16780I
2 ORDINANCE NO. 16,780
3
4 AN ORDINANCE TO GRANT A FRANCHISE TO
5 BROOKS FIBER, INC., AS A
6 TELECOMMUNICATIONS COMPETITIVE
7 ACCESS PROVIDER WITHIN THE CITY OF
8 LITTLE ROCK, ARKANSAS; PERMITTING A
9 LICENSE TO COMPLETE CONSTRUCTION;
10 DECLARING AN EMERGENCY; AND FOR
11 OTHER PURPOSES.
12
13 WAS, the City has been approached by ACSI, Inc., and
14 Brooks Fiber, Inc., about the possibility of obtaining a
15 franchise to use the public streets and rights -of -way to
16 construct and maintain a fiber optic access network; and
17 WHEREAS, subject to the terms and conditions of a formal
18 franchise agreement which is in the nature of a rental agreement
19 for the use of the public streets and rights -of -way, the City
20 believes that it would be good to grant this agreement.
21 NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF DIRECTORS OF
22 THE CITY OF LITTLE ROCK, ARKANSAS:
23 SECTION 1. The City grants a franchise agreement to Brooks
24 Fiber, .Inc., pursuant to the terms and conditions of the
25 agreement set forth as Exhibit A to this ordinance, to use the
26 public streets and rights -of -way for purposes of constructing
27 and maintaining a fiber optic access system within the corporate
28 limits of the City of Little Rock, Arkansas.
29 SECTION 2. In addition tv any other covenants set forth in
30 Exhibit A, Brooks Fiber, Inc., agrees to pay the City annually a
31 sum equal to five percent (5 %) of gross revenues as a fee, in
32 the form of a rental, for use of the public streets and
33 right -of -way. This sum is to be calculated in accordance with
34 the terms and conditions set forth in Exhibit A.
35 SECTION 3. The term of this franchise agreement shall be
36 for a period of S- years and shall commence on January 1,
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1995, provided that Brooks Fiber, Inc., shall be granted a
license to take steps necessary to complete the construction of
this system, including the laying of conduit, between the date
this ordinance is adopted and January 1, 1995, provided further,
that Brooks Fiber, Inc., complies with all terms and conditions
and obtains all necessary permits required by the City necessary
for such work.
SECTION 4. Emergency. The construction and operation of a
fiber optic access network is essential to the continued
economic development and progress of the City and serves the
City health, safety and welfare; an emergency is, therefore,
declared to exist and this ordinance shall be in full force and
effect from and after the date of its adoption.
PASSED: November 23, 1994
ATTEST:
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• EXHIBIT A - #16,780
554
BROOKS FIBER C0:414=ICATION OF ARKANSAS, INC.
FIBER OPTIC TELECOMKUNICATIONS NETWORK
FRANCHISE AGREEMENT
THIS Agreement is entered into this 23rd day of November,
1994, between the City of Little Rock, Arkansas, ( "City ") a
municipal corporation duly organized pursuant to the laws of the
State of Arkansas, and Brooks Fiber Communication of Arkansas,
Inc. ( "Company ") a corporation duly organized pursuant to the
laws of the State of Delaware, and authorized to do business in
the State of Arkansas,
W I T N E S S E T H
WHEREAS, the City of Little Rock, Arkansas (hereafter "the
City") recognizes that fiber optic telecommunications services
for purposes of providing information services is essential to
the creation and maintenance of an information network within
the City of Little Rock, Arkansas, that can connect to the
information superhighway; and
WHEREAS, Brooks Fiber Communication of Arkansas, Inc., a
corporation organized pursuant to the laws of the State of
Delaware (hereafter "the Company") and licensed to do business
in the State of Arkansas, has asked for a franchise to use the
public rights -of -way including, but not limited to, streets,
alleys, sidewalks, and air rights that belong to the City, to
install conduit and fiber optic technology that will facilitate
the connection of businesses, residences and public agencies
located within the City to an information network; and
WHEREAS, the parties agree that these information services
are a telecommunications service and, therefore, a utility for
which a written franchise agreement must be entered pursuant to
555
Act 6 of the First Extraordinary Session of 1994 of the Arkansas
General Assembly; and
WHEREAS, the City intends to exercise the full scope of its
municipal powers, including both its police power and
contracting authority, to promote the public interest and to
protect the health, safety and welfare of the citizens of the
City.
NOW, THEREFORE, IN CONSIDERATION OF THE COVENANTS AND
�4ENTS SET FORTH BELOW, THE PARTIES DO HEREBY CONTRACT AND
AGREE AS FOLLOWS:
1. Gross Revenues - shall mean all revenues (exclusive of
sales tax) collected by Company from operation of Company's
Network installed pursuant to this franchise agreement, and any
related services provided by the Company within the corporate
limits of the City, including, but not limited to:
a. all intrastate telecommunications service revenues
charged on a flat rate basis;
b. all intrastate telecommunications services charged on a
usage sensitive or mileage basis;
c. all revenues from intrastate installation service
charges;
d. all revenues from intrastate connection or disconnection
fees;
e. all revenues from penalties or charges to intrastate
customers for checks returned from banks, net of back costs
paid;
f. all revenues from equipment sold or rented to
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intratstate customers upon customer premises;
g. all revenues from any authorized intrastate rental of
conduit space;
h. all revenues from intrastate charges for access to local
and long distance networks;
i. all revenues from authorized rentals of any portion of
Company's intrastate Network, including plant, facilities, or
capacity leased to others;
j. all other revenues collected by Company from business
pursued within the City;
k. recoveries of intrastate bad debts previously written
off and revenues from the sale or assignment of bad debts.
Unrecovered bad debts charged off after diligent, unsuccessful
efforts to collect are excludable from Gross Revenues;
1. all intrastate revenues from enhanced data service;
M. all intrastate interconnect revenues from interexchange
carriers;
n. all revenues derived from intrastate co- location
connection fees; and
o. all revenues from intrastate subsidiary companies
derived from use of fiber optic network.
Notwithstanding the foregoing definition, the term Gross
Revenues shall not include interconnection services paid to a
basic local exchange carrier if that carrier has paid a
franchise fee on the collection of such revenues from the
Company.
