Verizon Northwest - Cable CABLE FRANCHISE AGREEMENT
between
CITY OF
TIGARD
AND
VERIZON NORTHWEST INC.
TABLE OF CONTENTS
ARTICLE PAGE
1 DEFINITIONS 2
2 GRANT OF AUTHORITY, LIMITS AND RESERVATIONS 9
3 PROVISION OF CABLE SERVICE 12
4 SYSTEM OPERATION 14
5 SYSTEM FACILITIES 14
6 PEG SERVICES . 15
7 FRANCHISE FEES 19
8 CUSTOMER SERVICE 21
9 REPORTS AND RECORDS 21
10 INSURANCE AND INDEMNIFICATION 23
11 TRANSFER OF FRANCHISE 25
12 RENEWAL OF FRANCHISE 26
13 ENFORCEMENT AND TERMINATION OF FRANCHISE 26
14 MISCELLANEOUS PROVISIONS . 29
EXHIBIT A-INITIAL SERVICE AREAIFRANCHISE AREA 34
EXHIBIT B - ORIGINATION POINTS . 37
EXHIBIT C-QUARTERLY FRANCHISE FEE REMITTANCE FORM .38
EXHIBIT D-CUSTOMER SERVICE STANDARDS 39
EXHIBIT E-FRANCHISEE PARENT AS OF JANUARY 24, 2007 49
EXHIBIT F-QUARTERLY CUSTOMER SERVICE STANDARDS
PERFORMANCE REPORT 50
MACCNERIZON FINAL MAY 2007 1
THIS CABLE FRANCHISE AGREEMENT (the "Franchise" or"Agreement") is entered
into by and between the Metropolitan Area Communications Commission (the "Commission"),
Member Jurisdictions, and Verizon Northwest Inc , a corporation duly organized under the
applicable laws of the State of Washington (the "Franchisee")
WHEREAS, Grantor and Member Jurisdictions wish to grant Franchisee a nonexclusive
franchise to construct, install, maintain, extend and operate a cable communications system in
the Franchise Area as designated in this Franchise,
WHEREAS, Grantor and Member Jurisdictions are "franchising authorities" in
accordance with Title VI of the Communications Act (see 47 US C §522(10)) and are
authorized to grant one or more nonexclusive cable franchises,
WHEREAS, Franchisee is in the process of installing a Fiber to the Premise
Telecommunications Network ("FTTP Network") in the Franchise Area for the transmission of
Non-Cable Services pursuant to authority granted by the State of Oregon;
WHEREAS, the FTTP Network will occupy the Public Rights-of-Way within the
jurisdictional boundaries of the Commission's Member Jurisdictions, and Franchisee desires to
use portions of the FTTP Network once installed to provide Cable Services (as hereinafter
defined) in the Franchise Area,
WHEREAS, Grantor has identified the future cable-related needs and interests of the
Commission, its Member Jurisdictions and their citizens, has considered the financial, technical
and legal qualifications of Franchisee, and has determined that Franchisee's plans for its Cable
System are adequate in a full public proceeding affording due process to all parties,
WHEREAS, Grantor and Member Jurisdictions have found Franchisee to be financially,
technically and legally qualified to operate the Cable System,
WHEREAS, Grantor and Member Jurisdictions have determined that the grant of a
nonexclusive franchise to Franchisee is consistent with the public interest, and
WHEREAS, Grantor and Franchisee have reached agreement on the terms and conditions
set forth herein and the parties have agreed to be bound by those terms and conditions
NOW, THEREFORE, in consideration of Grantor and Member Jurisdictions' grant of a
franchise to Franchisee, Franchisee's promise to provide Cable Service to residents of the
Franchise Area pursuant to the terms and conditions set forth herein, the promises and
undertakings herein, and other good and valuable consideration, the receipt and the adequacy of
which are hereby acknowledged,
THE SIGNATORIES DO HEREBY AGREE AS FOLLOWS
1 DEFINITIONS
Except as otherwise provided herein the following definitions shall apply
MACC/VERIZON FINAL MAY 2007 2
1 1 Access Channel A video channel, which Franchisee shall make available
to Grantor without charge for non-commercial public, educational, or governmental use for the
transmission of video programming as directed by Grantor
1 2 Additional Service Area Shall mean any such portion of the Service Area
added pursuant to Section 3 1 2 of this Agreement
13 Affiliate Any Person who, directly or indirectly, owns or controls, is
owned or controlled by, or is under common ownership or control with, Franchisee
1 4 Basic Service Shall be defined herein as it is defined under Section 602
of the Communications Act, 47 U S C § 522, which currently states, "any service tier which
includes the retransmission of local television broadcast signals "
1 5 Cable Operator Shall be defined herein as it is defined under Section
602 of the Communications Act, 47 U S C § 522(5), which currently states, "any person or
group of persons (A) who provides cable service over a cable system and directly or through one
or more affiliates owns a significant interest in such cable system, or (B) who otherwise controls
or is responsible for, through any arrangement, the management and operation of such a cable
system "
1 6 Cable Service or Cable Services Shall be defined herein as it is defined
under Section 602 of the Communications Act, 47 U S C § 522(6), which currently states, "the
one-way transmission to subscribers of (i) video programming, or (n) other programming
service, and subscriber interaction, if any, which is required for the selection or use of such video
programming or other programming service "
1 7 Cable System or System Shall be defined herein as it is defined under
Section 602 of the Communications Act, 47 U S C § 522(7), which currently states, "a facility,
consisting of a set of closed transmission paths and associated signal generation, reception, and
control equipment that is designed to provide cable service which includes video programming
and which is provided to multiple subscribers within a community, but such term does not
include (A) a facility that serves only to retransmit the television signals of 1 or more television
broadcast stations, (B) a facility that serves subscribers without using any public right-of-way,
(C) a facility of a common carrier which is subject, in whole or in part, to the provisions of title
II of the Communications Act, except that such facility shall be considered a cable system (other
than for purposes of section 621(c)) to the extent that such facility is used in the transmission of
video programming directly to subscribers, unless the extent of such use is solely to provide
interactive on-demand services, (D) an open video system that complies with section 653 of this
title, or (E) any facilities of any electric utility used solely for operating its electric utility
systems " Subject to Section 2 10, the Cable System shall be limited to the optical spectrum
wavelength(s), bandwidth or future technological capacity that is used for the transmission of
Cable Services directly to Subscribers within the Franchise/Service Area and shall not include
the tangible network facilities of a common carrier subject in whole or in part to Title 1I of the
Communications Act or of an Information Services provider
MACCNERIZON FINAL MAY 2007 3
1 8 Channel Shall be defined herein as it is defined under Section 602 of the
Communications Act, 47 U S C § 522(4), which currently states, "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 Commission by
regulation) "
19 Commission The Metropolitan Area Communications Commission, Its
officers, agents and employees, and, for purposes of this Agreement, Its affected Member
Jurisdictions which are the Oregon cities of Beaverton, Cornelius, Durham, Forest Grove,
Hillsboro, King City, Lake Oswego, Rivergrove, Tigard, and Tualatin, together with Washington
County The Commission was created and exercises its powers pursuant to an Intergovernmental
Cooperation Agreement, as authorized by state law (particularly ORS Chapter 190) and the laws,
charters, and other authority of the individual member units of local government who are
members of the Commission The powers of the Commission have been delegated to it by its
members and although it may exercise those powers as an entity, it remains a composite of its
members
1 10 Communications Act The Communications Act of 1934, as amended
1 11 Control The ability to exercise de facto or de lure control over day-to-
day policies and operations or the management of corporate affairs
1 12 Days Calendar days unless otherwise noted
1 13 Designated Access Provider The entity or entities designated by the
Grantor to manage or co-manage the Public, Education, and Government Access Channels and
facilities The Grantor may be a Designated Access Provider
1 14 Educational Access Channel An Access Channel available solely for the
use of the local public schools in the Franchise Area and other higher level educational
institutions in the Franchise Area
1 15 Effective Date The effective date of this Agreement shall be upon the
Grantor's written certification of approval of all its Member Jurisdictions and Franchisee's
unconditional written acceptance of this Agreement If either event fails to occur, this
Agreement shall be null and void, and any and all rights of Franchisee to own or operate a Cable
System within the Franchise Area under this Agreement shall be of no force or effect
1 16 FCC The United States Federal Communications Commission, or
successor governmental entity thereto
1 17 Force Majeure An event or events reasonably beyond the ability of
Franchisee to anticipate and control This includes, but is not limited to, severe or unusual
weather conditions, strikes, labor disturbances, lockouts, war or act of war (whether an actual
declaration of war is made or not), Insurrection, riots, act of public enemy, actions or inactions of
any government instrumentality or public utility Including condemnation, accidents for which
Franchisee is not piimarily responsible, fire, flood, or other acts of God, or documented work
delays caused by waiting for utility providers to service or monitor utility poles to which
MACCNLRIZON FINAL MAY 2007 4
Franchisee's FTTP Network is attached, and documented unavailability of materials and/or
qualified labor to perform the work necessary to the extent that such unavailability of materials
or labor was reasonably beyond the ability of Franchisee to foresee or control
1 18 Franchise Area Those portions of the unincorporated area of Washington
County and the incorporated areas (entire existing territorial limits) of Beaverton, Cornelius,
Durham, Forest Grove, Hillsboro, King City, Lake Oswego, Rivergrove, Tigard, and Tualatin as
shown in Exhibit A, and such additional areas as may be included in the corporate (territorial)
limits of Member Jurisdictions during the term of this Agreement or are added pursuant to
Section 3 12
1 19 Franchisee Verizon Northwest Inc , and its lawful and permitted
successors, assigns, and transferees
120 Government Access Channel An Access Channel available solely for the
use of Grantor and other local governmental entities located in the Franchise Area
121 Grantor The Metropolitan Area Communications Commission (MACC)
created in 1980 which is the local franchising authority for the Oregon cities of Beaverton,
Cornelius, Durham, Forest Grove, Hillsboro, King City, Lake Oswego, Rivergrove, Tigard, and
Tualatin, and Washington County, or the lawful successor,transferee, or assignee thereof
122 Gross Revenue All revenue, including any and all cash, credits, property,
or consideration of any kind, as determined in accordance with generally accepted accounting
principles which is earned or derived by Franchisee and/or its Affiliates received from
Franchisee's provision of Cable Service over the Cable System in the Franchise Area Gross
Revenue shall be reported to Grantor using the "accrual method" of accounting Gross Revenue
shall include the following items so long as all other cable providers in the Service Area include
the same in Gross Revenues for purposes of calculating franchise fees
(a) fees charged for Basic Service,
(b) fees charged to Subscribers for any service tier other than Basic Service,
(c) fees charged for premium Channel(s), e g HBO, Cinemax, or Showtime,
(d) fees charged to Subscribers for any optional, per-channel, or per-program
services;
(e) charges for installation, additional outlets,relocation, disconnection,
reconnection, and change-in-service fees for video or audio programming,
(f) fees for downgrading any level of Cable Service programming,
(g) fees for service calls,
(h) fees for leasing of Channels,
(i) rental of customer equipment, including converters (e g set top boxes,
high definition converters, and digital video recorders) and remote control
devices,
(1) advertising revenue as set forth herein,
(k) revenue from the sale or lease of access Channel(s) or Channel capacity,
(1) revenue from the sale or rental of Subscriber lists,
MACC/VERIZON FINAL MAY 2007 5
(m) revenues or commissions received from the carriage of home shopping
channels,
(n) fees for any and all music services that are deemed to be a Cable Service
over a Cable System,
(o) revenue from the sale of program guides,
(p) late payment fees,
(q) forgone revenue that Franchisee chooses not to receive in exchange for
trades, barters, services, or other items of value, -
(r) revenue from NSF check charges,
(s) revenue received from programmers as payment for programming content
cablecast on the Cable System, and
(t) Franchise fees
Advertising commissions paid to independent third parties shall not be deducted from
advertising revenue included in Gross Revenue Advertising revenue is based upon the ratio of
the number of Subscribers as of the last day of the period for which Gross Revenue is being
calculated to the number of Franchisee's Subscribers within all areas covered by the particular
advertising source as of the last day of such period, e g ,Franchisee sells two ads Ad"A" is
broadcast nationwide, Ad `B" is broadcast only within Oregon Franchisee has 100 Subscribers
in the Franchise Area, 500 Subscribers in Oregon, and 1,000 Subscribers nationwide Gross
Revenue as to the Grantor from Ad"A" is 10% of Franchisee's revenue therefrom Gross
Revenue as to the Grantor from Ad"B" is 20% of Franchisee's revenue therefrom
Gross Revenue shall not include:
122 1 Revenues received by any Affiliate or other Person from
Franchisee in exchange for supplying goods or services used by Franchisee to provide Cable
Service over the Cable System in the Franchise Area,
122 2 Bad debts written off by Franchisee in the normal course of its
business, provided, however, that bad debt recoveries shall be included in Gross Revenue during
the period collected,
1 22 3 Refunds, rebates, or discounts made to Subscribers or other third
parties,
122 4 Any revenues classified, in whole or in part, as Non-Cable
Services revenue under federal or state law including, without limitation, revenue received from
Telecommunications Services, Information Services, including without limitation Internet
Access services, charges made to the public for commercial or cable television that is used for
two-way communication; and any other revenues attributed to Non-Cable Services in accordance
with applicable federal and state laws or regulations,
1 22 5 Any revenue of Franchisee or any Person that is received directly
from the sale of merchandise through any Cable Service distributed over the Cable System,
notwithstanding that portion of such revenue that represents or can be attributed to a Subscriber
fee or a payment for the use of the Cable System for the sale of such merchandise, which portion
shall be included in Gross Revenue,
MACCNERIZON FINAL MAY 2007
122 6 The sale of Cable Services on the Cable System for resale in which
the purchaser is required to collect cable franchise fees from purchaser's customer,
122 7 The imputed value of the provision of Cable Services to customers
on a complimentary basis including, without limitation, the provision of Cable Services to public
buildings as required or permitted herein,
122 8. Any tax of general applicability imposed upon Franchisee or upon
Subscribers by a city, state, federal, or any other governmental entity and required to be collected
by Franchisee and remitted to the taxing entity (including, but not limited to, gross receipts tax,
excise tax, utility users tax, public service tax, communication taxes, and non-cable franchise
fees and revenue),
