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HomeMy WebLinkAboutCable Franchise Agrmt0.TES L' ►�0G Z-1 Deschutes County Board of Commissioners 1300 NW Wall St., Suite 200, Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org AGENDA REQUEST & STAFF REPORT For Board Business Meeting of January 30, 2008 DATE: January 17, 2008 FROM: Dave Kanner Administration 388-6565 TITLE OF AGENDA ITEM: Consideration and authorizing county administrator's signature of Document Nos. 2008-038, 2008-039 and 2008-040, cable franchise agreements with Bend Cable Communications, LLC, California Oregon Broadcasting, Inc. d/b/a Crestview Cable Communications, and Chambers Cable Communication, LLC. PUBLIC HEARING ON THIS DATE? No. BACKGROUND AND POLICY IMPLICATIONS: Federal law (47 USC 541(b)(1)) states that "a cable operator may not provide cable service without a franchise" from a local franchising authority. Under the U.S. Code and the Oregon Revised Statutes, Deschutes County is the local franchising authority for those unincorporated portions of Deschutes County served by Bend Broadband, Chambers Cable Communications and Crestview Cable Communications. These three cable companies have been operating cable systems in Deschutes County for many years without a franchise. Pursuant to direction given to staff by the Board of Commissioners in 2006, the county administrator has spent the better part of a year negotiating franchise agreements with these operators, and those agreements are now complete and ready for approval. In order to create a level playing field and encourage competition, these three agreements are identical. These franchises are non-exclusive and it is anticipated that the same franchise would be offered to other cable operators who wanted to enter the Deschutes County market in the future. A franchise agreement is essentially an agreement between a government agency and a private entity that grants the private entity blanket permission to use public rights of way for for-profit purposes. In this case, the cable operators are granted permission to "construct, erect, operate and maintain, in, upon, along, across, above, over and under the [County's] streets, alleys, public ways and public places ... poles, wires, cables, conduits and other technical facilities necessary for the construction, maintenance and operation in County of a cable television system..." Much of what is in this agreement is common to cable franchises throughout the United States. Some of the languge directly mirrors language found in federal law regarding the operation of a cable system. Note that the 1996 Federal Telecommunications Act largely stripped local governments of their ability to regulate cable rates and channel offerings. Of particular interest in these agreements is a requirement that the cable operators pay the county a franchise fee of 5% of gross receipts in exchange for the rights granted by the county to use public rights of way. Under federal law, this fee can be passed throug h the cable customers, but it will not necessarily mean a 5% increase in customer bills. The franchise fe,; applies only to cable services as defined in the agreement and does not apply to such things as broadband or phone service. Still, a new charge will likely show up on customers' bills beginning with the June 2008 billing cycle. In addition, the agreement requires the cable companies (at the county's option) to televise Board of County Commissioner business meetings, Budget Committee meetings and Planning Commission meetings. If the cable company's physical plant passes the Deschutes Services Building, the meetings must be televised live. If not, a recording of the meeting will be televised. The term of the agreement is 10 years, which is a usual and customary length for an agreement of this nature. FISCAL IMPLICATIONS: It is estimated that the franchise fee revenue will amount to as much as $350,000 in FY '09. This money will be used to cover the cost of televising the meetings listed above and other costs associated with the County's public information program. Any remaining revenues will go to the general fund. RECOMMENDATION & ACTION REQUESTED: Staff recommends approval and authorization of county administrator's signature of Document Nos 2008-038, 2008-039 and 2008-040, cable franchise agreements with Bend Cable Communications, LLC, California Oregon Broadcasting, Inc. d/b/a Crestview Cable Communications, and Chamber. Cable Communications, LLC. ATTENDANCE: Dave Kanner DISTRIBUTION OF DOCUMENTS: Document # 2008-038: Amy Tykeson Bend Cable Communications, LLC 63090 Sherman Road Bend, Oregon 97701 Document # 2008-039: Scott Chambers Chambers Cable Communications, LLC P.O. Box 7009 Eugene, OR 97401 Document # 2008-040: Patricia Smullin California Oregon Broadcasting, Inc. P.O. Box 1489 Medford, OR 97501 DESCHUTES COUNTY DOCUMENT SUMMARY (NOTE: This form is required to be submitted with ALL contracts and other agreements, regardless of whether the document is to be on a Board agenda or can be signed by the County Administrator or Department Director. If the document is to be on a Board agenda, the Agenda Request Form is also required. If this form is not included with the document, the document will be returned to the Department. Please submit documents to the Board Secretary for tracking purposes, and not directly to Legal Counsel, the County Administrator or the Commissioners. In addition to submitting this form with your documents, please submit this form electronically to the Board Secretary.) Date: Please complete all sections above the Official Review line. Jan. 23, 2008 Contact Person: lAmy Tykeson Contractor/Supplier/Consultant Name: Department: V-\dmiriistration Phone #: 312-6442 Bend Cable Commuriictions LLC Goods and/or Services: Franchise agreement for cable TV services in Deschutes County. Background & History: Deschutes County is the local franchising authority for those unincorporated portions of Deschutes County served by Bend Broadband, Chambers Cable Communications and Crestview Cable Communications. These franchises are non-exclusive and it is anticipated that the same franchise would be offered to other cable operators who wanted to enter the Deschutes County market in the future. A franchise agreement is essentially an agreement between a government agency and a private entity that grants the private entity blanket permission to use public rights of way for for-profit purposes. This agreement includes a requirement that the cable operators pay the county a franchise fee of 5% of gross receipts in exchange for the rights granted by the county to use public rights of way. The franchise fee applies only to cable services as defined in the agreement and does not apply to such things as broadband or phone service. In addition, the agreement requires the cable companies (at the county's option) to televise Board of County Commissioner business meetings, Budget Committee meetings and Planning Commission meetings. If the cable company's physical plant passes the Deschutes Services Building, the meetings must be televised live. If not, a recording of the meeting will be televised. The term of the agreement is 10 years, which is a usual and customary length for an agreement of this nature. Agreement Starting Date: Ending Date: Feb. 1, 2008 or on final signature Feb. 1, 2018 or ten years from final signature Annual Value or Total Payment: $250,000 (est.) ❑ Insurance Certificate Received check box) Insurance Expiration Date: Check all that apply: ❑ RFP, Solicitation or Bid Process ❑ Informal quotes (<$150K) Z Exempt from RFP, Solicitation or Bid Process (specify — see DCC §2.37) Funding Source: (Included in current budget? ❑ Yes ® No 1/22/2008 If No, has budget amendment been submitted? ❑ Yes ® No Departmental Contact: Title: Dave