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Ordinance 09-030 Amending Cable Franchise Code • CITY OF SPOKANE VALLEY SPOKANE COUNTY,WASHINGTON ORDINANCE NO. 09-030 AN ORDINANCE OF THE CITY OF SPOKANE VALLEY, SPOKANE COUNTY, WASHINGTON, REPEALING EXISTING SPOKANE VALLEY MUNICIPAL CODE CHAPTER 3.65 IN ITS ENTIRETY AND ADOPTING NEW PROVISIONS RELATING TO FRANCHISING AND OPERATION OF A CABLE TELEVISION BUSINESS IN THE CITY,AND OTHER MATTERS RELATED THERETO. WHEREAS, the City of Spokane Valley currently has limited City Code provisions relating to the franchising and operation of a cable television business in the City; and WHEREAS, a comprehensive cable code would establish minimum standards for persons or entities operating or desiring to operate a cable television system in the City; and WHEREAS, a comprehensive cable code would help ensure the City's continued compliance with Federal law requirements regarding rough consistency between franchisees. NOW, THEREFORE, the City Council of the City of Spokane Valley, Spokane County, Washington, ordains as follows: Section 1. Purpose. The purpose of this Ordinance is to adopt a comprehensive Cable Code for the City of Spokane Valley. Section 2. Repealing Spokane Valley Municipal Code Chapter 3.65. Spokane Valley Municipal Code Chapter 3.65, and all of its sections as currently adopted, are hereby repealed in their entirety. Section 3. Adopting Spokane Valley Municipal Code Section 3.65.010. Spokane Valley Municipal Code Section 3.65.010 is adopted as follows: 3.65.010 Definitions For the purpose of this Chapter, the following words and terms shall have the meaning set forth below: "basic cable service" shall mean any service tier which includes the lawful retransmission of local television broadcast signals and any public, educational, and governmental access programming required by a franchise agreement to be carried on the basic tier. "Cable Act" means the Cable Communications Policy Act of 1984, as amended by the Cable Television Consumer Protection and Competition Act of 1992, and the Telecommunications Act of 1996, and any amendments thereto. "cable advisory board" shall mean a City or regional cable advisory board as established by ordinance or interlocal agreement. "cable service" or "service" shall mean (A) the one-way transmission to subscribers of (i) video programming or (ii) other programming service, and (B) subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service. Ordinance 09-030 Cable Page 1 of 28 "cable system" or"system" shall mean a facility, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide cable service which includes video programming and which is provided to multiple subscribers within a community, but such term shall not include: (I) a facility that serves only to retransmit the television signals of one (I) or more television broadcast stations; (2) a facility that serves only Subscribers without using any public right-of-way; (3) a facility of a common carrier which is subject, in whole or in part, to the provisions of 47 U.S.C. § 201 et seq., except that such facility shall be considered a cable system (other than for purposes of 47 U.S.C. § 541(c)) to the extent such facility is used in the transmission of video programming directly to subscribers, unless the extent of such use is solely to provide interactive on-demand services; (4) an open video system that complies with 47 U.S.C. § 573; or (5) any facilities of any electric utility used solely for operating its electric utility system. For the purpose of a franchise, cable system shall mean a grantee's cable facilities servicing the City. "channel" shall mean a portion of the electromagnetic frequency spectrum which is used in a cable system and which is capable of a television channel, as television channel is defined by the FCC. "City" means the City of Spokane Valley, a Washington municipal corporation. "City Manager" means the City Manager or designee. "complaint" shall mean a subscriber contact with a grantee to express a grievance or dissatisfaction concerning cable service. Complaints do not include matters not within the scope of a franchise agreement. A complaint may be verbal or in writing, but need not include initial contacts where an issue is promptly resolved to the subscriber's satisfaction. "construction" or "construct" shall mean digging, excavating, laying, extending, upgrading, removing, and replacing of a facility. "FCC" shall mean the Federal Communications Commission or any legally appointed or designated agent or successor. "facility" or "facilities" means all of the plant, equipment, fixtures, appurtenances, and other related property necessary to furnish and deliver cable television services, including but not limited to wires, cables, conductors, ducts, conduits, vaults, manholes, pedestals, amplifiers, appliances, and attachments, necessary or incidental to the distribution and use of cable television services. "franchise" shall mean the nonexclusive right and authority to construct, maintain, and operate a cable system through use of public rights-of-way in the City pursuant to a contractual agreement approved by the City Council, and executed by the City and a grantee. "franchise area" shall mean the entire geographic area within the City as it is now constituted or may in the future be constituted. Ordinance 09-030 Cable Page 2 of 28 "grantee" shall mean any person or corporation granted a franchise under this chapter. "gross revenues" means all revenue derived directly or indirectly by a grantee, or by a grantee's affiliates, from the operation of a grantee's cable system to provide cable services in the franchise area. Gross revenues include, by way of illustration and not limitation, monthly fees charged subscribers for cable services including basic service and all other tiers of cable service; pay-per-view service; cable service installation, disconnection, change-in-service and reconnection fees, leased access channel fees, late fees, payments received by a grantee from programmers for carriage of cable services on the cable system and recognized as revenue under generally accepted accounting principles ("GAAP"), revenues from rentals of cable system equipment such as converters; advertising revenues (including local, regional, and a pro rata share of national advertising carried on the cable system in the franchise area) net of commissions due to advertising agencies that arrange for the advertising buy and as recognized as revenue under GAAP; additional outlet fees, franchise fees, and revenues from home shopping channels. Gross revenues shall not include (i) bad debt, provided, however, that all or part of any such bad debt that is written off but subsequently collected shall be included in gross revenues in the period collected; (ii) any capital contribution referenced in subsections 13.8; (iii) any payments by the City to a grantee for I-Net maintenance or expansion; or (iv) any taxes on services furnished by a grantee which are imposed directly on any subscriber or user by the State, City or other governmental unit and which are collected by a grantee on behalf of said governmental unit. The franchise fees are not such a tax and are therefore included in gross revenues. "lockout device" shall mean an optional mechanical or electrical accessory to a subscriber's terminal which inhibits the viewing of a certain program, certain channel, or certain channels provided by way of the cable system. "maintenance or maintain" shall mean repair, restoration, replacement, renovation and testing of the cable system or components thereof so as to ensure that it operates in a safe and reliable manner and as required by this chapter. "non-commercial" shall mean, in the context of PEG Channels, that products and services are not sold via the PEG Channel. The term will not be interpreted to prohibit an PEG Channel operator or programmer from independently (i.e. not in the context of any televised programming) soliciting and receiving financial support to produce and transmit video programming on an PEG channel, or from acknowledging a contribution, in the manner of the corporation for public broadcasting. A PEG channel operator or programmer may cablecast informational programming regarding City events, projects and attractions of interest to residents so long as the format for such programming is consistent with the purposes for which PEG resources may be used. "normal business hours" shall mean those hours during which most similar businesses in City are open to serve customers. In all cases, "normal business hours" must include some evening hours, at least one(1) night per week and/or some weekend hours. "normal operating conditions" shall mean those service conditions which are within the control of grantee. Those conditions which are not within the control of a grantee include, but are not limited to, natural disasters, civil disturbances, power outages, telephone network outages, and severe weather conditions. Those conditions which are ordinarily within the control of a grantee include, but are not limited to, special promotions, pay-per-view events, rate increases, regular peak or seasonal demand periods, and maintenance or upgrade of the cable system. Ordinance 09-030 Cable Page 3 of 28 "PEG" shall mean any channel set aside for public use, educational use, governmental use without a channel usage charge. "Person"shall mean an individual or legal entity, such as a corporation or partnership. "premium service" shall mean pay television offered on a per channel or per program basis. "public property" shall mean any real estate or any facility owned by the City. "Public Works Director" shall mean the Spokane Valley Public Works Director or his/her designee. "right-of-way" shall mean all property, and the space above and below, in which the City has any form of ownership, title, or interest, including easements and adjacent utility strips, which is held for public roadway or dedicated for compatible utility purposes, regardless of whether or not any roadway or utility exists thereon or whether it is used, improved or maintained for public use. "service interruption" shall mean the loss of picture or sound on one(I)or more cable channels. "service tier" shall mean a specific set of cable services which are made available as, and only as, a group for purchase by subscribers at a separate rate for the group. "standard installation" shall mean those that are located up to one hundred twenty-five (125) feet from the existing distribution system. Grantee shall comply with applicable FCC regulations regarding commercial installations as may now or hereafter arise. "subscriber" shall mean any person who lawfully receives cable service via the system. "video programming" shall mean programming provided by, or generally considered comparable to programming provided by, a television broadcast station. Section 4. Adopting Spokane Valley Municipal Code Section 3.65.020. Spokane Valley Municipal Code Section 3.65.020 is adopted as follows: 3.65.020 General Provisions A. It is unlawful to engage in or commence construction, operation, or maintenance of a cable communications