2. Fiber optic Telecommunications Network or Network -
shall mean the Company's system, of cables, wires, lines,
towers, wave guides, optic fiber, microwave, laser beams, and
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any associated converters, equipment, of facilities designed and
constructed for the purpose of producing, receiving, amplifying,
or distributing, by audio, video, or other forms of electronic
signals, Authorized Telecommunications Services to or from
subscribers or locations within the City. No portion of the
Fiber Optic Telecommunications Network shall constitute all or
any portion of a cable television system except with the prior
written consent of the City.
3. Event of Default - The events set forth in Section 8.2
and other parts of this Franchise agreement that may be the
basis for the involuntary termination of this Franchise.
4. Authorized Telecommunications Services - includes
intrastate (a) services interconnecting interexchange carriers
for the purpose of voice or data transmission; (b) services
connecting interexchange carriers or competitive carriers to
telephone companies providing local exchange services for the
purpose of voice or data transmission; (c) services connecting
interexchange carriers to any entity, other than another
interexchange carrier, or telephone company providing local
exchange services, for the purpose of voice or data
transmission; (d) service providing private line point to point
service for end users for voice and data transmission; (e)
nonentertainment video, videoconferencing, or point to point
private line service; or (f) any intrastate or interstate
telecommunication services regulated by the Arkansas Public
Service Commission (PSC) which the PSC or the Federal
Communications Commission (FCC) has authorized Company to
provide, if Company has provided advance notice of same to City,
provided that this service is not basic local exchange carrier
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service unless authorized by the appropriate state or federal
agency.
SECTION 1
GRANT OF AUTHORITY
1.1 Grant of Franchise. The Company is hereby granted a
franchise ( "the Franchise ") to occupy and use the streets and
airways within and belonging to the City in order to construct,
operate, maintain, upgrade, repair and remove a Fiber Optic
Telecommunications Network, subject to the terms and conditions
of this agreement.
1.2 Term of Agreement. This agreement shall commence on
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January 1, 1995, and shall expire on December 31, 2968, unless
the agreement is renewed in accordance with Section 1.5 or
unless the expiration date is accelerated pursuant to Section
8.3 of this agreement, or unless the Franchise is terminated by
abandonment. Upon expiration or termination of the Franchise,
all rights of the Company shall cease. The City recognizes that
once a Franchise is granted, the City shall not limit as to time
the Company's right to use the streets and public rights -of -way
unless the Company engages in misuse or nonuse, the Company is
determined not to be a public utility, or, the state, the PSC,
the FCC, or any other branch or agency of the federal
government, establishes a time limit for such use or amends the
law relating to this issue and establishes or permits a time
limit.
1.3 Nonexclusive Franchise. The Franchise is nonexclusive.
Nothing in this agreement shall limit or otherwise impact the
right of the City to enter into similar agreements with other
companies for use of the City's streets and airways.
[5]
1.4 Scope of Franchise. For purposes of initial
construction, the scope of the Franchise awarded pursuant to
this agreement is limited to the area and locations noted on
Exhibit A to this agreement. Any extension, construction, or
other preparation for the extension of conduit or any facilities
within the streets of public rights -of -way (not including
lateral connections under sidewalks that do not interfere with
the normal flow of traffic on City streets or public
rights -of -way for which permits have been issued), other than
that set forth in Exhibit A is prohibited unless there has been
an appropriate award of permits by the Department of Public
Works the issuance of which, pursuant to the terms of Section
1.7 and in the sole discretion of the Director of Public Works,
may be reasonably delayed.
1.5 Process for Renewal of Agreement. Assuming the
successful and satisfactory compliance with the terms of this
agreement, the City and the Company anticipate that the
agreement will be renewed at the end of the term set forth in
Section 1.2 Prior to any renewal, the following process shall be
followed: (a) Not less than one hundred and twenty (120) days
prior to the end of the term of the agreement, the Company shall
notify the City in writing of its intention to seek renewal of
the agreement; (b) Upon receipt of such a written intention,
the City shall schedule a public hearing to be held not later
than sixty (60) days prior to the end of the term of the
agreement for purpose of seeking public input on the issue of
renewal from any person concerning compliance by the Company
with the terms of the Franchise; (c) If, as a result of these
hearings, the City determines, in its sole discretion, that any
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significant problems have occurred, the Company shall be
required to respond to these concerns in writing within ten (10)
days of written notice by the City; (d) If the City is
satisfied with the answers to these inquiries, or if the City
determines that there have been no significant problems, then
the City shall announce not less than thirty (30) days prior to
the end of the term of this agreement its intent to renew the
agreement and shall, by resolution, state an intended term for
such renewal; (e) All other terms and conditions are subject to
renegotiation and an ordinance adopting a new agreement shall be
enacted prior to the end of the term of this agreement provided,
the parties may agree in writing to extend the initial term for
a period of not more than fifteen (15) days in order to finalize
any negotiations. The failure of the Company to negotiate in
good faith shall constitute misuse of the Franchise. If the
agreement is not renewed as a result of this process, the City
may, in its sole discretion, direct any action permitted by
Section 8 of this Agreement.
1.6 Reservation of Authority. The City reserves the right
to perform any public works or make any public improvements to
the City's streets or airways during the term of this Agreement.
If, as a result of any action by the City, or by any action
authorized by the City for the benefit of the public good,
location of any of the Company's conduit or other facilities is
required, such relocation shall be accomplished at the sole
expense of Company. Nothing in this Franchise shall be deemed a
waiver of the City's right to require the Company to comply with
all zoning and other regulatory ordinances or to pay any
reasonable permit fees or to seek appropriate authorizations
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561
from the Company to perform any work in connection with the
Franchise Should the City close, eliminate, or discontinue use
of any public street during the term of this Franchise, or any
renewal term, this Franchise shall cease with respect to such
streets upon the date of final action by the City with respect
to the closure, elimination or discontinuance of such streets.