Kanner County Administrator Department Director Approval: Signature Phone #: xt. 6565 Date Distribution of Document: Central Administration file, Amy Tykeson, Bend Broadband, 63090 Sherman Rd., Bend, OR 97701 Official Review: County Signature Required (check one): ® BOCC 0 Department Director (if <$25K) ❑ Administrator (if >$25K but 150K; if >$150K, BOCC Order No. C� '/ Date z -06 • Legal Review Document Number �< r 1/22/2008 DESCHUTES COUNTY DOCUMENT SUMMARY (NOTE: This form is required to be submitted with ALL contracts and other agreements, regardless of whether the document is to be on a Board agenda or can be signed by the County Administrator or Department Director. If the document is to be on a Board agenda, the Agenda Request Form is also required. If this form is not included with the document, the document will be returned to the Department. Please submit documents to the Board Secretary for tracking purposes, and not directly to Legal Counsel, the County Administrator or the Commissioners. In addition to submitting this form with your documents, please submit this form electronically to the Board Secretary.) Date: Please complete all sections above the Official Review line. Jan. 23, 2008 Contact Person: Roger Harris Contractor/Supplier/Consultant Name: Department: lAdministration Phone #: Crestview Cable 541-779-1151 Goods and/or Services: Franchise agreement for cable TV services in Deschutes County. Background & History: Deschutes County is the local franchising authority for those unincorporated portions of Deschutes County served by Bend Broadband, Chambers Cable Communications and Crestview Cable Communications. These franchises are non-exclusive and it is anticipated that the same franchise would be offered to other cable operators who wanted to enter the Deschutes County market in the future. A franchise agreement is essentially an agreement between a government agency and a private entity that grants the private entity blanket permission to use public rights of way for for-profit purposes. This agreement includes a requirement that the cable operators pay the county a franchise fee of 5% of gross receipts in exchange for the rights granted by the county to use public rights of way. The franchise fee applies only to cable services as defined in the agreement and does not apply to such things as broadband or phone service. In addition, the agreement requires the cable companies (at the county's option) to televise Board of County Commissioner business meetings, Budget Committee meetings and Planning Commission meetings. If the cable company's physical plant passes the Deschutes Services Building, the meetings must be televised live. If not, a recording of the meeting will be televised. The term of the agreement is 10 years, which is a usual and customary length for an agreement of this nature. Agreement Starting Date: Ending Date: Feb. 1, 2008 or on final signature Feb. 1, 2018 or ten years from final signature Annual Value or Total Payment: $50,000 (est. ❑ Insurance Certificate Received check box) Insurance Expiration Date: Check all that apply: ❑ RFP, Solicitation or Bid Process ❑ Informal quotes (<$150K) ® Exempt from RFP, Solicitation or Bid Process (specify — see DCC §2.37) Funding Source: (Included in current budget? ❑ Yes ® No 1/22/2008 If No, has budget amendment been submitted? ❑ Yes ® No Departmental Contact: Title: Dave Kanner County Administrator Department Director Approval: Phone #: Sign ture xt. 6565 Date Distribution of Document: Central Administration file, Roger Harris, COBI, P.O. Box 1489, Medford, OR 97501 Official Review: County Signature Required (check one): E BOCC ❑ Department Director (if <$25K) ❑ Administrator (if >$25K but $150 , if >$150K, BOCC Order No. LegalU�A-rReview %- ' Date t ' 2 z - Document Number 1/22/2008 DESCHUTES COUNTY DOCUMENT SUMMARY (NOTE: This form is required to be submitted with ALL contracts and other agreements, regardless of whether the document is to be on a Board agenda or can be signed by the County Administrator or Department Director. If the document is to be on a Board agenda, the Agenda Request Form is also required. If this form is not included with the document, the document will be returned to the Department. Please submit documents to the Board Secretary for tracking purposes, and not directly to Legal Counsel, the County Administrator or the Commissioners. In addition to submitting this form with your documents, please submit this form electronically to the Board Secretary.) Date: Jan. 23, 2008 Contact Person: Bob T Please complete all sections above the Official Review line. Department: jAdministration owe Phone #: 541-485-5611 Contractor/Supplier/Consultant Name: Chambers Cable Communictions LLC Goods and/or Services: Franchise agreement for cable TV services in Deschutes County. Background & History: Deschutes County is the local franchising authority for those unincorporated portions of Deschutes County served by Bend Broadband, Chambers Cable Communications and Crestview Cable Communications. These franchises are non-exclusive and it is anticipated that the same franchise would be offered to other cable operators who wanted to enter the Deschutes County market in the future. A franchise agreement is essentially an agreement between a government agency and a private entity that grants the private entity blanket permission to use public rights of way for for-profit purposes. This agreement includes a requirement that the cable operators pay the county a franchise fee of 5% of gross receipts in exchange for the rights granted by the county to use public rights of way. The franchise fee applies only to cable services as defined in the agreement and does not apply to such things as broadband or phone service. In addition, the agreement requires the cable companies (at the county's option) to televise Board of County Commissioner business meetings, Budget Committee meetings and Planning Commission meetings. If the cable company's physical plant passes the Deschutes Services Building, the meetings must be televised live. If not, a recording of the meeting will be televised. The term of the agreement is 10 years, which is a usual and customary length for an agreement of this nature. Agreement Starting Date: Ending Date: Feb. 1, 2008 or on final signature Feb. 1, 2018 or ten years from final signature Annual Value or Total Payment: $50,000 (est.) ❑ Insurance Certificate Received check box) Insurance Expiration Date: Check all that apply: ❑ RFP, Solicitation or Bid Process Informal quotes (<$150K) ® Exempt from RFP, Solicitation or Bid Process (specify — see DCC §2.37) Il Funding Source: (Included in current budget? ❑ Yes ® No 1122120f» If No, has budget amendment been submitted? ❑ Yes ® No Departmental Contact: Dave Kanner Title: County Administrator Department Director Approval: Phone #: Sign ure xt. 6565 j. (0 Date Distribution of Document: Central Administration file, Bob Towe, Chambers Cable Communications, P.O. Box 7009, Eugene, OR 97401 Official Review: County Signature Required (check one): C] BOCC ❑ Department Director (if <$25K) ❑ Administrator (if >$?5K but < 150K;_;if >$150K, BOCC Order No. Legal Review (c! Date Document Number :).0(='Y', - 9 1/22/2008 AN AGREEMENT GRANTING A FRANCHISE TO BEND CABLE COMMUNICATIONS, LLC, ITS SUCCESSORS OR ASSIGNS, TO OWN AND OPERATE AND MAINTAIN A CABLE SYSTEM IN THE COUNTY OF DESCHUTES, OREGON, SETTING FORTH CONDITIONS ACCOMPANYING THE GRANT OF FRANCHISE, AND PROVIDING FOR THE REGULATION AND USE OF SAID SYSTEM NOW, THEREFORE, the County of Deschutes hereby grants a nonexclusive franchise for a period of ten (10) years for the operation and maintenance of a Cable System within the County of Deschutes to Bend Cable Communications, LLC, hereinafter referred to as the "Company." Provided, however, that