ORDINANCE NO. _____________

AN ORDINANCE OF THE CITY OF ISSAQUAH, WASHINGTON, GRANTING A NONEXCLUSIVE RENEWAL FRANCHISE (“Franchise”) TO TCI CABLEVISION OF WASHINGTON, INC., TO OPERATE A CABLE COMMUNICATIONS SYSTEM WITHIN THE CITY LIMITS OF THE CITY OF ISSAQUAH.

THE CITY COUNCIL OF ISSAQUAH, WASHINGTON, DO ORDAIN AS FOLLOWS:

1. PURPOSE:

This Franchise shall constitute an agreement between the City of Issaquah (hereinafter referred to as the “City”) and TCI Cablevision of Washington, Inc., a Washington corporation (hereinafter referred to as the “Operator”), authorizing the Operator to construct, maintain and operate a cable television system for the distribution of Cable Services (this and other capitalized terms having the definitions assigned them in Section 00.00.020 of Exhibit C) and other [related] programming services, as well as for the provision of an Institutional Network (I-Net), and shall, upon acceptance by the Operator, supersede and replace all existing franchises previously granted by the City to the Operator or any of its predecessors, subsidiaries or affiliated companies. This Franchise does not authorize the provision of any services other than those specified above. Nor does it in any way relieve the Operator of any obligation to obtain authorizations, licenses, or franchises to use the City’s rights-of-way to provide other services or to comply with requirements governing the use of such rights-of-way or the provision of such services.

2. LENGTH OF FRANCHISE:

The length of this Franchise shall be for a term of seven (7) years from the date of acceptance by the Operator, unless extended in accordance with subsection 2(b).
If, within six months following the third anniversary of the date of acceptance, the City finds the Operator to be in substantial compliance with the material terms of this Franchise, the Operator shall be granted an extension of three (3) years, so that the total length of this Franchise is ten (10) years from the date of acceptance by the Operator.

3. TERMS OF THE FRANCHISE:

This Franchise granted to the Operator shall not be deemed exclusive and shall not in any manner prevent the City from granting other or further franchises, nor shall this grant in any way hereafter limit the City from itself constructing, maintaining and operating a cable television system for the distribution of television and other electronic signals within the City. The Operator agrees to all the terms, conditions, requirements, obligations, and duties as specified in the City’s Ordinance No. 1443, dated September 2, 1980, (hereinafter referred to as the “Cable Communications Regulatory Ordinance” or “Regulatory Ordinance); provided, however, that insofar as this Franchise is inconsistent with the Regulatory Ordinance as enacted on the date of this grant, this Franchise, including its exhibits, shall supersede the Regulatory Ordinance. The Operator shall be given an opportunity to be heard in a public hearing regarding any proposed amendments to the Regulatory Ordinance which may affect its obligations under this Franchise.

4. FRANCHISE FEE:

Operator shall pay unto the City, quarterly, a sum equal to five percent (5%) of the Gross Receipts received by the Operator as set forth in Exhibit C (6) (“Franchise Fees”).

5. ACCEPTANCE:

This grant of Franchise and its terms and provisions shall be accepted by the Operator by written instrument, executed and sworn to by a corporate officer of the Operator before a Notary Public or other officer authorized by law to administer oaths, and filed with the City Clerk within thirty (30) days after the date of this grant. Such written instrument shall state and express the Operator’s unconditional acceptance of this Franchise; shall promise to comply with and abide by all its provisions, terms and conditions; and shall be accompanied by a signed agreement regarding the details of certain monetary payments to be made to the City by the Operator for PEG Access, Institutional Network or other costs associated with the Franchise, along with a cashier’s check for such payments as are identified in the agreement as due upon acceptance of the Franchise. The acceptance shall further include an affirmative statement to the effect that the Operator agrees to accept the terms of Exhibit C (7) (“Judicial Review”), and that such commitment is knowingly and voluntarily entered into for the express purpose of inducing the City to grant this Franchise. The Acceptance shall contain an agreement that the Operator will not initiate any litigation against the City claiming that the provisions of this Franchise, the Regulatory Ordinance referred to in Section 3 hereof, or the draft revisions to the Regulatory Ordinance attached as Exhibit F (“Draft Revisions”) are unreasonable, arbitrary, void, ultra vires or contrary to public policy; and the further agreement that the Operator will not challenge the constitutionality or otherwise assert the invalidity of the provisions of this Franchise, the Regulatory Ordinance, or the Draft Revisions as grounds for non-enforcement of its obligations thereunder.

This grant shall take effect on _____________, ______, provided such formal acceptance hereof of the terms and conditions by the Operator as herein provided, and the form approved by the City Attorney, shall be filed with the City Clerk within such thirty days.

Unless this grant of Franchise is accepted within the time set forth in this section and in the manner herein provided, it shall not become effective.

6. SYSTEM RECONSTRUCTION AND SCHEDULE:

The Operator shall upgrade its system in the City, using a hybrid-fiber-coaxial design, to a capacity of 750 MHz. The system shall be designed to support at least 78 analog channels downstream and to be capable of delivering at least 20 additional video programming services. Fiber optic cable shall feed neighborhood nodes of no more than an average of 1,200 homes. Bi-directional capacity on the residential network shall be capable of being activated from each subscriber location for television origination, high-speed Internet access and other services contingent only on the installation of equipment on the subscriber’s premises. For high-speed Internet access and other services requiring cable modems, the number of nodes supporting these services will be at least the larger of one node per 1,200 homes passed, or one node per 120 cable modem service subscribers. The upgraded system in its initial configuration shall also include Institutional Network capacity, as further specified in section 11.2.

The Operator represents and warrants that, as of the effective date of this Franchise, the Operator has sufficient capital funds available and committed to complete the system upgrade contemplated by this section within the time specified.

A detailed construction schedule shall be submitted to the City no later than 15 days after the effective date of this grant. Operator shall commence construction within two months following the effective date of this grant, shall complete construction and all activation procedures within 12 months following the effective date of this grant, and shall inform the City of its progress at least quarterly during the construction and activation work. Following completion of such construction and activation and throughout the term of the Franchise, at least 78 channels must be able to be delivered on the Cable System without additional construction activity or the addition of any further electronic equipment to the system, and the system shall have the capacity to provide pay-per-view and other services requiring addressability. In addition, at least 45 channels on the system must be carrying video programming in accordance with the provisions of Section 7.

The Operator agrees that failure to complete the system upgrade within the time allowed in the preceding paragraph, or failure of the upgraded system to meet all applicable criteria and standards of Exhibits C (2) (“System Design and Services”), C (3) (“Installation Requirements”), and C (5) (“Technical Performance Standards”) within the time allowed in the preceding paragraph, as reflected in testing pursuant to Exhibit D, shall constitute grounds for Franchise termination and acquisition of the System by the City pursuant to Sections 4.3.2, “Franchise Termination for Non-Compliance,” and 4.3.3, “Effect of Termination for Non-compliance,” of the Regulatory Ordinance.

Within 15 days after the effective date of this grant, the Operator shall cause to be delivered to the City an unconditional, irrevocable, transferable, sight-draft letter of credit in the amount of $1,000,000 to secure the Operator’s timely performance of its obligations as set forth in this Section of the Franchise. The terms of this letter of credit shall be as set forth in Exhibit E.

Time is of the essence of this Franchise. The deadline for completion of the system upgrade may be extended only if, and only to the extent that, the Operator is prevented from performing its obligations hereunder by an act of God or other event(s) beyond the control of Operator that Operator cannot overcome by using its best efforts. If Operator fails to meet the deadline for completion of the system upgrade or the system fails to meet the criteria and standards described above, Operator agrees to pay to the City, not as a penalty but as liquidated damages, an amount equivalent to $0.50 per City subscriber for each day after passage of the deadline for completion until the system upgrade has been completed and has passed all applicable tests; provided, however, that if the delay or other problems in upgrading the system cannot be rectified in the time provided by the Regulatory Ordinance for cure prior to termination, the Operator shall pay to the City, not as a penalty but as liquidated damages, a sum equal to 150% of the estimated cost of completing the system upgrade to compensate the City for the costs of winding up construction or removing Operator’s materials from the City’s rights of way, of pursuing termination, and of securing an alternative provider of Cable Services to City residents.