system without a franchise issued under this chapter, except as may be otherwise provided by state or federal law. The council may, by ordinance, award a nonexclusive franchise to construct, operate and maintain a cable communications system within all or any portion of the city to any person, whether operating under an existing franchise or not, who makes application for authority to furnish a cable communications system which complies with the terms and conditions of this chapter; provided, that this section shall not be deemed to require the grant of a franchise to any particular person or to prohibit the council from restricting the number of franchisees should it determine such a restriction would be in the public interest. Any franchise for the construction, maintenance and operation of cable television systems using the public streets, utility easements, other public rights-of-way or places shall conform generally to the provisions of this chapter, except as may be otherwise set forth in the ordinance granting such franchise. B. The provisions of this chapter may be incorporated by specific reference in any franchise agreement approved under this chapter. However, in the event of any conflict or ambiguity arising between the Ordinance 09-030 Cable Page 4 of 28 provisions of any franchise agreement and those of this chapter, the provisions of the franchise agreement shall prevail. Section 5. Adopting Spokane Valley Municipal Code Section 3.65.030. Spokane Valley Municipal Code Section 3.65.030 is adopted as follows: 3.65.030 Non-Exclusivity. The grant of authority for use of the City's rights-of-way under this chapter is not exclusive and does not establish priority for use over other franchise holders, permit holders and the City's own use of public property. Nothing in any franchise agreement made under this chapter shall affect the right of the City to grant to any other person a similar franchise or right to occupy and use the rights-of-way or any part thereof.. Section 6. Adopting Spokane Valley Municipal Code Section 3.65.040. Spokane Valley Municipal Code Section 3.65.040 is adopted as follows: 3.65.040 Franchise Issuance Prior to the granting of a franchise, the city council shall conduct a public hearing to determine the following: A. Initial franchise; 1. That the public will be benefited by the granting of a franchise to the applicant; 2.That the applicant has the requisite financial and technical resources, and capabilities to build,operate and maintain a cable television system in the area; 3. That the applicant has no conflicting interests, either financial or commercial, which will be contrary to the interests of the City; 4. That the applicant will comply with all terms and conditions placed upon a franchisee by this article; 5. That the applicant is capable of complying with all relevant federal, state, and local regulations pertaining to the construction, operation and maintenance of the cable facilities and systems incorporated in its application for a franchise; 6. That the public rights-of-way have the capacity to accommodate the cable communications system; 7. That the applicant is capable of meeting buildout threshold requirements as specified in SVMC 3.65.090; 8. That the proposed franchise is consistent with the city's present and future use of the public rights-of-way to be used by the cable communications system; 9. That the benefit to the public from the cable communications system outweighs the potential disruption to existing users of the public rights-of-way to be used by the cable communications system and the resultant inconvenience which may occur to the public; and 10. That all other conditions resulting from the grant of the franchise have been considered by the City and that the City determines that the grant is still in the public's best interest. B. Renewal franchise. I. That the applicant has complied with the terms and conditions of the existing franchise; 2. That the quality of the applicant's previous service has been reasonable in light of community needs; Ordinance 09-030 Cable Page 5 of 28 3. That the applicant's proposal is reasonable to meet the future cable related community needs and interests taking into account the cost of meeting such needs and interests; 4. That all other conditions resulting from the grant of the franchise have been considered by the City and that the city determines that the grant is still in the public's best interest. Section 7. Adopting Spokane Valley Municipal Code Section 3.65.050. Spokane Valley Municipal Code Section 3.65.050 is adopted as follows: 3.65.050 Fee. A. In all franchises made under this chapter, the grantee shall pay to the City five percent (5%) of its annual gross revenues in the City, pursuant to 47 U.S.C. § 542, throughout the full term of the franchise agreement. Payment shall be due no later than 30 days from the end of each calendar quarter, after which interest shall accrue at the rate of I% per month. In the event all or a portion of the franchise fee has not been paid within 60 days of the end of each calendar quarter, a penalty in the amount of 10% of the delinquent amount shall be added to the outstanding amount. All franchise fees, interest and penalties shall constitute a debt of the City and may be collected by any means allowed under the law. B. No acceptance by the City of any payment from grantee 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 the City may have for further or additional sums payable under the provisions of the franchise Agreement. All amounts paid shall be subject to auditing and recomputation by the City. C. Grantee acknowledges and agrees that the franchise fees payable by grantee to City pursuant to a franchise agreement, as well as capital support provided by grantee for PEG equipment and facilities, are authorized under the Federal Cable Act and shall not be deemed to be in the nature of a federal, state or local tax. D. Franchise fees subject to audit. Upon reasonable prior written notice, during normal business hours, at the grantee's principal business office, the City shall have the right to inspect the grantee's financial records used to calculate the City's franchise fees. The City shall provide to the grantee a final report setting forth the City's findings in detail, including any and all substantiating documentation. In the event of an alleged underpayment, the grantee shall have thirty (30) days from the receipt of the report to provide the City with a written response agreeing to or refuting the results of the audit, including any substantiating documentation. Grantee shall review and the City shall be entitled to review grantee's historical financial records used to calculate the City's franchise fees consistent with the currently applicable state statute of limitations. E. Failure to comply with this section, except alleged underpayments under subsection D, above, shall constitute a material breach of the franchise agreement pursuant to SVMC 3.65.380. Section 8. Adopting Spokane Valley Municipal Code Section 3.65.060. Spokane Valley Municipal Code Section 3.65.060 is adopted as follows: 3.65.060 Competitive Equity A. The City reserves the right to grant more than one franchise. The City shall amend a franchise, as requested by the grantee, if it grants additional cable service franchises or similar multiple channels of video programming authorizations that contain material terms or conditions which are substantially more favorable or less burdensome to the competitive entity than the material terms and conditions contained in a previously granted franchise. A word-for-word identical franchise or authorization for a competitive Ordinance 09-030 Cable Page 6 of 28 entity is not required so long as the regulatory and financial burdens on each entity are generally equivalent taking into account any difference in the number of subscribers served, the number of PEG channels and aggregate support provided, the level of fees and taxes imposed, the term of the franchise, and all other circumstances affecting the relative burdens. B. Notwithstanding any provision to the contrary, at any time prior to the commencement of a grantee's thirty-six month renewal window provided by Section 626 of the Cable Act, that a non-wireless facilities based entity, legally authorized by state or federal law, makes available for purchase by subscribers or customers, cable services or multiple channels of video programming within the franchise area without a franchise or other similar lawful authorization granted by the City, then a grantee shall have a right to request franchise amendments that relieve the grantee of regulatory burdens that create a competitive disadvantage to the franchisee. In requesting amendments, the grantee shall file a petition seeking to amend the franchise. Such petition shall: (1) indicate the presence of such wireline competitor; and (2) identify all material terms or conditions which are substantially more favorable or less burdensome to the competitive entity. The City shall act on the petition within 120 days. C. In the event an application for a new cable television franchise is filed with the City proposing to serve the franchise area, in whole or in part, the City shall notify the grantee. Section 9. Adopting Spokane Valley Municipal Code Section 3.65.070. Spokane Valley Municipal Code Section 3.65.070 is adopted as follows: 3.65.070 Taxes. As is consistent with applicable law, nothing contained in any franchise agreement granted under this chapter shall be construed to except the grantee from any applicable tax, liability or assessment authorized by law. Section 10. Adopting Spokane Valley Municipal Code Section 3.65.080. Spokane Valley Municipal Code Section 3.65.080 is adopted as follows: 3.65.080 Cable System Specifications. A. Prior to entering into a franchise agreement, and during the term of the franchise agreement, the grantee's cable system shall meet or exceed the following specifications: hybrid fiber coaxial, fiber-to-the- node system architecture, with fiber-optic cable deployed from the headend to the node and coaxial cable deployed from the node to subscribers' homes. Active and passive devices capable of passing a minimum of 750 MHz and capable of delivering high-quality analog or digital video signals meeting, or exceeding FCC technical quality standards. Cable system nodes designed for future segmentation as necessary to maximize shared bandwidth. B. A grantee shall comply with all applicable technical standards of the FCC as published in subpart K of 47 C.F.R. § 76. To the extent those standards are altered, modified, or amended during the term of the franchise agreement, the grantee shall comply with such altered, modified or amended standards within a reasonable period after such standards become effective. The City shall have, upon written request, the right to review tests and records required to be performed pursuant to the FCC's rules. C. In accordance with applicable law, the City shall have the right to regulate and inspect the construction, operation and maintenance of the cable system in the public rights-of-way. Upon reasonable prior written notice and in the presence of the grantee's employee, the City may review the cable system's technical performance as necessary to monitor the grantee's compliance with the Ordinance 09-030 Cable Page 7 of 28 provisions of the franchise agreement. All equipment testing under a technical performance review shall be conducted by the grantee. Section 11. Adopting Spokane Valley Municipal Code Section 3.65.090. Spokane Valley Municipal Code Section 3.65.090 is adopted as follows: 3.65.090 Cable Service. A. Subject to the density considerations listed below, except in areas reserved for public travel or utility access not yet opened and accepted by the City as public right-of-way that the grantee is specifically and lawfully prohibited from deploying its cable system by the owner/developer, the grantee shall provide cable service as follows: 1. A new entrant grantee shall commence construction within 120 days of the granting of a franchise. The city council may grant an extension thereof for good cause shown, provided, however, that formal application for such an extension must be filed by the grantee within the 120 day period. 