said franchise shall be subject to the following terms and performance conditions: SECTION 1. TITLE OF AGREEMENT This agreement shall be known and may be cited as the "Cable Franchise," hereinafter "Franchise." SECTION 2. DEFINITIONS For the purpose of this agreement and all attachments included thereto, 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, and words in the singular number include the plural number. The word "shall" is mandatory and "may" is permissive. Words not defined shall be given their common and ordinary meaning. "Cable Services" shall mean (1) the one-way transmission to Subscribers of (a) video programming, or (b) other programming services, and (2) Subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service. "Cable System" means a system of antennas, cables, wires, lines, towers, wave guides, fiber, coax, or other conductors, converters, equipment or facilities, designed and constructed for the purpose of producing, receiving, transmitting, amplifying and distributing audio, video, and other forms of electronic, electrical or optical signals, which includes Cable Service and which is located in the County. "Cable mile" shall mean a linear mile of strand -bearing cable as measured on the street or easement from pole to pole or pedestal to pedestal. "Channel" means a portion of the electromagnetic frequency spectrum which is used in a cable system and which is capable of delivering video signal whether in an analog or digital format. This definition does not restrict the use of any channel to the transmission of analog video signals. "Complaint" means any written complaint from a subscriber or the general public or a verbal complaint from a subscriber or the general public that has been duly documented in writing by the County, regarding the Company's operations or services sufficiently reasonable in nature that written response by the Company should reasonably be made, or action taken. Bend Broadband cable franchise Page 1 of 18 DC- 2 1.J '3 "County" means Deschutes County, a political subdivision of the State of Oregon, whose governing body is the Deschutes County Board of Commissioners. County refers to unincorporated areas of Deschutes County. "FCC" shall mean the Federal Communications Commission and any legally appointed or elected successor. "Franchise" shall mean the non-exclusive authorization granted pursuant to this agreement to construct and operate a Cable System along the public ways within all or a specified area in the County. "Company" shall mean any "person" receiving a Franchise pursuant to this agreement and its lawful successor, transferee or assignee. "Government Access" means the non-commercial use by the County of capacity on a channel on the Cable System to distribute live or pre-recorded government video programming under applicable law. "Installation" shall mean the connection of the system from feeder cable to subscribers' terminals. "Person" shall mean an individual, partnership, association, organization, corporation or any lawful successor, transferee or assignee of said individual, partnership, association, organization or corporation. "Public School" shall mean any school at any educational level operated within the County by any public school system, but limited to, elementary, middle school, and high school. "Service Area" shall mean the area of the County of Deschutes served by Company's Cable System on the date of this Agreement and as extended thereafter in accordance with this Agreement. "State" shall mean the State of Oregon. "Street" or "Public Right of Way" shall include each of the following which have been dedicated to the public or hereafter dedicated to the public and maintained under public authority located within the County limits: streets, roadways, highways, local access roads, avenues, lanes, alleys, sidewalks, easements, rights-of-way and similar public ways including roads open to public use and extensions and additions thereto, together with such other public property and areas that the County shall permit to be included within the definition of street from time to time. "Subscriber" shall mean any person lawfully receiving Cable Service as defined from the Company. SECTION 3. RIGHTS AND PRIVILEGES OF COMPANY County grants to Bend Cable Communications, LLC the right and privilege to construct, erect, operate and maintain, in , upon, along, across, above, over and under the streets, alleys, public ways and public places now laid out or dedicated , and all extensions thereof and additions thereto, that the County has rights of way jurisdiction over, including : poles, wires, cables, Bend Broadband cable franchise Page 2 of 18 conduits and other technical facilities necessary for the construction, maintenance and operation in County of a cable television system or the interception, sale and distribution of television system services. This Franchise is not exclusive and County reserves the right to grant a similar use of streets, alleys, public ways and places to any other person at any time during the period of this franchise. SECTION 4. FRANCHISE TERRITORY This nonexclusive Franchise relates to the County limits as presently defined and to any area henceforth added thereto during the term of this Franchise, except those areas within the jurisdictional boundaries of an incorporated city as they currently exist or may from time to time be altered. SECTION 5. NON -FRANCHISED COMPETITORS In the event that a non -franchised multi -channel video -programming distributor accessing County public rights of way provides service to the residents of the Service Area equivalent to those services provided by a Cable System, but not fitting the definition of cable system subject to local franchise, the Company shall have a right to request Franchise amendments that relieve the Company of regulatory burdens that create a competitive disadvantage to the Company. In requesting amendments, the Company shall file with County a petition seeking to amend the Franchise. Such petitions shall: 1. Indicate the presence of a non -franchised competitor(s), 2. Identify the basis for Company's belief that certain provisions of the Franchise place Company at a competitive disadvantage, 3. Identify the regulatory burdens in this agreement to be amended or repealed in order to eliminate the competitive disadvantage. The County shall not unreasonably withhold granting the Company's petition and so amending the franchise. SECTION 6. FRANCHISE TERM AND RENEWAL This Franchise shall be effective for a period of ten (10) years from the date on which each party has signed this agreement, unless extended or terminated earlier in accordance with its terms. Applications for renewal of this Franchise shall be reviewed by the County pursuant to applicable law. A request for renewal of this Franchise shall be made in writing by Grantee prior to the expiration date of this agreement. Should this agreement expire without any written renewal or extension thereof, the terms and conditions of this agreement shall remain in full force and effect until such time as a new agreement is adopted by the County and accepted by Company, or until the County or Company terminate the agreement. Such continued performance under this agreement shall not preclude the County from exercising its regulatory authority under any state or federal law or County ordinance. SECTION 7. POLICE POWERS AND CONFLICTS WITH FRANCHISE Bend Broadband cable franchise Page 3 of 18 In accepting this Franchise, the Company acknowledges that its rights hereunder are subject to the police power of the County to adopt and enforce ordinances of general applicability necessary to the safety and welfare of the public; and it agrees to comply with all lawful ordinances enacted by the County pursuant to such power. Subject