1.7 Agreement for Reasonable Moratoria. The Company and the
City recognize that from time to time it may be necessary for
the City to impose reasonable moratoria on construction projects
that would otherwise be authorized by this Franchise. The
Company agrees that the City has the right to impose such
moratoria and further agrees that it will waive the right to
challenge the legality of any moratorium the City imposes for a
reasonable period of time in order to accomplish or facilitate
any public purpose or, a purpose of particular importance to the
City as determined by the Mayor, the Board of Directors, the
City Manager, or the Director of Public Works. The City
acknowledges that a moratorium is a unique power that the
government should exercise only on limited occasions because of
a legitimate governmental need or objective and, that with the
exception of undue hardship or emergency situations, as
determined by the City, a moratorium must be applied equally to
all persons impacted by its terms and conditions.
1.8 Notice of Intention to Construct. The City has a vested
interest in assuring that any disruption of the flow of traffic,
or the digging or creation of a trench in any of the streets, be
kept to a minimum. In order to facilitate this interest, and to
avoid requiring the Company to share conduit with any other
utility, the City and the Company agree to the following:
[8]
(a) The Company will provide thirty (30) days notice to
other utilities in the City of its interest in seeking
construction permits to open the street before it applies for
any such permits. Further, with the exception of emergency
situations, as determined in the sole discretion of the Director
of Public Works, the Company acknowledges that the City shall
withhold approval of any such permits to open any City street
for a period of ten (10) business days during which time any
other public utility that desires to do so will be allowed to
ask to simultaneously lay conduit, or other appropriate
equipment, in any trench opened by the Company. If another
public utility so desires, the Company will permit that public
utility to do so provided: (i) the other utility shares in the
cost of opening and repairing the trench; (ii) the utility's
desire to so participate does not unnecessarily delay the
Company's construction schedule.
(b) The Company agrees that if, pursuant to a similar
requirement for other public utilities, it receives notice from
any other public utility of a request for a permit to open the
streets, the Company shall determine whether to participate in
the opening of any trench by that utility and shall participate
in such a project pursuant to the terms of this subsection.
(c) Failure to comply with the provisions of this
subsection, or any applicable city-ordinances, may, in the sole
discretion of the City: (A) be the basis for the City to
require that the Company perform more extensive restoration work
than otherwise anticipated by such a permit and (ii) may result
in the Company being assessed an additional premium on any
permit fee.
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(d) For purposes of this subsection, "public utility" means
Arkansas Louisiana Gas Company, Arkansas Power & Light Co.
(Entergy), Southwestern Bell Telephone Company, Comcast (or
another other cable television company), any interexchange
carrier for long distance telecommunications services, any
company providing a Fiber Optic Telecommunications Network,
Little Rock Water Commission, or Little Rock Sanitary Sewer
Committee.
SECTION 2.
CONSTRUCTION REQUIREMENTS
2.1 Ouality. All work involved in the construction,
operation, maintenance, repair, upgrade, and removal of the
Network that is permitted by this Franchise shall be performed
in a safe, thorough, reliable manner using materials of good and
durable quality in accordance with City Standards as determined
by the City Department of Public Works. If, at any time, it is
determined by the City that any part of the Network is harmful
to the health or safety of any person, then the Company shall at
its own cost and expense, promptly correct all such conditions.
For purposes of this subsection, promptly shall mean twenty -four
(24) hours, or a longer period of time if and only if additional
time is granted in writing by the Director of Public Works
acting with the advice and consent of the City Manager.
2.2 Aesthetic Construction Requirements. Before the company
constructs, extends or replaces its Network, it shall file with
the City's Director of Public Works a written work description,
including scale drawings, showing the Network's location and
estimated depth of the facilities. The plans will be reviewed by
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the Director of Public Works and any comments will be provided
to the Company within ten (10) business days. The City agrees to
expedite its review when conditions warrant. Before Company
repairs its existing Network the Company shall give notice to
the City's Director of Public Works as to the time and location
of the proposed repairs and obtain any and all permits required
by the City. Company will provide a thirty (30) day advanced
schedule of planned work at the beginning of each month. Daily
work schedules shall be provided to City by 8:30 a.m. of each
work day. When an emergency occurs, repairs shall be performed
by the Company and notice shall be given to the Director of
Public Works within twenty -four (24) hours following emergency
repairs.
Any construction project shall be completed within thirty
(30) days from the date that the Department of Public Works
issues any necessary permits, provided that the Director of
Public Works may allow reasonable extension due to weather or
Acts of God, or other reasonable circumstances that in the sole
discretion of the Director of Public Works justifies an
extension of the project target completion date.
If construction is not completed by the project target
completion date permitted by the City, the Company shall pay
liquidated damages to the City in an amount determined by the
Director of Public Works at the time the City issues permits for
the construction project. The City and the Company agree that
the Company's failure to abide by the schedule for a project
subsection will result in damages that will be impracticable or
difficult to ascertain. The Company agrees to pay the City these
liquidated damages for its failure to complete construction,
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modification, or relocation of any facilities, conduit or any
other matter allowed pursuant to a permit granted by the
Department of Public Works, provided the amount shall not exceed
One Hundred ($100.00) dollars per day for the first thirty (30)
days after the project target completion date; Five Hundred
($500.00) dollars per day for the next thirty (30) days after
the project target completion date; and, thereafter, Seven
Hundred and Fifty ($750.00) dollars per day for each day after
the project target completion date.
The City may collect liquidated damages owed either through
the draw -down of the security required in Section 11.1, or
through other means allowed by law. Unless the delay is excused
by resolution adopted by the Board of Directors, the City
Manager may immediately request payment of any liquidated amount
due to the City. In addition to the payment of liquidated
damages, if the project target completion date is unmet after
sixty (60) days and the Board of Directors has not passed a
resolution forgiving the delay, the City may, in its sole
discretion contract with another party to complete the
construction, pursuant to the Company's specifications, provided
that this work will be accomplished at the sole expense of the
Company.
In permitting such work to be done, the City shall not be .
liable to Company for any damages so caused, nor shall the City
be liable to Company for any damages arising out of the
performance of said work by the City's licensees, invitees, or
franchisees; provided, however, nothing herein shall relieve
any other person or corporation from liability for damage to the
Company's Network.
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If the City requires Company to remove, alter, change,
adapt or conform its Network to enable any other person, except
the City or any person franchised by the City prior to the
enactment of this Ordinance, to use, or to use with greater
convenience, the rights -of -way, Company shall be obligated to
make such changes to its Network only if said person undertakes
with solvent bond to reimburse Company for any loss and expense
which will be caused by or which will arise out of such changes
to Company's Network. The City shall not be liable for any
reimbursement, loss, or expense which is caused by or which
arises out of such changes to Company's Network.