7. PROGRAMMING REQUIREMENTS

The Operator shall provide video programming services in at least the following broad categories:
1. News & Information
2. Sports
3. General Entertainment
4. Arts, Culture, Performing Arts, and History
5. Children / Family
6. Science
7. Weather Information
8. Governmental and Educational Programming
9. Movies
10. Religious Programming
11. Foreign language / Ethnic Programming

The City acknowledges that identification of these broad categories of programming in no way implies regulatory authority by the City over specific programming services or networks which may be carried on the Operator’s system.

As contemplated in Section 6.1 of the Regulatory Ordinance, Operator shall also provide FM radio programming services consisting of no fewer than 15 discrete Seattle-area stations.


No broad category of services as referred to above may be deleted, or so limited as effectively to be deleted, by the Operator without prior notice to the City. If the City has authority under the Cable Act to approve or disapprove a change in services of the nature contemplated in the preceding sentence, the Operator shall not make such a change without the City’s approval, which approval shall not be unreasonably withheld. In the event any applicable law or regulation materially alters the terms and conditions under which the Operator carries programming within the broad programming categories described in this Section 7, then the Operator shall be obligated to carry such programming only upon reasonable terms and conditions.

8. TECHNICAL IMPROVEMENTS:

In addition to its general obligations under the Regulatory Ordinance, and in view of the City’s unique dependence upon cable for the provision of radio and television programming, the Operator agrees that any material technical improvements introduced in any TCI system in incorporated or unincorporated portions of King County shall be instituted in the city of Issaquah within twelve (12) months after such improvements are first put into service. As part of its annual report to the City, the Operator shall provide a description of all technical improvements introduced in any TCI system in incorporated or unincorporated portions of King County during the preceding twelve (12) months.

9. RATES AND CHARGES:

The City reserves the right under this Franchise to regulate all rates and charges by the Operator, to the full extent permitted by applicable federal, state and local law and regulations. Independent of this reservation of rights, Operator represents and warrants that its rates and charges to customers in the City will not, during the term of this Franchise, be less favorable than those in any other TCI system in the State of Washington.

10. ADDITIONAL ASSURANCES OF PERFORMANCE:

In addition to all other commitments of the Operator under the Cable Communications Regulatory Ordinance and this Franchise, the Operator hereby agrees to the following, as assurances of its performance of all such commitments and maintenance of high quality service responsive to the needs of the City:

(a) TCI West, Inc., shall deliver to the City, within the time permitted for Operator acceptance and subject to the same formalities as are provided in Section 5, a duly authorized and unconditional guarantee of Operator’s compliance with the terms of this Franchise by TCI West, Inc., and any successor company.
(b) Operator shall fund a City inspector to provide assistance during the permit and construction period. The inspector shall monitor the progress of the system upgrade from the effective date of this grant until the system upgrade is complete. The annualized salary contribution including benefits shall be $63,000.

(c) At regular intervals, approximately every nine (9) months, a senior executive of TCI West, Inc., or its successor shall meet with the City Council or its designees in the City to discuss any matters relating to the system and performance under this Franchise.

(d) It is recognized that the terms and conditions of the Franchise contract granted by this ordinance are not severable, but constitute one entire contract and each clause thereof is dependent upon the other. Therefore, it is agreed that should the City Council by ordinance determine that any (1) federal or state legislation, (2) administrative rule, regulation or determination, or (3) judicial decision hereafter deprive or in any material way limit the City with respect to any power or authority which either has or may be exercised in connection with this Franchise, then the City and the Operator will have sixty (60) days within which to renegotiate a new franchise contract. If a new franchise contract is not successfully negotiated within such time, then in such event this Franchise shall be deemed terminated and the procedures specified under Section 4.3.5 “Effect of Termination by Expiration” of the Regulatory Ordinance shall be applicable. Both the City and the Operator shall use their best efforts to negotiate, in good faith, a new franchise contract.


11. PUBLIC, EDUCATIONAL AND GOVERNMENT (PEG) USE OF THE SYSTEM

11.1 PEG Access

11.1.1 Designated PEG Access Providers.

(a) The City may designate Public, Educational, and Government (PEG) Access Providers, including itself, to control and manage the use of all Access Facilities provided for under this Franchise, including, without limitation, the operation of any interconnected Access Channels. To the extent of such designation by the City, as between any Designated Access Provider and the Operator, the Designated Access Provider shall have sole and exclusive responsibility for operating and managing such Access Facilities. In the event the Operator establishes a regional PEG Access system in which the City may effectively participate, the City may designate the Operator as a PEG Access Provider. If the City participates in regional PEG Access established by the Operator, then the City and its residents shall have full rights to the use of such Access under terms and conditions substantially the same as those met by any other participant; but the City at its own discretion shall have the right at any time to withdraw fully or partially from participation in such Access, and thereby be relieved wholly or partially from any obligations associated with the operation of the Operator’s regional PEG Access.

(b) The Operator shall cooperate with Designated PEG Access Providers in the use of the Cable System and Access Facilities for the provision of PEG Access. The Operator shall enter into such operating agreements with designated PEG Access providers as may be necessary to facilitate and coordinate the provision of PEG Access provided that all such operating agreements shall not be inconsistent with the terms of this Franchise.

(c) For the purposes of Section 11, “Access Facilities” means the Channel capacity (and portions thereof), services, facilities, equipment, and technical components used or useable by PEG Access.

11.1.2 Channel Capacity.

(a) Downstream Channels. The Operator shall provide 24 MHZ of downstream bandwidth, and all electronic facilities necessary for the transmission of four (4) downstream video channels, for distribution of PEG Access programming to all Residential Subscribers. In addition, at any time during the term of the Franchise, the Operator, if the City so requests, shall provide one additional 6-MHZ access channel each time that for six consecutive weeks 80% of the access channels are being used for locally scheduled original video programming 80% of the weekdays during any consecutive three-hour period. This requirement shall apply until an additional access channel would result in the number of access channels on the system exceeding ten percent (10%) of the activated system capacity. All PEG Access Channels shall be delivered n the basic service tier, and shall be receivable by Subscribers without special expense.

For purposes of this subsection, "original programming" means non-character-generated programming in its initial cablecast on the system or in its first, second or third repeat. "Locally scheduled" means that the scheduling, selection, and/or playback of original programming on a per-program basis is determined in good faith in consultation with the City or its designee or, with respect to programming received from an interconnection, the provider transmitting the programming over the interconnection. If the City or its designee or the provider transmitting the programming does not have discretion as to the scheduling of the programming, then the programming shall not be considered locally scheduled.

(b) Upstream Channels. Initially and throughout the term of this Franchise, the Operator shall provide actually operating upstream bandwidth sufficient to enable character-generated, prerecorded and live cablecasts from remote points of the Cable System, including the Low-Capacity I-Net Locations marked with a double asterisk in Exhibit A, and all Interconnection points on the Cable System, to enable the distribution of all PEG Access programming to Residential Subscribers on Access Channels, to all Institutional Network locations, and to all Interconnection points on the Cable System. A minimum of 18 MHZ of bandwidth, with all electronic facilities required for the transmission of as many upstream video channels as there are operating Access Channels, plus an additional six (6) MHZ upstream bandwidth for data, shall be in operation throughout the Franchise from the Hardwired Origination Point designated as the Access Center by the City. The upstream bandwidth required in this subsection (B) may be provided as part of the separate Institutional Network capacity as provided for in Section 11.2.

(c) Digital Capacity. At such time as the Operator constructs and activates frequency spectrum for digital transmission on PEG channels in the Seattle / King County cable systems, then, within no more than six (6) months’ time following such activation, equivalent digital capacity, both upstream and downstream, shall be provided for PEG Channels on the System in the Franchise area.