to the County's lawful police powers, the County may not, by agreement or otherwise, alter any of the Company's material rights, benefits, obligations or duties as specified in this Franchise. SECTION 8. INDEMNIFICATION AND INSURANCE A. INDEMNIFICATION Company shall at all times conduct its operations under this Franchise, including installation, construction or maintenance of its facilities, in a safe and workmanlike manner so as not to present a danger to the public or County. Company shall pay, save harmless and indemnify the County, its Officers, Boards, Commissions, Agents, and Employees from any loss or claim against County on account of or in connection with any activity of Company in the construction, operation or maintenance of its technical facilities and system services. (1) This Franchise shall not be effective until Company secures, and shall at all times be conditioned upon Company maintaining, a comprehensive liability insurance policy which shall contain the following provisions: a) Bodily injury policy limits of $1,000,000 for each person and $1,000,000 for each occurrence. b) Property damage policy limits of $1,000,000. c) An endorsement for completed operations coverage. d) An endorsement naming the County, its officers, agents and employees, as additional insured for liability arising from or in connection with this franchise. A certificate evidencing this endorsement shall be deposited with the County. e) A certificate evidencing insurance as described in this franchise shall be deposited with County. f) In the event that the County's tort liability limits are raised by the Oregon Legislature to exceed the limits described in this section, Company shall obtain and maintain insurance in the amount of the County's tort liability limits. g) The provisions of this Section shall not be construed to limit the liability of Company for damages. (2) Duty to Give Notice and Tender Defense. The County shall give the Company timely written notice of any claim or of the commencement of any action, suit or other proceeding covered by the indemnity obligation in this Section. In the event any such claim arises, the County or any other indemnified party shall tender the defense thereof to the Company and the Company shall have the obligation and duty to defend, settle or compromise any claims arising thereunder, and the County shall cooperate fully therein. Company shall accept or decline the tender within thirty (30) days. Company shall reimburse reasonable attorney fees and costs incurred by the County during the thirty (30) day period in which the Company accepts or declines tender. In the event that the Company declines defense of the claim in violation of this subsection A, the County may defend such claim and seek recovery from Company its expenses for reasonable attorney fees and disbursements, including expert witness fees, incurred by the County for defense and in seeking such recovery. Bend Broadband cable franchise Page 4 of 18 B. DEDUCTIBLES AND SELF-INSURED RETENTIONS If Company changes its policy to include a self-insured retention, the Company shall give notice of such change to the County. The County's approval will be given if the self- insured retention is consistent with standard industry practices and may be qualified by County. Any deductible or self-insured retention of the policies shall not in any way limit Company's liability to the County. SECTION 9. RIGHTS OF INDIVIDUALS A. Company shall not deny Cable Service, or otherwise discriminate in the provision of Cable Service on the basis of race, color, religion, national origin, age or sex. B. Company shall adhere to the equal employment opportunity requirements of the FCC and state and local regulations, as amended from time to time. C. In the event Company, or any of its agents or employees, elect to sell, or otherwise make available to any party any list which identifies the viewing habits of individual subscribers, Company will do so in a mariner consistent with Federal law. D. Company rate structure shall comply with all applicable federal laws and regulations. SECTION 10. SERVICE AVAILABILITY The Company shall provide Cable Service throughout the Service Area pursuant to the provisions of this Franchise and shall keep a record of all extensions of the Cable System by the Company. This record shall be available for inspection by the County at the local office of the Company during regular office hours upon reasonable notice. A. LINE EXTENSIONS (1) In all areas of the Franchise territory, the Company shall be required to extend its system pursuant to the following requirements: a. Company must extend its Cable System and make Cable Service available to every dwelling unit in all unserved, developing areas having at least forty (40) dwelling units per cable mile as measured from the existing Cable System, and when practicable shall extend its Cable System simultaneously with the installation of utility lines b. Company must extend the Cable System and make Cable Service available to any isolated resident in the Service Area requesting connection at the standard connection charge, if the connection to the isolated resident would require no more than a standard one hundred and fifty (150) foot aerial drop line from existing Cable System facilities. (2) New Development Underground In cases of new construction or property development within the Service Area where utilities are to be placed underground, the developer or property owner shall give Company at least 30 days prior notice of such construction or development, and of the particular Bend Broadband cable franchise Page 5 of 18 date on which open trenching will be available for Company's installation of conduit, pedestals and/or vaults, and laterals. Company shall also provide specifications as needed for trenching. Costs of trenching and easements required to bring service to the development shall be borne by the developer or property owner; except that if Company fails to install its conduit, pedestals and/or vaults, and laterals within five (5) working days of the date the trenches are available, as designated in the notice given by the developer or property owner, then should the trenches be closed after the five-day period, the cost of new trenching is to be borne by Company. Nothing herein shall be construed to prevent Company from serving areas outside its Service Area upon agreement with developers, property owners, or residents. SECTION 11. CONSTRUCTION STANDARDS AND STREET OCCUPANCY A. CONSTRUCTION STANDARD (1) Company and Company's contractors shall comply with all applicable state and federal safety codes and shall apply for and obtain all permits necessary for construction or installation of any facilities, and for excavating and laying any facilities within the streets. Company shall pay, prior to issuance, all applicable fees for the requisite construction permits. Company and Company's contractors shall comply with all applicable provisions of the National Electric Safety Code; shall design antenna supporting structures (towers) for the proper loading zone as specified in the most current version of the Electronics Industry Association's R.S.