122 9 Any forgone revenue that Franchisee chooses not to receive in
exchange for its provision of free or reduced cost cable or other communications services to any
Person, including without limitation, employees of Franchisee and public institutions or other
institutions designated in the Agreement, provided, however, that such forgone revenue that r
Franchisee chooses not to receive in exchange for trades, barters, services, or other items of
value in place of cash consideration shall be included in Gross Revenue,
1 22 10 Sales of capital assets or sales of surplus equipment,
12211 Reimbursement by programmers of marketing costs
incurred by Franchisee for the introduction of new programming pursuant to a written marketing
_ agreement, or
1 22 12 Directory or Internet advertising revenue including, but not
limited to, yellow page, white page, banner advertisement, and electronic publishing
123 Information Services Shall be defined herein as it is defined under
Section 3 of the Communications Act, 47 U S C §153(20), which currently states, "the offering
of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing,
or making available information via telecommunications, and includes electronic publishing, but
does not include any use of any such capability for the management, control, or operation of a
t telecommunications system or the management of a telecommunications service "
124 Initial Service Area The area depicted as the Initial Service Area in
Exhibit A
125 Internet Access. Dial-up or broadband access service that enables
Subscribers to access the Internet
126 Member Jurisdictions Washington County and the member cities of the
Commission that are within the Initial Service Area, specifically the cities of Beaverton,
- Cornelius, Durham, Forest Grove, Hillsboro, King City, Lake Oswego, Rivergrove, Tigard, and
Tualatin
MACClVEREON FINAL MAY 2007 7
127 Non-Cable Services Any service that does not constitute the provision of
Video Programming directly to multiple Subscribers in the Franchise Area including, but not
limited to, Information Services and Telecommunications Services consistent with FCC rules '
and orders by courts of competent jurisdiction following all appeals
128 Normal Business Hours Those hours during which most similar
businesses in the Franchise Area are open to serve customers In all cases, "normal business
hours" must include some evening hours at least one night per week and/or some weekend hours
129 Origination Points Locations from which PEG programming is delivered
to the PEG Access Headend for transmission as set forth in Exhibit B
130 PEG Public, educational, and governmental
1 31 Person An individual, partnership, association, joint stock company,
trust, corporation, or governmental entity
1 32 Public Access Channel An Access Channel available solely for use by
the residents and others in the Franchise Area, as authorized by Grantor
133 Public Communications Network ("PCN') /Institutional Network. The
separate communications network provided by Comcast Inc or its successor in interest, designed
principally for the provision of non-entertainment, interactive services to schools, public
agencies, or other non-profit agencies for use in connection with the ongoing operations of such
institutions Services provided may include video, audio, and data to PCN subscribers on an
individual application, private channel basis This may include, but is not limited to, two-way
video, audio, or digital signals among institutions
134 Public Rights-of-Way The surface and the area across, in, over, along, _
upon and below the surface of the public streets, roads, bridges, sidewalks, lanes, courts, ways,
alleys, and boulevards, including, public utility easements and public lands and waterways used '
as Public Rights-of-Way, as the same now or may thereafter exist, which are under the -
jurisdiction or control of the Member Jurisdictions, to the full extent of the Member
Jurisdictions' right, title, interest, and/or authority to grant a franchise to occupy and use such
streets and easements for Telecommunications Facilities and Cable Service Public Rights-of-
Way shall also include any easement granted or owned by the Grantor or Member Jurisdictions
and acquired, established, dedicated or devoted for public utility purposes Public Rights-of-
Way do not include the airwaves above a right-of-way with regard to cellular or other nonwire
communications or broadcast services
1 35 School Any educational institution, public or private, registered by the
State of Oregon pursuant to ORS 345 505- 525, excluding home schools, including but not
limited to primary and secondary schools, colleges and universities
1 36 Service Area All portions of the Franchise Area where Cable Service is
being offered, including the Initial Service Area and any Additional Service Areas
MACGVERIZON FINAL MAY 2007 8
1 37 Service Date: The date that Franchisee first provides Cable Service on a
commercial basis directly to more than one Subscriber in the Franchise Area Franchisee shall
memorialize the Service Date by notifying Grantor in writing of the same, which notification
shall become a part of this Franchise
1 38 Subscriber A Person who lawfully receives Cable Service over the Cable
System with Franchisee's express permission
1 39. Telecommunications Facilities Franchisee's existing Telecommunications
Services and Information Services facilities and its FTTP Network facilities
1.40 Telecommunication Services Shall be defined herein as it is defined
under Section 3 of the Communications Act, 47 U S C § 153(46), which currently states, "the
offering of telecommunications for a fee directly to the public, or to such classes of users as to be
effectively available directly to the public, regardless of the facilities used "
141 Title II Title II of the Communications Act
142 Title VI. Title VI of the Communications Act
143 Video Programming Shall be defined herein as it is defined under
Section 602 of the Communications Act, 47 U S C § 522(20), which currently states,
"programming provided by, or generally considered comparable to programming provided by, a
television broadcast station"
2 GRANT OF AUTHORITY; LIMITS AND RESERVATIONS
2 1 Grant of Authority Subject to the terms and conditions of this Agreement,
Grantor and Member Jurisdictions hereby grant Franchisee the right to own, construct, operate
and maintain a Cable System along the Public Rights-of-Way within the Franchise Area in order
to provide Cable Service No privilege or power of eminent domain is bestowed by this grant,
nor is such a privilege or power bestowed by this Agreement
2 1 1 This Agreement is intended to convey limited rights and interests
only as to those streets and Public Rights-of-Way in which the Member Jurisdictions have an
actual interest. It is not a warranty of title or interest in any Public Right-of-Way, it does not
provide the Franchisee any interest in any particular location within the Public Right-of-Way,
and it does not confer rights other than as expressly provided in the grant hereof Except as set
forth in this Agreement, this Agreement does not deprive Grantor or Member Jurisdictions of
any powers, rights, or privileges they now have or may acquire in the future under applicable
law, to use, perform work on, or regulate the use and control of the Member Jurisdictions' streets
covered by this Agreement, including without limitation, the right to perform work on their
roadways, Public Rights-of-Way, or appurtenant drainage facilities, including constructing,
altering,paving, widening, grading or excavating thereof
2 12 This Agreement authorizes Franchisee to engage in providing
Cable Service Nothing herein shall be interpreted to prevent Grantor or Franchisee from
challenging the lawfulness or enforceability of any provisions of applicable law
MACC/VERIZON FINAL MAY 2007 9
2 1 3 To the extent Franchisee uses other parties (whether or not
affiliated) to fulfill its obligations hereunder, Franchisee will insure such parties comply with the
terms and conditions of this Agreement
2 2 Regulatory Authority Over the FTTP Network The parties recognize that
Franchisee's FTTP Network is being constructed and will be operated and maintained as an
upgrade to and/or extension of its existing Telecommunications Facilities for the provision of
Non-Cable Services Jurisdiction over such Telecommunications Facilities is governed by
federal and state law, and Grantor and Member Jurisdictions do not and will not assert
jurisdiction over Franchisee's FTTP Network in contravention of those laws Therefore, as
provided in Section 621 of the Communications Act, 47 U S C § 541, Grantor and Member
Jurisdictions' regulatory authority under Title VI of the Commumcations Act is not applicable to
the construction, installation, maintenance, or operation of Franchisee's FTTP Network to the
extent the FTTP Network is constructed, installed, maintained, or operated for the purpose of
upgrading and/or extending Verizon's existing Telecommunications Facilities for the provision
of Non-Cable Services Nothing in this Agreement shall affect the Grantor or Member
Jurisdictions' authority, if any, to adopt and enforce lawful regulations with respect to the Public
Rights-of-Way, subject to 2 9 below
2 3 Term The term of this Agreement and all rights, privileges, obligations, and
restrictions pertaining thereto shall be from the Effective Date of this Agreement through the
fifteenth (15th) anniversary thereof, unless extended or terminated sooner as hereinafter provided
2 4 Grant Not Exclusive This Agreement shall be nonexclusive, and is subject
to all prior rights, interests, agreements, permits, easements or licenses granted by Grantor or
Member Jurisdictions to any Person to use any street, right-of-way, easements not otherwise
restricted, or property for any purpose whatsoever, including the right of the Member
Jurisdictions to use same for any purpose they deem fit, including the same or similar purposes
allowed Franchisee hereunder Member Jurisdictions may, at any time, grant authorization to
use the Public Rights-of-Way for any purpose not incompatible with Franchisee's authority
under this Agreement, and for such additional franchises for cable systems as the Grantor deems
appropriate Any such rights which are granted shall not adversely impact the authority as
granted under this Agreement and shall not interfere with existing facilities of the Cable System
or Franchisee's FTTP Network
2 5 Effect of Acceptance By accepting the Agreement, the Franchisee. (1)
acknowledges and accepts the Grantor's and Member Jurisdiction's legal right to issue the
Agreement, (2) acknowledges and accepts the Grantor's legal right to enforce the Agreement on -
behalf of its Member Jurisdictions, (3) agrees that it will not oppose the Grantor intervening or
other participation in any proceeding affecting Cable Service over the Cable System in the
Franchise Area, (4) accepts and agrees to comply with each and every provision of this
Agreement, and (5) agrees that the Agreement was granted pursuant to processes and procedures
consistent with applicable law, and that It will not raise any claim to the contrary
2 6 Franchise Subject to Federal Law Notwithstanding any provision to the
contrary herein, this Franchise and its exhibits are subject to and shall be governed by all
MACC/VERIZON FINAL MAY 2007 10
applicable provisions of federal law and regulation as they may be amended, including but not
limited to the Communications Act
2 7 No Waiver
2 7 1 The failure of Grantor on one or more occasions to exercise a right
or to require compliance or performance under this Franchise or any other applicable law shall
not be deemed to constitute a waiver of such right or a waiver of compliance or performance by
Grantor, nor to excuse Franchisee from complying or performing, unless such right or such
compliance or performance has been specifically waived in writing.
2 7 2 The failure of Franchisee on one or more occasions to exercise a
right under this Franchise or applicable law, or to require performance under this Franchise, shall
not be deemed to constitute a waiver of such right or of performance of this Agreement, nor shall
it excuse Grantor from performance, unless such right or performance has been specifically
waived in writing
2 8 Construction of Agreement
2 8 1 The provisions of this Franchise shall be liberally construed to
effectuate their objectives
2 8 2 Nothing herein shall be construed to limit the scope or applicability
of Section 625 Communications Act, 47 U S C § 545
2 8 3 Notwithstanding any provision to the contrary herein, this
Franchise is subject to and shall be governed by all applicable provisions of federal and state law
as they may be amended, including but not limited to the Communications Act Should any
change to state and federal law after the Effective Date have the lawful effect of materially
altering the terms and conditions of this Franchise to the detriment of one or more parties, then
the parties shall modify this Franchise to ameliorate such adverse effects on, and preserve the
affected benefits of, the Franchisee and/or the Grantor to the extent possible which is not
inconsistent with the change in law If the parties cannot reach agreement on the above-
referenced modification to the Franchise, then, at Franchisee or Grantor's option, the parties
agree to submit the matter to mediation In the event mediation does not result in an agreement,
then, at Franchisee or Grantor's option, the parties agree to submit the matter to non-binding
arbitration in accordance with the commercial arbitration rules of the American Arbitration
Association The non-binding arbitration and mediation shall take place in the Franchise Area,
unless the parties' representatives agree otherwise In any negotiations, mediation, and
arbitration under this provision, the parties will be guided by the purpose as set forth below In
reviewing the claims of the parties, the mediators and arbitrators shall be guided by the purpose
of the parties in submitting the matter for guidance The parties agree that their purpose is to
modify the Franchise so as to preserve intact, to the greatest extent possible, the benefits that
each party has bargained for in entering into this Agreement and ameliorate the adverse effects
of the change in law in a manner not inconsistent with the change in law Should the parties not
reach agreement, including not mutually agreeing to accept the guidance of the mediator or
arbitrator, this Section 2 8 3 shall have no further force or effect To the extent permitted by law,
MACC/VERIZON FINAL MAY 2007 11
if there is a change in federal law or state law that permits Franchisee to opt out of or terminate
this Agreement,then Franchisee agrees not to exercise such option
2 9 Police Powers In executing this Franchise Agreement, the Franchisee
acknowledges that its rights hereunder are subject to the lawful police powers of Grantor or
Member Jurisdictions to adopt and enforce general ordinances necessary to the safety and
welfare of the public and Franchisee agrees to comply with all lawful and applicable general
laws and ordinances enacted by Grantor or Member Jurisdictions pursuant to such power
Nothing in this Agreement shall be construed to prohibit the reasonable, necessary, and lawful
exercise of Grantor or Member Jurisdictions' police powers However, if the reasonable,
necessary and lawful exercise of Grantor or Member Jurisdictions' police power results in any
material alteration of the terms and conditions of this Franchise, then the parties shall modify this
Franchise to the satisfaction of all parties to ameliorate the negative effects on Franchisee of the
material alteration If the parties cannot reach agreement on the above-referenced modification
to the Franchise, then Franchisee may terminate this Agreement without further obligation to
Grantor or Member Jurisdictions or, at Franchisee's option, the parties agree to submit the matter
to binding arbitration in accordance with the commercial arbitration rules of the American
Arbitration Association.