2. A new entrant grantee shall begin providing service to subscribers within 240 days of the granting of a franchise. 3. A new entrant grantee shall have completed buildout within all areas of the city within 36 months of the granting of a franchise. The city council may grant an extension thereof for good cause shown, provided, however, that formal application for such an extension must be filed by the grantee within the 36 month period, and the maximum extension allowable is up to six additional months. 4. Areas subsequently annexed shall be provided with cable service within twelve months of the time of annexation. 5. Failure to comply with these buildout requirements shall result in revocation of the franchise by the city council. B. Access to cable service shall not be denied to any group of potential cable subscribers because of the income of the potential cable subscribers or the area in which such group resides. All residents requesting cable service and living within a standard installation of one hundred twenty-five feet shall have the cable installed at no more than the prevailing published installation rate. In the event a request is made for cable service and the residence is more than a standard installation of one hundred twenty-five feet, such installation shall be completed on a time and material cost basis for that portion of the service line extending beyond one hundred twenty-five feet. C. Upon request through the designated City representative, the grantee shall provide, without charge and throughout the term of the franchise agreement, one outlet, one converter, if necessary, and basic cable service and expanded basic cable service (i.e. together the equivalent of sixty channels of programming) or the future analog or digital equivalent of such service tiers offered by grantee to the City's administrative buildings as designated by the City, fire station(s), police station(s), libraries and state accredited K-I2 public and private school(s). 1. If the drop line to such building exceeds a standard installation drop one hundred twenty-five feet, the grantee will accommodate the drop up to three hundred feet if the City or other agency provides the necessary attachment point for aerial service or conduit pathway for underground Ordinance 09-030 Cable Page 8 of 28 service. If the necessary pathway is not provided the City or other agency agrees to pay the incremental cost of such drop in excess of one hundred twenty-five feet or the necessary distribution line extension of the cable system, including the cost of such excess labor and materials. The recipient of the service will secure any necessary right of entry. 2. The cable service will not beused for commercial purposes, and the outlets will not be located in areas open to the public excepting one outlet to be located in a public lobby of any government building that will be used by the public for viewing public, governmental, or educational access channels. The City will take reasonable precautions to prevent any use of the grantee's cable system in any manner that results in inappropriate use, loss or damage to the cable system. grantee hereby reserves all rights it may have under the law to seek payment from City for liability or claims arising out of the provision and use of the cable service required by this section. 3. If additional outlets of cable service are provided to such buildings, the building occupant will pay the usual installation fees, if any. D. Grantee shall extend the system to any portion of the City after the date of the franchise agreement, when dwellings can be served by extension of the system past dwellings equivalent to a density of seven dwellings per one-quarter mile of cable contiguous to the system. Grantee may petition the City for a waiver of this requirement, such waiver to be granted for good cause shown. Such extension shall be at grantee's cost. In areas not meeting the requirements of seven or more dwellings per one-quarter mile, for mandatory extension of service, grantee shall provide, upon the request of any potential subscribers desiring service, an estimate of the costs required to extend service to such subscribers. Grantee shall then extend service upon request and upon payment of an amount equal to the reasonable value of actual time and materials to be incurred by grantee for such extension. Any customer drop not exceeding a standard installation drop of one hundred twenty-five feet will be free of charge to the customer other than normal installation fees. For drops in excess of one hundred twenty-five feet, grantee may assess an amount equal to time and materials. Section 12. Adopting Spokane Valley Municipal Code Section 3.65.100. Spokane Valley Municipal Code Section 3.65.100 is adopted as follows: 3.65.100 Programming. A. All final programming decisions remain the discretion of grantee in accordance with a franchise agreement made under this chapter, provided that grantee notifies City and subscribers in writing thirty days prior to any channel additions, deletions, or realignments, and further subject to grantee's signal carriage obligations hereunder and pursuant to 47 U.S.C. § 531-536, and further subject to City's rights pursuant to 47 U.S.C. § 545. B. A grantee shall provide at least the following initial broad categories of programming to the extent such categories are reasonably available: 1. Educational programming; 2. News, weather and information; 3. Sports; 4. General entertainment including movies; 5. Children, family oriented; 6. Arts, culture and performing arts; 7. Foreign language programming; and 8. Science/documentary. Ordinance 09-030 Cable Page 9 of 28 C. A grantee shall offer to all subscribers a diversity of video programming services and it will not eliminate any broad categories of programming without first obtaining the written approval of the City, such approval not to be unreasonably withheld. D. A grantee shall notify in writing the City of its intent to eliminate any broad category of programming noted in subsection B, above. The City, or its designee, shall make a determination on such request not later than sixty days after receipt of the request by grantee. In the event that the City makes an adverse determination, such determination shall be in writing, along with a concise statement of the reasons therefore. In the event the City fails to make a determination within sixty days after receipt of a request from grantee, grantee shall have the right to make the deletion contained in its written request. Section 13. Adopting Spokane Valley Municipal Code Section 3.65.110. Spokane Valley Municipal Code Section 3.65.1 10 is adopted as follows: 3.65.110 Rates. A. Throughout the term of any franchise agreement made under this chapter and upon request by the City, the grantee shall provide an updated rate card to the City that details applicable rates and charges for cable services provided under the franchise agreement. This does not require the grantee to file rates and charges under temporary reductions or waivers of rates and charges in conjunction with promotional campaigns. B. A grantee shall provide a minimum of thirty days' written notice to the City and each Subscriber before changing any rates and charges. • C. City may regulate rates for the provision of cable service provided over the system in accordance with applicable federal law, in particular 47 C.F.R. Part 76 subpart N. In the event the City chooses to regulate rates it shall, in accordance with 47 C.F.R. § 76.910, obtain certification from the FCC, if applicable. The City shall follow all applicable FCC rate regulations and shall ensure that appropriate personnel are in place to administer such regulations. City reserves the right to regulate rates for any future cable services to the maximum extent allowed by law. Section 14. Adopting Spokane Valley Municipal Code Section 3.65.120. Spokane Valley Municipal Code Section 3.65.120 is adopted as follows: 3.65.120 PEG and Local Programming. A. Any grantee shall make available one full-time non-commercial multi jurisdictional PEG channel (the "government channel") for future activation and joint use by the City, the City of Spokane and/or Spokane County for governmental access programming. The City shall provide grantee with a minimum of forty-five days prior written notice of an initial meeting to develop an implementation plan for activation of the government channel. B. Commencing on the effective date of a franchise granted under this chapter, and throughout the term of the franchise, grantee shall deliver those PEG channels with whom the City has contracted for service, up to a maximum of six channels. Grantee shall continue to deliver those PEG channels so long as the City's contracts are valid and the PEG channels have content to distribute. The City shall provide copies of all PEG channel contracts, and contract renewals,to grantee within thirty days of execution. C. The grantee will endeavor to provide the subscribers in the franchise area with the other regional PEG channels so long as the PEG programmers offer them for use on the cable system. Ordinance 09-030 Cable Page 10 of 28 D. All PEG channels provided to subscribers under a franchise made pursuant to this chapter shall be included by grantee subject to applicable law. For all PEG channels not under grantee's control, grantee shall insure that there is no material degradation in the signal that is received by grantee for distribution by grantee over the cable system. E. The City shall be responsible for all programming requirements for the government channel, including but not limited to scheduling, playback, training, staffing, copyright clearances, and equipment, maintenance and repair, unless responsibility for administering the government channel has been designated to a third party, which shall then become responsible for all programming requirements under this section. F. The grantee shall provide the PEG channels as part of the cable service provided to any subscriber, at no additional