-22A Specifications; shall maintain towers in accordance with all applicable rules and regulations of the Federal Aviation Administration and all other applicable state or local codes and regulations., B. STREET OCCUPANCY Company agrees to comply with the following conditions: (1) Use. All transmission and distribution structures, lines and equipment erected by Company within County shall be so located as to cause minimum interference with the proper use of streets, alleys and other public ways and places, and to cause minimum interference with the rights or reasonable convenience of property owners who adjoin any of the streets, alleys or other public ways or places. (2) Restoration. In case of any disturbance of pavement, sidewalk, driveway or other surfacing by Company, Company shall, at its own cost and expense and in a manner approved by County, replace and restore all paving, sidewalk, driveway or surface of any street or alley disturbed, in as good condition as before the disturbance. If Company fails to make restoration as required, County shall cause the repairs to be made at the expense of Company. (3) Relocation. County may require Company to change the location of or to remove any pole, conduit, structure or facility within the public right of way when the public convenience requires such change or removal and the expense thereof shall be paid by Company. County shall give Company reasonable written notice at the location designated by Company in this agreement of any changes required and Company shall have a reasonable time within which to make the requested change. If the Company refuses to make the change Bend Broadband cable franchise Page 6 of 18 requested by the County or does not make the change within a reasonable time after the request of County, the County may make the change at the expense of the Company. (4) Placement of Facilities. Company shall not place its technical facilities where they will interfere with any gas, electric or telephone fixture or sewer or water facility. All facilities placed in the street shall be placed as the County directs. (5) Temporary Rearrangement of Facilities. Company shall, upon receipt of at least seven days written notice from anyone desiring to move a building or other object according to County ordinances regulating the moving of buildings, arrange to temporarily raise, lower or otherwise move its facilities to permit the moving of buildings or other objects if the person wishing to move the building or other object makes a reasonable arrangement to reimburse Company for its expenses in rearranging its facilities. Nothing contained in this section shall preclude the County from requiring Company to move its facilities at its own expense when public convenience requires the move, as described in subsection (4) of this section. (6) Tree Trimming. Company may trim trees upon or overhanging streets, alleys, sidewalks and public places of County so as to prevent the branches from coming into contact with the facilities of Company, all trimming to be done under the supervision of County Vegetation Manager or his/her designee and at the expense of Company. SECTION 12. SERVICES AND RATES A. The terms and provisions of the Code of Federal Regulations, Title 47, Chapter I, Part 76, Subpart H, Sec. 76.309 (47 CFR 76.309) as it currently exists or as it may hereafter be amended, are hereby adopted and incorporated by reference herein, with the following additions: (1) Pursuant to 47 CFR 76.309(a), the County shall enforce the customer service standards contained in 47 CFR 76.309(c) as it currently exists or as it may hereafter be amended. B. CUSTOMER SERVICE STANDARDS (1) Company shall keep a record of Cable Service complaints and shall promptly resolve the complaints as required by applicable FCC regulations. (2) Requests for repairs received during normal business hours, which result in the need for a field visit are to be dispatched for repair according to the following plan: a. A call involving loss of reception on all channels is dispatched to the field immediately. Outages involving single customers received during business hours will be dispatched on the same day received. Calls received after business hours will be dispatched the next day. b. Calls involving degraded reception or single channel outages are handled on the same day if received prior to 3:00 PM, if at all possible. Calls received after 3:00 PM will be dispatched the next business day. c. The Company will employ the normally accepted methods of communications for customers to make requests for repair after business office hours or on weekends. Outage calls are referred immediately to the standby technician for resolution in Bend Broadband cable franchise Page 7 of 18 accordance with 2.a., above. Calls involving degraded service are forwarded to the office staff on the next business day for dispatch. (3) Upon activation of the Cable System in any area, Company shall provide Cable Service to any requesting Subscriber as follows: a. Basic and other entertainment Cable Services within ten business days of the receipt of subscriber deposits or prepayment; interactive and similar innovative Cable Services will be provided within forty-five days of the receipt of deposits or advance payments. b. Any delay in providing a Cable Service beyond the maximum period shall be deducted from the first month's charges for the service at the rate of two days of deduction for each day of delay beyond the maximum period. (4) It shall be the right of all Subscribers to continue receiving Cable Service insofar as their financial and other obligations to the Company are honored. Company shall not interrupt Cable Service except for good cause and for the shortest time possible. Such interruptions, insofar as possible, shall be preceded by notice and shall occur during periods of minimum use of the Cable System. A log shall be maintained by Company of all Cable Service interruptions within the previous 12 months involving all channels in the Cable Service and shall be made available to County upon request. For planned interruption of Cable Service for more than 24 hours, Company shall provide written notice of the interruption and its length either electronically or by mail to all affected Subscribers at least five days prior to the interruption. Said notice shall inform Subscribers that they are eligible to receive, if they so notify Company, billing credit for the period during which Cable Service will not be delivered. C. TELEPHONE ANSWERING SERVICE Toll free lines or local phone numbers, either staffed or with answering capability, providing at least emergency referral information, must be operational twenty-four (24) hours per day, including weekends and holidays. D. RATE REGULATION To the extent that Federal or State law or regulation may now, or as the same may hereafter be amended to authorize the County to regulate the rates for any particular Cable Service tiers, service packages, equipment, or any other services provided by Company, the County shall have the right to exercise rate regulation to the fullest extent authorized by law, or to refrain from exercising such regulation for any period of time, at the sole discretion of the County. If and when exercising rate regulation, the County shall abide by the terms and conditions set forth by the FCC. E. SPECIAL NOTICE PROCEDURES (1) At any time a person subscribes to any Cable Service, the person must be specifically informed whether there will be a charge to drop the service. Bend Broadband cable franchise Page 8 of 18 (2) If there is any charge for terminating a promotional or free Cable Service, the charge must be disclosed in writing prior to connection of the service or provision of the product. F. EMERGENCY BROADCAST (1) In accordance with, and at the time required by, the provisions of the FCC Regulations Part 11, Subpart 11.51, as such provisions may from time to time be amended, Company shall install, if it has not already done so, and maintain an Emergency Alert System (EAS) for use in the franchise area in transmitting Emergency Act Notifications and Emergency Act Terminations in local and state-wide situations as may be designated to be an emergency by the Local Primary, the State Primary and/or the State Emergency Operations Center, as those authorities are identified and defined within FCC Reg. Section 11.51. (2) The County shall permit only appropriately trained