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SALT LAKE CITY ORDINANCE
No. 68 of 2008
(Granting to TCG, Utah and Its Successors, a Telecommunication Franchise)
WHEREAS, TCG, Utah, a New York general partnership (the "Company") desires to provide certain telecommunication services within Salt Lake City, Utah (the "City"), and in connection therewith to establish a network in, under, along, over, and across present and future streets, alleys and rights-of-way of the City, consisting of telecommunication lines and cables, together with all necessary and desirable appurtenances; and
WHEREAS, the City, in the exercise of its police power, ownership, use or rights over and in the public rights-of-way, and pursuant to its other regulatory authority, believes it is in the best interest of the public to provide to the Company, and its successors, a non-exclusive franchise to operate its business within the City; and
WHEREAS, the City and the Company propose to enter into a Franchise Agreement, the substantially final form of which has been presented to the City Council at the meeting at which this Ordinance is being considered for adoption; and
WHEREAS, the City desires to approve the execution and delivery of such Franchise Agreement and to otherwise take all actions necessary to grant the referenced Franchise to the Company; and
WHEREAS, the City believes this Ordinance to be in the best interest of the citizens of the City,
NOW, THEREFORE, be it ordained by the City Council of Salt Lake City, Utah, as follows:
SECTION 1. Purpose. The purpose of this Franchise Ordinance is to grant to the Company, and its successors and assigns, a non-exclusive right to use the present and future streets, alleys, viaducts, bridges, roads, lanes and public way within and under control of the City for its business purposes, under the constraints and for the compensation enumerated in the Franchise Agreement attached hereto as Exhibit A, and by this reference incorporated herein, as if fully set forth herein (the "Franchise Agreement").
SECTION 2. Short Title. This Ordinance shall constitute the TCG Utah Franchise Ordinance.
SECTION 3. Franchise Description. There is hereby granted to the Company, and its successors and assigns, in accordance with the terms and conditions of the Franchise Agreement, the right, privilege, and franchise (collectively, the "Franchise"), to construct, maintain and operate in, under, along, over and across the present and future streets, alleys, and rights-of-way and other property of the City, all as more particularly described in Section 3.1 of the Franchise Agreement, a network consisting of telecommunication lines and cables, together with all the necessary or desirable appurtenances (including without limitation fiber-optic and copper lines and cables, underground and above ground conduits and structures, poles, towers, wires and cables) (the "Network"). The Network shall be used by the Company for the purpose of supplying high-speed digital data transmission telecommunication services (including without limitation high-speed internet access, voice and multimedia transmissions) to the City, the inhabitants thereof and persons and corporations beyond the limits thereof. This Franchise Ordinance does not relate to, and does not authorize the Company to provide, or govern the operation by the Company of, cable television services as defined in the United States Cable Communication Policy Act of 1984, as amended to any customer in the City, without a separate franchise. If, in the future, the Company decides to offer cable television or other bundled services, the approval and issuance by the City of the appropriate franchise shall not be unreasonably withheld.
SECTION 4. Term. The term of the Franchise is for a period from and after the effective date of this Ordinance and its acceptance by the Company, until January 1, 2019.
The Company shall pay all costs of publishing this Ordinance.
SECTION 5. Acceptance by Company. Within thirty (30) days after the effective date of this Ordinance, the Company shall file an unqualified acceptance of this Ordinance, in a form approved by the City Attorney, with the City Recorder of Salt Lake City; otherwise, this Ordinance and the rights granted hereunder shall be null and void.
SECTION 6. Consideration and Payment Dates.
(a) For and in consideration of the Franchise, and as fair and reasonable compensation to the City for the use by the Company of the City's Right-of-Way, the Company agrees to pay to the City an annual franchise fee (the "Franchise Fee"), in an amount equal to, and consisting of, the municipal telecommunications license tax (the "Municipal Telecommunications Tax") authorized pursuant to the Utah Municipal Telecommunications License Tax Act, Title 10, Chapter 1, Part 4, Utah Code Annotated 1953, as amended (the "Municipal Telecommunications Tax Act"), and imposed and levied pursuant to Salt Lake City Code, Title 3, Chapter 10. Such Franchise Fee shall be calculated in the manner provided in the Municipal Telecommunications Tax Act, and shall be paid by the Company to the Utah State Tax Commission, as agent for the City under an Interlocal Cooperation Agreement by and among the City, the Utah State Tax Commission, and others, at the times and in the manner prescribed in the Municipal Telecommunications Tax Act, and any rules and regulations promulgated thereunder. Compliance by the Company with the terms and provisions of the Municipal Telecommunications Tax Act, and any rules and regulations promulgated thereunder, shall satisfy all requirements of this Agreement with respect to the calculation and payment of the Franchise Fee.