11.1.3 PEG Access Equipment

Within 30 days following the effective date of the Franchise, the Operator shall provide to the City the sum of $130,000 for PEG Access equipment. In addition, the Operator shall provide such technical assistance as may be needed by the City to install and activate the use of the PEG Access equipment in a manner that allows live cablecasting from City Hall. The Operator shall also assist the City in purchasing the equipment at a favorable price through the use of any volume trade discounts available to the Operator.

11.1.4 Hardwired Origination Points.

(a) As part of the construction and extension of the Cable System required under this Franchise, the Operator shall at its own expense, construct and extend the Cable System to provide activated, Hardwired Programming Origination Points at the sites and locations and according to the schedule set forth in Exhibit A. Hardwired Origination Points are the locations marked with a double asterisk in Exhibit A.

(b) The Operator shall provide activated return channel capacity, as required by Section 11.1.2 (B), enabling the use of the remote sites at the time the Hardwired Programming Origination Points are activated.

11.1.5 Access Interconnections.

The Operator shall install and maintain all interconnections of PEG access channels in accord with the requirements of this section and with the requirements of the Cable Regulatory Ordinance. Specifically, the Operator shall interconnect its system with all major contiguous systems, whether owned and operated by the Operator or by another party, in such a manner that all access programming may be both received and transmitted in both upstream and downstream directions on the two systems, and viewed on the access channels on the two systems. Locations served by the interconnection of access channels pursuant to this section shall include, without limitation, all educational institutions in the City of Issaquah, as well as all additional locations within the Issaquah School District which are included in Exhibit B of this Franchise. There shall be a reasonable allocation of costs for such interconnections between systems, and the City shall be responsible for securing interconnection authorization from adjacent jurisdictions’ franchising authorities.

11.1.6 Technical Quality.

(a) The Operator shall maintain all Upstream and Downstream Access channels and Interconnections of Access Channels at the same level of technical quality and reliability required by this Franchise and all other applicable laws, rules and regulations for Residential Subscriber Channels, for both video and data transmission.

(b) The Operator shall not cause any programming to override Access Programming on any Access Channel, except by specific written permission from the Access Provider.

11.1.7 Change in Technology.

In the event the Operator makes any change in the Cable System and related equipment and Facilities or in the Operator∗s signal delivery technology, which directly or indirectly substantially affects the data or video signal quality or transmission of Access Programming, the Operator shall at its own expense take necessary technical steps or provide necessary technical assistance, including the acquisition of all necessary equipment, to ensure that the capabilities of Access Providers or Access Programmers are not diminished or adversely affected by such change.

11.2 New System Institutional Network Design.

(a) Introduction

In addition to the residential network capacity of the system established in the system upgrade required under this Franchise, the Operator shall, as part of the upgrade, install institutional network capacity permitting full bi-directional, closed circuit video, voice and high-speed data communications among government agencies, educational agencies, and other institutions, with an activated common interface to the Operator’s King County cable system capacity serving similar institutions. The plan for provision of such capacity shall be part of the upgrade plan and schedule as required by Section 6 of this Franchise.

The I-Net capacity to be installed by the Operator shall include activated I-Net service capability via institutional cable facilities which are in part separate from the residential network, to a limited number of sites with high anticipated bandwidth needs, called “High Capacity I-Net Locations.” Operator shall also install activated I-Net capacity of a more limited nature, utilizing bandwidth on the residential network or by providing separate activated coaxial cable connections, to a number of sites identified as “Low Capacity I-Net Locations.” Exhibit A lists both High Capacity and Low Capacity I-Net Locations.

The requirement for installation of I-Net capacity shall be met through a 3-stage process:

1) The Operator shall, as part of its system upgrade plan, present to the City without charge a design for I-Net capacity installation to locations listed in Exhibit A, including both Low Capacity I-Net Locations, and High Capacity I-Net Locations. The design shall include cost estimates for all High Capacity I-Net Locations not marked with an asterisk in Exhibit A.

2) The City shall decide which I-Net locations shall be provided capacity during the course of the system upgrade and, to the extent possible, in years following the completion of the upgrade.

3) Installation of activated I-Net system capacity shall be completed by the Operator during the system upgrade. Installation shall include, at no charge to the City or other Exhibit A user, all Low-Capacity I-net Locations, and all initial High Capacity I-Net Locations (those marked with an asterisk in Exhibit A);as well as all additional High Capacity I-Net Locations designated by the City to be installed at a cost to the City or other school, government or City-sponsored non-profit user. In those cases where installation of High-Capacity I-Net Locations in addition to the initial ones specified in Exhibit A is made at a cost to the City or other Exhibit A user, that cost shall in no case be more than the incremental cost of individual optical fibers added to the system backbone exclusively for City I-Net purposes, the cost of node hardware for activating nodes for I-Net purposes, plus the cost of any coaxial or fiber cable plant and electronics to be used to connect I-Net locations to the nodes. In those cases where a charge for installation of a High-Capacity I-Net Location is to be made to the City or another Exhibit-A user, that charge shall in no case exceed the cost of node hardware for activating nodes for I-Net purposes, plus the cost of any coaxial or fiber cable plant and electronics to be used to connect I-Net locations to the nodes. Low Capacity I-Net Locations utilizing the residential Network shall be installed at no charge to the City or other Exhibit-A user, nor shall any costs for such installations be passed through to Cable Subscribers; provided that a user may be charged time and materials for any extension of the system beyond 150 feet from existing residential cable plant. The overall cable system design shall be completed in such a way as to facilitate the future installation of I-Net capacity to additional locations for which a need for I-Net services is anticipated during the course of the Franchise.

A more detailed description of I-Net capacity installation requirements follows below.

(b) High Capacity I-Net Locations

1) In conjunction with the design of the Upgraded Cable System, Operator shall provide without charge to the City a detailed design for a High Capacity I-Net overlaying the Residential Network with a minimum 450 MHZ symmetrically split bi-directional capacity at each Node to and from High Capacity I-Net locations in the Node area. Each I-Net Node shall be served by a minimum of two (2) fibers to and from the Node, and such fibers and routing as is required through intermediary hubs and the primary fiber ring serving King County to ensure activated bi-directional service both within the Franchise area and throughout the Operator’s regional fiber network. The design presented by the Operator shall include cost estimates for the installation of any High Capacity I-Net Locations which are listed in Exhibit A but are not marked with an asterisk as initial locations.

2) Within 30 days after receipt of the design and cost estimates provided pursuant to Subsection A, the City shall advise Operator of the Hubs, Nodes and High Capacity I-Net Locations that it wishes the Operator to construct in conjunction with the Upgrade of the Cable System. The City will further advise which I-Net Nodes are to be activated, and all locations which are to be connected including those that are additional to the I-Net Locations marked with an asterisk in Exhibit A.

3) Operator shall Activate an initial 12 High Capacity I-Net Locations, plus two (2) unspecified locations, each of which shall be installed upon the City request during the Cable System Upgrade. The locations are specified in Exhibit A. Further, the Operator shall activate such additional portions of the I-Net installed pursuant to Subsection 11.2 (B)(2) as are designated by the City for activation. The activated High Capacity I-Net Nodes shall have a capacity of at least 450 MHZ of symmetrically split capacity to and from the Node to the I-Net locations. The activated capacity shall be at least 450 MHZ to the Node and shall utilize the best current state-of-the-art laser technology for transmission from the Node to the secondary Hub.

(c) Low Capacity I-Net Locations.

Low Capacity I-Net Locations requiring upstream video, as so specified in Exhibit A, shall have a minimum of 8 MHZ Upstream and 12 MHZ Downstream Capacity installed and activated, and reserved for I-Net use from the nearest Fiber Hub. From each Fiber Hub to the I-Net switching center, the entire upstream and downstream capacity shall be independent of any other hub to allow Frequency Reuse. Low Capacity I-Net sites not requiring upstream video use may be served by the use of digital data terminals provided by the Operator which are capable of at least 10 Mbps bi-directional transmission. The Operator shall utilize either the residential network or separate coaxial cable connections to activate transmission capability at the Low Capacity I-Net Locations.