210 Termination of Telecommunications Services Notwithstanding any other
provision of this Agreement, if Franchisee ceases to provide Telecommunications Services over
the FTTP Network at any time during the Term and is not otherwise authorized to occupy the
Public Rights-of-Way in the Franchise Area, Grantor may regulate the FTTP Network as a cable
system to the extent permitted by Title VI
3 PROVISION OF CABLE SERVICE
3 1 Service Area
3 1 1 Initial Service Area Franchisee shall offer Cable Service to
significant numbers of Subscribers in residential areas of the Initial Service Area, and may make
Cable Service available to businesses in the Initial Service Area, within twelve (12) months of
the Service Date of this Franchise, and shall offer Cable Service to all residential areas in the
Initial Service Area within four (4) years of the Service Date of the Franchise, except- (A) for
periods of Force Majeure, (B) for periods of delay caused by Grantor or Member Jurisdictions;
(C) for periods of delay resulting from Franchisee's inability to obtain authority to access rights-
of-way in the Service Area, (D) in areas where developments or buildings are subject to claimed
exclusive arrangements with other providers, (E) in developments or buildings that Franchisee
cannot access under reasonable terms and conditions after good faith negotiation, as determined
by Franchisee, and (F) in developments or buildings that Franchisee is unable to provide Cable
Service for technical reasons or which require non-standard facilities which are not available on
a commercially reasonable basis, and (G) in areas where the occupied residential household
density does not meet the density requirement set forth in Subsection 3 1 1 1
3 1 1 1 Density Requirement Franchisee shall make Cable
Services available to residential dwelling units in all areas of the Service Area where the average
density is equal to or greater than ten (10) occupied residential dwelling units per quarter mile as
MACCNERIZON FINAL MAY 2007 12
measured in strand footage from the nearest technically feasible point on the active FTTP
Network trunk or feeder line Should new construction in an area within the Initial Service Area
meet the density requirements after the time stated for providing Cable Service as set forth in
Subsection 3 1 1, Franchisee shall provide Cable Service to such area within ninety (90) days of
the date that the Franchisee's Franchise Service Manager is notified of a request from a potential
Subscriber and verification that the density requirement is satisfied Franchisee has an ongoing
obligation to notify Grantor of any changes to the name and contact information for the
Franchise Service Manager
3 1 2 Additional Service Areas Aside from the Initial Service Area,
Franchisee shall not be required to extend its Cable System or to provide Cable Services to any
other areas within the Franchise Area during the term of this Franchise or any renewals thereof
If Franchisee desires to add Additional Service Areas within the unincorporated areas of
Washington County or the territorial limits of the Member Jurisdictions, Franchisee shall notify
Grantor in writing and provide a map of such Additional Service Area at least thirty (30) days
prior to providing Cable Services to such Additional Service Area which shall then become part
of the Franchise Area Notwithstanding the foregoing, the parties acknowledge that the addition
of the cities of Banks, Gaston, or North Plains as an Additional Service Area shall be subject to
reasonable approval by Grantor and the affected jurisdiction Franchisee shall meet with Grantor
at least once every two years, beginning with the Effective Date, to discuss whether technology
and development warrant extending the service area to include Banks, Gaston, North Plains and
additional areas within Member Jurisdiction boundaries not included in the Initial Service Area
As a result of each of these meetings, Franchisee will either (a) negotiate in good faith an
amendment to the Agreement to expand service to one or more of these areas, if an amendment
is necessary, or (b) explain why, in Franchisee's sole discretion, expansion of service is not yet
justified Franchisee shall not be required to disclose confidential information in conjunction
with these discussions
3 2 Availability of Cable Service Franchisee shall make Cable Service available
to all residential dwelling units and may make Cable Service available to businesses within the
Service Area in conformance with Section 3 1 and Franchisee shall not discriminate between or
among any individuals in the availability of Cable Service In the areas in which Franchisee
shall provide Cable Service, Franchisee shall be required to connect, at Franchisee's expense
(other than a standard installation charge) all residential dwelling units that are within one
hundred twenty-five (125) feet of trunk or feeder lines not otherwise already served by
Franchisee's FTTP Network Franchisee shall be allowed to recover, from a Subscriber that
requests such connection, actual costs incurred for residential dwelling unit connections that
exceed one hundred twenty-five (125) feet and actual costs incurred to connect any non-
residential dwelling unit Subscriber
3 3 Cable Service to Public Buildings Subject to 3 1, Franchisee shall provide,
without charge within the Service Area, one service outlet activated for Basic Service to each
unserved (by any cable operator) fire station, School, police station, and public library as may be
designated by Grantor, provided, however, that if it is necessary to extend Franchisee's trunk or
feeder lines more than one hundred twenty-five (125) feet solely to provide service to any such
School or public building, Grantor shall have the option either of paying Franchisee's direct
costs for such extension in excess of one hundred twenty-five (125) feet, or of releasing
MACGVERIZON FINAL MAY 2007 13
Franchisee from the obligation to provide service to such building Furthermore, Franchisee
shall be permitted to recover, from any School or other public building owner entitled to free
service, the direct cost of installing, when requested to do so, more than one outlet, or concealed
inside wiring, or a service outlet requiring more than one hundred twenty-five (125) feet of drop
cable, provided, however, that Franchisee shall not charge for the provision of Basic Service to
the additional service outlets once installed Cable Service may not be resold or otherwise used
in contravention of Franchisee's rights with third parties respecting programming Equipment
provided by Franchisee, if any, shall be replaced at retail rates if lost, stolen or damaged No
more than 150 complimentary service outlets shall be required to be served under this provision
In addition, Franchisee shall provide without charge one service outlet activated for Enhanced
Basic Service and one set-top box as necessary to receive digital signals to each of the following
locations the Commission's offices and the Commission's PEG Access Headend
4 SYSTEM OPERATION
As provided in Section 2 2, the parties recognize that Franchisee's FTTP Network is
being constructed and will be operated and maintained as an upgrade to and/or extension of its
existing Telecommunications Facilities The jurisdiction of Grantor or Member Jurisdictions
over such Telecommunications Facilities is restricted by federal and state law, and neither
Grantor nor the Member Jurisdictions asserts jurisdiction over Franchisee's FTTP Network in
contravention of those limitations
5. SYSTEM FACILITIES
5 1 System Characteristics The Cable System must conform to or exceed all
applicable FCC technical performance standards, as amended from time to time Franchisee's
Cable System shall substantially conform in all material respects to applicable sections of the
following standards and regulations to the extent such standards and regulations remain in effect '
and are consistent with accepted industry standards.
5 1 1 The System shall be designed with an initial analog and digital
carrier passband of between 50 MHz and 860 MHz The System shall be capable of analog, V
standard digital, HDTV, VOD, as well as other future services
5 1 2 The System shall have a modern design, when built, utilizing an
architecture that will permit additional improvements necessary for high quality and reliable
service throughout the Franchise Term
5 1 3 The System shall have protection against outages due to power
failures, so that back-up power is available at a minimum for at least twenty-four (24) hours at
each headend, and conforming to industry standards, but in no event rated for less than four (4)
hours, at each power supply site
5 14 All work authorized and required hereunder shall be done in a safe,
thorough and workman-like manner The Franchisee must comply with all safety requirements,
rules, and practices and employ all necessary devices as required by applicable law during
construction, operation and repair of its Cable System By way of illustration and not limitation,
MACC/VERIZON FINAL MAY 2007 14
the Franchisee must comply with the National Electrical Code, National Electric Safety Code,
and Occupational Safety and Health Administration(OSHA) Standards
5 2 Inspection of Facilities The Grantor may inspect upon request any of
Franchisee's facilities and equipment to confirm performance under this Agreement upon at least
twenty-four (24) hours notice In all instances, a qualified representative of Franchisee must be
available to accompany the tour to insure that no privacy requirements are violated
5 3 Emergency Alert System
5 3 1 Franchisee shall comply with the Emergency Alert System
("EAS") requirements of the FCC in order that emergency messages may be distributed over the
System
" 5 3 2 In the event of a state or local civil emergency, the EAS shall be
activated by equipment or other acceptable means as set forth in the State and Local EAS Plans
Member Jurisdictions shall permit only appropriately trained and authorized Persons to activate
the EAS equipment through the EAS Local Primary Stations (LP I or LP2) and remotely override
the audio and video on all channels on the Cable System Each Member Jurisdiction shall take
reasonable precautions to prevent any inappropriate use of the EAS or Cable System, or any loss
or damage to the Cable System, and, except to the extent prohibited by law, shall hold harmless
and defend Franchisee, its employees, officers and assigns from and against any claims arising
out of use of the EAS by that Member Jurisdiction, including but not limited to, reasonable
attorneys' fees and costs
6 PEG SERVICES
6 1 PEG Access Channels
611 All PEG Access Channels provided for herein shall be
administered by the Grantor or its designee Grantor or its designee shall establish rules and
regulations for use of PEG facilities consistent with, and as required by, 47 U S C §531
Franchisee shall cooperate with Grantor or its designee in the use of the Cable System for the
provision of PEG Access Channels
6 12. In order to ensure universal availability of public, educational and
government programming, Franchisee shall provide Grantor, within thirty (30) days of the
Service Date of this Agreement, six (6) dedicated Public, Educational, and Government Access
Channels ("PEG Access Channels") All PEG Access Channels will be on the Basic Service
Tier and will be fully accessible to Subscribers, consistent with FCC regulations Franchisee
shall ensure that the signal quality for all PEG Access Channels is in compliance with all
applicable FCC technical standards Franchisee will use equipment and procedures that will
minimize the degradation of signals that do not originate with the Franchisee Franchisee shall
provide regular and routine maintenance and repair/replacement of transmission equipment it
supplies necessary to carry a quality signal on the PEG Access Channels and from the
Origination Points provided for herein
MACCNVERIZON FINAL MAY 2007 15
6 13 Within ten (10) days after the Effective Date of this Agreement,
Grantor shall inform Franchisee of the general nature of the programming to be carried on the
initial PEG Access Channels set aside by Franchisee Grantor and Member Jurisdictions
authorize Franchisee to transmit such programming within and outside the Franchise Area
Franchisee shall assign the PEG Access Channels on its channel line-up as set forth in the notice
from Grantor to the extent such channel assignments do not interfere with Franchisee's existing
or planned channel line-up If Grantor later changes the programming carried on a PEG Access
Channel(s), Grantor shall provide Franchisee with at least ninety (90) days notice of the
change(s)
6 13 1 If a PEG Access Channel provided under this Article is
not being utilized by Grantor, Franchisee may utilize such PEG Channel, in its sole discretion,
until such time as Grantor elects to utilize the PEG Access Channel for its intended purpose
6 13 2 Grantor shall require all local producers and users of any
of the PEG facilities or Channels to agree to authorize Franchisee to transmit programming
consistent with this agreement in writing and to defend and hold harmless Franchisee and
Grantor from and against any and all liability or other injury, including the reasonable cost of
defending claims or litigation, arising from or in connection with claims for failure to comply
with applicable federal laws, rules, regulations or other requirements of local, state or federal
authorities, for claims of libel, slander, invasion of privacy, or the infringement of common law
or statutory copyright, for unauthorized use of any trademark, trade name or service mark, for
breach of contractual or other obligations owing to third parties by the producer or user, and for
any other injury or damage in law or equity, which result from the use of a PEG facility or PEG
Access Channel
6 14 If all of Franclsee's video programming is delivered in a digital
format, then, Franchisee shall reserve six (6) additional PEG Access Channels, for a total of
twelve (12) PEG Access Channels Franchisee shall activate the reserved PEG Access Channels
following a written request from Grantor when the following criteria have been met for each
additional PEG Access Channel
6 14 1 Grantor must have a documented need for additional
programming capacity that cannot be fulfilled by existing PEG Access Channels,
6 14 2 the existing PEG Access Channels must be utilized for
PEG programming within the Franchise Area as follows
614.21 Public Access Channels- During any eight
(8) consecutive weeks, the Public Access Channel is in use for Locally Produced, Locally
Scheduled Original Programming 80% of the time, seven (7) days per week, for any consecutive
five (5)hour block during the hours from noon to midnight, or
6 1 4 2 2 Educational Access Channels During any
eight (8) consecutive weeks, the Educational Access Channel is in use for Locally Scheduled
Original Programming 80% of the time, five (5) days per week, Monday through Friday, for any
consecutive five (5)hour block during the hours from 6 00 a in to 11 00 p in , or
MACCNEFJZON FINAL MAY 2007 16
6 1 4 2 3 Governmental Access Channels. During
any eight (8) consecutive weeks, the Governmental Access Channel is in use for Locally
Scheduled Original Programming 80% of the time, five (5) days per week, Monday through
Friday, for any consecutive five (5) hour block during the hours from 6 00 a in to 11 00 p.m ,
6 14 3 all cable providers within the Franchise Area similarly
provide such additional PEG Access Channels, and
6 14 4 as long as the signal source location is the PEG Access
Headend, any additional PEG Access Channel shall be made available within one hundred
twenty (120) days following Grantor's request (which shall constitute Grantor's authorization to
transmit the PEG Access Channel within and outside the Franchise Area) and verification of
compliance with each of the foregoing conditions If the signal source location is not the PEG
Access Headend, the timing of the availability and other conditions will be by mutual agreement
of Grantor and Franchisee In no event shall the origination point be located outside the
Franchise Area
6 1 5 For the purpose of Section 6 14
61 5 1 "Locally Produced" means programming produced in
