Subject: 10377/Code/32-ArtXI/FiberOpticCos Date: Fri, 18 Aug 1989 14:54:00 -0500 ORDINANCE NO. 10377 AN ORDINANCE TO AMEND CHATTANOOGA CITY CODE, PART II, CHAPTER 32, BY ADDING A NEW ARTICLE XI RELATIVE TO TELECOMMUNICATIONS SERVICES WITHIN THE CITY OF CHATTANOOGA. _________________________ SECTION 1. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CHATTANOOGA, TENNESSEE, that Chattanooga City Code, Part II, Chapter 32, be and the same is hereby amended by adding a new Article XI as follows: ARTICLE XI. TELECOMMUNICATIONS SERVICES; FRANCHISES FOR TELECOMMUNICATIONS SERVICES Sec. 32-231. Definitions. For the purposes of this Article, the following definitions shall apply: "City of Chattanooga" and "City" shall mean the City of Chattanooga, Tennessee, but shall not include the Electric Power Board of the City of Chattanooga unless specifically so stated. "Gross revenue" shall mean all revenues of any kind collected by Provider from any source whatsoever for customer access to a long distance telephone carrier or provider using a Telecommunications Services system within the City of Chattanooga. For the purposes of this section, "gross revenue" shall not include (1) any taxes which are collected by Provider from its customers, (2) lease or rental fees received from a lessee or sublessee of Provider's System for which a five percent (5%) franchise fee on the lessee's or sublessee's gross revenue is paid to the City pursuant to this Article, or (3) revenues from sale of capacity in Provider's System for which a franchise fee on the purchaser's gross revenue is paid to the City pursuant to this Article. 0C "Provider" shall mean any person who owns, leases, operates, installs, purchases capacity in or maintains any network or equipment within the City of Chattanooga for Telecommunications Services containing communication cables, wires, lines, towers, wave guides, optic fiber, microwave, laser beams or conduit and any associated converters, equipment or facilities designed and constructed for the purpose of producing, receiving, amplifying or distributing, by audio, video or other forms of electronic signals to or from subscribers or locations within the City of Chattanooga, and not including cable television, (hereinafter collectively referred to as "Provider's System" or "System") in, on or over the public rights-of-way of the City of Chattanooga. "Telecommunications Services" shall mean all telephone and telegraph services of any kind whatsoever including, but not limited to, the following: (1) services interconnecting interexchange carriers for the purpose of voice or data transmission; (2) services connecting interexchange carriers or competitive carriers to telephone companies providing local exchange services for the purpose of voice or data transmission; (3) 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; (4) services providing private line point-to-point service for end users for voice and data transmission; and (5) local exchange telephone services. Sec. 32-232. Services prohibited without franchise and without authorization from State of Tennessee. No person or entity shall use the public rights-of-way in the City for Telecommunications Services without first having received a franchise from the governing body of the City for Telecommunications Services. No person shall provide services directly regulated by the Tennessee Public Service Commission (or any successor agency) under Tennessee law unless so authorized by the Public Service Commission, if such authorization is required. No person or entity shall use the public rights-of-way in the City for video dial tone or Personal Communication service without first having received a franchise from the governing body of the City for Telecommunications Services. 0C Sec. 32-233. Application for telecommunications franchise; application fee. Any entity desiring to construct, operate, lease or purchase capacity (for resale) in a Telecommunications System within the rights-of-way of the City shall make application for a franchise from the City to the office of the City Engineer on the form provided by the City Engineer. Such application shall be accompanied by an application fee of Seven Hundred Fifty Dollars ($750.00). Sec. 32-234. General provisions for telecommunications services. Any Provider shall comply with any special requirements of the office of the City Engineer or office of the City Traffic Engineer with respect to the specific location and installation of Provider's System and with respect to any other matters which affect the installation, operation and maintenance of Provider's System; to the maximum extent possible, Provider's System shall be installed underground, provided that Provider's System may be installed above ground where either telephone or electric utility facilities are above ground at the time of installation. To the extent that Provider installs its System in underground ducts, Provider shall provide to the City one duct of equal size to that of Provider's for the City's exclusive use; if Provider installs its own poles, Provider will reserve space on said poles for the City to install its own line on said poles. To the extent that Provider installs fiber optic fibers for its System, Provider agrees to provide the City with four (4) dark fiber optic fibers and access thereto (including lateral connections) on Provider's System, at no cost to the City for the City's unrestricted exclusive use; Provider shall also provide coordination and engineering assistance to the City for providing such fiber optic accesses for initial hookup as the City may desire at no cost to the City. City will not sell or lease said fibers to any competitor or potential customer of Provider during the term of any franchise to Provider for Telecommunications Services. Provider, with the prior written approval of the City Engineer and the City Traffic Engineer, may make minor deviations from the Provider's System as shown in the map attached to Provider's franchise ordinance in the event unforeseen problems necessitate the rerouting of said System. Provider will comply with all applicable city ordinances and state laws, including