(b) Notwithstanding the provisions of Section 6(a) above, the Franchise Fee shall be calculated and payable as described therein only so long as the Company and the services provided within the City by the Company by means of the Company Facilities are subject to the Municipal Telecommunications Tax. In the event all or any portion of the Company Facilities ceases to be used by the Company to provide services subject to the Municipal Telecommunications Tax, the Company shall pay, in lieu of the Franchise Fee, a charge with respect to such portion of the Company Facilities, payable from and after the (i) the date Company ceases to provide such services, or (ii) the date the Municipal Telecommunications Tax ceases to apply to the services provided by the Company, which shall be calculated in the same manner as the charge then imposed by the City on other Companies occupying the Right-of-Way with similar facilities, and which do not provide telecommunication services subject to the Municipal Telecommunications Act. The City and the Company agree to negotiate in good faith any amendments to this Agreement as shall be necessary to accommodate the change in the Franchise Fee, including payment provisions; provided such new or changed provisions shall conform substantially with the provisions contained in any permits held by other similarly situated companies.
(c) The Company represents to the City that one of the purposes for entering into this Agreement is to obtain authority to build a network within the City to provide telecommunication services to customers within the City. Upon completion of the Company Facilities, the Company will actively market customer services and generate local gross receipts within the meaning of the Municipal Telecommunications Tax Act. The Company represents that it expects to generate more than a nominal amount of gross receipts from local customers, and that the use of the Company Facilities for other purposes, or to otherwise provide services to customers located outside of the City, is not the sole or preeminent objective of the Company.
(d) Upon the written request of the City no more than once per year, the Company shall submit to the City a certificate signed by a corporate officer of the Company certifying whether or not all elements of the Company Facilities have been used to provide services which generate gross receipts attributed to the City (within the meaning of the Municipal Telecommunications Tax Act) during the preceding calendar year. Any elements of the Company Facilities not so used shall be identified.
SECTION 7. Rights Reserved to the City. Without limitation upon the rights that the City might otherwise have, the City expressly reserves the following rights, powers and authorities to: (a) exercise its governmental powers now or hereafter to the full extent that such powers may be vested in or granted to the City; (b) grant additional franchises to the same property covered by the Franchise within the City to others, under competitively neutral and nondiscriminating basis as conditions acceptable to the City; or (c) exercise any other rights, powers, or duties required or authorized, under the Constitution of the State of Utah, the law of Utah, or the City ordinances.
SECTION 8. Extension of City Limits. Upon the annexation of any territory to the City, the right and Franchise hereby granted shall extend to the territory so annexed to the extent the City has authority. All facilities owned, maintained, or operated by the Company located within, under, or over streets, alleys and rights-of-way of the territory so annexed shall thereafter be subject to all terms hereof.
SECTION 9. Early Termination or Revocation of Franchise.