Clackamas, Multnomah, or Washington Counties, or the Vancouver/Clark County, Washington
metropolitan area, and
6 1 5 2 "Original Programming"means Programming in its initial
cablecast on the Cable System or in its first or second repeat, and
6 1 5 3 "Locally Scheduled" means that the scheduling, selection
and or playback of Original Programming on a per-program basis is determined in consultation
with, or pursuant to the operating procedures of, the Designated Access Provider or, with respect
to programming received from an Interconnection, the provider transmitting the programming
over the Interconnection However, carriage on any PEG Access Channel of all or a substantial
portion of any non-local programming which duplicates programming otherwise carried by
Grantee as a part of its Basic or expanded Basic Cable Services shall not be considered "Locally
Scheduled "
6 2 Connection of PEG Access Headend
6 2 1 Grantor shall provide suitable video signals for the PEG Access
Channels to Franchisee at Grantor's PEG Access Headend located at 11375 SW Center Street,
Suite B, Beaverton, Oregon 97005 Upon receipt of a suitable video signal, Franchisee shall
provide, install, and maintain in good working order the equipment necessary for transmitting the
PEG signal to the channel aggregation site for further processmg'for distribution to Subscribers
Franchisee's obligation with respect to such upstream transmission equipment and facilities shall
be subject to the availability, without charge to Franchisee, of suitable required space,
environmental conditions, electrical power supply, access,pathway within the facility, and other
facilities and such cooperation of Grantor as is reasonably necessary for Franchisee to fulfill such
obligations
MACC/VERIZON FINAL MAY 2007 17
6 2 2 Grantor shall have the right to relocate the PEG Access Headend
one time during the term of this Franchise as follows Grantor may relocate the PEG Access
Headend to a new location within the Service Area and within five hundred (500) feet of one of
Franchisee's active, video-enabled FTTP trunk or feeder lines, provided that Grantor shall
provide to Franchisee at the new location (1) suitable required space, environmental conditions,
electrical power supply, access, pathway within the facility, and other facilities and cooperation
of Grantor as is reasonably necessary, (2) access to such space at least ninety (90) days prior to
anticipated use of the new PEG Access Headend, and (3) reimbursement of up to Fifteen
Thousand Dollars ($15,000) for costs associated with the relocation of the equipment necessary
for transmitting the PEG signal
6 3 Origination Points To facilitate the Grantor's transmission of live
video/audio and other PEG programming from certain remote sites, the Franchisee, at its own
expense, will provide and maintain fiber connections and the related analog to digital (ADC)
transmission/receive equipment necessary between the Grantor's PEG Access Headend and the
Origination Points listed in Exhibit B of this Agreement Grantor agrees it will not use these
fiber connections for other purposes
6 4 PEG/PCN Grant
6 4 1 Franchisee shall provide an annual grant (the "PEG/PCN Grant")
to Grantor to be used in support of the production of local PEG programming and in support of
the PCN Such grant shall be used by Grantor for capital costs for public, educational, or
governmental access facilities, including, but not limited to, studio and portable production
equipment, editing equipment and program playback equipment, or for renovation or
construction of PEG access facilities, and to support the capital and operating needs of PCN
users
6 4 2 The PEG/PCN Grant provided by Franchisee hereunder shall be
the sum of$1 00, per month, per Subscriber in the Service Area to Franchisee's Basic Service
Tier Franchisee shall deliver the PEG/PCN Grant payment, along with a brief summary of the _
Subscriber information upon which it is based, to Grantor concurrent with the Franchise fee
payment Calculation of the PEG/PCN Grant will commence with the first calendar quarter
during which Franchisee obtains its first Subscriber in the Service Area. Franchisee may retain
up to twenty-five percent (25%) of PEG/PCN Grant payments until the full amount of the
Incidental Payment required in Section 14.5 of this Agreement is recovered
6 4 3 Grantor shall provide Franchisee with a complete accounting
annually of the distribution of funds granted pursuant to this Section
6 4 4 To the extent permitted by federal law, the Franchisee shall be
allowed to recover the costs of the PEG/PCN Grant or any other costs arising from the provision
of PEG and PCN services from Subscribers and to include such costs as a separately billed line
item on each Subscriber's bill Without limiting the forgoing, if allowed under state and federal
laws, Franchisee may externalize, line-item, or otherwise pass-through these costs to
Subscribers
MACC/VERIZON FINAL MAY 2007 18
7 FRANCHISE FEES
7 1 Payment to the Grantor Franchisee shall pay to the Grantor a Franchise fee
of five percent (5%) of annual Gross Revenue In accordance with Title VI of the
Communications Act, the twelve (12) month period applicable under the Franchise for the
computation of the Franchise fee shall be a calendar year Such payments shall be made no later
than forty-five (45) days following the end of each calendar quarter Franchisee shall be allowed
to submit or correct any payments that were incorrectly omitted, and shall be refunded any
payments that were incorrectly submitted, in connection with the quarterly Franchise fee
remittances within ninety (90) days following the close of the calendar year for which such
payments were applicable In the event any law or valid rule or regulation applicable to this
Franchise limits Franchise fees below the five percent (5%) of annual Gross Revenues required
herein, Franchisee agrees to and shall pay the 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 Franchisee shall pay the higher amount up to the maximum allowable by law, not to exceed
five percent(5%) during all affected time periods
7 2 Supporting Information Each Franchise fee payment shall be accompamed
by a written report prepared by a representative of Franchisee showing the basis for the
computation in the form attached hereto as Exhibit C Grantor shall have the right to reasonably
request further supporting documentation and information for each Franchise fee payment,
subject to the confidentiality provisions in this Agreement, provided that Franchisee shall not be
required to develop or create reports that are not a part of its normal business procedures and
reporting or that have been defined specifically within this Agreement
7 3 Acceptance of Payments Subject to Section 7 4 below, no acceptance of any
payment shall be construed as an accord by Grantor that the amount paid is, in fact, the correct
amount, nor shall any acceptance of payments be construed as a release of any claim Grantor
may have for further or additional sums payable or for the performance of any other obligation of
Franchisee
7 4 Audit of Franchise Fee Payments
7 4 1 Grantor, or its designee, may conduct an audit or other inquiry in
relation to payments made by Franchisee no more than once every two (2) years during the
Term. As a part of the audit process, Grantor or Grantor's designee may inspect Franchisee's
books of accounts relative to Grantor at any time during regular business hours and after thirty
(30) calendar days prior written notice
7 4 2 All records deemed by Grantor or Grantor's designee to be
reasonably necessary for such audit, which shall include, but not be limited to, all records subject
to inspection by Grantor pursuant to Section 9 2 herein, shall be made available by Franchisee in
a mutually agreeable format and location Franchisee agrees to give its full cooperation in any
audit and shall provide responses to inquiries within thirty (30) calendar days of a written
request Franchisee may provide such responses within a reasonable time after the expiration of
the response period above so long as Franchisee makes a good faith effort to procure any such
tardy response
MACCNERIZON FINAL MAY 2007 19
7 4 2 1 During any audit period when Franchisee has less than
10,000 Subscribers, if the results of any audit indicate that Franchisee (i) paid the correct
Franchise fee, (n) overpaid the Franchise fee and is entitled to a refund or credit, or (iii)
underpaid the Franchise fee by five percent (5%) or less, then Grantor shall pay the costs of the
audit If the results of the audit indicate Franchisee underpaid the Franchise fee by more than
five percent (5%) during the audit period, then Franchisee shall pay the reasonable, documented,
third-party costs of the audit up to Ten Thousand Dollars ($10,000) per audit
7 4 2 2 During any period when Franchisee has 10,000 or more
Subscribers, if the results of any audit indicate that Franchisee (i) paid the correct Franchise fee,
(ii) overpaid the Franchise fee and is entitled to a refund or credit, or (iii) underpaid the
Franchise fee by three percent (3%) or less, then Grantor shall pay the costs of the audit If the
results of the audit indicate Franchisee underpaid the Franchise fee by more than three percent
(3%) during the audit period, then Franchisee shall pay the reasonable, documented, third-party
costs of the audit up to Fifteen Thousand Dollars ($15,000) per audit
7 4 2 3 Grantor agrees that any audit shall be performed in good
faith If any audit discloses an underpayment of the Franchise fee of any amount, Franchisee
shall pay Grantor the amount of the underpayment, together with interest as provided in Section
7 7 below. Any auditor employed by Grantor shall not be compensated on a success based
formula, e g ,payment based on a percentage on underpayment, if any
7 5 Limitation on Franchise Fee Actions The period of limitation for recovery
of any Franchise fee payable hereunder shall be three (3) years from the date on which payment
by Franchisee is due
7 6 Bundled Services In the case of a Cable Service that is bundled
or integrated functionally with other services, capabilities, or applications, the portion of
Franchisee's revenue attributable to such other services, capabilities, or applications shall be
included in Gross Revenue unless Franchisee's books and records that are kept in the regular
course of business identify the revenue as being attributable to the other services, capabilities or
applications
7 7 Annual Franchise Fee Report Franchisee shall, no later than one hundred
twenty (120) days after the end of each calendar year, furnish to Grantor an annual summary of
Franchise fee calculations, substantially in the form attached hereto as Exhibit C but showing
annual rather than quarterly amounts_
7 8 Interest on Late Payments In the event that a Franchise fee payment or
other sum is not received by Grantor on or before the due date, or is underpaid, Franchisee shall
pay in addition to the payment, or sum due, interest from the due date at a rate equal to the
statutory interest rate on judgments in the State of Oregon
7 9 Payment on Termination If this Agreement terminates for any reason,
Franchisee shall file with Grantor within ninety (90) calendar days of the date of the,termination,
a financial statement showing the Gross Revenues received by the Franchisee since the end of
the previous calendar quarter for which Franchise fees were paid If, within sixty (60) days of
MACCNERIZON FINAL MAY 2007 20
providing such financial statement, Franchisee has not •satisfied all remaining financial
obligations to Grantor, Grantor reserves the right to satisfy any remaining financial obligations of
the Franclusee to Grantor by utilizing the funds available in the Letter of Credit provided by the
Franchisee under Section 13 6 of this Agreement
7 10 Costs of Publication . Franchisee shall pay the reasonable cost of
newspaper notices and publication pertaining to this Agreement, and any amendments thereto,
including changes in control or transfers of ownership, as such notice or publication is
reasonably required by Grantor under applicable law
8 CUSTOMER SERVICE
8 1 Customer Service Requirements are set forth in Exhibit D, which shall be
binding unless amended by written consent of the parties
8 2 If, at any time during the term of this Franchise, "Effective Competition," as
defined by the Communications Act, as the term may be reasonably applied to Franchisee, ceases
to exist in the Service Area, Grantor and Franchisee agree to enter into good faith negotiations to
determine if there is a need for additional customer service requirements Grantor and
Franchisee shall enter into such negotiations within forty-five (45) days following a request for
negotiations by Franchisee after the cessation of"Effective Competition" as described above
9 REPORTS AND RECORDS
91 Open Books and Records Upon reasonable written notice to Franchisee
and with no less than thirty (30) days written notice to Franchisee, Grantor shall have the right to
inspect Franchisee's books and records pertaining to Franchisee's provision of Cable Service in
the Franchise Area at any time during weekday business hours and on a nondisruptive basis at a
mutually agreed location within Franchisee's Title II service territory in Oregon and
Washington, as are reasonably necessary to ensure compliance with the terms of this Franchise
Such notice shall specifically reference the section or subsection of the Franchise which is under
review, so that Franchisee may organize the necessary books and records for appropriate access
by Grantor Franchisee shall not,be required to maintain any books and records for Franchise
compliance purposes longer than three (3) years Franchisee shall not be required to provide
Subscriber information in violation of Section 631 of the Communications Act, 47 U S C §551
If any books, records, maps, plans or other requested documents are too voluminous, not
available locally in the Franchisee's Title II service territory in Oregon and Washington, or for
security reasons cannot be copied and moved, then the Franchisee may request that the
inspection take place at a location mutually agreed to by Grantor and the Franchisee, provided
that the Franchisee must pay all travel expenses incurred by Grantor in inspecting those
documents or having the documents inspected by its designee, above those that would have been
incurred had the documents been produced in Franchisee's Title II service territory in the
Portland metropolitan area
92 Proprietary Books and Records If the Franchisee believes that the
requested information is confidential and proprietary, the Franchisee must provide the following
documentation to Grantor (i) specific identification of the information, and (1I) statement
MACOVERIZON FINAL MAY 2007 21
attesting to the reason(s) Franchisee believes the information is confidential The Grantor shall
take reasonable steps to protect the proprietary and confidential nature of any books, records,
Service Area maps, plans, or other documents requested by Grantor that are provided pursuant to
this Agreement to the extent they are designated as such by the Franchisee, consistent with the
Oregon Public Records Law Should Grantor be required under state law to disclose information
derived from Franchisee's books and records, Grantor agrees that it shall provide Franchisee
with reasonable notice and an opportunity to seek appropriate protective orders prior to
disclosing such information Notwithstanding anything to the contrary set forth herein,
Franchisee shall not be required to disclose any of its or an Affiliate's books and records not
relating to the provision of Cable Service in the Service Area, or any confidential information
relating to such Cable Service where the Grantor and Member Jurisdictions cannot lawfully
protect the confidentiality of the information
93 Records Required Franchisee shall maintain
9 3 1 Records of all written complaints for a period of three (3) years
after receipt by Franchisee The term "complaint" as used herein refers to complaints about any
aspect of the Cable System or Franchisee's cable operations, including, without limitation,
complaints about employee courtesy Complaints recorded will not be limited to complaints
requiring an employee service call,