2.3 No Liability to Company /or /Afff X�$K00 /porAoo$. Neither
the City nor its officers, employees, agents, attorneys,
consultants or independent contractors shall have any liability
to the Company for any liability as a result of any disruption
or damages to the Network that occur as a result of or in
connection with any protection, breaking through, movement,
removal, alteration, or relocation of any part of the Network by
or on behalf of the Company or the City in connection with any
emergency, public work of any nature whatsoever, improvement,
alteration of municipal structure, any change in the grade or
line of any street, or the elimination, discontinuation, and
closing of any street, as provided for in this Agreement.
2.4 Map of Network. Before Company constructs new Network
facilities or extends existing Network facilities, or before it
uses Network facilities that were in existence in the City prior
to the effective date of this franchise agreement, the Company
shall provide to the City's Public Works Director its fiber
optics location data in conformance with City's standards. Such
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data shall adhere to City's level standards and pen assignments.
The City shall provide electronic base data to allow for
accurate matching of street names and rights -of -way lines in
TekniCAD -TDS, AutoCAD DXF, Intergraph or IGES formats on 1.2MB,
1.44MB, or QIC mini tape media [or equivalent format compatible
with City's requirements], but in any event, shall be in a
magnetic media format that is compatible with the City
Geographic Information System (said format to be approved by the
City prior to submittal). The data shall be returned to City in
the same format in which it was provided.
SECTION 3
SERVICE OBLIGATIONS
3.1 Service to All Perscns. The Company shall make all Services
on its Network available to all Persons within the area covered
by the Franchise who request service and can pay the cost of
such service.
3.2 No Discrimination. In accordance with Section 3.1, the
Company shall not discriminate or permit discrimination between
or among any Persons as to the availability of services. It
shall be the right of all Persons within the City in the area
covered by this Franchise to receive continuously all available
services to the extent that they satisfy the financial
(including, but not limited to the payment of extension and
interconnection costs) and other obligations of the Company. The
Company shall continuously monitor the requirements set forth in
this Section 3.2 and understands that failure to comply with
this provisions shall be grounds for termination of this
Franchise.
3.3 Service to Governmental and Institutional Facilities.
[14]
In addition to any Franchise Fee collected pursuant to Section
5.1 of this Franchise, the Company shall provide the fiber and
facilities to the governmental and institutional facilities as
set forth in Exhibit B.
The Company shall provide to the City without charge, and
solely for City's noncommercial telecommunications purposes,
four (4) dark fiber pair in all of the ducted and conduit
facilities within the City limits, with sufficient space for
necessary joints, upon written request by the City.
Additionally, the Company shall provide adequate space on all
non - ducted facilities constructed on, over, or within
rights -of -way, for the City to attach transmission media for the
City's noncommercial use.
In the case of new construction of the network, the
Company, at its sole cost and expense, shall provide to the City
for noncommercial municipal purposes four (4) dark fiber pair
throughout the portion of the Network used for transmission
purposes, as required by the City and suitable for the City's
stated needs. In addition, the Company shall provide lateral
lines connecting the City's locations to the Network as required
by the City and any necessary facilities to accomplish the
interconnection of City telecommunications services at Company's
cost to be reimbursed by the City.
Based upon specifications provided by the Company, the City
reserves the right to obtain bids from vendors, other than
Company and other franchisees.
SECTION 4
FEES AND CHARGES
4.1 Prohibition Against Discrimination in Fees and Charges.
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The Company shall not discriminate or permit discrimination
between or among any persons in the rates, terms, and conditions
for any service provided by the Company. This prohibition shall
not prevent the Company from using: (a) short -term promotional
sales and discounts; (b) reasonable discounts or reduced
charges to senior citizens or other economically disadvantaged
groups; (c) bulk rate arrangements; (d) other rates and
charges subject to, and receiving, the approval of any local,
state or federal regulatory agency.
4.2 Reservation of the City /s Authority to Regulate Fees
and Charges. To the extent that the City is, or may in the
future become, entitled to set fees and charges for the services
provided pursuant to this Franchise, the City reserves the right
to regulate the rates, fees, charges, deposits and associated
terms and conditions for any service provided pursuant to this
Franchise to the fullest extent permitted by applicable law.
SECTION 5
COMPENSATION TO THE CITY
5.1 Franchise Fees -- Amount. (a) The Company shall pay to
the City franchise fees in an amount equal to five percent (5 %)
of Gross Revenue. Except for the payments expressly required in
this Section 5.1, none of the payments, contributions of
services, equipment, facilities, support, resources, or other
activities to be provided or performed by the Company pursuant
to this Franchise shall be chargeable against the compensation
payments to be made pursuant to this Section 5.1, nor shall any
of them be treated as a part of the compensation to be paid
pursuant to this Section 5.1. If the foregoing sentence is held
invalid, the compensation payments shall take precedence over
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all other payments, contributions, services, equipment,
facilities, support, resources, or other activities to be paid
or supplied by the Company pursuant to this Franchise.
•(b) In the event it is determined that the City cannot
assess a franchise fee based upon the Company's Gross Revenues,
then an annual fee based upon a flat fee of Three ($3.00)
dollars per linear foot shall be paid by the Company in
accordance with the terms of this agreement.
. (c) The payment of a franchise fee by the Company in no way
limits the right of the City to charge fees for any permits the
Company is required to obtain for any construction project; nor
does the payment of a franchise fee preclude the right of the
City to assess a reasonable occupation tax.
5.2 Franchise Fees -- Payment. All such payments of
franchise fees required by this Section 5.2 shall be made
quarterly and, in any event, no later than fifteen (15) days
after: March 31; June 30; September 30; December 31.
5.3 Initial Payment - Franchise fee. For the initial
period of this Franchise -- not to exceed the first quarter
covered by this Franchise (or if only a part of a quarter, that
part and the first full quarter immediately thereafter) --
covered by the construction of the Network the Company shall pay
the City the greater of five percent (5°s) of Gross Revenues, or
one dollar ($1.00) per foot of conduit placed in the City
right -of -way.