Low Capacity I-Net Locations shall include all institutions so designated in Exhibit A, and shall have Institutional Network Capacity, as set forth under this Subsection, available for use upon installation of Residential Service. Additional schools, government agencies, and City-sponsored non-profit agencies which become part of the Franchise area in the future shall be provided with I-Net Capacity under the terms of this Subsection as the Cable System is extended to new areas.

Upon request by the City, the Operator shall provide a conversion plan to the City to upgrade Low Capacity I-Net Locations to High Capacity Locations

11.3 I-Net Ownership and Maintenance.

(a) Operator shall own and maintain the Institutional Network

1. Upon completion of the Upgrade, the Institutional Network shall be maintained to the minimum standards specified in (2) below; however, individual institutions requiring more stringent standards of I-Net system maintenance may strike separate contracts with the Operator for such maintenance.

2. Upon completion of the Cable System Upgrade, Operator shall provide I-Net Location users of the I-Net the highest level of service, reliability, repair and maintenance which the Operator makes available to any commercial or residential user of the Cable System. At a minimum, Operator shall meet the following performance standards for I-Net Capacity and services:

a. Operator shall make I-Net Services and Capacity available to I-Net Locations within 30 days of their request. In cases where the conditions of providing I-Net installation make it infeasible for the Operator to provide service within 30 days pursuant to this section, the Operator may request of the CTC an extension of time for providing service, and such request shall not be unreasonably denied.

b. Operator shall maintain a minimum of 99.5 percent service availability to I-Net Locations measured in periods of one-quarter-hour over a period of one year; provided that in providing maintenance and repair the Operator shall be responsible only for matters reasonably within the Operator’s control.

c. Operator shall assure that I-Net Services encounter fewer than ten to the minus seventh (10-7) unfiltered errors due to impulse noise under normal operating conditions; provided that this requirement shall not apply to the carriage of upstream signals from Low Capacity I-Net Locations.

d. Operator shall respond to all requests for I-Net repairs by having service personnel addressing the reported problem within two (2) hours of I-Net user request.

e. Operator shall provide ongoing maintenance as required for normal system operation. Operator shall notify each affected I-Net user one week in advance of any planned maintenance requiring temporary interruption of services.

f. I-Net Locations carrying critical circuits shall receive top priority in Operators' repair program. The Operator and I-Net users shall develop a mutually agreeable priority listing of such circuits and their terminal locations. When notifying Operator of service complaints, an I-Net user shall identify critical circuits requiring priority repair. Operator shall escalate repair of priority circuits to the extent reasonable under the circumstances.

(3) All service agreements between the Operator and I-Net users for repair and maintenance shall, at a minimum, meet the requirements of this Franchise. TCI shall enter into agreements to provide and shall provide such more stringent levels of maintenance and repair as are requested by I-Net users, unless circumstances beyond TCI’s control prevent its doing so. If the I-Net user and the Operator are unable to mutually agree on terms of a service agreement, or upon the extent to which such agreement has been fulfilled, then the City and TCI shall in a timely manner jointly employ the services of a qualified third party to make a final determination consistent with the terms of this Franchise, and shall abide by the decision of the third party.

11.4 Interconnection of I-Net to Public Fibers of Other Carriers.

Upon request by the City, Operator shall Interconnect its I-Net to any fibers within the City limits set aside for City use under other telecommunications franchises, insofar as such Interconnection is technically feasible. If authorized by the City, Operator may credit the cost of such Interconnection against Access Capital Costs provided under Section 11.9 hereof.

11.5 Joint Use of Fiber or Conduit

So long as it is technically feasible, and subject to the provisions of Section 7.14 (iii) of the Regulatory Ordinance, the City and the Operator shall cooperate to use existing conduit or Fiber for the purpose of expanding the I-Net to achieve the most economical coverage.

11.6 Activation

The Institutional Network, as required in this Section 11 shall be activated in conjunction with the completion of the Upgrade of the Cable System provided for in Section 6 hereof.

11.7 Institutional Network Switching and Routing Capabilities

Operator's Upgraded I-Net shall, at a minimum, permit Public Institutions to transmit Programming via Upstream Institutional Network Channels to Operator's Headend or appropriate hub, and then to Downstream Open or Closed PEG Access Channels on Operator's Residential Network, or to Downstream Institutional Network Channels serving any I-Net Location on the Cable System. The design of the Cable System, and equipment installed by the Operator, shall enable the switching and routing of Institutional Network Signals from Upstream to Downstream transmission to be accomplished remotely via computer and modem by Designated Access Providers or other institution designated by the City, without the assistance of the Operator. Operator shall initially provide, at its own expense, terminations clearly identified for each individual forward and return path to and from the I-Net in the Headend, to facilitate patching and routing capability. The Operator shall at its own expense design and install at its Headend or appropriate hub an expandable 10-channel by 10-channel RF video switching mechanism for the I-Net, with 3 additional outputs for the Residential Network PEG Access Channels, with all associated equipment, as necessary to demonstrate an initial level of switching pursuant to this Section. Operator shall also at its own expense provide a minimum of three data translators or equivalent devices to allow demonstrations of the data transmission capability of the I-Net.

11.8 Limits on use

There shall be no charge to I-Net users for the use of the I-Net. However, I-Net Location users shall not re-sell, lease, or assign use of Institutional Network Capacity or Services to any third party.

11.9 Consistency with Regulatory Ordinance

The City and the Operator agree that the requirements of this Section 11 are consistent with and implement the requirements of the City’s Cable Regulatory Ordinance, and with the provisions of Exhibit C (4).

11.10 Regional Educational Network Connection

The Operator shall connect each school and school administrative location in the Franchise area to the regional educational network serving King County under the terms of the Operator’s King County franchise, in a manner permitting full participation in the network by each location. This regional educational network connection shall be accomplished and activated within 30 days following completion of the regional educational network in any area of King County adjacent to the City.

12. Joint PEG Access and Institutional Network Support Conditions

The Operator shall meet all of the requirements of Section 11 at no charge to the City or any other user, unless specifically permitted to impose a charge under the terms of Section 11.

The Operator shall not pass through to subscribers, nor itemize on any subscriber bill, any cost incurred by the Operator in the fulfillment of its obligations under Section 11; provided that, if the City elects to participate in a regional PEG Access operation established by the Operator, and the costs of such operation are passed through to subscribers in all other participating franchise areas, then the Operator shall not be prohibited from passing through to subscribers and itemizing on subscriber bills the costs of the regional PEG operation, so long as the per-subscriber-per-month pass-through and itemization do not exceed those imposed in any other franchise area participating in the operation.

The Operator agrees that although the sum of Franchise Fees and other payments or alternative support as set forth in section 11 may total more than five (5) percent of the Operator’s Gross Revenue in any 12-month period, the additional commitments are not to be offset or otherwise credited in any way against any franchise fee payments required under this Franchise.

This ordinance shall take effect and be in force five (5) days from and after its passage, approval, and publication as provided by law.

PASSED by the City Council and approved by the Mayor at regular meeting this ______ day of ______, ______.

APPROVED:


________________________________________
Mayor


ATTEST:


_______________________________________
City Clerk


APPROVED AS TO FORM:



_______________________________________
City Attorney


Published: ___________________

Exhibit A

Institutional Network Subscriber Locations

A. HIGH CAPACITY I-NET LOCATIONS

[To be completed from existing lists and maps. Asterisks indicate initial locations. Double asterisks designate Hardwired Origination Points for PEG Access programming return feeds]

B. LOW CAPACITY I-NET LOCATIONS

[To be completed from existing lists and maps. Double asterisks designate Hardwired Origination Points for PEG Access programming return feeds]


Exhibit B

School District Sites for Interconnection

ISSAQUAH SCHOOL DISTRICT ADMINISTRATION BUILDING 565 N.W. HOLLY ST
CLARK ELEMENTARY 500 2ND Ave S.E.
ISSAQUAH HIGH SCHOOL 700 2ND AVE S.E.
ISSAQUAH MIDDLE SCHOOL 400 1ST AVE S.E.
ISSAQUAH VALLEY ELEMENTRY 555 N.W. HOLLY ST
TIGER MOUNTAIN COMMUNITY HIGH SCHOOL 355 S.E. EVANS LANE

Exhibit C
Exhibit C (1): Definitions.