but not limited to obtaining building permits, street cut permits and any other permits required by applicable law. Sec. 32-235. Engineering designs for telecommunica- tions services systems; "as built" drawings for systems. Engineering designs for Provider's System will be prepared by a competent engineering group which shall be licensed by the state if required by state law and installation will be performed by a competent contractor which shall be licensed by the state if required by state law, and Provider will furnish said engineering designs to the City not less than thirty (30) days prior to commencement of construction. Provider will provide to the City Engineer "as built" drawings of its System within 120 days of completion of the initial phase of said System; Provider shall update said drawings within 120 days of the completion of any material change to Provider's System; said "as built" drawings shall include, at a minimum, the routing of Provider's System and the location of all amplifiers, power supplies and system monitor test points, provided that if Provider already has its System, or a portion thereof, in place as of the effective date of this Section, Provider shall provide such "as built" drawings to the City Engineer within the time provided in such Provider's franchise ordinance. Sec. 32-236. No adverse effect upon adjacent properties. Under no conditions will the installation of Provider's System adversely affect any properties adjacent to the public rights-of-way without the prior express written permission of the owner of such properties. Sec. 32-237. No adverse effect upon other utilities. Under no conditions will the installation of Provider's System adversely affect any existing utilities without the prior express written permission of such utilities. Provider's system will not physically interrupt or interfere with the facilities in the public rights-of-way of the Chattanooga Gas Company, BellSouth, the Electric Power Board of Chattanooga, the water utility in whose area Provider's System is located, Chattanooga Cable TV Company, and any other utilities or companies holding a franchise in any right-of-way in which Provider's System is to be located. Provider is responsible for ensuring compliance with this section. Sec. 32-238. Restoration of public rights-of-way. Provider shall promptly restore to its original condition in accordance with the City's standard specifications for streets and sidewalks any street pavement, sidewalks or other portions of the public right-of-way disrupted by construction of Provider's System. By acceptance of any franchise from the City to provide Telecommunications Services, Provider warrants the restoration of any disturbed right-of-way or part thereof. Provider will, to the maximum extent possible, coordinate all system installation, repairs and maintenance with other utilities and franchisees so as to minimize the number of street cuts and interruption of traffic within the City. Sec. 32-239. Maintenance of telecommunications services system in safe condition. Provider shall maintain Provider's System in a safe condition during the term of any franchise it holds from the City. Sec. 32-240. Notification of execution of any security agreement or similar agreement concerning telecommunications services systems. Provider will notify the City of the execution of any security agreement or similar agreement concerning any of the facilities and property, real or personal, of the Provider located in the City of Chattanooga and will, upon three (3) business days notice, allow the City to inspect any such agreements in Chattanooga, Tennessee. Sec. 32-241. Indemnification of City by Providers. Provider will defend, indemnify and hold harmless the City, its officers, employees, successors and assigns from any and all actions or claims for damages arising out of or related to the operation, installation or maintenance of Provider's System. Sec. 32-242. Insurance to be maintained by Providers. Provider will provide for approval by the Office of the City Attorney evidence of general liability insurance to further indemnify the City against losses of whatever kind and nature as a result of Provider's System being in the public right-of-way with limits of liability not less than those set forth in the Tennessee Governmental Tort Liability Act, as amended from time to time. Such insurance policy or policies shall name the City of Chattanooga as an additional insured and shall provide that the same may not be canceled for any reason except after thirty (30) days' written notice to the City. Sec. 32-243. Removal or relocation of systems. In the event the City shall need the right-of-way for the purpose of providing public improvements either to the street or the public right-of-way, for the best interest of the public or in the event the City abandons a public right-of-way and does not reserve an easement for Provider, and Provider's System or any part thereof should need to be relocated or removed, such relocation or removal will be done at the sole expense of the Provider; in the event Provider fails or refuses to timely complete such relocation or removal, the City shall have the right to perform such relocation or removal, and Provider shall promptly reimburse the City for all costs associated therewith. Sec. 32-244. Assignment of franchise; lease or sale of capacity. No Provider shall assign or transfer any franchise from the City without the prior approval of the Chattanooga City Council by ordinance or resolution, which approval shall not be unreasonably withheld. No Provider shall lease or rent any portion of the right-of-way it uses to any other entity which has not obtained a franchise for Telecommunications Services from the City, and no Provider shall sell, lease or rent any portion of or capacity in Provider's System to any other entity which has not obtained a franchise for Telecommunications Services from the City. A mortgage, lien, deed to secure debt, deed of trust, security interest or other encumbrance of Provider's franchise as a part of acquiring, constructing, equipping or maintaining Provider's System shall not be considered