5.4 Franchise Fee Payments Subject to Audit: Remedy for
Underpayment. All franchise fee payments shall be made pursuant
to a form provided by and acceptable to the Finance Director and
Treasurer of the City. No acceptance of any franchise fee
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payment by the City shall be construed as an accord and
satisfaction that the amount paid is in fact the correct amount,
nor shall acceptance be deemed a release of any claim the City
may have for further or additional sums payment pursuant to this
Franchise. All amounts paid shall be subject to audit and
recomputation by the City. If, as a result of such audit or any
other review, the City determines that the Company has underpaid
its fees by ten (10 %) percent or more for any twelve (12) month
period, then in addition to making full payment of the relevant
obligation, the Company shall reimburse the City for all of the
reasonable costs associated with the audit or review, including
all reasonable out -of- pocket costs for attorneys, accountants,
and other consultants.
5.5 Authority to Pass Franchise Fee Pavments on to System
Users. To the extent provided by law, the Company is permitted
to pass any franchise fee assessed by the City through to all
its customers, other than the governmental or institutional
customers referred to in Section 3.3.
5.6 Nature of Franchise Fee Payments. The City and the
Company agree that the compensation and other payments to be
made pursuant to this Franchise are not a tax and are not in the
nature of a tax, but are in addition to any and all taxes of
general applicability or other fees or charges which the Company
shall be required to pay to the City or to any other
governmental authority, and the Company shall not have or make
any claim for any deduction or other credit of all or any part
of the amount of the compensation or other payments made
pursuant to this Franchise, on the one hand, from or against any
Company or other governmental taxes of general applicability or
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other fees or charges which the Company is required to pay to
the City or other governmental agency on the other hand, or vice
versa.
5.7 Continuing Obligation. In the event the Company
continues to operate all or any part of the Network after the
terms of this agreement expire or are terminated, and before any
renewal of the Franchise by the City, then the Company shall
continue to comply with all applicable provisions of this
agreement, including, without limitation, all compensation and
other payment provisions of this Franchise, throughout the
period of such continued operation, provided that any such
continued operation shall in no way be construed as a renewal or
other extension of this Franchise.
SECTION 6
OVERSIGHT AND REGULATION
6.1 City's Right of Oversight. The City shall have the
right to oversee, regulate, and periodically inspect the
construction, operation, maintenance and upgrade of the Network,
and all parts thereof, in accordance with the provisions of this
Franchise and applicable law. The City reserves the right to
adopt such rules, regulations, orders, or other directives
governing the Company's operation and maintenance of the Network
as it shall find necessary or appropriate in the exercise of its
police power, and such other orders as the City shall find
necessary or appropriate pursuant to and in furtherance of the
purposes of this Franchise. The Company expressly agrees to
comply with all lawful rules, regulations, orders, or other
directives issued pursuant to this Section 6.1. No rule,
regulation, order, or other directive issued pursuant to this
[19]
573
Section 6.1 shall constitute an amendment to this Franchise.
6.2 Proprietary Information as Property of Company. The
City and the Company recognize that in order to comply with all
the terms and conditions of this Franchise it may, on occasion,
be necessary for the Company to provide the City access to
certain proprietary information. To the extent that such
information is individually noted and marked "Proprietary" by
the Company, the City acknowledges that such information will
always be .considered to be in the sole custody and control of
the Company, that the information will only being reviewed by
the City and, that despite the immediate location of such
material, the Company shall never be deemed to have been
provided to the City for its possession and control nor to
include such information as a part of any public record. In the
absence of a court order issued by a court of competent
jurisdiction, or a subpoena duly issued according to law, should
any person request access to such information solely upon the
basis of state or federal freedom of information laws, the City
shall immediately return the information to the Company with
notice of the request, shall refuse access to the records to the
requesting party, and shall complete any necessary review at the
Company's office. Nothing in this Franchise should be considered
to mean that in the event it is necessary for purposes of
litigation, state or federal public finance laws, or otherwise,
for the City to publish such information, the City is waiving
any right to request publication or to comply with any
appropriate order, statute, regulation, subpoena or request for
publication of such material.
6.31/ /Financial Reports. The Company shall submit to the
[20]
574
City, not later than three (3) months after the end of the
Company's annual fiscal periods, with respect to the period just
ended: a copy of the Company's annual financial statements or
other appropriate financial statements as reasonably determined
by the City to be necessary, which statements shall, unless
otherwise agreed to by the City, be certified by the Company's
Chief Financial Officer in accordance with generally accepted
accounting principles; and a statement of the gross revenues
subject to Franchise fees under this Agreement and a calculation
of fees due the City certified to be true and correct by the
Company's Chief Financial officer.
6.4,;// /Company to Maintain Books, Records and Files.
Throughout the term of this Agreement, the Company shall
maintain in the City, or make available in the City upon fifteen
(15) business days, complete and accurate books of account and
records of the business, ownership, and operations of the
Company with respect to the Network. All documents which pertain
to financial matters which may be the subject of an audit by the
City shall be retained by the Company for a minimum of six (6)
years following the termination of this Franchise. It is
expressly agreed by and between the City and the Company that
all financial records to which the City may have access pursuant
to this Franchise are, and at all times shall be, the property
of the Company.
SECTION 7
RESTRICTIONS AGAINST ASSIGNMENTS AND OTHER TRANSFERS
7.1 Transfer of Franchise or Interest Therein. Neither the
Franchise, nor any rights or obligations of the Company provided
under this Franchise, or any guaranty of the performance of the
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575
Company's obligations pursuant to the terms of this Franchise,
nor all of its right, title or interest in any part of the
Network, shall be assigned, sold, or transferred in any manner,
in whole or in part, to any person without the prior written
consent of the City Board of Directors (acting through an
appropriate and duly authorized resolution or ordinance),
provided that the City shall not unreasonably withhold such
consent. The Company shall have the right to mortgage or pledge
a portion or all of the Network in order to secure financing of
the Company's operations obtained in the ordinary course of
business of the Company. Notwithstanding the foregoing, no
mortgage or pledge entered into by the Company shall relieve any
person, including the Mortgagor or pledgor, of any of the terms
and conditions of this agreement. Should any person, including
the Company, default or otherwise be deemed in violation of the
terms of this agreement, the City shall be permitted to exercise
all its rights, privileges and remedies pursuant to this
agreement. To assure compliance with this subsection, the
Company shall provide the City with written evidence that any
mortgagor, creditor, pledgor, or other person providing
financing to the Company, acknowledges this obligation and
agrees to fulfill the terms and conditions of this agreement
should the Company default.
