees and Rates.

Those fees and charges subject to regulation by the City pursuant to state and federal law shall not be increased without prior approval of the city. The City reserves the right to regulate rates for any service pursuant to changes in federal or state law which would authorize such regulation. The City reserves the right to establish procedures for any lawful regulation of rates.

Section 2. Reports.

The Franchisee shall makes reports to the City at such times and provide such information as is requested.

Article 6

Section 1. System Technical Standards.

The cable communication system to be installed by a franchisee shall comply in all respects with the technical performance requirements set forth by the Federal Communications Commission. The City reserves the right to amend, in its sole discretion, this ordinance or a franchise to incorporate technical performance standards in the event it has the legal authority to promulgate such standards.

Section 2. Access and Local Programming.

Grantee shall provide reasonable access for public, education and governmental use pursuant to the provisions of the Cable Communication Policy Act of 1984 and subsequent cable acts upon request. City reserves the right to reasonable public educational and governmental access, but this provision does not create an obligation to exercise that right. 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 and subsequent cable acts and regulations. Any cost of capital equipment incurred in complying with the City’s determination shall be paid by the Grantee.

Use of facilities for public, education and governmental access upon the Cable Television System shall be made available, without central 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 access programming cable cast 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 cable cast 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 cable cast upon other cable television systems within the community.

The grantee shall, at its own expense and liability, install one cable connection at each public school located within the City, at the public library, and at the request of the Mayor in City buildings designated by the Mayor. The grantee may at its option, provide similar free service to other private, parochial and religious schools.

Section 3. Standby Power.

A franchisee shall maintain equipment capable of providing stand by power for the headends for a minimum of eight (8) hours, and transportation and trunk amplifiers for a minimum of four (4) hours. The standby power equipment shall engage automatically in the event of a power failure. A franchisee shall comply with all safety regulations to prevent stand by generators from “back feeding” or otherwise powering the “dead” utility line.

Section 4. Parental Control.

(1) Grantee shall provide subscriber controlled “lock-out” devices to subscriber 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 the time to the cable industry.

Section 5. Emergency Audio Alert System.

The cable system shall be engineered, constructed and maintained to provide for an audio alert system. This audio alert system shall allow authorized officials of the City or its designated representatives to override automatically the “audio” signal on all channels and to transmit and report emergency information. A franchisee shall in the case of any emergency or disaster, make its entire system available without charge to the City or any other governmental or civil defense agency that the City shall designate for the duration of such emergency or disaster.

Article 7

Section 1. Construction Standards.

(a) Any cable system constructed within the City shall meet or exceed all federal, state or local technical standards consistent with this ordinance, a franchise agreement, and a franchisee’s application.

(b) In addition the City may require additional reasonable proof of performance tests not more often than annually and within ninety (90) days of the completion of the construction of a new system or the upgrading or reconstruction of an existing system. In the event that the City requires proof of performance testing under this section, the City shall provide the franchisee with a detailed list of electrical tests and testing methodology which the City deems necessary to evaluate the performance of the new, upgraded or reconstructed system. The City may observe the testing performed under this section, and may provide a list of locations and/or areas where the tests specified are to be performed. The city shall be entitled to recover from the franchisee fifty percent (50%) of all of its costs associated with defining tests and procedures, observation of said tests, and evaluation of tests findings.

Section 2. Construction and Installation Work.

(a) Before commencing any construction in, above, over, across, under, through or in any way connected with the streets, public ways or public places of the City, a franchisee shall first submit to the City its plan and design maps. A franchisee may commence construction in accordance with such maps upon written approval by the Mayor or his designee and upon issuance of all permits and licenses necessary to do the work; provided, however, that the City approval shall not be unreasonably withheld. A franchisee shall give the City notice within a reasonable time prior to the commencement of the proposed construction, but in no event shall said notice be given less than seven (7) days before such commencement unless waived by the City or unless shorter notice is reasonably necessary. Such construction shall be done under the supervision of the mayor.