a violation of this section; any such creditor shall be entitled to all the rights and remedies granted to same in any documents relating to any such transaction, provided that any sale or transfer of Provider's System or any portion thereof following a foreclosure sale shall be subject to the prior approval of the Chattanooga City Council by ordinance or resolution, which approval shall not be unreasonably withheld. Sec. 32-245. Removal of obsolete equipment. When Provider opens a trench, accesses a conduit or boring, or is working on aerial locations, or when Provider is aware that any other franchisee or public utility is opening a trench, accessing a conduit or boring, or is working on aerial locations with access to Provider's System, Provider shall remove all of its obsolete communication cables, wires, lines, towers, wave guides, optic fiber, microwave, laser beams, conduit and all of its obsolete associated converters, equipment or facilities while they are open without interfering with the efficient operation of other public utilities. In the event Provider's franchise is terminated, forfeited or abandoned, the City may require Provider to remove Provider's System or any portion thereof from the public right-of-way within a reasonable period of time, and in the event Provider fails to do so the City may, at its option, remove Provider's System or any portion thereof from the public right-of-way and seek reimbursement therefor from Provider or from any performance bond posted by Provider in favor of the City. Sec. 32-246. No cost to City arising out of franchise. The City shall incur no costs or expenses as a result of granting any franchise to Provider or as a result of connecting to Provider's System (other than usual and customary fees for the use of Provider's System in the event the City utilizes same). Sec. 32-247. Performance bond from Providers. Any Provider shall, during construction of any phase of Provider's System, post a bond, in form satisfactory to the Office of the City Attorney, in the amount of the lesser of (i) Two Hundred Fifty Thousand Dollars ($250,000.00) or (ii) the cost of such construction, to secure the performance of all of Provider's obligations under Provider's franchise and this Article including, but not limited to, the cost of removal of Provider's System from the public right-of-way in the event Provider's franchise is terminated or abandoned and the cost of repairing any 0C damage to the City rights-of-way in the event Provider fails to repair same. For a period of one year after the City Engineer has certified satisfactory completion of construction of Provider's System or any part thereof to the City's standards set forth in Provider's franchise ordinance and this Article and to any applicable standards otherwise imposed by law, Provider shall post a bond, in form satisfactory to the Office of the City Attorney, in the amount of Fifty Thousand Dollars ($50,000.00) to secure the performance of all of Provider's obligations under Provider's franchise ordinance and this Article including, but not limited to, the cost of removal of Provider's System from the public right-of-way in the event Provider's franchise is terminated or abandoned and the cost of repairing any damage to the City rights-of-way in the event Provider fails to repair same. Sec. 32-248. Franchise fee from Providers. Provider shall pay to the City on a quarterly basis a franchise fee of five percent (5%) of the gross revenue, as defined in Section 32-231 above, of the Provider. Payments of said franchise fee shall be due and payable on or before the fifteenth day of February, May, August and November of each year for the preceding calendar quarter. In the event it is determined that the City is not permitted by law or otherwise to assess or collect a franchise fee based upon Provider's gross revenues, then an annual franchise fee based upon a flat fee per linear foot of public right-of-way in which Provider has installed it's System in the City's public right-of-way shall be paid by the Provider to the City according to the schedule set forth in the chart below (which will be amended before the year 2002 to establish said fee for subsequent years): Payment Due Fee Per Linear Foot 1997 $1.00 1998 $1.05 1999 $1.15 2000 $1.21 2001 $1.27 Such payment shall be due and payable thirty (30) days after the end of each calendar year or, if the Provider pays its taxes based upon a fiscal year ending other than on December 31, such payment shall be due and payable thirty (30) days after the end of each fiscal year of the Provider. Provider shall submit to the City with its franchise fee payments a sworn report showing total revenue, detailed by category, received by Provider from the operations of Provider's System during the preceding calendar quarter. Provider shall also make available in the City of Chattanooga for inspection by the City, upon three business days' notice, independently audited financial statements showing all revenue, detailed by category, received by Provider during the preceding calendar or fiscal year. Upon fifteen days' written notice from the City, Provider shall make available in Chattanooga all books and records of the Provider which are requested by the City for audit purposes to ensure that franchise fees in the proper amount have been paid. In the event any such audit reveals that Provider has paid less than ninety-seven percent (97%) of any portion of any franchise fee payment due to the City, Provider shall reimburse the City for the cost of any such audit as well as for any franchise fee payment which is overdue together with interest thereon as provided below. In the event any franchise fee payment due under this section is paid late, Provider shall also pay interest thereon at the rate of eighteen percent (18%) per annum for any period such payment is late. No portion of the franchise fee shall be noted separately on bills to customers except as required by law. Notwithstanding anything herein to the contrary, the franchise fees payments due under this section shall be paid beginning January 1, 1997. Sec. 32-249. Default of Providers. (a) The occurrence