SECTION 8
SPECIFIC RIGHTS AND REMEDIES
8.1 Nonexclusive Remedies. The Company agrees that the City
shall have the specific rights and remedies set forth in this
Section 8. These rights and remedies are in addition to and
cumulative with any and all other rights or remedies, existing
(22]
57b
.or implied, now or hereafter available to the City at law or in
equity in order to enforce the provisions of this Franchise.
Such rights and remedies shall not be exclusive, but each and
every right and remedy specifically provided or otherwise
existing or given many be exercised from time to time and as
often and in such order as may be deemed expedient by the City.
The exercise of one or more rights or remedies shall not be
deemed a waiver of or acquiescence to any default. The exercise
of any such right or remedy by the City shall not release the
Company from its obligations or any liability under this
Franchise, except as expressly provided for in this Franchise or
as necessary to avoid duplicative recovery from or payment by
the Company or its Guarantor.
8.2 Events of Default. The Company agrees that an Event of
Default shall include, but shall not be limited to, any of the
following acts or failure to act by the Company or any
Affiliated Person:
(a) Failure to obtain any applicable permits from the
Department of Public Works of the City before making expansions
to the Network described in Exhibit A to this Franchise.
(b) Failure to comply with Section 3 and the prohibition
against discrimination.
(c) Failure to comply with the terms of Section 7 which
limits the assignment of the Franchise, or transfer of control
of the Franchise.
(d) Substantial failure to supply the capital items or
other support for the governmental or institutional facilities
as specified in Section 3.3.
(e) Failure to supply insurance, bonds, or letters of
— [23]
M M M M M
5'7,i
credit as may be required by the City to assure the proper
completion of any construction performed pursuant to the
Franchise.
(f) Failure to comply with any local, state or federal law
that prohibits discrimination in employment, or prohibits the
creation of hostile working environments for an employee of the
Company;
(g) Failure to make any of the payments set forth in
Section 5 of this Franchise.
(h) Failure to pay any permit fees, or substantial failure
to comply with any rules, regulations, orders or directives of
the City as set forth in this agreement.
(i) Substantial or repeated failure to comply with Section
6 concerning oversight and Regulation.
(j) Refusal to renegotiate the terms and conditions of this
agreement in accordance with Section 9.2.
8.3 City Action Upon Occurrence of an Event of Default.
Upon the occurrence of an Event of Default, then, in accordance
with the procedures provided for in this Franchise, the City
may:
(a) Require the Company to take such actions as the City
deems are appropriate; or
(b) Seek money damages from the Company as compensation for
such Event of Default; or
(c) Accelerate the expiration of the term of this Franchise
by decreasing the term of the Franchise as set forth in Section
1; the extent of such acceleration shall be determined by the
City and may include any period of time, but not less than six
(6) months; or
[24]
578
(d) As a last measure only, revoke the Franchise by
termination of this agreement.
8.4 Procedure to Follow Upon Breach. The City shall
exercise the rights set forth in this Section in accordance with
the following procedures:
(a) The City Manager shall notify the Company, in writing,
of an alleged Event of Default. This written notice shall set
forth with reasonable specificity the facts the City believes
are the basis for declaring that an Event of Default has
occurred. The Company shall, within fifteen (15) business days
of the date the notice is postmarked, or such additional time as
the City Manager may specify in the notice, cure the alleged
Event of Default, or, in writing, present for review by the City
Manager a reasonable time frame and method to cure the Event of
Default. The Company, in lieu of the cure of the Event of
Default as set forth herein, may, in writing, present facts and
arguments as to why the Company disagrees that an Event of
Default has occurred.
(b) If the Company presents a written response that
challenges whether an Event of Default has occurred, the City
Manager shall within ten (10) days review the submitted
materials and determine again whether an Event of Default has
occurred. If the City Manager reaffirms that an Event of Default
has occurred, the Company shall be notified in writing of this
decision and shall, within fifteen (15) days, cure the alleged
Event of Default.
(c) If the Company fails to cure the Event of Default so
declared pursuant to this Section within the time permitted by
the City Manager, the City Manager shall prepare a written
[25]
57'r
report to the City Board of Directors and recommend action to be
taken. If the City Board of Directors, after consideration of
this report, agrees that an Event of Default has occurred, it
may order an appropriate remedy as set forth in Section 8.3.
(d) Notwithstanding the foregoing, or any other part of
this Franchise, the failure of the Company to comply with the
consent requirements of Section 7 may result in the immediate
termination of this Franchise.
8.5 Removal. In addition to the rights under this Section,
the City, upon any termination, may, at its sole discretion,
direct the Company to remove, at the Company's sole cost and
expense, any or all of the Network from all
streets, right -of -way and other public property within the City,
subject to the following:
(a) The City may determine that removal of buried fiber
optic cable, or conduit, is not necessary;
(b) In removing any part of the Network, the Company shall
refill and compact, at its own expense, any excavation that
shall be made by it and shall leave all streets and other
property in as good a condition as that prevailing prior to the
Company's removal of the Network;
(c) The City shall have the right to inspect and approve
the conditions of the streets and public property after removal
has occurred;
(d) The removal shall commence within thirty (30) days of
an order to remove being issued by the City Manager at the
direction of the City Board of Directors.
(e) The company shall be responsible for all necessary
repairs, relocations of the facility, and maintenance of the
(26]
580
street area in the same manner and degree as if the facility
were in active use, and the Company shall retain all liability.