9.1 The City may terminate or revoke the Franchise and all rights and privileges herein provided for any of the following reasons:
(a) The Company fails to make timely payments of the Franchise Fee as required under Article II of this Agreement and does not correct such failure within twenty (20) business days after receipt of written notice by the City of such failure, provided, however, that any payment made pursuant to such written notice shall not be deemed to constitute a waiver of the Company's right to challenge the calculation of the Franchise Fee;
(b) The Company by act or omission materially violates a term or condition (other than as provided in (a) above) herein set forth within the Company's control, and with respect to which redress is not otherwise herein provided. In such event, the City, acting by or through its City Council, may after public hearing, determine that such failure is of a material nature; and thereupon, after written notice given to Company of such determination, Company shall, within thirty (30) days of such notice, commence efforts to remedy the conditions identified in the notice, and will have six (6) months from the date it receives notice to remedy the conditions. After the expiration of such six (6) month period and failure to correct such conditions, the City may declare the Franchise forfeited and the Franchise Agreement terminated, and thereupon the Company shall have no further rights or authority hereunder or under the Franchise Agreement; provided however, that any such declaration of forfeiture and termination shall be subject to judicial review as provided by law, and provided further that in the event such failure is of such nature that it cannot be reasonably corrected within the six (6) month period above, the City shall provide additional time for the reasonable correction of such alleged failure;
(c) The Company becomes insolvent, unable or unwilling to pay its debts, is adjudged bankrupt, or all or part of its facilities should be sold under an instrument to secure a debt and is not redeemed by the Company within sixty (60) days;
(d) In furtherance of the Company policy or through acts or omissions done within the scope and course of employment, a member of the Board of Directors or an officer of the Company knowingly engages in conduct or makes a material misrepresentation with or to the City, that is fraudulent or in violation of a felony criminal statute of the state of Utah; or
(e) Upon adoption of a new ordinance as described in Section 11 hereof, which new ordinance shall operate to extend the Franchise pursuant to the terms of such new ordinance, upon acceptance thereof by the Company.
9.2. Nothing contained herein shall be deemed to preclude the Company for pursuing any legal or equitable rights or remedies it may have to challenge the action of the City.
9.3 No Franchise revocation or termination may be effected until the City Council shall first adopt an ordinance terminating the Franchise and setting forth the reasons therefor, following not less than thirty (30) days prior written notice to the Company of the proposed date of the ordinance adoption. The Company shall have an opportunity on said ordinance adoption date to be heard upon the proposed termination.
SECTION 10. Severability.
10.1. If any section, sentence, paragraph, term or provision of the Franchise Agreement or this Franchise Ordinance is for any reason determined to be or is rendered illegal, invalid, or superseded by other lawful authority including any state or federal, legislative, regulatory or administrative authority having jurisdiction thereof or determined to be unconstitutional, illegal or invalid by any court of competent jurisdiction, such portion shall be deemed a separate, distinct, and independent provision and such determination shall have no effect on the validity of any other section, sentence, paragraph, term or provision hereof or thereof, all of which will remain in full force and effect for the term of the Franchise or any renewal or renewals thereof, except for Section 6 hereof and Article II of the Franchise Agreement.
10.2. Section 6 hereof and Article II of the Franchise Agreement are essential to the adoption of this Ordinance and should they be challenged by the Company, or determined to be illegal, invalid, unconstitutional or superseded, in whole or in part, the entire Franchise shall be voided and terminated, subject to the following: (a) in the event of a judicial, regulatory or administrative determination that Section 6 hereof or Article II of the Franchise Agreement is illegal, invalid, unconstitutional and superseded, such termination shall be effective as of the date of a final appealable order, unless otherwise agreed upon by the City and the Company; and (b) in the event of any legislative action that renders Section 6 hereof or Article II of the Franchise Agreement unconstitutional, illegal, invalid or superseded, such termination shall be effective as of the effective date of such legislative action.
10.3. Notwithstanding the foregoing, if the City stipulates in writing to judicial, administrative or regulatory action that seeks a determination that Section 6 hereof or Article II of the Franchise Agreement is invalid, illegal, superseded or unconstitutional, then a determination that Section 6 hereof or Article II of the Franchise Agreement is invalid, illegal, unconstitutional or superseded shall have no effect on the validity or effectiveness of any other section, sentence, paragraph, term or provision of the Franchise, which shall remain in full force and effect.
10.4. In the event this Franchise Ordinance or the Franchise Agreement is terminated pursuant to paragraph 10.2 hereof or Article X of the Franchise Agreement, the City grants to the Company a lease according to the same terms and conditions as set forth in the Franchise Agreement. Accordingly, the Company shall pay, as fair market rental value, the same amounts, at the same times, required for the payment of the Franchise Fee pursuant to Section 6 hereof and Article II of the Franchise Agreement and shall be bound by all other terms and conditions contained herein; provided, however, that in no event will the Company be obligated to pay a higher percentage of revenues derived from the sale of telecommunication services within the City than is paid by other similarly situated franchisees serving within the City.
SECTION 11. This Ordinance shall take effect immediately upon publication.
Passed by the City Council of Salt Lake City, Utah, this 12th day of August, 2008.
Bill No. 68 of 2008.
Published: August 23, 2008.