charge. If channels are selected through a menu system, the PEG channels shall be displayed as prominently as commercial programming choices offered by grantee. A grantee will use reasonable efforts to minimize the movement of City-designated PEG channel assignments and maintain common channel assignments for compatible PEG programming. G. At such time as a grantee converts its basic cable service tier from an analog to a digital format, the City's PEG channels will be carried on the digital platform and grantee shall install, at its sole cost, such headend equipment to accommodate such channels. Such PEG channels shall be accessed by subscribers through use of standard digital equipment compatible with grantee's cable system. H. Grantee will remit to the City as a capital contribution in support of PEG capital requirements an amount equal to thirty-five cents per subscriber per month to be paid to the City on a quarterly basis for the life of the franchise. The City shall allocate all amounts under this subsection to PEG capital uses exclusively. Grantee shall not be responsible for paying the PEG capital contribution with respect to gratis or bad debt accounts. Consistent with 47 C.F.R. § 76.922, grantee may, in its sole discretion, add the cost of the PEG capital contribution to the price of cable services and to collect the PEG capital contribution from subscribers. In addition, consistent with 47 C.F.R. § 76.985, all amounts paid as the PEG capital contribution may be separately stated on subscribers' bills as a City of Spokane Valley PEG capital contribution. Upon grantee's written request and due as agreed upon by both parties, the City shall provide the grantee with documentation showing expenditures for PEG capital use of the previous fiscal years' PEG capital contribution and showing the budgeted use of the current year's PEG funding. In the event the City cannot demonstrate that PEG capital funding was used or budgeted for PEG capital needs, grantee's PEG funding obligations going forward shall be reduced by an equivalent amount. 1. Within ninety days of request, the grantee shall provide an estimate of costs associated with the construction and activation of one return path capable of transmitting video programming to enable the distribution of the City's specific government access programming to subscribers on the multi- jurisdictional PEG channel. The return line shall run from a location to be determined by the City to the grantee's facilities. Within two hundred seventy days of the City's directive, the grantee shall construct and activate a return line in accordance with the cost estimate previously provided. The City agrees to pay the costs of the return line within sixty days of construction/activation and receipt of an invoice from the grantee. Section 15. Adopting Spokane Valley Municipal Code Section 3.65.130. Spokane Valley Municipal Code Section 3.65.130 is adopted as follows: Ordinance 09-030 Cable Page 11 of 28 3.65.130 Institutional Network Connections. Upon request of the City, a grantee shall investigate and provide the City a plan with a cost estimate based on either a managed network or the most cost efficient connection utilizing current technology to accommodate the City's reasonable broadband capacity needs for a non-commercial connection between the City's facilities. For the purposes of this section, non-commercial means private network communications from and among the City and other public agencies and excludes leasing or reselling the broadband capacity to a third party for any purpose. After receiving a request from the City, grantee shall provide the City a plan, including an estimate of the construction costs, within ninety days. The cost estimate shall include the fully allocated construction cost from the nearest grantee identified fiber access location to the requested site(s), including, but not limited to, site construction, fiber, labor, materials and grantee provided equipment. The City shall pay all of grantee's design engineering costs associated with development of the requested plan and cost estimate(s), if the City does not accepted the plan for construction. To approve the grantee to perform the work, the City shall provide the grantee with written authorization to complete the connectivity construction and a purchase order in the amount of the cost estimate. Any connectivity construction shall be performed and completed within six months after the City authorizes the work be performed, unless the parties agree in writing to a different completion date prior to commencement of the work in order to accommodate special considerations of the City. Section 16. Adopting Spokane Valley Municipal Code Section 3.65.140. Spokane Valley Municipal Code Section 3.65.140 is adopted as follows: 3.65.140 Parental Control. A. A grantee shall provide subscriber controlled lockout devices (audio and visual) at a reasonable charge to subscribers upon their request. B. As to any program which is transmitted on a channel offered on a per channel or per program basis, grantee shall block entirely the audio and video portion of such program from reception by any subscriber who so requests. Scrambling of the signal shall not be sufficient to comply with this provision. Section 17. Adopting Spokane Valley Municipal Code Section 3.65.150. Spokane Valley Municipal Code Section 3.65.150 is adopted as follows: 3.65.150 Recovery of Costs. A grantee shall reimburse the City for all costs of one publication of an ordinance authorizing a franchise made under this chapter in a local newspaper,and required legal notices prior to any public hearing regarding the franchise,contemporaneous with its acceptance of the franchise. Section 18. Adopting Spokane Valley Municipal Code Section 3.65.160. Spokane Valley Municipal Code Section 3.65.160 is adopted as follows: 3.65.160 Least Interference. The City shall have prior and superior right to the use of its rights-of-way for installation and maintenance of its facilities and other governmental purposes. Work by grantee in the right-of-way shall be done in a manner that causes the least interference with the rights and reasonable convenience of property owners and residents. The owners of all facilities, public or private, installed in or on such public properties prior to the installation of the facilities of the grantee, shall have preference as to the positioning and location of such utilities with respect to the grantee. Such preference shall continue in the event of the necessity of Ordinance 09-030 Cable Page 12 of 28 relocating or changing the grade of any such right-of-way. Disputes between the grantee and other parties over the use, pursuant to a franchise agreement, of the rights-of-way shall be submitted to the City for recommended resolution. No franchise under this chapter shall, in any way, prevent or prohibit the City from using any of its rights- of-way, or affect its jurisdiction over them or any part of them. The City hereby retains its full police power to make all changes, relocations, repairs, maintenance, establishments, improvements, dedications or vacation of same, including the dedication, establishment, maintenance, and improvement of all new rights-of-way. Section 19. Adopting Spokane Valley Municipal Code Section 3.65.170. Spokane Valley Municipal Code Section 3.65.170 is adopted as follows: 3.65.170 Construction Standards. All work authorized and required hereunder shall comply with all generally applicable City codes and regulations. Grantee shall also comply with all applicable federal and state regulations, laws and practices. Grantee is responsible for the supervision, condition, and quality of the work done, whether it is by itself or by contractors, assigns or agencies. Section 20. Adopting Spokane Valley Municipal Code Section 3.65.180. Spokane Valley Municipal Code Section 3.65.180 is adopted as follows: 3.65.180 Restoration After Construction. If in connection with the construction, operation, maintenance, upgrade, repair or replacement of the cable system,a grantee disturbs, alters, or damages any public or private property, the grantee agrees that it shall at its own cost and expense pay for any damage and replace and restore any such property to a condition reasonably comparable to the condition existing immediately prior to the disturbance. Whenever grantee disturbs or damages any right-of-way or other public property, grantee shall complete the restoration work within a reasonable time as authorized by the City's Public Works Director. Section 21. Adopting Spokane Valley Municipal Code Section 3.65.190. Spokane Valley Municipal Code Section 3.65.190 is adopted as follows: 3.65.190 Obstruction Permits Required. Grantee shall apply for and obtain appropriate obstruction permits from the City pursuant to the Spokane Valley Municipal Code. Grantee shall pay all generally applicable permit fees for the requisite City permits and reimburse the City for all generally applicable fees incurred by the City in the examination, inspection,and approval of grantee's work. Section 22. Adopting Spokane Valley Municipal Code Section 3.65.200. Spokane Valley Municipal Code Section 3.65.200 is adopted as follows: 3.65.200 Emergency Response. The grantee shall maintain with the City an emergency response number providing an emergency 24-hour response for the City to use in case of an emergency. After being notified of an emergency, grantee shall cooperate with the City and make every effort to immediately respond with action to aid the protection the health and safety of the public. Ordinance 09-030 Cable Page 13 of 28 • Section 23. Adopting Spokane Valley Municipal Code Section 3.65.210. Spokane Valley Municipal Code Section 3.65.210 is adopted as follows: 3.65.210 Hazardous Substances. Grantee shall comply with all applicable state and federal laws concerning hazardous substances relating to grantee's facilities in the right—of-way. Section 24. Adopting Spokane Valley Municipal Code Section 3.65.220. Spokane Valley Municipal Code Section 3.65.220 is adopted as follows: 3.65.220 Environmental. Grantee shall comply with all applicable state and federal laws concerning environmental protection relating to grantee's facilities in the right—of-way. Section 25. Adopting Spokane Valley Municipal Code Section 3.65.230. Spokane Valley Municipal Code Section 3.65.230 is adopted as follows: 3.65.230 Movement and Relocation of Facilities. A. Relocation of facilities at the request of a third party. 1. If any removal, replacement, modification or disconnection of the cable system is required to accommodate the construction, operation or repair of the facilities or equipment of another City cable franchise holder(s), grantee shall, after at least thirty days advance written notice, take action to effect the necessary changes requested by the responsible entity, as long as the other franchise holder(s) pay for the grantee's time and material costs associated with the project and grantee is issued a permit for such work by the City. 2. The grantee shall, upon reasonable prior written request of any subscriber, relocate its aerial distribution cable facilities underground, as long as the subscriber pays for the grantee's time and material costs associated with the project and grantee is issued a permit for such work by the City. 3. In the event an underground conversion of cable facilities is required as part of the street improvement condition(s) of a new land use development, not associated with a City designated capital improvement project, a franchise shall in no way limit the grantee's right to bill and collect in advance all time and material costs associated with the underground conversion of the cable system from the person responsible for the land use development project. 