(f) Prior to the City's exercise of this right, the
Company's mortgagees, pledgees or other persons providing
financing to the Company shall have the right to cure the
Company's default under this agreement. City acknowledges that
its right to direct the Company to remove the Network provided
herein shall be subject and subordinate to the rights of the
Company's mortgagee, creditor, pledgee, or other person
providing financing to the Company, as described in the written
documents evidencing the financing the the security therefor,
provided that such mortgagee, creditor, pledgee, or other person
providing financing tc the Company complies with the terms and
conditions of this agreement. 8.6 Acquisition or Transfer. Upon
any termination and as an alternative to ordering removal of the
Network, the City shall have the right to, and may, in its sole
discretion, acquire or effect a transfer to a third party
acceptable to the Company all or any part of the Network and all
components thereof necessary to maintain and operate the Network
pursuant to the terms of this Franchise to the extent that such
components are in the public right -of -way. Prior to the City's
exercise of this right, the Company's mortgagees, creditors,
pledgees or other persons providing financing to the Company
shall have the right to cure the Company's default under this
agreement. City acknowledges that its right to acquire or
transfer the Network shall be subject and subordinate to the
rights of the Company's mortgagees, creditors, pledgees, or
other persons providing financing to the Company, as described
in the written instruments evidencing the financing and security
0
[27]
• • 5�Y
therefor, provided that said mortgagee, creditor, pledgee, or
other person providing financing to the Company, complies with
the terms and conditions of this agreement.
The price on such transfer shall be the fair market value
of the Network if the termination is the result of the
expiration or nonrenewal of the Franchise. If it is the result
of a revocation of the Franchise, the price shall be the
equitable value of the Network on the date that the Franchise is
terminated with due regard for injury caused the City and its
residents, and without any determination of the value of the
Franchise itself.
8.7 other Provisions. The City and the company shall
negotiate in good faith all other terms and conditions of any
acquisition or transfer of the Network by the City, provided
that the City shall not assume the requirements of any
collective bargaining agreements that have been entered into by
the Company.
8.8 Consent not a Waiver. The grant or waiver of any one or
more of the consents required by this Franchise shall not render
unnecessary any subsequent consent, nor shall the grant of any
such consent constitute a waiver of any other rights of the
City.
SECTION 9
SUBSEQUENT ACTION
9.1 Current Enforceability of Agreement. The City and the
Company and any Affiliated Person agree by the execution of this
Franchise that the terms and conditions are valid in their
entirety and hereby waive and relinquish, to the maximum extent
permitted by any applicable law, any and all rights they have or
[28]
582
may have had at any time or in any manner subsequently acquire,
in law or in equity, to assert in any manner at any time or in
any forum that this Franchise, or the process or procedures
pursuant to which this Franchise was entered into and granted,
are not consistent with applicable law.
9.2 Agreement to Reopen Negotiations. The City and the
Company agree that the services provided pursuant to this
Franchise are in an area of law undergoing significant review by
state and federal authorities and that there is a real
possibility that some of the terms of this Franchise may be
preempted by state or federal law during the term. of this
Franchise. Therefore, the City and the Company expressly agree
that: (a) The terms of this Franchise the City wishes to
reconsider, particularly the terms relating to the compensation
to be paid, shall, in the sole discretion of the City, be
subject to renegotiation one (1) year from the effective date of
this Franchise, and again, if the City desires, two (2) years
from the effective date of this Franchise; (b) In addition to
and separate and apart from the provisions of subparagraph (a)
of this subsection, in the event an earlier negotiation must
occur in order to comply with newly enacted federal or state
law, such negotiation shall occur within a reasonable time after
any request for renegotiation is issued by either the City or
the Company, or at such time as it becomes apparent that a
portion of this Franchise has been preempted by state or federal
law. By execution of this Agreement, the Company agrees that
upon the conclusion of any such renegotiations, the Company will
enter into any reasonably necessary amendments to this this
Franchise, and the Company expressly agrees to waive any rights
_a
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it may have under Arkansas law to refuse to renegotiate this
Franchise as set forth in this Section 9.
9.3 Procedure if City /s Abilities are Enhanced. The Company
and the City agree that if the City's abilities to set terms and
conditions are enhanced as the result of state or federal law,
the City, at its sole option, may choose to reopen the
negotiations on relevant terms and conditions of this Franchise
at the time these abilities are applicable.
9.4 Indemnification. Company shall indemnify and hold
harmless the City and all of its officers, agents, and employees
from all suits, actions, or claims of any character, style, and
description brought for or on account of any injuries or
damages, including death, received or sustained by any person or
any property occasioned by, arising out of, or in connection
with the erection, construction, location, replacement,
reconstruction, maintenance, repair, or operation of Company's
Network, and Company shall pay any judgments, interest, and
costs which may be obtained against City arising out of such
injury or damage. If the franchise granted by this agreement is
terminated or is not renewed, and Company does not remove its
facilities from the right -of -way, Company shall continue to
indemnify and hold harmless pursuant to this section as long as
its facilities are located in the rights -of -way, and for said
purpose, this section shall survive the franchise.
SECTION 10
MISCELLANEOUS
10.1 Controlling Law. This Franchise shall be determined
according to the laws of the State of Arkansas and venue and
jurisdiction to challenge, contest, review, or otherwise subject
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its terms and conditions to litigation, shall occur in Little
Rock, Pulaski County, Arkansas, or in the United States District
Court for the Eastern District of Arkansas.
10.2 Captions. The captions given to various provisions of
this Franchise are for purposes of convenience only and are to
it have no impact upon the interpretation of any such provisions.
10.3 Entire Agreement. This Franchise, with its exhibits,
comprises the entire agreement between the City and the Company
for purposes of this Franchise.
10.4 Burden of Proof. In any disagreement upon the terms
and conditions of this Franchise, the Company shall bear the
burden of demonstrating its compliance with each term and
condition of this Franchise for all purposes.
10.5 No Coercion. The Company enters into this Franchise
willingly and without coercion, undue influence or duress. The
Company has reviewed each and every obligation, term and
condition of this Franchise and hereby certifies that none of
the obligations, terms or conditions imposed upon it by this
Franchise are commercially impracticable.
10.6 System is Economically and Technically Feasible and
Viable. The Company, after thoroughly considering all
foreseeable economic and business risks, currently believes that
the provision of all such services, facilities and equipment as
required for this Franchise is economically and technically
feasible during the term of this Franchise.