(b) A franchisee or any other person acting on its behalf shall not obstruct, open, or otherwise disturb the surface of any street, sidewalk, driveway, public way or other public place for any purpose whatsoever without obtaining the approval to do so after proceeding in the manner prescribed above; provided for minor construction of an emergency nature, a franchisee may proceed upon oral approval from the Mayor or designee.

(c) 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. A franchisee shall, at its own cost and expense, restore and replace any property disturbed, damaged or any way injured by or on account of its activities to as good or better condition as said property was in immediately prior to the disturbance, damage, or injury.

If a franchisee 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 at the franchisee’s expense. Nothing in this subsection shall be interpreted to preclude a franchisee from passing onto a customer the actual construction costs associated with extending cable plant more than one hundred and fifty (150) feet.

(d) A franchisee shall maintain all wires, conduits, cables and other real and personal property and facilities in good condition and order and repair. All cables facilities shall be maintained so as to further, to the extent reasonably possible, the objective of maintaining the aesthetic character of the City. The City in its sole discretion, may determine whether a franchisee has complied with this requirement. If a franchisee fails to comply with this requirement the City may cause such work to be done at the franchisee’s expense.

(e) All construction, installation and maintenance must comply with the federal and state codes and regulations and those adopted by the city.

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

(g) 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.

(h) 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.

(i) The City shall have the right, during the term of any 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 does not unreasonably interfere with the cable system operations of the Grantee.

(j) Locations 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, or designee which approval will not be unreasonably withheld and shall be granted or denied in a timely fashion.

(k) 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 3. Location of Structures, Lines and Equipment.

(a) A franchisee shall utilize existing poles, conduit systems and other facilities whenever possible, and shall not construct or install any new, different or additional poles, conduit systems or other facilities whether on public property or on privately owned property until approval of the property owner or appropriate governmental authority is obtained. However, the location of any pole or wire-holding structure by a franchisee shall not constitute a vested interest, and such poles, structure, or facilities shall be removed, replaced or modified by the franchisee at its own expense whenever the city authority reasonably determines that the public interest so necessitates.

(b) All transmission and distribution structures, lines, and equipment installed by a franchisee within the City shall be located so as to cause minimum interference with the scope or use of streets, alleys and other public ways and places and to cause minimum interference with the rights or reasonable convenience of property owners who adjoin any of the streets, alleys or other public ways or places and where they will not interfere with any gas, electric telephone, water or other preexisting utility facility.

(c) Wherever deemed appropriate by the mayor or his designer, 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 cable, 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 permission of the owner of the 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.

(d) All cables and wires or other works shall be installed parallel with existing telephone and electric utility wires wherever possible. Multiple configurations shall be parallel arrangements and bundled in accordance with engineering and safety considerations.

(e) No franchise shall be deemed to expressly or impliedly authorize the Grantee to construct or install poles or wire holding structures within the streets and ways of the City for the purpose of placing cables, wires, lines or otherwise without the written consent of the City within which street is situated. Such permission may be conditioned on additional requirements related to the location or other circumstances of the installation.

(f) A franchisee shall, at its sole cost and expense, 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.

(g) The City shall have the right, during the term of a franchise to install and maintain free of charge upon the poles and conduit systems of the franchisee any wire and pole fixtures and appurtenances. The City use of a franchisee’s poles and conduit system shall not unreasonably interfere with the use or enjoyment of such poles and conduits by the franchisee.

(h) The franchisee shall provide, at no charge, to any available “one number locator service,” as defined by Chapter 19.122 of the Revised Code of Washington, RCW 19.122.020(13), a list of its underground facilities and equipment. A franchisee shall, before commencing excavation, provide notice of the scheduled commencement of excavation through the one number locator service if such a service is available.