4. At the request of any person holding a valid permit and upon reasonable advance notice and payment by the permit holder of grantee's expenses of such temporary change, grantee shall temporarily raise, lower or remove its facilities as necessary to accommodate a permittee of the City. B. Relocation at Request of the City. 1. Upon at least sixty days prior written notice to grantee, the City shall have the right to require grantee to relocate any part of the cable system within the rights-of-way when the safety, health or welfare of the public requires such change, and the expense thereof shall be paid by grantee. Ordinance 09-030 Cable Page 14 of 28 The City may, at its option, provide more than sixty days notice. After receipt of such notice, grantee shall complete relocation of its facilities at least five days prior to commencement of the project or an agreed upon date by both parties. Should grantee fail to remove or relocate any such facilities by the date established by the City, the City may effect such removal or relocation, and the expense thereof shall be paid by grantee, including all costs and expenses incurred by the City due to grantee's delay. If the City requires grantee to relocate its facilities located within the rights-of-way, the City shall make a reasonable effort to provide grantee with an alternate location within the right-of-way. If public funds are available to any person using such rights-of- way for the purpose of defraying the cost of any of the foregoing, the grantee may make application for such funds. 2. In the case of relocation projects where the conversion of overhead utilities is within a City capital improvement project, then the grantee shall participate in the joint trenching portion of the project, and grantee shall pay to the City grantee's portion of the traffic control and trench costs, including excavation and other associated costs, trench bedding, and backfill commensurate with grantee's proportionate share of trench usage. However, if bids from the City or it's designated contractor for placement of grantee's conduits and vaults/pedestals in the supplied joint trench, in the reasonable estimation of the grantee are not acceptable, the grantee shall have the option to utilize contractor(s) of its choice to complete the required work, so long as use by grantee of its contractor(s) does not delay the City project. The City or it's designated contractor shall coordinate with the grantee's contractor(s) to provide reasonable notice and time to complete the placement of the grantee's facilities in the supplied joint trench. 3. Nothing in a franchise made under this chapter shall prevent the City from constructing any public work or capital improvement. Further, the City shall have the right to require grantee to relocate, remove, replace, modify or disconnect grantee's facilities and equipment located in the rights-of-way or on any other property of the City in the event of an emergency or when necessary to protect or further the health, safety or welfare of the general public, and such work shall be performed at grantee's expense. Following notice by the City, grantee shall relocate, remove, replace, modify or disconnect any of its facilities or equipment within any right-of-way, or on any other property of the City. 4. If the grantee fails to complete the above work within the time prescribed by the City, given the nature and extent of the work, or if it is not done to the City's reasonable satisfaction,the City may cause such work to be done and bill the reasonable cost of the work to the grantee, including all reasonable costs and expenses incurred by the City due to grantee's delay. In such event, the City shall not be liable for any damage to any portion of grantee's cable system. Grantee shall pay the City within ninety days of receipt of an itemized list of those costs. The City shall give consideration to any circumstances outside the grantee's control preventing grantee's completion of work. Section 26. Adopting Spokane Valley Municipal Code Section 3.65.240. Spokane Valley Municipal Code Section 3.65.240 is adopted as follows: 3.65.240 Tree Trimming. A grantee shall have the authority to conduct pruning and trimming for access to cable system facilities in the rights-of-way subject to compliance with applicable City Code relating to the same as adopted or amended. All such trimming shall be done at the grantee's sole cost and expense. The grantee shall be responsible for any damage caused by such trimming. Ordinance 09-030 Cable Page 15 of 28 Section 27. Adopting Spokane Valley Municipal Code Section 3.65.250. Spokane Valley Municipal Code Section 3.65.250 is adopted as follows: 3.65.250 Vacation. The City may vacate any City road, right-of-way or other City property which is subject to rights granted by a franchise under this chapter, but the grantee shall be provided notice of such vacation proceedings and the opportunity to secure future use rights as allowed under the City's Municipal Code. Section 28. Adopting Spokane Valley Municipal Code Section 3.65.260. Spokane Valley Municipal Code Section 3.65.260 is adopted as follows: 3.65.260 Abandonment of Grantee's Facilities. No facility constructed or owned by a grantee may be abandoned without the express written consent of the City. Section 29. Adopting Spokane Valley Municipal Code Section 3.65.270. Spokane Valley Municipal Code Section 3.65.270 is adopted as follows: 3.65.270 Maps,Books,and Records. A. Grantee shall provide to the City upon request: 1. A route map that depicts the general location of the cable system facilities placed in the rights-of- way. The route map shall identify cable system facilities as aerial or underground and is not required to depict cable types, number of cables, electronic equipment, and service lines to individual subscribers. The grantee shall also provide, if requested, an electronic format of the aerial/underground facilities in relation to the right-of-way centerline reference to allow the City to add this information to the City's GIS program; and 2. A copy of all FCC filings which relate to the operation of the cable system in the franchise area. B. To the extent such requests are limited to specific facilities at a given location within the franchise area in connection with the construction of any City project, grantee shall cooperate with the City, upon the City's reasonable request, to field locate its facilities in order to facilitate design and planning of City improvement projects. C. The City has the right to inspect books and records of grantee, which are reasonably necessary to monitor a grantee's compliance with the provision of cable services. Within receipt of written notice from the City to inspect a grantee's books and records under this section, the grantee shall within five business days or a mutually agreeable date and time, accommodate the City's request at the grantee's business office in the City, during normal business hours, and without unreasonably interfering with the grantee's business operations. All such documents pertaining to financial matters shall be preserved and maintained in accordance with grantee's standard record retention policy except for financial records which are governed by SVMC 3.65.050(D). D. The City has the right to request a copy of the books and records that are not identified as proprietary or confidential. For purposes of this section, the terms "proprietary or confidential" include, but are not limited to, information relating to the cable system design, customer lists, marketing plans, financial Ordinance 09-030 Cable Page 16 of 28 information unrelated to the calculation of franchise fees or rates pursuant to FCC rules, or other information that is reasonably determined by the grantee to be competitively sensitive. 1. The City shall have a right to inspect but the grantee shall not be required to release information that it reasonably deems to be proprietary or confidential in nature provided that this shall not prevent the release of such proprietary or confidential documents for purposes of any enforcement proceeding where appropriate legal steps are available to address grantee's concerns regarding confidentiality. In the event the grantee asserts that certain information is proprietary or confidential in nature, the grantee shall identify generally the information which it deems proprietary and confidential and the reasons for its confidentiality in writing to the City. Each page of such information provided will be clearly marked as "proprietary and confidential." The City agrees to treat any information disclosed by the grantee as confidential and only to disclose it to those employees, representatives, and agents of the City that have a need to know in order to enforce the franchise agreement, and who agree to maintain the confidentiality of all such information. The grantee shall not be required to provide customer information in violation of Section 631 of the Cable Act or any other applicable federal or state privacy law. 2. Information submitted to the City may be subject to inspection and copying under the Washington Public Disclosure Act codified in RCW 42.56. The City shall timely provide a grantee with a copy of any public disclosure request to inspect or copy documentation/information which the grantee has provided to the City and marked as "proprietary and confidential" prior to allowing any inspection and/or copying as well as provide the grantee with a time frame, consistent with RCW 42.56.520, to provide the City with its written basis for non-disclosure of the requested documentation/information. In the event the City disagrees with the grantee's basis for non-disclosure, the City agrees to withhold release of the requested documentation/information in dispute for a reasonable amount of time to allow grantee an opportunity to file a legal action under RCW 42.56.540. Section 30. Adopting Spokane Valley Municipal Code Section 3.65.280. Spokane Valley Municipal Code Section 3.65.280 is adopted as follows: 3.65.280 Reports. A. File for Public Inspection. A grantee shall maintain at its business office, in a file available for public inspection during normal business hours, those documents required pursuant to the FCC's rules and regulations. B. Complaint File and Reports. A grantee will keep an accurate and comprehensive file of all complaints regarding the system and grantee's actions in response to those complaints in a manner consistent with the privacy rights of subscribers. Upon thirty days written