For the purpose of this Franchise, and the interpretation and enforcement thereof, the following words and phrases shall have the following meanings, unless the context of the sentence in which they are used shall indicate otherwise:

1 "Access Channel" or "Public, Educational or Government Access (PEG) Channel" means any channel or portion of a channel utilized for non-commercial programming, where any member of the general public or any non-commercial organization may be a programmer, without charge by the Operator, on a non-discriminatory basis.

1.1 "Educational Access Channel" means any channel or portion of a channel available for educational programming by individuals or institutions.

1.2 "Government Access Channel" means any channel or portion of a channel available for programming by government agencies.

1.3 "Public Access Channel" means any channel or portion of a channel where any member of the general public may be a programmer on a non-discriminatory basis, subject to operating rules formulated by the City or its designee. Such rules shall not be designed to control the content of public access programming.

2 "Addressability" means the ability of a Cable System to allow the Operator to authorize customer terminals to receive, change or cancel any or all specified programming by remote control from a remote location.

3 "Affiliate" means, in relation to a person, any other person who owns or controls, is owned or controlled by, or is under common ownership or control with, such person.

4 "Availability of Service" means the ability of a subscriber to obtain a service within 30 days (unless otherwise specifically provided in the Franchise) by requesting the service and paying applicable installation and/or usage charges.

5 "Basic Cable Service" means that tier of cable service which is required as a condition of access to all other video services and which includes but is not limited to a) the retransmission of local broadcast station signals, and b) public, educational and government access channels.

6 "Broadcast Signal" means a television or radio signal that is transmitted over-the-air to a wide geographic audience and is received by the cable communications system off-the-air, whether by microwave link, by satellite receiver, or by other means.

7 “Cable Act” means collectively the federal Cable Communications Policy Act of 1984 and the Cable Television Consumer Protection and Competition Act of 1992, as amended.

8 “Cable Service” means (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.

9 "Cablecast Signal" means a nonbroadcast signal that originates within the facilities of the cable communications system.

10 "Cable Communications System" or "Cable System" or "System" shall have the meaning specified in the definition of "Cable System" in the Cable Act. In every case of its use in this Ordinance, unless otherwise specified, the term shall refer to the cable system constructed and operated by the Operator in the City under this Ordinance.

11 "Channel" means a portion of the electromagnetic frequency spectrum which is used in a cable system and which is capable of delivering a television channel (as television channel is defined by the FCC by regulation).

12 "City" means the City of Issaquah, a City of the State of Washington in King County, and all the territory within the corporate boundaries of Issaquah as these may change from time to time.

13 "Commercial Subscriber" means a subscriber receiving cable services in a business or other commercial enterprise, where the services are to be used primarily in conjunction with the enterprise and the rates for services are individually negotiated with the subscriber.

14 "Community Access Services" means services provided on any public, educational or government access channel .

15 "FCC" means the Federal Communications Commission.

16 "Franchise" means an initial authorization, or renewal thereof (including renewal of an authorization which has been granted subject to Section 626 of the Cable Act), issued by a franchising authority, whether such authorization is designated as a Franchise, permit, license, resolution, contract, certificate, agreement, or otherwise, which authorizes the construction or operation of a cable system. Unless otherwise specifically provided for “Franchise” shall refer to this document.

17 "Franchise Area" means the corporate boundaries of the City as these may change from time to time.

18 "Operator" means a Person authorized by a franchise to construct, operate and maintain a Cable System in the City.

19 "Gross Receipts" means gross revenues less any bad debts.

20 “Gross Revenues” means all amounts earned by the Operator, or any affiliate of the Operator, or any entity that constitutes a “cable operator” under the Cable Act definition, in whatever form and from all sources, derived from the operation of Grantee’s Cable System to provide Cable Services within the franchise area. “Gross Revenues” shall include, without limitation, amounts for all Cable Services, including without limitation Basic services, premium and pay-per-view services, and Internet services; advertising, commissions on sales of goods or services by third parties utilizing the Cable System (e.g., home shopping networks); installations; leasing, renting or selling of system capacity; and all other revenues derived from the operation of Grantee’s Cable System related to the provision of Cable Services, regardless of whether initially recorded to another entity and however characterized.

However, any sales, excise or other taxes or fees levied directly upon subscribers by a local, state or federal government and collected by the Operator or any affiliate for direct passthrough to such government shall not be included in “Gross Revenues”.

Subject to the limits and restrictions of federal and state law, neither Franchise Fees nor copyright fees paid by the Operator or any affiliate shall be excluded from gross revenues.

“Gross Revenues”, however, shall not be double counted. Revenues of both Grantee and an Affiliate that represent a transfer of funds between the Grantee and the Affiliate, and that would otherwise constitute Gross Revenues of both the Grantee and the Affiliate, shall be counted only once for purposes of determining Gross Revenues.

21 "Institutional Service" means video, audio, data and other services provided to institutional subscribers on an individual application, private channel basis. These services may include, but are not limited to, twoway video, audio or digital signals among institutions, or between institutions and residential subscribers.

22 "Institutional Network" means that part of a cable communications network designed principally for the provision of nonentertainment, interactive services to schools, public agencies or other Citysponsored nonprofit agencies for use in connection with the ongoing operations of such institutions.

23 "Institutional Subscriber" means a public agency, school or Citysponsored nonprofit corporation receiving institutional services on the institutional subscriber network.

24 "Interactive Services" means services provided to subscribers where the subscriber either (a) both receives information consisting of either television or other signals and transmits signals generated by the subscriber or equipment under the subscriber's control for the purpose of selecting what information shall be transmitted to the subscriber or for any other purpose; or (b) transmits signals to any other location for any purpose.

25 "Leased Channel" means any channel or portion of a channel available for programming by persons or entities other than Operator for a fee or charge.

26 "NonBroadcast Signal" means a signal that is transmitted by the cable communications system and that is not involved in an overtheair broadcast transmission path.

27 "Pay Service" or "Premium Service" means a service in which television signals are delivered to subscribers for a special fee or charge over and above the regular charges for standard subscriber service, on a per program, per channel, or other subscription basis.

28 "Person" means an individual, partnership, association, joint stock company, trust, corporation, or governmental entity.

29 "Programmer" means any person or entity who or which produces or otherwise provides program material or information for transmission by video, audio, digital or other storage methods or media, to subscribers, by means of the cable communications system.

30 "Record" means written or graphic materials, however produced or reproduced, or any other tangible permanent record, including, without limitation, all letters, correspondence, memoranda, minutes, notes, summaries or accounts of telephone conversations, opinions or reports of consultants or experts, invoices, billings, statements of accounts, studies, appraisals, analyses, contracts, agreements, charts, graphs, magnetic and laser disk files, and photographs.

31 "Resident" means any natural person residing within the Franchise area.

32 "Residential Service" means services delivered on the residential subscriber network.

33 "Residential Subscriber" means a person who receives services on the residential subscriber network.

34 "Residential Subscriber Network" means a cable communications network designed principally for the delivery of entertainment, community access or interactive services to individual dwelling units. Businesses and other subscribers may also receive such services on the Residential Subscriber Network.

35 "School" means any public educational institution, including primary and secondary schools, community colleges, colleges, universities and extension centers, and all similarly situated private nonprofit and parochial educational institutions which have received the appropriate accreditation from the State of Washington and, where required, from other authorized accrediting agencies.

36 "Section" means any section, subsection or provision of this Ordinance.

37 "Streets and Public Ways" means the surface of and the space above and below any public street, sidewalk, alley, or other public way of any type whatsoever, now or hereafter existing as such within the Franchise area, and any easements, rights of way or other similar means of access to the extent City has the right to allow Operator to use them.

38 "Subscriber" means any Person who elects to subscribe, for any purpose, to a service provided by the Operator by means of, or in connection with, the cable communications system whether or not a fee is paid for such service.