10.7 Company shall Not Discriminate In Employment. The
Company shall comply in all respects with all applicable local,
state and federal employment laws during the term of this
Franchise.
—[31]
585
10.8 Multiple ori4inals. This Franchise may be executed in
any number of copies and any fully executed copy of this
Franchise shall be deemed an original for purposes of
authentication or presentation in evidence before any court or
administrative tribunal.
10.9 Notice. Any notice or communication required in the
administration of this Ordinance shall be sent by any method
that assures overnight delivery and shall be addressed as
follows:
City Manager
City of Little Rock
500 West Markham
Little Rock, Arkansas 72201
with a complementary copy the delivery of which is not
required in order for notice to be accomplished to:
City Attorney
City of Little Rock
City Hall: Room 310
500 West Markham
Little Rock, Arkansas 72201
Notice to Company will be to:
Brooks Fiber Properties
425 Woods Mill Road South, Ste. 300
Town & Country, Missouri 63017
with a complementary copy the delivery of which is not
required in order for notice to be accomplished to:
Brooks Fiber Communication of Arkansas, Inc.
425 West Capitol, Suite 3824
Little Rock, Arkansas 72201
or to such other address as Company and City may, in
writing, designate from time to time provided that notice is
accomplished by overnight delivery to only one (1) designated
person for either the City or the Company.
SECTION 11
[32)
M M M M
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BOND AND INSURANCE
11.1 Bond The Company shall obtain and shall maintain
during the term of the franchise, at its sole cost and expense,
and shall file with the City of Little Rock, a corporate surety
bond, issued from a surety company authorized to do business in
the State of Arkansas and found acceptable by the City Attorney,
in the amount of Two Hundred and Fifty Thousand dollars ($
250,000) to secure the Company's performance of its obligations
and faithful adherence to all requirements of this franchise
ordinance. Company shall provide this corporate surety bond at
the time of filing the acceptance of the franchise.
The rights reserved to the City with respect to the bond
are in addition to all other rights of the City, whether
reserved by this franchise ordinance or authorized by law; and
no action, proceeding or exercise of a right with respect to
such bond shall affect any other rights the City may have.
The bond shall contain the following endorsement: It is
hereby understood and agreed that this bond may not be canceled
by the surety nor any intention not to renew be exercised by the
surety until sixty (60) days after receipt by the City, by
registered mail, of written notice of such intent.
The bond requirement should be in force throughout the term
of franchise, and any renewal thereof, until all Company
facilities are removed.
11.2 Insurance. The Company shall maintain the following
insurance coverages and the respective policies thereof shall
cover all risks related to the use and occupancy of the
right -of -way and all other risks associated with this franchise
agreement:
[33]
M M M M
587
(a) Description of Insurance Coverages and Limits
1. Commercial General Liability Insurance Two Million
dollars $ 2,000,000 for each occurrence - coverage shall include
but not be limited to the following: premises, operations,
independent contractors, products /completed operations, personal
injury, contractual liability, explosion /collapse /underground
property damage. Insurance shall be provided on an occurrence
basis, be as comprehensive as the current Insurance Services
Office (ISO) policy and have no exclusion by endorsement.
2. Automobile Liability Insurance One Million dollars $
1,000,000 each accident - coverage shall be on "any auto ",
including leased, hired, owned, nonowned and borrowed vehicles.
3. Environmental Impairment Liability including Pollution
Liability Insurance if it can reasonably be obtained in the
amount of One Million dollars $ 1,000,000 each occurrence - this
coverage is to be provided on an occurrence basis and it shall
include claims arising from gradual emissions and sudden
accidents. Clean -up and defense costs shall be covered.
4. Workers' Compensation Insurance Statutory Limits -
Employer's Liability - minimum Five Hundred Thousand dollars
$500,000 for each accident /disease -each employee /disease - policy
limit
(b) Other Insurance Related Requirements
1. The City shall be an additional insured, by endorsement,
on all applicable insurance policies.
2. Applicable insurance policies shall each be endorsed
with a waiver of subrogation in favor of the City.
3. Insurers shall be authorized to do business in the State
of Arkansas, or otherwise approved by the City, and such shall
_e
[34]
M M M M �
be acceptable to the City insofar as their financial strength
and solvency are concerned.
4. Deductible limits on insurance policies and /or self
insured retentions exceeding $50,000 require approval of the
City as respects this agreement.
5. The City shall be notified a minimum of thirty (30) days
prior to the insurer's action in the event of cancellation,
nonrenewal or material change coverage regarding any policy
providing insurance coverage required in this agreement.
6. Full limits of insurance required in Subsection (a) of
this section shall be available for claims arising out of this
agreement with the City.
7. Certificates of insurance shall be provided by Company
to the City prior to commencement of operations pursuant to this
franchise. Any failure on part of the City to request such
documentation shall not be construed as a waiver of insurance
requirements specified herein.
8. The City shall be entitled, upon request and without
incurring expense, to review the insurance policies including
endorsements thereto and, at its discretion, to require proof of
payment for policy premiums.
9. The City reserves the right to revise insurance
requirements specified herein and require Company to comply
therewith within sixty (60) days of the City's official notice
of the revision.
10. The City shall not be responsible for paying the cost
of insurance coverage required herein.
11. Notice of any actual or potential claim and /or
litigation that would affect insurance coverages required herein
- =e
[35]
ii
589
shall be provided to the City in a timely manner.
12. "Other insurance" as referenced in any policy of
insurance providing coverages required herein shall not apply to
the City.
13. Company shall agree to either require its contractors
to maintain the same insurance coverages and limits thereof as
specified herein or such coverage on the Company's contractors
shall be provided by the Company.
WHEREUPON, the City and the Company, acting through their
duly authorized officers and pursuant to appropriate authority
granted by their respective Board of Directors, do hereby
execute this Franchise.
CITY OF LITTLE ROCK, ARKANSAS BROOKS FIBER COMMUNICATIONS
OF ARKANSAS, INC.
By:_
Date:
ATTEST:
Date:
State of Arkansas)
By:_
Date:
ATTEST:
Date:
) ss
County of Pulaski)
SUBSCRIBED and sworn to before me this day of
November, 1994.
6
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o ary Public
t
590
My Commission Expires:
(Seal)
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