request, grantee will provide a report to the City that contains total number and summary of all complaints received by category, length of time taken to resolve and action taken to provide resolution. C. Annual Report. No later than March 31st of each year, if requested by the City, grantee shall file a written report with the City, which shall include: I. a summary of the previous calendar year's activities in development of this system, including but not limited to services begun or dropped, number of subscribers (including gains and losses), homes passed, and miles of cable distribution plant in service (including different classes if applicable); Ordinance 09-030 Cable Page 17 of 28 2. a gross revenue statement for the preceding fiscal year and all deductions and computations for the period, and such statement shall be reviewed by a certified public accountant, who may also be the chief financial officer or controller of grantee; 3. a current statement of cost of any construction by component category; 4. a summary of complaints, identifying the number and nature of complaints and their disposition; 5. if a grantee is a corporation, a list of officers and members of the board and the officers and board members of any parent corporation; 6. a list of all partners or stockholders holding one percent or more ownership interest in a grantee and any parent corporation; provided, however, that when any parent corporation has in excess of one thousand shareholders and its shares are publicly traded on a national stock exchange, then a list of the twenty largest stockholders of the voting stock of such corporation shall be disclosed; 7. a copy of all of a grantee's written rules and regulations applicable to subscribers and users of the cable system; 8. any additional information related to operation of the cable system as reasonably requested by the City. D. Customer Service Reports. Grantee shall maintain a quarterly compliance report specific to the system in the franchise area and shall provide such report to the City at the request of the City. Such report shall demonstrate grantee's compliance with the customer service standards set forth herein. E. Grantee shall, upon request of the City, make available to the Public Works Director a description of construction plans for the following twelve months. F. Grantee shall, upon request of the City, make available a copy of the final report on each proof of performance test of each technical parameter defined in Part 76 of the Rules and Regulations of the FCC. Section 31. Adopting Spokane Valley Municipal Code Section 3.65.290. Spokane Valley Municipal Code Section 3.65.290 is adopted as follows: 3.65.290 Customer Service Standards A. A grantee shall comply in all respects with the customer service standards contained herein. B. A grantee shall comply at all times with all applicable federal, state and local laws and regulations regarding discrimination, as adopted or amended. C. In providing service, a grantee shall maintain a convenient local customer service location in either the City of Spokane Valley or the City of Spokane for receiving subscriber payments, handling billing questions, equipment replacement and dispensing customer service information. Also, the grantee will endeavor to accommodate a bill payment location in the City as long as there is an acceptable 3rd party vendor available to support the service in accordance with the grantee's business practices. D. When similar complaints have been made by a number of subscribers, or where other evidence exists which, in the reasonable judgment of the City, casts doubt on the reliability or quality of the cable service, Ordinance 09-030 Cable Page 18 of 28 the City, notwithstanding any other provisions of this franchise agreement, shall have the right and authority to require that grantee test, analyze and report on the performance of the system relative to applicable technical standards of the FCC. Upon 30-day prior written notice from the City, the grantee shall fully cooperate with the City in performing such testing and shall prepare a written report of the results, if requested. E. A grantee shall satisfy the consumer protection and service standards as outlined below. 1. Cable system office hours and telephone availability: a. Grantee will maintain a local, toll-free or collect call telephone access line which will be available to its subscribers twenty-four hours a day, seven days a week. i. Trained grantee representatives will be available to respond to customer telephone inquiries during normal business hours. ii. After normal business hours, the access line may be answered by a service or an automated response system, including an answering machine. Inquiries received after normal business hours must be responded to by a trained grantee representative on the next business day. b. Under normal operating conditions, telephone answer time by a customer representative, including wait time, shall not exceed thirty seconds when the connection is made. If the call needs to be transferred, transfer time shall not exceed thirty seconds. These standards shall be met no less then ninety percent of the time under normal operating conditions, measured on a quarterly basis. c. Grantee shall possess equipmeirt to measure compliance with the telephone answering standards above. d. Under normal operating conditions, the customer will receive a busy signal less than three percent of the time. e. Customer service center and bill payment locations will be open at least during normal business hours. 2. Installations, Outages and Service Calls. Under normal operating conditions, each of the following standards will be met no less than ninety-five percent of the time measured on a quarterly basis: a. Standard installations will be performed within seven business days after an order has been placed. i. The "appointment window" alternatives for installations, service calls and other installation activities will be either a specific time or, at maximum, a four- hour time block during normal business hours. (grantee may schedule service calls and other installation activities outside of normal business hours for the express convenience of the customer.) ii. Grantee may not cancel an appointment with a customer after the close of business on the business day prior to the scheduled appointment. Ordinance 09-030 Cable Page 19 of 28 iii. If grantee's representative is running late for an appointment with a customer and will not be able to keep the appointment as scheduled, the grantee shall use its best efforts to contact the customer prior to the time of the scheduled . appointment. The appointment will be rescheduled, as necessary, at a time which is convenient for the customer. iv. Under normal operating conditions, if grantee cannot perform installations within the times specified in applicable customer standards, the grantee shall offer the subscriber a credit equal to the charge for a standard installation or other compensation of equal or greater value. For non-standard installation, grantee shall attempt to contact a subscriber requesting an estimate of charges within seven business days of receiving the request by the subscriber. This subsection does not apply to the introduction of new products and services when grantee is utilizing a phased introduction. b. Excluding conditions beyond the control of grantee, grantee will begin working on "service interruptions" promptly and in no event later than twenty-four hours after the interruption becomes known. Grantee must begin actions to correct other service problems the next business day after notification of the service problem. Grantee shall resolve all service interruptions to the extent reasonably possible within forty-eight hours under normal operating conditions. i. In those cases where service is not restored within twenty-four hours due to unusual circumstances, the reasons for the delay shall be fully documented in an outage log. ii. Under normal operating conditions, if after twenty-four hours service is not restored to a subscriber, grantee shall, upon a subscriber's request, provide a refund or credit or other compensation of equal or greater value. iii. As subscribers are connected or reconnected to the system, grantee shall, by appropriate means such as a card or brochure, furnish general subscriber information (including, but not limited to, terms of service and procedures for making inquiries or complaints, including the name, address and local telephone number of the employee or employees or agent to whom such inquiries or complaints are to be addressed) and furnish information concerning the City office responsible for the administration of the franchise agreement, including the address and telephone number of said office. 3. Communications between grantee and subscribers. a. Notifications to subscribers. i. Grantee shall provide written information on each of the following areas at the time of installation of service, at least annually to all subscribers, and at any time upon request to subscriber or the City: 1. Products and services offered. 2. Prices and options for programming services and conditions of subscription to programming and other services. Ordinance 09-030 Cable Page 20 of 28 3. Installation and service maintenance policies. 4. Instructions on how to use the cable service. 5. Channel positions of the programming carried on the system; and 6. Billing and complaint procedures, including the address and telephone number of the City. b. Rate/Programming Changes. i. Subscribers will be notified of any changes in rates, programming services or channel positions as soon as possible in writing. Notice must be given to subscribers a minimum of thirty days in advance of such changes if the changes are within the control of the grantee. In addition, the grantee shall notify subscribers thirty days in advance of any significant changes in the other information required by this section. Grantee shall not be required to provide prior notice of any rate changes as a result of a regulatory fee, franchise fee or other fees, tax, assessment or charge of any kind imposed by any federal agency, state or City on the transaction between the grantee and the subscriber. ii. Grantee shall provide a qualified discount program for senior and disabled customers. iii. All programming decisions remain the discretion of grantee, provided that grantee notifies City and subscribers in writing thirty days prior to any channel additions, deletions or realignments directed to each subscriber individually through mailed notice or as an insert or addendum to the subscriber's monthly bill, email or other means reasonably calculated to give the subscriber and the City advanced notice, and further subject to grantee's signal carriage obligations hereunder and pursuant to 47 U.S.C. § 531-536, and further subject to City's rights pursuant to 47 U.S.C. § 545. Location and relocation of the PEG channels shall be governed by the franchise agreement, and further to the programming category requirements contained within the franchise agreement. c. Billing. i. Bills will be clear, concise and understandable. Bills