39 "Year" means a full twelvemonth calendar year, unless designated otherwise, such as a "fiscal year".

Exhibit C (2) System Design and Services.
The cable system shall consist of a residential subscriber network capable of carrying oneway and twoway video programming, and such voice and data programming as the Operator may elect to provide, to residences, government and nonprofit agencies, and businesses throughout the franchise area. The system shall also provide an institutional communications capability to permit government, educational and public use of the system for oneway and twoway voice, video and data communications. The details of the institutional communications capability shall be specified in the franchise.

The residential subscriber system shall have the capacity of at least 750 MHz, with the ability to transmit no fewer than 78 activated analog video channels downstream, and the capacity for no fewer than 15 discrete stations of FM radio. A minimum of 45 video channels shall be programmed with television programming. Subject to Federal law and regulation, programmed channels shall include all offtheair network channels serving the franchise area, and all public, educational and government access channels required under this ordinance and the franchise.


Exhibit C (3): Installation Requirements.

Codes. All work done by an Operator pursuant to any Franchise shall be in full compliance with all applicable laws and codes of the State of Washington and ordinances, rules, regulations and resolutions of the City then in effect. In the event an Operator fails at any time to furnish any required safeguards, signs, signals and/or lights; to promptly repair any damage to City utilities; or to promptly backfill excavations as required by law, ordinance, rule, regulation or resolution, then the City reserves the right to proceed as may be required to so comply, and in such event such Operator agrees and covenants to promptly reimburse the City for all expenses of such work.

Construction Limitations.

(i) The location of any Franchise property in a street or other public property shall be subject to the approval of the City. Such approval shall be given in writing. The Operator shall be subject to all applicable ordinances, regulations, permits or licenses as provided by the ordinances of the City as they now exist or as they may be amended.

(ii) During any period of construction, all surface structures, if any, shall be erected and used in such places and positions within said public rightsofway and other public properties so as to interfere as little as is feasible with the free passage of traffic and the free use of adjoining property. The Operator shall at all times post and maintain proper traffic control during any such period of construction as is required by the laws and statutes of the City and the State of Washington.

(iii) The Operator shall properly repair any damage to public and private property of every type and nature and all other improvements if the damage is caused by the act or failure of the Operator.

Undergrounding. For system expansion into new developments, the Operator shall place the cable system underground in localities where telephone and electric power lines are also underground. All installations into existing communities shall be underground in those areas of the City where telephone and electric service are underground at the time of installation of the cable service. In areas where either telephone or electric utility facilities are above ground at the time of cable installation, the Operator may install its Service above ground with the understanding that at such time as those facilities are required to be placed underground by the City, the Operator shall likewise place its services underground without additional cost to the residents of the City; provided, however, if funding for such undergrounding is made available under state or federal law, the Operator shall be entitled to share in such funding on the same terms and conditions applicable to the other utilities to the extent permitted by law. The Operator shall share equitably with other utilities in the cost of any joint undergrounding.

The Operator shall be notified of the date when trenches are open for the installation of cable in new subdivisions, in accordance with the City’s permit process and ordinance(s) governing the operation of utility providers.

Standby Power. The Operator shall install and maintain equipment capable of providing standby power for the headend, transportation, and all trunk amplifiers, as well as throughout any institutional network serving public, educational or government uses, for a minimum of two hours. Such equipment shall be so constructed as to automatically notify the Operator when it is in operation and to automatically revert to the standby mode when normal A/C power returns.

Service to Public Buildings. The Operator shall provide, free of charge to the City, one outlet and Basic service to each public building in the City of Issaquah, as identified on a list of such buildings which is included in a Franchise. The City shall provide each operator with a list and addresses of all public facilities requiring service pursuant to this subsection. For any public facility installations requiring a drop or system extension of more than 150 ft., normal line extension charges for the residential subscriber network shall apply.


Exhibit C (4): Government Service – Public, Educational, and Government Use of System.

In addition to any Government Access channel provided for herein or in a Franchise, the Operator shall provide to the City on its residential subscriber network or on a separate network interconnected with the residential subscriber network, at no charge for its unrestricted use, an activated upstream and downstream Institutional Network capability for full motion video, voice and high speed data services, the details of which capability shall be specified in the Franchise.

The City shall utilize the capacity provided under this Section only for the purpose of carrying out public business, and shall not utilize the capacity to compete commercially with the Operator to provide cable services or telecommunications services to any third party.

The Operator shall install and maintain a capability within its system for digital data to be transmitted from each subscriber location to a centralized site, for such purposes as (but not limited to) burglar alarms, fire alarms, medical alert, meter reading, and/or community response. For services installed by the City under this provision, the City shall be solely responsible for control of any data it generates by such service, and the Operator shall not restrict, monitor, or otherwise control any aspects of such service provided by the City.

The Operator shall install in its system an emergency alert system for use by the City, subject to Federal and State laws, FCC rules, and regional planning authority guidelines. The system shall permit the Mayor to override all channels simultaneously, with an audio and video emergency message originating from a central location designated by the City.

Except to the extent expressly prohibited by law, the City shall hold the Operator, its employees, officers, and assigns, harmless from any claims arising out of the City’s sole negligence in the emergency use of the Operator’s facilities by the City, including, but not limited to, reasonable attorneys’ fees and costs. If only part of the negligence involved in any instance is attributable to the City, then the City shall hold the Operator, its employees, officers and assigns harmless only with respect to that part of the negligence for which the City is responsible.

The Operator shall provide for public, educational and government use of the system, including use of an Institutional Network, details of which provision shall be included in the Operator’s Franchise.

Exhibit C (5): Technical Performance Standards.

The Operator shall construct, install, operate and maintain its system in a manner consistent with: applicable local construction standards; all applicable local, state and federal laws, rules, regulations and codes; and the FCC Rules and Regulations, Part 76, Subpart K (Technical Standards), as now or hereafter constituted. The City may establish and enforce higher or additional reasonable technical standards, following consultation with the Operator, to the extent that the City determines there is a need to do so following a recommendation from the CTC, and applicable law and FCC rules and regulations allow the City to do so without the consent of the Operator. Upon request by the City, the Operator shall provide to the City a copy of the results of any test of system performance or signal leakage required by the FCC, as well as documentation of compliance with all other local, state, and federal laws, rules, regulations and codes. The Operator shall cooperate fully in any inspection of the system, and any inspection of the Operator’s records, undertaken by the City for the purpose of determining the Operator’s compliance with applicable laws, rules, regulations and codes. In addition, if the City is permitted under federal law and regulation to actively enforce FCC technical standards on a local basis, then all the provisions of Exhibit D shall be obligations of this Franchise.


Exhibit C (6) Franchise Fees.
Franchise Fees. As compensation for a Franchise granted pursuant to this Ordinance, and in consideration of permission to use and occupy the streets and public ways of the City for the construction, operation, maintenance and/or reconstruction of a cable television system within the City, and in consideration of the regulatory burden imposed on the City by the Operator's cable television system, every Operator shall pay to the City an amount equal to five percent (5%) of such Operator's Gross Receipts.

Usage of the Fees by the City. It is the intent of the City to utilize these funds, as the City Council determines necessary, to defray the costs of local regulation of any franchise, and to generally encourage development of the System including the development of the City’s use of the System for public purposes. Of the franchise fee collected by the City, an amount of the Operator's gross annual receipts shall be budgeted to the CTC for such purposes. Other than the above, the CTC shall be selfsustaining and no other general funds shall be allocated to its use.

Computation of Franchise Fees. Payments due the City under this provision shall be computed quarterly, for the preceding quarter, as of March 31, June 30, September 30, and December 31. Each quarterly payment shall be due and payable no later than thirty (30) days after the relevant computation date and shall thereafter be payable with interest at a rate of twelve percent (12%) per annum of the amount due, until paid.

Franchise Fee Waiver. No acceptance of any payment shall be construed as an agreement by the City 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 this ordinance. All amounts paid shall be subject to audit and recomputation by the City. In the event that recomputation results in additional fees to be paid to the City, such amount shall be subject to a twelve percent (12%) interest charge.