of any one or more of the following events, at the City's sole option, shall constitute an Event of Default by the Provider under any franchise from the City for Telecommunications Services: (1) The Provider shall fail to pay when due any franchise fee as and when such fee becomes due or any lessee or sublessee of Provider's System shall fail to pay any franchise fee as and when such fee becomes due as set forth in Section 32-248 above. (2) The Provider shall fail to observe or perform any other obligation to be observed or performed by it under this Article. (3) The Provider shall dissolve or discontinue the Provider's business, or transfer all or substantially all of the property of the Provider without the prior consent of the Chattanooga City Council by ordinance or resolution. (4) A judgment creditor of the Provider other than the holder of a valid security interest in Provider's System shall obtain possession of any portion of the Provider's System in the public rights-of-way of the City by any means. (5) That Provider fails to begin actual construction on Provider's System within six (6) months of the date Provider obtains a franchise for Telecommunications Services from the City, or Provider has not substantially completed Provider's system as set forth in the franchise from the City to Provider within two (2) years of the date Provider obtains a franchise for Telecommunications Services from the City. (b) Upon the occurrence of an Event of Default specified in this section, the City shall notify Provider in writing of such Event of Default and identify the Event of Default; such notice shall also notify Provider that the franchise from the City to Provider for Telecommunications Services is considered forfeited by Provider and canceled not less than fifteen (15) business days from the date of receipt of such notice by Provider unless such default, violation, non-compliance or other event causing forfeiture of said franchise specified in the notice has been cured within said fifteen (15) business days. (c) Before any franchise for Telecommunications Services may be terminated and canceled, Provider shall be provided with an opportunity to be heard before the governing body of the City. In the event Provider desires to have a hearing before the City Council, Provider shall, within ten (10) business days of its receipt of the aforementioned notice, notify in writing the Clerk of the City Council of its desire for such a hearing; upon receipt of such a request for a hearing, the Clerk shall notify the Council at or before its next meeting of such request and the Council shall schedule a hearing upon such request. The termination of Provider's franchise shall be stayed until the conclusion of such hearing before the City Council. In the event the City Council determines that no Event of Default has occurred or that such default has been timely cured, Provider's franchise shall continue in full force and effect. (d) In the event the City Council determines that a specific default cannot be cured within such fifteen (15) business day period and the Provider has timely instituted action necessary to cure such default, Provider shall be permitted to diligently pursue such cure to completion; the City Council may specify a time period within which Provider must cure such default, and in the event Provider fails to cure within such time period, Provider's franchise for Telecommunications Services shall be considered forfeited and canceled. Sec. 32-250. Notices. Any notices or communication required in the administration of Provider's franchise for Telecommunications Services from the City shall be sent by hand delivery or by any method that assures overnight delivery and shall be addressed as follows: If to the City: Office of the Mayor Chattanooga City Hall 100 East Eleventh Street Chattanooga, TN 37402 with a copy to: Office of the City Attorney 400 Pioneer Bank Building Chattanooga, TN 37402 If to the Provider, to the address of Provider listed on the franchise ordinance from the City. Sec. 32-251. Nondiscrimination by Providers. Provider will not discriminate against any employee or applicant for employment because of race, color, religion, sex or national origin, and Provider will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex or national origin. Such action shall include employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff, termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. Provider will post in conspicuous places, available to employees and applicants for employment, notices setting forth the provisions of this nondiscrimination clause. Sec. 32-252. No grant of use of other utilities' property. Nothing in this Article or in a Provider's franchise shall be deemed to grant to any Provider any rights to work in, use or attach to any facilities of the Electric Power Board of the City of Chattanooga, BellSouth or any other utility or entity occupying space in the public rights-of-way without the prior express written permission of any such entity. Sec. 32-253. Severance clause. If any section, sentence, word or figure contained in this Article, other than the franchise fee in the first paragraph of Section 32-248, should be declared invalid by a final decree of a court of competent jurisdiction, such holding shall render any franchises for Telecommunications Services void in their its entirety and of no further force or effect, provided that in the event the alternate franchise fee in the second paragraph of Section 32-248 should be declared invalid by a final decree of a court of competent jurisdiction in addition to the franchise fee in the first paragraph of Section 32-248, such holding shall render any franchises for Telecommunications Services void in their entirety and of no further force or effect. SECTION 2. BE IT FURTHER ORDAINED that this ordinance shall take effect two (2) weeks from and after its passage as required by law. 0C PASSED on Third and Final Reading February 6, 1996. s/s_________________________________ CHAIRPERSON APPROVED:__X____ DISAPPROVED:_______ DATE:_________________ ______, 1996. s/s_________________________________ MAYOR WSP:cjc