9 3 2 Records of outages for a period of three (3) years after occurrence,
indicating date, duration, area, and the number of Subscribers affected, type of outage, and
cause,
9 3.3 Records of service calls for repair and maintenance for a period of
three (3) years after resolution by Franchisee, indicating the date and time service was required,
the date of acknowledgment and date and time service was scheduled (if it was scheduled), and
the date and time service was provided, and (if different) the date and time the problem was
resolved,
9 3 4 Records of installation/reconnection and requests for service
extension for a period of three (3) years after the request was fulfilled by Franchisee, indicating
the date of request, date of acknowledgment, and the date and time service was extended, and
9 3 5 A public file showing the area of coverage for the provisioning of
Cable Services and estimated timetable to commence providing Cable Service
94. Additional Requests: The Grantor shall have the right to request in writing
such information as is appropriate and reasonable to determine whether Franchisee is in
compliance with applicable Customer Service Standards, as referenced in Exhibit D Franchisee
shall provide Grantor with such information in such format as Franchisee customarily prepares
reports Franchisee shall fully cooperate with Grantor and shall provide such information and
documents as necessary and reasonable for the Grantor to evaluate compliance, subject to
Section 9 6
95 Copies of Federal and State Documents Franchisee shall submit to the
Grantor a list, or copies of actual documents, of all pleadings, applications, notifications,
MACGVERIZON FINAL MAY 2007 22
communications and documents of any kind, submitted by Franchisee or Its parent corporations
or Affiliates to any federal, state or local courts, regulatory agencies or other government bodies
if such documents specifically relate to the operations of Franchisee's Cable System within the
Franchise Area Franchisee shall submit such list or documents to the Grantor no later than
thirty (30) days after filing, mailing or publication thereof Franchisee shall not claim
confidential, privileged or proprietary rights to such documents unless under federal, state, or
local law such documents have been determined to be confidential by a court of competent
Jurisdiction, ora federal or state agency or a request for confidential treatment is pending To the
extent allowed by law, any such confidential material determined to be exempt from public
disclosure shall be retained In confidence by the Grantor and Its duly authorized agents and shall
not be made available for public Inspection
96 Report Expense All reports and records required under this or any other
Section shall be furnished, without cost, to Grantor Franchisee shall not be required to develop
or create reports that are not a part of its normal business procedures and reporting or that have
not been defined specifically within this Section 9 in order to meet the requirements of this
Section 9
10 INSURANCE AND INDEMNIFICATION
10 1 Insurance
10 1 1 Franchisee shall maintain in full force and effect, at its own cost
and expense, during the Franchise Term, the following Insurance coverage
10 1 1 1 Commercial General Liability Insurance in the amount
of Three Million Dollars ($3,000,000) combined single limit for property damage and bodily
Injury, one million dollar ($1,000,000) limit for broadcaster's liability Such insurance shall
cover the construction, operation and maintenance of the Cable System, and the conduct of
Franchisee's Cable Service business in the Franchise Area
10 1 1 2 Automobile Liability Insurance in the amount of Two
Million Dollars ($2,000,000) combined single limit for bodily Injury and property damage
coverage.
101 1 3 Workers' Compensation Insurance meeting all legal
requirements of the State of Oregon
10 1 14 Employers' Liability Insurance in the following amounts
(A) Bodily Injury by Accident $100,000; and (B) Bodily Injury by Disease $100,000
employee limit, $2,000,000 policy limit
1012 Grantor and Member Jurisdictions shall be designated as
additional Insureds under each of the insurance policies required in this Article 10 except
Worker's Compensation and Employer's Liability Insurance.
10 1 3 Franchisee shall not cancel any required insurance policy without
obtaining alternative insurance in conformance with this Agreement
MACC/VERIZON FINAL.MAY 2007 23
10 1 4 Each of the required insurance policies shall be with sureties
qualified to do business in the State of Oregon, with an A- or better rating for financial condition
and financial performance by Best's Key Rating Guide, Property/Casualty Edition
1015 Upon written request, Franchisee shall deliver to Grantor
Certificates of Insurance showing evidence of the required coverage
102 Indemnification
10 2 1 Franchisee agrees to indemnify, save and hold 'harmless, and
defend Grantor, Its officers, agents, boards and employees, from and against any liability for
damages or claims resulting from tangible property damage or bodily injury (Including
accidental death), to the extent proximately caused by Franchisee's negligent construction,
operation, or maintenance of Its Cable System, provided that Grantor shall give Franchisee
written notice of Its obligation to Indemnify Grantor within ten (10) days of receipt of a claim or
action pursuant to this subsection Notwithstanding the foregoing, Franchisee shall not
indemnify Grantor for any damages, liability or claims resulting from the willful misconduct or
negligence of Grantor, Its officers, agents, employees, attorneys, consultants, Independent
contractors or third parties or for any activity or function conducted by any Person other than
Franchisee in cormection with PEG Access Channels, use of the PCN, or EAS, or the distribution
of any Cable Service over the Cable System
10.2 2 With respect to Franchisee's indemnity obligations set forth in
Subsection 10 2 1, Franchisee shall provide the defense of any claims brought against Grantor by
selecting counsel of Franchisee's choice to defend the claim, subject to the consent of Grantor,
which shall not unreasonably be withheld Nothing herein shall be deemed to prevent Grantor
from cooperating with Franchisee and participating In the defense of any litigation by Its own
counsel at its own cost and expense, provided however, that after consultation with Grantor,
Franchisee shall have the right to defend, settle or compromise any claim or action arising
hereunder, and Franchisee shall have the authority to decide the appropriateness and the amount
of any such settlement In the event that the terms of any such settlement does not Include the
release of Grantor and Grantor does not consent to the terms of any such settlement or
compromise, Franchisee shall not settle the claim or action but its obligation to indemnify
Grantor shall in no event exceed the amount of such settlement
10 2 3 Grantor shall hold Franchisee harmless and shall be responsible
for damages, liability or claims resulting from willful misconduct or negligence of Grantor.
10 2 4 Grantor shall be responsible for its own acts of willful misconduct
or negligence, or breach of obligation committed by Grantor for which Grantor is legally
responsible, subject to any and all defenses and limitations of liability provided by law
Franchisee shall not be required to indemnify Grantor for acts of Grantor which constitute willful
misconduct or negligence, on the part of Grantor, its officers, employees, agents, attorneys,
consultants, Independent contractors or third parties
MACGVER[ZON FINAL MAY 2007 24
11 TRANSFER OF FRANCHISE
11 1 Subject to Section 617 of the Communications Act, 47 U S C § 537, no
"Transfer of the Franchise" shall occur without the prior consent of Member Jurisdictions,
provided that such consent shall not be unreasonably withheld, delayed or conditioned No such
consent shall be required, however, for a transfer in trust, by mortgage, by other hypothecation,
by assignment of any rights, title, or interest of Franchisee in the Franchise or Cable System in
order to secure indebtedness, or otherwise excluded under this Article 11
112 A"Transfer of the Franchise" shall mean any transaction in which
112 1 an ownership or other interest in Franchisee is transferred, directly
or indirectly, from one Person or group of Persons to another Person or group of Persons,
so that control of Franchisee is transferred, or
112 2 the rights held by Franchisee under the Franchise are transferred
or assigned to another Person or group of Persons
However, notwithstanding Subsections 112 1 and 112 2, a Transfer of the Franchise shall not
include transfer of an ownership or other interest in Franchisee to the parent of Franchisee or to
another Affiliate of Franchisee, transfer of an interest in the Franchise or the rights held by
Franchisee under the Franchise to the parent of Franchisee or to another Affiliate of Franchisee,
any action which is the result of a merger of the parent of Franchisee, or any action which is the
result of a merger of another Affiliate of Franchisee The parent of Franchisee is shown in
Exhibit E
113 Franchisee shall make a written request ("Request") to Grantor and
Member Jurisdictions for approval of any Transfer of the Franchise and furnish all information
required by law and/or reasonably requested by Grantor and Member Jurisdictions in respect to
its consideration of a proposed Transfer of the Franchise Member Jurisdictions shall render a
final written decision on the Request within one hundred twenty (120) days of the Request,
provided it has received all requested Information. Subject to the foregoing, if the Member
Jurisdictions fail to rendera written decision on the Request within one hundred twenty (120)
days, the Request shall be deemed granted unless Franchisee and Member Jurisdictions agree to
an extension of time
114 In reviewing a Request related to a Transfer of the Franchise, Grantor and
Member Jurisdictions may inquire into the legal, technical and financial qualifications of the
prospective transferee, and Franchisee shall assist Grantor and Member Jurisdictions in so
inquiring Member Jurisdictions may condition said Transfer of the Franchise upon such terms
and conditions as they deem reasonably appropriate, provided, however, any such terms and
conditions so attached shall be related to the legal, technical, and financial qualifications of the
prospective or transferee and to the resolution of outstanding and unresolved issues of
Franchisee's noncompliance with the terms and conditions of this Agreement
MACCNERIZON FINAL MAY 2007 25
11 5 The consent or approval of Member Jurisdictions to any Request by the
Franchisee shall not constitute a waiver or release of any rights of Member Jurisdictions, and any
transferee shall be expressly subordinate to the terms and conditions of this Agreement
11 6 Notwithstanding the *foregoing, the parties agree that the Member
Jurisdictions' consent and/or approval to any transfer or assignment of any rights, title, or interest
of Franchisee to any Person shall not be required where Verizon Northwest Inc or its lawful
successor which is not a third party transferee remains the Franchisee following any such transfer
or assignment
12. RENEWAL OF FRANCHISE
121 The parties agree that any proceedings undertaken by Grantor and
Member Jurisdictions that relate to the renewal of this Franchise shall be governed by and
comply with the provisions of Section 626 of the Communications Act, 47 U S C § 546
122 In addition to the procedures set forth in said Section 626 of the
Communications Act, Grantor agrees to notify Franchisee of all of its assessments regarding the
identity of future cable-related community needs and interests, as well as the past performance of
Franchisee under the then current Franchise term Grantor further agrees that such assessments
shall be provided to Franchisee promptly so that Franchisee has adequate time to submit a
proposal under Section 626 and complete renewal of the Franchise prior to expiration of its term
13 ENFORCEMENT AND TERMINATION OF FRANCHISE
13 1 Notice of Violation- In the event Grantor believes that Franchisee has
failed to perform any obligation under this Agreement or has failed to perform in a timely
manner, Grantor shall informally discuss the matter with Franchisee If these discussions do not
lead to resolution of the problem, Grantor shall notify Franchisee in writing, stating with
reasonable specificity the nature of the alleged violation
132 Franchisee's Right to Cure or Respond Franchisee shall have thirty (30)
days from receipt of the written notice described in Section 13 1 to (i) respond to Grantor,
contesting (in whole or in part) Grantor's assertion that a violation has occurred, and requesting a
hearing in accordance with subsection 13 3 below, (ii) cure the violation, or (iii) notify Grantor
that Franchisee cannot cure the violation within the thirty (30) days, and notify the Grantor in
writing of what steps Franchisee shall take to cure the violation including Franchisee's projected
completion date for such cure The procedures provided in Section 13 4 shall be utilized to
impose any fines The date of violation will be the date of the event and not the date Franchisee
receives notice of the violation provided, however, that if Grantor has actual knowledge of the
violation and fails to give the Franchisee the notice called for herein, then the date of the
violation shall be no earlier than ten (10) business days before the Grantor gives Franchisee the
notice of the violation
13 2 1 In the event that the Franchisee notifies the Grantor that it cannot
cure the violation within the thirty (30) day cure period, Grantor shall, within thirty (30) days of
Grantor's receipt of such notice, set a hearing
MACCNERIZON FINAL MAY 2007 26
13 2 2. In the event that the Franchisee fails to cure the violation within
the thirty (30) day basic cure period, or within an extended cure period approved by the Grantor
pursuant to subsection 13.2(111), the Grantor shall set a hearing to determine what fines, if any,
shall be applied
13.2 3 In the event that the Franchisee contests the Grantor's assertion that
a violation has occurred, and requests a hearing 1n accordance with subsection 13 2(1) above, the
Grantor shall set a hearing within sixty (60) days of the Grantor's receipt of the hearing request to
determine whether the violation has occurred, and 1f a violation 1s found, what fines shall be
applied
13 3 Public Hearing In the case of any hearing pursuant to section 13 2 above,
Grantor shall provide reasonable notice to Franchisee of the hearing in writing At the hearing
Franchisee shall be provided an opportunity to be heard, to examine Grantor's witnesses, and to
present evidence in its defense The Grantor may also hear any other person interested in the
subject, and may provide additional hearing procedures as Grantor deems appropriate
13 3 1 If, after the hearing, Grantor determines that a violation exists,
Grantor may use one of the following remedies
13 3 1 1 Order Franchisee to correct or remedy the violation
within a reasonable time frame as Grantor shall determine,
133 12 Establish the amount of fine set forth 1n Section
13 5, taking into consideration the criteria provided for 1n subsection 13 4 of this Agreement as
appropriate in Grantor's discretion, or
13 3 13 Pursue any other legal or equitable remedy
available under this Agreement or any applicable law, or
133 14 In the case of a substantial material default of a
material provision of the Franchise, seek to revoke the Franchise in accordance with Section
137
134 Reduction of Fines The fines set forth 1n Section 13 5 of this Agreement
may be reduced at the discretion of the Grantor, taking into consideration the nature,
circumstances, extent and gravity of the violation as reflected by one or more of the following
factors
13.4.1. Whether the violation was unintentional;
13 4 2 The nature of the harm which resulted,
13 4 3 Whether there 1s a history of prior violations of the same or other
requirements,
13 4.4 Whether there 1s a history of overall compliance, and/or,
MACCNERIZON FINAL MAY 2007 27
13 4 5 Whether the violation was voluntarily disclosed, admitted or cured.