and authorized persons to operate the EAS equipment and shall take reasonable precautions to prevent any use of the Company's cable system in any manner that results in inappropriate use thereof, or any loss or damage to the cable system. Except to the extent expressly prohibited or limited by law, the County shall hold the Company, its employees, officers and assigns harmless from any claims arising out of the emergency use of its facilities by the County, including, but not limited to, reasonable attorney's fees and costs. (3) The County, with the assistance of the Company, shall develop emergency operating procedures to be strictly adhered to by persons authorized to operate the EAS equipment in the event of an emergency. SECTION 13. FRANCHISE FEE A. FEE DUE AND PAYABLE TO COLTNTY 1. Beginning July 2008, Company shall pay to the County of Deschutes a fee of five percent (5%) of gross receipts collected by Company for operation of the Cable System to provide Cable Services to Subscribers within the County, including all forms of consideration, such as lump sum payments. Fees for other telecommunications services that may be offered in the future will be determined at the time the new services become available in accordance with applicable laws and regulations. Cable franchise fees shall be paid by the Company monthly on or before the 20th day of each month for the preceding month. Company shall provide to the County reasonable access to their books and records for the franchise fees received upon being presented by the County with ten (10) days prior written demand for the production of said records for County inspection. This franchise fee shall be paid instead of an annual business license and no other business license fee shall be required. 2. County's acceptance of any payments due under this section shall not be considered a waiver by County of any breach of this agreement. Payment to the County under this section shall be the verifiable amount owed to the County and shall be considered to have been certified as such by Company. 3. Franchise fee payment shall be in addition to any other taxes or permit fees owed to the County by the Company that are not included as franchise fee under federal law. In the event any law or valid rule or regulation applicable to this Franchise limits franchise fees below the five percent (5%) as set forth in Section 13(A)(1), the Company agrees to and shall pay the Bend Broadband cable franchise Page 9 of 18 maximum permissible amount and, if such law or valid rule or regulation is later repealed or amended to allow a higher permissible amount, then the Company shall, upon receiving a written 120 day notice from the County, pay the higher amount up to the maximum allowable by law, not to exceed five percent (5%) upon implementation. B. AUDITS/REVIEWS No more frequently than every twelve (12) months, upon thirty (30) days prior written notice, the County shall have the right to conduct an independent audit or review of Company's records reasonably related to the payment of franchise fees under_this agreement, covering the period since the last audit or the commencement date of this agreement, which ever is less, in accordance with generally accepted accounting principles. Upon completion of any audit, County shall provide Company with a complete audit report, including the basis for any claimed underpayment. Company may dispute any claimed underpayment based on an independent or internal audit or review conducted by or on behalf of Company. The Company shall pay to the County within forty-five (45) days written notice any undisputed amounts due to the County as determined by any audit of Company. In cases of undisputed underpayment of more than 5%, Company shall reimburse to the County the total cost of the audit or review described in this section within thirty (30) days of the County's written demand for same. Any undisputed underpayment and interest due shall be payable to County in 30 days. SECTION 14. PAYMENT TO COUNTY A. ACCEPTANCE BY COUNTY No acceptance of any payment by the County shall be construed as a release or as an accord and satisfaction of any claim the County may have for further or additional sums payable as a Franchise fee under this Agreement or for the performance of any other obligation of the Company. B. FAILURE TO MAKE REQUIRED PAYMENT In the event that any Franchise payment or recomputed payment is not made on or before the dates specified herein, Company shall pay an interest charge, computed from such due date, at the annual rate of one percent over the prime interest rate or 9%, whichever is higher. C. PAYMENT ON TERMINATION If this agreement terminates for any reason, upon request of County, the Company shall file with the County within ninety (90) calendar days of the date of the termination, a financial statement, certified by an independent certified public accountant, showing the gross revenues received by the Company since the end of the previous fiscal year. The County reserves the right to satisfy any remaining financial obligations of the Company to the County by utilizing the funds available in a letter of credit or other security provided by the Company. Bend Broadband cable franchise Page 10 of 18 SECTION 15. TRANSFER OF OWNERSHIP OR CONTROL Company shall not sell, assign, dispose of or transfer this agreement, the Franchise or the Cable System without prior written approval of County. Such approval shall be based upon the following criteria: Company shall be required to demonstrate to that Company's proposed purchaser, assignee or transferee has such financial and managerial resources as are sufficient to maintain the then current quality of Cable Service and to comply with the terms of this Franchise prior to the County granting such approval. Grantee shall assist the County with reasonable inquiries to determine the financial and managerial sufficiency of a proposed purchaser, assignee or transferee. Such approval by County, shall not be unreasonably withheld, delayed, or conditioned by the County. SECTION 16. RECORDS, REPORTS AND MAPS A. REPORTS REQUIRED (1) The Company's schedule of charges, contract or application forms for Cable Service, policy regarding the processing of Subscriber complaints, delinquent Subscriber disconnect and reconnect procedures and any other terms and conditions adopted as the Company's policy in connection with Subscribers shall be maintained by Company for a period of not less than two years and shall be made available for County inspection upon reasonable notice. SECTION 17. DISCONTINUED USE OF FACILITIES Whenever Company intends to discontinue using any facility within the Streets or Public Ways, Company shall submit for the County Engineer's approval a complete description of the facility and the date on which Company intends to discontinue using the facility. Company may remove the facility or request that any such facility remain in place, the County Engineer may require the Company to remove the facility from the street or modify the facility to protect the public health and safety or otherwise serve the public interest. The County Engineer may require the Company to perform a combination of modification and removal of the facility. Company shall complete such removal or modification in accordance with a schedule set by the County Engineer. Until such time as Company removes or modifies the facility as directed by the County Engineer, or until the rights to and responsibility for the facility are accepted by another person having authority to construct and maintain such facility, Company shall be responsible for all necessary repairs and relocations of the facility, as well as maintenance of the street or public way, in the same manner and degree as if the facility were in active use, and Company