Franchise Fee Limitation. Nothing in this section shall limit an Operator's liability to pay generally applicable local taxes. This reservation includes, but is not limited to, any applicable amusement or Business and Occupation taxes.


Exhibit C (7): Judicial Review/Attorneys’ Fees.

Any action challenging any decision, order, requirement or other acts or refusals to act of the CTC and the City Council must be filed in King County Superior Court and served on the City within 21 days of the decision, order, requirement or other act or refusal to act being challenged. Any challenge by the Operator to the validity or enforceability of the Franchise agreement or the Regulatory Ordinance must be brought within 21 days of the effective date of the Franchise Agreement, the Regulatory Ordinance, or any amendments thereto. In the event any party begins any action specified herein before any court or regulatory agency, the prevailing party shall recover its costs, including reasonable attorneys’ fees and reasonable expert witness fees.


Exhibit D

Testing

Provisions for local enforcement of FCC technical standards to the extent that such local enforcement is permitted by federal law and regulation.

The Operator shall at its own expense perform all system tests required by the FCC, and all other tests reasonably necessary to determine compliance with technical standards required by this ordinance. These tests shall include, at a minimum:


Initial proof of performance for any construction
Semiannual proof of performance tests
Special Tests in response to subscriber complaints
Monthly signal level monitor tests
FCC Cumulative Leakage Index (CLI) tests
Special Tests requested by the City to demonstrate franchise compliance.

Written records of all system test results performed by or for the Operator shall at a minimum be maintained, and supplied to the City upon request

1.1 Initial Proof of Performance

(i) Performance requirements and standards specified in this Ordinance and in all FCC requirements and standards, shall be measured at the time of initial system operation.

(ii) For all newly constructed systems, initial proof of performance testing shall occur within sixty (60) days of the commencement of cable service to each section of the System franchise area as delineated in the construction timetable of the applicable Operator's franchise, and within (30) days after service has been extended to new or existing subscribers upon any reconstruction or rehabilitation of the cable system. Following other system extensions, the system shall be tested to ensure it is operating in accordance with the requirements of the FCC, this Ordinance, and any applicable Franchise.

(iii) For all newly constructed systems, initial proof of performance testing shall be done under the supervision and direction of a registered professional engineer, not on the permanent staff of the Operator. Said engineer shall be selected jointly by the City and the Operator. Further, the City reserves the right to provide an official observer to be present during the initial test period. The Operator shall notify the City at least five days prior to the start of said testing to coordinate scheduling of the City's observer. All records of initial tests shall be signed by the aforesaid engineer, who shall include in such records a statement of his or her qualifications.

(iv) The aforesaid engineer shall render a report to the City as prescribed in Section 2.1 of this Ordinance.

1.2 Initial and SemiAnnual System Proof of Performance Tests. System proof of performance tests shall be performed initially and at least semiannually, in accordance with the rules and regulations of the FCC. The City shall be given the opportunity by the Operator to review the test sites in advance. The tests may be witnessed by representatives of the City, and the Operator shall inform the City of the time and place of each test no less than three weeks prior to the test. Written test reports shall be submitted to the City within 30 days following completion of the tests. The City may conduct independent tests of the system for which the Operator shall give its fullest cooperation. If one or more of the locations tested fail to meet the performance standards, the Operator shall be required to indicate what corrective measures have been taken, and the entire test shall be repeated at the locations which failed. If results of a second test indicate failure of the system to meet the technical performance requirements of this franchise, then the City may apply such remedy or remedies as it deems appropriate, unless the circumstances of the failure are caused by conditions which are beyond the Operator's control, as determined, acknowledged and verified by the City.

Initial and semiannual proof of performance testing shall, at the City's option and expense, be done under the supervision and direction of an independent engineer. Said engineer shall be selected jointly by the City and the Operator and may, at the City's option and expense, be a registered professional engineer; provided, however, the cost of such registered professional engineer shall, in each evennumbered year, be borne entirely by the Operator. All records of annual tests shall be signed by the aforesaid engineer, who shall include in such records a statement of his or her qualifications.

1.3 Procedure for Special Tests.

(i) When there have been similar complaints made or where there exists other evidence, which in the judgment of the CTC casts doubt on the reliability or quality of cable service, the CTC shall have the right and authority to require the Operator to test, analyze, and report on the performance of the system. Such test or tests shall be made, and the reports of such test or tests shall be delivered to the CTC within fourteen (14) days after the tests have been requested by the CTC.

(ii) the City's right under this subsection 1.3 shall be limited to requiring tests, analyses, and reports covering specific subjects and characteristics based on said complaints or other evidence, when and under such circumstances as the City determines are reasonable grounds to believe that the complaints or other evidence require that tests be performed to protect the public against substandard service.

(iii) At the CTC's option, said tests and analysis shall be supervised by a professional engineer not on the permanent staff of the Operator, and selected jointly by the City and the Operator. The aforesaid engineer shall sign all records of special tests and forward the same to the CTC within the time prescribed, with a report interpreting the results of the tests and recommending actions to be taken by the City and/or Operator.

(iv) Whenever the results of any special test conducted under this subsection 1.3 indicate that the Operator is in compliance with the specifications of this Ordinance for the specific subjects and characteristics tested, the City shall bear the expense of any professional engineer required under subsection (iii) hereof.

All technical reports shall include without limitation a statement of the date of the tests, the location of the test points, the technicians performing the tests and their qualifications, the test equipment used, the detailed results of the tests, summaries of test results, a discussion of the results as compared to applicable FCC standards and requirements under this ordinance and the franchise.

Except as otherwise provided for herein, all costs associated with the preparation and publication of system records and reports set forth in this ordinance shall be borne by the Operator.

2.1 Reports on Initial Testing. The Operator shall prepare a technical report that describes details of the cable system as described in this Section. Two copies of said technical report shall be submitted to the City within twenty (20) calendar days following completion of the initial testing required in Section 1.1 of this Ordinance. The technical report shall include the following details:

(i) Basic Information

A description of test equipment and procedures used.

An assessment of the picture quality available from the local origination (PEG) equipment.

Measurements of system performance on all channels, including local access channels, with respect to all parameters of FCC technical standards.

Statement of the System's adherence to construction and performance standards. If these are not satisfactory, a statement as to what items are to be corrected, and if necessary recommendations as to action to be taken by the City.

Justification of the site selected, including:

Listing of television and radio stations carried on the System.
Location of microwave terminals.
Location of antenna site.
Distance from antenna site to farthest area served by the System.
Height of tower.
Height of antenna site in relation to average terrain.
Accessibility of antenna site all year round.
Local construction restrictions on tower.
Direction of desired signal sources.
Analysis of potential sources of interference in the nearby environment.

System information, for both residential and institutional networks, including, as applicable:

Asbuilt drawings of the System.
Description of all headend and plant equipment.
Description of local origination equipment.
Identification of trunk and feeder cables.
Description of fiber optic design, including fiber count.
Location and technical capability of fiber optic nodes.
Calculations of System temperature capabilities.

Description of each antenna array, including:

Mechanical configuration.
Type of mounting.
Method of stacking.
Method of weatherproofing.
Method of preventing corrosion if applicable.
Wind and ice loading capabilities.
Electrical Performance.
Gain.
Return loss in dB.

2.2 SemiAnnual Proof of Performance Tests. These tests shall be conducted in accordance with Section 1.2, and shall include the results of tests on all parameters designated for proof of performance testing by FCC rules and regulations. All tests and measurements required to be taken shall be recorded and submitted to the City within twenty (20) calendar days following the completion of the testing. Each submission shall be accompanied by a discussion of test results and certification by the Operator’s System General Manager or designee indicating the extent to which the System meets all FCC technical standards and the requirements of this ordinance.

2.3 Reports on Special Tests Records and Reports. Any special tests or measurements required by the CTC to be taken pursuant to Section 1.3, shall be reported to the City within fourteen (14) days after such tests have been requested by the CTC. Such report shall include the following information: the nature of the complaint which precipitated the special tests; what system component was tested; the equipment used and procedures employed in said testing; the results of such tests; and the method in which such complaints were resolved. Any other information pertinent to the special test shall be recorded.