13 5 Fane Schedule
13 5 1. For violating telephone answering standards set forth in Ekhibrt D,
Section 2 D for a quarterly measurement period, unless the violation has been cured, fines shall
be as set forth below A cure is defined as meeting the telephone answering standards for two
consecutive quarterly measurement periods
Quarterly Telephone Answer Time Fines
1st Violation 2nd Violation 3rd Violation
Quarterly Fine $ 2,000* $ 4,000* $ 6,000*
* If after forty-two (42) months, no fines have been assessed for
violations of call answer time standards, these fines shall be reduced
by fifty percent 50%
13 5 2 For all other violations of this Agreement, the fine shall,be $250
per day
13.5 3 Total fines shall not exceed Twenty-Five Thousand Dollars
($25,000) in any twelve-month period
13 5 4 If Grantor elects to assess a fine pursuant to this Section, such
election shall constitute Grantor's exclusive remedy for the violation for which the fine was
assessed for a period of sixty (60) days Thereafter, 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 Grantor at law or equity, provided that the
cumulative remedies may not be disproportionate to the magnitude and severity of the breach for
which they are imposed.
13 6. Letter of Credit- Franchisee shall provide a letter of credit in the amount
of Twenty Thousand Dollars ($20,000) as security for the faithful performance by Franchisee of
all material provisions of this Agreement.
13 7. Revocation Should Grantor seek to revoke the Franchise after following
the procedures set forth in Sections 13 1 through 13 5 above, Grantor shall give written notice to
Franchisee of its intent The notice shall set forth the exact nature of the noncompliance
Franchisee shall have ninety (90) days from such notice to object in writing and to state its
reasons for such objection In the event Grantor has not received a satisfactory response from
Franchisee, it may then seek termination of the Franchise at a public hearing Grantor shall
cause to be served upon Franchisee, at least thirty (30) days prior to such public hearing, a
written notice specifying the time and place of such hearing and stating its intent to revoke the
Franchise
MACC/VERiZON FINAL MAY 2007 28
13 7 1. At the designated hearing, Franchisee shall be provided a fair
opportunity for full participation, including the right to be represented by legal counsel, to
introduce relevant evidence, to require the production of evidence, to compel the relevant
testimony of the officials, agents, employees or consultants of Grantor, to compel the testimony
of other persons as permitted by law, and to question and/or cross examine witnesses A
complete verbatim record and transcript shall be made of such hearing
13 7 2 Following the public hearing, Franchisee shall be provided up to
thirty (30) days to submit its proposed findings and conclusions in writing and thereafter Grantor
shall determine (i) whether an event of default has occurred, (n) whether such event of default is
excusable, and (iii) whether such event of default has been cured or will be cured by Franchisee
Grantor shall also determine whether to revoke the Franchise based on the information presented,
or, where applicable, grant additional time to Franchisee to effect any cure If Grantor
determines that the Franchise shall be revoked, Grantor shall promptly provide Franchisee with a
written decision setting forth its reasoning Franchisee may appeal such determination of
Grantor to an appropriate court, which shall have the power to review the decision of Grantor de
novo Franchisee shall be entitled to such relief as the court finds appropriate Such appeal must
be taken within sixty(60) days of Franchisee's receipt of the determination of the Grantor
13 7 3 Grantor may, at its sole discretion, take any lawful action which it
deems appropriate to enforce Grantor's rights under the Franchise in lieu of revocation of the
Franchise.
13 8 Limitation on Grantor Liability The parties agree that the limitation of
Grantor liability set forth in 47 U S C §555a is applicable to this Agreement
139 Franchisee Termination Franchisee shall have the right to terminate this
Franchise and all obligations hereunder within ninety (90) days after the end of four (4) years
from the Service Date of this Franchise, if at the end of such four (4) year period, Franchisee
does not then in good faith believe it has achieved a commercially reasonable level of Subscriber
penetration on its Cable System Franchisee may consider Subscriber penetration levels outside
the Franchise Area in this determination Notice to terminate under this Section 13 9 shall be
given to the Grantor in writing, with such termination to take effect no sooner than one hundred
and twenty (120) days after giving such notice Franchisee shall also be required to give its then-
current Subscribers not less than ninety (90) days prior written notice of its intent to cease Cable
Service operations
14 MISCELLANEOUS PROVISIONS
141 Actions of Parties In any action by Grantor or Franchisee that is
mandated or permitted under the terms hereof, such party shall act in a reasonable, expeditious,
and timely manner Furthermore, in any instance where approval or consent is required under
the terms hereof, such approval or consent shall not be unreasonably withheld, delayed or
conditioned
142 Binding Acceptance This Agreement shall bind and benefit the parties
hereto and their respective heirs, beneficiaries, administrators, executors, receivers, trustees,
MACCNERIZON FINAL MAY 2007 29
successors and assigns, and the promises and obligations herein shall survive the expiration date
hereof
143 Preemption In the event that federal or state law, rules, or regulations
preempt a provision or limit the enforceability of a provision of this Agreement, the provision
shall be read to be preempted to the extent, and for the time, but only to the extent and for the
time, required by law In the event such federal or state law, rule or regulation is subsequently
repealed; rescinded, amended or otherwise changed so that the provision hereof that had been
preempted is no longer preempted, such provision shall thereupon return to full force and effect,
and shall thereafter be binding on the parties hereto, without the requirement of further action on
the part of Grantor
144 Force Majeure. Franchisee shall not be held in default under, or in
noncompliance with, the provisions of the Franchise, nor suffer any enforcement or penalty
relating to noncompliance or default, where such noncompliance or alleged defaults occurred or
were caused by a Force Majeure
14 4 1 Furthermore, the parties hereby agree that it is not the Grantor's
intention to subject Franchisee to penalties, fines, forfeitures or revocation of the Franchise for
violations of the Franchise where the violation was a good faith error that resulted in no or
minimal negative impact on Subscribers, or where strict performance would result in practical
difficulties and hardship being placed upon Franchisee which outweigh the benefit to be derived
by Grantor and/or Subscribers
145 Incidental Payment The Franchisee shall pay the Grantor an Incidental
Payment of $149,600 as set forth below as a condition of the Franchise granted by this
Agreement The Incidental Payment will be made to Grantor in four annual payment
installments as follows Commencing on the Service Date, and on the same date in the three (3)
following years, the Franchisee shall provide the amounts shown below to the Grantor as an
advance of a portion of the Annual PEG/PCN Grant required in Section 6 4 of the Agreement
Incidental Payment Schedule
Year 1 $17,600
Year 2 $35,200
Year 3 $44,000
Year 4 $52,800
These payments shall not be regarded as franchise fees, nor payments in lieu of franchise fees,
nor as an offset against franchise fees, and they shall be used by Grantor at the Grantor's sole
discretion consistent with applicable law To recover the Incidental Payment, the Franchisee
may retain up to twenty-five percent (25%) of the $1 00 per month collected from Subscribers
under Section 6 4 of this Agreement until such time as the total amount of$149,600 is recovered
Once the total amount of the Incidental Payment is recovered, the Franchisee shall pay the
Grantor the full $100 per month, per Subscriber PEG/PCN Grant The Grantor may assure the
accuracy of these payments by inspecting Franchisee's records under Section 9 of this
Agreement or by an audit under Section 7 4 of this Agreement
MACCNERIZON FINAL MAY 2007 30
146 Notices Unless otherwise expressly stated herein, notices required under
the Franchise shall be mailed first class, postage prepaid, to the addressees below Each party
may change its designee by providing written notice to the other party
14 6 1. Notices to Franchisee shall be mailed to
Verizon Northwest Inc
Attn Tim McCallion, President
112 Lakeview Canyon Road, CA501 GA
Thousand Oaks, CA 91362
with a copy to
Mr Jack H White
Senior Vice President & General Counsel—Verizon Telecom
One Verizon Way
Room VC43EO10
Basking Ridge,NJ 07920-1097
146.2 Notices to the Grantor shall be mailed to
Mr Bruce Crest, MACC Administrator
Metropolitan Area Communications Commission
1815 NW 1691h Place, Suite 6020
Beaverton, OR 97006-4886
147 Entire Agreement This Franchise and the Exhibits hereto constitute the
entire agreement between Franchisee and Grantor, and it supersedes all prior or
contemporaneous agreements, representations or understanding of the parties regarding the
subject matter hereof Any ordinances or parts of ordinances that conflict with the provisions of
this Agreement are superseded by this Agreement
14 8 Amendments Amendments to this Franchise shall be mutually agreed to
in writing by the parties
149 Captions The captions and headings of articles and sections throughout
this Agreement are intended solely to facilitate reading and reference to the sections and
provisions of this Agreement. Such captions shall not affect the meaning or interpretation of this
Agreement
14 10 Severability If any section, subsection, sentence, paragraph, term, or
provision hereof is determined to be illegal, invalid, or unconstitutional, by any court of
competent jurisdiction or by any state or federal regulatory authority having jurisdiction thereof,
such determination shall have no effect on the validity of any other section, subsection, sentence,
paragraph, term or provision hereof, all of which will remain in full force and effect for the term
of the Franchise.
MACCNERIZON FINAL MAY 2007 31
•
14 11 Recitals The recitals set forth in this Agreement are incorporated into the
body of this Agreement as if they had been originally set forth herein
14 12 Modification This Franchise shall not be modified except by written •
instrument executed by both parties
14 13 FTTP Network Transfer Prohibition Under no circumstance including,
without limitation, upon expiration, revocation, termination, denial of renewal of the Franchise
or any other action to forbid or disallow Franchisee from providing Cable Services, shall
Franchisee or its assignees be required to sell any right, title, interest, use or control of any
portion of Franchisee's FTTP Network including, without limitation, the cable system and any
capacity used for cable service or otherwise, to Grantor or any third party Franchisee shall not
be required to remove the FTTP Network or to relocate the FTTP Network or any portion thereof
as a result of revocation, expiration, termination, denial of renewal or any other action to forbid
or disallow Franchisee from providing Cable Services This provision is not intended to
contravene leased access requirements under Title VI or PEG requirements set out in tivs
Agreement
14 14 Independent Legal Advice Grantor and Franchisee each acknowledge
that they have received independent legal advice in entering into this Agreement In the event
that a dispute arises over the meaning or application of any term(s) of this Agreement, such
term(s) shall not be construed by the reference to any doctrine calling for ambiguities to be
construed against the drafter of the Agreement
14 15 Grantor Authority Grantor represents and warrants that it is authorized to
enter into this Agreement on behalf of its Member Jurisdictions pursuant an Intergovernmental
Cooperation Agreement originating in 1980 and in effect in its current form since February 13,
2003, and that the party signing below is authorized to execute this Agreement on behalf of the
Member Jurisdictions following certification that the governing bodies of each of the affected
Member Jurisdictions have approved this Agreement as required by Section 4 E of the
Intergovernmental Cooperation Agreement
14 16. Franchisee Authority Franchisee represents and warrants that it is
authorized to enter into this Agreement and that the party signing below is authorized to execute
this Agreement
MACCNERIZON FINAL MAY 2007 32
•
AGREED TO THIS o2 S DAY OF , 2007.