shall retain all liability for such facility. SECTION 18. SERVICE TO PUBLIC BUILDINGS A. The Company shall maintain, without charge, one outlet to each public school passed by the Cable System and will provide free basic and expanded basic service, for so long as the Cable System remains in operation in the area. Any such school may install, at its expense, such additional outlets for classroom purposes as it desires, provided that such installation shall not interfere with the operation of Company's Cable System, and that the Bend Broadband cable franchise Page 11 of 18 quality and manner of installation of such additional connections shall have been approved by the Company and shall comply with all County, state and federal laws and regulations. B. In addition, the Company shall furnish, without monthly service charge, to each designated County buildings passed by the Cable System,one outlet and basic and expanded basic programming. County shall pay non-standard charges (if any) for plant extension and standard installation charges. Company agrees to provide, for no programming charge, one (1) outlet of basic and expanded basic programming to all such future public buildings if the drop line to such building does not exceed one hundred and twenty five (125) cable feet from existing cable system facilities or if the County agrees to pay the incremental cost of such drop line in excess of one hundred twenty five (125) feet, including the standard charges for time, labor and materials. Outlets of basic and expanded basic programming provided in accordance with this subsection may be used to distribute basic service throughout such buildings, provided such distribution can be accomplished without causing Cable System disruption and general technical standards are maintained. Cost for any additional outlets and/or equipment shall be the responsibility of the County. SECTION 19, NON-COMPLIANCE, REVOCATION AND RESTORATION A. PROCESS AND PROCEDURE FOR FAILURE TO COMPLY WITH FRANCHISE PROVISIONS (1) If the County determines that evidence of potential non-compliance with the provisions of this franchise has been presented, the County shall make written demand by certified mail to the Company to comply with any such requirement, limitation, term, condition, rule or regulation and shall provide the Company with minimum of 30 days to cure the County's complaint. If a cure could not reasonably be completed within 30 days, the Company shall submit a proposal for cure and begin the process of cure as soon as practical. If the default, failure, refusal or neglect of the Company continues beyond the cure period following such written demand, the County may place its request for equitable relief or termination of the Franchise upon a regular Board meeting agenda. The County shall serve upon Company via certified mail, at least twenty (20) days prior to the date such Board meeting, a written notice of this intent to request such relief or termination, and the time and place of the meeting, notice of which shall be published by the County at least once, twenty (20) days before such meeting in a newspaper of general circulation within the county. (2) The Board shall hear any persons interested therein, and shall reasonably determine if Company is in default on any material obligation under this agreement. If the Board determines that Company is in default in any material obligation under this agreement, the Board shall also determine: (i) if just cause exists for the default; or (ii) if the default is otherwise excusable. (3) In the event that County, after such meeting, determines that Company is in material default of any provision of this Franchise, and the default is not excusable, County may: a. Commence an action at law for monetary damages or seek equitable relief; Bend Broadband cable franchise Page 12 of 18 b. Seek specific performance of any provision, which reasonably lends itself to such remedy; c. In the case of a substantial default of a material provision of this Franchise, declare the franchise agreement to be revoked. B. RESTORATION OF PROPERTY In removing its plant, structures and equipment, the Company shall refill, at its own expense, any excavation that shall be made by it and shall leave all public rights of way and places in as good condition as prevailed prior to the Company's removal of its equipment and appliances without affecting the electrical or telephone cable wires, or attachments. The County shall inspect and approve the condition of the public ways and public places; and cables, wires, attachments and poles after removal. The liability, indemnity and insurance as provided herein shall continue in full force and effect during the period of removal and until full compliance by the Company with the terms and conditions of this paragraph and this agreement. C. RESTORATION BY COUNTY, REIMBURSEMENT OF COSTS In the event of a failure by the Company to complete any work required by Subsection B, above, or any other work required by County law or agreement within the time as may be established and to the reasonable satisfaction of the County, the County may cause such work to be done and the Company shall reimburse the County the reasonable cost thereof within thirty (30) days after receipt of an itemized list of such costs. The County shall be permitted to seek legal and equitable relief to enforce the provisions of this section. D. RIGHTS NOT AFFECTED The termination and forfeiture of any Franchise shall in no way affect any of the rights of the County or Company under the Franchise or any provision of law. SECTION 20. RECEIVERSHIP AND FORECLOSURE A. APPOINTMENT OF RECEIVER The Franchise herein granted shall at the option of the County, cease and terminate one hundred twenty (120) days after the appointment of a receiver or receivers or trustee or trustees to take over and conduct the business of the Company whether in a receivership, reorganization, bankruptcy or other action or proceeding unless such receivership or trusteeship shall have been vacated prior to the expiration of said one hundred twenty (120) days. SECTION 21. COMPLIANCE WITH STATE AND FEDERAL LAWS Company's operations in the County shall comply with all applicable laws, rules and regulations of the United States, the State of Oregon and the County. SECTION 22. INTEGRATION Bend Broadband cable franchise Page 13 of 18 This Agreement sets forth the entire agreement between the parties respecting the subject matter hereof. All agreements, covenants, representations and warranties, express and implied, oral and written, of the parties with regard to the subject matter hereof are contained herein. No other agreements, covenants, representations or warranties, express or implied, oral or written, have been made by any party to another with respect to the matter of this Agreement. All prior and contemporaneous conversations, negotiations, possible and alleged agreements, representations, covenants and warranties with respect to the subject matter hereof are waived, merged herein and therein and superseded hereby and thereby. This is an integrated Agreement. SECTION 23. NOTICES Throughout the term of the agreement, Company shall maintain and file with the County a designated legal or local address for the service of notices by mail. A copy of all notices from the County to Company shall be sent, postage prepaid, to such address and such notices shall be effective upon the date of mailing. At the effective date of this agreement, such addresses shall be: Amy Tykeson Bend Cable Communications, LLC 63090 Sherman Road Bend, Oregon 97701 All notices to be sent by Company to the County under this agreement shall be sent, postage prepaid, and such notices shall be effective upon the date of mailing. At the effective date of this agreement, such address