must be fully itemized, with itemizations including, but not limited to, basic and premium service charges and equipment charges. Bills will also clearly delineate all activity during the billing period, including optional charges, rebates and credits. ii. Billing complaints shall be responded to promptly, but in no event later than within seven days of receipt. d. Refunds. Refund checks will be issued promptly, but no later than either: i. the subscriber's next billing cycle following resolution of the request or thirty days, whichever is earlier; or ii. the return of the equipment supplied by grantee if service is terminated. e. Credits. Credits for service will be issued no later than the subscriber's next billing cycle following the determination that a credit is warranted. Ordinance 09-030 Cable Page 21 of 28 f. Subscriber Charges. A list of grantee's current subscriber rates and charges for cable service shall be maintained on file with City and shall be available for public inspection. F. A grantee shall comply with all applicable federal and state privacy laws, including Section 631 of the Cable Act and regulations adopted pursuant thereto. Section 32. Adopting Spokane Valley Municipal Code Section 3.65.300. Spokane Valley Municipal Code Section 3.65.300 is adopted as follows: 3.65.300 Cable Advisory Board. City reserves the right to maintain a Cable Advisory Board for advisory purposes only. The grantee agrees to cooperate with reasonable requests for information, through the designated City representative, to support the Cable Advisory Board. Section 33. Adopting Spokane Valley Municipal Code Section 3.65.310. Spokane Valley Municipal Code Section 3.65.300 is adopted as follows: 3.65.310 City Ordinances and Regulations. In the event of a conflict between the Municipal Code and regulations and the terms of a franchise granted under this chapter,the terms of the franchise shall control subject to the limitation of the City's exercise of the police powers set forth below. Subject to federal and state preemption, the material terms and conditions contained in the franchise may not be unilaterally altered by the City through subsequent amendments to any ordinance, regulation, resolution or other enactment of the City, except within the lawful exercise of the City's police power. Grantee has the right to challenge any City ordinance or regulation that conflicts with its rights under a franchise. A grantee's rights under a franchise are subject to the police powers of the City to adopt and enforce ordinances necessary to protect the health, safety and welfare of the public, and grantee agrees to comply with all applicable laws and ordinances enacted by the City pursuant to such power so long as the same do not unduly discriminate against grantee. Section 34. Adopting Spokane Valley Municipal Code Section 3.65.320. Spokane Valley Municipal Code Section 3.65.320 is adopted as follows: 3.65.320 Indemnification. A grantee shall, at its sole cost and expense, indemnify and hold harmless the City, its officials, boards, commissions, agents and employees against any and all third party claims, suits, causes of action, proceedings, and judgments for injury, loss, or damage arising out of the construction, reconstruction, use, operation, ownership and maintenance of the cable system under a franchise agreement, except that no such requirement shall apply where such claims, suits, causes of actions, proceedings, and judgments for damage are occasioned by the active negligence, gross negligence or intentional acts of the City or its officials, boards, commissions, agents and employees while acting on behalf of the City. These damages shall include, but not be limited to, claims made against the City by the franchisee's employees from which the franchisee would otherwise be immune under Title 51 RCW, penalties arising out of copyright infringements and damages arising out of any failure by the grantee to secure consents from the owners, authorized distributors or licensees of programs to be delivered by the grantee's cable system whether or not any act or omission complained of is authorized, allowed, or prohibited by a franchise agreement. Indemnified expenses shall include, but not be limited to, all out-of-pocket expenses, such as costs and attorneys' fees, and shall also include the reasonable value of any services rendered by the Office of the Ordinance 09-030 Cable Page 22 of 28 City Attorney, or any outside consultants employed by the City. Grantee shall not be required to provide indemnification to City for programming cablecast over the access channel administered by City. The City shall give the grantee timely written notice of any claim or of the commencement of any action, suit or other proceeding covered by the indemnity in this section, but failure to give notice is not a defense to the indemnification obligations except to the extent of actual prejudice. In the event any such claim arises, the City or any other indemnified party shall tender the defense thereof to the grantee and the grantee shall have the obligation and duty to defend, through services of competent counsel satisfactory to the City, settle or compromise any claims arising thereunder. If the City determines that it is necessary for it to employ separate counsel, the costs for such separate counsel shall be the responsibility of the City. Section 35. Adopting Spokane Valley Municipal Code Section 3.65.330. Spokane Valley Municipal Code Section 3.65.330 is adopted as follows: 3.65.330 Insurance. A. Upon the granting of a franchise agreement under this chapter and following simultaneously with the filing of the acceptance of a franchise agreement and at all times during the term of a franchise agreement, the grantee shall obtain, pay all premiums for, and deliver to the City, written evidence of payment of premiums for and a certificate of insurance, naming the City as an additional insured, with a company licensed to do business in the State of Washington with a rating by A.M. Best and Co. of not less than "A" or equivalent, for the following: 1. A comprehensive commercial or general liability insurance policy or policies, issued by an insurance carrier licensed to do business in the State of Washington. Said policy or policies shall pay on behalf of and defend the City, its officials, boards, commissions, agents or employees from any and all claims by any person whatsoever (including the costs, defense costs, attorneys' fees and interest arising therefrom) on account of personal injury, bodily injury or death of a person or persons or damages to property occasioned by the operations of the grantee under a franchise agreement, or alleged to have been so caused or occurred, with a minimum combined single limit of$1,000,000 per occurrence, and $2,000,000 general aggregate for personal injury, bodily injury and property damage. 2. A comprehensive automobile liability insurance policy or policies, issued by an insurance carrier licensed to do business in the State of Washington. Said policy or policies shall pay on behalf of and defend the City, its officials, boards, commissions, agents or employees from any and all claims by any person whatsoever (including the costs, defense costs, attorneys' fees and interest arising therefrom) for bodily injury and property damage occasioned by any vehicle operation of the grantee, or alleged to have been so caused or occurred, with a minimum liability of$1,000,000 per person and $5,000,000 in any one accident or occurrence. B. Not less than thirty days prior to its expiration, grantee shall deliver to City, a substitute, renewal or replacement policy or bond conforming to the provisions of this Chapter. Section 36. Adopting Spokane Valley Municipal Code Section 3.65.340. Spokane Valley Municipal Code Section 3.65.340 is adopted as follows: Ordinance 09-030 Cable Page 23 of 28 3.65.340 Performance Bond. A. Within sixty days of the effective date of a franchise, grantee will provide a performance bond to the City in the total sum of $250,000, which will remain in effect for the term of the franchise. The performance bond is to ensure the faithful performance of grantee's obligations under the franchise including the payment by the grantee of any penalties, claims, liens, fees, or taxes due the City which arise by reason of the operation, maintenance, or construction of the cable system within the franchise area. B. If a franchise is terminated, or upon expiration or renewal, or transfer of a franchise, the City will return the original bond or sign the necessary documentation to release the bond promptly if grantee does not owe funds to the City or is not in default of a material provision of the franchise. Section 37. Adopting Spokane Valley Municipal Code Section 3.65.350. Spokane Valley Municipal Code Section 3.65.350 is adopted as follows: 3.65.350 Remedies to Enforce Compliance. A. This section does not apply to revocation of a franchise agreement. Whenever the City seeks to enforce a franchise agreement, it shall first provide written notice to the grantee of the nature of the problem and requested action, together with any applicable time frame for response. Any time limits here or in a franchise agreement may be modified by written stipulation of the City and grantee, except time limits relating to revocation of a franchise agreement or where otherwise required by law must be approved by the city council. B. Except in case of urgency or public need relating to management of the public right-of-way as reasonably determined by the City; the grantee has thirty days from receipt of such notice to respond in writing to the City official sending the notice: I. contesting it; or 2. accepting it and agreeing to cure as requested within time limits specified; or 3. requesting additional time or other modifications. In such event, grantee shall promptly take all reasonable steps to cure the default, keeping the City informed as to the steps to be taken and a projected completion date. C. If the City is not satisfied with the grantee's response, both parties shall meet informally to discuss the matter. If these discussions do not lead to resolution of the problem, the City shall notify the grantee in writing. Grantee may thereafter request a hearing thereafter as provided in this franchise. D. No provision of a franchise is intended to affect the right of either party to seek judicial relief from a violation of any provision of a franchise, or any regulation or directive under a franchise. The existence of other remedies under a franchise does not limit the right of either party to recover monetary damages, or to seek judicial enforcement of obligations by specific performance, injunctive relief or mandate, or any other remedy at law or in equity. Section 38. Adopting Spokane Valley Municipal Code Section 3.65.360. Spokane Valley Municipal Code Section 3.65.360 is adopted as follows: Ordinance 09-030 Cable Page 24 of 28 3.65.360 Liquidated Damages. A. Because grantee's failure to comply with the provisions of a franchise agreement will result in damage to the City and because it will be impractical to determine the actual amount