METROPOLITAN AREA COMMUNICATIONS COMMISSION
By _ A-�
Administrator
VERIZON NORTHWEST INC
FOAP ROVFb
Atto
Date
By
[Title]
EXHIBITS
Exhibit A• Initial Service Area/Franchise Area
Exhibit B Origination Points
Exhibit C: Quarterly Franchise Fee Remittance Form
Exhibit D: Customer Service Standards
Exhibit E: Franchise Parent Structure as of January 24, 2007
Exhibit F Quarterly Customer Service Standards Performance Report
MACCNERIZON FINAL MAY 2007 33
EXHIBIT A - INITIAL SERVICE AREA/ERANCHISE AREA
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MACCNERIZON FINAL MAY 2007 36
•
EXHIBIT B
ORIGINATION POINTS
Alternate City Council "Live" Meeting Sites
Beaverton Library, 12375 SW 5th St , Beaverton, Oregon 97005
Tigard Library, 13500 SW Hall Blvd , Tigard, Oregon 97223
Area Emergency Management Centers
Tualatin Valley Fire & Rescue TVF&R Administration, EMC, 20665 SW Blanton St , Aloha,
Oregon 97007
WCCCA Emergency Management Center,EMC 17911 NW Evergreen Parkway, Beaverton,
Oregon 97006
Washington County EMC Washington County Sheriff's Office, 215 SW Adams Ave ,
Hillsboro, Oregon 97123
MACCNERIZON FINAL MAY 2007 37
EXHIBIT C
QUARTERLY FRANCHISE FEE REMITTANCE FORM
MACC
FRANCHISE FEE SCHEDULE/REPORT
For the Quarter Ending
Month 1 Month 2 Month 3
1 Monthly Recurring Cable Service Charges
(e g , Basic, Enhanced Basic, Premium and
Equipment Rental)
2 Usage Based Charges
(e g , Pay Per View, Installation)
3 Other Mise
(e g , Late Charges,Advertising, Leased Access)
4 Franchise Fees Collected
Less
1 Sales Tax Collected $ $ $
2 Uncollectibles
Total Receipts Subject to Franchise Fee Calculation
Franchise Fee Rate 5%
Franchise Fee Due
Quarter Franchise Fee
Monthly PEG Grant Collection
Quarterly PEG Grant Remission $
MACC/VERIZON FINAL MAY 2007 38
•
EXHIBIT D
CUSTOMER SERVICE STANDARDS
These standards shall apply to Franchisee to the extent it is providing Cable Services over the
Cable System in the Franchise area However, for the first three (3) months after the Service
Date, Franchisee shall not be required to provide reports under this Agreement and, for the first
six (6) months after the Service Date, Grantor will not impose fines if Franchisee fails to meet
the customer service standards set forth in this Agreement This Section sets forth the minimum
customer service standards that the Franchisee must satisfy
SECTION 1: DEFINITIONS
A Normal Operating Conditions Those service conditions which are within the
control of Franchisee, as defined under 47 C F R § 76 309(c)(4)(n) Those conditions which are
not within the control of Franchisee include, but are not limited to, natural disasters, civil
disturbances, power outages, telephone network outages, and severe or unusual weather
conditions Those conditions which are ordinarily within the control of Franchisee include, but
are not limited to, special promotions, pay-per-view events, rate increases, regular peak or
seasonal demand periods, and maintenance or rebuild of the Cable System
B Respond The start of Franchisee's investigation of a Service Interruption by
receiving a Subscriber call, and opening a trouble ticket, and begin working, if required
C Service Call The action taken by Franchisee to correct a Service Interruption the
effect of which is limited to an individual Subscriber
D. Service Interruption The loss of picture or sound on one or more cable channels
E Significant Outage A significant outage of the Cable Service shall mean any
Service Interruption lasting at least four (4) continuous hours that affects at least ten percent
(10%) of the Subscribers in the Service Area
F Standard Installation Installations where the Subscriber is within one hundred
twenty five (125) feet of trunk or feeder lines
SECTION 2: TELEPHONE AVAILABILITY,
A Franchisee shall maintain a toll-free number to receive all calls and inquiries from
Subscribers in the Franchise Area and/or residents regarding Cable Service Franchisee
representatives trained and qualified to answer questions related to Cable Service in the Service
Area must be available to receive reports of Service Interruptions twenty-four (24) hours a day,
seven (7) days a week, and such representatives shall be available to receive all other inquiries at
least forty-five (45) hours per week including at least one night per week and/or some weekend
hours Franchisee representatives shall identify themselves by name when answering this
number
MACCNERIZON FINAL MAY 2007 39
B Franchisee's telephone numbers shall be listed, with appropriate description (e g
administration, customer service, billing, repair, etc ), in the directory published by the local
telephone company or companies serving the Service Area, beginning with the next publication
cycle after acceptance of this Franchise by Franchisee
C Franchisee may use an Automated Response Unit ("ARU") or a Voice Response
Unit ("VRU") to distribute calls. If a foreign language routing option is provided, and the
Subscriber does not enter an option, the menu will default to the first tier menu of English
options
After the first tier menu (not including a foreign language rollout) has run through three
times, if customers do not select any option, the ARU or VRU will forward the call to a queue
for a live representative Franchisee may reasonably substitute this requirement with another
method of handling calls from customers who do not have touch-tone telephones
D Under Normal Operating Conditions, calls received by the Franchisee shall be
answered within thirty (30) seconds. The Franchisee shall meet this standard for ninety percent
(90%) of the calls it receives at call centers receiving calls from Subscribers, as measured on a
cumulative quarterly calendar basis Measurement of this standard shall include all calls
received by the Franchisee at all call centers receiving calls from Subscribers, whether they are
answered by a live representative, by an automated attendant, or abandoned after 30 seconds of
call waiting If the call needs to be transferred, transfer time shall not exceed thirty (30) seconds
E Under Normal Operating Conditions, callers to the Franchisee shall receive a busy
signal no more than three (3%) percent of the time during any calendar quarter
F Forty-five (45) days following the end of each quarter, the Franchisee shall report
to Grantor, using the form shown in Exhibit F, the following for all call centers receiving calls
from Subscribers except for temporary telephone numbers set up for national promotions
(1) Percentage of calls answered within thirty (30) seconds as set forth in
Subsection 2 D, and
(2) Percentage of time customers received a busy signal when calling the
Franchisee's service center as set forth in Subsection 2 E
G At the Franchisee's option, the measurements and reporting above may be
changed from calendar quarters to billing or accounting quarters one time during the term of this
Agreement Franchisee shall notify Grantor of such a change not less than thirty (30) days in
advance
SECTION 3: INSTALLATIONS AND SERVICE APPOINTMENTS
A All installations will be in accordance with FCC rules, including but not limited
to, appropriate grounding, connection of equipment to ensure reception of Cable Service, and the
MACCNERIZON FINAL MAY 2007 40
provision of required consumer information and literature to adequately inform the Subscriber in
the utilization of Franchisee-supplied equipment and Cable Service
B The Standard Installation shall be performed within seven (7) business days after
the placement of the Optical Network Terminal ("ONT") on the customer's premises or within
seven (7) business days after an order is placed if the ONT is already installed on the customer's
premises Franchisee shall meet this standard for ninety-five percent (95%) of the Standard
Installations it performs, as measured on a calendar quarter basis, excluding those requested by
the customer outside of the seven (7) day period
C Franchisee shall provide Grantor with a report forty-five (45) days following the
end of the quarter, noting the percentage of Standard Installations completed within the seven (7)
day period, excluding those requested outside of the seven (7) day period by the Subscriber
Subject to consumer privacy requirements, underlying activity will be made available to Grantor
for review upon reasonable request
D At Franchisee's option, the measurements and reporting above may be changed
from calendar quarters to billing or accounting quarters one time during the term of this
Agreement. Franchisee shall notify Grantor of such a change not less than thirty (30) days in
advance
E Franchisee will offer Subscribers "appointment window" alternatives for arrival
to perform installations, Service Calls and other activities of a maximum four (4) hours
scheduled time block during appropriate daylight available hours, usually beginning at 8'00 AM
unless it is deemed appropriate to begin earlier by location exception At Franchisee's
discretion, Franclusee may offer Subscribers appointment arrival times other than these four (4)
hour time blocks, if agreeable to the Subscriber
(1) Franchisee may not cancel an appointment window with a customer after the
close of business on the business day prior to the scheduled appointment
(2) If Franchisee's representative is running late for an appointment with a
customer and will not be able to keep the appointment as scheduled, the customer will be
contacted The appointment will be rescheduled, as necessary, at a time which is convenient for
the customer
F Franchisee must provide for the pick up or drop off of equipment free of charge in
one of the following manners (i) by having a Franchisee representative going to the Subscriber's
residence, (ii) by using a mailer, or (iii) by establishing a local business office within the
Franchise Area If requested by a mobility-limited customer, the Franchisee shall arrange for
pickup and/or replacement of converters or other Franclusee equipment at Subscriber's address
or by a satisfactory equivalent
MACC/VERIZON FINAL MAY 2007 41
SECTION 4: SERVICE INTERRUPTIONS AND OUTAGES
A Franchisee shall promptly notify Grantor of any Significant Outage of the Cable •
Service
B Franchisee shall exercise commercially reasonable efforts to limit any Significant
Outage for the purpose of maintaining, repairing, or constructing the Cable System Except in an •
emergency or other situation necessitating a more expedited or alternative notification procedure, .
Franchisee may schedule a Significant Outage for a period of more than four (4) hours during
any twenty-four (24) hour period only after Grantor and each affected Subscriber in the Service
Area have been given fifteen (15) days prior notice of the proposed Significant Outage
Notwithstanding the foregoing, Franchisee may perform modifications, repairs and upgrades to
the System between 12 01 a in. and 6 a In which may interrupt service, and this Section's notice
obligations respecting such possible interruptions will be satisfied by notice provided to
Subscribers upon installation and in the annual Subscriber notice
C Franchisee representatives who are capable of responding to Service Interruptions
must be available to Respond twenty-four(24) hours a day, seven (7) days a week
D Under Normal Operating Conditions, Franchisee must Respond to a call from a
Subscriber regarding a Service Interruption or other service problems within the following time
frames
(1) Within twenty-four (24) hours, including weekends, of receiving
Subscriber calls about Service Interruptions in the Service Area
(2) Franchisee must begin actions to correct all other Cable Service
problems the next business day after notification by the Subscriber or Grantor of a Cable Service
problem
E Under Normal Operating Conditions, Franchisee shall complete Service
Calls within seventy-two (72) hours of the time Franchisee commences to Respond to the
Service Interruption, not including weekends and situations where the Subscriber is not
reasonably available for a Service Call to correct the Service Interruption within the seventy-two
(72)hour period
F Franchisee shall meet the standard in Subsection E of this Section for ninety
percent(90%) of the Service Calls it completes, as measured on a quarterly basis
G Franchisee shall provide Grantor with a report within forty-five (45) days
following the end of each calendar quarter, noting the percentage of Service Calls completed
within the seventy-two (72) hour period not including Service Calls where the Subscriber was
reasonably unavailable for a Service Call within the seventy-two (72) hour period as set forth in
this Section. Subject to consumer privacy requirements, underlying activity will be made
available to Grantor for review upon reasonable request At the Franchisee's option, the above
measurements and reporting may be changed from calendar quarters to billing or accounting
MACCNERIZON FINAL MAY 2007 42
quarters one time during the term of this Agreement The Franchisee shall notify the Grantor of
such a change at least thirty (30) days in advance
H At Franchisee's option, the above measurements may be changed for calendar
quarters to billing or accounting quarters one time during the term of this Agreement Franchisee
shall notify Grantor of such a change at least thirty (30) day in advance
I Under Normal Operating Conditions, Franchisee shall provide a credit upon
Subscriber request when all Channels received by that Subscriber experience the loss of picture
or sound for a period of four (4) consecutive hours or more The credit shall equal, at a
minimum, a proportionate amount of the affected Subscriber(s) current monthly bill In order to
qualify for the credit, the Subscriber must promptly report the problem and allow Franchisee to
verify the problem if requested by Franchisee If Subscriber availability is required for repair, a
credit will not be provided-for such time, if any, that the Subscriber is not reasonably available
J Under Normal Operating Conditions, if a Significant Outage affects all Video
Programming Cable Services for more than twenty-four (24) consecutive hours, Franchisee shall
issue an automatic credit to the affected Subscribers in the amount equal to their monthly
recurring charges for the proportionate time the Cable Service was out, or a credit to the affected
Subscribers in the amount equal to the charge for the basic plus enhanced basic level of service
for the proportionate time the Cable Service was out, whichever is technically feasible or, if both
are technically feasible, as determined by Franchisee provided such determination is non-
discriminatory Such credit shall be reflected on Subscriber billing statements within the next
available billing cycle following the outage
SECTION 5: CUSTOMER COMPLAINTS REFERRED BY GRANTOR
Under Normal Operating Conditions, Franchisee shall begin investigating Subscriber
complaints referred by Grantor within twenty-four (24) hours. Franchisee shall notify Grantor of
those matters that require more than seventy-two (72) hours to resolve, but Franchisee must
make all necessary efforts to resolve those complaints within ten (10) business days of the initial
complaint Grantor may require Franchisee to provide reasonable documentation to substantiate
the request for additional time to resolve the problem Franchisee shall inform Grantor in writing,
which may be by an electronic mail message, of how and when referred complaints have been
resolved within a reasonable time after resolution. For purposes of this Section, "resolve" means
that Franchisee shall perform those actions, which, in the normal course of business, are
necessary to investigate the Customer's complaint and advise the Customer of the results of that
investigation
SECTION 6: BILLING
A Subscriber bills must be itemized to describe Cable Services purchased by
Subscribers and related equipment charges Bills shall clearly delineate activity during the
billing period, including optional charges, rebates, credits, and aggregate late charges Franchisee
shall, without limitation as to additional line items, be allowed to itemize as separate line items,
MACCNERIZON FINAL MAY 2007 43
•
Franchise fees, taxes and/or other governmental-imposed fees Franchisee shall maintain records
of the date and place of mailing of bills
B Every Subscriber with a current account balance sending payment directly to
Franchisee shall be given at least twenty (20) days from the date statements are mailed to the
Subscriber until the payment due date
C A specific due date shall be listed on the bill of every Subscriber whose account is
current Delinquent accounts may receive a bill which lists the due date as upon receipt,
however, the current portion of that bill shall not be considered past due except in accordance
with Subsection 6 B above
D Any Subscriber who, in good faith, disputes all or part of any bill shall have the
option of withholding the disputed amount without disconnect or late fee being assessed until the
dispute is resolved, provided that
(1) The Subscriber pays all undisputed charges,
(2) The Subscriber provides notification of the dispute to Franchisee within
five (5) days prior to the due date, and
(3) The Subscriber cooperates in determining the accuracy and/or
appropriateness of the charges in dispute
(4) It shall be within Franchisee's sole discretion to determine when the
dispute has been resolved
E Under Normal Operating Conditions, Franchisee shall initiate investigation and
resolution of all billing complaints received from Subscribers within five (5) business days of
receipt of the complaint Final resolution shall not be unreasonably delayed
F Franclusee shall provide a telephone number and address clearly and prominently
on the bill for Subscribers to contact Franchisee
G Franchisee shall forward a copy of any rate-related or customer service-related
billing inserts or other mailings related to Cable Service, but not promotional materials, sent to
Subscribers,to Grantor
H Franchisee shall provide all Subscribers with the option of paying for Cable
Service by check or an automatic payment option where the amount of the bill is automatically
deducted from a checking account designated by the Subscriber Franchisee may in the future, at
its discretion, permit payment by using a mayor credit card on a preauthorized basis Based on
credit history, at the option of Franchisee, the payment alternative may be limited.