shall be: Deschutes County Attn: County Administrator 1300 NW Wall St., Ste. 200 Bend, Oregon 97701 SECTION 24. RELATIONSHIP OF REMEDIES A. REMEDIES ARE NON-EXCLUSIVE. The remedies provided for in this agreement are cumulative and not exclusive; the exercise of one remedy shall not prevent the exercise of another remedy, or the exercise of any rights of the County at law or equity provided that the cumulative remedies may not be disproportionate to the magnitude and severity for the breach for which they are imposed. B. NO ELECTION OF REMEDIES. Without limitation, the recovery of amounts under the insurance, indemnity or penalty provisions of this agreement shall not be construed as any of the following: an election of remedies; a limit on the liability of Company under the agreement; or an excuse of faithful performance by Company. Bend Broadband cable franchise Page 14 of 18 SECTION 25. FORCE MAJEURE Whenever this agreement sets forth a time for any act to be performed by Company, such time shall be deemed to be of the essence, and any failure of Company to perform within the allotted time may be considered a material violation of this agreement and sufficient grounds for the County to invoke any relevant provision of this agreement. However, in the event that Company is prevented or delayed in the performance of any of its obligations under this agreement by reason of a force majeure occurrence, such as acts of God (for example, floods, fires, tornadoes, earthquakes or unusually severe weather conditions), Company's performance shall be excused during the force majeure occurrence and Company thereafter shall, under the circumstances, promptly perform the affected obligations under this agreement or procure a substitute for performance which is satisfactory to the County. Company shall not be excused by mere economic hardship nor by misfeasance or malfeasance of its directors, officers, employees, or duly authorized agents. SECTION 26. GOVERNMENTAL ACCESS A. CHANNEL CAPACITY FOR GOVERNMENT ACCESS (1) Company shall provide access to one cable channel for Government Access and shall insure access to said channel to the County for non-commercial government use. Company may use said channel for its purposes when said channel is not being utilized for governmental use. Company may fulfill its obligations under this Section by providing access to a shared Government Access channel. (2) Within six (6) months of the effective date of this agreement, Company shall provide, without charge, adequate capacity to facilitate the transmission of live broadcasts of the regular business meetings of the Deschutes County Board of Commissioners, Deschutes County Budget Committee, Deschutes County Planning Commission and other regularly scheduled public County business meetings, if those meetings are held in a single specified permanent meeting room at 1300 NW Wall Street, Bend, Oregon. If meetings are not held in this location, or if the Company is located outside of Bend and does not have a physical plant connection to facilitate live broadcasts, the County will arrange for recording and delivery of content to Company, at County's expense. Company shall broadcast recorded footage of the County business meetings described if the meeting cannot be aired live due to the location. Recorded copies shall be provided to Company on DVD, VHS tape or other medium mutually agreeable to County and Company. All meetings, whether originally broadcast live or on recorded medium shall be broadcast not less than three (3) times on the government access channel within one week of the original broadcast or made available free on -demand after the initial airing once all customers have access to video on -demand. (3) County reserves the right, at its sole discretion, to change the permanent location of the regularly scheduled business meetings described above. County will reimburse Company for connectivity costs required to change the location for broadcasts. Company shall provide, at County's cost, adequate capacity to facilitate the transmission of live broadcasts from the new location upon receipt of ninety (90) days written notice from County of the new, permanent location. (4) If the Company lacks live feed capability and its cable system becomes interconnected with the cable system of another Company with live feed capability, or if Bend Broadband cable franchise Page 15 of 18 interconnection becomes technologically and economically feasible, Company agrees to make its best efforts to make the technological improvements necessary to cablecast live County video programming as provided in subsection (2), above. (5) In the event of a conflict between Deschutes County live video programming and the live programming of another Government Access user, County shall negotiate in good faith with the the other government agency or agencies creating the conflict and shall notify the Company of the mutually agreed upon preference of the agencies. B. ACCESS CHANNEL ON LOWEST AVAILABLE TIER The Government Access channel shall be included by the Company, without limitation, as a part of basic service offered by the Company on its Cable System. C. CHANGE IN GOVERNMENT ACCESS CHANNEL DESIGNATION Company shall provide the County with a minimum of thirty days' notice prior to the time Governmental access channel designations are changed. Company shall consult with the County prior to making a final determination regarding any changes in the Government Access channel designations/assignments. Any new channel designations for the Government Access channel provided pursuant to this agreement shall be in full compliance with FCC signal quality and proof of performance standards. D. CHANGE IN TECHNOLOGY County agrees to consult with Company prior to the purchase of digital production equipment to insure forward compatability with planned technological changes. In the event the Company makes changes to the Cable System and related equipment, outside of planned technological changes or obsolescence, which render the County's equipment incompatiable, Company shall provide reasonable technical assistance and training to ensure that the capabilities of the Government Access channel are not diminished or adversely affected by such change. County will consult with Company prior to purchasing equipment to ensure said equipment is technically compatible with the Cable System. Technology changes enacted by the federal government or those caused by technological obsolescence (e.g., digital, high definition, etc.) are the County's responsibility. E. TECHNICAL QUALITY The Company shall maintain all upstream and downstream cable channel at the same level of technical quality and reliability required by this agreement and all other applicable laws, rules and regulations for residential subscriber channels. SECTION 27. SEVERABILITY If any section, subsection, sentence, clause, phrase, or portion of this Agreement 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 of this Agreement. Bend Broadband cable franchise Page 16 of 18 Agreed to this day of 2008. Attest: Dave Kanner Amy Tykeson County Administrator Bend Cable Communications, LLC Bend Broadband cable franchise kEViEWEC LE !: co Page 17 of 18 TO: County Administrator Deschutes County 1300 NW Wall St. Rm. 200 Bend, OR 97701 ACCEPTANCE OF CABLE COMMUNICATION FRANCHISE hereby accepts this non-exclusive franchise granted by Deschutes County and does hereby agree that it will comply with and abide by all of the provisions, terms and conditions of the Franchise Agreement between itself and the County, and the documents comprising the Franchise as said documents are set forth in the Franchise Agreement, subject to applicable federal, state and local law. Accepted this day of , 2007. Title Bend Broadband cable franchise Page 18 of 18