of such damages, the City and grantee hereby agree upon and specify certain amounts set forth hereafter in this section which represent both parties' best estimate of the damages. Damages associated with non-payment of franchise fees are not subject to this section. B. The City shall specify any damages subject to this section and shall include such information in the notice sent to grantee required under SVMC 3.65.350. Such a notice may provide for damages sustained prior to the notice where so provided, and subsequent thereto pending compliance by grantee. C. To the extent that the City elects to assess liquidated damages as provided in this section, and such liquidated damages have been paid, the parties agree that this shall be the City s sole and exclusive damage remedy in lieu of actual damages; provided, however, this shall not limit the right of the City to seek equitable or other relief as reserved in SVMC 3.65.370. D. Unless otherwise provided, liquidated damages do not accrue after the timely filing of a request for hearing by grantee until the time of a decision from the hearing. Nothing in this section prevents the parties from settling any dispute relating to liquidated damages by mutual stipulation. E. Grantee may cure the breach or violation within the time specified to petition for review to the City's satisfaction, whereupon no liquidated damages are assessed. G. After fulfilling the procedure required under SVMC 3.65.350, grantee has thirty days to pay such amounts, or grantee may seek review of any assessment of liquidated damages under SVMC 3.65.360. Liquidated damages shall be immediately payable from the performance bond, if review is not sought or if not paid within the thirty day period by the grantee. G. Schedule of Liquidated Damages. Liquidated damages are set as follows. All amounts accrue per day, but not beyond the number of days to exceed the amount of $10,000 per twelve month period unless specifically provided. Nothing requires the City to assess liquidated damages, acting in its sole discretion, but such event does not operate as waiver or estoppel upon the City. Damages resulting from failure to pay franchise fees or PEG capital contributions may be recovered in whole, without limitation. H. Pursuant to the requirements outlined herein, liquidated damages shall not exceed the following amounts: I. Five hundred dollars per day for failure to provide cable service as promised in Section 3.65.070 of this chapter; one hundred dollars per day for material departure from the FCC technical performance standards; fifty dollars per day for failure to provide the PEG channel or any PEG fee related thereto which is required hereunder; one hundred dollars per day for each material violation of the customer service standards; twenty five dollars per day for failure to provide reports or notices as required by this chapter; and one hundred dollars per day for any material breaches or defaults not enumerated herein. 2. Where grantee has three or more of the same violation or breach events (an "event" may involve multiple customers, but is discrete in time or circumstances) within any twelve month period, all applicable damages amounts are doubled. Ordinance 09-030 Cable Page 25 of 28 Section 39. Adopting Spokane Valley Municipal Code Section 3.65.370. Spokane Valley Municipal Code Section 3.65.370 is adopted as follows: 3.65.370 Hearings. Grantee may request a hearing as follows: A. Grantee files a written request within fourteen days of receipt of a decision it wants reviewed with the City Manager. The request does not stay the effect of the decision or obligation to comply or exercise of any remedy available to the City except as otherwise provided. The City Manager may conduct the hearing or appoint an alternate hearings officer, who shall not be the person issuing the order or such person's subordinate. For matters exceeding $25,000 reasonably estimated value in controversy as determined by the City Manager, the grantee may file a request that the City Hearings Examiner conduct the hearing. A reasonable filing fee may be set by the Hearings Examiner or generally applicable ordinances. B. The hearing may be informal and shall be conducted within twenty days, with at least ten days prior notice to both sides. The official conducting the hearing is responsible to keep a record of any materials submitted and shall record the hearing by video or audio tape, for matters exceeding $25,000 reasonable estimated value amount in controversy. A written decision shall be issued within ten days. Either party may appeal the decision to a court of competent jurisdiction within thirty days. C. Except where otherwise provided, at the conclusion of the City hearings process, if grantee remains in default, it shall correct said default in fifteen days or as otherwise ordered by the City. In the event the grantee does not cure within such time to the City's reasonable satisfaction,the City may: 1. seek specific performance of any provision that reasonably lends itself to such remedy as an alternative to damages, or seek other equitable relief; and/or 2. assess liquidated damages resulting from grantee's default if not already done or await the conclusion of the judicial process. D. Where grantee seeks judicial review and ultimately prevails, any money judgment against the City shall be paid or may thereafter be offset by grantee, in grantee's discretion, against further franchise fee payments due to the City. In such event, grantee shall notify the City at least sixty days prior to apply the offset. E. Nothing in this section limits the City's right to seek to revoke a franchise agreement in accordance with SVMC 3.65.380. Section 40. Adopting Spokane Valley Municipal Code Section 3.65.380. Spokane Valley Municipal Code Section 3.65.380 is adopted as follows: 3.65.380 Revocation. A. The City may revoke a franchise agreement made under this chapter and rescind all rights and privileges associated therewith in the following circumstances: I. Grantee abandons the cable system, fails to cure a non-payment of a quarterly franchise fee within 30 days of the required payment date, or terminates the cable system's operations; or Ordinance 09-030 Cable Page 26 of 28 2. Grantee has a pattern of failing to perform the material obligations listed under SVMC 3.65.360(8); or 3. Grantee attempts to evade any material provision of the franchise agreement or practices any fraud or deceit upon the City or subscribers. B. Prior to revocation of a franchise agreement, the City shall give written notice to the grantee of its intent to revoke the franchise agreement, setting forth the exact nature of the noncompliance. The grantee shall have thirty days from such notice to object in writing and to state its reasons for such objection and provide any explanation. In the event the City has not received a timely and satisfactory response from the grantee, it may then seek a revocation of the franchise agreement by the City Council in accordance with this section. C. The grantee may file a revocation hearings request within 14 days of the City's written notice of intent to revoke the franchise with the City Hearings Examiner. The filing fee shall be established by separate resolution, and is considered an appeal of an administrative decision. Any revocation hearing under this subsection shall be consistent with SVMC 17.90, except as specifically set forth below. This shall provide the grantee a fair opportunity for full participation, including the right to be represented by legal counsel, and to introduce evidence. Within 20 days of the hearing, the Hearing Examiner shall issue a recommendation to the city council. At the next available city council meeting with notice provided to the grantee, the city council shall review the City Hearing Examiner's record and recommendation, allowing the grantee an opportunity to state its position on the matter reserving the right to set reasonable time limits. Within sixty days after the review, the city council shall determine whether to revoke the franchise agreement; or if the breach at issue is capable of being cured by the grantee, direct the grantee to take appropriate remedial action within the time and in the manner and on the terms and conditions that the city council determines are reasonable under the circumstances. The city council shall issue a written decision and shall transmit a copy of the decision to the grantee. Any appeal of the decision by the city council shall be to Spokane County Superior Court within thirty (30) days of adoption of the decision. Upon timely appeal, the effect of the revocation is stayed pending final judicial resolution, but this shall not affect accrual of penalties or the right of the City to take any other enforcement action, including curing the default at grantee's expense and liability, also subject to judicial review. The parties shall be entitled to such relief as the court may deem appropriate. D. The city council may in its sole discretion take any lawful action that it deems appropriate to enforce the City's rights under the franchise agreement in lieu of revocation. Section 41. Adopting Spokane Valley Municipal Code Section 3.65.390. Spokane Valley Municipal Code Section 3.65.390 is adopted as follows: 3.65.390 Conditions of Sale. If a renewal of a franchise agreement is denied or a franchise agreement is lawfully terminated, and the City lawfully acquires ownership of the cable system or by its actions lawfully effects a transfer of ownership of the cable system to another person, any such acquisition or transfer shall be at a price determined pursuant to the provisions of the Cable Act. Section 42. Adopting Spokane Valley Municipal Code Section 3.65.400. Spokane Valley Municipal Code Section 3.65.400 is adopted as follows: Ordinance 09-030 Cable Page 27 of 28 3.65.400 Transfer of Rights. A franchise granted under this chapter may not be assigned or transferred without the written approval of the City pursuant to the provisions of the Cable Act. However, grantee can assign or transfer a franchise without approval of but upon notice to the City to any parent, affiliate or subsidiary of grantee or to any entity that acquires all or substantially all the assets or equity of grantee, by merger, sale, consolidation or otherwise and for transfers in trust obtained to finance construction or operations of a cable system by pledging the system as collateral. Section 43. Severability. If any section, sentence, clause or phrase of this Ordinance should be held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of any other section, sentence, clause or phrase of this Ordinance. Section 44. Effective Date. This Ordinance shall become effective five days after publication of the Ordinance, or a summary thereof, in the official newspaper of the City. Adopted this 13th day of October, 2009. City of Spokane Vale ,se)ilikriaaale .9-.4 -idiailice Rich.d M. Munson, - •.r- A T $� i .. _ ...-. _�.. _ IA IA fistine Bainbridge ity Clerk, Approved as to Form: // I/ . .i Office of the City Attorney / Date of Publication: 10-23-09 Effective Date: 10-28-09 Ordinance 09-030 Cable Page 28 of 28