(i) On request to a franchisee by any person who is authorized to perform work on any public right of way which has been used by a franchisee for erection of a cable communications system, a franchisee shall provide information regarding the type, location, height, and other pertinent information of poles, conduits, and other structures which the franchisee has placed on said right of way. The reasonable cost of fulfilling such request shall be born by the person making such request, except in the case of the city or its agents.

Section 4. Replacement of Pavement.

In case of disturbance of any street, 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. Failure to replace paving in a reasonable time shall give the City the right to replace it at the Grantee’s expense.

Section 5. 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 the building. 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 6. Trimming Trees.

The grantee shall have the authority to trim trees upon and overhanging streets, alleys, sidewalks, and public ways and 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 7. Repair of Damages.

A franchisee, its successors and assigns shall promptly repair any damage of every type and nature to City property or City improvements caused by the failure or workmanship of the franchisee’s work or equipment during the life of a franchise.

Article 8

Section 1. 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 or fined 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 or persons or property within the City or other areas where the Grantee may have equipment located.

Section 2. Discrimination.

A franchisee shall not deny service, access or otherwise discriminate against any person, including subscribers and users on the basis or race, color, religion, national origin, age, sex, physical or mental disability, or marital status. A franchisee shall comply at all times with all other applicable federal, state, and local laws and regulations.

Section 3. Tampering or Unauthorized Connections.

It shall be a misdemeanor punishable by ninety (90) days in jail and/or a $1,000.00 fine for any person to make any connection, whether physically, electrically, acoustically, inductively, or otherwise, with any part of a franchised cable communication system within the City for the purpose of enabling anyone to receive any television signal or other information transmitted over the cable communications system, without the consent of the franchisee; and for any person, without the consent of a franchisee to willfully tamper with, remove, or injure any cables, wires, or other cable communications system equipment except, however, a subscriber may disconnect a television receiver from the cable system at any time. This section is an alternative to any State misdemeanor or gross misdemeanor adopted by the City by reference. The City prosecutor may charge under either one or the other ordinance.

Section 4. Consumer Protection.

(a) The City reserves the authority to take any reasonable action, including amendments to this ordinance to protect consumers of cable communications services.

(b) The City reserves the rights granted under the Cable Television Consumer Protection and Competition Act of 1992 and the regulations from the Federal Communications Commission including but not limited to rates for basic cable services including but not limited to (1) all local and distant television broadcast signals carried by the cable operator, (2) all signals carried under retransmission consent agreements and must carry requirements; and (3) all public, educational and governmental (PEG) programming provided by the cable operator.

(c) The City reserves the right to file complaints with the Federal Communications Commission if it believes that cable rates not under regulation by the City are unreasonable.

(d) To the extent allowed by law including but not limited to the Cable Television Consumer Protection and Competition Act of 1992, the Revised Code of Washington, City shall be immune from any claim for monetary damages relating to the City’s regulation of cable services and rates.

(e) City may require, in writing, biannual reviews which Grantee shall conduct, at Grantee’s expense, as pact 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 the franchise.

Article 9

Section 1. Standards.

(a) A franchisee’s system shall be designed and constructed so as to be capable of interconnection with any systems existing in the area contiguous to the city and in the city and with any systems anticipated for future construction.

(b) A franchisee shall cooperate with any interconnection corporation, regional interconnection authority or county or state regulatory agency which may be hereafter established for the purpose of regulating, facilitating, financing, or otherwise providing for the interconnection of cable communications system beyond the boundaries of individual political jurisdictions.

Article 10

Section 1. CATV Committee.

(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 a 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 terms 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 proposed transferee under the section on transfer of rights in this 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 and this ordinance 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 any 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. Subject to the authority of the City Council, the committee is hereby authorized and empowered to adjust, settle, or compromise any complaint, controversy or charges regarding the quality of service, equipment malfunctions or similar matters arising from the operations of the grantee under a 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.

Article 11

Section 1. Severability.

In 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 2. 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.

Passed by the City Council of the City of Newport, Washington this 4th day of May, 1993.