2.4 Other Technical Records and Reports.

The results of monthly monitoring tests for signal levels shall be maintained by the Operator and made available for inspection by the City within 14 days following the last day of each month.

Cumulative Leakage Index tests results shall be maintained by the Operator, and a copy of each current CLI Certification of compliance shall be kept on file with the City.

2.5 Notification and Approval of System Changes. Should any of the following occur, each Operator must notify the City, thirty (30) days in advance, with particulars:

i) addition to, deletion of, or change in received television, radio, and other channels; addition to, deletion of, or change in all types of distributed channels, channel lineup or channel conversion;
ii) change in location of headend or antenna sites; addition to or changes in location of centers for origination of programs; and interconnection with other cable systems.

No change as described above, if it is a departure from a schedule, plan, or design previously requiring City approval, or if it results in a decrease in system performance, capacity or geographical coverage, shall be made without prior written approval of the City. The City shall have sixty (60) days from the date of notification of the proposed change to consider whether it will approve the change or not. If no decision is made by the City within that time, the change shall be deemed approved. Approval shall not be unreasonably withheld.



Exhibit E

Letter of Credit Provisions

As provided in Section 6 of the Franchise, within 15 days after the effective date of the Franchise grant, the Operator shall cause to be delivered to the City an unconditional, irrevocable, transferable, sight-draft letter of credit.

Said letter of credit shall be in the amount of $1,000,000; shall have an initial term of one (1) year; shall name the City as beneficiary; shall be issued by a bank acceptable to the City; shall be written in such a way that, as between the beneficiary and the issuing bank, the beneficiary may draw on the letter of credit by providing the issuing bank with beneficiary's draft accompanied by a writing wherein the beneficiary states that under the provisions of the Franchise the beneficiary is entitled to so draw; shall provide that it shall not be necessary for the beneficiary to draw on the letter of credit from the address of the beneficiary given in the letter of credit; shall otherwise be in form and content acceptable to the City; and shall include provisions reading as follows (or as the City may in its discretion determine to accept in lieu of language reading as follows):

"This letter of credit shall be deemed to be automatically extended without amendment for one (1) year from the present or any future expiration date hereof, unless at least thirty (30) days prior to any such expiration date the issuer hereof shall give notice to the beneficiary hereunder, by certified or registered letter, that the issuer elects not to consider this letter of credit extended for such additional one-year period. Such notice shall be deemed to have been given when received by the beneficiary. If such notice is given the beneficiary may, at any time prior to the then-applicable expiration date hereunder, draw under this letter of credit by providing to the issuer the materials required by the other provisions hereof. In no event shall this letter of credit be extended beyond a final expiration date of June 1, 2005. No notice will be given by the issuer in connection with such final expiration date."

Such letter of credit (as well as any letter of credit which may come to be substituted for such letter of credit or for any prior substitution therefor) is hereinafter referred to as the "Letter of Credit." The Letter of Credit is intended to and shall provide security for the Operator’s timely performance of its obligations under the Franchise. The City shall have and is hereby granted a security interest (pursuant to Article 9 of the Washington Uniform Commercial Code) in any proceeds of the Letter of Credit and in any interest or other earnings on such proceeds which from time to time may be held by the City.

Disposition of the Letter of Credit Relative to the Status of the Operator’s Performance. The Letter of Credit shall be returned to the Operator upon the latter’s written request made after completion and successful testing of the system upgrade contemplated in Section 6 of the Franchise; provided, however, that the City shall not be required to return the Letter of Credit to the Operator if, at the time such return would otherwise be required, there is a default in any of the Operator’s obligations under the Franchise, or there is an event or circumstance that is continuing and that, with the giving notice, the passage of time, or both, could ripen into a default.

If a default occurs, the City shall have the right (either before or after, as the City may elect) to draw upon the Letter of Credit and apply the proceeds thereof in either of the following ways or in any combination of either of the following ways: (a) to satisfy, in whole or in part, the Operator’s obligation(s) to pay liquidated damages under Section 6 of the Franchise and/or any sanctions or penalties identified in Section 00.00.640 of Exhibit C; or (b) to hold or continue to hold such proceeds (or any portion thereof), as well as any interest or other earnings thereon from time to time in the possession of the City, until the City determines to apply the same in the manner contemplated by the foregoing item (a). In the event the City holds the proceeds of the Letter of Credit as contemplated by the foregoing item (b), it need not hold the amounts involved in a separate account or otherwise segregate such amounts from the City’s own funds. In the absence of a written election by the City concerning the way in which any of the proceeds of the Letter of Credit are to be applied, it shall be assumed that the City has elected to apply the proceeds in question in the way contemplated by the foregoing item (b).

Draw upon Letter of Credit in Contemplation of Expiration. If at any time the unexpired term under the Letter of Credit comes to be less than 30 days, or if at any time the City is given notice by the issuer thereof that the Letter of Credit is not to be extended for an additional one-year period, then the City may draw the proceeds of the Letter of Credit and thereafter such proceeds, as well as interest or other earnings thereon from time to time in the possession of the City, shall be held, used, disposed of, and applied by the City in lieu of the Letter of Credit per se, but otherwise on the same terms and conditions as are provided for above. If the City comes to hold proceeds of the Letter of Credit drawn pursuant to this paragraph, the City need not hold such proceeds in a separate account or otherwise segregate such proceeds from the City’s own funds. If a Letter of Credit which complies with the requirements of this Exhibit E is thereafter furnished to the City in substitution for proceeds previously drawn pursuant to the preceding portion of this paragraph, the City shall return such proceeds (as well as any interest or other earnings thereon then in the possession of the City) to the Operator. Notwithstanding the foregoing, however, the City shall not be required to accept a Letter of Credit in substitution for such proceeds if, at the time the substitution would otherwise be required, there is a default in any of the Operator’s obligations under the Franchise, or there is an event or circumstance that is continuing and that, with the giving notice, the passage of time, or both, could ripen into a default.

Earnings on Proceeds of Letter of Credit. If the City comes to hold any proceeds of the Letter of Credit, then during the period that the City holds such proceeds (prior to the application thereof to satisfy, in whole or in part, the Operator’s obligation(s) to pay liquidated damages under Section 6 of the Franchise and/or any sanctions or penalties identified in Section 00.00.640 of Exhibit C) the dollar amount involved shall accrue simple interest for the benefit of Operator at the rate of six percent (6.0%) per annum. The interest that thus accrues shall be the only consideration due to Operator for the City’s holding the amounts involved and shall, so long as a default by Operator has not occurred and is not continuing, periodically be paid and disbursed by the City to Operator. Such payment and disbursement by the City of accrued interest need not occur more frequently than annually.

Expenses. All costs and expenses incurred by the City in connection with the arrangement dealt with in this Exhibit E (including, without limitation, attorneys' fees and costs incurred in ensuring that any conditions or requirements established hereby have been satisfied) shall be borne by Operator, and any such costs and expenses that may be incurred in the first instance by the City shall be reimbursed by Operator immediately upon the request of the City. In addition, Operator on demand shall reimburse the City for any and all costs and expenses, including attorneys' fees, incurred by the City in realizing on or enforcing its rights concerning the Letter of Credit.

General. The rights and remedies accorded by the provisions of this Exhibit E shall be in addition to, and not in substitution of, any rights and remedies available under the Franchise, under the Regulatory Ordinance as it now exists or may hereafter be amended, or under other extant or hereafter arising applicable law. No exercise of the City’s rights relative to the Letter of Credit shall waive any of the City’s other rights or remedies, including Franchise termination. All rights and remedies provided for in this Exhibit E, the Franchise, the Regulatory Agreement, or by law or equity are distinct and cumulative and may be exercised concurrently, independently, or successively. The failure on the part of the City to promptly enforce or exercise any right, remedy, election, or option hereunder shall not operate as a waiver of such right, remedy, election, or option.
Exhibit F

List of Public Buildings