I Franchisee shall provide Grantor with a sample Cable Services bill, and shall
provide an updated sample bill at least 30 days before any material change is sent to Subscribers
MACC/VEMON FINAL MAY 2007 44
SECTION 7: DEPOSITS, REFUNDS AND CREDITS
A Franchisee may require refundable deposits from Subscribers 1) with a poor credit
or poor payment history, 2) who refuse to provide credit history information to Franchisee, or 3)
who rent Subscriber equipment from Franchisee, so long as such deposits are applied on a non-
discriminatory basis The deposit Franchisee may charge Subscribers with poor credit or poor
payment history or who refuse to provide credit information may not exceed an amount equal to
an average Subscriber's monthly charge multiplied by six (6) The maximum deposit Franchisee
may charge for Subscriber equipment is the cost of the equipment which Franchisee would need
to purchase to replace the equipment rented to the Subscriber
B Franchisee shall refund or credit the Subscriber for the amount of the deposit
collected for equipment, which is unrelated to poor credit or poor payment history, after one year
and provided the Subscriber has demonstrated good payment history during this period
Franchisee shall pay interest on other deposits if required by law
C Under Normal Operating Conditions, refund checks will be issued within the next
available billing cycle following the resolution of the event giving rise to the refund, (e g
equipment return and final bill payment)
D Credits for Cable Service will be issued no later than the Subscriber's next
available billing cycle, following the determination that a credit is warranted, and the credit is
approved and processed Such approval and processing shall not be unreasonably delayed
E Bills shall be considered paid when appropriate payment is received by
Franchisee or its authorized agent Appropriate time considerations shall be included in
Franchisee's collection procedures to assure that payments due have been received before late
notices or termination notices are sent
SECTION 8: RATES, FEES AND CHARGES
A Franchisee shall not, except to the extent expressly permitted by law, impose any
fee or charge for Service Calls to a Subscriber's premises to perform any repair or maintenance
work related to Franchisee equipment necessary to receive Cable Service, except where such
problem is caused by a negligent or wrongful act of the Subscriber (including, but not limited to
a situation in which the Subscriber reconnects Franchisee equipment incorrectly) or by the
failure of the Subscriber to take reasonable precautions to protect Franchisee's equipment (for
example, a dog chew)
B Franchisee shall provide reasonable notice to Subscribers of the possible
assessment of a late fee on bills or by separate notice Such late fees are subject to ORS 646 649
C All -of Franchisee's rates and charges shall comply with applicable law
Franchisee shall maintain a complete current schedule of rates and charges for Cable Services on
file with the Grantor throughout the term of this Franchise
MACCNERIZON FINAL MAY 2007 45
SECTION 9: DISCONNECTION/DENIAL OF SERVICE
A Franchisee shall not terminate Cable Service for nonpayment of a delinquent
account unless Franchisee mails a notice of the delinquency and impending termination prior to
the proposed final termination The notice shall be mailed to the Subscriber to whom the Cable
Service is billed The notice of delinquency and impending termination may be part of a billing
statement
B Cable Service terminated in error must be restored without charge within twenty-
four (24) hours of notice If a Subscriber was billed for the period during which Cable Service
was terminated in error, a credit shall be issued to the Subscriber if the Service Interruption was
reported by the Subscriber
C Nothing in these standards shall limit the right of Franchisee to deny Cable
Service for non-payment of previously provided Cable Services, refusal to pay any required
deposit, theft of Cable Service, damage to Franchisee's equipment, abusive and/or threatening
behavior toward Franchisee's employees or representatives, or refusal to provide credit history
information or refusal to allow Franchisee to validate the identity, credit history and credit
worthiness via an external credit agency
D Charges for cable service will be discontinued at the time of the requested
termination of service by the Subscriber, except equipment charges may by applied until
equipment has been returned No period of notice prior to requested termination of service can
be required of Subscribers by Franchisee No charge shall be imposed upon the Subscriber for or
related to total disconnection of Cable Service or for any Cable Service delivered after the
effective date of the disconnect request, unless there is a delay in returning Franchisee equipment
or early termination charges apply pursuant to the Subscriber's service contract. If the
Subscriber fails to specify an effective date for disconnection, the Subscriber shall not be
responsible for Cable Services received after the day following the date the disconnect request is
received by Franchisee For purposes of this subsection, the term "disconnect" shall include
Subscribers who elect to cease receiving Cable Service from Franchisee and to receive Cable
Service or other multi-channel video service from another Person or entity
SECTION 10: COMMUNICATIONS WITH SUBSCRIBERS
A All Franchisee personnel, contractors and subcontractors contacting Subscribers
or potential Subscribers outside the office of Franchisee shall wear a clearly visible identification
card bearing their name and photograph Franchisee shall make reasonable effort to account for
all identification cards at all times In addition, all Franchisee representatives shall wear
appropriate clothing while working at a Subscriber's premises. Every service vehicle of
Franchisee and its contractors or subcontractors shall be clearly identified as such to the public.
Specifically, Franchisee velncles shall have Franchisee's logo plainly visible The vehicles of
those contractors and subcontractors working for Franchisee shall have the contractor's /
subcontractor's name plus markings (such as a magnetic door sign) indicating they are under
contract to Franchisee
MACCNERIZON FINAL MAY 2007 46
B All contact with a Subscriber or potential Subscriber by a Person representing
Franchisee shall be conducted in a courteous manner
C Franchisee shall send annual notices to all Subscribers informing them that any
complaints or inquiries not satisfactorily handled by Franchisee may be referred to Grantor A
copy of the annual notice required under this Subsection 10 C will be given to Grantor at least
fifteen (15) days prior to distribution to Subscribers
D Franchisee shall provide the name, mailing address, and phone number of Grantor
on all Cable Service bills in accordance with 47 C F R §76 952(a)
E All notices identified in this Section shall be by either
(1) A separate document included with a billing statement or included on the
portion of the monthly bill that is to be retained by the Subscriber, or
(2) A separate electronic notification
F Franchisee shall provide reasonable notice to Subscribers and Grantor of any
pricing changes or additional changes (excluding sales discounts, new products or offers) and,
subject to the forgoing, any changes in Cable Services, including channel line-ups Such notice
must be given to Subscribers a minimum of thirty (30) days in advance of such changes if within
the control of Franchisee If the change is not within Franchisee's control, Franchisee shall
provide an explanation to Grantor of the reason and expected length of delay. Franchisee shall
provide a copy of the notice to Grantor including how and where the notice was given to
Subscribers
G Franchisee shall provide information to all Subscribers about each of the
following items at the time of installation of Cable Services, annually to all Subscribers, at any
time upon request, and, subject to Subsection 10 E , at least thirty (30) days prior to making
significant changes in the information required by this Section if within the control of
Franchisee
(1) Products and Cable Service offered,
(2) Prices and options for Cable Services and condition of subscription to
Cable Services Prices shall include those for Cable Service options, equipment rentals, program
guides, installation, downgrades, late fees and other fees charged by Franchisee related to Cable
Service,
(3) Installation and maintenance policies including, when applicable,
information regarding the Subscriber's in-home wiring rights during the period Cable Service is
being provided,
(4) Channel positions of Cable Services offered on the Cable System,
MACCNERIZON FINAL MAY 2007 47
(5) Complaint procedures, including the name, address, and telephone number
of Grantor, but with a notice advising the Subscriber to initially contact Franchisee about all
complaints and questions,
(6) Procedures for requesting Cable Service credit,
(7) The availability of a parental control device,
(8) Franchisee practices and procedures for protecting against invasion of
privacy, and
(9) The address and telephone number of Franchisee's office to which
complaints may be reported
A copy of notices required in this Subsection 10 F will be given to Grantor at least
fifteen (15) days prior to distribution to Subscribers if the reason for notice is due to a change
that is within the control of Franchisee and as soon as possible if not with the control of
Franchisee
H Notices of changes in rates shall indicate the Cable Service new rates and old
rates, if applicable.
I Notices of changes of Cable Services and/or Channel locations shall include a
description of the new Cable Service, the specific channel location, and the hours of operation of
the Cable Service if the Cable Service is only offered on a part-time basis In addition, should
the Channel location, hours of operation, or existence of other Cable Services be affected by the
introduction of a new Cable Service, such information must be included in the notice
J Every notice of termination of Cable Service shall include the following
information
(1) The name and address of the Subscriber whose account is delinquent,
(2) The amount of the delinquency for all services billed,
(3) The date by which payment is required in order to avoid termination of
Cable Service, and
(4) The telephone number for Franchisee where the Subscriber can receive
additional information about their account and discuss the pending termination
K Franchisee will comply with privacy rights of Subscribers in accordance with
federal, state, and local law, including 47 U S C §551
MACCNERIZON FINAL MAY 2007 48
EXHIBIT E
FRANCHISEE PARENT STRUCTURE AS OF JANUARY 24, 2007
Verizon Northwest parent GTE Corporation 100%
GTE Corporation Parents
Verizon Communications Inc 92.88%
NYNEX Corporation 5 93% (which is 100% owned by Verizon Communications Inc)
Bell Atlantic Global Wireless, Inc 1 19% (which is 100% owned by Verizon Investments
Inc , which is 100% owned by Verizon Communications Inc )
MACCNERIZON FINAL MAY 2007 49
•
EXHIBIT F
CUSTOMER SERVICE STANDARD REPORT METRICS
THE FOLLOWING INFORMATION IS PROPRIETARY AND CONFIDENTIAL AND IS CONDITIONALLY EXEMPT FROM THE OREGON PUBLIC
RECORDS LAW THE FOLLOWING INFORMATION QUALIFIES AS PROPRIETARY AND CONFIDENTIAL BUSINESS INFORMATION
PURSUANT TO, WITHOUT LIMITATION, OREGON REVISED STATUTE § 192 501(2) AND ANY OTHER APPLICABLE LAW AND SHOULD
NOT BE DISCLOSED
Verizon Video Franchise Report: '
Contract Requirements
Jan Feb Mar 1st Qtr April May June 2nd Qtr July AugSept 3rd Qtr Oct Nov Dec 4th Qtr
rYfi',�� a"^r� .Y„ b'� g=, „= ; d> ,.fir z °x ,��”�'v k
}alCusEoma ,Co��wAvaelab1II*y +:,cv:'Y4.1a+s'�".�, ti.zNbi.,>.. tC� ler, t + So„+n t5 etr .n�.d�mwua,3s`,. ,.
90%Calls Answered within 30 Seconds
3%Calls Receiving a Busy
VMR=3„ rouble' Plet�onxlntervat8�€°�a„� ,a� s��' „�� . �z�� � , �s,�r".�`, �� '�,rr�r�:� �bfi ��� �s �`� rle .�.a��°>r<�k w,�.�2'+sur °.�n 'q��,•a�u., �a��i� 3� 'a��. �tt+a�."�35 • 6ac '�,5 �
90%Completed Service Interruption Troubles
<72 hours"; -
VPR 1&Cane letedawith�4 PeCified,#aft�ysa�a N&a �tn #� , x� � x_ A`d
96%Standard Installs Completed within seven V)
business days after ONT Placement Date,or if
ONT exists on Order Creation Date, within seven
(7)business days of Order Creation Date(126 FT)
MACC/VEWON FINAL MAY 2007 50